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Can England learn from Swiss apprenticeships?

English businesses would benefit from a Swiss-style apprenticeship system that starts earlier and lasts longer, a report authored by Swiss experts has found. But not all English businesses agree that apprenticeships are a good thing.

Apprenticeships are a key part of the United Kingdom’s government’s plans to improve technical skills among young people and to ensure the country can meet labour market needs post-Brexit. Reforms include a new employer levy (see infobox), and the target is to create three million more apprenticeships by 2020.

In contrast, Switzerland has a long tradition of apprenticeships. Two thirds of school leavers opt to take this route, and the system has been singled out as one of the best worldwide by the OECD and researchers at Harvard.

“Apprenticeship training in England – an effective model for firms?” was published by the London-based Education Policy Institute (EPI), German think tank Bertelsmann Stiftung, and the JP Morgan Chase Foundation on April 6 – the first anniversary of the levy. It was authored by Stefan Wolter, a leading economist at the University of Bern, and colleague Eva Joho.

England: apprenticeship situation

“So far, the results of the levy are mixed: there is an increase in apprenticeships, but not for young people. Actually, this number is in decline because last year companies more or less used the money for what we would call in Switzerland continuous education or adult education. So, the goal of really supporting apprenticeships was not reached,” Wolter told swissinfo.ch.

There is also a certain amount of scepticism among English businesses which see apprenticeships as an extra burden and cost, he said.

Using cost-benefit data from around 2,500 Swiss training firms as well as the UK’s labour force survey, Wolter’s report looked at how the Swiss approach could work if applied to England. The aim was to simulate the outcome for a typical average English firm in one of the ten occupations selected for the report.

“Simulation means: same number of hours of training as in Switzerland, same relative productivity of apprentices during the apprenticeship compared to skilled workers but with English market conditions like UK wages and wage structure,” Wolter explained. “We produced a result to show whether a company training an IT technician, cook or waitress could expect a net benefit after training.”

Earlier and longer

The report found that employers and apprentices would indeed benefit from school leavers starting apprenticeships earlier and staying in them for a longer period. Currently 60% of English apprenticeships start at age 19, whereas most Swiss ones start age 15-16.

“The chances for firms of breaking even at the end of the training period of an apprenticeship are the highest for three-year programmes, assuming that the apprentices are younger than 19 years, because minimum wages increase substantially afterwards,” the report found.

“Therefore, apprenticeships for young people as an alternative to school-based general education or school-based vocational training may produce the best outcomes from the perspective of firms.”

Boosting skills

Among the report’s other recommendations were: providing financial incentives for smaller firms to train apprentices and boosting the quality of apprenticeships overall.

“How can you expect an English apprentice to have the same skills in the same occupation if a Swiss or German apprenticeship needs 3-4 years and the English one, a year?” Wolter said.

There is also a difference in how the apprenticeship is carried out: in England an external training provider does the training and the firm offers work experience, Wolter said. In Switzerland – and in Germany, another country with a long apprenticeship tradition – the firm does more: the apprentice, although combining school and work, learns at least half of his or her skills on the job. The firm has a mandatory formal training plan.

Could you simply transplant the Swiss system to England? You could, but you would have to implement many changes to the system in England, Wolter said.

“Our report only touches on a tiny piece of the whole jigsaw puzzle, but an important one: we say if English firms would do as Swiss ones they could under certain circumstances expect a net benefit; but we do not mention all the elements that need to be changed to get to the situation where an English firm is run like a Swiss one. So, our report should be seen as a first stepping stone towards the change of the system.”

OECD: quality issues

Wolter’s report is not the only one to suggest changes are needed in England. An OECD report published on April 11 said that while England had committed itself to a “very ambitious” programme to develop apprenticeships, issues remained.

For one, English apprenticeships devote far less time to general education than other countries (50-100 hours over the course of their apprenticeship, compared with 400 hours over a range of subjects in Switzerland and Germany).

Apprenticeship workplace training was also deemed to be “subject to little quality assurance”. “Lack of standards with regard to training in workplaces increases the risk that employers will substitute apprentices for unskilled workers,” concluded the OECD.

Employer levy

The employer levy is a tax to be paid by UK employers with a payroll of over £3 million (CHF4.1 billion), set at 0.5% of their payroll. It is paid into a fund. Employers can then use this fund, to which the government adds an extra 10% in England, on apprenticeship training.

Data gathered by the Open University found that of the £1.39 billion paid into the levy by English firms, just £108 million was withdrawn, which was interpreted as showing that employers were struggling with the new system.

Anne Milton, the UK apprenticeships and skills minister, has defended the reforms, saying in the Telegraph newspaper that while it had taken some businesses longer to get going on their apprenticeship programmes using the levy, many others were forging ahead.