Since the Richard Review in 2014 we’ve been through a radical overhaul of England’s apprenticeships system.

We’ve seen the introduction of degree apprenticeships, the creation of the Institute for Apprenticeships and Technical Education and most radically the introduction of the apprenticeship levy. New research (Stability, transparency, flexibility and employer ownership) by the Institute of Student Employers (ISE) examines the new apprenticeship system from the employers’ perspective.

Systems thinking

George Osborne set out to create a step change in apprenticeships in 2015 when he placed the target of three million apprenticeships at the heart of the government’s policy. He was able to square this ambitious policy with his other signature policy of austerity by transferring the funding of the apprenticeship system to employers.

The apprenticeship levy was introduced in 2017 to much fanfare, but two years later it is clear that all is not well. Damian Hinds admitted to the Commons Education Select Committee that the government won’t hit the 3 million apprenticeship target.

It is also clear that the government’s rhetoric is out of step with the reality. Apprenticeship is presented as a youth policy, but in reality, only a minority of apprentices are recruited from school. Apprenticeships are commonly used as a mechanism for training existing staff rather than bringing new people into the labour market.

Employer perspectives

Even though employers have borne the brunt of the new system in the form of a 0.5% levy on their pay bill, they remain positive. Our research shows that employers, particularly larger employers, have been working with the new system to implement it in their businesses.

Employers have been recruiting apprentices at all levels (from level 2 to 7) and see value in using apprenticeships for entry-level staff, to support people later in life to make a career change and to develop and progress existing staff. Most view the apprenticeship system as a long journey which they are only at the beginning of, with the average employer only spending around 14% of their levy money at present. Nonetheless, most imagined that their level of engagement with the system will continue to grow.

Employers generally viewed themselves as critical friends of the current apprenticeship system. Nonetheless, they described several challenges which they felt were preventing the system working as well as it could: the funding system was inflexible and unresponsive; the development of new standards and the regulation of the system is too bureaucratic; it can be difficult to align the delivery requirements for apprenticeships with the operation of real businesses; and there are still concerns about how apprenticeships are perceived in the education system.

Why it matters for higher education

Some people in higher education might be tempted to view the trials and tribulations of the apprenticeship systems as someone else’s problem. This neglects the way in which apprenticeships have become integrated into higher education. This has happened in three main ways:

· As an alternative to higher education. Apprenticeships are often touted as an alternative to, and therefore a threat for, conventional higher education. At present this is a fairly limp threat with the proportion of young people choosing universities continuing to grow. However, if labour market demand for apprentices improves, the appeal of a debt free route into skilled work is likely to grow.

· As a funded pathway through higher education. It is becoming increasingly clear that many are viewing apprenticeships not as an alternative to higher education, but as another way of delivering higher education. Around 13% of apprenticeship starts are at higher education level (4-7). What is more 107 higher education providers have now registered to deliver degree apprenticeships.

· A progression route from higher education. Employers are frequently using apprenticeships to train and develop people who already have a degree. Many of these are level seven apprenticeships, but it is also common to enrol staff with a degree on lower level qualifications to help them make career shifts. This practice was criticised by Augur but is supported by most employers who are focused on what skills their businesses needs rather than on the abstract concept of qualification levels.

Our 10 recommendations to government call for employers to be put in the driving seat of apprenticeships. By improving the current system, the economy and HE as well as the students themselves stand to reap the benefits.