Building a skills system that makes progression a priority

6 February 2019

By Andy Norman

Good quality apprenticeships can provide a vital bridge between education and the world of work for a wide range of learners. They rightly form a key pillar of the government’s strategy for revitalising the skills system in this country. In their current form, however, changes are needed to maximise their contribution to inclusive growth in England. The latest data confirms this.

At their best, apprenticeships can lead to outcomes that rival those of more prestigious higher education courses. For example, analysis by the Centre for Vocational Education Research finds that, by age 28, men who have completed an advanced apprenticeship in engineering earn more on average than men with an engineering degree. However, at the other end of the spectrum there exist low level apprenticeships for which the subsequent wage benefits are little better than the minimum wage.

Analysis by the Resolution Foundation’s Kathleen Henehan of the latest available data shows that the composition of apprenticeship starts is changing, with a smaller proportion of people undertaking level 2 courses and a higher proportion starting level 4+ courses. Given that substantial wage benefits from apprenticeships only fully kick in at higher levels, should we not be celebrating this trend? A closer look at the evidence, unfortunately, suggests not.

It is unlikely that the trend towards higher level courses reflects people who would otherwise have started a level 2 course deciding to do a level 4+ course instead. Entry onto these higher-level courses requires a strong existing skill set. It’s far more likely that this is at least in part the effect of businesses shifting already highly skilled staff out of existing training programmes and onto apprenticeships in an effort to recoup their apprenticeship levy payments, as suggested by evidence from the Sutton Trust.

An apprenticeship system geared towards inclusive growth would ensure young people are able to start lower level apprenticeships and then progress through to the higher levels that provide them with the skills they need to secure higher earnings in the future. However, CPP analysis presented in our latest report – Skills for Inclusive Growth – shows that only 22% of those who completed a Level 2 apprenticeship in 2014/15 progressed to a Level 3 apprenticeship within 12 months, despite an average wage premium of £2,100 associated with doing so.

The recent data also shows the share of overall apprenticeship starts at level 2 for those under 19 is falling. Added to the poor progression rates, this is cause for serious concern. Recent policy appears to be incentivising provision away from young people trying to climb the skills ladder and towards already highly skilled members of the workforce. Research published this week by the Social Mobility Commission shows this to be indicative of a wider trend in our skills eco-system. They find that ‘The poorest adults with the lowest qualifications are the least likely to access training – despite being the group who would benefit most’.

CPP’s Skills for Inclusive Growth report suggests that if the apprenticeship system is to drive inclusive growth then it must make the progression of young people through the system a top priority. In order to achieve this, we recommend two key changes. Firstly, Level 2 qualifications should, by default, make progression routes into Level 3 clear to allow learners to identify routes through the system. As called for by the Commons Education Select Committee, this could be achieved through the creation of progression maps to direct progress between levels. Secondly, the Department for Education should publish annual data outlining progression rates between levels of apprenticeships to ensure accountability.

Successive reviews of technical education have lamented our failure to help young people progress out of low-level courses and into the higher-level technical education they need to access well-paying employment. Clear routes through apprenticeship levels and publishing regular data to hold decision makers to account are two important steps towards building a skills system that makes progression a priority.