This report investigates the crucial role that local government plays in shaping apprenticeships in their local economies and communities, and how this role can be consolidated and expanded to ensure the apprenticeships system delivers on its potential.

At their best, apprenticeships serve two vital economic and social purposes: increasing productivity and promoting inclusion. A well-designed and high-performing apprenticeship system can help to resolve deep-seated problems of unemployment and inactivity, while at the same time driving up the skills of the workforce and its productivity.

Their role in local economies is particularly important. While they have historically been focussed in certain industries or sectors, as local economies have changed, so too has the role of apprenticeships. They have become more diverse and have spread throughout the service-sector occupations that provide the majority of local employment opportunities. Too often, however, the current system is failing to realise its potential.

There are a number of major concerns:

  • Two-thirds of apprentices (67 per cent) at level 2 or level 3 are people who were already employed by their company, rather than new recruits.
  • Since 2010, 42 per cent of starting apprentices have been over the age of 25, rather than being young people finding their way into work.
  • A significant proportion of companies are failing to comply with the apprenticeship minimum wage, particularly in sectors such as hairdressing and children's care, and to the particular disadvantage of young people.
  • There appears to be a mismatch between the apprenticeships people want to take on and the vacancies available.
  • There is a particular concern over the poor quality of some apprenticeships – particularly in certain sectors and with certain providers – and falling success rates since 2010/11.
  • There are concerns centred on the quality of careers education, information, advice and guidance (CEIAG), which is currently secured by schools in challenging circumstances.
  • Finally, an overriding concern is that successive upheavals in policy designed to improve the system have instead often undermined it. For employers looking for clarity about a potential employee, the system is opaque and confusing. And for policymakers, analysing the performance of the system over time is challenging, due to the changing nature of apprenticeship programmes.

The potential of local authorities to enhance the local apprenticeships system is often overlooked, sometimes even by the authorities themselves. To inform this report, we surveyed 14 councils across the country to identify best practice and the barriers or limitations they are facing.

Our surveyed local authorities have undertaken a range of activities to:

  • boost uptake of apprenticeships among both employers and learners
  • improve quality
  • target specific disadvantaged groups.

Key examples and lessons from these councils are included in the report.

Beyond learning from best practice, we conclude that the underlying apprenticeships system needs to be reformed in various ways, in order to allow local authorities to maximise the value of apprenticeships within their local economies, for the benefit of apprenticeships and employers alike.

In summary, our recommendations for reforms at the local level include:

  • Local scale and capacity: Local authorities should pool capacity at local enterprise partnership (LEP) or combined authority areas for key functions related to employment and skills.
  • Focussing and coordinating services: Combined authorities (or local authorities working within LEP geographies) should combine forces with Jobcentre Plus, the National Apprenticeship Service, the Skills Funding Agency, LEPs and trade unions to become the primary point of contact for all actors in the apprenticeships system, through 'local apprenticeship hubs'. They should also take on statutory responsibility for careers education, information, advice and guidance (CEIAG), with additional power and funding from central government to do so.
  • Targeting and incentivising: Local apprenticeship hubs should be given control of the apprenticeship grant for employers (AGE).
  • Maintaining quality: Local government should work to ensure young people – and disadvantaged groups in particular – are apprenticeship-ready, through preapprenticeship training, traineeships and work experience targeted at vulnerable groups. They should also scrutinise apprenticeship agencies and providers, and monitor compliance.
  • Direct employment, commissioning and planning: Local government should lead by example in recruiting apprentices, including using their planning and commissioning powers to require employers to recruit apprenticeships from disadvantaged groups, whom employers would otherwise not hire. Local government should use 'section 106' powers to drive social inclusion.

A set of recommendations for central government, to support these changes at the local level, focus on:

  • simplifying policy and introducing national standards
  • promoting and enforcing minimum wage requirements
  • transferring the responsibility for CEIAG to combined authorities, LEPs or local authorities
  • requiring the agencies of central government (Jobcentre Plus, the National Apprenticeship Service and the Skills Funding Agency) to cooperate with local government, work closely with local schools and colleges, and be collectively responsible for the employment and skills activities in the area.