The National Apprenticeship Service was set up in 2008 to raise skill levels in England to both encourage companies to offer apprenticeships and to communicate the benefits to young people in applying for them.
There are separate bodies running national apprenticeship schemes for Scotland, Wales and Northern Ireland.
Since April 2017, apprentices across the UK have been funded by a combination of government spending and the apprenticeship levy. British companies with a wage bill of more than £3m a year (just 2% of UK businesses) pay 0.5% of their total wage bill into the levy scheme.
This is, effectively, their budget for training apprentices. If they take on more apprentices than their levy payment can fund, they need to pay 10% of the additional training costs; the government contributes the remaining 90%. If they do not use up their levy, they can transfer the training budget to fund apprentice training at SMEs in their supply chain.
For companies that do not pay the apprenticeship levy – the vast majority – the government picks up 90% of the training costs, and the employer the remaining 10%.
The government will fund the total cost if an apprentice is aged 16 to 18 or if the company taking on the apprentice has fewer than 50 employees.
Employers need to pay apprentices at least the national minimum wage of £3.70 for anyone under 19, and for everyone in the first year of their apprenticeship. This rises after the first year to the national living wage of £7.83 an hour if an apprentice is aged 25 or over.
Typically, an apprentice will work within the business for four days and spend one day a week at a local college or university, working towards a professional qualification.
Apprenticeships are numbered according to the qualification they lead to. An “intermediate”, or level 2, apprenticeship is equivalent to GCSE standard and an “advanced”, or level 3, is rated at A-level standard. “Higher apprenticeships” – levels 4 and 5 – are considered the equivalent of a higher education certificate, higher education diploma or a foundation degree, while level 6 is the equivalent of a bachelor’s degree.
Take-up is encouraging and is evenly spread between large companies and small, according to Karen Woodward, divisional apprenticeship director at the National Apprenticeship Service, who answered a number of the most commonly asked questions.
Q What levels of uptake for apprenticeships are you seeing?
A We’ve seen more than 1.4 million people start an apprenticeship since May 2015. It isn’t just about the quantity, though. We want to see an increasing number of apprentices, but improving the quality of apprenticeships, for both employer and learner, is the most important thing.
More than 40% of apprenticeship starts are now on our new “trailblazer” high-quality schemes, where employers are involved in shaping the training, compared to just 2.5% this time last year.
Q What do employees get out of becoming an apprentice?
A Apprenticeships give people of all ages the opportunity to earn while they learn, and can now offer around 670 training hours on average, up from 540 hours in the past year.
It makes sense, financially. Apprentices don’t have to pay for their training, the training makes them more productive, and they will end up earning more, too. On average, a level 2 apprenticeship boosts a person’s earning by 11% and a level 3 apprenticeship by 16%.
More than four in every five apprentices believes their career prospects have improved since starting their apprenticeship.
Q How do apprenticeships benefit companies?
A Hiring an apprentice is a cost-effective way to both recruit new employees and upskill their current workforce. Nearly eight out of 10 employers have said that productivity has improved as a result of taking on an apprentice.
Apprentices help companies increase staff retention rates and, therefore, reduce recruitment costs. More than four in five employers say productivity has improved and 86% say their apprentices have developed skills relevant to their organisation.
Q Are large companies taking a lead or are SMEs equally involved in apprenticeships?
A Participation is spread across businesses of all sizes. The latest figures show that 44% of apprenticeships are offered by small employers – those with fewer than 50 employees – and 41% are at companies employing 250 people or more.
Q What can companies do to ensure they get the most out of an apprenticeship scheme?
A Employers who get the most out of apprenticeships are those who are looking ahead, and seeing the potential to invest in their staff to help their business grow, improve productivity, help meet any skills gaps and add creativity and ideas.
The best schemes start with a business getting an understanding of how the process works so they can plan a strategy before recruiting. Their training provider can help with advertising jobs, as can we. Companies need to ensure the funds are committed to the scheme before taking people on, and then commit themselves to supervising apprentices throughout the process. Then, when an apprentice has finished, you can support them in taking on a higher level of apprenticeship, and recruit new apprentices to keep the flow of new talent going.
