Apprentices know all about Ebenezer Scrooge

Many firms appear to be using apprentices as a source of ultra-cheap labour.

Many firms appear to be using apprentices as a source of ultra-cheap labour

Yesterday was the last day of Parliament before Christmas. And, as is Christmas tradition, this day also marked the publication of a flurry of interesting reports and announcements being put out by Departments before most MPs and civil servants head on their Christmas holidays.

Hidden in amongst this Christmas hamper was the 2014 apprenticeship pay survey.

While last week the prime minister was celebrating the creation of the 2 millionth apprenticeship since 2010, the survey paints a much more gloomy picture about the state of this country’s apprenticeships.

The figures on apprenticeship wages compound fears that many firms may be using apprentices as a source of very cheap labour, in the knowledge that they will be rewarded financially by the government for doing so.

Some may argue that it is right that apprentices wages are initially lower, recognising the fact that, all being well, apprentices should be gaining high quality training and an introduction into a fruitful career in return.

This is already reflected, however, in the fact that employers only have to pay their apprentices an ‘apprenticeship rate’ of £2.68 for the first year of their apprenticeship, moving up to the national minimum wage in subsequent years for those who are 18 and over.

Even if you accept this justification for a lower rate it is questionable, given many apprentices are not ‘new’ recruits at all. The survey shows that a significant proportion of employers are in fact exploiting apprentices, paying them less than the very meagre minimum wages to which they are entitled.

Some of the most shocking facts are as:

  • 15 per cent of those surveyed were paid under the entitled rate of national minimum wage.  Given that there have been 2 million apprenticeships under this government that equates to around 300,000 who are not receiving the minimum wage.
  • it is an even worse picture for young people, where 24 per cent of 16-18 yr olds are not receiving their entitlement of a minuscule £2.68 an hour.  Again given there were 185,800 16-18 apprentices in 2013/14, that equates to roughly 45,000 not even receiving £2.68 an hour.
  • For 19-20 year olds in England, the same is true with 32 per cent not receiving their national minimum wage of £5.03 in their second or subsequent years of an apprenticeship. Even more shockingly, this age group were not simply underpaid by a matter of a few pence – the mean pay for a 19-20 year old was £3.96. So not only were 20 per cent of 19-20 year olds being underpaid, but this group are being underpaid by, on average, just over 21 per cent.
  • The picture across sectors is not consistent, with all sectors having some culprits who are failing to pay the minimum wage, but with some sectors who should take pride of place on Santa’s naughty list:
  • Hairdressing is by far the worst culprit – 42 per cent of hairdressing apprentices are failing to be paid the minimum wage.  With nearly 15,000 hairdressing apprentices starting apprenticeships this year, we can expect that to equate to 6300 being underpaid.
  • Children’s care is another sector which is performing badly – 26 per cent of apprentices in childcare are failing to be paid the minimum wage, equating to roughly 6323 out of this year’s 24,320 starting childcare apprentices.

When Nick Boles came and spoke at IPPR earlier this month, it was clear that he was starting to ask the right questions about other areas of apprenticeship reform.

In particular he was openly mulling the issue, previously highlighted by IPPR, of whether it is right that apprenticeships should be an opportunity which is available to those over the age of 25, particularly with many older ‘apprentices’ effectively being individuals who have already worked for a company for several years, but who are now being put through training incentivised by government grants.

In this respect, the following figures from the apprenticeship survey were interesting:

  • 67 per cent of level 2 and 3 apprentices in Great Britain were employed by their employer previously
  • 41 per cent of level 2 and 3 apprenticeships went to over 25 year olds. In total, 356,900 over 25 year olds were participating in apprenticeships, compared to just 200 in 2002/2003 or even just 93,900 in 2009/10.

Apprenticeships should be an opportunity that is kept exclusively for under 25-year-olds and so again these figures tell a very different picture between what the government may be counting as its 2 million apprenticeships, as opposed to the concept of an initial job and pathway into a career for young people – the concept of an ‘apprenticeship’ which we envisage.

The government might have hoped that these latest statistics on apprenticeships might have avoided attention, as heads were being nursed after Christmas parties and people’s thoughts turned to last minute present buying.

While it is sad to end the year with such doom and gloom, we are hopeful that these statistics will not be ignored, but will be a catalyst for redefining what an apprenticeship is and how apprentices should rightly be rewarded come 2015.

Louise Evans is senior research fellow at the IPPR think tank

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