Developing the young workforce: fifth annual progress report 2018-2019

Chapter 3: Apprenticeships

Record numbers of young people are undertaking a Modern Apprenticeship.

Key Indicators

Outcomes (KPIs)

• The number of Apprenticeship starts at SCQF Level 6+^[4] increased by 1,996, from 18,524 in 2017/18 to 20,520 in 2018/19;
• The percentage of Modern Apprenticeship (MA) frameworks where the gender balance is 75:25 increased by 0.7 percentage points, but remains at 72% (71.6% in 2017/18 to 72.3% 2018/19).This is a decrease of 1 percentage point on the baseline (2013/14);
• The percentage of MA starts from minority ethnic communities increased from 1.9% in 2017/18 to 2.3% in 2018/19. The 2018/19 target^[5] is 4.1%. This is an increase of 1.2 percentage points since the baseline (2013/14).

Outputs

• In 2018/19, there were 27,750 MA starts. This is an increase of 125 from 2017/18 (when the figure was 27,145), and an increase of 1,986 from the baseline 2013/14 (when the figure was 25,284);
• In 2018/19, the overall number of MA achievements increased compared to 2017/18, from 20,309 to 21,767. This also represents an increase from baseline in 2013/14 (when the figure was 20,576);
• In 2018/19, there were 15,121 achievements of MAs at SCQF Level 6 and above^[6], an increase of 960 from 14,161 in 2017/18 and an increase of 2,624 from 12,497 in 2013/14, the baseline figure.

(This activity delivers on the Developing the Young Workforce Recommendations 7, 8, 9, 10, 13, 20, 30, 31, 32, 34, 35, 38.)

Through DYW, we want to see increasing numbers of young people taking up apprenticeship opportunities. We have also been clear any expansion in apprenticeships needs to work for employers. Their leadership is vital to collectively shape how the apprenticeship programme meets the needs of the wider economy.

DYW also set an ambition for there to be more apprenticeships to be at a higher level – SCQF level 6 and above. To achieve this, DYW has supported the development of the Apprenticeship Advisory Group. This is part of new quality assurance arrangements developed to oversee the approval of apprenticeship frameworks and qualifications. This new approvals groups will complement and enhance existing quality assurance arrangements, including SDS and Education Scotland's work to review the quality of these newly created apprenticeship opportunities.

Delivering skills for both current and future labour markets

As apprenticeship expansion grows, we continue to be mindful of the wider context within which the DYW programme operates. Youth unemployment remains at historically low levels, however we must continue to focus on providing young people with the skills to succeed in an ever-evolving labour market.

In September this year the Scottish Government published Scotland's Future Skills Action Plan which sets out our ambition for an agile and flexible skills system able to respond at pace to changing labour market skills demands. It responds to and endorses the Future Skills Mission in the Enterprise and Skills Board's Strategic Plan.

The Plan recognises the many challenges we face in Scotland, including EU Exit, the global climate emergency, demographic change, and technological advance and in this first phase details work already underway to address these and considers future policy questions.

Our ambition to tackle inequality and achieve sustained inclusive growth will be at the heart of our work as we implement the Plan and work with stakeholders to take this work forward.

Employers have a critical role in shaping and delivering our ambitions. To ensure they remain close to this work, we have committed to supporting the DYW Regional Groups for at least a further 4 years.

We will work with the DYW Regional Groups and others to review their the priorities and ensure that they can contribute to achieving the Scottish Government's vision to build sustainable and inclusive economic growth and tackle child poverty by focussing on opportunities for young people most likely to be left behind.

Key themes and milestones:

• Achieving 30,000 Apprenticeships by 2020/21;

• Focus on the delivery of Graduate Apprenticeships;
• Focus on STEM Apprenticeships;
• Establishment of a Scottish Apprenticeship Advisory Board (SAAB), supporting greater responsiveness to labour market need meaning Modern and Graduate Apprenticeships are better aligned with job opportunities;
• Clearer pathways into Apprenticeships for those not in work or those from previously under-represented groups.

Scotland's Apprenticeship Family

We are delivering more Apprenticeships in Scotland than ever before with a record number of starts in 2018/19. Statistics published on 11 June 2019 show there were 28,191 starts in 2018/19, including 921 Graduate Apprenticeships. This is an increase on 2017/18 levels (27,145^[7]) and also exceeds our annual target to provide 28,000 starts.

So to date, over the course of this administration, the Scottish Government has funded training for over a quarter of a million Modern Apprentices (278,500 from April 2007 – March 2019). Work is already underway to increase this further with our target to provide 29,000 new starts in 2019/2020, which will include over 1,300 Graduate Apprenticeships.

SDS continues to expand work based opportunities and strengthen the pathways between the new Foundation Apprenticeship in school, Modern Apprenticeships and Graduate Apprenticeships.

Progress

Modern Apprenticeships (MAs)

The Modern Apprenticeship In Training Survey was published by Skills Development Scotland on 12 September 2019. The survey was last carried out in 2014 and is a key source of information about MAs' perceptions of their training experience.

The results show that the majority of Modern Apprentices who completed the survey (79%) reported a satisfaction level of 8 or above out of 10 with their MA. Lower satisfaction levels (5 out of 10 or below) were relatively infrequent at around 10% of survey respondents. The survey also showed that 96% of survey respondents would recommend an apprenticeship to others.

Further key findings from the survey include:

• For the majority of survey respondents, the main reason for selecting an MA was 'learning new skills' (69%). Other reasons selected by more than half of the respondents were the 'qualification level [of an MA]' (59%), 'advancement within the company' (57%) and 'to earn while learning' (55%);
• 77% of survey respondents would rate the quality of their apprenticeship training highly (a score of 8 out of 10 or above);
• The majority of survey respondents (95%) said they know who to approach for help and support while training;
• The majority of survey respondents (79%) expect to 'stay with their current employer' upon completion of their apprenticeship.

From SDS's annual progress report on Modern Apprenticeships, published in June 2019, we can see the following progress:

• There were 27,270 Modern Apprenticeship starts in 2018/19;
• Additionally, there were 921 Graduate Apprenticeship (GA) starts in 2018/19;
• The total number of apprenticeship starts (MAs and GAs) in 2018/19 was 28,191 against a target of 28,000;
• This year, the majority of MA starts (68%) were aged 16-24, -2.4 percentage points lower than 2017/18. The majority of MA starts (71%) were at SCQF level 6 or above;
• 41% of all MA starts in 2018/19 were in STEM frameworks.
• The gender breakdown of MA starts was 62% male to 38% female; the proportion of female starts remained around the same as last year (-0.04 percentage points), but there was an increase of 38 female starts. Of all female starts 72.1% were working towards SCQF level 6 or above and VQ level 3 compared to 71.8% for males;
• The proportion of MA starts self-identifying an impairment, health condition or learning difficulty was 14.1% (2.9 percentage points higher than 2017/18);
• The proportion of MAs who self-identified as being from a Mixed or Multiple; Asian; African; Caribbean or Black; and Other ethnic group has continued to increase and was 2.3% in 2018/19, an increase of 0.4 percentage points and 113 starts on 2017/18;
• 24.3% of MA starts in 2018/19 lived in the 20% most deprived areas, a decrease of 0.4 percentage points since 2017/18. This is compared to 13.7% of 2018/19 MA starts living in the 20% least deprived areas, an increase of 0.4 percentage points. This shows a similar pattern over the last five years;
• 21,767 individuals achieved their MA in 2018/19. This equates to an achievement rate of 76% in 2018/19, compared to 78% last year (-1.3 percentage points).

Uptake in STEM Frameworks

• Almost half (41%) of all Modern Apprenticeship (MA) starts in 2018/19 were in STEM frameworks an increase on 2017/18, when the figure was 38%. 65% were aged 16-24 and 79% of STEM starts were at SCQF Level 6 and above or VQ level 3;
• Starts to the IT & Other Services grouping accounted for 9% of MA starts in 2018/19 (+0.8 percentage points compared to 2017/18).

Graduate Apprenticeships (GA)

Graduate Apprenticeships were launched in 2017 and are a direct response to industry need, bringing the skills system, leading universities and employers closer together, to help create the skills and capabilities required to power the Scottish labour market of the future.

921 GA places were taken up during 2018-19, up from 278 in 2017/18. Our successful initial delivery of GAs is now formally recognised within the Apprenticeship delivery targets, opening up more opportunities in key highly skilled areas such as Business and Management, Construction and Cyber Security. This is in recognition of the increasing demand for GAs and supports our continuing commitment to prioritise higher level skills considered to bring the greatest economic benefits, linked to higher paid jobs and increased productivity.

The programme will grow within 2019/20 and it will make available more than 1,300 Graduate Apprenticeship places across a range of 14 different types of apprenticeship frameworks at 15 university or college providers. Two new frameworks, 'Accounting' and 'Early Learning & Childcare', will also become available as pilot schemes.

The first report on the GA programme, Graduate Apprenticeships: Early activity and progress 2017/18 and 2018/19, was published on 14 August 2019. Key findings from the report include:

2017/18

• There were 278 starts registered on a GA in 2017/18;
• 82.2% of starts in 2017/18 were male and 17.8% were female;
• There were 6 frameworks available in 2017/18 across 9 institutions;
• There were 4 local authorities without any employers taking part in the GA programme;
• As of the 8th March 2019,15.5% of the 2017/18 starts had left the programme early, 82.4% remained in training;
• Of the 2017/18 starts, two Graduate Apprentices have achieved their full qualification in IT Software Development (after accelerated entry due to recognition of prior learning). In addition four Higher Apprentices achieved their full qualification in Civil Engineering at SCQF level 8.

2018/19

• There were 921 starts registered on a GA in 2018/19;
• 65.7% of starts in 2018/19 were male and 34.3% of starts were female;
• There were 12 frameworks available in 2018/19, across 13 institutions;
• All local authorities have at least one employer taking part in the GA programme;
• As of the 8th March 2019, 5.5% of the 2018/19 starts had left the programme early and 94.5% remained in training.

We recognise that there is still work to be done to support more women into Graduate Apprenticeship roles and SDS is working in partnership with a range of organisations to address gender imbalance in Apprenticeships.

SAAB

Ensuring the employer voice continues to influence our approach, SDS facilitate the SAAB Employer Engagement Group, SAAB Standards and Frameworks Group and SAAB Employer Equality Group to support and encourage employer participation in apprenticeships. Recognising how valuable apprenticeships are to Scotland's future workforce, the SAAB also established an Apprentice Engagement Group (AEG) to take on an ambassadorial role, communicating the benefits of Scotland Apprenticeship Family to young people, employers, parents and other stakeholders.

In March 2019, the First Minister launched Scotland's Apprentice Network to promote the benefits of apprenticeships to young people and businesses across Scotland. Facilitated by SDS, the Network is open to current and former apprentices who can share their experiences and use their own first-hand experiences to communicate the benefits of Foundation, Modern and Graduate apprenticeships to young people, employers, parents, schools and other stakeholders.

Challenges

Apprenticeship Levy

In this year, we have continued to monitor the impact of the UK wide Apprenticeship Levy. This is a UK Government tax imposed through reserved powers without consultation with devolved nations where skills policy is devolved.

In 2019/20 Scotland's share of forecast Levy receipts totalled £239m, which represented an overall reduction in public sector spending power in Scotland. The Scottish Government has been clear that the Scottish share of the Levy receipts largely replaces money previously received and will continue to be invested in skills, training and employability to meet the needs of Scotland's economy, employers, and the workforce.

All employers are able to access funding for approved apprenticeships, regardless of their size or whether they pay the Levy. This includes a contribution towards training costs for Modern Apprentices; the cost of training Graduate and Foundation Apprentices; and recruiting from an employability programme. Levy paying employers in Scotland are able to access the Flexible Workforce Development Fund which provides up to a fixed cap of £15,000 to purchase college learning.

Aligning Scotland's Apprenticeship Programmes

Recognising the changing skills landscape a new approach to the development and approval process of Apprenticeships is being introduced. This will help to align framework approvals across Scotland's Apprenticeship Family and build on existing structures and processes.

By positioning the new approvals function within SAAB, it will fully incorporate employer leadership into apprenticeship development and will provide the opportunity to harness the available skills infrastructure in Scotland to respond rapidly to emerging needs. From 31st March 2020 it is intended that the new Apprenticeship Approvals Group will approve all of Scotland's Apprenticeship Programme Frameworks and Standards and the Modern Apprenticeship Group will be dissolved. The SAAB Standard and Frameworks Group was instrumental in this governance change.

Next steps

During 2019 - 2020, we expect to see:

• We will see the continued growth of Scotland's Apprenticeships programme including more opportunities in STEM;
• Targets announced during Scottish Apprenticeship Week 2019:
• 29,000 Modern Apprenticeships including at least 1,300 Graduate Apprenticeships;
• 5,000 Foundation Apprenticeship opportunities.

During 2020 - 2021, we expect to see:

• At least 30,000 new Apprenticeship starts;
• A sustainable and fully embedded family of apprenticeships.

Case study: Anything but a Standard Life for Graduate Apprentice Shannon.

Based in Edinburgh, Shannon Macnamara's "very proactive and positive" approach led to her working as a credit research assistant while completing a business management Graduate Apprenticeship with a global asset management company.

Shannon had planned to study psychology at university until she was offered a Modern Apprenticeship after a work experience placement with Standard Life Aberdeen.

"I enjoyed working in the Edinburgh office so much that when I was given the opportunity of a Modern Apprenticeship, I jumped at the chance to complete qualifications on the job." explained Shannon.

She was based in the Fixed Income Investment team when she was offered a Graduate Apprenticeship.

Learning first-hand

Graduate Apprenticeships allow individuals the opportunity to work, get paid and get a degree – up to masters level.

The former Woodmill High School pupil had four-month placements in operations, compliance and finance before moving into the investments side of the business.

While on placement in the Fixed Income department, Shannon spent time shadowing portfolio managers and worked with the research team before being offered a role as a credit research assistant and her Graduate Apprenticeship.

Employer support

Shannon said: "The thing I enjoy most about my role is being challenged every day. Graduate Apprenticeships are great because you learn first-hand how a business operates and you can develop experience and skills from working with a wide variety of people which cannot be taught in a classroom.

"The Graduate Apprenticeship is a fantastic opportunity. It was a very difficult decision for me to join the company as an apprentice in 2016 as opposed to attending university, however, I think I now have the best of both worlds.

"A lot of people view going to university as the only option to be successful in this industry – that's not the case. It is also becoming increasingly difficult for students to secure a role after graduating due to the competitive job market."

Shannon was quick to credit the support of her employers, her line manager Nick Kordowski, who is currently Head of Credit Research, and her university workplace mentor Luke Hickmore, an Investment Director at Standard Life Aberdeen, as she works towards her Business Management degree.

"The company really does support the apprenticeship programme. I'm coming to the end of my first year at Robert Gordon University and have been given lots of support from my colleagues," said Shannon.

An inclusive approach to recruitment

Nick said: "Shannon is doing very well. She has a very proactive and very positive approach, with a can-do attitude and energy to support that. We're always looking for new talent and when Shannon was in the team for her placement as a Modern Apprentice, she started on the front foot in terms of intellect and her willingness to do her own leg work.

"We've given her a lot of responsibility and she now owns a sector of the market, writes up her views and shares them with team. That all leads to her getting the recognition she deserves."

Luke said the company was keen to attract people from different backgrounds. He explained: "If you don't have that, there's a danger that you could have everyone thinking in the same direction, so we want to encourage people who have different approaches."

Skills Development Scotland Relationship Accounts Executive June Gallagher said: "This is yet another example of how Standard Life Aberdeen is offering fantastic opportunities using the apprenticeship family which has provided Shannon with an alternative route to a degree. Shannon has been able to progress in the business very quickly, becoming a productive member of the team while earning while she is learning."