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Apprenticeship degrees – the answer to the skills gap and undergraduate debt

Apprenticeship degrees – the answer to the skills gap and undergraduate debt

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Although a university education is often pushed as a ‘one size fits all’ option for tertiary education, Susanna Lawson, Co-Founder and CEO, of the education technology platform, OneFile, said it doesn’t need to be that way. She explains the benefits of degrees which offer vocational training and address the UK’s skills gap.

This year’s A level results marked a high-water mark in regards to interest in apprenticeship degrees. UCAS CEO, Clare Marchant, said that for the first time more than 50% of student enquiries to the clearing organisation were in relation to apprenticeship degrees. There is a shift in perception and understanding among the 17+ age group, as well as their parents, as to the value of these different kinds of qualification.

I believe that today’s students and their parents are beginning to realise that attending university for its own sake is not a guaranteed route to success, future career or social mobility. The only thing attending a university course is going to guarantee, for most undergraduates, is debt.

It’s hard to believe that in a digital world, which is driving increasing levels of personalisation in everything from TV show recommendations on Netflix to song suggestions and playlists on Spotify, the UK academic establishment is still predominately pushing a ‘one size fits all’ approach to tertiary education – university, university, university.

The focus on universities to the virtual exclusion of other learning or training options has contributed to a UK skills gap. The pandemic has brought the skills shortage within the UK into sharp relief. The most recent Open University Business Barometer showed that, despite a rise in the number of overall candidates, three in five employers are reporting that they are unable to attract the skills they require. The need is across all sectors, from engineering and digital to construction and health and social care.

A recent survey highlighted the link between business growth and training, with 71% of businesses that had experienced growth in the last year having also increased their training budgets. In contrast, 61% of businesses that did not either increase their training investments or have fully functional training plans reported declines in growth.
To better respond to the growing skills gap in the UK economy and help improve the efficiency of the workforce, we need to shake up the current status quo. We must look for a new model for how we prepare our young people for the wider working world.

The challenge is that schools are not giving the same weight and importance to the range of options available to students in regards to different routes to success. Youth Employment UK’S Youth Voice Census notes: ‘…young people are not being properly prepared for the breadth of opportunities post-16, with evidence highlighting that academic qualifications are still discussed with pupils more frequently than vocational qualifications’. A possible solution could be engaging with secondary students after a lesson to discuss related careers.

The ‘Baker clause’ was meant to address this issue. Authored by former education secretary, Kenneth Baker, and introduced in 2018, the clause mandates schools to allow training providers access to their pupils to discuss technical and vocational education routes.

However, while mandated, the clause is not uniformly enforced nor are there any agreed consequences for noncompliance. This results in a patchwork approach to how vocational or technical training options are presented. To address this imbalance, a new report from the Education Select Committee has called for Ofsted to exclude schools from the top two grades if they fail to comply with the Baker Clause.

Another approach that is starting to gain traction is around the funding of careers advice in schools. There are now calls to also tie the funding to compliance with the ‘Baker Clause’. This idea was included in the Government’s latest Skills for Jobs white paper published in January.

And finally, more weight is being put behind this issue by Lord Baker himself, who is currently seeking to amend the Skills and Post-16 Education Bill to make his clause a statutory duty for schools.

So, we can hope that the schools of the future will be more open and inclusive in regards to the options they put in front of their pupils.

But schools are only one part of the landscape – employers need to be incentivised to offer more engaging and relevant apprenticeship opportunities. The Apprenticeship Levy, introduced in 2017, was intended to create a new pool of funding for companies to invest in their workforce’s training needs.

The way the scheme works is that any business with an annual wage bill of more than £3 million has to put 0.5% of its payroll above the £3 million threshold into a new fund. This is then topped up with an extra 10% from central government. The funds are kept in a digital account and must be used by the business within 24 months or are passed back to government.

The levy, while created with the best intentions, is proving to be somewhat controversial in its implementation. Many businesses are saying that the rules on accessing the funds are too rigid and not suited to real-world working environments. Indeed, the Charted Institute for Professional Development (CIPD) has recently called for changes to how the levy operates.

The changes the CIPD would like to see include more flexibility to be introduced to allow employers to fund employees through technical or vocational courses in further education, which is not currently allowed under the existing framework.

But even without the changes being advocated by the CIPD, the Apprenticeship Levy offers a huge opportunity for small to medium-sized enterprises (SMEs) to bring new skills into the organisation with the bulk of the cost coming from the levy fund.

How SMEs access the fund is quite straightforward. The easiest first step is to link up with a local training provider or further education college, the organisations that are incentivised to help SMEs bring on apprentices. They can advise on the most appropriate type of scheme that can be funded by the levy. Each apprenticeship scheme has its own standard linked to the specific occupation. Those are monitored and require a minimum of 12 months’ training followed by an End-point Assessment (EPA).

The training provider partner can help run the process and ensure that the EPA is in place. They will also support in setting up the digital Apprentice Service Account into which the levy funds are transferred each month. These payments will continue until the apprentice either completes their training or leaves.

At the moment, too much of the monies raised by the levy are not being used by business and industry on training and apprenticeships. This is a clear indicator that something at the heart of the system is not functioning as it should and must stand as a warning to government that a change to the levy has to happen sooner rather than later.

In conclusion, to address the skills shortage in the UK economy, I believe we must focus on the areas that have been outlined here. First, we must give the ‘Baker Clause’ some real teeth. By strengthening the role of the clause, we will positively change how vocational and technical training options are perceived and positioned within the academic environment. Next, the Apprenticeship Levy needs revising to better fit the real-world needs of employers and employees. A clear sign of success in this endeavour will be the fact that very little of the funds raised by the levy end up back in government coffers at the end of the 24-month period.

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