The National Apprenticeship Service is the latest in a long line of organisations that believes it can get creatives to work for free by disguising an extended pitch process as a competition – but the NAS's scheme is worse than most because of who it's aimed at.

The Service has created a 'competition' for creatives aged 16-24 to design a Facebook app to 'raise awareness' of Apprenticeships. Up to five winners will get "up to £3,000" to develop a beta of their app, with one eventual overall winner getting "up to £10,000" to develop the app, which will be released in August.

While the app may be noble in intent, the process is no better than going on the likes of 99designs: where commercial projects such as logo designs are offered up to anyone who wants to create them – but only the design picked by the client is paid for. Everyone else who submitted designs get nothing.

Those outside the creative industries often find it difficult to understand the problems with this unless it's pointed out to them that you wouldn't invite five plumbers round to fix a leaking pipe – or five accountants to do your books – and only pay the one who did the best job. In other professions, the idea that if you ask someone to do some work for you, you pay them, is inherent.

Is this really the message the NAS – which generally does a great job of helping young people by increasing the number and quality of apprenticeships around the UK – should be sending out to those it wants to help? That it's ok to be exploited by clients at the barest sight of a dangled carrot of possible reward.

The Service seems at least semi-aware of what it's doing. It says in a press release that "rather than following a traditional route of appointing a creative agency to develop the new app" – and pay a fair rate to everyone who works on creating the app – "the National Apprenticeship Service will tap into the talent and creativity of young people" i.e. exploit those who know no better.

'Competitions' like this demean the value of the creative industries – and if the NAS really wants to help young creatives here it should help teach them to respect themselves and the value of their skills by stopping this 'competition' straight away.

Update 4/5/2013: The article above has been corrected to reflect that there is an intial round of prizes to aid beta development, and then a single overall prize – not just a single prize as the article originally said. We regret the error

Update 7/5/2013: The National Apprenticeship Service has written a response to this piece, which we're happy to print below.

""We were disappointed to read the article on Digital Arts and strongly refute the claim that the National Apprenticeship Service is in any way intending to exploit young people with our Facebook app design challenge.

"The project is rooted in research and feedback from young people who highlighted the need for an app of this nature and expressed a clear desire to be part of the process of designing the finished product to ensure their requirements would be met. Contrary to the article's claims, we are not asking applicants to submit an extensive proposal akin to a formal pitch process, rather a very simple form which briefly explains their creative concept.

"Only those individuals whose ideas are shortlisted will be asked to undertake any further design and development work for which there is funding available. The winning individual or team will also receive additional funding to ensure they are adequately compensated for their efforts and will be actively involved in the process of any further development following the end of this project."