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The UK's apprenticeship system must serve our diverse labour market

There is no question that apprenticeships are a great thing. They help huge numbers of people every year, offering hands-on skills training opportunities while also providing employment. It is right that they should be celebrated every year with National Apprenticeships Week. 

But while encouraging apprenticeships is laudable, the skills system needs to encompass so much more. The government’s focus on apprenticeships, and particularly the Apprenticeship Levy, has failed to increase the number of apprenticeship starters, and drawn attention away from other forms of training.

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However, with some changes, the system has the potential to unlock training opportunities for even more people and lead to a higher skilled, higher productivity economy. 

If you're from outside the recruitment sector, it is easy to overlook the importance and power of the UK's temporary workers. According to REC research, the temporary recruitment industry contributed £32.2 billion to the economy in 2020.  

This includes many contractors and freelancers who are highly qualified and work flexibly in a range of business sectors. But there is also a large portion of the temporary workforce that has entry-level skills, looking to upskill and progress their careers using their temporary jobs as a stepping-stone. 

For those looking to progress, there is a wide variety of training programmes available – some where workers pay, some funded by employers, and some by government. But while full-time employees of large companies can have apprenticeships funded by their employer, via the Apprenticeship Levy, temporary workers are shut out of this system.

The levy lacks the flexibility to meet the needs of temporary workers, which is a failure of government policy around understanding the diversity of the UK labour market. 

An apprenticeship must last for at least 12 months. The recruitment industry places one million temporary or freelance workers into work on any given day, but only 2% of temporary assignments last for 12 months or more.

That means that almost a million people are automatically cut off from valuable training opportunities, despite there being funds to train them via the levy. 

The current focus on year-long apprenticeships also disadvantages many employers trying to fill vacancies at entry level. Take HGV drivers. There is a shortage of almost 100,000 drivers in the UK.  

Money from the Levy could be used to fund the training, which only takes a few weeks. This opportunity to upskill and increase their pay while maintaining some flexibility could make such a difference to many temps. 

Opening up Apprenticeship Levy funding so employers could use it for shorter training courses and non-apprenticeship schemes would be a win-win for businesses, workers and government.

Firms could unlock the funding to train and upskill their workers with the government's support, building those workers’ skills and the UK's productivity levels.  

There are thousands of short-term training courses that would allow workers to develop, earn and grow. Broadening the Apprenticeship Levy could remove one of the biggest barriers preventing workers progressing their careers, benefitting everyone and boosting the economy. It is also an opportunity to help with the government's aim of levelling up.  

There’s no time to waste in reforming the way the Apprenticeship Levy works. 

Yerin Seo is senior campaigns advisor at the Recruitment and Employment Confederation