By AAT Comment ApprenticeshipsEnabling social mobility is an economic necessity11 Jun 2024 This general election, social mobility should be on the agenda. Post-Covid, accountancy is facing an even greater challenge in opening up opportunities – blocking one route to easing the skills gap.A report on social mobility from the Institute of Fiscal Studies, (IFS) published late last year came to a stark conclusion: “It may be harder now than at any point in over half a century to move up if you are born in a position of disadvantage,” said David Sturrock, a senior research economist at the IFS.Did you miss out on our popular Spring tax update masterclass?Fear not – we’ve recorded the session, which is now available on-demand for you to purchase and watch at your leisure.Watch nowA steady decline But what exactly is social mobility? Laura Jane Rawlings of Youth Employment UK gives a basic definition: “We define social mobility as the chance of free school meal students moving into the next social strata above them”.Other measures are available – PwC uses parental occupation as its marker, for instance – but there is broad agreement that those from a disadvantaged background are finding it harder now to move up the ladder than in the past. The IFS report found the number of factors that both create and compound social inequality were growing: from greater inherited wealth to the growing gap in house prices.As a result, “[Mobility] has been in decline for the last 20 years – and we’re not seeing enough policy or system change to make any real difference to those young people,” says Rawlings.And, she says, coupled with the anxiety around the economy, “there’s a paralysis around young people making choices – they feel immobilised by all this”. Some of the remedies for this malaise are well known, others less so. Most observers agree that reforms to skills policy must form a central plank of any effective plan to increase mobility. And the cornerstone of skills policy in the past decade has been apprenticeships.That’s an approach the previous AAT President Christina Earls endorsed. “Sometimes, socioeconomic background impedes high academic recognition. I really do recommend apprenticeships to potential students as a great way to find a career, whatever their academic record from school. There they can learn technical knowledge whilst developing the right skills and behaviours and at the same time earn whilst they learn. It also enables them to feel they’re giving value to their employers from day one.”As the election looms in the UK, once again apprenticeships – their design, adoption, funding structure and completion rates – are back on the agenda, as the parties compete to offer a compelling vision for greater social mobility. And they should have a receptive audience: social mobility thinktank The Sutton Trust recently published research that found that, “The British public want fairer opportunities – with 93% saying it is important to make sure every young person has equal opportunities regardless of their background, and 87% saying it’s important to level the playing field.”Accounting for accountancyAs someone who trained via an apprenticeship and had to support themselves while training, Lucy Cohen FMAAT agrees things need to change. “I’d like to see firms make efforts to reach out to people who maybe otherwise wouldn’t have considered accountancy as a career,” she says, pointing to a continued perception gap around the profession that isn’t as welcoming to those from different backgrounds. “Before I did my apprenticeship with AAT, I had no idea that you could train to be an accountant without going to university or working for a big practice. It was by chance that I found that out, and it was life-changing.” Cohen now runs her own practice, and employs apprentices as a matter of course. Her advice to anyone looking to attract and retain a broader talent pool is clear: “Take a long hard look at recruitment of both staff and trainees – where did you go to reach them? If you are only advertising in the same three places, then you’ll likely keep attracting the same people over and over again.” To address social mobility and diversity, she suggests accounting practices need to make efforts to advertise in places they haven’t tried before in order to attract a different set of people. “Speak to the people you want to attract – find out where they look for opportunities in education and work. Listen to their feedback and make the right changes.”Addressing knowledge gaps is key: “The thing that is really challenging is that employers keep using the same measurement tools to assess young people,” Laura Jane Rawlings says. “But we know that not all young people get equal opportunity. Employers have to change their recruitment practices because a lot of them are using yardsticks that are 20 years out of date.”To that end, Youth Employment UK recently launched its Good Youth Employment Benchmark, designed to help employers assess and track their current employment practices. By utilising this benchmark, “Employers can gain insights into what’s working well and identify areas for improvement particularly for those young people with protected characteristics.”Earn as you learn Apprenticeship is a well-established principle for training youngsters in a trade and in recent years it has been extended to cover more white-collar and professional careers, including accounting. Offer young people the chance to develop skills on the job and acquire academic qualifications, the theory goes, and you open up careers to those for whom three years of university isn’t the right route. A growing number of accounting employers are using apprenticeships to open up the profession to a broader cohort, and to include more of those from a disadvantaged background. Key to their success, Emily Jones of Youth Employment UK says, is employer support. “Once someone is in an apprenticeship, you want to make sure it’s a good-quality standard that will help them progress – because ultimately that’s what social mobility is all about.” It’s a key point. Government data published in March 2022 showed that just 60.2% of apprentices training on new-style standards stayed on their programme until the end in 2019/20. Youth Employment UK looked into the worryingly high rate of non-completion and it showed that for those that dropped out, lack of employer support was the key reason. That includes time off for training, but also social support. The government says it recognises the flaws in the current system. A recent BDO survey of over 500 mid-market companies found that 32% want to take on more apprentices but find the associated costs too prohibitive. Another 32% said they want more direction on how to establish an apprenticeship program. The government recently pledged £60m in additional funding to support small businesses taking on apprentices by paying the full cost of training for anyone up to the age of 21. It’s a step in the right direction, but some critics believe government action isn’t enough to tackle social mobility. Employers must lead, too.Some are making real strides. Take PwC, one of the Big Four and increasingly outspoken on its determination to change the nature of its workforce.“Our apprentices can progress at pretty much the same rate as graduates, give or take,” says the firm’s head of social mobility Hollie Crompton, pointing out that she qualified as a chartered accountant via an apprenticeship in four years. “And over the years, the retention of school leavers is actually better than graduates, so they tend to be more loyal, having started with you earlier.”A smarter approach The PwC model – combining outreach to underserved communities, more nuanced and effective recruitment practices (they recently dropped the 2:1 degree requirement), and better in-job support – shows that a blended approach can open doors to many young people who previously felt excluded from a career in accountancy. Ultimately, Emily Jones says, offering a good apprenticeship isn’t rocket science: “It should provide the opportunity to gain skills, work experience, access to progression opportunities and an increase in pay. So even if you’re not motivated by social mobility, if you’re giving those opportunities, then you’re supporting social mobility even without knowing it.”Time for change While the apprenticeship system offers an alternative to university, the harsh reality is it’s producing the same winners and losers.The Social Mobility Commission finds those from better-off backgrounds are almost 80% more likely to end up in a professional role, and it notes “disadvantage gaps… at every stage of the apprenticeship journey, from initial selection of candidates by employers to the quality of training”.AAT recognises the potential of apprenticeships – and the problems they face. That’s why AAT has previously gathered politicians, employers, educators and policy groups at the House of Commons for a round table. Delegates laid out a difficult set of challenges that need to be overcome, from a disjointed and short-term approach to skills policy, to inequality and problems with funding.Each year, £2bn of apprenticeship levy is left unspent by business and reclaimed by HMRC. At the same time, the Government’s rigid funding bands are not matching inflation, leading private training providers to pass on costs to employers, causing some to walk away. AAT’s ‘Time for Change’ campaign activity is part of its wider efforts to address these difficulties.Did you miss out on our popular Spring tax update masterclass?Fear not – we’ve recorded the session, which is now available on-demand for you to purchase and watch at your leisure.Watch now AAT Comment offers news and opinion on the world of business and finance from the Association of Accounting Technicians.