20 April 2018

Employers are rebadging pre-existing low-paid jobs and training course as apprenticeships, thereby shifting the cost of upskilling to the government and dodging the minimum wage.

This is according to new analysis from think tank Reform, which reviewed the available evidence after a year of the Apprenticeship Levy to report on the consequences of government policy.

Nearly 40% of apprenticeships fail to meet the internationally agreed standard of an apprenticeship, the think tank found. Jobs being rebadged as apprenticeships include serving food and drinks in coffee shops and restaurants, performing entry-level administrative roles, and working on hotel reception desks.

"Such training courses do not meet the historical or international definition of an apprenticeship because they typically offer minimal training, represent low-wage jobs and do not constitute skilled occupations," the think tank noted.

As the minimum wage for an apprenticeship is set at the much lower level of £3.70 per hour, it also means that the pay of those taking on these already low-income roles is being significantly undercut.

Mislabelled roles eat up 20% of the funding available for new apprenticeships and are projected to cost the government £600 million in 2019-20.

As well as low-paid jobs, pre-existing training courses have also been rebadged, including those designed to upskill staff to take on managerial roles. Even Cranfield University's Executive MBA has been relabelled an apprenticeship, transferring up to 90% of the cost of delivering the high-level postgraduate degree to the public purse.

The apprenticeship levy works by raising a tax against companies that they can offset by delivering apprenticeship programmes. The government's aim was to "incentivise more employers to provide quality apprenticeships" and "transform the lives of young people who secure them". The report found that the policy has failed on both accounts.

Not only have the number of apprenticeships plummeted since the levy was introduced (falling by 40% in the first six months), but the age and experience of workers taking on the roles has increased. As older workers who have already served more time in the workforce take on apprenticeships, the funding available for younger and less experienced workers is being depleted.

This outcome will surprise few of those who have been critical of the government's aim to create three million apprenticeships by 2020 since it appeared in the Conservative Party's 2015 Manifesto. Many pointed out that the programme could lead to an emphasis on quantity over quality.