• International comparisons of productivity show no change in UK productivity compared to G7 average.
• New figures reveal the UK is still lagging 18 percentage points behind the average amongst other G7 nations in terms of output per hour.
• Compared with the rest of the G7, the UK had below average productivity growth in terms of output per worker in 2015. Efforts to boost the country’s output have so far failed to untangle this ‘productivity puzzle’.

The upcoming apprenticeship levy has been a flagship part of the government’s plan to increase productivity since July 2015, but its implications are still being unpacked by UK businesses. Steve Hill, External Engagement Director at The Open University, comments: “It’s clear that investment in skills is able to produce productivity growth. But getting the most out of the apprenticeship levy requires tailored programmes that really address businesses’ skills needs. Apprenticeships that are not targeting skills gaps with contextualised work-place learning will not deliver a full impact on business productivity.”

According to the Confederation of British Industry, employers are supportive of an increase in apprenticeships if the outcome is training that is relevant to businesses and the individual learner. Steve comments: “There is a lot of uncertainty in the market at the moment. Employers from the largest FTSE 100 companies through to SMEs are trying to understand how to get the most out of the levy. Many are coming to us seeking urgent advice on delivering effective apprenticeship courses. Employers need to feel confident that the apprenticeship programmes they are paying for actually fit with the skills gaps they face. When apprenticeships are designed well, there can be a real impact on UK productivity.” Steve concludes: “It’s not just those who are paying the levy who will benefit, as businesses of all sizes can access funding for programmes. Although paying the levy is not optional for those with a £3 million payroll, exploring how to get the most out of the levy is a choice. With the benefits to be achieved through a targeted apprenticeship plan, it’s a choice all organisations should be considering.”