
Saving apprenticeships
Think tank: Social Market Foundation
Author(s): Professor Baroness Alison Wolf DBE
January 17, 2025
This report from UK think tank the Social Market Foundation outlines strategies for creating a skills system that adequately encourages genuine apprenticeships.
In this report, Baroness Alison Wolf calls for the new Growth and Skills Levy to focus on young people, have greater local involvement, and distinguish between apprenticeships and workplace upskilling.
The current system is ineffective. The number of apprenticeships for young people has significantly fallen, with those under 19 making up only 23% of starts in 2023/24 compared to 41% in 2008. Meanwhile, 49% of apprenticeships are now taken by individuals aged 25 and older. The apprenticeship levy is primarily utilized by large firms. In 2022/23, 69% of total apprenticeship spending went to levy-paying employers, with many using funds for existing employees’ upskilling rather than new hires.
Only 20% of apprenticeships address skill shortage areas. Small and medium enterprises (SMEs), which employ 61% of the UK workforce, struggle to access apprenticeships due to limited funding and administrative barriers. Non-levy-paying SMEs account for under 33% of apprenticeship starts, yet over half of these apprentices are under 19. Apprenticeship opportunities have disproportionately declined in poorer regions. Large firms, concentrated in economically successful areas, dominate levy usage, leaving disadvantaged regions with fewer training opportunities.
The report outlines short- and long-term strategies for creating a skills system that adequately encourages genuine apprenticeships.