Dear Philip Hammond: Ad-hoc tech investment is no match for a decent apprenticeship strategy

Last month’s budget announcement was full of promise with regard to bridging the productivity and skills gap for the UK as Philip Hammond promised extra funding for artificial intelligence, skills and technology. But when it comes to helping young people find their feet in a struggling workforce, this ad-hoc government funding for impressive-sounding technology misses the mark.
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Last month’s budget announcement was full of promise with regard to bridging the productivity and skills gap for the UK as Philip Hammond promised extra funding for artificial intelligence, skills and technology. But when it comes to helping young people find their feet in a struggling workforce, this ad-hoc government funding for impressive-sounding technology misses the mark.

The Apprenticeship Levy was announced at the Summer Budget 2015, and at the Autumn Statement 2015. Fast forward to today – two years on from its initial announcement – and we have witnessed a shocking 60% collapse in the number of apprentices, with new starts decreasing to 43,600 from 113,000.

It appears that this is a consequence that the government had foreseen after the introduction of the Levy: as Education Secretary Justine Greening put it, “we knew that when employers finally took over responsibility for actually spending the money themselves, they may well take some time to look at how they wanted to invest that money in apprenticeships”.

What’s more, in the previous quarter, we saw a 47% year-on-year increase in apprenticeship starts, suggesting that there was a rush among employers to recruit new apprentices before the new system came into effect. These factors both point to a general reluctance on the part of British businesses to get to grips with the legislation, as well as the government’s failure to communicate adequately around the new rules.

The absence of a coherently rolled-out communications strategy around what the Apprenticeship Levy’s goal should be is a key mistake on the part of the government. Perhaps even the very concept of using the term ‘levy’ to refer to what is intended to be a growth package buoying a vital arm of the regenerating British workforce, is in itself psychologically counterproductive during times of economic uncertainty.

Apprenticeships are a burgeoning and vital tool in the building and rebuilding of economy; consequently, any imposed structures and levies should be correctly communicated. The Government states that “it has committed to an additional 3 million apprenticeship starts in England by 2020. The levy will help to deliver new apprenticeships and it will support quality training by putting employers at the centre of the system.”

The apprenticeship levy exists to increase domestic growth and prosperity. Apprenticeships are a vital part of UK’s infrastructure – according to the National Apprenticeship Service, an average person completing an apprenticeship increases productivity by £214 a week, while 83% of employers who employ apprentices rely on their apprenticeship programme to provide the skilled workers that they need for the future. Most strikingly, 96% of employers that take on an apprentice report benefits to their business.

The budget sets out its stall on various points of pride – issuing forth terms of clear ambition for the UK to have global leadership in AI and driverless cars – but what of the domestic workforce that can actualise such industry ambitions? Apprenticeships require their own funding and communication journey. And yet the strategy of how the Apprenticeship Levy will be played out, and how it is woven into the government’s overall industrial strategy, is missing.

The draft legislation reads like many other such documents – dense, wordy and ultimately time-consuming to unpick how it will really affect us. We should not expect business owners and apprentices to be unravelling balls of string in order to understand what is happening to them without their say – the facts and the ambitions of the legislation should be made clear through a robust, explanatory digital campaign.

The message that the government needs and wants people to become apprentices should resonate – and that strong commitment is what has been left behind in the rolling-out of this legislation. A government preoccupied with Brexit must realise that there is a significant emotional contingent that drives an economy – that same energy will lose faith in apprenticeships if a poorly communicated levy is placed upon it.

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