Steve Hill, External Engagement Director, The Open University

The development of degree apprenticeships is at a momentous turning point.

With the introduction of the apprenticeship levy just days away on 6th April, every organisation in the UK with an annual wage bill of at least £3m will be asked to pay a levy of 0.5% of their wage bill towards apprenticeship training and up-skilling staff across the nation. From 1st May, organisations with staff in England can start drawing down on their ‘levy pot’ to fund these apprenticeships, and if they don’t use it, then they’ll lose it.

But let’s rewind for a moment. The UK Government announced the introduction of degree apprenticeships and the intention of the levy just three years ago, and then we saw some of the new degree apprenticeship standards come onto the market shortly after in 2015. There hasn’t been a lot of time for universities to respond, nor to build awareness among employers and individuals, but the higher education sector has seized the opportunity and is making impressive headway – recognising the huge benefits degree apprenticeships will bring society, business and the economy, as well as the additional income stream for institutions themselves.

Recent findings from Universities UK paint a very promising picture, with a 658% increase in degree apprentice entrants expected from 2015/16 (when they started) to 2017/18 (a year into the levy).

The study was conducted among 66 English universities, including The Open University, and found 91% are now actively involved in providing degree apprenticeships across 18 standards. Current growth is being driven by management, digital and technology, and engineer-related degree apprenticeships – encouraging to see, as it reflects the areas where the UK lacks skills the most. While a big part of the skills gap is a shortage of people skilled in STEM (science, technology, engineering, maths) areas, management and soft skills such as communication and advanced leadership skills are also lagging[1] – affecting every employer, whatever their size or field.

As well as delivering the new standards, the report found that universities are interested in collaborating with industry to develop standards in a further 43 industry areas – clear evidence of the widening footprint. Apprenticeships may have once been viewed as a route into a trade occupation, but this simply isn’t the case anymore. Students will flourish and develop higher skills in areas ranging from accountancy to cyber security to nursing, and this is helping to address skills gaps, productivity issues and societal needs on a macro level.

However, one figure from the Universities UK study that really did stand out to me was the 88% of universities that said their apprentices are mostly based locally, and the conclusion that the focus of degree apprenticeships is predominantly local. The report highlighted that the local focus is reflected in the value that universities place on the ability of degree apprenticeships to meet local and regional skills needs. Two in five (40%) universities don’t have any students based nationally.

This isn’t wholly surprising when you consider that the majority of universities are intrinsically linked to their location, have relationships with local employers and schools, and deliver skills development directly to those based in their region.

But with more and more institutions using technology to take a blended learning approach the potential for national reach should not be underestimated. We can vouch for this from our years of experience in providing technology-enabled distance learning and conversations we are having with our business clients.

For larger employers it will be important to deliver apprenticeship programmes at a national scale across multiple sites, where training is consistent to ensure their organisational skills needs are being met and staff are offered the same opportunities across the country. A national training partner can offer this consistency at scale - the alternative is multiple partnerships with multiple training providers offering multiple training solutions, which may prove to be overly complicated, time-consuming and financially unviable for employers.

Universities UK found that 66% of universities expect significant growth at the local level, and 57% expect growth at a national level. Despite the report’s focus on the local opportunity, the prospect for national growth is notable and we believe will be key to delivering the flexibility and consistency required by larger organisations.

With the levy just around the corner, you’d expect employers to be primed and waiting to take advantage, but awareness and understanding of all the options is still limited. For example, there’s still a lot of confusion how funding works across the different nations, due to apprenticeships being a devolved policy. Along with UK Government, it’s our job as training providers to ensure employers are equipped to make an informed decision and truly align apprenticeships with business strategy so they get the most out of them.

We strongly believe high quality degree apprenticeships will give people a ladder of opportunity, more choice and help shape the UK to become a nation of highly skilled workers.  They deliver for learners, who can graduate and gain work-relevant skills free from debt, and deliver for employers, who get the skills they need to improve productivity and performance. By working together, we can plug the skills gap, while offering more choice and prospects for people of all walks of life – and the levy is the opportunity to start this.

Steve Hill, External Engagement Director, The Open University

[1]UKCES Skills Survey 2015 reveals the skills gaps by sector (p59-60). It shows that while there are large skills shortages in occupations such as management and sales, indicating that soft skills are required, as well asSTEMskills.

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