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Nick Clegg believes apprenticeships represent an incredible chance to gain the skills and knowledge needed to succeed in the workplace, but are enough people taking the opportunity?

Speaking last week at the National Apprenticeship Awards 2014 Clegg said: ‘Good quality apprenticeships create a fairer society by giving hard working young people the chance to aim for their dream job whilst playing their part in building a stronger economy for Britain.’

At The Engineer we’re well aware of many apprenticeship schemes that are oversubscribed but new research suggests that the number of people starting engineering apprenticeships has reached its lowest level in three years. Furthermore, the number of new apprenticeships across all subjects has fallen by 17 per cent over the last three years, from 520,600 in 2011/12 to 434,400 in 2012/14.

These are the findings of SJD Accountancy, which today issued a warning on skills shortages that have echoes of their statement made on October 13, 2014 that discussed the importation of engineering skills into Britain.

This time around they’ve focused on engineering apprenticeships, looking to the government’s Skills Funding Agency for statistics that show 63,240 people starting engineering apprenticeships in 2013/14, a decline of 9.3 per cent from 2011/12, when 69,730 students started apprenticeships.

According to SJD Accountancy, the third consecutive year of decline in the number of new students starting engineering apprenticeships corresponds with a 36 per cent rise in non-EU engineers coming to the UK over the past year. 

In a statement, Simon Curry, CEO of SJD Accountancy said: ‘Despite initial success in boosting the number of engineering apprenticeships, the numbers are now on a worrying downward trend.’

‘At a time when the UK engineering sector is facing a skills shortage and needs to recruit tens of thousands of additional engineers every year, these apprenticeships numbers show that the gap is beginning to widen again. Skills shortages push up costs for major engineering projects and have a knock-on effect across the wider economy.’

‘With the economy recovering and the government having ramped up investment in infrastructure projects, demand for engineering skills is rising. With a large number of senior engineers reaching retirement, we need to ensure that the talent pipeline is delivering fresh skills if the UK engineering sector is to prosper.’

As my colleague Stephen Harris discussed on October 1, 2014, it is employers, not governments, that create apprenticeship schemes and there are limits to the efficacy of state funds.

SJD notes that the government could do more to narrow the skills gap by encouraging engineering contractors to re-train and update their skills, thereby helping to maintain the flexibility  of the engineering workforce.

‘External training is currently not a tax deductable expense, but if we want to ensure that the UK engineering skills base is equipped for the future, providing a tax break for engineering contractors to update their skills would be a useful contribution,’ said Curry.  

SJD also reminds us that that spending on infrastructure projects has risen from around £41bn annually 2005-10 to £45bn annually 2011-13. The National Infrastructure Plan, announced by the government in December 2013, will spend £375bn on infrastructure projects up to 2030 and beyond. As it said in October, this will put further pressure on the UK’s engineering talent pool at a time when the supply of skills is already struggling to cope with demand.

Infrastructure is very much on EEF’s mind today as it calls on government to use the Autumn Statement to invest in roads and provide a boost for innovation in order to support long-term growth.

The manufacturers’ organisation has made its submission to the Autumn Statement and has focused on ‘supply side reform which will influence current and future investment plans by manufacturers, as well as the need to maintain a strongly competitive and stable business tax regime.’

With infrastructure, EEF cites one of its surveys that found a third of respondents viewing roads as ‘poor’ or very poor’ and two thirds stating that investment in the strategic road network should be government’s main priority.

EEF believes government should set out implementation plans for projects currently at the scoping stage, including upgrades to the A303, A14, A590 and A1; and it should set out a timetable for tackling the £12bn localroad maintenance backlog.

On innovation, it notes that the UK sometimes lags behind overseas competitors when it comes to investment, a situation that could be rectified with an increase in funding to Britain’s Catapult network.

The organisation adds that funding should be directed at the existing seven centres rather than used to extend the network. This would enable them to build capacity and engage more with SMEs, a critical factor if they are to succeed.

Terry Scuoler, EEF chief executive said: ‘Amid the many funding pressures Ministers face I hope that support for the existing Catapult centres will…be enhanced to make sure they stay at the cutting edge of technology and keep Britain at the forefront of manufacturing excellence.’

EEF also recommends:

  • Commitment to maintaining the fundamental structure of the business rates system which provides stability and certainty for manufacturers, but introduce more frequent updates to plant and machinery orders, link uprating to an annual average CPI rate and extend empty property relief for industry buildings to 12 months.
  • Consultation should begin now on developing a stable and internationally competitive capital allowances regime when the temporary increase in the Annual Investment Allowance expires in 2016. This should also consider the future of Enhanced Capital Allowances.
  • There should be no future increases to the Landfill Tax Escalator until there is better evidence of the likely impact of any further rises.
  • The Energy Intensive Industry (EII) compensation scheme should be brought forward as early as possible.