Apprenticeships and Skills (Public Procurement Contracts) Bill

Baroness Keeley Excerpts

Friday 1st November 2013 Commons Chamber

[Philip Davies]

If I hear the hon. Gentleman correctly, and I may not have done, this sounds like a red letter day for me. It appears that he has agreed to change the wording of his Bill to suit my views. This is the first time an amendment of mine has been agreed in advance; they are not usually agreed even when tabled at the appropriate time. If I am right, it has been a successful day at the office for me and my time has not been wasted.

I say to the hon. Gentleman that the Government are already doing a good job in introducing greater rigour into the apprenticeship scheme. I would not want to do anything that inadvertently led to that being weakened, so I am not convinced that the Bill is the way to go. I shall come to what local authorities and public bodies should focus on when deciding on procurement, which does not always go well.

Trying to have a top-down approach, which is what the Bill encourages, is not necessarily the way forward. A bottom-up approach is far better. It is better to leave businesses to ensure that apprenticeships are tailored to their needs. The problem with the Bill’s approach is that we will end up losing the idea that apprenticeships should be set by businesses to suit their approach; the issue will become a tick-box exercise for companies to achieve a contract.

Companies will not necessarily introduce an apprenticeship because there is a job at the end of it and they really need the skill; the danger is that the whole thing will become a form-filling exercise: “Oh, if it will help us get a contract, let’s just say that we’ll take on an apprentice. There won’t be a job for them at the end, but the costs of putting the person through an apprenticeship is x and we’ll get a contract worth y. We have done the calculations, and it’s worth our while taking on an apprentice—five, if we have to.” That company would know full well that at the end of the period there would not be a full-time job for the apprentice, who would have spent time on a false prospectus, hoping that something would happen.

[Barbara Keeley (Worsley and Eccles South) (Lab)]

We are talking about local areas, and I will talk about the situation in Salford if you call me to speak, Mr Deputy Speaker. I have had cases of the revolving-door apprenticeships that the hon. Gentleman mentions. A council or other public body would quickly know that a particular contractor was doing that, and they would not fall for it twice. There is a protection in that if the public body had a bad experience once, it would know not to have it again.

[Philip Davies]

I understand the point, but local authorities would have to undergo an awfully long learning process. If somebody takes on an apprenticeship lasting a year, two years or three years, as the hon. Member for Denton and Reddish envisages, only to find out that a job was never going to be available at the end, it will take at least three years for the lesson to be learned. There is no telling how many contracts could have been awarded in that time. The situation would just roll forward.

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[Philip Davies]

The hon. Gentleman is very lucky, then, but his Bill applies not only to his local authorities but to all of them, including mine, which is also run by the Labour party. I cannot say that I necessarily have the same faith in my local authority as he does in his.

The problem is that all the existing requirements are not only leading to lots of burdens for small businesses in getting their hands on some of these lucrative contracts but causing lots of confusion for the local authorities themselves. Adding further requirements on to local authorities regarding public procurement would cause even more confusion. I am concerned about this because of what happened in Bradford council. A report was produced that showed a major lack of skills and expertise among council staff in Bradford tasked with getting the best deals for its suppliers. Bradford council spends about £350 million a year with outside suppliers and holds more than 1,500 contracts. The council’s corporate overview and scrutiny committee revealed a major skills shortage not among the people who were doing the contracts but among the staff who buy the goods and services and commission the works from the suppliers. It seems to me that, occasionally, the staff, who are already trying to juggle all these documents in order to get the best deal, are just not up to the job. I do not see how asking them to consider something else as part of the public procurement process would help them in their efforts to get the best deal for the council taxpayer.

[Barbara Keeley]

I think that we are all, like the hon. Gentleman, supporters of small businesses, but they could really benefit if larger companies provided more training, particularly higher level apprenticeships. Small businesses would then benefit from taking on an employee who had done an apprenticeship with a larger company. Does the hon. Gentleman not see the general benefit, particularly to small businesses, of more training and the completion of more apprenticeships?

[Philip Davies]

I take the hon. Lady’s point and I will come on later to the view of the Federation of Small Businesses on the Bill and whether it thinks it would be to its advantage. For the moment, I want to stick to the point about the capability of the people in public bodies who are giving out contracts.

The report on the contract procurement process at Bradford council found that, of 170 council employees doing procurement work, none—not one—was actually trained in it, and that staff lacked a

“widespread understanding of both UK law and European directives related to procurement and commissioning”.

The report brings into doubt the argument advanced by the hon. Member for Denton and Reddish that passing an extra Act would clear up any confusion, because Bradford council staff did not have any understanding of UK and European law anyway. Adding another law would not help; it would probably make them even less likely to understand the law.

The report goes on to say that, among a 20-strong dedicated procurement team, there was a

“shortage of procurement skills and expertise”,

that the team was

“often asked to conduct tenders at short notice and are unable to maximise value improvement”,

and that officers were

“often restrained and inflexible in their approach to procurement and were becoming very compliant and rules orientated”.

That goes to the heart of one of the dangers of this Bill. Procurement should be a relatively straightforward process. It is about trying to get the best possible service or product at the best possible price, thereby generating the best value for money for the purchaser—in this case, the taxpayer. That is what people should focus on when doing procurement.

The problem is that there are so many rules, regulations, documents and policies that the basics of what procurement should be about are getting lost in myriad other factors. The Bill does not help address that problem, which has left Bradford council taxpayers out of pocket because they are paying more than they should for contracts. As the report states, officers were

“inflexible in their approach to procurement and were becoming very compliant and rules orientated”.

I fear that the Bill would make what has already been identified as a problem in local authorities such as Bradford—I do not have a great deal of faith in Bradford council, but I am sure it is not alone in this—even worse. People would focus on the wrong things—nice-to-have things—and forget about the big picture and what they were supposed to be doing.

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[Barbara Keeley (Worsley and Eccles South) (Lab)]

I am pleased to have the opportunity to speak in support of the Bill, which has been introduced by my hon. Friend the Member for Denton and Reddish (Andrew Gwynne). I congratulate him on the Bill and on the excellent way in which he opened the debate. We can lose our way in such debates when there are such long contributions from Government Members, but we will remember this debate for how he opened it.

I want to say to my hon. Friend and those who are interested in supporting the Bill that apprenticeships are important for my constituents, who appreciate how much difference a completed apprenticeship can make to their employment chances. We need a strong skills infrastructure and a high proportion of our young people participating in higher education, or gaining an advanced apprenticeship or equivalent technician-level qualification. That is one point of agreement among hon. Members this morning—we all support the more advanced apprenticeships that can take people to a higher level of training.

I have looked at the benefits to those who take on apprenticeships. The Richard review of apprenticeships found that apprenticeships deliver substantial wage and employment benefits over the learner’s lifetime. It found that, in fact, an advanced apprenticeship delivers wage returns of 22% and employment returns of 14%. The person who achieves an apprenticeship can therefore earn 22% more than similar individuals who have not completed one. In addition, completed apprenticeships continue to deliver those strong earnings and employment returns for seven years post-completion. On the point from the hon. Member for Shipley (Philip Davies), completing an apprenticeship straightaway delivers higher wages to that person and carries on delivering for seven years.

[Andrew Gwynne]

I am pleased that my hon. Friend is going to support my Bill today. Is not the point about lifting those opportunities and raising the salary levels of her constituents of real importance, because in her area, like mine, low skills and wages are endemic? This is about tackling those two great social problems in places such as Salford and Denton and Reddish.

[Barbara Keeley]

It very much is, and I really do agree with my hon. Friend.

I agreed with the point my hon. Friend made earlier about long-term unemployment, particularly youth unemployment, being high in Salford and my constituency, as it is in his. In my constituency—only a part of Salford—we have almost 3,000 jobseekers, of whom 900 are unemployed young people and 390 are over-25s who have been unemployed for two years or more. In fact, the number of people who have been unemployed for two years or more has risen this summer by 34%. I hear from young people, week in, week out—as I am sure do other hon. Members—about how over one or two years of unemployment they can start to lose hope. I get some really desperate appeals for help and support from them.

The previous Labour Government’s offer was that by 2015 there would be an apprenticeship for every 16 or 17-year-old who wanted one and was suitably qualified. We should keep that in our minds, because obviously, with the economic difficulties in recent years, we do not want 16 and 17-year-olds who are not in education, employment or training to lose hope, and I think they could do so. Worryingly, the number of apprenticeship starts for under-19s has fallen by 20,000 from 132,000, in 2010-11, to 112,000 last year. That is a dismal record. Youth unemployment remains stubbornly high, yet the number of apprenticeship starts for that age group have fallen. That is pathetic.

Government Members, in particular, have spoken about the difficulties of small employers taking on apprentices. You might be aware, Mr Deputy Speaker, that I took on an apprentice in my constituency some years ago. She was a 17-year-old who had started her business administration apprenticeship in a bakery, but was interested in working in an MP’s office. She was an excellent staff member and completed her apprenticeship, becoming one of the highest-achieving apprentices the college had ever worked with. In her early 20s, she is now a county councillor serving part of your constituency, Mr Deputy Speaker. We can, therefore, support apprenticeships. It is an interesting development that not only did she train in business administration, but she has gone into local government and I am sure is doing an excellent job.

[Diana Johnson]

I am listening carefully to my hon. Friend. I, too, took on an apprentice in my office—a young person who had been made redundant part way through his apprenticeship—and he was such an excellent employee that I kept him on and found him a job. MPs showing how apprentices can bring added value to even a small office is a good example of the value of apprenticeships.

[Barbara Keeley]

Indeed, it is. I should say—I am sure it was the same for my hon. Friend—that that excellent experience was partly due to the training supervised by my office manager, to whom I give credit. As employers, we have to remember that we can play our part. Like all employers, we must offer training. What is more, having a 17-year-old working with us really revitalised my office. I was invited to a 21st birthday party—the first I have been to in a long time!

Apprenticeships.org is the website of the National Apprenticeships Service. In May, we were worried that only 37 apprenticeships in Salford were available on the website, and now there are still only 44, so the situation is not improving. There are other websites, but that is the national one. Salford city council is doing an excellent job providing support for apprentices and apprenticeships through Salford Futures, an employment initiative that has been running since April 2012. It, like the earlier example from Tameside, provides support to unemployed Salford residents through the provision of work experience placements and pre-employment training and support. It also encourages local employers to create and develop employment opportunities through the provision of grants, funding and wider business support. I have managed to link up employers who contacted me with that business support, and I know it is excellent.

Salford Futures is being delivered with the support of the Greater Manchester combined authority, not just individual authorities. The hon. Member for Shipley talked about his local authority perhaps not excelling in procurement, but local authorities can work together on this, and that might be a solution for any authority that feels it does not have the skills to do it. It is supported by the Greater Manchester combined authority and co-funded through the Greater Manchester commitment to youth employment scheme. There are some excellent partnerships in areas such as Greater Manchester, which are committed to ensuring that we tackle the scourge of youth unemployment. The package of support for employers includes

“Access to a 13-week wage subsidy, paid at national minimum wage, for any employer that recruits an eligible Salford resident into an apprenticeship or job with accredited training for a minimum period of six months…Brokerage and dedicated recruitment support…Information and advice on accessing additional funding opportunities, including the National Apprenticeship Service’s…initiative…Wider business support from Salford City Council's business team”.

I commend the business team. I put an employer who was interested in taking on apprentices in touch with them, and I know that they gave that employer a great deal of support.

The Bill would ensure that suppliers who won major public contracts began to offer apprenticeship opportunities if those contracts were at a certain level. We have just had a lot of to-ing and fro-ing about the circumstances, but the Bill actually follows on from “Apprenticeships”, the fifth report from the Business, Innovation and Skills Committee. Having looked into it, the Committee recommended that approach, and suggested that at least one new apprenticeship could be provided for every £1 million of procurement spending.

I have described what Salford city council has been doing, but there is also good news from Salix Homes. Our housing associations are really showing the way ahead. Salix Homes was recently named by Salford council as the chosen landlord to take ownership of the 8,500 council homes in Salford in a proposed stock transfer, although that is, of course, open to consultation. It has worked to secure a commitment from its contractors—or subcontractors—to recruit two apprentices for every £1 million invested in homes and communities throughout Salford. That amounts to more apprenticeships than the number recommended by the Select Committee, and it shows what can be done. Salix Homes has promised that if the stock transfer goes ahead, it will invest a further £700 million over the next 30 years, which it says

“could generate more than 1,000 new apprenticeships for…young people.”

[Andrew Gwynne]

I am grateful to my hon. Friend for highlighting more of the best public procurement practice that already exists. Salix Homes has set itself a very ambitious target. Have any small businesses in my hon. Friend’s constituency expressed the fear that that may prevent them from being included in the subcontracts?

[Barbara Keeley]

No. I understand that Salix Homes and the sub-contractors want to work in a way that helps both local young people and those who train them.

Salix Homes wants to employ highly trained people if it becomes the owner of those thousands of homes, and I commend it for that commitment. It would not, however, become the landlord in my part of Salford, where another organisation, City West Housing Trust, committed itself to creating 40 apprenticeships, which it managed to do in 2012. Perhaps we can now generate a race between the two housing associations: the target set by Salix Homes might provide the spur for City West Housing Trust.

[Andrew Gwynne]

My Bill requires apprenticeships that are being generated in places such as Salford to be advertised in local jobcentres to give young people an opportunity to gain access to training and skills. Does my hon. Friend agree that that is an important provision?

[Barbara Keeley]

Indeed, and I shall say more about it in a moment.

As my hon. Friend said, it makes a great deal of sense for the Government and public authorities to use the leverage of the money that they already spend on public procurement—this is not additional funding—to promote skills training and provide new apprenticeship opportunities. We need those in Salford. According to the latest monthly figures, we have a core of 3,000 unemployed people, including nearly 1,000 young people, and that preys on my mind.

I hope that my hon. Friend is heartened by the example that I gave from Salford, but it is clear that many more apprenticeships could be created if the Government backed his Bill. Recently, we have had contracts let by public authorities without any local advertising of job vacancies or any commitment to provide apprenticeships and skills training, and that is a real missed opportunity. My hon. Friend talked about the new schools completed through Building Schools for the Future, but I had contractors complaining to me as our new schools were being built that they did not feel it offered them opportunities locally. We have had new buildings at Salford Royal hospital, and the BBC and ITV have moved to Salford Quays. The BBC has done quite an amount, as a publicly funded body—it is not a public authority and so the Bill would not strictly apply to it—to take on more apprentices. The BBC has said that, being the name it is, people apply from all over the country, whereas I know that what it wants to do, now that it is based at Salford Quays, is try to take on local young people. Having the vacancies advertised in the local jobcentres would help with that. So a number of opportunities have been happening in Salford, but we still have fewer than 50 apprenticeship vacancies advertised on the national apprenticeships website. I should say that four of those are with the BBC in Salford, whereas 20 are with the BBC in London, so we are still not forging ahead as much as we should.

I go back to the fact that we have 3,000 jobseekers in my constituency, with 900 young people unemployed and 390 over-25s who have been unemployed for two years or more. I think about that group of unemployed young people. I want them to have the opportunities of an apprenticeship and the benefits that can bring: higher wages straight away; higher wages over the period of seven years; and more chances of employment. We need the extra apprenticeships that could come through the measures in the Bill and I very much commend it to the Minister and to all hon. Members here today.

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[Mr Nuttall]

Thank you, Madam Deputy Speaker. I will try to be as succinct as I can about the points I want to make about each of the clauses.

Clause 1 deals with apprenticeship requirements. It is the key clause because it states that when a public authority, defined as

“any body or person discharging functions of a public nature, including local authorities”,

prepares to issue a relevant contract—that is, one exceeding a total of £1 million—it must

“give due consideration to the relevant guidelines”.

We have not heard much about those relevant guidelines, but they were published by the Office of Government Commerce in 2009 in a document called “Promoting skills through public procurement”. It is a long document, but I want to refer to one particular sentence. The document goes through the process that a public body has to follow in granting a tender. It says of the stage at which the contract is granted:

“It is at this stage that public authorities should”—

I am afraid that the document is not written correctly because there is a word missing; I think it should say “should meet”—

“Regulation 39 of the Public Contracts Regulations 2006”,

which states

“that contracting authorities ‘may stipulate conditions relating to the performance of a public contract, provided that those conditions are compatible with Community law and are indicated in the contract notice and the contract documents or the contract documents’.”

Clearly, the 2006 regulations contained in the guidelines mentioned in clause 1 already give local authorities the power that the Bill seeks to give them in order to do all the things the hon. Gentleman would like them to do.

The second part of clause 1 would require that an authority “may specify” that

“a minimum proportion of the apprentices employed by the contractor are higher or advanced”

apprenticeship level. Because of the use of the word “may”, that could equally mean “may not specify”. The provision is therefore completely superfluous, irrelevant and unnecessary.

“Apprentice” is defined in clause 4 as having

“the meaning given in section 32 of the Apprenticeships, Skills, Children and Learning Act 2009”.

I thought that I would have a look at that to see what the definition is. It gives a definition not of “apprentice” but of “apprenticeship agreement”, which is not what one would expect from reading clause 4. If the Bill receives a Second Reading, that should be looked at, because clearly some clarification is needed regarding the definition of “apprentice”.

Clause 2 deals with the advertising of work force vacancies. In an intervention, the hon. Member for Denton and Reddish said, “You must be in favour of that”, but it is not as straightforward as that. In some cases, these contracts cover the whole country. Does he intend that, if the contractor needs to take on half a dozen extra workers as a result of getting the contract, they should advertise every single one of those vacancies across the whole country? That is what the clause would mean if taken literally, and of course one has to take it literally, so, if it is a national contract, that is what the contractor would have to do. As the hon. Gentleman himself admitted, this is the one clause that is mandatory, because it

“must require the contractor to…advertise all vacancies”

in local jobcentres.

Another aspect is that many local newspapers rely on job adverts to survive in this day and age. I wonder what they would think of this provision if they suddenly lost their local job adverts as a result. The first thing that many people do when they are looking for a job is to turn to the local paper.

[Barbara Keeley]

What does the hon. Gentleman have to say about the situation with our local paper, which is not delivered to all parts of Salford? A lot of postcode areas do not get a paper and if the jobs were not advertised at the jobcentre, the people who live in those areas, most of which are deprived, would not see them.

[Mr Nuttall]

I think the hon. Lady is referring to a free paper, but what I had in mind was a paid-for paper. Either way, any jobseeker who is anywhere near half-interested in finding a job will not find it beyond their wit to get hold of a paper.

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[Lyn Brown]

I absolutely do think it is important that we are working with jobcentres. In Newham we have an excellent programme called Workplace, in which local employers work with the local council and Jobcentre Plus to advertise local positions locally before they are advertised regionally or nationally. That can only be a good thing in an area with the deprivation indices that we have. It is one way of embedding into the area an economic and social legacy for the people that I represent.

The other good thing about what the LLDC is doing is that it adds value and avoids duplication with the existing employment and skills provision of the London boroughs. We are not talking about something that becomes unwieldy, or that is not welcomed by the other host boroughs. When we are recreating infrastructure and targeting delivery according to the needs of the park, we ensure that it is done in the most cost-effective way.

The LLDC is tailoring its approach to the specific needs of the contracts in the programme. We are not asking employers to take on apprenticeships and to have apprenticeships that are not consistent with what they are contracted to undertake. That is another good thing. The Bill would not require the LLDC to change its modus operandi at all; it gives a platform on which the LLDC can base its apprenticeship programme. Obviously, it promotes best practice in recruitment and promotes the London living wage or the construction working board agreements—whichever is higher. I am sure that every Member in the Chamber would applaud that.

There is a strong client commitment to delivering jobs and apprenticeships, which means ensuring that these elements are sufficiently weighted in the pre-qualification questionnaire and invitation-to-tender evaluations. The Bill sends an important message to bidders about the importance of this agenda to the LLDC. The need for apprenticeships is there. It is in the pre-qualification questionnaire. If you want to—I am sorry, Madam Deputy Speaker; I know that you will not want to qualify as a contractor at the LLDC, although you could should you wish to, of course.

Any company that wishes to qualify to take a contract with the LLDC has to submit a completed questionnaire. One of the questions in it is, “Are you prepared to offer apprenticeships?” If the company is not prepared to do so, it might get a bit cross. It might think to itself, “Why should I have to?” The Bill will point to the fact that the LLDC is entitled to place that requirement in its pre-tender questionnaire.

The LLDC makes sure that contractors are aware of everything in its procurement pipeline, and uses the principle of relevancy to identify appropriate evaluation questions and weighting. Externally, the LLDC ensures that bidders are clear about the regeneration aims and objectives of the LLDC—convergence and so on. I know that we all understand what that means.

Crucially, the LLDC provides contractors with enough information to know what kind of commitment they are making. It specifies the commitment that companies will have to make in order to get the contract. It is clear that companies will be monitored, evaluated and held to account for what they deliver or fail to deliver. The Bill will make sure that those companies understand that the LLDC is not asking anything of them that it is not entitled to do.

The LLDC asks bidders to set targets for apprenticeships for under-represented groups such as black and minority ethnic communities, disabled people, previously unemployed people, people who have been unemployed for a very long time, and women. I hope you do not mind, Madam Deputy Speaker, if I digress for a moment and say that one of the things that I liked about the apprenticeship programme for the building of the Olympic sites was how it encouraged women into construction industries.

One of the things I learned from sitting in a digger truck and trying to excavate the earth at the Olympic park was that employers liked women using their equipment, because we are gentler on it and the equipment lasts longer if women are employed to use it. I know this from my own experience of driving a car and using the clutch, but my husband disagrees somewhat.

[Barbara Keeley]

Earlier I mentioned City West in Salford, which takes on apprentices. Those apprentices usually appear at city festivals, where I saw the best example I have ever seen of somebody plastering. That left me, and probably left that woman too, with the view that plastering is not something I will ever be good at. She persuaded me to try it. She was an excellent woman plastering apprentice, but this MP is not going that way.

[Lyn Brown]

I am not very good at icing cakes either.

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[Barbara Keeley]

I want to return to my hon. Friend’s earlier point about young women. There is a question about young people moving on to permanent jobs. I do not know whether my hon. Friend is aware of it, but a report out today states that three times more young women are employed in low-paid, low-skilled jobs. The proportion of the group about whom we are worried, the 16-to-24 year-olds, in jobs such as cleaning offices and hotels—of which there are plenty in the area of London my hon. Friend is talking about—has increased from 7% to 21%. Sadly, only 1% of the young women are working in skilled trades, compared with 20% of the young men.

Is there anything in the regeneration around the Olympic park that gives hope that those young women will not carry on in those unskilled trades of cleaning offices and hotels, but get opportunities through apprenticeships to do something more skilled?

[Lyn Brown]

I am happy to tell my hon. Friend that the LLDC has reported that its targets for BME communities, women and people who have been unemployed for a long period have all been met. It did say that employment for disabled people had been slightly under target, mainly due to non-declaration at the point of induction; people are not recorded as disabled in an apprenticeship because they do not self-identify at the point of application. The LLDC has done a sterling job.

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[Diana Johnson]

Absolutely. My hon. Friend has been a champion of ensuring that youngsters have those opportunities and that businesses provide the apprenticeships that they should provide.

[Barbara Keeley]

It was pointed out to me last week that the Care Bill, which I hope will return to this place in a few weeks, makes commitments on health education. Health education costs £4.9 billion. Caring for older people in our communities is a vital job, which now takes place mainly in the private sector, but there is no reward of the sort that we are discussing for the few employers who bother to train people. This is a new area that is opening up as we integrate health and social care. We cannot spend a huge amount—£4.9 billion—on the health side of the equation and not train people, for example through apprenticeships, to take up a valued career in social care.

[Diana Johnson]

Absolutely. My hon. Friend has a great deal of experience of social care and carers. Earlier in the debate, I raised with my hon. Friend the Member for Denton and Reddish (Andrew Gwynne) the issue of how the NHS is spending its money and whether it takes into account whether businesses offer apprenticeships. Given all the reorganisations and changes in the NHS, we need to ask whether clinical commissioning groups are doing everything they should be doing to ensure that their contractors are providing training and apprenticeships. My hon. Friend the Member for Worsley and Eccles South (Barbara Keeley) makes the important point that we need to focus on training people in the care sector. There have been scandals in many parts of the country because people have not had the skills that are needed to care for the elderly.

I want to mention again the Hull training awards, which I attended last Friday. A number of businesses in the city have supported apprenticeships for many years. I have been going to the awards for about five years. The number of businesses is growing year on year, but many employers still do not offer apprenticeships and do not feel that it is something that they want to do.

According to surveys, more than 80% of those who employ apprentices agree that they make the workplace more productive and 81% of consumers would favour a company that takes on apprentices. More than 200 types of apprenticeship are available, offering more than 1,200 job roles. Among employers who employ apprentices, 92% believe that apprenticeships lead to a more motivated and satisfied workforce, and 83% rely on their apprenticeship programme to provide the skilled workers they need for the future of the company. One in five employers is hiring more apprentices to help them through the tough economic climate.

I started by saying that offering apprenticeships was a no-brainer. Why would a business not choose to do it? The facts and figures suggest that every employer should at least consider hiring an apprentice. Money from the public purse should be spent on companies that provide more than just the service or the widget by investing in communities and young people.

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[Mr Iain Wright (Hartlepool) (Lab)]

I thank my hon. Friend the Member for Denton and Reddish (Andrew Gwynne) for his passionate and compelling argument. I fully support the Bill and believe that we should give it a fair wind and take it to Committee. I hope that the Minister agrees.

It is vital that the British economy succeeds, thrives and grows. That success should be based not on making a fast buck, cutting corners, thinking of the short term or cutting employment rights and training opportunities in a race to the bottom, but on well-paid, secure and skilled jobs. That is how Britain can pay its way in the world in the 21st century—with an emphasis on a high-skilled, well trained work force. To help achieve that objective, we need a skills system that meets the needs of our country, our society, the economy, employers and young people. My hon. Friend’s Bill would provide that and be central to having a good, resilient, productive and efficient work force for the future.

My hon. Friend rightly said that in many ways, the previous Government helped to revalue apprenticeships. There were something like 65,000 apprenticeships when the Government came into office in 1997, and when we left office in 2010—I was the Minister responsible for apprenticeships at that time—there were 240,000. The current Government have carried on that good work to some extent, and I want one characteristic of apprenticeships to be that they transcend party politics and Parliaments and work in the long-term interests of what this country needs. It is clear that we need good, strong apprenticeships.

As my hon. Friend said, even in these financially straitened times, it makes common sense, economic sense and social sense, when both central and local government spend money—often billions of pounds—for skills and training opportunities to be provided when contracts are granted. He mentioned the 50:50 scheme in his constituency, which particularly interested me, and other hon. Members have mentioned similar schemes. My hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) said that 926 apprenticeships had been put in place through Liverpool city council, and we heard about other initiatives. In an excellent speech, my hon. Friend the Member for West Ham (Lyn Brown) talked about what is going on in London. Of course, in programmes such as Crossrail, Building Schools for the Future and so on, Labour established the idea of procurement as a lever to bring in additional training opportunities.

There remains a huge issue to consider. Although the number of apprenticeships has gone up, I am particularly concerned about the statistics on under-19-year-olds. In 2011-12, there were 129,900 apprenticeship starts by those aged under 19, but that represented a 1.4% decrease year on year. There were 95,400 intermediate-level apprenticeship starts, which was a 2% decrease. We fail our young people if we do not get them a good first step on the career ladder, and we all know about the crisis of youth unemployment that this country still has. In the quarter June to August 2013, 958,000 young people aged 16 to 24 were unemployed, making an unemployment rate of 20%—up by 0.1% on the previous quarter and 0.5% on the same period last year. The unemployment rate for 18 to 24-year-olds is 19.1%, but what really concerns me—it is linked with the decline in apprenticeship starts for under-19s—is that the unemployment rate for 16 to 17-year-olds is 36.3%. That should be a national scandal.

We are failing our young people and not giving them the employment and training opportunities they need. We will suffer the consequences of that for decades to come. If we do not get our 16 to 19-year-olds on to a career ladder and thinking about skills and training, and if they cannot get employment, the chances are that they will suffer low-paid, low-skilled jobs for the rest of their careers.

Not only will the careers of those people and the prospects for their families suffer for decades, but the long-term economic potential of the country and how we compete in the modern, fiercely competitive world, will be compromised. We need to address that. I suggest that ensuring we can link training opportunities and apprenticeship places with public procurement is an exceptional way to go.

[Barbara Keeley]

I want to tie in my hon. Friend’s point with the wage benefits of completing an advanced apprenticeship, which I have mentioned. Does he agree that, in areas such as Salford, where we have such a lot of long-term unemployment and unemployed young people, wage benefits are the important factor? If we can get people in to apprenticeships, particularly advanced apprenticeships, we can ensure that they can earn 22% more than similar young people.

[Mr Wright]

I am glad my hon. Friend has contributed to the debate. I know how much she is passionately committed to giving young people a chance, particularly with apprenticeships. I have fond memories of going to Salford as Minister with responsibility for apprenticeships. We had launched the apprenticeships grant for employers. I met a tree surgeons firm in her constituency—I do not know whether she remembers. It could not afford to take on a young person, but we provided a £2,500 grant. I thought it was to help to pay the wages of that young apprentice, but it provided the equipment to allow them to scale up the tree and do the work required. That small firm wanted to help to bring on young people and to ensure that it gave young people a chance, making a difference—as I recall, it took on a 17-year-old. The Bill can do exactly the same.

My hon. Friend the Member for Denton and Reddish was right to highlight the importance of driving up quality. However, he also mentioned the need to expand opportunity. Often, we do not tell young people of the difference apprenticeships can make. People will be paid more over the lifetime of their career if they become apprentices. I am therefore baffled by the debate on clause 2, which is on the advertisement of work force vacancies. When there are opportunities, we should communicate them as much as possible. That is a no-brainer. Where better to do so than in the jobcentre? Clause 2 is essential. I want the Bill to pass on Second Reading, but, in Committee, we need to widen and expand it to ensure that schools, colleges, teachers and others are aware of apprenticeship opportunities.