The Journal

27th August 2015

Border Post 5. APPRENTICESHIPS: ARE THEY REALLY THE ANSWER?

The present Conservative led administration likes apprenticeships; the Government wants to create another three million of them. In this post I discuss the pros and cons of the system.

Origins

First, let’s go back in time and consider its origins. In the medieval era, apprentices were generally the unpaid pupils of craftsmen, who were often paid by guardians to take them on. By the 1950s the system had become associated with technical training in the engineering industries. This association with engineering and manufacturing has now declined, reflecting the lower contribution of manufacturing to our economy. Modern apprenticeships are more likely to be at McDonalds or Costa Coffee than at a factory.

The current regime for Further Education

Apprenticeships also need to be seen within the context of the further education regime. Nowadays young people must stay in further education until they are 18 (previously they could leave school when they were 16 or indeed younger). Around half the student population choose not to do A levels. The other half must now choose between some kind of further education course at their local College or an apprenticeship (a simplification of the choices but that’s what it boils down to).

It is self-evidently sensible for many young people to be in a working environment learning how to do a job than pursuing an academic course at school for the sake of it; even more sensible when this enables children without particular academic gifts to get to grips with the disciplines required for the world of work. My concern is more about what is missing from the apprenticeship system, and how it is funded.

Flaws in the system

Two of the more pressing issues facing this country are the stubbornly high level of youth unemployment, which currently averages 15%, and the perhaps counter intuitive prevalence of skills shortages in many industries. Modern apprenticeships are helping to address the first issue, but failing to address the second. Ultimately I believe we will fail to address both issues adequately unless we recognise the current flaws in the system. The central problem is that the further education system (including the apprenticeship system) does not produce enough candidates with higher level skills relevant to industry; in manufacturing this means skilled engineers, craftsmen and machinists.

The current cost of an apprenticeship, including what the employer and the state contribute, currently starts at around £7,000 a year. Around half of this is provided by the employer in wages, and the other half in either grants or funding for training from the state. This is roughly equivalent to the cost of full time education for a state funded pupil. This of course explains why apprenticeships are so popular with Government, because the employer is paying half the costs. There are two major problems with this approach.

The first is that the majority of state funding is actually going to “box tickers”, the institutions and assessors who formally organise and award the apprenticeships but more often than not don’t actually do the training, which is usually done at work at the cost of the employer. This is an inefficient use of funds. The second is that the training is often by definition limited to the resources and skills of the employer. This is no substitute for full time training in a relevant institution. The problem is that these institutions may not exist. In our industry of clothing and accessories, you may be astonished to learn that there is no institution in the whole of the United Kingdom where students can enrol to learn physically how to make bags and leather goods. The nearest such institution is in Haute-Savoie, France. The last such centre of learning in this country, the Leather College in Walsall, was closed down a few years ago.

Failure to address skills shortages in key industries

So what we have is a system capable of encouraging less academically gifted younger people to get into lower skilled service industry jobs, half funded by employers. The inadequacy of the system is its failure to produce enough individuals with the skills required to work in manufacturing, construction, engineering and related industries. Crucially these are industries with the potential to increase the size of our national economic cake (rather than taking a slice of that cake from some other domestic business) and more often than not capable of thriving outside the great metropolitan magnets like London.

Solutions

We can of course sustain a growing economy in this way simply through increasing the size of our population, although this would have a negative impact on our productivity in the long term, something we are already beginning to see. If we are to become a genuinely richer society, however, with a more balanced wealth distribution across regions, we have to find a better way to train our young people with relevant skills, and that means doing two things: first, nudging our cultural bias back towards more productive industries and second, developing centres of excellence in the skills required to design, manufacture and sell products the rest of the world wants to buy.