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Apprenticeships contribute 34bn a year to UK economy

This figure includes gains to the economy from higher wages, business profits and taxes of &pound31 billion per year, an estimated reduction in unemployment benefit payments of &pound370 million per year, and benefits to organisations while training apprentices of &pound1.9 billion per year (in 2014 prices).

The ratio of benefits to costs of apprenticeships is &pound21 for the national economy for each &pound1 of public money spent*.

The number of people starting an apprenticeship each year has grown in recent years from around 100,000 in 1950 to more than 450,000 people in 2013-14, and the government is on course to deliver in excess of 2 million apprenticeships in the lifetime of this parliament**. If this upward trend in recruitment continues, the national economy stands to gain &pound50 billion by 2025 and &pound101 billion by 2050.  If the number of employers taking on apprentices rises still further, these benefits could increase by &pound8 billion in 2050, giving a total gain of &pound109 billion.

Minister of State for Skills Nick Boles said:

“Today’s celebration of a hundred years of apprenticeships demonstrates how they have long played a key role in the workforce and commemorates the contribution apprentices have made to employers and the nation. Today apprenticeships are at the heart of the Government’s drive to equip people with the skills that employers need to grow and compete.”

Employers who have been delivering apprenticeships for 100 years will attend an event tomorrow on board HMS St Albans along with some of their apprentices. These will include the Ministry of Defence, the largest employer of apprentices in the UK, large independent retailer the Lincolnshire Co-op, leadingengineering support service provider Babcock International Group and Merseyside shipbuilder Cammell Laird.

& lsquo;Made by apprentices 1914-2014’ will recognise all the employers taking part in the Centenary Apprenticeship Programme and the contribution of apprentices past and present.

The Cebr report reveals the economic benefit of apprenticeships for all parties involved - the apprentice, employer and the state:

&middot         For every &pound1 that is spent on apprenticeships, the national economy gains &pound21. This is high in comparison to other expenditure, for example, returns on investment in the innovation, research and technology sectors range from around &pound4 - &pound7 per &pound1 spent.

&middot         Apprentices are more likely to be in employment for longer, and will receive higher earnings, with wage premiums of 11% for intermediate-level apprentices, and 18% for advanced-level. 

&middot         Employers gain in the long and short term from taking on an apprentice, with the Cebr estimating increased outputs for businesses of &pound1.8 billion in 2012-13.

&middot         Unemployment is reduced with &pound370 million gained from saved benefits per year, thanks to around 99,000 extra employed people as a result of apprenticeships.

&middot         The most popular sectors for apprenticeships are: health and social care (13%), customer service (10%), business administration (8%) and retail and engineering (both at 7%). This is out of a total of 950,313 people participating in an apprenticeship in 2012-13.

&middot         The region with the highest concentration of apprentices per total population is the North West, followed by regions within Northern England and the Midlands.

The Skills Funding Agency is urging employers to recognise the positive impact apprenticeships have made over the past hundred years and to consider how an apprenticeship could benefit their business in 2014 and beyond. Employers can visit greatbusiness.gov.uk/apprenticeships  to find out more.

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