A report published today by the Education and Business Select Committees has highlighted that skill shortages in science, technology, engineering and maths are hampering the UK’s productivity. The UK’s productivity is a major constraint on the UK economy, with the Office for National Statistics estimating that output per hour in the UK is 20 percentage points below the average for the rest of the G7.
Given the UK’s productivity problem, the Government’s commitment to three million apprenticeship starts by 2020 is welcome. However, this commitment alone is not enough to secure much needed gains in the UK’s productivity. The apprenticeships need to be of high-value and focused on the industries that have the strongest demand for a skilled workforce.
Unfortunately, the Government’s apprenticeship programme over the last parliament did not appear to achieve this. A recent report by Ofsted found that there was an excessive growth in the number of apprentices in service sectors. There were also accounts of some employers providing poor quality, low level apprenticeships, leading to a waste of public money while abusing the trust of Government and apprentices. Examples include apprentices in food production completing their apprenticeship by having skills such as coffee making and cleaning.
Figure 1: Breakdown of Apprenticeship Starts by Sector
Data from the House of Commons Library confirms the lack of progress in boosting apprenticeships in non-service sectors of the economy. Engineering and manufacturing apprenticeships increased by just 23,000 over three years, whereas apprenticeships in business, administration and law grew by 83,000. Moreover, the service sector as a whole still accounts for the vast proportion of apprenticeships, with almost three quarters of apprenticeship starts in areas such as administration, care and retail.
The Government needs to urgently review the apprenticeship programme to encourage high-value apprenticeships, particularly in the areas of science, technology and engineering. This alone will not solve the UK’s productivity problem, but it would certainly go some way to closing the gap with our G7 competitors.