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UK – More apprenticeships pledged to boost productivity

03 July 2015

Chancellor George Osborne has pledged to use money cut from the welfare budget to create three million new apprenticeships to help young people into jobs and give a boost to UK productivity, reports the BBC.

However, many still view apprenticeships as a second-rate career choice.

Figures from the Centre for Economic and Business Research (CEBR) reveal that there is a £34 billion benefit to the UK economy from apprentices. This calculate that the economy benefits by £21 for every £1 of public money spent on apprenticeships, thanks to higher profits and wages, and reductions in welfare costs.

In 2013/14 there were 440,000 new apprentices in England; 53% of whom were female.  

While apprenticeships have traditionally been offered in industries such as electronics and automotive maintenance, they're now found in a diverse range of sectors, from accountancy to childcare. The idea is that apprentices will learn skills in the workplace alongside part-time academic study at a university or further education college.

But the government's plans to increase the number of new apprenticeships from two million over the course of the last parliament to three million by 2020 may stumble thanks to the mixed reputation of apprenticeships, and the way the government plans to spread the costs.

Neil Carberry, Employment and Skills Directors at the Confederation of British Industry (CBI) said: "In the past there has been some good and frankly some less good provision. The challenge is making sure we don't obsess over numbers and we talk about quality."

One particular barrier is the minimum wage set for apprentices. At present, apprentices under the age of 19 earn £2.73 an hour. While the government is raising the minimum wage to £3.30 an hour as of October 2015; apprenticeships can last several years depending on the sector meaning that, even with the higher rate, the capped earnings potential is off putting for young people.

The benefit to the apprentices has also been called into question. On the government's online database of available apprenticeships, alongside courses for forklift truck drivers and trainee chefs, are posts for digital marketing and shoe shop assistants, many lasting only a year. One for a restaurant post suggests the candidate would acquire skills such as "offering menus" and "verbalising specials".

The Department for Business Innovation and Skills (BIS) is introducing more rigorous standards for apprenticeships across all sectors and is planning to give employers more say over what apprentices learn off-site, through a voucher scheme allowing businesses to shop around for the most suitable course at local colleges.

In return, however, business will be expected to contribute more, up to a third of the cost of the off-site education will be required upfront, as well as the new higher wages.

While the big established companies already spend much more than that on their apprentices, the new system may not suit all employers.