Public Sector Apprenticeship Targets Regulations 2017

Viscount Younger of Leckie Excerpts

Thursday 30th March 2017 Lords Chamber

Moved by

[Viscount Younger of Leckie]

That the draft Regulations laid before the House on 6 March be approved.

[Viscount Younger of Leckie (Con)]

My Lords, these regulations are the first use of the power under Sections A9 and A10 of the Apprenticeships, Skills, Children and Learning Act 2009 which enables the setting of apprenticeship targets for prescribed public bodies. There is a fair amount of ground to cover so I hope the House will forgive me if my remarks take slightly longer than usual.

I will start by setting out what we are trying to achieve, the scale of our ambition and how these regulations enable that to be met. The public sector comprises bodies ranging from large government departments, such as the Department for Work and Pensions, to more independent institutions such as local NHS trusts. With 4.2 million people working in the public sector, in professions stretching from front-line nursing to local council administration, it is vital that all those employed have the skills they need to succeed.

Apprenticeships are the cornerstone of our skills strategy and across the country employers are hiring apprentices as part of the workforces of the future. Therefore, to encourage public sector bodies to incorporate apprentices into their own workforce planning, these regulations set an apprenticeship target for prescribed public bodies. The apprenticeship target is for the number of apprentices who start working for the public body over the target period to be equal to 2.3% of the public body’s headcount in England. The target period is from 1 April 2017 to 31 March 2021.

I do not intend to go into the formula used to set the target at 2.3% of a public body’s headcount but I will say that this figure reflects the public sector’s proportional share of our broader target to achieve 3 million apprenticeship starts by 2020. Across the public sector, 2.3% means a goal of more than 80,000 new, employer-led, quality apprenticeships in each year the target is in effect, with the positive impact felt by everyone from police forces to schools to government agencies, and the public benefiting throughout from the delivery of world-class public services.

To realise this, the regulations prescribe the public bodies in scope of the target, how public bodies can calculate their progress towards meeting the 2.3% target, and the information they must publish and send to the Secretary of State. The regulations enable the Government to effectively set and monitor this target, and they will be supported by statutory guidance, assisting public sector bodies to understand how they can best have regard to the target.

I will now focus on quality and benefit. Historically, the public sector has employed far fewer apprentices than the private sector and that is why it is necessary to establish the target, to ensure that all parts of the economy are able to benefit from a skills revolution. Through these regulations we are creating more opportunities for people to earn as they learn in an apprenticeship.

Quality remains at the core of the Government’s apprenticeship reforms. New, employer-led standards will ensure that each apprentice will be fully competent in their profession, and the Institute for Apprenticeships, which is coming on stream on 1 April 2017, will oversee the quality of apprenticeship standards and assessment plans. We have also legislated to protect the term “apprenticeship” by creating an offence for a person to provide or offer a course or training as an apprenticeship in England if it is not a statutory apprenticeship. This is crucial as we must uphold quality in order that the strong benefits of apprenticeships may continue.

Employing apprentices makes sense for everyone involved. It makes economic sense and delivers a high return on investment, with research indicating that adult apprenticeships at level 3 bring £28 of economic benefits respectively for each pound of government investment. Employers benefit, too. In a 2015 survey 87% of employers said they were satisfied with their apprenticeship programme. That is the latest survey that we have.

Finally, the financial benefits to apprentices themselves are immediately apparent. Apprenticeships boost current earnings by 11% and 16% for levels 2 and 3 apprenticeships respectively.

Although we are not intending to set sub-targets for individual groups, we remain committed to improving access to apprenticeships for all, including those from BAME backgrounds, those with learning difficulties or disabilities, care leavers, and those from deprived areas. We are taking a range of actions to make apprenticeships more accessible, including implementing the recommendations of the Maynard taskforce for people with learning difficulties or disabilities, and establishing the Apprenticeships Diversity Champions Network.

We are also investing over £60 million in supporting apprentices from deprived areas. As a priority, we are establishing parity of esteem to ensure that doing an apprenticeship is no longer seen as a secondary choice to the academic route. This is particularly important as we ensure that apprenticeships are valued by all and remain opportunities open to all. Apprentices no longer fit the image of old; now they work in all sectors from education to planning and administration, at all levels from first job even up to management level, and they are from all backgrounds.

During the passage of the Enterprise Act 2016, which inserted this provision into the Apprenticeships, Skills, Children and Learning Act 2009, this House debated and voted on provisions enabling the Government to set apprenticeship targets for prescribed public bodies. At that time there was cross-party support for what was rightly recognised as an opportunity to improve public services and provide more opportunities for people of all backgrounds.

We consulted extensively on the proposed bodies and scope and the calculation of the target, and heard from a wide range of 180 public bodies and representative groups of different sectors. The majority of respondents felt it vital that the public sector engaged with our reforms and that public sector bodies also benefited from the growing apprenticeship movement, with one trade union commenting that they,

“welcome the extension of good quality apprenticeships”.

We also listened to concerns raised. For example, some respondents were critical of the target being assessed on an annual basis. As such, while still continuing to monitor public bodies’ progress in annual returns, for grouped bodies the target is calculated as an average over the target period. For all other public bodies, the target is calculated with respect to only those years in which the public body has 250 or more employees. This will enable organisations to plan their training and recruitment of apprentices to meet their workforce needs, and for government to monitor and support public bodies where needed.

Following consultation, we will also allow local authorities to separate the headcount of those bodies where they employ staff but do not direct the workforce planning—including schools and emergency services—in their information returns. We have also responded to those who were concerned about how the target may impact them given their high proportion of part-time workers. We suggest that these bodies can, should they choose to, use their full-time equivalent number in parallel under their obligation to report on headcount, in order to explain any underachievement of the target as necessary.

I will move on to reporting requirements. In order to promote transparency, public bodies will be required to publish and/or provide information relating to their progress. They must do this in the six months following 31 March, in each year of the target period in which the body is in scope. There are two parts to this requirement. First, to make it clear which bodies are leading in their investment in apprenticeships, public bodies must publish and send information about their progress towards the target. This includes how many apprentices they employ as a percentage of their total headcount.

Secondly, public bodies will have to send an “apprenticeship activity return” to the department, detailing the actions they have taken to have regard to the target, why they may not have met the target, and their intended future actions to do so. This information does not have to be made available publicly but will instead be used by government to determine which bodies have had regard to the target before offering suitable support and guidance thereafter. To be clear, we do not intend to use a heavy hand in our approach to public bodies in this respect but rather consider the details that they have provided in the return, before assessing whether they have had regard, or enough regard, to the target.

We do not wish to overburden the public sector unnecessarily and we remain aware of the challenges faced by different bodies. That is why the Department for Education is liaising with the Department for Communities and Local Government, the Department for Health, the Home Office and other departments across Whitehall to support them in delivering apprenticeships throughout their own wider public sectors. Departments will also work with public bodies to develop new, employer-led apprenticeship standards and increase the number of quality apprenticeships, thereby directly improving services delivered to the public.

--- Later in debate ---

[Viscount Younger of Leckie]

My Lords, I thank the noble Lords, Lord Watson and Lord Storey, for their comments and questions. First, I am pleased that in general they welcome what we are doing. As the noble Lord, Lord Storey, said, these initiatives started under the previous Government. We realise that this is long-term work. We fully intend to roll this out and stick with it over the long term. It takes many years to ensure the success of this sort of initiative.

The noble Lord, Lord Watson, asked about the Department for Education in relation to apprenticeship participation. This is a fair point. The Department for Education is confident that it will meet the target. I shall write to the noble Lord setting out precise numbers and the wider plan in the education sector. I shall also cover his other points as to the percentage of apprenticeships in the department and the percentage of women apprentices. I can certainly do that.

The noble Lord also asked whether the House of Commons or the House of Lords were in scope of the targets. In other words, would we and the other place be taking on apprenticeships? While we are not imposing this target on this House and the other place, there is nothing to prevent us or the other place from creating apprenticeships. We do not fall in scope because we do not seek to have Ministers tell us what to do.

[Lord Watson of Invergowrie]

I understand that the Minister cannot direct either House and I accept that. That is why I referred to smoking in the workplace. That, equally, cannot be enforced. However, it is de facto, if not de jure. I welcome the noble Viscount’s response because he is encouraging both Houses to adopt this measure. It is interesting to have that on the record. We shall see what figures emerge over the next two to three years and proceed with that, perhaps even jointly.

[Viscount Younger of Leckie]

I entirely agree with the noble Lord that having this recorded in Hansard encourages the Houses to initiate it.

Perhaps more important, though, is the question that the noble Lord raised about the target and the clarity of the target—in other words, the 80,000 which I mentioned. I may have to write to clarify this matter further because it is somewhat complex. I say, to be helpful, that this is a proportional target. It is based on the proportion of public sector employees as part of the total workforce in 2015. As this target is set from 2017-18 up to 2020-21, the number is not an exact copy of the 2015 number. In addition, following reaction to the consultation, we have excluded certain bodies who presented a good reason for not being included. We reiterate that this remains an ambitious and transformative target. It is important to have targets, but it is not set in stone. However, the 80,000 figure is there, and it is meant to be.

The noble Lord, Lord Storey, asked about the support offered to engage those from BAME backgrounds. We are taking action in this area, as he will know. We have launched the diversity champions network, chaired by Nus Ghani MP, to champion equality and diversity. Public sector organisations, including councils and NHS trusts, are among our diversity champions. We are also celebrating the BAME apprenticeships in our Get In Go Far publicity campaign. The question that he really asked concerned what we would do if there was concern about the targets not being met. I reassure him that the targets in these areas will be kept under review. Although I cannot promise any particular action, being kept under review means that, if there were any concerns, they should rightly be addressed.

The noble Lord, Lord Watson, asked about child benefit eligibility in an apprenticeship. Ministers fully understand the intention behind the noble Lord’s amendment. The Government need to analyse costs and the impact on the wider system. It is best for the Government to respond to this in the other place.

The noble Lord, Lord Watson, also asked about supply chains in the target. Supply chains are mostly, normally, in the private sector, so they are not included. However, the Government are using their procurement for contracts of over £10 million to take this forward. In the Department for Transport, for example, we should see 30,000 apprenticeships in the road and rail sectors through the use of the Government’s procurement programme. We anticipate that this will be about 2.3% of employees in those workforces.

The noble Lord also asked about the target of 2.3% and whether a higher target would be achievable in later years. That is a fair question. As I mentioned, we are asking public bodies to have regard to this figure. Some will achieve it each year, and some may not. But where they do not achieve it in the early years, we will look to employers to make further progress. We will do our best to support them to make that progress.

I hope that answers all the questions. I will, of course, read Hansard to check what questions were raised—quite a few questions were asked by the two noble Lords—and I will, of course, write to them if there are other questions to be answered.

Motion agreed.