Progression pathways for young people need an aspirational destination, and that includes at level 7
Keir Starmer addressed the Labour Party Conference last Tuesday. Since coming to power there has been a clear focus by the new government on economic growth as what seems to be the ‘first among equals’ of Labour’s Five Missions. According to the Labour manifesto, this growth is to be accompanied by good jobs and improved productivity. However, it is fair to say this growth relies on good jobs and improved productivity.
Supporting the Skills System
It was reassuring to hear the Prime Minister emphasise the need to “get the skills system right”. The skills sector supports every other sector and given the talent and skills gaps that seem so pervasive across the economy, it is more important than ever that the delivery of skills at all levels is supported in a way that works for employers.
A core part of improving the skills system is the new government’s plan to replace the Apprenticeship Levy with a more ‘flexible’ Growth and Skills Levy. This promises to allow large employers to use some of their levy to fund training outside apprenticeship programmes. This is great news for the many levy payers who find the current system too inflexible to allow them to fully spend their available pots. Possibly less great news for the non-levy employers who rely on unspent levy pots to co-fund their apprenticeship programmes.
The Growth and Skills Levy
As Keir Starmer finished his speech, two big apprenticeship-related announcements by the DfE came in short order:
- A move to shorter duration apprenticeships, and the introduction of foundation apprenticeships as a form of ‘pre-apprenticeship’
- To rebalance funding in the training system back to young people some level 7 apprenticeships will be moved outside the scope of levy funding
Whilst the first of these points is extremely promising and might help improve uptake of lower-level apprenticeships where the Gateway Rule is a blocker, the second has caused much concern and debate in the days since.
The link between level 7 apprenticeships and young people
There seems to be an incorrect connection made between age and level; a DfE spokesperson even said that the changes “will involve businesses funding more of their level 7 apprenticeships – often accessed by older or already well qualified employees – outside of the levy.”
Often accessed by ‘older or already well qualified employees’, perhaps. But certainly not exclusively accessed by that demographic.
There is a dangerous assumption that young people follow lower-level programmes, and older people follow higher-level programmes. Not only is this quite patronising, and somewhat lacking in ambition, in some sectors it’s just plain wrong.
One sector that has a level 7 apprenticeship programme aimed squarely at young people is the accountancy sector (incidentally another example of a sector that supports every other sector, and that will be critical to achieving the economic growth mission).
Apprenticeships in the accountancy sector
Accountancy is a popular career choice for ambitious young people who want opportunities to progress to leadership positions. That is one of the reasons that UCAS chose it as a sector be an early pilot for an apprenticeship industry guide on their website. Demand for accountancy apprenticeships by both young people and employers has grown dramatically in the years since the levy was introduced in 2017. And that includes at level 7.
The accountancy sector currently suffers from an acute lack of talent, particularly in areas such as audit, tax and bookkeeping. The recent Skills England report on skills shortages identified accounting technicians as being in critical demand. Apprenticeship programmes have become an important part of the talent pipeline that helps to resource the sector with the best young people.
The growth in apprentice starts has in turn had a huge impact on access to the accountancy profession for a more diverse range of young people regardless of their academic or economic background, and this has transformed social mobility into careers that offer exciting prospects and earning power.
Apprenticeships have truly broken-down barriers to opportunity in the accountancy profession.
Level 7 apprenticeships as the top of the ‘chimney’
The level 7 standard is an important part of that apprenticeship talent pipeline feeding the accountancy sector, both to bring graduates into their first professional finance roles, and also as an aspirational destination for school leavers starting at levels 2 or 3.
Ben Rowland, CEO of AELP, uses a ‘chimney’ analogy to describe how the progression of apprentices from one level to another not only benefits the learner who is progressing, but also benefits the learners who are recruited to backfill the gap left behind.
This is exactly what happens every year in hundreds and hundreds of accountancy firms in all corners of the country. Level 4 learners complete and successfully move onto level 7 (to become chartered accountants), which allows level 3 learners to move up to level 4, and level 2 learners to progress to level 3 roles. This strong progression pathway can take a bright 18-year-old school leaver all the way to a chartered accountant status by the age of 23.
Data covering the period since 2017/18 shows that 58% of accountancy apprentices progressed onto a higher level including at level 7. Many sectors would give their right arm for long-term learner retention and progression rates like that.
This chimney effect benefits not only successive intakes of learners, but also the employers who deploy their skills, the clients those firms support and advise, and the local, regional and national economies they are all part of.
The reality of level 7 age demographics
Data for the period since the levy was introduced in 2017 has been gathered from the four largest providers of the level 7 accounting/taxation professional standard (that support around 90% of level 7 learners in the industry) and the statistics are clear:
- Over 70% of learners were aged 24 or below when they started the level 7 programme
- Around 90% were aged 30 or below
In the accountancy sector, it’s not ‘young people’ or ‘level 7’. It’s ‘young people’ and ‘level 7’.
Social mobility
Apprenticeships have been an incredible leveller, supporting a dramatic shift towards school leaver programmes. This has particularly been the case in smaller towns and more rural areas, typically where smaller employers operate and give opportunities to young people from disadvantaged and weaker academic backgrounds.
The success of apprenticeships in the accountancy sector has helped drive far greater diversity in a profession once dominated by private school alumni and Russell Group graduates. The data from the last seven years shows that 83% of level 7 learners attended state-run or state-funded school and 57% said that neither parent attended University. This in turn offers a greater number of accessible role models which helps to further increase the appeal of careers in accountancy to those who would otherwise have felt ‘that’s not for someone like me.’
I truly hope that the government comes to realise that not all level 7 apprenticeships are the same. There are those, such as in accountancy, that entirely align with their desire to rebalance funding to young people.
By Gareth John, Director of accountancy apprenticeship provider, First Intuition
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