A rise in the number of costly apprenticeships given to older employees has led to fears that younger workers are being excluded from the UK government’s flagship training scheme.
The proportion of over-25s starting apprenticeships increased from 43 per cent in 2015 to 47 per cent last year, according to government figures. Meanwhile, the number of under-19s enrolling in training courses fell from 25 per cent to 22 per cent.
Some experts in the training sector fear the shift is crowding out younger workers and allowing private training companies to generate lucrative profits by providing state-funded courses.
Multiverse, the £1.4bn international training provider founded by Euan Blair, eldest son of former UK prime minister Tony Blair, has become a key player in the training sector since being founded eight years ago, according to recent government data.
Set up in 2016, Multiverse was created with the aim of giving young people a “genuine alternative to university” by “matching them with apprenticeships at leading employers”.
However, 73 per cent of people starting Multiverse apprenticeships in the first half of 2022-3 had been employed for more than a year, according to an analysis by the Financial Times. Meanwhile, 75 per cent were aged over 25. Both counts were higher than the national averages for these categories during the same period.
Multiverse said it had shifted to mid-career training in response to a growing need for upskilling and life-long learning, and that it provided a badly needed alternative to a “one shot” university model that did not tend to learning needs spanning several decades.
“Creating apprenticeships for people across career stages is critically important to both employers and society at large,” the company said.
“The digital, data and tech skills we provide help people access better paid, more resilient careers, while improving productivity in the wider economy,” it added.
Daisy Hooper, head of policy at the Chartered Management Institute, said apprenticeships for high-skilled workers were a crucial way of upskilling the labour force in key areas such as management.
The training provided by companies, such as Multiverse, was rigorous and well regulated, she added. “Just because people are over 25 doesn’t mean they can’t benefit from good training.”
In the first half of the current academic year, data analyst or data technician training represented 72 per cent of apprenticeships provided by Multiverse — two of most expensive courses available. The figure was up from 56 per cent in the same period in 2021-22 year.
The part-time courses, costing £15,000 and £12,000, respectively, last 13-18 months and are delivered online alongside trainees’ jobs.
Multiverse said that supplying online courses allowed it to reach more potential learners. The provider has been rated as “outstanding” by education watchdog Ofsted.
In 2020-21 the company’s revenue nearly tripled to £27.2mn compared with the previous year, according to the company’s accounts. However, it posted a £14.2mn pre-tax loss as it pushed to expand, particularly in the US.
The company’s £1.4bn valuation suggests investors, which include StepStone Group and Lightspeed Venture Partners, have seen the potential for rapid growth in its business model.
Other large providers have also tended towards supplying courses to more experienced workers. Lifetime, England’s largest apprenticeship company, issued 57 per cent of its apprenticeships to over-25s in the first half of this year, FT analysis showed. It did not respond to a request for comment.
The Conservative government has identified retraining adults as a key objective to address the UK’s skills gap and lagging economic productivity.
In his Budget last month, chancellor Jeremy Hunt pledged to launch a new “returnship” apprenticeship scheme aimed at incentivising older people to get back to work. The over-50s were the largest demographic group to leave the labour market after the Covid pandemic.
However, many further education experts argue that costly apprenticeships are not the best way to raise national skills levels, and that the pivot to late career training stems from flaws in the current apprenticeship policy.
In England, the apprenticeship levy is funded by large employers paying in 0.5 per cent of their annual payroll. Companies lose any apprenticeship funding allocation that they fail to spend.
Tom Richmond, director of EDSK, a think-tank, said the system incentivised employers to spend on expensive courses, rather than choosing the most beneficial courses for new employees.
The “easiest route” to doing so, he said, was often to “enrol existing and often very senior employees” on to pricier training programmes.
“Multiverse’s approach is a perfect example of how a training provider can help an employer rapidly draw down their own levy contributions by focusing their so-called ‘apprenticeships’ on older workers, even if that means excluding young people,” he noted.
Since the apprenticeship levy was introduced, the number of people starting an apprenticeship has fallen by nearly one-third, from a total of 494,900 in 2016-17 to 349,200 last year.
The Department for Education said that “more than half” of apprenticeship starts were under-25, and that providers were subject to strict rules, including checks by Ofsted.
“The apprenticeship system is employer-led because employers are best placed to determine what apprenticeships are needed for their business,” it said.
Stephen Evans, chief executive of the Learning and Work Institute, a think-tank, said his knowledge of individual providers was limited, but overall there had been “massive growth in higher level and degree apprenticeships” and a “huge fall in apprenticeships to young people”.
Employers needed to be given more incentives to spend the levy on younger workers, he added.