Apprenticeships forecast to contribute £3.4BN to the economy by 2022
Apprenticeship completions over the next decade are forecast to contribute £3.4 billion a year to the economy through productivity gains by 2022. That’s according to a new report from the Centre for Economics and Business Research (Cebr) released today to mark the start of National Apprenticeship Week 2013.
The report, Productivity Matters: The impact of Apprenticeships on the UK economy, presents Cebr’s analysis of the contribution of Apprenticeships to the economy, examining current trends and future developments and exploring the productivity impact of Apprenticeships. Key findings include:
The potential for Apprenticeships to contribute more to the economy is significant. Based on Cebr’s forecasts, between 2012-13 and 2021-22, 3.8 million people will complete an Apprenticeship. It is estimated this would contribute £3.4 billion to the UK economy a year in productivity gains by 2022.
Apprenticeships are boosting productivity by enabling businesses to grow their skills base. The average Apprenticeship completer increases business productivity by £214 per week leading to increased profits, lower prices, better products and higher wages.
Productivity gains from former apprentices vary according to industry sector. The engineering and manufacturing sectors see the greatest gains (£414 per week) followed by construction and planning (£401) and business, administration & legal (£268).
The number of annual Apprenticeship completions is forecast to rise across all sectors of the economy over the coming decade, growing from an annual 260,000 in 2012/13 to 480,000 by 2021/22.
According to the Cebr’s predictions, the annual number of Apprenticeship completions in the business, administration & law sector is forecast to rise from 74,000 in 2012/13 to 121,000 by 2021/22. By 2021/22, it is predicted there will be 65,000 completions in the construction & planning sector, compared to 27,000 in 2012/13. It is forecast that there will be 81,000 completions in the engineering & manufacturing sector by 2021/22, compared to 38,000 in 2012/13.
Deputy Prime Minister Nick Clegg said: “Apprenticeships are at the heart of our drive to provide employers with people who have the skills needed for their businesses to prosper and compete, often in a global market.
“Apprentices are vital to Great British business – from mechanical engineering and business administration to dental nursing and physiotherapy.
“We are making it as simple and rewarding as possible to take on apprentices.”
Secretary of State for Business, Innovation and Skills, Vince Cable, said: "This research confirms the economic importance of Apprenticeships and sends a clear message that they deliver for employers, individuals and the economy.
"Since 2010 we have had over a million people start an Apprenticeship in the UK. But I want to see more small and medium businesses reap the benefits of Apprenticeships which is why we have introduced a £1,500 incentive for SMEs who take on a young person.
"I hope that during National Apprenticeship Week more employers up and down the country will look to increase their skillset and productivity by taking on an apprentice."
Charles Davis, Head of Macroeconomics at the Centre for Economics and Business Research added: “The importance of Apprenticeships to businesses and the wider UK recovery cannot be underestimated. Our research clearly demonstrates the significant contribution that Apprenticeships can make to economic growth. Raising the skills of the UK’s workforce translates into improved UK competitiveness in a challenging post-financial crisis environment. This is a vital part of rebalancing the UK economy and raising the chances of sustained export-led growth.”
The report coincides with the launch of Barclays’ new Bridges Into Work programme. Delivered in partnership with the National Apprenticeship Service and charities, Tomorrow’s People and The Prince’s Trust, as well as Route 2 training, the scheme aims to support 10,000 young people into work in the coming years.
Through Bridges Into Work, businesses across England will be able to receive additional free support to take on an apprentice, whilst local Barclays Business Managers will help match up suitable apprentices and businesses in their area. Ashok Vaswani, Chief Executive of Barclays Retail and Business Banking, said:
“We’ve seen first hand how our apprentices are incredibly productive and valued members of staff, which is why we are now doubling our recruitment to 2,000. But we often also find great young people who want to work in other industries, and we believe we can help them into work through our vast network of business customers. Our new package of free support is available to any businesses whether they bank with us or not because we are aiming to make a really big difference to young people’s careers, and to our economy.”
David Way, Chief Executive of the National Apprenticeship Service, said:
“I regularly speak to employers who tell me about the benefits that Apprenticeships bring to their business. This research provides further hard evidence that Apprenticeships really are improving business and transforming lives. Apprentices not only increase productivity but also bring creativity and dynamism into the workplace; the very best examples of which are being showcased in this year’s National Apprenticeship Week.
“We need to get this evidence across, particularly to small employers. The Bridges Into Work Programme will help us to do this, by being able to reach many more small businesses who would benefit from taking on an apprentice.”
For information about Apprenticeships and the Apprenticeship Grant for Employers of 16 to 24-year-olds (AGE 16 to 24) which offers £1,500 to help SMEs cover the costs of taking on a new apprentice, visit apprenticeships.org.uk or call 08000 150 600.
