You’re Hired: A Bright Future for Apprenticeships in London

Apprenticeships are a vital component of London’s skills system, providing pathways into work and opportunities for the existing workforce to gain new skills. They are unique in offering both on- and off-the-job training, combining studying with experience in the workplace.

England’s apprenticeship system has undergone substantial reform in recent years, with the introduction of the apprenticeship levy and the replacement of the old system of apprenticeship frameworks with apprenticeship standards.

However, apprenticeship numbers in London and across the UK have fallen since the introduction of the levy. In 2020-21, the estimated number of apprenticeship starts in London was 14 per cent lower than in 2016-17, the year before the levy was introduced.

The London Assembly Economy Committee carried out an investigation into apprenticeships to understand the impact they are having in London and how the system can be improved.

Published today, the Committee's report makes the following recommendations:

Recommendation 1

The Government should establish a one-stop shop for small and medium-sized businesses that supports employers with the process of taking on apprentices.

Recommendation 2

The Mayor should provide support to small and medium-sized employers to share expertise and help them navigate the complexity of the apprenticeship system, linked to the work of the Mayor’s Academies Programme where appropriate.

Recommendation 3

The Government should introduce financial incentives for employers into the levy system to encourage them to hire more apprentices who are under the age of 19.

Recommendation 4

The Government should introduce financial incentives for employers into the levy system to encourage them to hire more disabled apprentices.

Recommendation 5

The Government should allow employers to spend a proportion of their apprenticeship levy funds on pre-employment training to get people ready for an apprenticeship. This should apply to both levy-paying employers and non-levy-paying employers.

Recommendation 6

The Government should allow businesses to transfer 40 per cent rather than the existing 25 per cent of their levy funding to SMEs who do not pay the levy, in order to increase the take-up of apprenticeships by SMEs.

Recommendation 7

The Mayor should work with employers, for example through the Skills for Londoners Business Partnership, to identify whether current apprenticeship standards are meeting London’s needs given its unique sectoral mix.

Recommendation 8

The Government should ensure it is developing new apprenticeship standards that respond to employer demand, in particular those at lower levels that provide opportunities for younger people and other under-represented groups – for example, a business administration level 2 standard.

Recommendation 9

The Government should explore options for collecting and making accessible anonymised data on apprenticeship progression and outcomes, in a similar way that it currently does for starts and achievements.

Recommendation 10

The Mayor should ensure that apprenticeships are promoted as part of his Jobs and Skills marketing campaign and demonstrate to the Committee how apprenticeships are being integrated into the overall messaging of the campaign. He should also continue to raise awareness about apprenticeships as part of the Mayor’s Academies Programme.

Recommendation 11

The Mayor should use his relationships with employers to raise awareness about apprenticeships, with the aim of increasing demand for apprentices in London, including through the Skills for Londoners Business Partnership.

Recommendation 12

The Mayor should continue to press the Government for devolution of a London-wide careers guidance service and demonstrate how he would ensure further devolution would be a success. The Mayor should demonstrate to the Assembly what work is being undertaken to achieve this, and should share copies of Government responses.

Recommendation 13

The Mayor should continue to lobby the Government over the UK Shared Prosperity Fund (UKSPF) and demonstrate to the Assembly what work is being undertaken to achieve this, including any responses from Government.

Recommendation 14

The Mayor should continue to promote the Good Work Standard and encourage all employers to sign up to it, in order to ensure that they pay the London Living Wage to all apprentices, rather than the apprentice National Minimum Wage (NMW) which is currently just £4.30 per hour.

Recommendation 15

The Government’s Apprenticeship Pay Survey 2018-19 found that 19 per cent of apprentices were paid below the appropriate NMW or National Living Wage. The Government should set out what steps it has taken to raise awareness amongst employers of the NMW rate for apprentices and set out an action plan to enforce this.

Recommendation 16

The Mayor, working with the Skills for Londoners Board, should investigate the impact of travel costs on apprentices in London across all years of their apprenticeship, and whether this is acting as a barrier to more people taking up apprenticeships.

Recommendation 17

The Committee welcomes that, from April 2022 the apprentice minimum wage and the age-related minimum wage for under-18s will be the same, although the apprentice minimum wage remains lower than the minimum wage for those aged 19 and over. The Government and the Mayor should each conduct analysis to understand the potential effect of removing the apprentice minimum wage, with apprentices instead receiving the age related minimum wage.

Recommendation 18

The Government should explore barriers faced by people in accessing traineeships, including whether a lack of requirement to pay trainees is a barrier; and use these findings to inform future provision. The Government should increase promotion of traineeships to both potential employers and participants, with an emphasis on advertising traineeships to BAME young people and disabled people.

Recommendation 19

The Government should create an action plan to address barriers to accessing traineeships, and to ensure that those on traineeships do progress into apprenticeships.

Recommendation 20

As part of the Mayor’s Academies Programme and the ‘No Wrong Door’ initiative, the Mayor should ensure that he is using his convening powers to join up apprenticeships with other parts of the skills and employment system, including courses funded by the Adult Education Budget; traineeships; and opportunities created by the Kickstart scheme.

Recommendation 21

The Mayor should outline how the Mayor’s Academies Programme will support the growth of green apprenticeships.

Recommendation 22

The Mayor should clarify what definition of a green job he is using as part of the Mayor’s Academies Programme.