Apprenticeships

Andrew Gwynne Excerpts

Wednesday 4th February 2015 Commons Chamber

[Richard Graham (Gloucester) (Con)]

rose—

[Andrew Gwynne (Denton and Reddish) (Lab)]

rose—

[Mr Umunna]

I will give way to—

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[Mr Umunna]

I thank the hon. Gentleman for his one intervention. I will come on to deal with pay and the 2 million figure he gives, but first I will give way to my hon. Friend.

[Andrew Gwynne]

May I thank my hon. Friend for the support that he and the Labour Front-Bench team gave to my private Member’s Bill in the previous Session? The Government talked it out, and does he not think that that was a wasted opportunity, because for every £1 million of capital investment in public procurement, we could have secured an additional apprenticeship?

[Mr Umunna]

My hon. Friend is absolutely right about that. I congratulated him at the time on his Bill, and we should continue to remind this House of the efforts that were made then and the wasted opportunity to which he refers. The reason he introduced that Bill was clearly because he read the OECD’s review of vocational education and training, which found that few countries achieve strong engagement in vocational education and training without a strong apprenticeship system. Now, that will not automatically happen on its own. Government must play an active role, not in a top-down, command-control fashion, but by using their convening power in an enterprising, entrepreneurial way, working in partnership with business to address the problem and to increase productivity. Before I explain how we aim to achieve that and consider what the Government have done during this Parliament, when I will touch on that 2 million figure, I want to say something about our record, because I am sure it will be referred to.

I accept that when Labour left office there was an outstanding need to increase the number and improve the quality of apprenticeships in our country, but before Government Members get too excited, I should say that it would be wrong to claim we did not make any progress. In government, we more than quadrupled the number of apprenticeship starts from a woeful 65,000 under the previous Major Government in 1996-1997 to 280,000 starts in our final year in office. Apprenticeships were simply not on the radar when we entered office; they were very much on the radar when we left office. We used the weight of government to begin the culture change we need. So from the 2012 Olympics to Building Schools for the Future projects up and down the country, we linked the creation of apprenticeships to public procurement across a number of Departments. We set up a dedicated National Apprenticeship Service to support and expand apprenticeships. I speak to many young people who tell me that they were signposted to the apprenticeship they are now doing by visiting the service’s website. Of course, it was also Labour in government that established national apprenticeship week in 2008, and the week is now an annual event in the national calendar. I am proud of our record. I am proud that this Labour party rescued apprenticeships from the scrapheap.



The current Government have sought to build on the foundations we put in place. They say that since we left office they have overseen the creation of 2 million new apprenticeship starts, and the hon. Member for Gloucester referred to those. I do not think there is any point boasting about numbers if the apprenticeships are not of sufficient quality. I will come to that in a moment, but first let us look at their claimed numbers. How many of the 2 million apprenticeships are really new apprenticeships and how many have emerged as a result of rebadging—in other words, re-labelling existing work a person is already doing in the workplace as an apprenticeship? A very large proportion of additional apprenticeship places created by this Government have come in the post-25 age brackets. The largest percentage rise in apprenticeships under this Government has actually been among the over-60s, where the increase has been 520%. According to the 2014 apprenticeship pay survey, 93% of adult apprentices already worked for their existing employer before starting their apprenticeship. That would suggest that many existing training schemes, such as those delivered under the old Train to Gain programme, have simply been rebadged and re-labelled as apprenticeships.

That is the situation on apprenticeships for adults. The shortage is perhaps most acute among young people, so what is happening to apprenticeship starts there? The number of 19 to 24-year-olds starting an apprenticeship has fallen by more than 6,000 in the past year. In fact, the number of 19 to 24 apprenticeship starts is currently falling in every single region outside London. Overall, the share of apprentices who are under 25 has fallen from 84% in 2009-10 to 64%, and the share of apprentices who are under 19 has fallen from 43% in the last year of the Labour Government to 28% under this one. So the simple fact is this: for all the boasts, there has been some jiggery-pokery with the numbers. The bottom line is that we need many more apprenticeships and we need to raise employer demand for them. Half our large employers do not offer any apprenticeships at all in Britain today—that is totally unacceptable. As my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne), the shadow skills Minister, has said previously, when it is harder to get an apprenticeship with Jaguar Land Rover than it is to get into an Oxford college, it is pretty obvious that more needs to be done.

The numbers are one thing, but I said that I would say something about quality. In most other northern European countries apprenticeships are level 3 qualifications lasting between two and five years, and they include at least one day a week of off-the-job learning, as well as significant on-the-job training. In England, most of the growth of apprenticeships in recent years has been at a level that would simply not be recognised in those countries. Just 35% of our apprenticeships are at level 3 or above, and just 2% are at level 4. In fact, according to the Department’s own figures, published in its apprenticeship pay survey, one in five apprentices does not even receive any formal training at the moment. The figure increases to almost a quarter of those in the 19 to 24 age bracket, who are not being properly trained. If we truly want to ensure more parity of esteem between the academic and the non-academic—between the way people view university degrees and the way they view these types of vocational and technical qualifications—how can we hope to do that when they are not of sufficiently good quality? We have got to raise standards. Even where apprentices are receiving training, far too many of them are still not receiving the appropriate minimum wage—15% are paid below the appropriate national minimum wage, with the figure rising to 20% for 19 to 20-year-olds.

I will come on to address how we intend to encourage more private sector employers to provide more and better quality apprenticeships appropriate to their needs, but surely government, as one of the biggest employers in the country, should be setting an example, both in recruiting as many apprentices as possible and in providing good-quality apprenticeships. The civil service apprenticeship scheme hired just 200 apprentices in 2014. That is 200 out of more than 400,000 civil servants, which is just not good enough. Never mind the Departments themselves, Government should be doing more in this area. They should use their clout as a procurer of goods and services to get more employers in the private sector to provide apprenticeships.

Our Labour colleagues in local government have already been leading the way in utilising procurement to boost apprenticeship numbers. Newham, Knowsley, Sheffield and Manchester have all developed strategies to use procurement contracts to create apprenticeship opportunities for young people locally. Central Government should do the same, as those opportunities are simply not happening to the degree and on the scale required.

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[Vince Cable]

The hon. Gentleman is right. There is a German model that seems to work for that country, and Austria is another example. Their approach is different from ours, but it has given them consistently high levels of skills in manufacturing industries, in particular. We should learn from that. There is an element of compulsion and levying that we have moved away from in the UK. However, I am certainly happy to learn from Germany on this and other things.

[Andrew Gwynne]

There are also some very good examples here in England. May I commend to the Secretary of State the work of Labour-controlled Tameside council, which covers part of my constituency and which has established a local apprenticeship company from which SMEs can draw down apprentices, even though the local authority is running the company?

[Vince Cable]

Yes, I believe there are lot of good models of that kind, and I commend the one that the hon. Gentleman mentions.

That leads on to another issue that the shadow Business Secretary raised—devolution and how we capture decision making to a local level. He is right that we should have as much devolution as possible. That is what we are trying to do through the city deals and the local deals. There are many good models. Leeds is one, and Manchester is also getting off the ground. Sheffield is pioneering a lot of the local-level commissioning of apprenticeships that is particularly good for getting through to SMEs.

Devolution is not simply about local government or LEPs. One thing we had to do when I came into office was strip away some of the bureaucracy governing further education colleges as leading providers. We had to simplify greatly a very bureaucratic top-down system. Devolution is also about devolving to companies, and one of our major initiatives—employer ownership schemes and the trailblazers, which set industry-level standards—has reduced bureaucracy for small companies and helped them at industry level to formulate standards that they can use. Devolution is not just about local government.