6 The Youth Contract: Apprenticeship
Grant for Employers |
156. Apprenticeships are paid jobs which include
on- and off-the-job training and lead to nationally recognised
qualifications. While there have been well-publicised concerns
about the value of some vocational education for young people
(see chapter 7), apprenticeships are recognised as an effective
way for young people to gain practical work experience at the
same time as working towards a directly relevant qualification.
This chapter examines the Youth Contract's offer of an extra 20,000
Apprenticeship Grants for Employers and considers its potential
impact as a measure to tackle youth unemployment. The Apprenticeship
Grant for Employers applies in England only.
157. Growing concern about the effectiveness of
apprenticeships led to a decline in numbers from around 240,000
in the mid-1960s to just 54,000 in 1990. Apprenticeships were
widely considered to be focussed on too narrow a range of occupations,
male-dominated and offering a poor quality of training.
158. Apprenticeships were "revived" in
the 1990s and are now offered in a much broader range of occupations.
These include information and communications technology, leisure,
tourism and travel, retail, arts and media, and publishing, as
well as the more traditional trades typically associated with
apprenticeships such as manufacturing and construction. Modern
apprenticeships cover around 1,200 job roles delivered via 250
separate "frameworks"documents that set out the
statutory requirements for apprenticeship programmes offered by
employers in conjunction with colleges and other training providers.
Frameworks are intended to ensure that programmes are delivered
consistently and to nationally recognised standards. 
159. Apprenticeships are offered at three qualification
· Intermediate levellevel
2 (equivalent to GCSEs at grades A*-C);
· Advanced levellevel 3 (equivalent
to A levels); and
· Higher levellevel 4 (equivalent
to a Certificate of Higher Education or the first year of a university
160. The previous Government expanded apprenticeship
provision through the economic downturn and the current Government
has continued to increase apprenticeship provision.
There were 457,000 apprenticeship starts in the 2010/11 academic
year, 131,700 of which were by those under 19. BIS has described
apprenticeships as "the cornerstone of our skills system."
BIS referred to a recent Government survey which found that, of
all people who had completed an apprenticeship in the last year,
some 85% remained in employment: 64% with the employer with whom
they completed the apprenticeship.
161. Witnesses were generally supportive of apprenticeships
as a way for young people to gain practical workplace experience
whilst studying for a competency qualification in a relevant subject.
Some felt that apprenticeships could make a considerable impact
in tackling youth unemployment. Working Links, a welfare-to-work
provider, urged the Government to focus its policy on delivering
a sufficient supply of quality apprenticeships for young, long-term
unemployed people. Its view was that the key to reducing youth
unemployment was to equip young people with "skills, support
and practical opportunities" and that apprenticeships offer
the "perfect opportunity" to do this.
Apprenticeships for young unemployed
The Wolf Report
162. In 2011 Alison Wolf, Professor of Public Sector
Management at King's College London and specialist in the relationship
between education and the labour market, published her independent
review for the Government of vocational education in England (see
also chapter 7).
163. The Wolf Report identified apprenticeships as
a key route into skilled employment and higher returns in terms
of career progression and future earnings. However, it also highlighted
that it has proved much more difficult to increase young people's
participation in apprenticeships than that of older people. It
noted that, while the commonly held perception of apprentices
remains the "traditional" one of 16-18 year-olds, the
trend in England has for some time been for older apprentices.
Since 2008 a large proportion of new apprenticeships have gone
to people over 25. Furthermore, many older apprentices are not
new employees but existing ones who have "converted"
to an apprenticeship. Wolf concluded that "The trend towards
adult apprenticeships is very problematic at a time of high youth
unemployment and when the statutory participation age is about
164. Several witnesses highlighted the Wolf Report's
analysis of the under-utilisation of apprenticeships by under
25 year-olds. The Local Government Association reported that,
while the number of apprenticeships for over 25 year-olds has
doubled, those for young people under 19 has increased by less
The Apprenticeship Grant for Employers (AGE 16-24)
165. The AGE 16-24 is designed to incentivise smaller
employers to take on new young apprentices. It is available to
employers through the National Apprenticeship Service (NAS).
Employers of fewer than 250 employees can claim up to three £1,500
grants for taking on new apprentices aged 16-24. Only those employers
who have not taken on an apprentice in the last three years are
eligible for the grant. In order to qualify, employers must give
the following commitments:
· Confirmation that they would not have
taken on the apprentice/s in the absence of the incentive payment/s;
· A commitment to employ the apprentice/s
for a minimum of 12 months or the time it takes to complete the
apprenticeship framework, whichever is greater; and
· An agreement to pay at least the minimum
apprenticeship wage of £2.60 per hour.
The AGE 16-24 predates the Youth Contract, but the
Youth Contract doubles the number of grants available from 20,000
166. Centrepoint welcomed the Government's attempt
to address the under-representation of young people on apprenticeship
programmes through the AGE 16-24 and the Youth Contract. However,
it considered the 20,000 extra grants on offer "limited"
and "unlikely to overcome the generally poor record of the
present Government's apprenticeship programme at targeting funding
for apprenticeships where it is most needed."
167. The other key concern amongst witnesses was
that apprenticeships were often not suitable for those furthest
from the labour market. Tony Wilson of Inclusion noted the trend
towards apprenticeships at higher qualification levels. His view
was that this trend should not go so far as to make apprenticeships
unattainable for young unemployed people, many of whom have low
168. We made similar points
in our 2010 Report on Youth Unemployment and the Future Jobs Fund.
We were concerned then that apprenticeships may not be the most
appropriate route into employment for young people at the highest
risk of long-term unemployment due to their lack of qualifications
and work experience and sometimes "difficult family circumstances".
We urged the Government to ensure that alternative provision was
available for those not ready to undertake apprenticeships.
169. The then Minister for Further Education, Skills
and Learning told us he agreed with the Committee's previous findings
and was working on ways to improve the "bridge to apprenticeships"
for those furthest from the labour market, particularly those
with low levels of educational attainment.
BIS later supplied us with information on pre-apprenticeship provision,
including the Access to Apprenticeship programme which was launched
in August 2011. Through a programme of unpaid work experience
and training, including courses in English and Maths, Access to
Apprenticeship aims to raise young people's employability to a
level sufficient to secure a paid apprenticeship placement. Some
4,400 young people entered the programme between August 2011 and
April 2012, of whom 1,000 (22%) have converted to a "paid,
employed apprenticeship". Originally limited to young people
who had had a period being NEET, the programme has been opened
up to young people through other routes in order to "maximise
take-up and effectiveness".
170. BIS also listed a number of other pre-apprenticeship
options for young unemployed people who are less "job-ready".
These include foundation learning, offering vocational courses
below Level 2; work pairing pilots, which include work experience
in small businesses focused on progression to an apprenticeship;
and "other provision" delivered through the EFA, including
"ESF-funded [European Social Fund] activity". It also
notes that one of the aims of the Youth Contract NEETs scheme
(see chapter 3) is to prepare young people for apprenticeships
and that JCP-run Sector-based Work Academies encourage employers
to take participants on as apprentices. BIS also told us of its
plans to pilot "traineeships"a mix of work experience,
basic vocational and employability skills and help to overcome
barriers to employment and engagementdesigned to give unemployed
18-24 year-olds with no qualifications or experience the skills
required to gain work, including apprenticeships.
171. Apprenticeships form a small part of the
Youth Contract offer. We welcome the attempt by the Government,
through the Apprenticeship Grant for Employers, to increase the
number of young people taken on as apprentices. However, we remain
concerned that apprenticeships may not offer the right support
for young people furthest from the labour market, who may have
no qualifications or experience and come from difficult backgrounds.
We therefore welcome the steps the Government has taken to date
to increase pre-apprenticeship provision; this is a useful starting-point
on which it needs to build.
136 See www.apprenticeships.org.uk Back
See www.afo.sscalliance.org Back
See www.apprenticeships.org.uk Back
Inclusion, Youth unemployment: A million reasons to act?, 2011,
para 5.3 Back
Ev 127; Department for Business, Innovation and Skills ' submission
to the BIS Committee's Apprenticeships inquiry: see www.parliament.uk/business/committees/bis Back
Ev 127 Back
Ev w65 Back
Alison Wolf, Review of Vocational Education, March 2011,
Appendix VII: Apprenticeships figures and trends [The Wolf Report] Back
Ev 145, para 5.2.4. See also Inclusion, Ev 104 Back
National Apprenticeship Service, AGE 16 to 24: Employer Fact
Sheet, March 2012 Back
Ev w18 Back
Q 15 Back
First Report of Session 2010-12, Youth Unemployment and the
Future Jobs Fund, HC 472, paras 121 and 125 Back
Q 365 Back
Ev 128 Back