Few people would deny that we face a skills crisis in the UK. Nearly half of the UK adult working population have numeracy levels expected of an 11 year old and as a result probably have difficulty with everyday tasks that involve numbers. Last year, over 140,000 jobs in the UK went unfilled as companies were unable to find workers with the appropriate skills and for several years we have languished at the bottom of basic skills tables in developed countries. Skill availability is a critical factor in determining where today’s global companies will invest and we need to remember that it’s as easy to build a call centre in Mumbai as it is in Manchester or to build a new car factory in Bejing as it is in Birmingham.
We Need A World-Class Skills Programme
Those statistics are a terrible indictment on our current skills strategy and unless we tackle this crisis, in future the first E in NEETs will be employability, not employment. The future career chances of our young people demand that we commit ourselves to building a world-class skills programme and of course Apprenticeships are a key part of that strategy. “World-class” has become a hackneyed phrase but in this case, it’s absolutely right. We simply have to be better than anyone else if we are going to ensure that companies invest in Britain.
So the question isn’t do we need to do this – that is a given, it’s how do we do it and I believe passionately that the only way we can achieve that is via a programme which is led by the people who employ Apprentices and who are responsible for their development and their careers. We need employers who say
“I want to start an Apprenticeship programme because I believe it is the right thing for my business and will underpin my future growth and because I believe that my people are my most valuable asset, I am prepared to invest in that programme. I will therefore invite a number of providers to tender for the programme and I will select the one who best meets my needs and can provide the highest quality”
Apprenticeships Must Be Led By Demand
That is a programme which is led by demand. Sadly, at the moment, the Apprenticeship programme is mainly led by supply. Far too many employers are starting an Apprenticeship programme not because they are highly committed, but because it has been sold to them as “free training” by a provider anxious to use up their “supply” of Apprenticeship funding. Couple that to the fact that they only have to pay Apprentices £2.68 per hour and if they are a small company, they get an additional government grant of £1500 and it starts to look a very good deal if your main motivation for running a business is to keep your costs as low as possible and extract a maximum short-term profit rather than investing for the long-term.
Why do I believe so many employers fall into this category? Well according to all the surveys doing the rounds at the moment, anything between 60 and 90% of these employers will pull out of the scheme if there is the merest hint that they may have to make any sort of contribution themselves. What does that say about their level of commitment? How do you build a world-class programme around people who aren’t prepared to invest in their employees?
And I’m afraid that I simply don’t buy the argument that employers are already investing by paying Apprentice wages or buying their uniforms. Providing appropriate clothing is a legal responsibility and paying an employee a wage for the work that they do is a basic human right, not a contribution towards their training. Companies do not take on Apprentices for philanthropic reasons, they take them on because they have a need for additional workers and their wages should not be seen as investment in kind.
And let’s be clear, the levels of investment being sought are far lower than the headline figure of 33% being widely quoted. The government is also funding a completion payment, Functional Skills in maths and English, a 16-18 year old payment and a small company payment. As such, for many businesses, the investment required will be 20% of the total – just £25 per week per Apprentice with the taxpayer picking up the remaining 80%. That doesn’t sound like a bad deal to me.