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24 June 2020

UK apprenticeship levy is failing people from poorer backgrounds, study suggests

The coronavirus pandemic is only expected to compound class divides, according to the Social Mobility Commission. 

By Rohan Banerjee

Over a third (36 per cent) fewer young people from working-class backgrounds have started apprenticeships since 2017, according to research carried out by the Social Mobility Commission.

While the rate of people from higher wealth brackets taking up apprenticeships has also fallen by 23 per cent, the commission has suggested the dip among those from poorer backgrounds risks compounding class divides because people are missing out on what are supposed to be more widely accessible routes into top professions.

The apprenticeship levy – a tax on all employers with a yearly wage bill of £3m or more – was introduced by the government in 2017 in an effort to shift the majority of the cost of funding such programmes from the state to the private sector.

The policy has struggled to incentivise uptake of apprenticeships and, according to some critics, this is to do with a lack of clear standards and many existing low-pay employment routes simply being rebadged as apprenticeships, even if they are not.

The Social Mobility Commission found that only 13 per cent of degree-level apprenticeships – the most expensive and advanced programmes –  go to people from economically disadvantaged backgrounds.  And, by extension, it highlighted that apprentices from disadvantaged backgrounds, on average, earn less than those from middle or upper-class backgrounds.

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[Read more: Skills and apprenticeships for the post-coronavirus economy]

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Alice Battiston, the report’s lead author, said: “There is a severe disadvantage gap throughout the entire apprenticeship training journey, and this has worsened over time.

“Not only has the proportion of new starters from disadvantaged backgrounds declined over time, but they have also benefited less than their better-off peers from the shift towards higher-level programmes.”

Battison added that the ongoing coronavirus pandemic, which has stalled much of the UK economy and in particular the hospitality and retail sectors, was likely to add to problems faced by poorer apprentices. “The pandemic is likely to have made the disadvantage gap worse. There needs to be urgent consideration of the impact of the apprenticeship levy on social mobility outcomes,” she said. 

The Department for Education has responded to the report in a statement saying that it is “absolutely committed levelling up opportunity across the country.”

In February, Labour grandee Andrew Adonis, the party’s former education secretary, told Spotlight in an interview that apprenticeships needed a rethink to encourage uptake.

Adonis suggested that if the government was serious about social mobility, then it needed to make apprenticeships a “credible alternative” to university, by introducing clear standards, a better pay grade and having more, not less involvement, in employer-employee training, based on industry needs.