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The Conservatives haveFailed on Apprenticeships
Sam Bright inspects the gap between the rhetoric and reality in relation to one of the Conservative Party’s key policy planks
The downfall of Boris Johnson’s Government appears to be imminent. Even if the Prime Minister clings on to power, the future of his leadership will most likely be plagued by the bitter infighting that has been unleashed by ongoing stories of corruption and lockdown impunity.
MPs report that the Government has effectively come to a standstill, as the energies of the Prime Minister are ploughed into his political self-preservation.
Thus, as the Conservatives consider the future of the party – both in terms of leadership and policy – it is worth appraising what it has and has not achieved in recent years.
One of the party’s core themes during this period has been the diversification of education and training in the UK. The New Labour Governments fuelled the higher education system – particularly non-vocational subjects at universities – at the expense of practical, non-academic routes, the Conservative Party has claimed.
This diagnosis has appeal to voters in former industrial constituencies, which are characterised by a larger proportion of voters who are older and less well-educated. Many of these seats flipped from Labour to the Conservatives at the 2019 General Election, some for the first time in decades.
These voters benefitted from the proceeds of manual training and education prior to the deindustrialisation of Britain from the 1980s onwards and are resentful about the modern education system – which often extracts talent from small towns to the larger metropolitan hubs that house leading universities.
It is perhaps as a result that the Conservative Party promised in its 2015 manifesto to deliver three million more apprenticeships – paid training opportunities with businesses – over the subsequent five years.
“This is a crucial part of our long-term economic plan to secure a better future for Britain,” then Prime Minister David Cameron said, announcing the policy in October 2014. “It will help give us the skills to compete with the rest of the world. And it will mean more hope, more opportunity, and more security for our young people, helping them get on in life and make something of themselves.”
However, since the party made this promise, the Government’s performance on apprenticeships has gone into reverse.
In 2015/16, 509,360 apprentices started their placements, which has since fallen to 322,530 in 2019/20 and 321,440 in 2020/21 – a reduction of 37%.
Overall, the party has delivered 630,000 fewer apprenticeships than it promised – a pretty stark failure, yet one that has garnered few headlines.
Levy Fiasco
What has been the cause of this? A key reason has reportedly been the apprenticeship levy – introduced in 2017 after being proposed in the 2015 budget by then Chancellor George Osborne.
Last March, the Chartered Institute of Personnel and Development (CIPD) concluded that the levy had “failed on every measure and will undermine investment in skills and economic recovery without significant reform”.
The levy functions by requiring large firms, which spend at least £3 million on their annual payroll, to dedicate 0.5% of this amount to training arrangements for apprentices, which is topped up by an extra 10% from the Government. The firm is able to claim up to £27,000 for each apprenticeship. Smaller companies also receive assistance from the Government in training apprentices. Funds that are not used by levy-paying employers within 24 months expire and are handed back to the Government.
Between May 2019 and March 2021, £2 billion was returned to the Government after firms were unable to use the funds on apprenticeships, with overall employer investment in apprenticeships also having fallen. Indeed, half of firms subject to the apprenticeship levy have returned unspent apprenticeship levy funding to the Treasury, a new survey has found.
A key criticism has been a lack of flexibility in the system – with the Government failing to approve certain apprenticeships schemes proposed by employers, and unwilling to support flexible apprenticeships that may involve classroom learning, short-term placements, or work across multiple projects at different firms.
In the month immediately after the introduction of the levy, starts fell by 83%.
“We’ve heard stories from companies who have hit a brick wall trying to get levy-supported apprenticeships off the ground – and not for a lack of trying,” Verity Davidge, head of education and skills policy at the Education Endowment Foundation, has said.
The levy is also seen as a tax by many large businesses, creating an antipathy towards the policy and a reticence to constructively use the funds, while it also fails to target support towards the companies that most need apprentices and pay the highest training costs.
Ergo, big retail businesses create low-cost apprenticeships “in things like customer service and cleaning” while engineering and manufacturing firms are given the same level of support – despite their disproportionate demand for apprentices, and their higher costs.
A year after the levy was introduced, just 5% of manufacturers surveyed by Make UK wanted the policy to continue in its current state. Indeed, the average cost of an engineering apprenticeship is some £40,000 – and can be much higher – yet these firms are only able to claim £27,000 from the levy.
“This is yet another example of the Conservatives’ over-promising and under-delivering when it comes to apprenticeships and skills,” Toby Perkins, Labour’s Shadow Minister for Further Education and Skills, told Byline Times.
“Despite the UK facing a national skills shortage, apprenticeship starts have fallen and billions of pounds in apprenticeships levy funding is going unspent. Labour has set out a plan to reinvest these unspent funds in training, there is no excuse for ministers failing to act.”
The Department for Education has subsequently introduced a ‘flexi-job’ apprenticeship scheme that widens the scope for more varied apprenticeships, though the policy is only backed by £7 million in investment. The department has separately committed “to [improving] the working of the levy and will be making improvements in response to employers’ feedback”.
The importance of apprenticeships is emphasised by the economic shock of the COVID-19 pandemic. Official figures published in April 2021 showed that those under the age of 35 accounted for almost 80% of jobs lost in the previous year.
The Prime Minister has consistently reiterated the Conservative Party’s support for “jabs, jabs, jabs” and “jobs, jobs, jobs”. However, on apprenticeships, the party’s record has been distinctly underwhelming.