The PM has put the spotlight on apprenticeships - how do we make them work?

By Olly Newton, Executive Director of the Edge Foundation

A year ago, Edge published our report, Flex without Compromise, outlining how we can protect routes into apprenticeships for young people. Since then, we have seen significant policy changes, including the announcement of the Youth Guarantee trailblazers, the introduction of Foundation Apprenticeships, and more detail on how the flexibilities around the Growth and Skills Levy would work. More recently, at the Labour Party Conference this week, the prime minister announced a new government target for two-thirds of young people to be in higher-level learning by age 25, which Edge welcomed.

The prime minister himself, in a personal address, urged the country to respect apprenticeship routes in the same way they value university. But will these policies and change in rhetoric be enough to encourage young people back onto apprenticeships?

For us, there are two key aspects missing from the government’s plans:

1. Improving the process for advertising and applying for apprenticeships, so that all opportunities and supportive resources are brought together in a central platform. This is explored in our new report, Chaos to Coordination.

2. How we can encourage more SMEs to get involved by expanding support services that help them navigate the apprenticeship system, as detailed in our new Agents of Change report.

That second aspect, engaging SMEs, is absolutely crucial to growing the number of apprenticeship opportunities. SMEs make up 99% of businesses, but only 37% of apprenticeship employment. While they were prominent in the apprenticeship system 10 years ago, their involvement has slowly shrunk since the introduction of the apprenticeship levy. This should be raising alarm bells for the government as SMEs are more likely to hire young apprentices, at lower levels, and away from big cities – all crucial to the Opportunity and Growth missions.

We know why SMEs have been disengaging – apprenticeships place too much demand on their limited resources. While funding is important, it’s not the full picture – since the government introduced the removal of co-investment for apprentices under 22 in SMEs, we haven’t seen a big uptick in SME starts as expected – in fact, we’ve seen a fall. What could make a difference are brokerage services - intermediaries supporting SMEs to navigate the apprentice system, find training providers, recruit apprentices, and provide ongoing mentorship support. The power of brokerage is backed by research by the St Martins Group and our own polling with the Recruitment and Employment Confederation, which found that over two-thirds of employers agree that tailored advice and support would be an encouraging or decisive factor in choosing to hire a young apprentice.

Brokerage can of course take many forms, which we explore in our report, one of which is the service offered by FE colleges. Colleges sit at the heart of local communities so are often the natural place for SMEs to go when looking for new hires. According to the AoC’s research, the overwhelming majority of colleges recognise their role in meeting local, regional (98%) and national skills needs (80%), and the importance of retaining skills within their local area.

One college going above and beyond is Wigan & Leigh College - apprenticeship participation amongst 16-18-year-olds has increased by 47% since 2021 and an overwhelming 90% of apprentices are employed by SMEs. Some of this can be explained by the local culture which prizes technical education, but it is also a result of the real commitment and bravery shown by the college. For those young people that may not yet be ready to start an apprenticeship, the college supports them through a pre-employability study programme, including functional skills development, work placements, and CV and interview preparation with prospective employers. Employers are invited in during the summer term to interview potential candidates, taking much of the legwork out of the hiring. Whenever they are ready, learners are then placed on an apprenticeship even if it means losing out on funding – this is a college where the wellbeing of the learner comes above all else.

Examples like Wigan & Leigh College and many other instances of successful intermediaries around the country have prompted us to call for a new framework for brokerage, nationally coordinated and funded, but locally delivered (similar to the model seen in Australia).

But we want to go further than this report, which is why we’ve launched a new campaign, Apprenticeship Work, to increase apprenticeship opportunities in small businesses, particularly for young people, by breaking down barriers and expanding support services. We are supported by some truly incredible organisations and with the weight of our collective impact and expertise, we hope we can truly place SMEs back at the heart of the apprenticeship system.