Edward Arnold takes a look at the future of one of L&D's hottest topics. 

'Apprenticeships' was a buzzword for all the parties in the 2015 UK general election. Manifestos primarily portrayed the desire to increase the number of apprenticeships as a way of improving job prospects for school leavers – a section of the workforce particularly affected following the economic downturn. In fact, many employers, particularly in the tech sector, have for some time now already realised the unique potential of apprenticeships to provide a workforce with the skills necessary for the future success of their businesses and the sector as a whole.

The past and the present

Apprenticeships aren’t a new concept; they’ve been around in one form or another for hundreds of years, with the fundamental goal of combining work experience with training to enable the apprentice to advance in their career. 

The current regime governing 'approved' apprenticeships (those which attract government funding and result in recognised qualifications for the apprentice) has been in place in England and Wales since 2011. It is based on apprenticeship 'frameworks', which dictate the structure and content of the training that must be provided to apprentices during their apprenticeship. 

The frameworks, developed by non-governmental agencies in consultation with employers, are sector specific. The IT Software, Web and Telecoms Professionals framework, for example, allows employers to 'pick and mix' from the elements within that framework in order to tailor the training to the specific role being undertaken by the apprentice. 

Provided the apprenticeship follows one of the recognised frameworks and meets certain minimum standards, employers can obtain government funding towards the apprenticeship:

• The government will meet the entirety of training costs for apprentices under 19 and up to 50% of the costs for those aged 19 and over. 
• Apprenticeship grants of £1,500 are available to small businesses taking on apprentices aged 16-24 for the first time. 

In some areas, grants have been devolved and offer greater incentives. For example, in London, employers with up to 249 employees are eligible for a grant of £3,000 per apprentice, with the grant being topped up by the European Social Fund. 

The current framework regime sets minimum standards for apprenticeships:

• They must last for at least 12 months (except in certain circumstances where the apprentice already has relevant qualifications).
• They must include 280 hours of guided learning in the first year, 100 hours of which must be off-site training. 
• The apprentice must be employed for a minimum of 30 hours a week, including training time, and be engaged under an apprenticeship agreement. 

Until recently apprenticeships were available at three levels: intermediate (equivalent to five GCSEs), advanced (equivalent to 2 A levels) and higher (containing degree level content). The Skills Funding Agency gives examples of IT roles which may be suitable for each level of apprenticeship, with an intermediate apprenticeship being suitable for a support technician, an advanced apprenticeship for a software developer, and a higher apprenticeship for an IT project manager. However, the intention is that the frameworks can be adapted to fit any role within the relevant sector. 

The future

The new Conservative government set a target of creating 3m new apprenticeships by 2020. This increase is intended to replace low-level further education courses which are not viewed as offering sufficient value to students or their eventual employers. 

To achieve this aim, the government will place targets for the recruitment of apprentices on public sector organisations and create an obligation under law for the government to report on progress towards its target. In the last budget, plans were announced to levy large employers to create a fund to support apprenticeships. To offer further incentive, National Insurance contributions will be abolished on the earnings of apprentices aged under 25 from April 2016. 

In May 2015, changes to the legal regime governing apprenticeships came into effect in England, creating a new 'standards'-based regime that will sit alongside the existing framework regime during a transitional period, and replace it entirely from 2017. 

The new standards are intended to be developed with significant employer input and be much more specific to particular roles within the relevant industry. So-called 'trailblazer' employer steering groups have already developed standards including those for network engineers and software developers, with standards for infrastructure technicians, digital marketers, cyber intrusion analysts and digital business soon to follow. 

In September this year, degree apprenticeships became available for the first time, providing a fully integrated honours degree with employers and higher education institutions collaborating to offer apprenticeships in roles such as business analyst, software engineer and IT consultant. 

To accompany the new standards-based regime, a new funding model is in place under which for every £1 spent by an employer on training, £2 will be provided by the government up to a possible cap of £18,000, depending on the type of apprenticeship. The new funding model also offers additional incentives for employers taking on apprentices between the age of 16-18, for small businesses, and for all employers on completion of an apprenticeship. 

Here to stay?

The impetus gained by apprenticeships within the tech sector, and more widely, over the last few years seems set only to increase. Employers would be well advised to take a closer look at whether apprenticeships are right for them, or risk missing out on the benefits they offer in  creating a workforce with skills tailor-made for the future of the industry.

Edward Arnold is a senior associate at Olswang LLP, an international law firm and a European leader in technology, media, telecommunications and real estate