Lib Dems call for increase to apprenticeship pay as dropout rates soar 

EMBARGO: 22:30 Wednesday 20th September

Apprenticeships in shortage occupations have fallen by up to 73%, research commissioned by the Liberal Democrats reveal, while in some sectors three in four apprentices are dropping out before completing their course.

It comes as the party is set to adopt proposals to increase pay for apprenticeships to at least the minimum wage, as part of a new industrial strategy being unveiled at its Autumn Conference this weekend.

A collapse in new apprenticeships is contributing to the crippling skills shortages affecting British businesses, making it even harder for them to fill vacancies. House of Commons Library research commissioned by the Liberal Democrats shows that sectors listed in the Government’s official “shortage occupation list” have seen particularly stark falls in apprenticeships.

Health and social care, a key sector facing major staffing issues, has seen the number of new apprentices fall from 47,700 in 2015-16 to just 18,200 last year - a fall of 62%. The fall is even worse in the manufacturing sector, where apprenticeships fell from 26,370 in 2015-16 to a mere 3,560 in 2021-22 - a 73% drop. Other shortage sectors, such as science and agriculture have also seen massive drops, of 59% and 52% respectively.

Meanwhile, people looking to start an apprenticeship face a huge financial penalty, as the minimum wage in the first year of an apprenticeship is just £5.28 an hour - almost half the normal minimum wage of £10.42.

This low pay is contributing to staggeringly high drop-out rates for apprenticeships in shortage occupations. In health and social care, more than half (52%) of apprenticeships ended in a drop out last year, whilst over a third (35%) of those in a manufacturing apprenticeship didn’t finish their training. Dropout rates for medicine and dentistry roles reached an astonishing 76%.

At their Autumn Conference in Bournemouth, Liberal Democrats will be debating proposals to fix the broken apprenticeship system, tackle skills shortages and grow the economy. The proposals include paying all apprentices the regular minimum wage, supporting businesses by cutting business rates and energy bills, and reintroducing an industrial strategy to unlock new investment.

Sarah Olney MP, Liberal Democrat Treasury and Business Spokesperson said:

“This Conservative government crashed the economy and is now sitting on the sidelines with no plan to fix the damage they’ve caused. It is incredibly damning that apprenticeships are plummeting in the very sectors that the government has identified as having severe skills shortages.

“Currently, first year apprentices are paid a shockingly low wage, almost half the national minimum wage. We would fix the broken apprenticeship system by making it much more flexible for employers and ensuring apprentices are paid a fair wage, helping to tackle soaring drop out rates.

“This forms part of the bold Liberal Democrat plan for a new industrial strategy to get our economy growing strongly again and tackle the cost-of-living crisis.”

ENDS

NOTES TO EDITOR:

Policy motion:

Motion F8: Bring Back the Industrial Strategy is available on page 19 of the Conference Agenda. The motion calls on the Government to: “Build an inclusive economy with broad access to training and skills, by scrapping the lower ‘apprentice’s wage’ band and boosting the take-up of apprenticeships.” This would see first-year apprentices get paid in line with the relevant minimum wage band depending on their age.

House of Commons Library research:

House of Commons Library figures and methodology are available here.

All apprenticeship figures in the release refer to apprenticeship achievements (people successfully completing an apprenticeship). 2021-22 dropouts refers to the number of apprentices who would have been expected to complete their apprenticeship that year but didn’t. 

Shortage occupation lists 

The Home Office provides a list of shortage occupations on Gov.uk called Skilled Worker visa: shortage occupations, which was last updated in August 2023. It also provides additional information on healthcare and education shortage occupations in the Gov.uk page Skilled Worker visa: shortage occupations for healthcare and education.

Apprenticeship data is not available by occupation, so we have provided statistics for the apprenticeship subject areas which include most of the occupations on these lists.

Apprenticeship data

We have provided data on apprenticeship starts, achievements and dropout rates in England in the spreadsheet attached.

We have provided data by subject sector area. Subject sector areas are broken into two tiers – a broader tier (tier 1) where they are only broken into 14 subject areas, and a narrower tier (tier 2) where they are broken down in 41 subject areas. We have provided data broken down by tier 2 as these most closely match the occupations on the shortage list.