Making apprenticeships future-fit

Young people are likely to be particularly hard-hit by the economic downturn, with early figures suggesting they're already bearing the brunt from the [Coronavirus Disease 2019] COVID-19 pandemic. Employees under 25 are significantly more likely to work in sectors shut down as a result of COVID-19, while those under 30 are working fewer hours and earning less than their older counterparts. This is compounded by the strain COVID-19 places on the completion of apprenticeships and on employers' ability to retain apprentices or take on new ones. As illustrated in this paper, the apprenticeship system in England - even prior to COVID-19 - was failing in its function as a pathway into the labour market for young people. Most apprenticeships are allocated to existing employees over new labour market entrants, with an increasing proportion of opportunities going to those 25 and over. The introduction of the Apprenticeship Levy tended to intensify long-run trends, leading many employers to concentrate their investment on existing employees through, for example, professional and managerial apprenticeships. This underscores the need to rebalance the apprenticeship system so that young people can access a greater share of apprenticeship opportunities.

This paper provides an overview and analysis of trends in apprenticeship starts in England - supported by international comparisons - and considers the policy changes needed to ensure that apprenticeships deliver for organisations, the economy, society and, importantly, new labour market entrants. The paper advocates boosting the number of apprenticeship places available for young people in the short term and reforming the apprenticeship system in the medium to long term to align it with more established systems. The paper also provides specific recommendations around several key areas for reform.

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