Chapter 2. Local initiatives to promote apprenticeships in the United Kingdom

This chapter reviews two local Apprenticeship Hubs that have been developed in the Greater Manchester and Leeds City Region as part of the current devolution process of new powers to English cities. The case study explores the effectiveness and efficiency of the Apprenticeship Hubs in a context of high youth unemployment and structural change in the United Kingdom, and provides an opportunity to compare and contrast differing approaches to implementation and governance changes.

Key findings

The Leeds and Greater Manchester city regions of the United Kingdom have recently assumed new responsibilities to manage apprenticeship programme through local apprenticeship hubs. This has occurred in a broader context of high youth unemployment, and historically negative perceptions towards apprenticeship and vocational pathways in comparison to traditional academic routes.
Each city region has pursued different governance and administrative structures for apprenticeship programme delivery and adopted separate objectives and processes in accordance with their specific local circumstances.
Capacity building among local training providers and a focus on engaging both employers and prospective apprentices are common features to the Apprenticeship Hubs in both city regions. The jurisdictions also both aim to deliver improved career guidance and improved accessibility mechanisms for apprentices. Similarly, both city regions aim to build flexibility into local apprenticeship management in order to remain agile to shifts in local growth sectors.

Introduction

Vocational training provision in the United Kingdom has been a historically devolved jurisdiction that is managed differently in England, Scotland, Wales and Northern Ireland. In the English system, responsibility for the management of apprenticeships have been recently further devolved to a number of specific city regions as part of a series of “City Deals”. Consequently, the Leeds and Greater Manchester city regions have recently assumed the capacity to manage apprenticeship provision in accordance with local requirements and needs.

Each city region has taken a separate approach to building employer engagement and streamlining training provision in their local areas. The strategies pursued by each city region differ in a variety of core ways, including the degree of further decentralisation and the focus of apprenticeship provision. The role of careers guidance and the landscape of training providers are also examined in this chapter.

Policy context

Apprenticeship hubs were developed at a time of recovering growth in the United Kingdom after the global financial crisis, but of high youth unemployment, which rose to 21.2% in 2012 (OECD, 2016). Since the start of 2013, the economy has grown in every quarter, with GDP growth being at 3% in 2014. Overall unemployment has fallen from 7.9% in 2012 to 6.1% in 2014 with youth unemployment at 16.3% in 2014 and still falling.

Vocational training provision in England¹ counts for a relatively small proportion of the overall education and training system, which is dominated by academic studies. Fewer than 10% of English youth participate in vocational training, in comparison to a third or more in many European countries. Vocational training is however more likely to be undertaken in the fields of education, health, social work, financial services and public administration (CEDEFOP, 2013). Much of the vocational training undertaken by adults is relatively low level, with many courses at the National Vocational Qualification (NVQ) level 2, which is equivalent to lower secondary education usually undertaken up to age 16 (ISCED level 2).

England is relatively unique in the OECD in that both upper secondary and post-secondary qualifications are designed and accredited by independent awarding bodies as opposed to central government. This has resulted in a plethora of different qualifications available for study (Musset and Field, 2013). The government is currently attempting to rationalise the number of qualifications and increase their rigour, while at the same time move learners towards Level 3 or upper secondary level. There is also a plethora of training organisations across the country, with nearly 3 000 training providers operating in England (UK Government, 2014).

Recent reforms have included the introduction of an employer-endorsed “technical level” at NVQ level 3. The government is also seeking to boost employer engagement more generally in training design and delivery. Throughout this process, England is moving from a centralised VET system to a system that is decentralised and market driven. This is intended to improve the ability of employers and local colleges to design courses, compete for funding and respond to enterprise skill needs.

A national push towards apprenticeships

There has also been a recent push to increase the number of apprenticeships in the UK at both the upper secondary and post-secondary levels. Apprenticeships have received significant policy attention and increased funding under the last two British governments, which has coincided with an almost 100% increase in apprentices in England between 2010 and 2015. However, there are still fewer apprentices as a share of the workforce in England (11 per 1 000 employees) in comparison to other OECD countries (39/1 000 in Australia, 40/1 000 in Germany and 43/1 000 in Switzerland) (What Works Centre for Local Economic Growth, 2015). There is now an aim to increase the number of apprenticeship starts in the UK from 2.3 million in the last parliament to 3 million within the current parliament (HM Treasury, 2015).

Apprenticeships can be offered at a number of different levels, including intermediate (NVQ level 2), advanced (NVQ level 3) and higher (NVQ level 4 and above) – with degree level apprenticeships currently being introduced. Despite this diversity, 58% of apprenticeships were at the intermediate level (NVQ level 2) from 2013-14.

While many have welcomed the government focus on increasing apprenticeships, there have been concerns that the rise in absolute numbers has led to a sacrifice in quality. It has been argued that many employers, particularly in retail, have adapted existing short-term employer training into an apprenticeship structure to secure government funding, which has the potential to undermine the perceived quality of the “apprenticeship” brand. Further, because training providers are only paid the full “outcome related” payment for delivering apprenticeships on completion, there have been concerns that providers are prioritising getting people into “easier” apprenticeships, while also working with those people who would find apprenticeships easier to complete, resulting in a “drive to the bottom” (Wolf, 2015).

The largest share of apprenticeships in England is in the area of business, administration and law (which together represent a quarter of all apprenticeship starts), followed by retail and commercial enterprise, and then health, public services and care. Apprenticeships rates have not increased to the same extent in sectors that have the highest skills shortages, such as engineering, manufacturing and construction (UKCES, 2013). There have been further concerns that small to medium enterprises (SMEs) are less likely to take apprentices than larger firms.

Until recently, there had been additional concerns about a rise in adult apprentices at the expense of younger people. For example, only 24% of surveyed employers had recruited any 16-18 year old apprentices throughout 2012, while 53% had recruited 19-24 year olds (IFF Research, 2012).

There have been a set of national reforms to boost the reach of apprenticeships to ensure that they reach the young and are undertaken in smaller employers (Mirza-Davies, 2015). These include:

Each apprenticeship must have a minimum duration of 12 months (the majority last 1 or 2 years).
Apprenticeships need to include 30 hours of employment a week (including off-site learning) and 280 guided learning hours in the first year, of which 30% are on the job.
A series of apprenticeship grants have been developed for SMEs (in particular micro-enterprises).
For those aged under 19, apprenticeships are free and 50% of costs are reimbursed to 19‐24 year olds. Adults over the age of 25 are now obliged to take government loans, which must be repaid to the state.

The shift towards non-funded apprenticeships for workers above the age of 25 has had a significant impact on adult apprenticeship numbers in recent years.

Following the 2012 Richard Review, the system for developing and awarding apprenticeships has also been simplified from the former situation of over 250 different apprenticeship frameworks (What Works Centre for Local Economic Growth, 2015). The existing apprenticeship frameworks (which were based on national occupational standards) are being replaced by new employer-designed apprenticeship standards. A set of apprenticeship “trailblazers”– groups of 10 or more industry employers – have been established to develop new occupational standards. By 2017, it is expected that all apprenticeships will be based on such standards. The standards involve a relatively simple description of the skills, knowledge and behaviour required to do a job competently and meet professional requirements where they exist (HM Government, 2015). They are therefore thought to make training less bureaucratic and accessible to small- and medium-sized enterprises (SMEs). 140 trailblazers have developed 169 occupational standards to date (Mirza-Davies, 2015). However the numbers of starts on trailblazer-designed apprenticeships have so far been small – just 300 in 2013-14 (BIS and Skills Funding Agency, 2015). Graduate-level apprenticeships have also been introduced that are designed to offer a formal alternative to a full-time degree.

Future policy commitments include an Apprenticeship Levy that will cover all larger employers by April 2017, bringing the UK system more in line with the systems in Germany, France and Denmark. The apprenticeship levy will represent 0.5% of an employer’s total wage expenses, which can then be accessed by the employer to fund apprenticeship training and assessment. A GBP15 000 allowance for employers will mean that the levy will only be paid on employers’ pay bills over GBP 3 million. This means that less than 2% of UK employers will pay the levy, which is mainly targeted towards larger employers. A new Institute of Apprenticeships will also be established in April 2017 to carry out quality assurance.

Local variation in apprenticeships: Quality and quantity

The take-up, nature and quality of apprenticeships varies across cities in England (see Box 2.1). It might be expected that cities that have the highest job density should also have the highest take-up of apprenticeships per working-age population, as employers are more willing to take on extra staff. However, Centre for Cities find that this is not reflected in their data. There actually appears to be an inverse relationship between job density and apprenticeship take-ups (Centre for Cities, 2016). Cities in the north of England are broadly more likely to offer apprenticeships than in the south. However several southern cities, such as Reading and Portsmouth have been particularly likely to offer advanced apprenticeships, and apprenticeships in engineering, construction, maths and science. Success rates have also been particularly high in Plymouth and Portsmouth on the south coast (ibid):

Box 2.1. Local variation across English cities in apprenticeships delivery and take-up

There are variations across England in terms of a number of dimensions of apprenticeship delivery:

Number – In 2013/14, the top three cities for apprenticeship starts per thousand of working-age population were Sunderland, Barnsley and Middlesbrough. Oxford, Cambridge and London were the bottom three cities.
Age group – Across all cities, 38 per cent of apprenticeships were undertaken by those aged 25 and over, 35 per cent by 19 to 24 years old and 27 per cent by 19 and under. In some cities the apprentices tended to be younger. Those aged 19 and under accounted for 33 per cent of all apprenticeship starts in Barnsley, Derby and Sheffield.
Level – The majority of apprenticeships across all cities were intermediate – across all cities one in three starts were in advanced apprenticeships and just 2% were higher apprenticeships. At 4 per cent, the share of higher apprenticeships was highest in Blackpool, while these apprenticeships were less than 1 per cent of all starts in Swindon.
Occupation – In 40 out of 56 English cities most apprenticeship starts were in business, administration and law (on average 31 per cent of all starts). In Blackburn 43 per cent of all apprentices trained in these subjects. But fewer than one in five apprentices trained in engineering, construction, maths and science. These subject areas were the most common choice of apprentices in Reading (42 per cent), Portsmouth and Chatham (30 per cent), and Plymouth (27 per cent).
Success rates – In 2013/14, across all cities 68 per cent of apprentices successfully completed their training. But chances of completion varied between cities. The success rate was highest in Barnsley (77 per cent) and lowest in Milton Keynes (59 per cent). Success rates were also high in Blackburn (76 per cent).

Source: Centre for Cities (2016).

Figure 2.1 shows variation in apprenticeship starts and job density across English cities.

Administrative and governance reform in the United Kingdom

The recent establishment of new local institutional structures (e.g. Combined Authorities) and the devolution of funding and greater responsibility to local areas to support economic growth (e.g. via City Deals/Local Growth Deals) is providing new opportunities for UK cities to lead, shape and implement skills strategies.

As part of the City Deal process, the city of Manchester and Leeds City Region both decided to invest in skills, with a priority focus on apprenticeships. A new Apprenticeship and Skills Hub was set up in Manchester in 2012-13 with a budget of GBP 6 million to increase the number of people taking apprenticeships at level 3 and above, and to support apprenticeships within SMEs. The initial aim was to increase the number of 16-24 year olds starting apprenticeships by 10% a year every year until 2017-18, but this target was later abandoned. The key partners include Manchester New Economy, the National Apprenticeship Service, the Skills Funding Agency, Greater Manchester Chamber of Commerce, Greater Manchester Learning Provider Network, Greater Manchester Colleges Group and the Greater Manchester Local Authorities.

The Leeds City Region received GBP 4.6 million within its City Deal to establish eight new apprenticeship hubs and two apprenticeship training agencies (ATAs), with the objective of creating a “NEET-free” city region (i.e. a region free of young people not in education, employment or training). Key partners include the Leeds City Region Enterprise Partnership (LEP), the National Apprenticeship Service, the Skills Funding Agency, ten local authority areas that make up the Leeds City Region, further education colleges and training providers and others.

This case study will summarise each local apprenticeship hub strategy in detail, assessing the problem that the initiative sought to address, the key objectives, the governance arrangements, the activities, the impacts to date and their strengths and weaknesses.

The apprenticeship initiatives: Activities and governance frameworks

The population of Greater Manchester is 2.73 million people. There are 105 000 businesses which generate 56 billion of gross value added (GVA) annually, accounting for nearly 40% of the GVA of the North West of England. The unemployment rate in Greater Manchester was 6.8% in 2015 – a decrease compared to 2014 but above the UK average. Manchester performs slightly below average when it comes to skills levels, with 31.9% of the working age population having a NVQ level 4 or above (this is equivalent to a bachelor’s degree) compared to 36% for the UK as a whole. A further 10.6% of the working age population has no qualifications, as opposed to 8.8% for the UK as a whole (ibid.). Greater Manchester is the third most deprived Local Enterprise Partnership in the country according to the 2015 Indices of Multiple Deprivation (Department for Communities and Local Government, 2015).

The Leeds City Region has a population of 3 million people and a GVA of GBP 60.5 billion, the largest in England after London and the South East. There were 119 000 businesses in the region in 2015. The sub-region is composed on ten local authority districts located in West, North and South Yorkshire. The city of Leeds is an important legal and financial centre. The unemployment rate was 6.2% in 2015. Skills levels are slightly below the UK average, as 30.6% of the population had NVQ 4 and above in 2015, while 9.9% of the population had no qualifications (NOMIS, 2015). The Leeds City Region is ranked 9th in terms of the most deprived Local Enterprise Partnerships in the country (Department for Communities and Local Government, 2015).

The apprenticeship hubs that were established in Manchester and Leeds sought to tackle broadly similar issues. Both city regions aimed to address the low level of engagement of SMEs in apprenticeships and increase the engagement of young people. Leeds had an additional specific objective to reduce the number of NEETs in the city (those young people not engaging in education, employment or training). In Manchester there was a further focus on increasing the number of higher and advanced apprenticeships, and on building training provider capacities to target key employment growth sectors.

The Greater Manchester Apprenticeship Hub

The Greater Manchester Apprenticeships and Skills Hub is managed, co-ordinated and facilitated by New Economy on behalf of Greater Manchester Combined Authority and the Greater Manchester Local Enterprise Partnership.

The process of developing the Apprenticeship Hub Delivery Plan highlighted a number of significant and critical issues in previous apprenticeship delivery, including:

Low volumes of NVQ level 3 and above apprenticeships available;
Low recruitment into apprenticeships of young unemployed people;
Limited availability of impartial information, advice and guidance for young people that was restricting demand among learners;
SMEs were not fully engaged in the skills system, which they often perceive as complex and disjointed.

The main objectives and activities of the Manchester apprenticeships hub can be seen in Figure 2.2:

A primary aim of the Apprenticeships Hub was to maximise demand for apprenticeships from employers, through carrying out marketing exercises, encouraging the public sector to provide civic leadership by taking on apprentices, and building capacities among smaller employers to recruit and manage apprentices. At the same time, there has been a campaign to increase the take-up of apprenticeships among young people by investing in careers advice and guidance in schools. A third aim has been to boost the capacity of local training providers to develop higher-level apprenticeships in growth sectors within the Manchester economy.

Key priorities and activities of the Greater Manchester Apprenticeship Hub

To date most of the work of the Apprenticeship Hub has focused on the following elements, namely:

Providing information, advice and guidance to young people;
Building capacity among training providers;
Engaging employers.

Providing information, advice and guidance to young people

The emphasis given in Greater Manchester to the promotion of information, advice and guidance for young people has reflected broader concerns about careers advice in schools and colleges, and the extent to which vocational training and apprenticeships were being promoted. A recent study by the quality standards agency Ofsted found that three quarters of schools in England were not implementing their duty to provide impartial careers advice effectively. The report also found that vocational training and apprenticeships were rarely promoted well, especially in schools providing education up until the age of 18 (Ofsted, 2012). This may be because schools have only recently been given the main responsibility for delivering careers advice, after national funding ceased for the careers advice agency Connexions in 2010. At the same time, stakeholders in Greater Manchester noted that a significant barrier to apprenticeship take-up by 16-18 year olds is a lack of understanding about the labour market and future earnings potential associated with apprenticeships among both young people and their parents. This contrasted with 19-24 year olds, where stakeholders noted greater concerns about apprenticeship quality, the breadth of opportunities available and pay (Cambridge Policy Consultants, 2014).

Each local authority in the Greater Manchester city region received 24 000 pounds in 2013 to deliver a set of initiatives relating to careers information, advice and guidance in schools. The local authorities were asked to develop various activities in order to:

Increase the proportion of 16-18 year olds in apprenticeships;
Raise awareness;
Encourage take-up of work experience, employer engagement activities and pre‐apprenticeship offers;
Target groups that are currently underrepresented, including unemployed young people.

The approach has generally been to embed information about apprenticeships in the context of other forms of career advice. Each local authority was required to produce materials and electronic resources to be used in careers events and tutorials, both locally and across the Greater Manchester area. The collective aim was to engage at least 50 compulsory and post-compulsory secondary schools across Greater Manchester in project activities (at least five per local authority area). The team also aimed to create encourage at least 3 000 young people aged 15-18 to register to the National Apprenticeship Service website (300 per local authority area). New Economy envisaged that the local authorities would work together and pool resources while specialising in different areas.

Examples of projects undertaken include an initiative by the Sharp Project focused on the Creative and Digital Media Sector. This project has involved engaging with five schools through taster sessions and mini projects. An initiative called “Engineering Futures” is also currently working with 47 schools to develop Engineering & Manufacturing Partnership Clusters that bring together young people, parents, schools and employers in order to stimulate demand for apprenticeships – particularly advanced apprenticeships – within engineering and advanced manufacturing. The project has included inviting inspirational speakers and ambassadors from the sector to speak to young people, organising site visits/tours, and encouraging employers to engage in dialogue with training providers. Following positive feedback from the first phase of activity, this activity has been further expanded within Greater Manchester.

In Rochdale, a pop-up apprenticeship shop was opened to provide guidance on apprenticeships to interested parties and unemployed people referred to them by Job Centre Plus. Particularly successful schemes included the employment of “apprenticeship ambassadors” – for example, after apprenticeship ambassadors in Bury spoke to students about their experiences undertaking apprenticeships, the local area saw a dramatic increase in post-16 sign ups. Professional development courses for teachers and school staff in careers advice were also found to be particularly valuable.

The aim of these youth-focused activities has recently shifted towards targeting the hardest to reach, focusing on specific communities. This includes young people that have been living in care (i.e. those without families who are looked after by the state). This group has been targeted by Rochdale Metropolitan Borough Council through a project called Care to Work (C2W). Some of the approaches in this area have been shared across Greater Manchester.

The activities in each local authority area have been complemented by an apprenticeships marketing campaign across the city. There have also been negotiations with transport planners in the city to create a transport deal for apprentices, so that young people are not dissuaded from applying for apprenticeships due to accessibility and cost issues.

Building capacity among training providers

The second main area of activity in Greater Manchester to date has been building capacity in the training provider sector, particularly in the field of higher and advanced level apprenticeships. New Economy has carried out a series of stakeholder discussions regarding advanced and higher apprenticeship programmes geared towards the Greater Manchester labour market. Some stakeholders considered that young people had been put off apprenticeships by the limited range of opportunities available. For example data from the National Apprenticeships Service (April 2013 to February 2014) showed that almost half of all vacancies (45%) were in Business Administration and Law, while just 14% of total jobs were in this sector. Sectors with a possible under-supply of apprenticeships in comparison to employment include retail, health, public services and care, engineering, construction, education and science and mathematics (Cambridge Policy Consultants, 2014).

The work under this priority has consisted of engaging with 13 different providers on 22 higher apprenticeship frameworks. The focus has been on Greater Manchester priority growth areas, namely those sectors which are the most productive and which have skills gaps. This includes health/social care, advanced manufacturing, digital and creative, finance and professional and retail. More recently there has been a specific bid for providers to develop capacity in delivering science-based apprenticeships, given Manchester’s growing scientific sector. Up to 50 000 pounds was available to contribute to 50% of start costs. New Economy has also brought training providers together to discuss progress and share good practice.

Engaging employers

As identified above, a key priority for Greater Manchester has been to engage more small to medium-sized enterprises or SMEs, of which there are 97 000 in Greater Manchester. The learning so far is that this process is partly about managing the expectations among these employers as to what makes somebody “job ready” at the age of 19. The direct engagement of employers has received less attention than the other two objectives thus far, although there have been specific pieces of work to engage the black and minority ethnic (BME) community, and to increase apprenticeships in the voluntary sector (identified as the “hidden sector” for apprenticeships). In the future, Greater Manchester is hoping to create a comprehensive Greater Manchester-wide support framework for employers in order to engage them in new standard setting exercises around apprenticeships, and ensure that employers feed further into apprenticeship curricula.

Box 2.2. A training provider’s perspective on engaging employers to deliver apprenticeships

QA Apprenticeships is a training provider that delivers higher and advanced apprenticeships in information technology to both Greater Manchester and the Leeds City Region. They originally worked with employers to deliver customised training for their own staff and have since branched into apprenticeships. They have found that most employers, including SMEs, would like to host apprenticeships but find it difficult to effectively recruit young apprentices. QA Apprenticeships has therefore focused to a large extent on this aspect of their support to SMEs. They run advertising through social media; establish job boards; advertise positions on specialist websites; run an assessment centre; and develop short lists for employers. As they can do these activities at scale, they feel that it makes more sense for them to do this as opposed to an individual SME. They also provide on-going support for apprentices once in post, particularly over the first three months, which they identify as often the hardest. While QA Apprenticeships have welcomed employer involvement in the design of their programmes, they have found it difficult to fully engage in the “trailblazers” discussions with industry and associated stakeholders because there have been a number of hold ups in implementation.

Source: Interview with QA apprenticeships, 18 December 2015.

Governance

The Greater Manchester apprenticeships hub is overseen by a core partnership involving the ten Greater Manchester Local Authorities, the Chamber of Commerce, the Skills Funding Agency, the Learning Provider Network, the Colleges Group and the North West Business Leadership team. These organisations are involved in project commissioning, and steering. The core partners meet every four months, and there are sub-groups that involve business and apprenticeship representatives to focus on specific issues, such as marketing. New Economy (an agency owned by the 10 local authorities in Greater Manchester) directly manages the Skills and Apprenticeships Hub. A Contract Manager and a Policy Officer are employed to manage the initiative. In addition, four people work within New Economy on strategy and policy around apprenticeships. The actual work of the Hub has been commissioned and tendered out on a project-by-project basis (except for the careers advice in schools where local authorities received direct grants).

Vertically, the hub reports to the Greater Manchester Skills and Employment Partnership which sits under the Local Enterprise Partnership and the Greater Manchester Combined Authority. Figure 2.3 shows the arrangements set in place to support vertical reporting,

Budget and financing

As identified above, Greater Manchester received GBP 6 million to run the apprenticeships hub. The budget for the Greater Manchester Apprenticeships Hub was due to be spent between 2012 and 2015 but spending will now continue until 2017.

The Leeds City Region Apprenticeship Hub

While the aims of the apprenticeships hubs in Greater Manchester and the Leeds City Region have been broadly similar, their management and administration styles differ. The apprenticeship hub in the Leeds city region has been decentralised to the eight local authorities that make up the region.

In Leeds, there has been a particular focus on NEETs (those 16-24 year olds not in education, employment or training). There were 28 000 young people in the NEET category at the start of the initiative three years ago, with the Leeds City Region Enterprise Partnership (LEP) aiming to make Leeds a “NEET-free city region”. However, the initial focus of the Hub Programme was the engagement of SMEs, based on the understanding that there was a glut of young people waiting to take-up apprenticeship opportunities but the availability of vacancies was limited.

SMEs make up 98% of local firms and constitute nearly 117 000 businesses. However, the Skills Funding Agency found that only 12% of SMEs were taking on apprentices before the hub activities began. Small businesses noted that they would like to provide apprenticeships but did not know where to turn – they were being marketed to by many different training providers but wanted free independent advice on what to do. This situation was made worse by the fact that training delivery in the city region is relatively fragmented, with over 600 training providers. Local SMEs also found that national advice and guidance on apprenticeships (available through a national phone line and website) was difficult to negotiate and they sought a degree of handholding from an impartial organisation that knew their local context well.

The specific goals of the Leeds City Region apprenticeship hubs were therefore to:

Create 2 500 new apprenticeships among those aged 16-24;
Engage 2 142 new businesses.

There is a central apprenticeship programme in the Leeds City Region with eight local apprenticeship hubs in Barnsley, Bradford, Calderdale, Kirklees, Leeds, North Yorkshire (covering Craven, Harrogate and Selby), York and Wakefield. Each local hub developed its own model for delivery depending on local circumstances. The employment and skills officers from the eight local authorities were involved in the bid for City Deal funding from the very beginning – each local authority developed their own business case, which were then combined into the application to the national government. When the City Deal funding was allocated, the eight local authorities were given the initial local lead, although this responsibility was outsourced in some cases, for example to a local college.

The City Deal has also supported the development of two Apprenticeship Training Agencies (or ATAs) in Leeds and Bradford – these are private agencies that help by taking on the administration associated with the employment of apprentices where companies are not able (for example because they could not offer the required length of contract). They act as “proxy-employers” that release the business from day to day employment of the apprentice. The ATAs can be particularly helpful in sectors that are based on more short-term project contracts, such as construction, where apprentices can be moved around according to the project’s needs. For example, in Bradford, the ATA has enabled apprentices to be involved in the construction of a new shopping centre. They also help young apprentices with any personal problems that they experience so that the employer does not need to be engaged with this. The aim is for the ATAs to be commercially sustainable by 2016 and thereafter charge a management fee to employers.

Activities

Each local hub in the Leeds City Region has been free to develop its own set of activities according to local priorities and in line with local business support infrastructure. All hubs work towards the combined aims of the partnership programme and agreement of increasing young people’s uptake of apprenticeships and the involvement of SMEs. Indeed although there was a broad aim for the programme to support the region’s aspiration to be “NEET-free”, NEET targets were not quantitatively specified to the local authorities. However, programme targets were based on and allocated to locations based on the number of NEETs as of 2012.

The local authorities have managed their hubs in various different ways. For example, Barnsley local authority outsourced their hub activities to the local college where an independent company was set up to deliver the programme. It started by focusing purely on employer engagement, cold calling employers, doing seasonal campaigns, and inviting referrals from the local development agency and Job Centre. They particularly targeted employers within the LEP priority sectors, while also developing innovative “seasonal” campaigns aimed at industries that are likely to recruit at certain times of year ahead of business peaks – for instance travel agents and estate agents in the months before New Year, and the hospitality industry before Christmas. After an initial period, the local apprenticeships hub realised that the pool of young people available to do apprentices was shrinking. They then broadened their focus, and started to better connect the hub to the wide range of Council services and agencies that connect with young people, such as schools and careers information, advice and guidance (IAG). Barnsley performed particularly well in comparison to other English cities in both apprenticeship starts and completions in 2013-14 (Centre for Cities, 2016), while starting from a relatively high base.

Calderdale local authority matched the grant from the Apprenticeship Hub with additional local funds to create a larger scale project with more intensive employer engagement. Their aim was to create 4 040 apprenticeships by 2020. The title of their campaign is “Grow your own future”. They have employed three employer engagement officers, worked with employers proactively on job design, delivered pre-apprenticeship work placements to help young people to identify the most appropriate employer and role for them, made monthly visits to apprentice work places, and established broader education-business partnerships in schools. They offer bursaries to apprentices who not able to access other grants. They have recruited apprenticeship ambassadors to talk to young people in schools so that they have a better understanding of the value of apprenticeships. The hub has also focused on specific local sectors – manufacturing, creative, digital industries – and prioritised quality apprenticeships. The local authority has also insisted that apprentices were paid at least the standard minimum wage for all employers for their work (the minimum wage for apprentices is usually lower).

The other local authorities have also developed approaches to delivery that have been adapted to their local conditions. In the city of Leeds, there has been a strong focus on career progression and developing apprenticeships as “pathways of choice”. In Wakefield, there has been a focus on longer-term job prospects – it was decided not to work with one particular local sector because they were consistently not retaining apprentices as employees after the apprenticeship training was over. In Bradford, it was decided to move from a focus on apprenticeship starts to apprenticeship completions, due to concerns over the number of people not finishing their apprenticeships.

Over time, across the programme, there has been a greater focus on engaging young people into apprenticeships, as opposed to carrying out employer engagement. This was due to the success of engaging businesses which created a wealth of vacancies. There has been a simultaneous fall in the pool of young people seeking apprentices due to reductions in youth unemployment and the new Raising Participation Age [RPA] requirement that young people remain in education until the age of 18 (which many have interpreted as remaining in school education). Once the hubs had helped SMEs to prepare for taking on an apprenticeship, there was a long lag time before the vacancy could be matched with somebody that was “apprenticeship ready”. As part of activities to reach the remaining unemployed youth, the apprenticeship hub representatives regularly go into Jobcentre Plus team meetings to talk about the benefits of apprenticeships and explain further how they work. Young people are also being targeted by another city region scheme called Headstart, which is operated by each local authority with funding that the LEP secured from government. The programme has a budget of GBP 4.6 million to help 18-24 year olds into work, and has helped over 1 000 young people to date.

Unlike in Greater Manchester, the Leeds City Region has not featured any direct work to build capacities among local providers, or to help them to focus on higher or advanced apprenticeships. However, each Hub has strong relationships with providers who are part of the “partnership delivery model” at the local level as the providers play a key role in providing apprenticeship learning opportunities through their core funding.

However, like in Greater Manchester, there has been a focus on transport and accessibility in the Leeds city region, to make sure that young apprenticeships could reach their work place easily and economically. The apprenticeship hub has worked with the West Yorkshire Combined Authority, transport operators and political leaders to ensure that apprentices are treated like all young people attending more academic strands of education, and are able to access transport half price. There have also been smaller pilots to give apprentices a free “metro card” for free transport for apprenticeships in their first month and a free bike campaign to give apprentices easier and healthier access options to their place of employment. At the same time, the links with the Combined Authority has enabled promotional advertising about the apprenticeship hub to be disseminated as part of real time travel information at bus stops throughout the city region and posters embedded into bus timetables at bus stops and bus stations around West Yorkshire.

Governance

As identified above, the Leeds City Region has established a rather different way of managing its apprenticeship hub in comparison to Greater Manchester. The central apprenticeships hub has decentralised control over the activities of the eight local hubs to the individual local authorities. However, all the hubs are managed within the same overall contract to build transparency and achieve common goals. The overall programme outputs were set broadly to enable flexibility for the individual local authorities to allow complementarity to local business support infrastructures. The local authorities have discretion regarding the targeting of the programmes within the broad quantitative targets to raise numbers of young people taking apprenticeships and apprenticeship placement in SMEs. However, as part of the City Deal funding received from the Skills Funding Agency is results-based, this was felt to create a fairly rigorous performance culture.

The central hub carries out a number of co-ordination activities. Every six weeks there are network meetings of all the hubs. These function both as places for sharing best practices and “self-help groups” to report on overall performance. There are also six weekly one to one meetings between the hub manager and each local hub. Some specific hub activities are also taken forward centrally such as engaging with the National Health Service to establish apprenticeships in the health care sector. Marketing and communication have also been developed centrally under a central communications contract, with a common website that contains promotional material including films featuring success stories. However local hubs have also been encouraged to take forward different marketing campaigns and to develop their own form of branding to complement other local business targeted marketing activities.

In terms of the vertical management of the central hub itself, the Apprenticeship Hub Manager reports to the Head of Skills and Enterprise of the Leeds City Region Enterprise Partnership. Performance on the programme is monitored by and reported to the LEP’s Employment and Skills Panel and its associated advisory groups and then upwards to the LEP Board. The manager is responsible for ensuring that the initiative remains aligned to the goals of the LEP and its Skills Plan.

Budget and financing

As in Greater Manchester, the apprenticeship hub activities in the Leeds city region are funded by the Department of Business, Innovation and Skills (BIS) via the Skills Funding Agency. Leeds City Council was identified as the central accountable body. The funding was then allocated down to the eight local hubs according to their numbers of NEETs (young people not in education, training or employment). Payments to the LEP were based on results.

Other similar schemes

In both Greater Manchester and the Leeds City Region, the apprenticeship hubs work alongside a number of related national programmes including:

Traineeships: courses of up to 6 months that can prepare people for taking an apprenticeship. The core content of Traineeships is work preparation training, English and Maths and a work experience placement;
A Jobcentre Plus sector-based Work Academy which offers young people preparatory work trials that can help them to prepare for apprenticeships;
The Apprenticeship Grant to Employers (AGE): nationally this scheme is aimed at enterprises of 50 people or less with the grant covering the first five apprenticeships that an enterprise might offer. However, through devolution of an AGE allocation both the Leeds City Region and Greater Manchester have designed grant schemes that support the economic priorities of each locality including adapting eligibility criteria to support companies with up to 250 employees, while also prioritising advanced/higher apprenticeships, and those apprenticeships showing progression.
The Employer Ownership pilot – for example the Leeds City Region has won a GBP 17.5 million grant associated with the Employer Ownership pilot in the UK to set up a skills fund for SMEs from 2015-16.

Impacts of the Apprenticeship Hub initiatives

Both Leeds City Region and Greater Manchester are confident that they are on track to meet their overall aims and objectives for the apprenticeships hubs. However both city regions have had to adjust their expectations in terms of their quantitative impacts on apprenticeship numbers in the context of a plateau of apprenticeships in the UK as a whole – particularly for adult apprenticeships (see Figures 2.4 and 2.5). For example in Greater Manchester, the Hub has not reached its target of increasing the number of apprenticeships by 10% per year. This has been blamed in part on a nationwide drop in the number of adults taking apprenticeships following funding changes.

Greater Manchester

As identified above, most of the work in Greater Manchester has so far has focused on their Objectives 2 and 3 – recruiting more young people to undertake apprenticeships through better information, advice and guidance; and building the capacities of training providers to deliver higher level and advance apprenticeships in key employment growth areas. The outcomes of the work to support Information Advice and Guidance in Manchester have exceeded expectations in terms of apprenticeship registrations, although there is recognition that this does not always translate into new apprenticeship starts. In addition, evaluators have found evidence to suggest that 16-18 year old starts have begun to improve from 2011-12 (Cambridge Policy Consultants, 2014).

In terms of the more specific impacts of the two programmes, the results appear relatively positive. Over time, it has been understood that it is not just important to spread information on apprenticeships but also to reassure young people that apprenticeships are a path to quality employment with opportunities for progression. The Apprenticeship Hub is now aiming to create a “parity of esteem” between apprenticeships and more academic forms of training, while also setting out the different opportunities for apprenticeships more clearly. A report on apprenticeship progression in Greater Manchester found that the ability to progress up an apprenticeship level varied significantly by sector because of the varying supply of higher-level provision in each sector to facilitate progression. Progression was also found likely to be higher in sectors where there was professional body representation, sector regulation and the need to undertake higher levels of study to provide a license to practice (Regeneris Consulting, 2015). The recent development of “Apprenticeship degrees” (now being delivered by Manchester Metropolitan University) was found to be particularly helpful in illustrating the opportunities and possibilities for progression. In addition, it was found easier to market apprenticeships to young people where wages for apprentices were higher. For example progression through apprenticeships in the financial sector works well because the pay is relatively good.

An evaluation of work in Manchester to boost capacities among training providers to deliver higher-level apprenticeships in skills shortage areas has also been relatively positive. However it was felt that the funding intervention had brought forward course delivery that may have occurred anyway. It was also identified that training providers had found it difficult to bring in new employers, and had often worked to encourage their existing employer base to sign up to the new apprenticeships. Further, the degree of employer engagement in the actual design of apprenticeships has been limited to choosing modules and planning work-based training late in the apprenticeship development process. In terms of the chosen sectors, introducing higher apprenticeships in hospitality management and finance has been much more successful than in retail. In the future, the hub would like to do more to professionalise growing sectors such as retail and to move towards assuring quality in apprenticeships, for example by having a quality standard and ensuring that providers focus further on progression pathways.

Leeds

In terms of the original commitments made within the City Deal, the Leeds City Region Apprenticeship Hub is expecting to reach its initial goal of 2 500 new apprenticeships among 16-24 year olds by March 2016. In addition, the hubs have already exceeded their target of engaging 2 142 businesses. In terms of broader impacts, the number of NEETs in the Leeds City Region has fallen from 28 000 to 10 000 – however this has to be placed in the context of falling youth unemployment across the country. The overall conclusion of the mid-term evaluation of the programme was that, “it has made a major impact in a short period of time”.

In the Leeds City Region, the balance between the two specific goals of the apprenticeship hub has shifted over time. To begin with the principal focus of the programme was to target SMEs to ensure that young people could get apprenticeship placements. Over time, it was noted that SMEs were receptive and that the main challenge was to engage young people who were “apprenticeship ready”. Once the hubs had helped SMEs to prepare to take on an apprenticeship, there was a long lag time before the vacancy could be matched with somebody that was “apprenticeship ready”. The apprenticeship hubs therefore ‘turned the programme on its head’ halfway through to focus more on encouraging young people to take-up apprenticeships.

Strengths of the Apprenticeship Hub initiatives

In both Greater Manchester and the Leeds City Region, there has been a certain amount of evolution in the aims and mechanisms of the apprenticeship hub activities, and the flexible delivery arrangements in both local areas has helped in this process. Flexibility in programme delivery allowed the objectives, mechanisms and targets to be adjusted along the way. For example, as the number of apprenticeship vacancies for young people were increased in Leeds City Region, the Apprenticeship Hub website shifted from principally targeting SMEs towards engaging young people. This coincides with the recognition that those still out of work or training and those seeking a change in learning direction were proving harder to reach. A good relationship with the Skills Funding Agency grant holder in each city region enabled some negotiation on funding and targets. In a similar fashion (and outside these particular city deals), flexibility has also been built into the National Apprenticeship Grant to Employers (see above), which has enabled both Leeds City Region and Greater Manchester to adjust the target group to larger SMEs while also prioritising local growth sectors and apprenticeships offering progression.

The decentralised approach taken in the Leeds City Region was also found to have benefitted from flexible performance management. In reality, some local authorities have over-performed while others underperformed. The flexibility in the management processes has allowed good performance to compensate for the poorer performance elsewhere. At the same time, it was felt that the national government’s insistence that some payment should be on the basis of results had created a strong performance-orientated culture.

Local authorities were key players in the delivery of the apprenticeships hubs in both city regions. In the UK, local authorities generally have a strong overview of local economic development and tend to be responsible for promoting growth while also ensuring local social inclusion. In addition, in both cases, the local authorities were closely linked to the Local Enterprise Partnership (LEP) so that the initiative could be partially steered employers with a focus on broader regional strategic aims. In Greater Manchester it was felt that this vertical relationship could have been stronger – more support from the LEP, for example, could have raised the profile of the initiative.

Unlike the Leeds City Region, Greater Manchester has developed a model which is largely based on tendering out projects, and while the commissioning process was sometimes challenging to manage, New Economy felt that it helped the hub to become embedded within mainstream provision as opposed to being managed separately or in parallel to other agencies and services.

In terms of other strengths, the Apprenticeship Training Agencies (ATAs) in the Leeds city region have been seen as particularly useful by national government in facilitating apprenticeships for those employers that could not take on the employment responsibilities associated with this training. The view locally is that such agencies have a role to play in supporting the apprenticeship agenda and are particularly suitable where it is difficult for a business to guarantee longer-term employment for the apprentice due to seasonal demand. However, there is a limit to the degree that employers are willing to pay for externalising apprenticeship management, which could have an impact on the commercial opportunity for ATAs.

Weaknesses of the Apprenticeship Hub initiatives

Both Greater Manchester and the Leeds City Region have struggled somewhat to bring more young people into apprenticeships in their region, partly because of a difficulty in establishing a ‘parity of esteem’ between apprenticeships and other more academic learning routes. This is to some extent outside their control as apprenticeships are defined nationally and this is a broader national issue. However, even if this were outside the direct scope of the city deal programmes, more could have been done in both city regions to raise the quality and relevance of apprenticeships and ensure that they lead to further learning and good employment prospects.

In the Leeds City Region, it was felt that encouraging employers to pay above the apprenticeship minimum wage, from the outset or from progression points such as at three months, had helped to attract more and stronger candidates to apply for apprenticeships and to deliver better results for businesses. It was found by evaluators that such actions had helped to convince both pupils and parents of the merits of apprenticeships. These actions could thus be further expanded (Les Newby Associates, 2015).

Both Greater Manchester and the Leeds City Region have also had to deliver their programmes in a changing national context for apprenticeships. In addition to changing the funding structure for adult apprenticeships, the UK Government has also recently raised the participation age so that young people are required to stay in education until the age of 18. Many schools have used this as a lever to encourage young people to stay in their own institution. This has resulted in some difficulties for the Apprenticeship Hubs in the Leeds City Region in engaging with certain schools, as they were seen to be in competition for students.

In both Greater Manchester and the Leeds City Region, the City Deal programme came a few years after a widespread collapse of careers education and guidance at local level in the UK. Schools now have responsibility for providing careers education through independent advisors but this has resulted in fragmented and inconsistent provision. In both regions, the City Deal initiatives have been “picking up the pieces” to deliver effective careers advice, thereby filling a gap in national policy provision. This may explain the significant emphasis on providing information, advice and guidance for young people, as opposed to investing in apprenticeships themselves. While this was obviously a necessary activity (and formed part of the initial city deal contracts), it is not necessarily the best use of apprenticeship-specific funding streams.

In the Leeds City Region, it was felt that the plethora of different national initiatives launched to support young people and increase apprenticeships had not helped to boost the engagement of employers. As different national initiatives that share target groups and outcomes were launched with different timelines, it was difficult to design and co-ordinate a fully integrated delivery infrastructure at the local level.

In both the Greater Manchester and the Leeds City Regions, it was felt that the time that was needed to build SMEs and secondary school engagement should not be underestimated. Turning around perceptions of the value of apprenticeships and increasing “parity of esteem” was identified as a long-term task. Building relationships with training providers had also required some perseverance in the Leeds City Region, as the providers initially saw the hubs as competitors as opposed to a potential supporter and partner.

Further, the Leeds City Region Enterprise Partnership felt that they did not have enough power to properly influence training providers to focus on skills shortage areas such as engineering, software development and computer engineering. In 2009-2010, the city region Employment and Skills board had been on the cusp of being awarded statutory powers to manage local skills policy, before these plans were abandoned by the then new Coalition government in favour of a policy of local management by “persuasion”. In reality, the City Region has found that colleges and training providers were more likely to be persuaded by demand from individual learners than the strategic recommendations of the LEP. Training providers are often particularly reluctant to develop and provide capital-intensive courses, such as engineering, without the necessary student demand. This was also a driver for the focus on influencing careers advice and IAG in schools, which was hoped to increase interest in the value of studying particular subjects of relevance to the broader city region economy, and thereby have a knock on impact on training providers. Upon review, Manchester’s decision to use its funds to tender out support for capacity building in particular sectors of importance to the local economy could also have worked well in Leeds if they had been given similar funding.

The UK government is currently devolving new powers to the local level to shape provision under “area based reviews”. The 16+ education area reviews will enable city regions to examine at their current FE and sixth form college base to determine the relationship with local skills needs and help to reshape delivery where necessary.

In both city regions, the work with employers focused on persuading and enabling employers to take on apprentices and instead of working with employers to design curricula. The administration felt that SMEs were more concerned about day-to-day issues and less invested in strategic engagement in training design. This may explain the limited progress made so far by the national Trailblazer initiative that enables groups of employers to get together and design new apprenticeship standards. In the Leeds region, the Trailblazer initiative is being facilitated by colleges instead of employers and has not yet resulted in substantive change.

There were also a number of lessons learnt in terms of the optimal governance arrangements for apprenticeship services. The Apprenticeships Hub in Greater Manchester, for example, regretted having initially started with a piecemeal approach instead of funding larger projects. However they felt that this was part of their growth and development process, and are now moving onto projects with higher critical mass.

The partnership between stakeholders in Manchester was felt to have worked well – while it has not always been possible to get the most senior level of management to meetings, everyone who is involved is very committed. However it was felt that this partnership could function sometimes as a relatively “closed network” of “usual suspects”. Care had to be taken to separate roles (i.e. so the same organisation could both bid for projects, while at different points helping to advise during the tendering process). It was also felt that there had not been enough employer engagement in the operation of the hub. For future initiatives, it may be beneficial to allow employers to play a greater role within the steering partnership.

Conclusions: Transferable lessons and considerations for the successful adoption of similar initiatives in other OECD countries

This case study to some extent underlines the benefits of working locally to promote apprenticeships, particularly among small to medium-sized enterprises. The Greater Manchester hub manager notes that working at the local level can maximise the use of local partners while understanding local labour market needs. New Economy’s actions in building capacities among training providers to deliver more apprenticeships in key local growth sectors is a good example of how to build on this potential. Further, working at the local level can bring the possibility of increasing resources at the local level to achieve critical mass (as can be seen in the case of Calderdale) and exploring synergies with other local and regional strategies. As an example, Greater Manchester has recently received more responsibility for strategically managing the health and care sectors and carrying out new commissioning. This has linked in well with campaigns to increase the number of apprenticeships in these sectors, which could enhance the role of the public sector as a ‘civic leader’ to then inspire other employers. In addition, as identified above, both apprenticeship hubs have been working to influence transport provision in order to reduce transport costs and increase accessibility for apprentices.

In the Leeds City Region, the value of delivering local support and activity to promote apprenticeships was also strongly underlined. In particular, it was felt that the decentralisation to local hubs had played an important part in the success of the initiative because the local authorities were able to integrate the funding into broader business support provisions, while harmonising the new programme with other local initiatives while contributing to the overall aspirations, ambitions and priorities of the LEP. At the same time, it was felt that SMEs and other employers strongly valued receiving advice from a local independent body who understood their locality. Being concretely able to “get hold of someone” as opposed to negotiating a national website was perceived as important.

At the same time, the case study highlights the challenges of working locally to promote the provision of essentially a national policy objective (boosting apprenticeships) when the ‘rules of the game’ keep shifting, such as changing funding arrangements and the arrival of new and sometimes competing programmes.

While the aims of the hubs are broadly similar, the governance arrangements have been quite different. Both models seem to have their advantages. Greater Manchester benefitted from its centralised tendering scheme to steer training to growing sectors, while in the Leeds City Region decentralising the activities to eight local hubs created a fertile field of experimentation which has led to some lessons (eg the need to focus on quality placements) which are now being mainstreamed to broader city region.

Both apprentice hubs have ultimately come to focus on two key issues in their work:

Improving careers advice so that apprenticeships were seen as a real option (to raise “parity of esteem”);
Simultaneously ensuring that apprenticeships were indeed a high quality vocational training option with progression opportunities.

While these issues are perhaps particularly relevant to the current UK economy, and the nature of apprenticeships in this country, such aims and objectives may well be relevant elsewhere. In particular, it seems that employer engagement is less of a problem where there is a pool of willing and good quality candidates available to carry out apprenticeships. It also seems to have been particularly valuable to SMEs in both regions to have training providers or other agencies such as the ATAs who are willing to help with recruitment while also managing some of the day-to-day problems experienced by apprentices.

More broadly, the quality of apprenticeships, the salaries available and the possibilities for progression are particularly important in building a ‘parity of esteem’ for this vocational route. Centre for Cities (2016) argue that there is considerable variation in the quality of apprenticeship provision across English cities, and this may also be a problem in other countries. Because of this, an emphasis on quality, progression and the local relevance of apprenticeship sectors may be just as important as trying to boost apprenticeship numbers at the local level. In the UK, the current plethora of lower quality apprenticeships may be reduced by the new Institute of Apprenticeships to be developed in 2017. Indeed, there is evidence from elsewhere in the OECD that the decentralisation of vocational training provision should be accompanied by a strong national quality assurance framework. In Sweden, for example, the Higher Vocational Education (Yrkeshögskolan), system is highly decentralised and is based on groups of employers that commission and design training courses (OECD, 2015), which are then quality approved and monitored at the national level.

Finally, in terms of learning for other OECD cities and regions the following points would seem to be key:

Taking a decentralised approach to apprenticeships programmes can be effective, particularly in bringing on board SMEs. It takes time to build employer engagement in apprenticeships and SMEs may in particular require some “handholding” which can be effectively achieved at the local level;
There is little point in building employer engagement without a simultaneous investment in increasing the pools of “apprenticeship-ready” young people;
Attracting new young people into apprenticeships requires more than just effective marketing campaigns – it is also important to convince people that apprenticeships are a quality training offer, with good salary prospects and promotion possibilities. This may require a greater focus on reforming apprenticeships themselves;
It is important to invest in good quality careers guidance locally for young people so that they understand how apprenticeships can lead to quality careers in local growth sectors;
It is useful to build flexibility into the management of vocational training and employer engagement projects so that they can be adapted to local employment growth sectors, while being agile in the face of a shifting economic and policy context;
There is a need for central government to be co-ordinated in terms of the tendering out of different programmes and policies, while avoiding “drip by drip” policy reforms that can create a confusing policy landscape at the local level and reduce the possibilities for sensible long term planning.

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