Apprenticeships

Lord Popat Excerpts

Wednesday 26th March 2014 Lords Chamber

[Lord Popat (Con)]

My Lords, I welcome the opportunity to set out what the Government are doing to increase the quality and availability of apprenticeships for 16 to 18 year-olds. I am grateful to the noble Lord, Lord Young of Norwood Green, for tabling this important and timely debate on a topic that, given his apprenticeship background, is obviously dear to him.

It was a pleasure to listen to the informative contributions of so many Peers. I refer, in particular, to the noble Lord, Lord Haughey, who has come a long way from being an air conditioning and refrigeration apprentice engineer. His success in now running a company with 11,000 employees worldwide shows what an apprentice can do. I hope that his story inspires a new generation of apprentices. We appreciate the number of jobs that the noble Lord’s group creates for young people, who are often given number one priority.

This topic is close to my heart. I had no formal education before joining a company as a trainee accountant. That opportunity to learn on the job enabled me to qualify as an accountant. Life is all about learning, irrespective of age. Now I am doing a new apprenticeship at the Dispatch Box.

I commend my honourable friend the Skills Minister, Matthew Hancock, for his tireless enthusiasm and energy. He has delivered real improvements on apprenticeships and helped to give better life choices to countless numbers of young people across the country. From listening to the debate, it seems that we are on the right path but there is a lot more to do. As the noble Lord, Lord Young, said earlier, we should not get complacent about what we are doing with apprenticeships.

Apprenticeships benefit employers, apprentices and the economy. We need to ensure that world-class apprenticeships are in place for years to come. We have seen a record 1.6 million people start an apprenticeship since 2010. Yes, we have made enormous progress, and apprenticeships are very important to the futures of our young people, but there is so much more that we need to do. We are not complacent about what apprenticeships deliver, or how accessible they are to different people. We have made a commitment to deliver 2 million apprenticeship starts in this Parliament.

Apprenticeships have always been about quality, as the noble Lord, Lord Lucas, said earlier. We have removed poor training provision and introduced a rule that every apprenticeship has to be for a minimum of one year. Over the past two years we have removed more than 54,000 short duration apprenticeships. Despite that, the number of apprenticeships for those aged 16 to 19 lasting a year or more went up by 30% between 2011-12 and 2012-13. Our aim is to raise the bar even further.

Apprenticeships are open to all. Because they are real jobs that lead to nationally recognised qualifications, recruitment decisions must rest with employers for apprenticeships as much as for other jobs. Our priority is to work with employers to increase the number of apprenticeship jobs for our young people. Apprenticeships must be high-quality, rigorous and focused on what employers need. We are using the apprenticeship reforms to address some of the barriers that employers say they face in recruiting apprentices. The reforms we are making will put employers in the driving seat of developing high-quality apprenticeship standards that deliver exactly the skills they need. Routing funding to employers will put them in charge of securing the most appropriate quality training and making providers more responsive to their needs.

Trailblazers led by employers and professional bodies are leading the way by collaborating and designing world-class standards for their sector. In the past, apprenticeships have been based on frameworks that run into hundreds of pages, often written in complex and technical language. The new standards are short, concise and written in a language that employers really understand. That will make apprenticeships very attractive to a large number of 16 to 18 year-olds.

We have already made great progress. The first 11 new apprenticeship standards have been published in occupations from aircraft fitter to software engineer. Phase 2 Trailblazers are already under way, covering an impressive 29 sectors and involving more than 340 leading employers.

In the future every apprentice will train towards the achievement of an employer-designed standard. The demand for higher standards will also stretch apprentices by setting higher expectations for achievement in English and maths and the introduction of a grading system will ensure that excellence is seen and widely recognised.

My noble friend Lady Sharp and the noble Baroness, Lady Prosser, mentioned the duty of schools to secure access to independent careers guidance for all pupils in years 8 to 13. That is exactly what we are doing. The guidance also will include information on apprenticeships.

We want it to become the norm for our young people to go into an apprenticeship or to university—or both, in the case of some higher apprenticeships. We are striving for apprenticeships to be held in the same high regard as university degrees. Giving young people the choice of routes to the skills and knowledge they need by providing careers advice and guidance at the right time has never been so important.

We want our schools, colleges and universities, together with the National Careers Service, to engage, inspire and help young people to make the right choices. The noble Lord, Lord Young, and the noble Baroness, Lady Prosser, pointed that out. Apprenticeships deliver and offer the ideal opportunity for ambitious young people to learn while earning a wage and also, of course, for employers to recruit the brightest and the best.

Higher apprenticeships are the key to providing able young people with the opportunity to undertake apprenticeship training at a level equivalent to a degree. The Budget announced £10 million in each of the next two years to support employer investment in apprenticeships up to postgraduate level. This will complement the additional £40 million announced in the autumn Statement for a further 20,000 higher apprenticeships, more than doubling current volumes.

We know that some people have the potential to benefit from an apprenticeship but cannot secure a place with an employer immediately. Our traineeships programme is helping 16 to 23 year-olds to develop the skills and experience they need for apprenticeships and other sustainable employment. We recognise that some of our younger apprentices require a greater level of supervision, guidance, education and introduction to the workplace. To address this under the new funding system, a simple one-off additional payment will be made to the employer once any 16 or 17 year-old is settled in their learning and workplace, having completed the first three months of their training.

A number of noble Lords mentioned the position of small and medium-sized enterprises. We are offering the apprenticeship grant for employers, which is a payment of £1,500 to smaller businesses offering a young person an apprenticeship. To date, the scheme has already helped 49,300 new apprenticeship starts. The additional £170 million over the next two years that was announced in the Budget will enable us to support the current very high demand for the grant by funding 100,000 additional incentive payments to employers. That represents a major boost to the job prospects of young people, in particular those aged between 16 and 18. However, this is just part of the success story of today’s apprenticeship programme. Figures show that 181,300 people aged 16 to 18 participated in an apprenticeship in the 2012-13 academic year, with an impressive total of 868,700 people overall participating in that academic year. That is a record number.

Apprenticeship starts for those aged 16 to 18 have broadly remained stable despite youth employment rates dropping by 39% over the past 10 years. This is the subject of today’s debate. It is a concern for us and for the department, and I am glad that the noble Lord, Lord Young, has raised the subject. I will ensure that I take it back to the department to make sure that progress continues to be made at all times.

Despite all this success, too many small businesses are still not engaged with apprenticeships. We are working with the Federation of Small Businesses and other stakeholders to ensure that our reforms are small- business and micro-business friendly. That is why all new apprenticeship standards will be approved only where they meet the needs of small businesses across the sectors.

I am grateful to the noble Lord, Lord Best, for sending me a copy of the report of the parliamentary inquiry entitled No More Lost Generations, also mentioned by the noble Lord, Lord Young. It headlines that we have 1 million NEETs aged 16 to 24. We are looking at a forecast of around 182,000 new construction jobs by 2018, but so far only just over 7,000 young people have completed an apprenticeship in the industry. We have to do better than that. The report arrived only this afternoon so I have taken just a brief look at it. However, the noble Lord can be assured that I will go through it and take it up with the department. It is interesting because it points out that one way of creating jobs for young people and giving them the skills they need is by training them for the construction industry. It is a sector that is going to grow further. If we do not do that, I am afraid that we will end up importing construction workers from the European Union, and that is something we want to avoid.

Several noble Lords, including the noble Lords, Lord Young and Lord Macdonald, talked about support for 16 to 18 year-olds. On 4 March, we announced the second phase of the Trailblazer apprenticeship standards in 29 industry sectors, including the STEM professions, services and others. Apprenticeship training for 16 to 18 year-olds is fully funded by the Government to provide incentives to employers. The National Apprenticeship Service has been tasked with redoubling its efforts to support more 16 to 18 year-olds into apprenticeships.

The noble Lords, Lord Stoneham, Lord Monks and Lord Young, all mentioned the role of public procurement in terms of the use of government procurement to grow apprenticeships. Public procurement is a key means of upskilling local workforces and reducing youth unemployment. Including a requirement to take on apprentices can play a valuable part. The Government support the appropriate use of apprenticeships in procurement, as they can contribute to encouraging growth in the economy.

The noble Lord, Lord Monks, raised the issue of how apprenticeships can be seen as being “just for the boys”. Girls are being encouraged into apprenticeships as part of the broader push on the STEM subjects, but the noble Lord was correct when he said that the percentage of girls taking up apprenticeships is low. We need to encourage more young women to come forward. He also mentioned the minimum wage. From the information I have, an apprentice earns on average around £200 a week, although the minimum wage is only £2.68, which is due to rise to £2.73 in October.

My noble friend Lord Addington referred to the difficulties that those suffering with dyslexia have in undertaking apprenticeships. As a vice-president of the British Dyslexia Association, he speaks from great experience. Final data from 2011-12 show that 21,110 dyslexic learners participated in an apprenticeship programme. Dyslexia should not present a barrier. We shall continue to monitor this and to do more about it.

My noble friend Lady Sharp touched on a number of issues that I know she has championed. She is right to highlight the historical emphasis on pursuing academic routes over vocational routes. This Government have taken considerable steps to even this playing field and have given every young person a choice, but we continue to look for other ways of furthering this agenda.

I have not covered all the areas that noble Lords have raised this evening but I promise to write to them. I shall follow up with the department as well to ensure that it takes action. A lot is happening, but we need to do a lot more. I thank the noble Lord, Lord Young, for initiating this important and timely debate.

House adjourned at 7.26 pm.