Education, economy and society (blog comment from

November 30, 2015

Osborne’s Spending Review. An apprenticeship levy and a ‘truce’ with austerity?

Filed under: apprenticeships — sitemananger @ 9:11 am

George Osborne’s decision to impose an apprenticeship levy v2-osborneon large firms represents a significant change in policy. In Germany and other European countries, employers are required to make a significant cost towards the cost of apprenticeship and skills training. Under Osborne’s scheme, employers with an annual wage bill of more than £3 million will have to make a payroll deduction of 0.5%. The scheme is expected to raise close to £3 billion –double the current size of the apprenticeship training budget.

Even though a step in the right direction, imposing a levy in itself is not enough to upgrade Britain’s ailing apprenticeships. Unlike in Germany, where agreements exist between employers, trade unions and state institutions, ensuring apprenticeships provide real transitions to work, UK firms will still not be compelled to offer them  and certainly not high-skilled ones.Though well over 2 million apprenticeships have been offered since 2010 –David Cameron promises 3 million more –the majority  have been ‘low-skilled’ and ‘dead-end’ –mostly at Intermediate (GCSE) Level, without guaranteeing progression to employment or further training. Significant evidence also shows that firms have reclassified existing workers to be able to access training funds . This has  allowed government to meet targets. Last year, for example, only 120 000 under 19 year olds began apprenticeships.  This can be compared to up to 60% of young Germans –mostly at Advanced Level.

FE gets off lightly?
There’s much relief that a further round of cuts will not decimate the FE sector as Osborne told MPs that core funding for FE (and Sixth Form colleges) will be protected. But the protection is in cash-terms and as  there may be  falling numbers of students because of demographic changes, colleges fill face reductions. The extension of the FE loans system to 19 to 23-year-olds raises as many questions as it provides answers as does the ‘opportunity’ for Sixth-Form Colleges to become Academies so as to be able to avoid VAT payments.

A ‘truce’ with austerity?
Because of growing opposition endangering his own ambitions to become the next prime Minister, Osborne made a significant U-turn on tax-credits.  Does this represent a fundamental change in course, or at least a ‘truce’ with austerity? Not at all. The Chancellor has been given extremely optimistic forecasts by the ‘neutral’ Office for Budget Responsibility (OBS) about future economic performance, that growth will be 2.4% for this year and next and that investment levels will continue to steadily increase.

As a result Osborne’s been allowed what the Financial Times (26/11/15) described as a ‘£27bn emergency exit route’ that allows him to retain his target for a budget surplus by the end of the Parliament –but more importantly, to continue to shrink the size and the role of the state to levels not seen since the 1930s. But previous OBS predictions have not always been correct, with the highly respected Institute of Fiscal Studies, continuing  to provide the clearest opposition to the government on economic policy, telling The Guardian (28/11/15) that it was only ’50-50’ that Osborne would not have too revisit his plans.



November 18, 2015

Is there a skills crisis?  Do schools and colleges contribute to it?

Filed under: Education and economy — sitemananger @ 9:41 am


Despite performance levels in education being higher than ever, some continue to bang on about skills shortages and about young people not being ‘ready for work’. According to the British Chamber of Commerce for example, two-thirds of businesses believe that secondary schools are not effective in preparing young people for employment and could do more to get them onto the career level. According to the BCC  director John Longworth ‘ high youth unemployment and business skills gaps are a cause for national embarrassment…..preparing students to face potential employers should be given the same level of priority as academic achievement in schools’. But is there a skills shortage and can schools and colleges be seen as contributing to this?

In the UK, unemployment continues to fall –almost reaching the level it stood at before the 2008 economic downturn.  But it’s also the case that pay rises remain subdued – with increases of just below 2.5% during the last year. If there were significant skills shortage in the economy, this would not be the case. Skill shortages would mean employers bidding up.  According to the highly regarded Certified Institute of Personnel and Development ( CIPD)  while half of employers may have hiring issues, only about a tenth of current vacancies are ‘hard to fill’ with the most common way of filling these being upskilling and upgrading existing employees.

This does not mean there are not particular difficulties in particular sectors like the construction industry and in parts of manufacturing and in parts of the public sector where training budgets have been cut back.   But according to CIPD only about a third of hard to fill vacancies – in otherwords just  5%  – are due to skill shortages. As the post below emphasises, employers continue to rely on new supplies of labour to fill low-skilled, low-paid vacancies.

The CIPD data reflects a more general trend –that employees are just as likely to be over-qualified for the work that is available. The most recent UK Commission for Employment and Skills (UKCES) skills survey reported large numbers of workers  not being able to, or not needing to use their skills. This is partly because of the large number of graduates  being pushed down into non-graduate work, but it’s also because as the CIPD previously reported, one in five of UK work roles only required a primary education and employment data shows that it is slow skilled work that is expanding the fastest.

So it’s difficult to argue that schools and colleges are holding back economic growth and that young people are not suitably prepared for work, though this doesn’t mean that the status of vocational learning should not be improved  its content broadened  and that the cutbacks in work experience placements should not be reversed.  These should all be part of a ‘general  education’ that could replace the narrow academic learning  which the CBI recently argued was not relevant to the needs of the 21st century.


Capital’s  new ‘reserve army’?

Filed under: Economy — sitemananger @ 9:39 am

Though UK unemployment continues to fall, more significant has been the much greater increase in the size of the workforce. For example, the most recent monthly Office for National Statistics data shows a fall in unemployment of  just over 200 000 over the year, but  a  400 000 plus rise in those working.

ONS data shows  a   325,000 increase in employment of non-UK nationals during the last year compared with 120 000 UK nationals, with the  latest CIPD labour market survey reporting   a fifth of its sample intending  to recruit migrant labour in the last quarter of 2015 – and reporting  difficulties in recruiting UK born workers for ‘unskilled and semi-skilled’ roles such  as factory workers (33%), kitchen assistants  and  retail assistants. Almost one in five care workers are migrants (Independent 17/11/15)download

Karl Marx used the term ‘reserve army’ to describe the pool of semi-employed or unemployed workers who were the consequence of ‘overproduction’ and also the rising organic composition of capital (the replacement of labour by machines) so while the concept might be a useful one, the nature of this modern reserve is rather different. Rather than being part of Marx’s impoverished ‘lumpen’ workforce, research shows that  migrant workers are likely to be overqualified  (compared with UK nationals,  a greater proportion have degrees) for the jobs they are recruited to  and in many cases, will have given up more highly skilled –though not better paid – employment in their home country.

It’s now also being  argued  that as the labour market tightens,   employers are increasingly recruiting more young people, the group that have suffered most in the period since the downturn. As a result, there’s optimism about a future increase in the number of apprentices.  The number of 18–24 years that work  is up nearly 80,000 over the year,   but half of these are full-time students (the largest increase in employment for young people has been among 16-17 year old students). Classifying young people as a reserve army is therefore problematic. But on the other hand if education’s  main role is now primarily to delay young people entering the labour and reduce official unemployment figures, the reserve army   analogy fits very well!

October 26, 2015

Low-level apprenticeships reflect Britain’s ‘coffee shop’ economy

Filed under: apprenticeships — sitemananger @ 7:30 pm

Blog Post for Reclaiming Schools *network                                                                          

Ofsted’s hard hitting report on the quality of apprenticeship provision, confirms what is increasingly becoming apparent. Large numbers of apprenticeships are poor quality, involve little real training and merely certify ‘existing low-level skills, such as making coffee, serving sandwiches or cleaning floors’ (Ofsted p 4**). Ofsted reports  low rates of progression from these low-level schemes many of which, it argues, add little value to either the individual or the employer.

In particular Ofsted identifies a shortage of apprenticeships for school and college leavers. This is confirmed in the latest government data which shows only 1 in 4 new starts by those under 19. It calls for schools to do more to promote apprenticeships, says that careers advice is ‘not sufficiently detailed’ (Ofsted p 5) and that too few  pupils  experience high-quality work experience during their time at school.

There are some good apprenticeships however. Ofsted identifies engineering, motor vehicles and the construction sector in particular, but though these can lead  to higher salaries and promotion it argues there are nowhere near enough. Ofsted sees recent changes being made to apprenticeships, moving in the right direction. New Trailblazer apprenticeships, directly designed by employers, include more off-the-job, training for example, but it argues, apprenticeships as they are presently administered are not delivering the skills needed to promote economic growth and are wasting public funds.

Ofsted, particularly its chief Michael Wilshaw, is not usually right on very much, so in one sense this report should be welcomed. Ofsted though, has a rather shallow explanation for the failure of apprenticeships. There are major problems with design and implementation, but a key reason why there are so many  apprenticeships in retail, social care, leisure  and in customer services, is because the economic ‘recovery’  has been based on the growth of low paid, low skilled work in these areas. (The UK is becoming the coffee shop capital of Europe!) Engineering and manufacturing now employ less than 1 in 10 of the workforce and only about a quarter of new jobs created could be described as ‘professional or managerial’. 

We should continue to support all initiatives seeking to improve apprenticeship, but if employment opportunities for young people are to be seriously improved,  an alternative policy for the economy is also  required. In other words the apprenticeship problem  is a jobs problem, as much as it is one of  training and skills. Critics of apprenticeships often look to the German system for inspiration. German apprenticeships provide a ‘licence to practice’ an occupation, are to a much higher standard and require attendance at college,  but there, employers, trade unions and government are involved in much greater cooperation over apprenticeship provision, economic planning and labour market needs.

Meanwhile, schools will not be persuaded to promote apprenticeships  as alternatives to higher education, while they are clearly not.



October 18, 2015

Now Apprenticeships failed by Ofsted

Filed under: apprenticeships — sitemananger @ 5:07 pm

Skills Minister Nick Boles  might be  correct to claim that more people than ever are now currently on cup-of-coffeeapprenticeships, but  the  government’s  own  data published last week   shows it  will struggle to create the 3 million (high quality) new apprenticeships promised by  the end of the Parliament.

It’s true that the last academic year saw almost 500 000 starts, but 60% of these have been at Intermediate (GCSE) Level – a qualification most school leavers already have.  In comparison barely a thousand 19 year olds started the Higher Level schemes that are being promoted as alternatives to university.   Around 4 out of 10 new apprenticeships are still started by adults, many of whom are existing workers – while less than 1 in 5   new starts are by somebody 19 years old or under.

Ofsted will report on apprenticeships this week.   Ofsted boss   Sir Michael Wilshaw telling the BBC   that the expansion of apprenticeships had ‘devalued the brand’ with ‘making-coffee’ and ‘cleaning floors’ being accredited.  (He might have remembered that in April David Cameron launched a Costa-Coffee scheme  as part of his election campaign)  According to the BBC, Wilshaw (not usually right on much) claims some young people taken on in jobs classified as apprenticeships are not even aware they are on them. Quiet Likely!

                                                                             New e-book from 


October 15, 2015

Labour and the Fiscal Charter    ( ‘Living within our means’ Part 2)

Filed under: Economy — sitemananger @ 10:18 am

jeremy-corbyn-john-mcdonnellPredictably, in the run up to the Parliamentary vote on the Fiscal Charter,   media attention focused on the fall-out from John McDonnell’s sudden   ‘U-turn’ and the way Labour MPs opposed to the Corbyn leadership sought to exploit the situation.

Much of the confusion has arisen from the Shadow Chancellor’s attempt to ‘out Osborne, Osborne’ (his own words) arguing  that a balanced budget  applied only to current expenditure and that Labour’s emphasis on capital spending would, in sharp contrast to Osborne’s policies,  enable the economy to grow generate the extra taxation necessary to reduce debt.  But it’s now clear that Osborne’s Charter is intended to apply to all expenditure, forcing   McDonnell to backtrack, citing deteriorating economic prospects as the reason for his change of policy. (Not to mention a little pressure from Scottish activists perhaps?)

McDonnell’s performance   in the Commons   might not have been exactly convincing, but Labour now has the beginnings of  a clearer line on economic management, around which it can begin to reshape other policies –those on employment and education and training for example. The charter only applies to ‘normal’ conditions anyway   and with another economic downturn on the cards, it’s likely that Osborne will also have to ditch his commitment to ‘living within our means’ as the Neo-liberal argument that the economy should be run like a prudent household, becomes increasingly unsustainable.  

October 7, 2015

New e-book Hard Labour: young people moving into work in difficult times

Filed under: Uncategorized — sitemananger @ 6:12 pm

Though youth unemployment has continued to fall, at 16% it cover_remains three times the adult rate – but many more young people still can’t get the jobs that they want. Young people have been encouraged to continue to higher education, yet qualifications buy less and less and thousands remain ‘underemployed’. This study provides both an overview and a context to the difficulties facing young people seeking to enter the labour market. It examines the debate about skills and the changing nature of work that have made the transition from full-time education to employment more difficult, more precarious, more prolonged.

                                                                                   Download @

‘Living within our means’

Filed under: Uncategorized — Tags: — sitemananger @ 7:44 am


 ‘Living within our means’ has become a cliché of late.  George Osborne continues to espouse it as justification for austerity policies,  but Labour’s new shadow Chancellor John McDonnell’s  apparent endorsement of George Osborne’s  ‘ Fiscal Charter’ which commits governments to achieve balanced budgets over a  5 year parliamentary cycle, may seem perplexing;  given his clear commitment to an anti-austerity  economics

McDonnell’s immediate problem has been the shadow left by Ed Miliband’s front bench and its capitulation to George Osborne’s ‘spin’ offensive   -particularly the charge that it was Labour’s ‘overspending’ that  was  a major  reason for the extent of the 2008 crash. But there’s little evidence that there was any  overspending.  On average, despite what Osborne wants us to believe, Labour spent less and borrowed less   than the Tories did before the downturn set in   –  and for 2007-8 the current deficit of was under 1% of  GDP    There’s a huge difference between McDonnell and Osborne of course.  Labour insists that borrowing for public investment is excluded from any fiscal restrictions, as this will form the basis of its alternative programme for growth. 

Meanwhile, ‘living within our means’  continues  to  be impossible for many people, including many of those in work, with wages barely reaching their pre-down levels and easily available credit being used to fill the gap.  As a result   average household debt  (excluding mortgages)  grew  by 9% in 2014 and is set  to reach £10 000 by  the end of 2016 (Guardian  23/03/15) –a  significant factor behind  the Bank of England’s   delay  in raising  interest  rates.

Despite McDonnell’s caution, it’s nonsense to apply imaginary household budgeting habits to government   fiscal policy and indeed until the emergence of neo-liberal  economics as the new orthodoxy, few economists would consider trying to do this. Equally ridiculous have been the accusations that McDonnell’s and Jeremy Corbyn’s plans for a ‘People’s Quantitative Easing’ will lead to the hyperinflation of   Zimbabwe or the Weimar Republic (!) Osborne himself, accepting that in times of recession, low interest rates and near zero inflation, governments can increase the nation’s money supply to promote growth and renew activity (1) injected £325 billion worth of new funds (equivalent to over a third of the national debt)  into the banking system after the crash in the vein hope that it would be converted into loans to businesses and consumers.

With an increasing risk of another downturn in the months ahead –making  it even less likely that  either the national debt to income ratio will  be reduced or  the budget deficit cleared by the end of the Parliament,   a  less constrained  Labour economic  strategy will surely be able to emerge

(1) See  3.35 “Review of the Monetary Policy Framework.” (2013)

September 28, 2015

The problem’s the jobs, not the people who do them.

Filed under: Economy — sitemananger @ 8:11 am

Deputy Governor of the Bank of England Ben Broadbent thinks the growth of low-skilled and low paid-employment can be related to the increased availability of low skilled workers from different parts of Europe. (Guardian 24/09/15). Not only has this kept wage levels depressed, Broadbent argues, but it is also a reason why ‘human capital’ –the quality of the workforce and therefore its productivity has been growing more slowly compared to the 1990s.

These arguments can’t really be substantiated. A UCL study (Financial Times 05/11/15) for example, reveals that more than 60% of new migrants from western and southern Europe are now university graduates while the educational levels of east Europeans who come to Britain are also improving, 25% of recent arrivals having completed a degree compared with 24% of the UK-born workforce. Britain is uniquely successful, it argues, even more so than Germany, in attracting the most highly skilled and highly educated migrants in Europe.

In otherwords highly qualified European migrants often ‘trade down’ skills for the highly level of pay they can earn in their adopted country. But it also continues to be the case that many low-skilled jobs are also done by ‘overqualified’ British workers – According to the Office for National Statistics for example, graduates increasingly work as receptionists, sales assistants and many types of factory workers, care workers and home carers.

Broadbent thinks that an improvement in European economies will make the UK less attractive and the reduced supply of labour will help both to push up wages and encourage investment. The labour market is certainly tightening, but there’s not enough evidence so far to show that real wages are rising because of this. Equally significant is the zero rate of inflation. There’s even less sign of any significant increase in investment.

Since the downturn, the proportion of low-paid low-skilled jobs has increased extensively and labour intensive work with low productivity and low pay, continues to predominate. Though more pronounced in the UK, this has been a feature across the developed world as has the mismatch between workers qualifications and the jobs they end of doing.

August 21, 2015

Under-Grads, NEETs and the Apprenticeship Levy

Filed under: Education and economy — sitemananger @ 1:10 pm

The Certified Institute of Personnel and Development (CIPD) considered one the leading commentators on skill development and the labour market, has just published an extensive report about the  ‘mismatch’ between graduates and the work they do.

CIPD estimates that 58% of graduates are now underemployed, doing work for which they are over qualified –even higher than previously thought and in Europe, only exceeded in Greece and Estonia. The ‘pushing down’ of graduates into non-graduate jobs is reflected in a 21% share of administrative, 13% of sales workers , but also 8% of those in unskilled ‘elementary’ occupations. As CIPD note, the UK has had one the highest increases in Higher Education participation in Europe, but at the same time one of the lowest increases in high skilled jobs.

But the report makes clear than even though graduates may experience falls in income, this doesn’t mean the gap between graduate and non-graduate pay is getting less (known as the ‘graduate premium’). On the contrary, non-graduates are pushed into jobs farther down the income scale. In otherwords it emphasises the importance of a degree as a ‘positional’ good and helps explain why despite graduate underemployment, there’ s no let-up in the number applicants for HE.

Also out are the latest ONS figures for NEETs, those 16-24 year olds Not in Education, Employment, or Training.–employment-or-training–neets-/index.html

These show a slight fall in overall numbers, down to 922,000, but that 1 in 8 of all 16-24 year olds are in this category 1 in 7 for 18-24 year olds. The number of NEETs has fallen significantly since 2012 and has coincided with the raising of the ‘participation age’ for education and training to 17 and then 18. But the fall in numbers has levelled off more recently.

Finally, the government has also issued a consultation document about the proposed apprenticeship levy on large employers This has been designed to help pay for the 3 million more apprenticeships promised by David Cameron in the general election, but is opposed by the CBI. Regardless of the outcome, it’s not due to be implemented till 2017.

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