Report Overview
England needs an apprenticeship revolution, with 150-300,000 extra three-year apprenticeship starts each year for young people, according to a major new analysis by the Boston Consulting Group (BCG) for the Sutton Trust.
Key Findings
• The English education system is failing nearly half its young people by providing inadequate vocational opportunities. Across the population as a whole, more than four in ten people have only low level qualifications – below Level 3 (A-level standard) – with little value in the labour market.
• The UK labour market faces a fundamental skills mismatch. For example, there are five Hair and Beauty qualifications awarded for every vacancy1, whereas there are three vacancies for every Science, Technology, Engineering and Maths (STEM) qualification awarded. In particular, we train too few technicians.
• With 18,000 qualifications and around 150 awarding bodies, the UK system of vocational education and training is far more complex than in any of the other leading economies and creates a state of confusion and bewilderment among students, parents and employers.
• Sector Skills Councils (SSCs), who are in charge of quality control, remain vastly under-resourced – with only £25m, they have one-tenth the funds of their German counterparts even though they have 18,000 qualifications to oversee, compared to 350 in Germany. They are therefore powerless to implement change.
• Current funding incentives push students onto the academic A-level path, resulting in about a third (31%) of young people dropping out, whereas many of those who drop out would have had much better prospects in apprenticeships.2 In addition, too much low-quality vocational education is being taught in schools, where many students receive poor careers advice and guidance.
• With many lasting a single year, apprenticeships are of low quality and too short compared with those in other leading economies, where three years is the norm. Too few employers offer apprenticeships (20% in the UK compared with 50-60% in Germany and Switzerland) and there is too little support for the creation of high quality dual-track apprenticeships combining workplace training and off-site study.
• Sector Skills Councils need more effective employer involvement and control over the form and content of what should be fewer qualifications on offer – there should be no more than five “preferred” qualifications for each occupation.
• Evidence shows that, in order to tackle significant skills shortages, the UK needs to create between 150,000 and 300,000 quality apprenticeships (level 3 or higher) each year. These should be a mix of new jobs for young people aged 16-24 who are at school, college or entering the labour market and be offered directly by employers or be innovative apprenticeships linked to small firms and training providers. But of the 240,000 new apprenticeships created in the past two years, 58% were low level (Level 2 – GCSE standard) and 75% went to people aged over 25 and who were already employed.
• The challenge to match other leading nations is huge: with two-thirds (64%) of UK apprenticeships judged ‘low quality’, Switzerland offers seven times as many high quality apprenticeships for its population size. Also, only 36% of UK apprenticeships are 3 years at Level 3 or higher; this compares poorly with Germany, which not only has a much higher participation rate, but also has 90% of its apprentices in three to four year programmes at Level 3 or higher.
• Government spending is not directed effectively enough. This report argues for a government “kick- start” with apprentice wage subsidies in a twelve year programme (covering nine cohorts of three years each) pooling schemes to help small businesses and information campaigns for employers and students on the cost benefits of apprenticeships. The estimated rewards are considerable – an increase in GDP by around £8bn and reduce government spending by £2.5bn, net of all subsidies.
Recommendations
• Radically expand apprenticeships, with up to 300,000 extra new apprenticeship starts each year. The vast majority should be three years at level 3, with some four years at level 4, and no more than 10% at level 2, with a two-year duration. There are fewer than 200,000 level 3 starts each year now.
• The new apprenticeships should be “dual-track”, combining workplace training with off-site study, and lead to an occupational or trade qualification, such as a “Professional Certificate in Automotive Engineering”, which would set the minimum standards required for further education leading to a Licence to Practise in a trade or to open a business.
• Address the gap in supply of quality (Level 3 or higher) apprentices by offering booster STEM (Science, Technology, Engineering, Maths) courses in all Further Education colleges to vocational students who have not achieved the minimum level to pursue STEM qualifications and boosting funding for qualifications in fields such as engineering with skills shortages.
• Simplify the qualifications market by giving re-empowered and employer-led Sector Skills Councils control to filter the existing 18,000 qualifications and select between one and five “preferred” qualifications for each occupation, reducing the total to 200-300. Replace the modular approach to curriculum and assessment with comprehensive, holistic programmes.
• Increase availability of apprenticeships through a subsidy that eventually funds itself kick-started by government subsidies for apprenticeship wages (such as through tax breaks or national insurance contributions). These funds should be channelled through employers, who should shape the training collectively. Simplify funding rules to focus on output-based results and post-apprenticeship employability.
• Use apprenticeship training agencies to manage apprenticeships for small firms, enabling their participation with the minimum of bureaucracy. These agencies would arrange college placements for these apprentices and enable small firms to employ apprentices on a wider basis.
• Ensure transferability back to the academic track – or from the academic to vocational – at every step for young people over the age of 16. In particular, introduce two routes to university to attract academically able students with a bridging year via accelerated A-Levels or a professional degree to give access to university.
• Continue to develop the programme of University Technical Colleges (UTCs), but limit the number of UTCs to 100, so that they maintain a clear focus on meeting demonstrable skills needs. UTCs can become standard-bearers for vocational education.
• Improve student attainment with a stronger focus on English and maths in primary schools and by increasing applied learning to allow students to demonstrate mastery through everyday applications of concepts. All apprentices must have level 2 (GCSE-standard) English and maths to qualify.
• Ensure students are able to make informed choices about future careers based on impartial and relevant information. Introduce a comprehensive programme of careers education in schools and colleges from age 11, backed by mandatory annual training for career advisers.
• Remove incentives for schools to recruit students to inappropriate vocational or AS-level courses by funding further education colleges equally with schools and base funding on students completing courses rather than simply enrolling on them.