Opinion: The UK can’t spend its way to more apprenticeships – here’s what it should do instead

Following the UK Government's announcement of an additional £3.3 billion investment in apprenticeships, Aidan Friend, CEO of Better Futures Apprenticeships at Coventry University Group, explains why increasing apprenticeship participation requires much more than cash injections.

Six months after announcing a multi-million-pound investment in apprenticeships, the Government has returned with billions more, yet this really tells us that money alone has never been enough to fix the challenges the system has faced for the best part of a decade.

Apprenticeship starts are around 30% lower than they were ten years ago with no sign of coming back to where they should be to meet the UK's skills needs.

It has been outlined how some of this investment will be used, including a new bursary for low-income households and full funding for the training costs of 16 to 24-year-old apprentices once levy-paying employers have exhausted their apprenticeship funds.

And while this could help in the margins, the Government must still dig deeper and confront what really is holding apprenticeships back for employers and learners.

Bureaucracy changed employer behaviour

Though introduced with good intentions, the Levy is often pinpointed as one of the reasons why apprenticeship uptake is lagging because it made the process far more complex.

Before the Levy, starts sat at around half a million per year, with sectors such as construction, engineering and manufacturing viewing them as a valuable means of developing talent, passing on specialist skills and filling vacancies. Yet, following its introduction, starts fell by 26% and have never recovered to previous levels.

The problem wasn’t that employers were suddenly being asked to invest in skills, as many were already doing so.

It was the additional bureaucracy that transformed what had been a relatively straightforward process - businesses worked directly with training providers and apprenticeship programmes clearly set out the skills required for different occupations - into a convoluted web of digital accounts, funding bands, expiry rules, off-the-job training requirements and compliance obligations; a level of bureaucracy many had never previously encountered.

An imbalance was born

An imbalance between large and small employers emerged, as larger employers often had the human resources and learning-and-development capacity to navigate the new rules – just as we did, expanding our apprenticeship provision and launching initiatives such as the Levy Gift to help SMEs access apprenticeship funding.

But the same couldn’t necessarily be said about smaller businesses that did not need to pay the Levy but were still required to operate within the same system. Though many continued to recognise the value of apprenticeships, the newfound administrative burdens and upfront costs made them more difficult to offer and deliver, especially when already battling the cost-of-living crisis.

More money won’t incentivise businesses

By offering more financial support for SMEs taking on apprentices under the age of 25, the Government is clearly trying to tackle two things at once: giving smaller businesses more financial breathing space while also reducing the volume of young people who are not in education, employment or training (NEET). This extra funding may reimburse SMEs for the training cost, but who picks up the tab for all the administration remains one giant question mark.

The Government needs to take a deep dive into the apprenticeship system itself and identify where red tape and unnecessary regulation can be reduced or removed.

A simpler process could see training providers or regional skills bodies manage more of the administration on behalf of employers, allowing businesses to focus on recruiting and developing apprentices – thus increasing productivity, skills growth and economic opportunity.

There’s still far too much focus on headcount targets

What also lies within this new investment is the aim to deliver 50,000 more apprenticeship starts for young people within the next three years, but we have been here before.

Success isn’t about how many people begin an apprenticeship, but what happens afterwards. Are apprentices completing their training? Are they moving into sustained employment, progressing into higher-skilled roles and seeing wage growth? And are they effectively supporting the skills needs of different sectors?

Young people will not pursue education because a target has been set; they will pursue apprenticeships when they can clearly see how they will benefit their career prospects and when there are enough choice and availability for people from all backgrounds.

The focus on young apprenticeships should also not come at the expense of developing the experienced workforce needed to support them. The Government says it is committing to lifelong learning and upskilling yet limits how apprenticeship funding can support the development of existing workers.

At the very least, levy funding should be flexible enough to support the training of mentors and supervisors where it directly improves the quality, completion and long-term success of young apprentices.

A successful apprenticeship system will not be created by more money without deeply understanding what learners and employers need and making the system work for both. Businesses need a system that is simpler to navigate and easier to operate within, while people need opportunities that are accessible and connected to career progression.

Getting that balance right will make apprenticeships one of the most effective educational routes for improving social mobility, tackling skills shortages and providing more young people with a direct route into skilled employment.