The British Chambers of Commerce have impressed upon the government to ensure that the current apprenticeship frameworks are fit for purpose for small and medium sized businesses (SME). According to a statistical analysis of business in the UK conducted for a House of Commons briefing paper in November 2016, there are 5.5 million businesses in the UK of which 24% are employers (down from 32% in 2000) 99.9% of which were SME employing 60% of the UK workforce.

In developing a training system designed by and for large employers (0.1% of businesses employing 40% of the workforce), our government (and previous governments) have created a system that effectively bars 48% of the workforce (those working for micro and small businesses – fewer than 50 employees) from developing the skills they need to improve business productivity: that is nearly 12.5 million workers. If we say that only 30% of workers are eligible for apprenticeships (including the planned advanced levels), we will have surpassed the 3 million target just by focusing on SME needs.

The skills minister Anne Milton today vowed not to ‘sacrifice’ quality to meet the government’s 3 million manifesto pledge. However, figures published today show that the number of apprenticeship starts is 25% less than the equivalent period in 2016/17. The introduction of the apprenticeship levy has done nothing to improve starts. This comes on top of the skills minister conceding that there is a lack of clarity when it comes to who is accountable for apprenticeship quality. The skills agency has overruled Ofsted inspection reports stating that providers are inadequate, and many new untested providers have been successfully registered to deliver levy funded apprenticeship programmes. The faith of SME in the current apprenticeship system is deteriorating markedly. Particularly badly hit (as it was always been) are 16-18 year old apprenticeship starts. With well over 80% of SME owners reporting that school leavers of this age group are not fit for work, traditional sources of apprenticeships for manufacturing are being overlooked in favour of older trainees.

CIPD recently reported that just 22% of parents responding to their survey identified apprenticeships as the first or second choice in terms of the kind of qualification they would like their children to achieve. This is less than half of the number of parents who identified an honours degree. Grant Thornton has reported that over half of young people at university do not believe that their degree guarantees them a well-paid job. This comes on top of surveys that suggest that young people still see schools pushing academic success and progression to HE as their priority and what they are measured on.

  1. We have a desperate need for skilled talent. Our SME are losing talent to bigger better paying rivals with 20% reporting problems associated with a high turnover. Two thirds are finding it difficult to find qualified staff.
  2. Over 80% of SME owners are saying school leavers are not fit for work
  3. There is a 25% drop in apprenticeship starts since the introduction of the levy.
  4. 40% of apprenticeship starts are business administration or customer service. A further 21% are health and public service with 28% engineering, manufacturing, science and construction.
  5. According to the Office of National Statistics, “output per hour growth has fallen more sharply and persistently in the UK than in other major economies.” If gross domestic product in the UK was 100 in 2016, it was between 110 and 120 in Germany, France and Italy and almost 140 in the US.

We seem to have a situation where we are relatively uncompetitive, have no real solutions to addressing current skills shortages, are shortly to be hit with needing to trade with a wider grouping of countries while we lose current EU talent and restrict well needed access by foreign talent.

This is completely unacceptable to me and my business. What I need are motivated young people ready and willing to work and able to pick up the work-related skills that they need. The only way for that to happen in time is for the department of education to commit to make every young person employable by aged 16. Properly managed this will lead to a surge in apprenticeship starts. It will lead to a reduction in employer costs associated with recruitment, discipline and basic skills training. Making young people employable means addressing literacy and numeracy and assuring parity of status between vocational and academic career paths. I am lucky enough to be a Patron of Employability UK and have seen what they can achieve in a short space of time to energise, enthuse and motivate young people to take ownership of their employability.

I will be taking these issues up with local decision makers and ask you to help me with this cause.


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