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A new report from leading apprenticeships provider QA has called for a radical shake-up in how the apprenticeship programme in England is funded and run, to turbo charge social mobility and support growth in high tech, high growth areas of the economy.

Current data on apprenticeships shows that overall, compared to university students, apprentices are twice as likely to live in an area in the most deprived quintile according to the Index of Multiple Deprivation. Apprentices are also almost 50% more likely to have been eligible for free school meals (FSM). But the data also shows that more disadvantaged learners are more likely to be found at lower levels of apprenticeships. At the highest levels – including in areas which are likely to deliver good wages and high employment outcomes –data shows that those from more affluent backgrounds are more likely to be taking such apprenticeships .

To address social mobility within the apprenticeship programme, training firm QA is calling for:

  • The apprenticeship minimum wage to be scrapped and for all apprentices to be covered by normal minimum wage legislation for their applicable age-groups That would mean many apprentices seeing a pay increase from as low as just £3.90 an hour to £4.35 for apprentices aged under 18, £6.15 for apprentices aged 18 to 20 and £7.70 for 21 to 24 year old apprentices.
  • More active targeting of funding toward apprenticeship programmes providing the best employment outcomes and tackling skill shortages.
  • Greater transparency over how major employers and apprenticeship providers are performing against targets to get more young people from disadvantaged backgrounds into apprenticeships.

QA’s report shows that apprentices from a deprived background are much less likely to have the option of family support while they finish their programme and face more pressure to contribute to family budgets. Low wages work as an exclusionary force for this group. To be fully inclusive, wages for apprenticeships should be enough for people to live independently in a way appropriate to their age-group.

Alongside better pay, the report is calling for a major focus on recruiting higher numbers of people into apprenticeships that build digital skills which will boost UK productivity and strengthen the areas of the economy where employers are facing the biggest skills gaps. Data in the report shows clearly that higher level apprenticeships are more likely to result in sustained employment than lower level apprenticeships. But given the additional cost of higher level qualifications, the levy currently incentivises some employers to focus on volume of qualifications from within their levy pot, and to train staff to a lower level. Extra funding from the apprenticeship levy should therefore be specifically made available to employers in these areas to take on more apprentices and train them to a higher level.

The report also calls for greater transparency over how major employers and apprenticeship providers are performing against targets to get more young people from disadvantaged backgrounds into apprenticeships, through a new requirement to collect and publish data in a standardised format. This data – which would also track employment outcomes for apprentices as well as pay levels – would allow for easy comparison and the creation of performance tables similar to that used to hold schools to account.

Report author Thomas O’Reilly, Chief Learner Officer at QA, said:  “This report shows apprenticeships have the power to be a rocket-booster on skills in the economy, and on the pay of young people entering the workforce. 

“But if people can pick up low or non-skilled work and earn a lot more than they would doing an apprenticeship, then that is likely to be a powerful disincentive to staying on and developing skills. That is why pay needs to get better.

“There also isn’t enough emphasis on the types of apprenticeship being taken up. We know that some apprenticeships, especially in technology and at higher levels, provide a vastly better return both to businesses and the economy. That is where funding from the levy should be concentrated.

“It isn’t good enough for there to be only partial data as to how well different apprenticeship providers are doing at really opening their doors to talent from all backgrounds, or for employers or young people to not really know what the employment prospects are from taking an apprenticeship. We need much more transparency over how well the whole sector is doing.”