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.