Time and again we hear that apprenticeships should be for young people entering the labour market for the first time.
16- and 17-year-olds fit the bill: they are young and recruited by employers from the external labour market rather than internally.
The problem is that too few apprentices aged 16-17 are taken on by levy-paying employers and there has been no long-term plan for non-levy payers to take up the slack.
A group in long-term decline
In 1997, around 9% of 16-year-olds and 11% of 17-year-olds were on apprenticeships in England, equivalent to 57,000 and 69,000 respectively.
In 2021, nearly a quarter of a century later, only 3% of 16-year-olds and 5% of 17-year-olds were on apprenticeships, or 18,000 and 30,000 in raw numbers. *
As well as data for the whole cohort of 16- and 17-year-olds, the decline in apprenticeships shows up in the data on starts.
In academic year 2015/16, the number of 16–18-year-olds starting an apprenticeship was 131,420. By 2021/22, the number had fallen by 41% to 77,520. **
A decline before the levy
The apprenticeship levy came into force in April 2017. The decline in 16–17-year-olds on apprenticeships both as a share of the age cohort and number of starts began well before then.
We should, therefore, be cautious before pinning the blame on the apprenticeship levy for the decline in programme starts by 16–17-year-olds.
Non-levy payers recruit more 16-18 apprentices
What is undeniable, however, is that the levy paying employers take on far fewer 16-, 17- and 18-year-old apprentices than non-levy paying employers. Non-levy payers account for nearly two-thirds of apprenticeship starts by 16–18-year-olds.
https://explore-education-statistics.service.gov.uk/data-tables/fast-track/444612c7-02fa-4a11-bba0-3eb188d7d895
Legislation is not a magic wand
Purists who believe apprenticeships should simply be an option for young people aged under 25 often put their faith in legislation which would prohibit funding for apprenticeships for older adults.
Yet, if Parliament legislated for this tomorrow, the result wouldn’t necessarily be a boost in the number of 16–18-year-olds starting an apprenticeship.
Instead, we need to understand what might encourage employers to offer more apprenticeship opportunities to young people and what would attract young people who have other choices available.
Generating more demand for the programme from 16- and 17-year-olds is not an easy task.
Interest by 16- and 17-year-olds in apprenticeships
In August 2022, the professional services firm BDO published research on how young people choose their career paths and one finding was that more than half (55%) of the survey respondents said their parents or guardians would prefer or have preferred them to go to university over an apprenticeship.
Employer interest in 16–17-year-old apprentices
Analysis by NFER in June 2021 suggested that the reasons for falling starts across all ages either side of the pandemic were complex, reporting that:
“while the phase-out of lower quality qualifications (frameworks) contributed to the decline – other reasons such as availability of funding for SMEs, the 20 per cent off-the-job training requirement, minimum requirements for English and maths, funding bands for qualifications and the overall complexity of the system also played a critical role” (nfer_imap_apprenticeships_report.pdf).
Anecdotal evidence from employers confirms that the reasons reducing demand for apprentices of all ages apply to apprentices aged 16-18.
Levy payers and training providers also report that the youngest apprentices need more support, and this has been exacerbated by the effects of the pandemic. Additional mentoring adds cost.
Furthermore, young people often need to learn transferable skills and acquire mental resilience. Moving young people successfully beyond the first three months of their employment can be a major challenge.
But the stark fact is that research explaining the big decline in employer recruitment of 16- and 17-year-old apprentices is scarce.
A task beyond levy-payers?
It is unrealistic to expect levy payers to step up to recruiting vastly many more 16- and 17-year-old apprentices unless the issues identified in the NFER research are resolved. Extra financial incentives aren’t going to make much of a difference with the large employers.
Non-levy payers must do more of the heavy lifting
If levy-payers cannot be expected to increase recruitment of 16–17-year-olds into apprenticeships, policy makers must ask non-levy payers – primarily SMEs – to do more of the heavy lifting.
Yet, if we rely on SMEs to recruit more 16–17-year-olds on apprenticeships the funding system must reflect this enhanced policy responsibility.
The levy and 16-17 apprentices
Levy-paying employers do not use all of their levy payments. Unused levy ensures the apprenticeship programme budget can fund apprentices taken on by non-levy payers.
When demand for apprentices increased by levy-payers, the government had to limit the recruitment of apprentices by non-levy payers to 3 starts per year to avoid over-spending on the programme budget.
Given the greater disposition of non-levy payers to recruit 16–18-year-old apprentices compared to levy-payers, the restriction to 3 starts per year to SMEs was bad news for 16–18-year-olds.
Later the cap on SMEs was raised to 10. In April 2023, the cap was removed entirely.
On the face of it, this could be good news for expanding apprenticeships for 16–18-year-olds but funding for this age group is not guaranteed.
If levy-payer demand for apprenticeships takes off, the government might need to cap starts by SMEs. And although SMEs might recruit more 16–18-year-olds on apprenticeships, funding might not be sufficient for everyone who wants one.
Arresting the Decline
Both the Conservative Government and Labour Opposition support apprenticeships for 16–18-year-olds which, in turn, are primarily provided by SMEs. To guarantee funding for 16–18-year-olds, DfE should fund 16-18 apprenticeships from the 16-18 Education Budget. Such an uplift will prevent an overspend on the programme budget.
Ministers should choose between reintroducing age-limited incentives for SMEs or removing the 5 per cent employer contribution required from them. Choosing the second option doesn’t mean that the employers no longer have skin in the game because they are still paying the apprentices’ wages and providing staff support for the training.
And finally, a fundamental review is required on how we work better with schools to make the Baker Clause measures generate more demand among school leavers at age 16 for apprenticeships.
Aidan Relf is a Public Affairs Consultant
* https://explore-education-statistics.service.gov.uk/find-statistics/participation-in-education-and-training-and-employment
** https://explore-education-statistics.service.gov.uk/data-tables/fast-track/cf505fa1-81cc-46b5-16e2-08da47b0392d