Apprenticeships have been found to add more value for money invested compared to other learning streams.
Research by the Department for Business, Innovation and Skills (BIS) shows that Apprenticeships generate around £40 for each pound invested by the government.
In addition, the study reveals the FE sector provides an additional £75 billion for the economy.
FE Minister John Hayes said: “Further Education is the unheralded triumph of our education system. This research illustrates just how important it is to this country – our economy, society and individuals’ lives.
“That is why we are funding an unprecedented number of Apprenticeships and freeing colleges from unnecessary burdens. We are also helping employers, colleges and training providers to work together to boost skills through the £50 million Growth and Innovation Fund.
“All these reforms will ensure that economic contribution of FE will continue to rise in the years to come.”
The study examined the economic value generated by government-funded post-19 qualifications, including apprenticeships and National Vocational Qualifications (NVQs) undertaken in colleges and workplaces.
Its analysis was derived using data from learners who began their qualifications in 2008/09. The approach taken to measure the economic value of the sector was to estimate the Net Present Value (NPV) associated with undertaking different qualifications.
The NPV is calculated by estimating the discounted benefits from achieving a qualification over the working life of the learner, and subtracting the costs associated with undertaking the qualification. The overall aim of the research was to produce a framework that can be updated as better and more up to date evidence becomes available.
Vince Cable, Secretary of State for BIS, said: “Further Education is a fundamental part of this Government’s growth strategy. We have committed to funding at least 250,000 more adult apprentices over the next four years than the previous government planned for, because we recognise that they offer real opportunities to young people and equip businesses with the trained workforce they need.”
“This research adds further weight to our conviction that further education has a vital role to play in ensuring we have the skills that will build a stronger and more balanced economy.”
In response to the BIS study, Tom Wilson, director of unionlearn, the TUC’s learning and training organisation, said: “Research shows that decent pay, good training and quality mentoring have resulted in the raising overall rate of successfully completed apprenticeships to around 70 per cent.
“But employers need to do more to ensure that there are enough apprenticeships available, particularly for young people, who are finding getting jobs difficult in the present economic climate. Unions learning reps can play a role in acting as mentors for apprentices and negotiating quality training and decent pay with employers. We can work together to make our apprenticeships the best in the world.”
Click here to read the full report.