Britain has turned apprenticeships into a scheme for the already employed

Alan Milburn has reportedly questioned whether that makes any sense in his upcoming review of economic activity among young people (18-24). His review of the growing number of young people not in education, employment or training is expected to recommend scrapping the apprenticeship levy, and I broadly agree.

The principle behind the levy was sound. Employers contribute, and the money funds training, creating opportunities and building the skills Britain needs, but somewhere along the way we lost sight of who needs that opportunity most.

We now have more than a million young people stuck between education and employment, while apprenticeship funding can be used for training people who already have degrees and established careers.

There is nothing wrong with employers investing in existing staff; as director of a company that employs more than 700 people, I believe upskilling is vital to a business's success. But when public policy is trying to tackle a youth employment crisis, we have to ask whether that is where scarce apprenticeship funding should go.

Through my work as chair of the Jobs Foundation North East, I have seen what the alternative looks like.

Our Ladders of Opportunity report highlighted Accenture in Newcastle, where its apprenticeship programme is open to people without degrees. Apprentices spend four days on site and one at Newcastle College. Accenture has also brought cohorts of young people who are NEET into the business for two-week bootcamps, giving them a first taste of the workplace.

One young man we met, Blessing, came through the programme and secured a permanent job. His verdict was telling - he would point his younger brothers towards the same opportunity and this is the chance so many young people need.

Sage, a worldwide business born in Newcastle and still rooted in the city, combines apprenticeship and graduate programmes with work encouraging local girls into technology. The apprenticeship levy should be creating a route through the door into employment, but too often the system seems designed to make doing the right thing unnecessarily difficult.

Christopher Nieper, chief executive of clothing manufacturer David Nieper in Derbyshire, told Ladders of Opportunity how his company wrote training standards for its own trade after much of the UK garment industry had disappeared, only to discover there wasn't a college in the country able to deliver them.

To access levy money, the company eventually had to turn the factory into an approved, Ofsted-inspected training provider, meaning years of work, simply to unlock funding it had already paid in. That is just one example of bureaucracy defeating the purpose of the policy.

We shouldn't pretend, though, that every higher-level apprenticeship is somehow illegitimate because it isn’t. South West Water runs hundreds of apprenticeships, many above entry level, while construction business Mace also makes extensive use of higher-level training and there can be very good operational reasons for doing this.

The answer is to rebalance the system, not wreck it and reforming the levy alone will not solve the problems, which are much deeper because employing young people is becoming increasingly expensive.

Centre for Policy Studies figures cited in the Jobs Foundation's Jobs and Education report suggest the cost of employing an 18- to 20-year-old rose by more than £4,000 between 2024 and 2026. That’s a lot of money when businesses are already squeezed in so many other ways, including wage pressures, taxation, energy prices and supply chain concerns

Businesses respond to incentives, and by making younger, inexperienced workers substantially more expensive, employers will inevitably think twice about taking a chance on them. That is the contradiction ministers need to confront.

Milburn is asking the right question about apprenticeship funding, but his review, and the Government, needs to go further.

If we want businesses to give young people their first chance, we need a system that makes it easier and more attractive to employ them rather than one that asks employers to take the risk while steadily increasing the cost.

The test should be simple: are we helping more young people get their first foot on the ladder?

____________________

Kiran Fothergill is director of Pickerings Lifts and chairman of the Jobs Foundation North East.

LBC Opinion provides a platform for diverse opinions on current affairs and matters of public interest.

The views expressed are those of the authors and do not necessarily reflect the official LBC position.

To contact us email opinion@lbc.co.uk