Edge’s response to Labour and the Conservatives’ apprenticeship plans

The Importance of Apprenticeships in the Election Campaign

An understated but, nevertheless, serious wedge issue, both the Labour and Conservative parties have bolted early in the election campaign to set out their stall on apprenticeships. With such crowded policy grids, it is welcome to see the parties recognise apprenticeships as mission-critical to their wider plans for economic growth and social justice.

Public Support for Apprenticeships

More cynically, perhaps they have seen our recent polling of 2,000 adults in England indicating just how popular apprenticeships are: nearly half (48%) think 50%+ of young people should go on to complete a vocational course, technical course, or an apprenticeship, after leaving school. And funding for more apprenticeships tips the noisier, bigger ticket education items, including early years, schools and HE, in terms of public appetite (see: Public First). But let’s not fall into the trap of thinking that apprenticeships or FE are a much simpler ‘fix’, any less deserving of longer-term policy attention than those areas of education reform being kicked down the road: the curriculum, assessment, teacher recruitment and retention or a sustainable HE funding model. Indeed, the race to put some detail, any detail, on apprenticeships policy – and appease businesses – has left one major technicality unaddressed: safeguarding apprenticeships for young people.

The Conservatives’ Pledge on Apprenticeships

To start with the current governing party, the Conservatives’ big pledge is to increase the number of apprenticeship starts by 100,000 a year by the end of the next Parliament, diverting funding from ‘rip-off’ university degrees. The plan is highly dependent on getting more employers to offer apprenticeships. To this end, the plan to strengthen flexi-job apprenticeships offers something for those in sectors not well served by the rigid structure of the apprenticeship programme (like the creative industries) and the earlier commitment to fully fund under-22 apprentices in SMEs taps into a vital market.

The Need for Safeguards for Young People

This signals the scale of ambition we need to grow apprenticeship places for young people (not least because the number of 18-year-olds is about to rise sharply). However, the pitting of FE against HE leaves a bitter taste in my mouth. It’s certainly a far cry from the public mood, with our recent polling showing that academic and vocational pathways are thought to be “as effective as one another” in terms of earnings, success, satisfaction and life chances. Crucially, there’s no guarantee that potential undergraduates will switch over to an apprenticeship and, without any apparent safeguards (e.g. through the levy), who’s to say that employers will choose to employ 18-year-old apprentices?

Addressing Low Completion Rates

The fixation on starts will never be achieved unless we do something about the dire completion rates. Our analysis of the available DfE data suggests that while the Conservative Party can be proud of the 5.8 million starts since 2010, less than half (around 47%) of these apprenticeships have ended in achievements. Under the current model, dropping out early leaves a former apprentice with no qualifications to show for it. We’d urge whoever gets in to look closely at the causes of drop-outs and consider a more modular approach to apprenticeships (as set out in Our Plan for Apprenticeships).

Labour’s Youth Guarantee and Growth and Skills Levy

On paper, Labour’s ‘Youth Guarantee’ – “opportunities for training, an apprenticeship or help to find work for all young people aged 18-21 years old” – signifies a very big commitment to reduce the worrying NEET rates.

It is welcome to see some long-awaited further detail on the more flexible Growth and Skills Levy, with a subtle but important tempering of language, to ensure “at least” 50% of the levy will have to be spent on apprenticeships. The 50:50 split felt completely arbitrary, and not necessarily a reflection of businesses’ needs or behaviour: more than a third, 35%, of levy-payers already spend more than half of their levy on apprenticeships.

Concerns about Labour’s Policy

Still, we have a nervousness about the policy. It will also be absolutely essential that Labour employs other mechanisms to ensure that apprenticeship numbers are not negatively impacted by this flexibility, especially amongst younger people and at lower levels where we’ve seen the biggest decline. Levy receipts are used not only to fund apprenticeships in levy-paying firms but in SMEs too. The DfE estimates that allowing 50% of the levy to be used on non-apprenticeship training would cost £1.5bn and decrease starts by 60%. To date, Labour has not explained how it would account for this lost funding. Labour’s pledge to use increased levy flexibility to bring back traineeships is an interesting one.

When we spoke to small businesses in Feltham and Harlow on Small Business Saturday 2023, employers told us that it’s particularly important for them that young people are workplace-ready before joining a business. And we know from the most recent Youth Voice Census, that as young people get closer to working age, their confidence that they will progress into a good job decreases. Those aged 19+ are less likely to feel confident that they have the right skills, relevant work experience, qualifications and network than their younger peers.

The Potential of Traineeships

If properly funded and high-quality, traineeships could be a great way to ensure that those starting an apprenticeship come prepared, although, as we point out in Our Plan for Apprenticeships, pre-apprenticeship programmes are more common and more substantial in many other countries. Having introduced pre-apprenticeships in 2004, it is important that Labour learns from the past to understand what improvements can be made this time around.

The Need for Guarantees for Young People

Once again, there is also no guarantee, as the IFS points out, that employers will choose to use their flexibility to spend on courses for young people or (pre)apprenticeships for young people. We are analysing Labour’s levy plans in more detail ahead of a report we intend to publish in the autumn.

Conclusion: A Mixed Bag for Apprenticeships Policy

So, is the apprenticeships race a good thing? For us at Edge, we are pleased to see vocational education, rightly, front and centre in this election (I asked, I suppose I received?). No doubt, we’ve come a very long way since Edge first started promoting parity of esteem some two decades ago. But though the rhetoric is loud, the policy isn’t delivering on the detail – and, in the long run, that simply won’t work for young people nor for businesses, despite trying to win over hearts and minds.

The Conservatives’ pledge comes across as an attempt to defend their record on starts, without getting into the knotty matter of achievements, and whether the system is actually working for young people. Levy reform will be a slippery slope for Labour, and is easy to get wrong, as we explored in our workshop last year with the Treasury. Both parties are making big promises to young people. They would do well to make sure their policies square up.

By Alice Barnard, CEO, Edge Foundation