Apprenticeships in Wales generate more than £1 billion a year for the country’s economy and represent excellent value for money for Welsh Government investment, reveals an important new report.
Foundation Apprenticeships (Level 2) generate around £510 million a year and Apprenticeships (Level 3) contribute £500 million to the Welsh economy, says ‘The Value of Apprenticeship to Wales’, a report commissioned by the National Training Federation for Wales (NTfW).
New evidence from the UK Government’s Department for Business, Innovation and Skills suggests that the return on every pound of public money invested in a Foundation Apprenticeship and an Apprenticeship could be as high as £26 and £28 respectively.
Return on investment is also compared between Apprenticeships and Higher Education courses. A separate piece of research, using different methodology, shows a £74 return for every pound invested in an Apprenticeship compared to £57 for the average degree. The only degrees to generate a return better than an Apprenticeship are medicine and engineering.
The report identifies the typical cost of an undergraduate degree as being at least £27,000 compared to between £4,000 and £16,000 for an Apprenticeship.
The overall success rate for Apprenticeships in Wales is 84 per cent compared to 68.9 per cent in England.
When lifetime earnings are considered, the value to individuals of achieving a Foundation Apprenticeship is calculated at between £48,000 and £74,000, while those achieving an Apprenticeship benefit by between £77,000 and £117,000.
Due to be launched at a special reception to be held at the Senedd in Cardiff tonight (Wednesday, September 16), the report has been compiled by Arad Research, working in partnership with Deryn Consulting.
The NTfW, which represents the country’s work-based training providers who deliver Apprenticeship for the Welsh Government, asked the researchers to undertake, for the first time, a comprehensive analysis of the value of Apprenticeships to the country’s economy, businesses and individuals.
Welsh Government Ministers, Assembly Members, training providers, Welsh businesses and apprentices will attend the Senedd reception to discover the results of the research.
The report endorses the investment by the Welsh Government in Apprenticeships, which it has described as its “flagship” programme.
There were 51,550 apprentices in Wales in 2013-‘14, of which 25,335 followed a Foundation Apprenticeship, 20,860 followed an Apprenticeship and 5,355 individuals followed a Higher Apprenticeship. There were 29,710 female apprentices compared to 21,840 male apprentices, which has been a constant trend over the past decade.
Other key findings include:
- Individuals with an Apprenticeship earn an average of £392 a week compared to £319 a week for those with National Qualification Framework Level 3 qualifications.
- Apprenticeships raise the productivity of a typical apprentice by £214 a week, rising to £414 a week in the engineering and manufacturing sector.
- 86% of apprentices said their Apprenticeship had increased their self-confidence and 70% said it was very relevant to their long term career goals.
- In 2014, 15% of employers in Wales offered formal apprenticeships and a further 21% said they planned to offer them in the future.
- The net benefit to employers from hiring an apprentice in the UK averages £1,670 and rises to £10,961 for Team Leadership and Management.
- Apprenticeships meet a wide range of employers’ identified business and skills needs.
- Apprenticeships boosted apprentices’ self-confidence, enhanced their skills and increase their employability.
- The Health Care and Public Services sector had the highest number of Apprenticeship programmes in Wales in 2013-14.
- Research highlighted the importance of Apprenticeships in the food and drink manufacturing and processing sector in Wales where a fifth of the workforce has no qualification and nearly half he employers provide no training.
Peter Rees, NTfW chairman, said: “We believe that this report is an important contribution to the on-going discussions regarding supporting economic growth, up-skilling the Welsh workforce, public investment priorities and ensuring all young people reach their full potential.
“We look forward to working with all stakeholders to ensure that Wales has a robust and strategic vision for Apprenticeships for the future, building on past success. We must ensure that more young people and employers have a better awareness and access to Apprenticeships as we continue to deliver our world class Apprenticeship programme here in Wales.
“The NTfW strongly believes that for far too long, Apprenticeships have been seen as the poor relation to a traditional academic route and the evidence presented in this report addresses some of the misinformation and misconceptions that exists.
“More needs to be done to highlight that Apprenticeships are equally suited for the more able and talented and to highlight the opportunity to acquire higher education qualifications via the Apprenticeship route.
“This report, and others based on English evidence, would suggest the Apprenticeship route through to higher education provides a better return on investment for Government, employers and learners.
“We believe the evidence presented in this report endorses the continued commitment to Apprenticeships in Wales. In a time of pressure on public finances we understand that government must face difficult budgetary decisions, and the information highlights not only the benefits to individuals, employers, the economy and to society but also endorses the historic decisions to prioritise spending in this area.
“We look forward to this report being considered by the Welsh Government as part of future budgetary discussions. It is also clear that investment in Apprenticeships ensures delivery of other key government targets and priorities, such as plugging the skills gap and addressing the number of young people not in education, employment or training.”
