I tend to think of Robert Halfon as a decent sort of chap who just got into bad company and so ended up as the Conservative MP for Harlow. He styles himself as representing the working-class Conservative voter and probably has more genuine sympathy with that group than many of his colleagues, who seem suddenly to have discovered a concern about the ‘left behind’. He has been an independent-minded chair of the education select committee and has a commendable record of rebelling against the whip on grounds of principle, most recently in relation to free school meals. He has been a champion of students with special educational needs and disability.
Although I don’t doubt his sincerity, Halfon’s affinity for the working-class voter seems in practice to draw more on the prejudices of ‘white van man’ than the privations of the ‘red wall’ voter. Indeed, his habit of championing issues that make for good headlines in the Sun often leads him to focus on issues that are second order – parking charges in hospitals rather than funding the NHS, for example – or just plain wrong, such as seeking cuts in fuel duty during a climate emergency. Sometimes a favoured policy is simply not thought through. His approach to apprenticeships is a good example.
Halfon’s enthusiasm for apprenticeships is well known, clear and consistent. It is also a little naive. It has led him to propose a dramatic reform of higher education with government adopting a target of 50 per cent of students to be studying degree apprenticeships “in which they will earn while they learn, have no debt at the end and, unlike many graduates, be virtually guaranteed a good job.” While ministers have quietly ignored his ideas, tactfully declining to rubbish them outright, he raised the issue again this week and was rather more firmly rebuffed by Lord Wharton of Yarm, the preferred candidate for chair of the Office for Students.
Make no mistake, a degree apprenticeship can be a very good thing and it would be excellent to have more of them. To secure one with a leading firm like British Aerospace or Jaguar Land Rover is quite some prize – indeed, they are more fiercely contested than entry to an Oxbridge college. Whether the number of firms able and willing to provide such an experience can radically be expanded, however, is questionable. Over 99 per cent of UK businesses (by number) are small or medium sized enterprises (SMEs) accounting for around 60 per cent of total employment. Most simply don’t have the time or the staff resource adequately to support an apprentice. Furthermore, many do not have opportunities for degree level recruitment in any case.
An even more serious concern however relates to the cost. Since Halfon does not seem to have done the sums for his proposal, let us do them for him. The detail is complex but the broad outlines are clear.
To start with, the employer would need to pay the fees for a degree course which in England is, in most cases, £9,250 per year. The average starting salary for a degree apprentice is around £17,800 per year giving a total of just over £27,000. Adding in recruitment, supervision and other employment costs would easily make the overall bill for an employer taking on such an apprentice total £30,000 per year, if not more.
The question of how many apprentices there might be is a little more tricky. There are over 2 million students in England. If, by students, Halfon only means undergraduates there were 1.8 million in the UK in 2018-19 of whom 1.55 million were home students. Since higher education policy is devolved, perhaps we ought to focus only on the 1.27 million in England. One does not need to be too precise about these figures, however, to realise that the total cost of turning half these students into apprentices is just short of £20bn per year.
Students and families would no doubt be delighted to avoid the burden of debt that currently hangs over so many young people, but who is going to pick up the cost instead? Large employers pay an apprenticeship levy, currently based on 0.5 per cent of their pay bill if it totals more than £3m per year. The cost of fees for approved apprenticeship training can be reclaimed from their levy payment, though the wages of trainees and trainers and other overheads cannot.
It is certainly true that since the levy was introduced employers have increased their investment in degree level apprenticeships, though sadly much of the growth has been through ‘rebadging’ existing programmes and, even more sadly, at the expense of younger employees. The levy currently raises less than £3bn however, and it is not clear whether Halfon has plans to extend its scope to cover smaller firms or to increase the rate firms pay. In a sense it doesn’t matter, since one way or another large employers would have to pick up the whole cost.
Smaller employers receive generous help from government funding to meet training fees and may be supported by larger employers passing unspent levy funds to their supply chain; but again, the employer has to meet wages and employment costs. The current apprenticeship budget cannot meet the level of existing demand so it is possible that taxpayers might have to foot a larger bill. Alternatively, the levy might be extended; but either way even small employers would meet most of the cost unless there were a large hike in general taxation.
So the largest part of £20bn would, under Halfon’s proposal, pass from students and the state to employers – a sort of stealth tax.
It’s no wonder that Lord Wharton refused to commit to a 50 per cent target and described it as ‘an extraordinary shift’ in public policy. I hesitate to think what the Confederation of British Industry might call it.
It makes a nice headline Mr Halfon but it’s just not thought through – an all too familiar pattern under the present administration.