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What does ‘Brexit’ mean for Apprenticeships?

In his latest blog, Paddy Patterson of Maverish Ltd and founder of Oxfordshire Apprenticeships discusses how the UK's decision to leave the EU could impact on Apprenticeships.

So, the United Kingdom has voted to leave the European Union. Like many people, I’ve spent the days since (and indeed the whole campaign) trying to avoid Chicken Little syndrome and trying somehow to work out what happens next.

It is not surprising that the Skills Minister Nick Boles has today (Monday 27th) announced that the next instalment in the government’s Apprenticeship Levy update – due by this Thursday, remember – will now be a “little delayed”. What should we read into this and what might ‘Brexit’ mean for Apprenticeships?

The Apprenticeship Levy

During the campaign, both Nick Boles and the Shadow Skills Minister Gordon Marsden expressed concern for the future of Apprenticeships should the ‘OUT’ vote prevail. Indeed Mr Boles questioned whether the Apprenticeship Levy would go ahead in that scenario, pondering whether the Chancellor would “feel it is prudent” to introduce a new payroll tax for employers, although today, while announcing the delay in the next Levy update, he said we should "continue to work on the basis that the Apprenticeship Levy is coming in April of 2017 as planned and in the way it was planned.” Erm, ok. 

Employers

Gordon Marsden spoke a few weeks ago of his fears on how the economic uncertainty caused by an OUT vote might affect business confidence in recruiting Apprentices. This would, he asserted, hinder companies looking to expand their business. And I suppose we have to consider the possibility of some large businesses moving their operations out of the UK and the impact that could have on Apprenticeship starts. Indeed, earlier in the campaign, the former Home Secretary Alan Johnston, campaigning for ‘Remain’ claimed that around 50,000 Apprentices work today in manufacturing Apprenticeships that depend on trade linked to our EU membership. On that basis, should we expect to see companies delaying or halting their Apprenticeship recruitment while they work out what it all mean for them?

Until the UK clarifies the status of the 2m+ EU workers living here, it’s too soon to start looking at what it could possibly mean for the labour market but in a scenario where employers face skills shortages because of new restrictions, then might they be more inclined to look at Apprenticeships as their only means of plugging the gap longer-term?

Young people

It’s widely reported that over 70% of 18-24 year olds voted to remain in the EU. However, only slightly over one-third (36%) of 18-24 years are estimated to have actually voted, so it’s not quite the ‘betrayal’ of the Millennials that some sections of the media are reporting. That said, every survey indicated a strong preference for remaining in the EU for that age group, and even more so for the 16 and 17 year olds who were unable to vote, of course. But what will the impact on young people, including Year 11’s who ironically from last Friday can opt to REMAIN or LEAVE in school education? Many expect graduate recruitment to be hit as larger firms downsize or scaleback on growth. Does this then make the Apprenticeship option even more attractive for young people? 

Wider impact

And of course, moving away from the EU means moving away from European funding for education, training and engagement programmes. We’ve been told consistently that the current European Social Fund (ESF) round via Local Enterprise Partnerships (LEPs) will proceed regardless, with the only variable being the value of the contracts, based on exchange rates. 

The loss of ESF – as complex and frustrating as it is at times - without replacing it with a new UK programme would be a blow to many individuals and groups who have been able to move closer to the labour market or progress onto further training or Apprenticeships because of it. 

What do you think?

What impact will Brexit have on Apprenticeships in the UK and beyond? Join us on Twitter for Oxfordshire Apprenticeships Hour on Thursday 30th June from 1-2pm and share your thoughts. Tweet @OxonApprentice or join in the conversation using the hashtag #OAHour.