Apprenticeships

Earl of Courtown Excerpts

Thursday 15th October 2015 Lords Chamber

[The Earl of Courtown (Con)]

My Lords, I welcome the opportunity to set out what Her Majesty’s Government are doing to grow the apprenticeship programme, to explain the process for monitoring the availability and quality of apprenticeships, and to set out what is in place to ensure an appropriate spread across the labour market. I am grateful to the noble Baroness, Lady Prosser, for tabling this debate and to noble Lords, who have raised important points. I was particularly interested in the points made by the noble Lord, Lord Lisvane, concerning the need for apprenticeships and the possibility of their use in the restoration of this great palace. I will endeavour to answer all the questions that have been put but, where I cannot, I will ensure that I write to noble Lords and place copies in the Library.

Apprenticeships are real jobs that give people the opportunity to train, develop skills and become fully competent while employed in a role. They are already offered in 240,000 workplaces in England, from microbusinesses to blue chip companies such IBM, BAE Systems and Sky. We know that apprenticeships benefit individuals, employers and the economy. Improving skills is an important factor in increasing productivity and will be essential to the prosperity of our economy in the coming years.

For young people, apprenticeships can be the first step on the career ladder, for all ages a route to career progression and, for employers, a sustainable way of building a workforce with the skills that they need. While we would not want to interfere in employers’ recruitment decisions, we believe there is more to be done to ensure that people from a diverse range of backgrounds, as mentioned by the noble Lord, Lord Watson, including care leavers, are in the best possible place to secure an apprenticeship.

An apprenticeship advisory group helps government to understand and address any apprenticeship equality and diversity issues, as mentioned by many noble Lords, in order to reduce barriers and make apprenticeships as inclusive as possible. For instance, we are promoting reasonable adjustment for disabled learners. I know that the noble Lord, Lord Addington, has been involved in shaping amendments to the Children and Families Bill to support people with difficulties such as dyslexia in completing the English and maths requirements. I totally agree that this is important, and more needs to be done on the guidance to address the management of disabled apprentices, as well as the issue of employers ignoring the Equality Act. We will ensure that these important issues are reflected in the guidance.

Unlike in most other countries, women are, as mentioned by many noble Lords, well represented within English apprenticeship schemes, with 52.9% of all starts in 2013-14 having been women. We have made enormous progress but there is still much to do. Over the last five years, we have seen significant growth, as mentioned, with more than 2.3 million new apprenticeships. We are now committed, as other noble Lords have said, to 3 million new starts in this Parliament. This is a challenging commitment to deliver because, as I have said, apprenticeships are real jobs, so growth depends on employer demand. The noble Baroness, Lady Warwick of Undercliffe, in particular mentioned this issue. We are taking action to support the growth needed to meet our commitment, working with large and small businesses to begin or expand their programmes, and setting new expectations for public sector bodies, including through public procurement.

We will need to work hard to stimulate both demand and supply across the labour market. The benefits of the programme are clear. The latest research, as at June 2015, shows that adult apprenticeships at level 3 deliver £28 of economic benefits for each pound of government investment. Some 89% of apprentices and 82% of employers are satisfied with the programme, and a higher apprentice can earn £150,000 more over their lifetime. I noted what the noble Baroness, Lady Humphreys, told me about higher apprentices in north Wales.

It has been made easier than ever before to recruit an apprentice, and it is expected that young people will continue to benefit from the expansion of the programme. Incentives are in place to encourage employers to take on a young person. For example, training for 16 to 18 year-olds is fully funded; the apprenticeship grant for employers provides small businesses with £1,500 for each new young person they take on; and, from April 2016, businesses will not be required to pay employer national insurance contributions on earnings for apprentices aged under 25.

Young people’s engagement with apprenticeships is obviously a priority, but there continues to be a solid justification for the public funding of adult apprenticeships. Data show strong wage returns for this group: 16% for level 3 and 11% for level 2 per year between three to five years after completion.

The public sector will also play a full role in delivering more. Government will ensure that it is a model employer, developing a skilled workforce for the future. We are demonstrating this commitment via legislation. The noble Lord, Lord Watson, among others, mentioned the Enterprise Bill, which has laid out plans to set apprenticeships targets for public bodies. Many public bodies—in central and local government—already choose to build skills considerations into their procurement. High Speed 2 has a target of 2,000 in the construction phase, and a new college to train the next generation of world-class engineers provides a clear signal that apprenticeships are a priority area. The noble Baroness, Lady Prosser, along with other noble Lords, mentioned Crossrail. This is the largest procurement project across government and has exceeded its target of employing 400 apprentices over the life cycle of the project, which is due to complete next year. It is the Government’s expectation that more apprenticeships will also be generated through public sector procurement.

We all agree that apprenticeships must be high quality, rigorous and focused on what employers need. We have insisted that all must have a minimum duration of 12 months. Furthermore, in order to strengthen and safeguard the reputation of the brand—a point raised by the noble Lord, Lord Aberdare—we are providing protection for the term “apprenticeship” to prevent any misuse.

We have put in place reforms to give employers much greater control. Through our trailblazers, they are designing new apprenticeship standards, deciding which skills, knowledge and behaviours are required as part of a successful apprenticeship for occupations across sectors. Criteria that all new standards must meet have been set to ensure quality and consistency across all apprenticeships. I know that this is of concern to all noble Lords. Standards will also clearly specify any qualifications that are necessary to achieve and demonstrate full competence. There are more than 140 trailblazers involving more than 1,300 employers. So far, approval has been given to develop more than 350 standards. Of these, 187 have been approved and, as mentioned by the noble Lord, Lord Bhattacharyya, 52 are ready for delivery.

The demand for higher standards will ensure that apprentices are stretched. By setting higher expectations for achievement in English and maths and introducing end-point assessment, excellence will be seen and widely recognised. The development of new, more rigorous standards is being extended into sectors with little or no previous history of apprenticeships, such as financial services and the legal profession.

As the noble Baroness, Lady Prosser, said, we are expanding higher and degree apprenticeships to offer new opportunities in occupations such as nuclear, digital, nursing, journalism and surveying. They range from level 4 all the way up to master’s degree level, allowing young people the opportunity to combine a world-class degree with a high-quality apprenticeship. We are also giving employers greater control over funding through a simple apprenticeship voucher, so that they can buy the quality training they need and hold training providers to account. The UK-wide levy is being developed for all larger employers in the public and private sector to help fund the increase in quantity and quality of apprenticeship training. In England, for any firm that will be able to get back more than it puts in by training sufficient apprentices, control over funding will be put in the hands of employers via the voucher mechanism that I mentioned. Many noble Lords have asked how this will be taken further. Additional details will be set out at the spending review, but businesses will be given sufficient time to prepare for the change. A consultation on the levy was launched on 21 August and closed on 2 October. The apprenticeship levy will link larger employers directly to its skills investment and promote the value, and drive the uptake, of apprenticeships.

Monitoring, as was mentioned by many noble Lords, is an essential part of raising and maintaining quality across the programme. Ministers are currently considering the future model for the long-term governance of the system. They will say more about this after the outcome of the spending review. In response to the point made by the noble Baroness, Lady Prosser, about the numerous organisations involved in regulation and oversight, these organisations do different things. Some deal with funding and others with the quality of provision, but it is something we can consider.

If we are to get more young people to consider and take up opportunities, it is essential that they receive quality careers advice and guidance at the right time. As my noble friend Lord Lingfield said, since 2012 schools have had a duty to provide independent careers guidance to 12 to 18 year-olds on their options post 16, including apprenticeships. It has been made clear that schools should give employers and other providers the opportunity to inform pupils about what they offer. Ofsted is now giving careers guidance a higher priority in school inspections, and we are working with it to monitor carefully the impact of the statutory guidance. For young people who are not yet work-ready and need extra help, traineeships offer an opportunity to develop the skills and experience they need to compete successfully for an apprenticeship or other job. The noble Baroness, Lady Garden, asked for an assurance that there will be support from the Government to ensure that employers do not cut corners on quality. Yes, we are working with employer-led trailblazers as part of that scheme to develop the quality standards and assessment plans.

The noble Lord, Lord Macdonald of Tradeston, asked about women in science and engineering apprenticeships. Investment is being made in a wide range of initiatives that aim to inspire and engage young people with the opportunities that a career in STEM can provide. There is a commitment to ensure that the STEM workforce is diverse, reflecting wider society, and makes use of all the talents available to it. It is recognised that in some STEM disciplines, there is a particular shortage of women, for example in engineering.

The noble Baroness, Lady Garden, also asked what incentives were offered to schools to celebrate pupils who go on to apprenticeships. Destination measures produced by the Department for Education will now include those going on to apprenticeships. This will help to raise the profile of apprenticeships and of the need to celebrate in the future. As far as extending this to other sectors beyond public procurement, as mentioned by the noble Lord, Lord Macdonald, we are working with employers across all sectors to grow this programme.

The right reverend Prelate the Bishop of Derby asked me to comment on the future of the current inspection system and the information that schools provide for pupils. Ofsted is now giving this higher priority in school inspections, as I mentioned earlier. We are working with it to monitor the impact of the statutory guidance. My noble friend Lord Lingfield asked whether it should be compulsory for schools to offer information about apprenticeships. There is now a duty to provide independent careers advice for 12 to 18 year-olds, which includes apprenticeships.

A number of noble Lords—Lord Aberdare and Lord Macdonald, among others—made the point that small employers and SMEs are the backbone of our economy in so many ways. Yes, small employers will benefit. More details will follow the spending review and the evaluation of the recent consultation. Businesses will be given direct control over funding and how it is spent.

The right reverend Prelate also asked about the role of learning academies in preparing people for work. They are, as he said, really important. For example, national colleges help the United Kingdom to develop world-class technical skills to compete globally and address high-level skill gaps in key sectors of the economy.

The noble Baroness, Lady Morgan of Huyton, asked about information on where apprentices were one year after completion. All apprenticeships are real paid jobs, so, as with any jobs, individual circumstances change, as the noble Baroness is aware. We are reviewing current reporting arrangements where this important point is being considered.

The noble Lord, Lord Addington, asked about English and maths requirements. If a person with a disability completes all elements of an apprenticeship except for the English and/or maths requirements, they were unable to pass a key skills test because they felt that they were not offered appropriate reasonable adjustments, and they go on to pass the appropriate functional skills qualifications or GCSEs, they can apply for an apprenticeship certificate even if the rest of the apprenticeship was completed somewhat earlier.

The noble Lord, Lord Bhattacharyya, asked whether I agreed that employers should contribute to improving quality as well as quantity. I absolutely agree with that. The trailblazer system, as he knows only too well, is employer-led and is developing quality apprenticeships to meet their skills needs. He also asked whether we should use a proportion of the levy to monitor apprenticeships’ quality of standards. We are currently evaluating the responses to the consultation, and will ensure that that issue is considered.

The noble Lord, Lord Haskel, asked what we were doing to incorporate apprenticeships into the new ways of working online. The “Find an apprenticeship” website has between 12,000 and 20,000 vacancies at any one time. This can also be accessed through social media. On average, each apprenticeship listed on the website receives 10 applications.

The noble Lord, Lord Haughey, asked how many of the 3 million proposals were real jobs and where they would come from. As I said before, all these apprenticeships will be real jobs with a minimum 12 months’ duration and sustained and substantial training to ensure that the apprentices gain significant new skills. All new placements are required to have robust assessment procedures at the end of the apprenticeship.

A number of noble Lords with whom I had the honour and pleasure of serving on a committee chaired so ably by the noble Baroness, Lady Morgan, asked me outside this Chamber—as did the noble Lord, Lord Macdonald, inside it—about progress on securing a debate on the findings of the digital skills report. I will of course pass on the request to the usual channels.

This has been a quite excellent debate, and there have been many useful contributions from many Peers. Building on the many successes of the last Parliament, we have set out our key measures for apprenticeships, some of which I have outlined today and all of which will ensure that we continue to grow high-quality apprenticeships in a wide range of occupations across England. Again, I thank the noble Baroness, Lady Prosser, for highlighting these very important issues.