In a recent conversation with MT, management guru Charles Handy spoke about the future of education. The era of university degrees as an expensive, American-style rite of passage will come to an end, he warned. ‘It’s an awful lot of money to spend. You can learn it all from the internet and free courses if you want to. Is it worth all that money to have fun for three years, given you have £50,000 of debt at the end of it?’
Yet if the economics of education will indeed reduce the number of graduates, will that mean a deskilling of the labour market? Employers are already complaining of a skills shortage, with 55% of those polled recently by the CBI describing themselves as worried about their recruitment prospects.
Apprenticeships have long been suggested as the perfect solution to this problem (not least by Handy himself). From a business perspective, apprentices are cheaper than regular workers and there’s a decent chance of getting a well-trained and loyal employee at the end of it. As far as the Exchequer goes, it means more people being economically productive for longer, with business shouldering some of the costs of education through on-site training and the forthcoming apprenticeship levy.
From next year, this will involve what’s effectively a payroll tax of 0.5% of staff costs above £3m, which is designed to raise £11.6bn over this parliament, paying for three million apprenticeships. Many business leaders – led by Tesco’s Dave ‘lethal cocktail’ Lewis – aren’t happy.
But the cost of the levy isn’t the only source of complaint. There are doubts too about the effectiveness of apprenticeships themselves. Almost half of the 492,000 apprenticeships begun in 2014-5 were only level 2 (academically equivalent to GCSEs), which doesn’t bode well for their rigour as an alternative to degrees, while a recent report in the FT found that 30% of apprentices didn’t even finish their training.
Are they fit for purpose? The answer surely is that they can be – the 200 apprenticeships announced by EY for National Apprenticeship Week are unlikely to be a waste of time – but they could also be weak. There have been calls for a gold standard of apprenticeships (the government has created the Institute of Apprenticeships to monitor standards, though it doesn't intend to rank them), but this is unlikely to work.
Practical experience – and this is largely what apprenticeships are – cannot be measured like degree courses. It’s much like the jobs in the employment history section of your CV – the market will assign a face value to them based on what it was, where it was and how long it was. Four years at Shell, therefore, is likely to be more valuable than a year’s ‘apprenticeship’ at Barry’s Chippy.
Much will depend therefore on to what extent businesses make a real go of apprenticeships. If they take them seriously and invest in them, it could be an important part of modern education. But that isn’t something that can be imposed from above, despite the levy. If employers’ experience of these programmes doesn’t justify the expense, then the market value of an apprenticeship will remain low.