September 13, 2014

Time for apprenticeships to graduate

Time for apprenticeships to graduate

Despite the recent positive economic news, youth unemployment remains a significant challenge.

Over three-quarters of a million young people are out of work in Britain today. For those young people finishing school, their next steps will have a substantial bearing on the rest of their lives.

A significant proportion is wedded to the idea that university is the key to a successful and prosperous future, unaware of other avenues open to them. While for many university remains the most suitable option, this is not the case for all.

A study by the Million Jobs campaign, launched in Parliament last week, is the first of its kind to directly compare the earnings, employment and taxpayer returns of graduates to those of apprentices. It was also the first to investigate, in any meaningful detail, the impact of the type of university attended.

The study was commissioned by Pera Training, the largest provider of manufacturing apprenticeships in the country, to explore the strength of often quoted anecdotal evidence that vocational educational routes provide a more suitable avenue for many young people to join the workforce than more traditional academic options, such as university.

An important mechanism in tackling youth unemployment is ensuring young people and their parents are fully aware of the differing returns various forms of qualification offer. Strikingly, the study reveals over a third of all graduates (39 per cent) have lifetime earnings below those of the average higher apprentice. While nearly half (46 per cent) of those from post-1992 universities earn less than higher apprentices.

These differences, the study demonstrates, become amplified when subject studied is examined. For some ‘new’ university courses, such as media studies, as many as three-quarters of graduates earn less than the average higher apprentice.

In terms of employment, it finds evidence of diminishing prospects for young graduates. Since 2005, apprentices under the age of 25 have broadly enjoyed more favourable levels of both employment and unemployment than graduates. The study also reveals evidence of an increasing divergence in employment and unemployment levels between apprentices and graduates, in the former’s favour.

Despite these results, a poll of 500 British school leavers commissioned for the study found that apprenticeships are still seen as a minority option. Only two per cent say the majority of their peers are planning to become an apprentice, and just six per cent say they are planning an apprenticeship themselves.

More than half of school leavers feel apprenticeships are of no interest to them, and those surveyed are more than twice as likely to associate university, rather than apprenticeships, with providing a good long-term earning potential and job prospects. Fewer than one in six say they are preferred over university by their parents and friends. Apprenticeships are struggling to acquire the social status they deserve.

The poll identifies clear drivers to encouraging the uptake of apprenticeships. Three in five school leavers not planning on undertaking an apprenticeship say a guarantee of a job or qualification at the end of the apprenticeship would encourage them to do so, while half say a clearer idea of the earning potential would have this effect. Emphasising these key attributes will help to reposition apprenticeships as a desirable and practical alternative for school leavers.

Tackling such misconceptions is vital if policymakers are serious in their determination to tackle the country’s youth unemployment and to equip young people with the skills they need to meaningfully participate in Britain’s 21st century workforce. But in order to be successful, the battle must take place on two fronts.

Firstly, to promote awareness among students, their parents and teachers of the opportunities modern apprenticeships offer. But secondly –and in order for apprenticeships to gain their rightful place alongside graduate degrees – we must see greater transparency and competition between higher education institutions. Young people must be made aware that not all degrees offer the same returns.

In a recent job interview for a policy position with a leading higher education membership body, a prospective candidate was asked what they deemed to be the greatest threat to the UK’s higher education industry. They replied: loan repayment rates by institution.

This attitude is wrong. Increased transparency and competition in the higher education can only be a positive. It will help the country retain its place at the forefront of higher education and research, while giving young people the opportunity they deserve to compete in the global race.

The increase in tuition fees to £9,000 a year was a bold and much needed step. For the first time it forced universities to compete to attract students, while affording students the power to hold institutions to account. But there is more still to be done to ensure the higher education system in the UK remains among the best in the world and to ensure students get a sufficient return on their investment. The status quo, whereby 45 per cent of student loans are never repaid, is unacceptable.

It is crucial we move away from the idea that graduates are a single homogenous unit. They are not. We will not see the apprenticeships revolution policymakers strive for without a revolution in the higher education sector.

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  • Shadow Warrior

    Hammond is continuity Brown. He is a hand-wringing lefty looking for clever wheezes to raise more tax in ways that people don’t immediately notice.

  • captainslugwash

    I predict the Budget will attempt to show the Left how caring the Tories are, and it will be funded by screwing over the working man.
    If Corp Tax comes down, I bet Divi tax will be going up.
    I would love to be wrong.

  • skynine

    We really need to look at tax credits, in particular in work tax credits that encourage people to work part time to preserve the benefits. 45% of women work part time and I would hazard a guess that tax credits are the main cause. This leads to low pay, low skill work in supermarkets and the retail sector including coffee shops. The government needs to get back to the employer paying people to do a job for economic reasons rather than to get onto the tax credit ladder. Like all government benefits it distorts the market and diverts government expenditure into non productive areas.
    The refrain that the government has cut expenditure is not true, it increases every year as more and more goes into welfare.

  • MrVeryAngry

    fat chance

  • MrSauce

    So, when wouldn’t we want a ‘budget for growth’?

  • Rob

    I note that the UK Government has just slapped on a 25% tax charge for anyone moving abroad and wishing to move out their private pension from the UK.

  • SonofBoudica

    The Remoaners will do their utmost to sabotage the Government’s negotiating position. They do not want a successful outcome; they want a failure. They want to be able to scream “Told you so!” from the rooftops.

  • EnglandLaments

    Thank goodness for Andrew Neil, the one media hack who scares the pants off the established politicians. He was spot on with Heidi Allen!

  • joshuafalken

    I had a very long, hard, studied and considered look at the hope, care and aspirations of all Europeans, before I voted to get the UK out of the toxic grasp of Brussels.

    The European Union and it’s charge of “ever closer union” has borrowed and spent its way to oblivion, whilst enslaving the working and middle classes in debt.

    The central control mantra of the unaccountable Brussels ruling elite, delivered through a mixture of socialism, globalism and corporatism is entirely responsible for the populist revolt by the millions of “Just About Managings” across Europe.

    We must remember the ultimate goal of socialists, globalists and corporatists is control, not prosperity. see—-not-prosperity.

    Social equality and economic growth always fail under central control and fighting against the Brussels doctrine on behalf of all Europeans is why I voted for Brexit.

    Britain has a long history of helping Europeans depose tyrants and Brussels is just the latest incarnation.

    Britain is the most racially advanced and accepting society on the planet. We welcome those in need and those that can help us with open arms and a smile; that will not change.

    We are also one of the most innovative, talented and open societies in the world, which why everyone wants to live here. However, we cannot fit everyone in, so we have to have clear, balanced and fair immigration policy which is where the arguments start between the monetarists and humanists will never be reconciled.

    I thought long and hard before coming to the conclusion that leaving the EU was in the best interest of all Europeans, as Brussels is toxic and cannot be reformed from within.

    Also, I find it insulting that people who voted Remain have insufficient faith in British ingenuity, compassion and skill to get a good deal for us and see the Europe that we love get a better deal from Brussels and the reform that European people deserve. and

    The politics of left verses right are dead because neither have delivered the promised economic growth and social mobility for anyone, but themselves. The populists are not selfish per-se, they just want to take back control of their own destiny that left/right politicians have freely given away and/or exploited for their own ends. In my constituency, the local residents group are taking over the councils as politicians ignore voters, so Westminster should beware of the well-organised, local resident independents at the next election. This is a peoples revolution which should be shouted from the rooftops, but liberals remained deafened by the socialist, globalist and corporatist “vested interests” that have spectacularly failed us and are obediently crying foul and fake.

    There will be an initial unpalatable inflationary cost to fighting globalism and rolling back central control that few appear to have factored in, but dismantling failed left/right vested interests should eventually free libertarian socially-conservative capitalism from the shackles of TBTF corporatism to feed economic growth and social mobility.

  • agdpa

    The EU usually makes the wrong decision – on immigration, on freedom of movement, on the euro, on the Ukraine, etc. etc. Little hope it will get Brexit right.

  • brownowl

    Eh? Reference please!

  • Neil2

    Sod caring. Screw the spongers and breeders. Kill HS2. Stop all “green” subsidies. Slash “foreign aid” and walk away from the EUSSR with immediate effect.

  • Rob
  • John C

    What a confused article. It conflates surveillance by the security services with poor defences against fraud.

  • John C

    Err, it’s the UK that’s leaving the EU, not vice versa.

  • John C

    Me, now. ‘Growth’ is a manic obsession.

  • La Face Nord

    Mr Redwood – are you aware of the Biased BBC website? It’s been exposing their agenda for a long time, but I imagine you’ve been well aware of the BBC’s agenda for quite some time…

  • Contact Rvtech

    The post is great

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