Too many graduates taking up apprenticeship spaces

A new report from the Social Market Foundation (SMF) finds that in the last 12 months over £400 million of apprenticeship funding has been spent on young people and adults who already have a Bachelor’s degree or even a Master’s degree.
 
Prime Minister Keir Starmer announced plans to remove some Level 7 apprenticeships in order to shift resources towards young people training at lower levels during Labour’s party conference in September. However, they have not specified how far this shift will go, or how it will be delivered.

Richmond’s paper recommends that anyone who has completed a university degree should not be able to access publicly-funded apprenticeships to ensure that apprenticeships remain focused on providing opportunities for young people who have chosen not to follow an academic pathway.
 
The reportm – authored by Tom Richmond, former government adviser and SMF Senior Fellow – shows that in the academic year 2023/24 around 56,000 people started an apprenticeship despite already having at least a Bachelor’s degree – accounting for 1 in 6 apprentices across the country. This included 14,000 people who had completed a Master’s degree before starting their training. The same trend was most pronounced for the controversial and costly Level 7 apprenticeships (equivalent to a Master’s degree), with over 70% of Level 7 ‘apprentices’ already having at least a Bachelor’s degree. Meanwhile, as large numbers of university graduates are starting apprenticeships after finishing their degree, the number of entry-level apprenticeships (Level 2) has collapsed from 260,650 in 2017 to 70,840 in 2024 – a 73% decrease in just seven years.
 
In addition, the report finds that the cost of sending so many graduates on apprenticeships is growing rapidly. An estimated £431 million of apprenticeship funding was used last year by university graduates, including £182 million for graduates starting Level 7 apprenticeships. What’s more, the most popular Level 7 apprenticeships include rebadged management training courses (£14,000 per apprentice) and graduate recruitment schemes in accountancy and finance (£21,000 per apprentice), which are considerably more expensive than entry-level courses and consume funding that could have provided thousands of apprenticeships for school and college leavers. More broadly, management courses for existing staff that have been rebadged as ‘apprenticeships’ have become so prevalent that they used up an estimated £150 million of apprenticeship funding last year.
 
Tom Richmond concludes that significant changes are needed to the apprenticeship system to ensure that young people who do not attend university can access the funding and support that they need to embark on an apprenticeship, just as university graduates have already been given substantial support by taxpayers.

To achieve this, recommends that young people and adults who are already qualified at Level 6 (equivalent to a Bachelor’s degree) or higher should be banned from accessing levy-funded apprenticeships.

The report says that management training courses should be removed from the apprenticeship system and funded as non-apprenticeship training within the upcoming ‘Growth and Skills Levy’.
It also says that employers should be expected to pay up to 50% of the costs of non-apprenticeship training in future to encourage them to identify training courses that offer the best value for money.
 
Tom Richmond, author of the report and Senior Fellow at the SMF, said: “If the government wishes to ‘break down barriers to opportunity’ then spending over £400 million a year sending university graduates on apprenticeships is simply not tolerable. That money should be redirected towards new apprenticeships for young people leaving school or college, particularly those from the most deprived backgrounds, who should be prioritised for the finite funding available for apprenticeships.

“University graduates have already had huge sums of taxpayers’ money invested in their education, so it is only right that young people who do not attend university are given the same level of investment and support to kickstart their careers. When almost one million young people are NEET, these reforms to apprenticeships cannot come soon enough.”