Apprenticeships could add 4.4bn to UK economy every year
New research from Barclays highlights the huge potential gain to the UK economy if industries were to raise the proportion of apprentices in their workforce to 2.2%, the same proportion as currently within admin and support services.
Mapped against productivity estimates from The Centre for Economics and Business Research (CEBR), which found every apprentice completing their workplace learning course adds £214 a week to the economy, it would deliver a £4.4bn productivity boost to the UK economy.
Combining data from The Department for Business Innovation and Skills (BIS) and the ONS reveals that administration and support services have the highest representation of apprentices in its workforce at 2.2%. This is followed by water and waste management at 1.6%, energy supply at 1.2%, and comes well above health and social work at 0.9% and manufacturing and IT, both at 0.8%.
For all industries to reach a 2.2% representation of apprentices in the workforce, a total of 437,787 apprenticeships would need to be created. Health and social work would need to take on 38,000 more apprentices, education 13,500, and 20,000 positions would need to be made available in the professional, scientific and technical activities sectors including legal practices and business consultancy.
Even industries known for offering apprenticeships such as engineering and manufacturing, which have well established pathways for developing talent, would need to add 20,000 to reach this 2.2% figure. However, if achieved this industry alone achieved this, the economy could see a £377m benefit each year.
Mike Thompson, head of employability programmes at Barclays Retail and Business Banking, said, “Apprenticeships are growing in profile, but we know there is potential for some industries to take on more and deliver dramatic benefit to both our economy and young people. We can see the results in countries such as Germany where skills deficits have been addressed and productivity boosted. It’s time we do more to help businesses overcome the barriers they face to offering apprenticeships, while at the same time encouraging more to offer opportunities for young people to learn about work, and the skills they need, at a younger age.
“It’s why we’re committed to offering apprenticeships and encouraging work experience through the LifeSkills programme. We recently welcomed our 1,000th apprentice, and are now calling on business leaders across industries to look at how we pave the way for a new wave of apprenticeships.”
Skills and Enterprise Minister, Matthew Hancock said: "I want going to university or choosing an Apprenticeship to become the new norm for young people. To make this a reality Apprenticeship reforms, such as the Trailblazers project, will make the system work better for businesses and learners. Businesses will work together to design apprenticeship programmes that meet their needs, meaning young people will be given the skills and experience required for them to succeed."
Previous research from Barclays has found that there is business appetite to create more apprenticeships. Over three quarters (76%) of SMEs say they would want to be part of a scheme that helped set up apprenticeships for young people. The same study found demand for apprentices is rising, up 5% over the last year to 27%. Young people are similarly keen to fill new positions with just under half (44.6%) considering it as an option.
The Barclays Apprenticeship programme has been highly successful in providing opportunities for young people who would otherwise struggle to find work. 86 per cent of apprentices were not in employment, education or training (NEET) before joining. Half (51%) had been unemployed for more than six months and over a quarter (27%) for more than a year. Over a third (38%) had fewer than four GCSEs at grades A-C.
Also supporting this transition from school to the workplace, The LifeSkills programme is connecting young people to work experience opportunities at Barclays and beyond, and aiming to reach one million young people by providing curriculum linked work based education resources.