Managing Director GB Training
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Post-Brexit Britain needs skilled workers

With the UK’s departure from the European Union seemingly imminent, the government must focus its resolve on addressing flaws in our country’s vocational training system that are preventing the productivity and skills revolution employers need.

13th Sep 2019
Managing Director GB Training
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apprentice listening to mentor in front of a computer
iStock/Charday Penn

The government’s controversial decision to prorogue parliament means the UK’s withdrawal from the EU appears imminent.

For a post-Brexit Britain to achieve economic success, however, we have to get to grips with our productivity crisis, which is restricting our economic potential.

To do so demands a fundamental reassessment of our attitudes towards further education, while at the same time addressing flaws in the skills funding system that are inhibiting apprenticeship expansion.

The UK is ill prepared for its impending economic drudge match outside the European Union.

While we currently boast modest economic growth rates, key indicators point towards signs of economic malaise.

Productivity, for example, is shrinking. The average British worker produces far less per unit of input than their counterparts in France, Germany or Italy.

The driving forces behind the UK’s sluggish productivity are varied, but skills deficits and poor education provision are central issues.

Our literacy levels and vocational training rates pale in comparison to those of our European neighbours.

Misguided assumptions

Perceptions are a key barrier. In the UK attitudes toward higher education and vocational training among young people, their parents, teachers and some employers are in contrast to countries like Switzerland, France and Germany.

Too many remain wedded to the misguided perception that a university education is the hallmark of success while vocational education is the preserve of the academic under achiever.

The issues are not only demand led. In many cases supply-side challenges are preventing the expansion of skills training and apprenticeships among employers.

These perceptions come in spite of the fact that five years after graduation nearly half of all graduates find themselves saddled with significant debt and in non-graduate jobs.

The net result is a system that breads inefficiency. Graduates typically spend at least three years out of the labour market accumulating debt, much of which will fall to the taxpayer to pick up.

Employers are confronted with a millennial workforce with over-inflated wage expectations and who often lack the skills required for the workplace.

Apprenticeships must be promoted

Frustratingly, viable alternatives are already available. New, higher-level degree apprenticeships, for example, provide young people with the opportunity to gain the life-long transferable skills employers need without accumulating thousands of pounds of debt.

Unfortunately, despite the alternative route of degree-level apprenticeships being available, last year saw only 11,000 people begin a degree-level apprenticeship, compared to over 300,000 taking up university degrees.

Driving this disparity in uptake is a combination of false perceptions mixed with a failure to promote higher apprenticeships to school leavers.

The issues are not only demand led. In many cases supply-side challenges are preventing the expansion of skills training and apprenticeships among employers.

The Apprenticeships Levy is failing

Additional funding is required and the prime minister’s pledge to invest more in further education is welcome, but the way the money is spent is also vital.

Introduced in 2017, and as noted recently by Rob Moss, the government’s flagship skills funding initiative, the Apprenticeship Levy, was initially heralded as the solution to stimulating employer investment in workplace training.

The reality, however, is the initiative has failed to deliver on its promises from the get-go.

The government should make the apprenticeship levy less prescriptive and abandon its one-size-fits-all approach to levy pot spending.

A recent survey revealed that less than one-third (31%) of levy-paying employers say the levy will lead them to increase the amount they spend on training.

Confidence in the levy has also fallen with many employers arguing it fails to meet their needs and is resulting in a ‘languishing levy pot’.

Earlier this year the Department for Education confirmed that for 2017/18 there remains a £400m underspend, the equivalent of 20% of the total £2.01bn budget.

Shortcomings to the separate taxpayer funded skills budget compound the problem.

Arbitrary funding allocation rules stifle competition between apprenticeship providers and leads to bottlenecks in funding.

As a result, the quality of training is suppressed, and every year money fails to get to the employers and young people who need it to complete their training.

This problem is solvable

Solutions to the challenges we face are achievable. First, the government should make the apprenticeship levy less prescriptive and abandon its one-size-fits-all approach to levy pot spending which has been dictated by larger employers and is often ill suited to smaller levy paying businesses.

Second, the government needs to remove the arbitrary funding restrictions that prevent skills funding getting to the small businesses and young people who need it most.

Lastly, the government should promote awareness of viable alternatives to university education that in many cases offer greater prospects.

They must also apply pressure to universities to disclose their graduate earnings and employment rates on their websites and undergraduate prospectuses.

Too many young people are embarking on a university education on the misguided belief that it will lead to enhanced jobs and earning prospects.

Only by delivering a change in mindset away from the notion that that graduates are a single homogenous unit will we see the skills and apprenticeships revolution this country urgently needs as it embarks on its journey outside the European Union.

Interested in this topic? Read The Apprenticeship Levy: where are all the apprentices?

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