Adam Smith Institute

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Arguing about apprentices

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Apprenticeship schemes can be beneficial to the labour market, and in turn the economy as a whole. If run efficiently and led by firms they can produce highly skilled young people with a higher degree of specialisation in their field. This helps promote high quality domestic industries.

The reason these schemes tend to work is that firms know that they are investing in high quality staff who can be nurtured to suit their needs, creating a reliable and efficient workforce. So when the quality of the apprenticeship schemes becomes questionable, the entire system is undermined. This is the problem with the governments interference by proposing a quota of 400,000 places to be on offer by 2020.

By producing such a quota, the government is effectively artificially boosting the supply within the market for apprentices, consequently devaluing the benefits they bring to firms and the economy. By ensuring that there are always places available on these schemes, the government is disincentivizing young apprentices, making the market less competitive. The government needs to be aware of possible unintended consequences that could harm the long-term interests industry.

As this article says, these targets are facing some stiff opposition and may not actually come into play. Let's hope so. Apprentice schemes should be left in the hands of the private sector. Ultimately, they know that if they invest in young employees, educating and training them, they will reap the rewards later on.