Sadly, the Apprenticeship reforms are an easy target: a great idea botched in delivery, with a lack of honesty and realism about the need for a thoughtful review of its implementation.
This problem is magnified significantly in the London skills market.
London has not had a fantastic track record of employer investment in skills. The state and the individual have tended to do most of the heavy lifting over recent years, individuals funding professional accreditation and hauling themselves up through the layers of the labour market, while the state paid to lift many people up to touching distance of a first-rung job. These two elements of skills growth are still in place, although the state pays for less than it did now and the individual has to carry a greater share of the load. As we know, this has caused social mobility to stagnate and created a widening gap between the well-paid and those clinging on to the lower ends of the pay ladder.
But the new Apprenticeship system should have helped fix this.
I’ve talked to numerous employers about how they see the levy and they point to the big gap in the middle of their staff structures as a new risk: limited succession, low levels of management skill and experience and an inevitable lack of loyalty among junior staff who haven’t seen much investment or opportunity. London employers have generally tackled these kinds of issues by recruiting from elsewhere in the UK or, crucially, from overseas. In the quarter to November 2017, net inward migration from the EU fell from 189,000 to 107,000, a big change in one three month period, and the signs are that this will continue.
So London’s employers will need to invest. Many are still puzzling over the Apprenticeship system, working on tactics to make it successful for them, trying to procure good delivery sensitive to their business realities in an immature market place, overshadowed by regulatory controls. I was part of an All-Part Parliamentary Group looking at the roll-out of the Apprenticeship reforms and, time and again, important stakeholders reported confusion, perverse outcomes and hesitation. The report’s available here and it makes depressing reading as the wall of evidence reflects disappointment in the muddled implementation of a grand plan.
Yes, it may just be a matter of time and there is no shortage of improvisation and creativity that will see us through a period of transition. The principles are sound and draw well on international models for employer involvement in the skills market, but the system of incentives established here are not motivating employers sufficiently. The Mayor of London, in his proposals for skills reform in London , calls for a new approach to employer engagement, including a badging scheme and an emphasis on ‘good growth’. There is also a lobby for the devolution of the Apprenticeship levy system, based on the level of frustration with its current impact.
However these reforms play out, we will know in about eighteen months whether they’ve taken root and begun to grow into the ecosystem: we will see, almost all at the same time, how Brexit impacts on EU migration, how London’s growth is trending and how much unspent levy money is drawn out of the skills system. These effects will all be linked and will tell us whether the London skills system can change, grow and organise, or whether it continues to create unintended barriers to opportunity and equality.