National Minimum Wage

Research
Chapter 3: Young People, Interns and Apprentices
3.71 We commissioned Ipsos MORI and Cambridge Policy Consultants (2012) to carry out
research on the impact of the introduction of the Apprentice Rate. The researchers
conducted a telephone survey of 500 employers of apprentices in England, Scotland and
Wales. Due to data protection issues and the absence of any centrally held employer data
they were not able to access learner records to conduct a similar telephone survey in
Northern Ireland. It was, however, possible to conduct an online survey of employers there,
through training providers. In addition to this quantitative research, the researchers conducted
qualitative research on the impact of the Apprenticeship Rate through interviews with key
personnel in national delivery teams and training providers, as well as a limited number of
group discussions with apprentices. Difficulties in accessing UK employers with apprentices
meant that some caution should be exercised when interpreting the results. The researchers
suggested that their findings should be interpreted in broad terms.
3.72 The survey asked UK employers offering apprenticeships after September 2010 whether the
introduction of the Apprentice Rate made any change to their offer of places. It found that the
Apprentice Rate appears to have had a minimal impact on these employers’ decisions, with
76 per cent agreeing with the statement that the introduction of the Apprentice Rate made
no change to their offering of apprenticeship places and 12 per cent disagreeing. Of the 77
employers no longer offering apprenticeships, 15 per cent agreed with the statement that the
introduction of the Apprentice Rate ‘was the main reason for their decision not to offer
apprenticeship training’, and 71 per cent disagreed with it. Only 18 per cent of employers
agreed that the Apprentice Rate had led them to seek alternative methods for training young
people, but 23 per cent of employers in the low-paying sectors did.
3.73 The researchers said their findings suggested that the Apprentice Rate was one of many
elements affecting employers’ overall decision making: employers that had either increased
or reduced their intake of apprentices over the last year provided a wide variety of reasons for
doing so, of which the Apprentice Rate typically played a minor role. In addition the qualitative
research undertaken also found little effect of the Apprentice Rate. Almost all discussions
with national delivery teams and training providers in each UK administration suggested that
the introduction of the Apprentice Rate had no impact on apprenticeships. Discussions with
apprentices themselves suggested that the impact of the introduction of the Apprentice Rate
was broadly neutral.
3.74 The study reported around one in seven of employers surveyed said they had difficulties with
one or more of the criteria which affect eligibility for the Apprentice Rate. As most of these
employers identified several problems no one single problem dominated, and the researchers
concluded that overall the impact was minimal. However those identifying these problems
were more likely to disagree with a further statement that the introduction of the Apprentice
Rate ‘made no change to your offering of apprenticeship places’ and agree that the
Apprentice Rate would make it less likely that they would take on apprentices in the
next year.
3.75 Among those employers who reported a problem the most frequently mentioned impact of
difficulties arising through the eligibility criteria was increased financial cost to the company
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