With 73% of organisations facing skills shortages in 2023 (Edge), the impact on business quality and public services is profound. We were pleased to welcome Anthony Painter, Director of Policy and External Affairs, at Chartered Management Institute (CMI), to our Apprenticeships Conference 2024. Anthony’s keynote: Social Mobility, Productivity, and Apprenticeships highlighted the challenge of filling skill shortages and contributing to the UK economy, as apprenticeships transition to more modern processes. Professionals working within the Apprenticeships sector can benefit from watching the full video above, alternatively, the full summary can be read below.
The debate around apprenticeships in the UK has gained momentum as the system reaches its ten-year milestone since the introduction of the apprenticeship levy and standards-based apprenticeships. This article delves into the current state of the apprenticeship system, its successes, challenges, and the broader context in which it operates.

Addressing Productivity and Skill Shortages
The UK has been grappling with slow productivity growth for over a decade and a half, a trend that has persisted through post-COVID and post-Brexit periods. From 2010 to 2022, the annual average growth in UK GDP per hour worked was just 0.5%, with little sign of improvement in recent years (Economic Observatory, 2024). This stagnation is evident across all regions, with London and the Southeast also experiencing growth challenges. However, the UK boasts strengths in innovation, high-level services, life sciences, digital sectors, AI, professional services, higher education, and creative industries. Harnessing these strengths could drive economic growth and spread opportunities across different regions and demographics.

Addressing Productivity and Skill Shortages Public Service Strains and Green Energy Progress
Public services face significant strains, with the NHS dealing with record waiting lists and chronic problems in local government, education, criminal justice, and policing. On a positive note, the UK has made commendable progress in green energy, with 50% of energy recently sourced from renewables (Gov). However, the skill system, particularly the apprenticeship system, must address these complex challenges and contribute to solving skill shortages in key industries.
Investment in People: A Critical Issue
Investment in people, often termed human capital, remains a critical issue. With 73% of organisations facing skills shortages (Edge), the impact on business quality and public services is profound. The UK’s investment in training is significantly lower than in other leading industrial nations. While the apprenticeship system has made strides in addressing this, there is still a considerable gap. The focus tends to be on immediate short-term needs rather than long-term skills development.

The Apprenticeship Levy and Systemic Trade-offs
The current apprenticeship system, supported by the £3 billion levy fund, faces debates on reallocating resources and addressing underspend, estimated at £300-400 million (IPPR). However, this leads to trade-offs, shifting resources from one set of qualifications or age groups to another. Such an approach is unsatisfactory, highlighting the need for a larger conversation about the underlying issues within the skills system.
Management and Leadership: A Vital Component
Management plays a crucial role in productivity growth and public service performance. Research indicates that over 50% of the productivity gap between the UK and the US (Economic Observatory) is due to lower average management capability in UK businesses. Effective management is key to developing others, fostering innovation, and enhancing public service outcomes.
Current System Contributions and Misconceptions
Despite criticisms, the apprenticeship system has shown significant benefits. Surveys reveal that 91% of apprentices receive a pay rise during their apprenticeship, indicating their value to employers (Gov). This contradicts media portrayals of the system as ailing. The current system contributes an estimated £7 billion to the UK economy annually, a 300% return on investment (CMI).
Addressing Misunderstandings About Management Apprenticeships
Contrary to misconceptions, management apprenticeships are not confined to the City of London or large professional services firms. In fact, the majority are in public services, with a significant portion in health, green, and STEM roles. These apprenticeships are reflective of society and regions, making substantial contributions to public services.

Future Directions and Broader Conversations
The apprenticeship system is nearing its capacity, necessitating broader conversations about its future. Calls for increased flexibility within the current system risk reducing the number of apprenticeships. Maintaining quality and standards is crucial, ensuring that apprenticeships provide real-world, work-based learning. Discussions about increasing levy funds and leveraging employer contributions are essential to meet the system’s demands.
Addressing Productivity Challenges Moving Forward
The apprenticeship system, while at the end of its current lifecycle, offers significant benefits. However, a larger, pragmatic conversation is needed to address productivity challenges, public service reform, and the green transition. A more comprehensive approach is essential to widen opportunities across regions and demographics, ensuring the system’s continued positive impact on the UK economy.
This was presented at our Apprenticeships Conference 2024. For more information on supporting the next generation to excel in their careers, please see our Most Able Pupils Conference below.
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