We recently attended and presented at the Employability and Skills Summit organised by the East Midlands Chambers of Commerce.

During the event at Loughborough University, there was a big focus on apprenticeships. So, we wanted to highlight some of the background information we heard and share what the unintended consequences are from the apprenticeship levy and new standards that were introduced a year ago.

The Institute for Apprenticeships were one of the keynote speakers at the event.

The institute are currently in the process of developing the standards and approving the overall apprenticeship programmes.

Here’s what we learnt from them…

• 15% of apprentices did not receive any training and 20% did not know they were on an apprenticeship under the previous system. So, there was a need to make changes
• 31% of school leavers receive no advice about apprenticeships
• The institute has made good progress having developed nearly 300 standards. The main principle being applied is that it should be employer led
• The government target remains at 3 million apprenticeship starts by 2020 with a budget of £2.4bn.

“An apprenticeship generates £26-£28 for the economy for every pound invested”

The East Midlands Apprenticeship Ambassador Network also gave a keynote presentation during the event.

This is where we learnt about the impact of the apprenticeship levy and introduction of the new standards.

Since the levy, the landscape for apprenticeships has changed.

• Apprenticeships for under 19s was down 15.7%
• For 19-24 year-olds it was down by 23.1%
• And for those over 25 it was down by 34.1%
• Intermediate levels down by 38.2%
• Advanced levels down by 14.6%
• Higher levels increased by 25.4%

(These national figures are based on the period between August 2017 to January 2018 compared to the previous period)

Anecdotally we were told that these figures can be explained by employers stating that they wanted to use the levy to invest in existing employees first rather than new starters.

We believe there must be a correlation between the standards not being fully in place and the apprenticeships not being fully promoted and the fall in apprenticeship starts.

In short, the unintended consequences are that the level two and three apprenticeships have suffered and these are the ones used to support and provide entry level roles for inexperienced young people.

When you couple this with the results of our research, there is clearly a big barrier for inexperienced young people trying to gain work.

Two out of three businesses did not have any entry points for young people to gain employment. Where we found entry level roles they were often over complicated with the job specification asking for industry specific experience.

It appears that after a shaky start that initiatives to improve the image of apprenticeships and engagement and careers advice is becoming more of a focus for schools and colleges. The government is also providing resource to support better communication and marketing and we hope this will have a positive impact.

Although we understand why companies would want to develop current employees this should not happen at the expense of creating access into the workplace for young people.

Summary

So, what does this mean for business?

It is clear there is some good work being done to create the standards. In the medium to longer term this should provide a solution to the current skills shortage that companies are experiencing.

60% of companies trying to recruit stated they were struggling due to a lack of skills according to the latest survey by the East Midlands Chambers of Commerce.

The Apprenticeship Ambassador Network is sending young people who have benefited from an apprenticeship into schools and colleges to improve the image of apprenticeships.

We believe businesses should not rely on government, agencies and others to create a pipeline of skilled employees.

Instead businesses should be prepared to invest and contribute themselves by creating entry level roles and adopting apprenticeships as part of their business strategy.