Apprenticeships

Lord Layard Excerpts

Thursday 4th July 2019 Lords Chamber

[Lord Layard (Lab)]

My Lords, I welcome this debate because we are talking about the future of at least half of all our young people. For those who do not go to university, apprenticeship has always been the main route to a skill. It has also been the biggest source of social mobility in our country, but unfortunately in the 1970s and 1980s both our main political parties switched their focus to full-time education and apprenticeship nearly died in this country. Fortunately, things have changed, largely due to the Labour Government’s apprenticeships Act 2009, which followed a landmark report from the Economic Affairs Committee of this House. Apprenticeship is now eminently respectable, but still nothing like as available as it needs to be; nor is it sufficiently coherent.

I start with one of the most shameful facts that I have become aware of in recent years. Some 37% of our 18 year-olds are not in full-time education or workplace learning. It is an unbelievable figure and the background against which we are talking now. I want to talk in a long-term sense about what kind of system we need to build over the next five to 10 years to deal with the problem of the other half of our young people. We obviously have to offer them as clear a route through apprenticeship as we now offer the other half through university. Every young person knows how the university route works: if you qualify at one level you are, de facto, guaranteed a place at the next level up, and there is a unified and relatively simple system of making applications at each stage, including to university.

Consider the contrast with the apprenticeship route, which is as labyrinthine and unclear as could possibly be dreamed up—probably even more so. The opportunities come and go from year to year, with constant changes of funding and no unified application system. We have to create an apprenticeship route by which any young person who qualifies at one level can expect to find a place at the next level up, just as is the case if they go down the university route. There needs to be, as with the university route, a de facto guarantee of a place at the next level up as you go through the system.

I shall talk briefly about what the guarantee would be. First, it would concentrate on the level 3 apprenticeship. I propose a two-part guarantee: there should be a guarantee to any young person who satisfies some conditions of entry to a first level 3 apprenticeship. The conditions would be either five good GCSEs, including maths or English, or another level 2 qualification, or—this is important for universal access—a pre-apprenticeship certificate. The other bit of the guarantee has to be a free place on a pre-apprenticeship course.

In the 2009 apprenticeships Act, entitlements of this kind were given legal force, but these clauses were repealed by the coalition Government. I am not saying that we should reinstate legal entitlements, but we should have entitlements in our mind as a basis for all future planning of provision. As I argued in our debate on Tuesday, the way to guarantee an entitlement is to provide uncapped per capita funding for all the places needed. All apprentices in training with an approved provider should receive automatic per capita funding, on some tariff basis of course.

However, we cannot be sure that even that would generate enough places, because the employers have to be on board. We also need somebody making a major effort to find enough apprenticeship places. We know that there is currently massive excess demand for apprenticeship places, with many more people trying to find an apprenticeship than the number of apprenticeships that get started. That is why we have a National Apprenticeship Service. It is surely its job to deliver that kind of guarantee and find the places.

Let me say a little about who these are for—the question of age and level. The prime purpose of any apprenticeship system has always been to introduce young non-graduates into the world of work. We must keep our focus on that. It is absolutely incredible that 40% of apprentices now are over 25. This is a complete distortion of the fundamental concept of an apprenticeship system. The priority must be those aged under 25, and it must be, above all, for people not interested in going to university. They should be the priority groups. I suggest that at least 70% not of places but of funding should go to level 2 and 3 apprentices aged under 25: that is, no more than 30% should go to levels 4 and 5, and levels 6 and above should be funded by loans, just like all other degree courses. The Department for Education is in a position to impose these restrictions, and it should do so. I would welcome the Minister’s comments on restoring the apprenticeship system to its original purpose.

I will now move on to the application process. It is very difficult to get an apprenticeship, much more so than to get into a university, because there is no unified application system. We need one; it could be run by UCAS. A would-be apprentice would make a single application which would then get passed on from the centre to the local branch of the National Apprenticeship Service. It would then do a rough matching of a number of applicants to each vacancy and send those potential applicants to the businesses offering those vacancies, which then choose among them using their own further testing and interviews.

If we had a single application process, it would of course deal with the problem, as already discussed, of schools. Schools would have to operate that application system, just like they operate UCAS; they would have to tell people how to apply for an apprenticeship, if that is what they want, just as they have to tell them how to apply to a university. It would also help us in an operational way around the problem of information.

I end with a comment on the economics of the T-level, raised by an earlier speaker. We have been doing some research at the London School of Economics on the earnings gain that young people of a given type receive by going either into an apprenticeship or to a college to get the same level of qualification. The apprentices are earning 20% more than the people who take the full-time route. The apprenticeship route is the gold-standard way of getting a skill, because your learning is directly related to what you are doing at work.

Full-time education with a work placement is completely different. The employer is not so interested and does not have the same incentive to bring you on. That must be the explanation of the huge economic effectiveness of the apprenticeship system. Where there is any conflict, as there might be between supporting T-levels and apprenticeships, my vote is for apprenticeships.

We are discussing one of the weakest aspects of our whole national life. It is interesting to note that at 15 our students do as well in maths, science and literacy as those in France and Germany, but by the ages of 20 to 25 the bottom third or half have dropped right behind. This is the basic weakness in our social and economic system. Once young people have left school, we simply abandon a third or more of them. We have to do better and must do it soon.