Enterprise Bill [HL]

Lord Young of Norwood Green Excerpts

Wednesday 25th November 2015 Lords Chamber

[Baroness Sharp of Guildford (LD)]

We on these Benches have considerable sympathy with this amendment. In Committee, we had a lot of discussion on quality and the number of apprentices who have completed only level 2 apprenticeships, which many people regard as being not really full apprenticeships. Indeed, the Government have a notion in a later part of the Bill of creating a statutory apprenticeship—the level 3 apprenticeship, which is normally a two-year or even a three-year apprenticeship.

Yesterday I had the benefit of visiting Rolls-Royce’s Apprenticeship Academy and saw precisely what a high-quality apprenticeship is really about. It is important to recognise that there are different levels of apprenticeship. The noble Lord, Lord Mendelsohn, talked about the need for us to aim at higher-level apprenticeships—levels 4 and 5—but it is important to recognise that there is a progression in apprenticeships from level 2, which is almost an entry-level apprenticeship, through to level 3, which is the standard apprenticeship, and on to levels 4 and 5, which are the more detailed apprenticeships for technicians. As the noble Lord, Lord Mendelsohn, mentioned, we as a country are extremely short of those who have completed apprenticeships at level 4 or 5, the technician level, and we need to put in considerable effort to increase the numbers. Equally, for some young people, a level 2 or level 3 apprenticeship is more appropriate than trying to push them into the very much higher-level apprenticeships.

I endorse the move by the Government to try to increase the quality of apprenticeships as well as the number of apprenticeships. There is some danger that in trying to reach the 3 million target, this may get pushed to one side again. For that reason, we on these Benches endorse the amendment.

[Lord Young of Norwood Green (Lab)]

My Lords, I shall speak also to Amendment 56, which is in my name. I endorse what my noble friend Lord Mendelsohn said about ensuring that we get high-quality as well as high-level skill. We are about to enter quite a complicated area in relation to apprenticeships. In the Autumn Statement today, the Chancellor talked about the apprenticeship levy. How it operates in relation not just to large companies but to SMEs will be vital. The Government have a doubled-edged, or perhaps even a triple-edged, challenge: increasing the number of apprenticeships to a large degree; ensuring that we sustain quality, which has already been mentioned by my noble friend Lord Mendelsohn and the noble Baroness, Lady Sharp; increasing the number of SMEs that employ apprentices; and attracting young people into apprenticeships with the guarantee that they will participate in a high-quality scheme.

--- Later in debate ---

[Baroness Neville-Rolfe]

My Lords, I am grateful not only to the noble Lord, Lord Mendelsohn, but to the noble Baroness, Lady Sharp, and the noble Lord, Lord Young, for their comments and to the noble Baroness, Lady Warwick, for taking us back to Committee and the issue about housing associations. I am rather hoping that somebody from the Box will be able to let me answer her question about timing before we finish, but if not, I will write to her separately.

This group of amendments would require the public sector target to apply to high-quality and high-level apprenticeships and would differentiate between new and existing apprenticeships. I have spoken previously during the passage of the Bill about how the Government are committed to ensuring that all apprenticeships are of a high quality, and that is central to our reforms. So there is common ground here.

Having said that, we had a very good discussion in Committee, but, rather like Amendment 52, which the noble Lord, Lord Stoneham, sensibly did not move because of today’s events in the spending review, discussion on quality has, I think, been overtaken to some extent by today’s announcement in the other place by the Chancellor that the Government intend to establish the institute for apprenticeships. That will be central to the discussion of this area, and I hope that this independent new quality body will be welcomed once people understand in detail what is proposed.

It is against that background that I will try to respond to the debate this evening. First, in response to the noble Lord, Lord Mendelsohn, we are committed to an apprenticeship programme that is for all ages and all sectors. All apprenticeships should be quality apprenticeships. As the noble Baroness, Lady Sharp, made clear, all apprenticeships, whether they are level 2 or level 3, offer benefits and obviously should be of appropriate quality. We believe that they are an important step into the labour market and provide very valuable jobs in the economy. For example, recent research shows that adult apprenticeships at level 2 deliver £26 of economic benefit for each £1 of government investment. We must not lose that.

Employers are developing new standards to meet the skills of their sectors. The trailblazer quality statement sets out a range of measures to improve quality, including a minimum duration of one year, and must involve substantial on-the-job and off-the-job training. Training providers are also registered to ensure that they can provide good-quality services, and we are creating more degree apprenticeships.

The current employer-led apprenticeship trailblazer programme has rightly put employers in the driving seat, determining what constitutes quality. However, to deliver a genuinely world-class apprenticeship programme, it is widely agreed that we need a long-term arrangement that will support employers to uphold the high quality of apprenticeship standards and—I think this is an important point—to be able to respond to the changing needs of business, technology and society. We are therefore establishing a new employer-led institute for apprenticeships, as I have just explained. That will set the standards and ensure quality, and we anticipate that it will be active from 2017 onwards.

I would like to respond to the point that the noble Lord, Lord Mendelsohn, made about bureaucracy; as he knows, that is something against which I am as keen a campaigner as he is. That is something that we need to have regard to in this process. However, the good news is that the body will be independent. It will put employers at the heart of ensuring a sustainable governance arrangement to uphold high-quality apprenticeships and respond to the changing needs of business. We intend to introduce legislation to deliver the institute for apprenticeships, and further details will be made available in due course.

I turn to the amendment from the noble Lord, Lord Young. We do not think it necessary for the public sector target to differentiate between new and existing employees. The public sector duty and the apprentices levy will encourage the public sector to identify talent from diverse backgrounds across their organisations. It will help many people, new starts and existing staff, to learn new skills and achieve their potential. Apprenticeships are of course not just for young people entering the world of work. To my mind, there is value to both employer and apprentice when anyone takes up an apprenticeship as they change roles, get promoted or start a new, demanding role within their organisation.

The noble Lord, Lord Mendelsohn, asked about the impact on local authority schemes, which are a good entry route. Our approach to the apprenticeship programme will be not to undermine local authority-supported schemes that help to create entry routes into apprenticeships. Indeed, we believe that such schemes—for example, traineeships and the Prince’s Trust—are also important. With regard to the end-point assessment in local authorities, we do not currently plan this but we welcome input on the role of the new institute from all stakeholders, and I will pick up the noble Lord’s point about bureaucracy.

The noble Baroness, Lady Warwick, asked about the timing of the housing association consultation. We plan to bring forward the consultation by the end of the year.

Finally, in response to the noble Lord, Lord Young, I think that I have already explained and engaged on the question of whether apprenticeships should be new jobs. I think we agree that apprenticeships are paid jobs for people of all ages and are dependent on employers offering opportunities. They offer a substantial way of building a workforce with the skills that people need to succeed, and offer substantial training to ensure that apprentices gain significant new skills. I am conscious that the noble Lord is a great expert on apprenticeships and I look forward to his input.

[Lord Young of Norwood Green]

Frankly, given the large number of what are described as adult apprenticeships, I think that we should distinguish, but I can see that I have not won that particular argument.

I could not help reflecting on the point that the Minister made about the institute and apprenticeship standards. It will guarantee the quality of standard but not the quality of delivery, and that is the challenge—that is where things can sometimes go badly wrong. I am not opposed to the new institute. I merely say to the Minister that if the Government are going to increase the numbers and the volume that they are talking about and they are successful in doing so, the challenge will still be to ensure that every single employer is delivering a quality apprenticeship.

We know we have had experience in the past where that has not been the case. The Government have changed the definition of what constitutes an apprenticeship, the timescales have been altered and so on, but that does not mean that there is no element of risk there. I say that in a constructive way. The Government need to think through very carefully how they are going to ensure that the quality of the training provider and of employer delivery will match what they believe defines a quality apprenticeship. If they do not, they will not attract into apprenticeships the kind of people that we need to attract. We need engineers and people working in construction, and we need more young women going into those areas. To do that, you need to create an environment where people feel that they are entering a quality area of employment.

[Baroness Neville-Rolfe]

I thank the noble Lord, Lord Young, for his constructive comments. He is right to explain that there could be difficulties and that it is important that we ensure quality as well as set quality standards. I apologise to the House that, as it were, an announcement tumbled into our Report stage today, but that is the way of the world. I emphasise that the issue of the institute and how we ensure quality is work in progress, as is the question of the levy. There will of course be further discussions on all this, and appropriate consultation processes are continuing. However, I hope that the provisions in the Bill on apprenticeships, limited though they are, will prove fruitful and helpful. I hope that the noble Lords have found my explanation helpful and, on that basis, will feel able to withdraw their amendment.