Apprenticeships

Lord Macdonald of Tradeston Excerpts

Thursday 15th October 2015 Lords Chamber

[Lord Macdonald of Tradeston (Lab)]

My Lords, I thank my noble friend Lady Prosser for initiating this important debate and for opening it so well.

Since the 1997 Labour Government, there has been cross-party support for increasing the number of apprenticeships. By reducing the skills gap in key sectors of the economy, the shared intention is to close the productivity gap between the UK and other leading nations.

Craft apprenticeships were once well regarded, but their reputation now suffers from recent experience of too many badly defined, short-term schemes that neither trained well nor paid well. Ministers have been repeatedly criticised in debates on this subject in your Lordships’ House for putting quantity before quality and for tolerating questionable criteria to hit their targets.

The pledge of the new Conservative Government is to create 3 million new apprenticeships by the end of this Parliament—up from the 2.3 million achieved over five years of the coalition Government. While many important questions have still to be answered, some of the measures recently announced by the Prime Minister deserve at least a tentative welcome.

We on the Labour Benches have in past debates urged government to link the award of public sector procurement contracts to the provision of apprenticeships by competing companies. With its procurement budget now totalling over £50 billion a year, the Government now agree that this would significantly boost apprenticeship numbers, and the No. 10 press notice promises that,

“all bids for government contracts worth more than £10 million must demonstrate a clear commitment to apprenticeships. In particular, employers’ bids will be reviewed in line with best practice for the number of apprentices that they expect to support”.

Can the Minister give the House more detail on how “best practice” in apprenticeships will be defined and then implemented?

The Department for Transport has also announced a target of 30,000 apprenticeship places in its sector by 2020. Will this be encouraged by writing new training requirements into regulatory contracts with the train operating companies, Network Rail and the supply chains? Can the Minister also say if there are any plans to extend contractual obligations on apprenticeships in other sectors that are subject to economic regulation?

The introduction of an apprenticeship levy on large companies is also proposed, to start in April 2017. As my noble friend Lady Prosser said, this policy should again be welcomed in principle. There are successful levy fund training systems in over 50 countries around the world, according to the Government. However, some in UK business are more querulous. Microsoft is concerned that its existing successful training schemes will be disrupted. The CBI wants large businesses which will pay the levy to decide how best to spend it. The British Chambers of Commerce complains that government is too focused on large employers. Smaller companies employing fewer than 250 workers will presumably not pay a training levy. Will they then not have access to the levy pot? Can the Minister say how apprenticeships will be boosted among the smaller companies, which of course employ the majority of the UK workforce?

In response to criticisms of inconsistent, poor-quality schemes, the trailblazer groups, led by employers and set up in 2013, are now publishing their approved standards to create apprenticeships worthy of the name. There are now 140 trailblazer groups, responsible for more than 350 standards and working across a far greater range of jobs than ever before. Again, this is progress that deserves cross-party support.

However, given the history of overpromise and underdelivery in regard to skills training, we can confidently anticipate future concerns being debated in your Lordships’ House, particularly when we factor in the impact that the digital revolution will have on so many sectors of our economy. Digital skills are already essential for all trainees, so I conclude with a plea. Your Lordships’ Select Committee on Digital Skills, of which I was a member, as was the Minister, published its report last February, and a debate on its findings now seems somewhat overdue, even by the measured pace of this establishment. Perhaps the Minister could use his influence to have digital skills scheduled for debate some time soon.