The Liberal Democrats have announced their vision for skills policy over the next parliament in their election manifesto. The proposals mainly focus on increasing the number of apprenticeships, and on the future funding for the skills sector.
The manifesto is quite explicit as to how they would like to achieve the rise in apprenticeship numbers. Namely, the Liberal Democrats want to extend the Apprenticeship Grants for Employers (AGE) by another 200,000 places over the next parliament.
A costly policy
AGE was introduced by the coalition government in 2012. The grant is a subsidy of £1,500 per apprentice between 16 and 24-years-old, taken on by firms who had not hired an apprentice in the three previous years and whose size did not exceed 250 employees. The eligibility criteria were later extended to include firms up to a size of 1,000 employees which had not hired an apprentice in the last year. The policy would cost about £300 million, which is nearly half of the apprenticeships budget for 2015 to 2016.
Initially, this targeted grant was introduced with good reason: until 2012, only about 13% of employers in the UK offered formal apprenticeships and about half of those were offered by larger firms (with 100 or more employees) as is evident in this UKCES report. The potential for growth in apprenticeships was identified mainly among small firms.
Among those firms who weren’t at the time offering apprentices, “structural barriers” were cited as the most common reason why (by 56%). In contrast, “high costs” were only cited by 10%. Other reasons, such as unavailability of apprenticeships for the particular industry (15%), and unsuitability of apprenticeships for the business (14%) were more important drivers for deciding not to offer them.
An early evaluation of the AGE showed that 22% of employers said the grant had made no difference to their decision to recruit an apprentice, suggesting that nearly a quarter of the resources spent could have been used more effectively elsewhere. So, the Liberal Democrats’ proposal targets one obstacle to apprenticeship growth, but does not say much about how they aim to overcome the other, seemingly more important barriers.
More for minorities?
The manifesto also pledges to increase the share of minority students and girls among apprentices. Indeed, the share of minority students on apprenticeships is only 9%, while they represent nearly 21% of students in state-funded secondary schools.
And while girls are overrepresented among apprentices overall (at 53%), the evaluation of the AGE showed that 62% of new apprentices taken on with a grant were male, and ethnic minority students were even worse represented, making up only 8% of the new recruits. The manifesto is not explicit as to how they are going to address these biases, so it is impossible to judge the potential success of this policy.
The Liberal Democrats’ manifesto also mentions funding for skills and lifelong learning. Recently, there have been cuts to adult skills – defined as skills provision for 19 to 24-year-olds – worth £249 million, or 11% of the entire adult skills budget. A pledge to protect funding for the sector will be welcomed by many who believe that for too long skills training has been neglected, especially compared to higher education.
This initiative would include a “review of VAT treatment of Sixth Form Colleges and FE Colleges,” so that they enjoy equal status and advantages compared to their counterparts in the schools sector and a cross-party commission to secure a “long-term settlement of the funding of reskilling and lifelong learning”. While this pledge does not promise a specific amount of money for the further education sector, the announcement of an additional £2.5 billion in education funding for two to 19-year-olds suggests that some of it will be used to improve further education for 16 to 19-year-olds.
Overall, the Liberal Democrats show commitment to the skills sector, and their proposals identify some important issues. The party’s policies seek to address the lack of engagement of UK firms in apprenticeships, and the unequal treatment of the skills sector compared to schools, in terms of funding.
Nonetheless, it may be that the proposed expansion of the apprenticeship grant is not the best use of public money. It also would have been helpful to have more details as to how much of the extra £2.5 billion in education funding would benefit the further education sector. Similarly, the manifesto largely avoids talking about how to up-skill the adult population, which the OECD recently highlighted as a pressing issue.
The Conversation’s Manifesto Check deploys academic expertise to scrutinise the parties’ plans.