How new apprenticeships can take on the skills gulf
The rhetoric around skills shortages is becoming increasingly dramatic — but the new apprenticeship regime is a source of real hope, according to Tony Howard.
The consultant Arcadis recently reported that the skills gap in our sector had developed into a ‘gulf’ and that shortages in critical areas would force employers to double wages to attract and retain key staff.
Its research suggested the construction sector would need to recruit 400 000 people every year between now and 2021 — equivalent to one worker every 77 s — to cope with predicted workloads.
The implications are catastrophic. If we can’t meet demand then vital projects may not be completed, and if we seek to meet demand with unskilled labour; quality will suffer.
There are shortages across most trades and at all levels — with the report identifying the need for 26 400 construction directors. Lack of skills means our companies are struggling to stay competitive — and this is before Brexit has started to make an impact.
Cuts in training funding fell off a cliff after the financial crash of 2008, and today the UK is languishing in 17th place in the investment league table of developed economies. The construction workforce as a whole has shrunk by 15% since 2008, which as well as damaging the pipeline of talent coming into the sector has harmed productivity and undermined efficiency and profitability.
However, those of us in the training business and who monitor and shape training strategies for a living, are very excited about the future. Why? Because we have Trailblazers and we have the Apprenticeship Levy. The Government is doing a lot of the right things, and we think we it is on the right track to tackle the skills gap…or gulf.
The tide is also turning away from ‘traditional’ university-style education towards the vocational model because, as well as ending up with a useful trade with good career prospects, a young person can also avoid racking up debts of £36 000…and the rest. And the system is flexible enough to allow them to go on to degree and post-graduate level study as well via the apprenticeship route.
However, this is not just about young people. The new system is a great opportunity to re-skill, upskill and move existing workers — of all ages — into areas where they are most needed…and get the funding to do it from the central pot.
The start of the new Apprenticeship Levy this month (April 2017) heralds a time of great opportunity for employers, which can use the funding to plug skills gaps as they occur in line with changing patterns of demand in the market.
The recent Institute for Fiscal Studies (IFS) report, which claimed the Government’s ambition of creating three million new apprenticeships via the levy by 2020 will be ‘poor value for money’, was a classic case of nit-picking and the art of knowing the cost of everything, but the value of nothing.
The IFS claimed that some of the £2.8 billion expected to be raised by the levy would not be spent on apprenticeships at all and questioned the quality of the training likely to be carried out under the scheme.
What value can you put on creating new career opportunities for thousands of people, improving social mobility and building our country’s skills base in key technical professions?
There are understandable concerns about the way the Apprenticeship Levy will operate, but, in the main, the business community recognises the need for radical change to the way we develop skills, and we should give credit to the Government for supporting an innovative approach. It is a new funding model, and employers will need time to get to grips with it, but surely it deserves to be given a chance rather than being written off as poor value before it has even started?
Research carried out by BESA’s training department has found that:
• 83% of apprentices believe their career prospects have improved as a result of securing a place on an apprenticeship scheme;
• 70% of employers say their productivity and, therefore, business prospects are improved by taking on apprentices;
• and every £1 of taxpayers’ money invested in apprenticeships at levels 2 and 3 pays back between £26 and £28 in long-term economic benefits.
Just 1.3% of employers, those with payrolls above £3 million in value, will pay into the new levy. In England, employers will have access to those funds for apprentice training and will receive 90% of the cost of training an apprentice — levy payers through their digital account and non-levy payers by co-investment. Scotland, Wales and Northern Ireland will remain with their current models.
Employers with fewer than 50 employees will receive 100% of the cost of training apprentices aged between 16 and 18. This will also apply if they take on 19 to 24-year-olds who were in care or 19 to 24-year-olds with an education and healthcare plan, which could have a really positive impact on social mobility and opportunity.
The funding available for STEM (science, technology, engineering and maths) subjects has also been increased to reflect their greater complexity and the need to improve quality.
Employers also now have two years to access the funds in their digital training accounts and can even transfer training funds to companies in their supply chains. The new scheme also provides for training those with prior qualifications in a bid to help existing workers develop new skills.
In fact, almost anyone at any stage on their career path can now start an apprenticeship. How radical and valuable is that?
You can catch people who might otherwise fall through the net and, if they missed some early qualifications, you can still bring them in via the Trailblazer scheme. How often do we hear of people with really good skills and attitudes who are unable to progress because they don’t have the right qualifications? The new scheme can bring them into an apprenticeship at an appropriate level and, if they are good enough, they can accelerate to a higher level.
The new system is generally much more flexible and forgiving. In the past, an apprentice would be set off on a route, but if they found it hard going or they were on the wrong track the system would simply spit them out. Now they can change direction and move across onto a different apprenticeship; they can also move up and down levels.
The regulatory compliance culture that dominates construction and construction-related professions has also forced skills in our industry down to the level of basic competence just to ensure we tick boxes rather than focusing on high levels of competency that can contribute to better performing buildings.
As a result, there is a surfeit of short courses designed simply to get people into the industry, which has undermined our skills base. We have ended up with lots of people only capable of carrying out basic activities — the plumbing and gas sectors being the most obvious examples.
It is a fundamental shift to allow people to change direction mid-career and support them and their employers with the right level of funding to re-train and add useful skills.
However, getting this right depends on the Trailblazers being developed by people who understand their sectors. We also need to engage with employers to make sure they make use of the levy funding so that money allocated to us remains in our industry and is spent on the skills we need.
A vocational apprenticeship is just the first step on the journey to a fulfilling career. BESA is working closely with employers in our sector to develop and deliver new Trailblazer apprenticeships at all levels — from initial technician grades right up to degree equivalence — to ensure our sector grasps this opportunity.
If you are trying to calculate potential value for money, you cannot compare this new approach with what has gone before. Many technical professions have suffered from decades of under-investment in skills and training. Trailblazers are designed to deliver training appropriate to the needs of employers struggling to find the skilled workers needed to keep up with demand. Surely there is enormous and immediate value in that?
By focusing efforts on professions that are critical to the country’s future development in areas like infrastructure and house building, you begin to build a pipeline of talent that will deliver a financial return for decades into the future. And by creating career paths and focusing funding where it is most needed, this new programme should deliver value for money for generations to come.
Tony Howard is training director at the Building Engineering Services Association (BESA).