Duty to Participate in Education or Training (Alternative Ways of Working) Regulations 2013
Debate between Baroness Garden of Frognal and Lord Young of Norwood Green
Baroness Garden of Frognal
My Lords, I am grateful to the legislation committee for its consideration of this order on 27 March. Noble Lords will be aware that the necessary consultation has been undertaken and that the regulations are being debated in the other place.
I shall start by setting out the background to these regulations. The Education and Skills Act 2008 places a duty on all young people in England to participate in education or training. Later this year, we will commence that legislation to require young people to continue in education or training until the end of the academic year in which they turn 17. From 2015, that will rise to their 18th birthday. As noble Lords will be aware, this is termed “raising the participation age”. This does not require young people to remain in school and they may choose an educational path that is best for them. This could be full-time education at a school, college or elsewhere, an apprenticeship or full-time employment combined with part-time education or training.
While this legislation was put in place by the previous Government, we are committed to supporting as many young people as possible into education or training and will be commencing the central part of this legislation shortly.
Continuing in education or training means that our young people will gain higher skills and qualifications, making them more attractive to employers and giving this country a more productive and competitive workforce. Our aim is that young people will be better educated and better prepared for higher education and for productive, sustainable jobs. The evidence is clear that participating in education post-16 improves young people’s life chances. It means that they are more likely to attain higher levels of qualifications and have increased earnings over their lifetime, better health and improved social skills—for instance, young people with two or more A-levels earn around 14% more than those without.
However, there are still a number of young people who are NEET—not in education, employment or training—and this number has been too high for too long. The most recent national statistics show that at the end of 2011 more than 90,000 16 to 17 year-olds were NEET—7% of that age group.
Participation in education or training is not an end in itself, so we are also substantially reforming the post-16 education system, taking significant steps to improve the quality of education and training and the outcomes for young people.
All the evidence shows that the better-educated children are pre-16, the more likely they are to continue in education post-16. Therefore, our reforms to the school system, increasing the freedoms of schools and providing additional support through the pupil premium, will mean that in the long term more young people continue in education for longer. By increasing the number of university technical colleges and studio schools, and supporting colleges to enrol 14 to 16 year-olds, we will ensure that pupils inspired by vocational education are better prepared to continue post-16.
From this September, all 16 to 19 year-olds will be able to take a study programme, which will include one or more substantial qualifications or extended work experience. Students who do not have a GCSE in maths and English at grade C or above will continue to study these subjects. These are exactly the areas that employers say they value most strongly, so study programmes will help all young people to be better prepared for work.
We know that many young people are highly motivated by the prospect of work. We are introducing a new high-quality traineeship programme that will better prepare young people for apprenticeships and sustainable jobs. Traineeships will offer a combination of high-quality work placements, work skills training and English and maths, together with other flexible training and support to suit individual young people’s needs. We know that some young people need additional help to overcome the barriers and difficulties that currently prevent them from participating in education or training. Through the youth contract we are providing intensive support for 70,000 of the most disengaged 16 and 17 year-olds with no or low qualifications. Some young people also need financial support to enable them to continue in education or training. Our £180 million 16-to-19 bursary fund provides targeted support, with guaranteed bursaries of £1,200 for the most disadvantaged.
The two instruments under consideration today are simple steps to ensuring that the legislation that was passed in 2008 is still fit for purpose. One is technical in content only. The other is in line with both the primary legislation and feedback from public consultation and is supportive of young people gaining experience from a range of valuable opportunities. I will briefly address each in turn.
The consequential amendments order is made under the Apprenticeships, Skills, Children and Learning Act 2009. That Act established the Office of Qualifications and Examinations Regulation, commonly known as Ofqual. This order simply updates the 2008 legislation to take account of that Act. It is important for raising the participation age, as young people undertaking full-time work are required to combine that with part-time study towards a qualification that is recognised and transferable.
I now turn to the Duty to Participate in Education or Training (Alternative Ways of Working) Regulations 2013. A key way for young people to meet the duty to participate in education or training will be through getting a full-time job and combining that with part-time education or training. This will be an important route for young people who are motivated and able to secure employment, while also allowing them to get rigorous transferable qualifications. Gaining experience of employment before the age of 18 is a key way to begin building the skills and experience that will lead to a long, fruitful career. However, there are also alternatives to paid work that can provide valuable experience to young people and we would not want to prevent young people from pursuing these activities for fear of falling foul of the legislation.
The 2008 Act makes allowance for further activities described as “ways of working” that could be considered in the same way as paid employment. These could be combined with part-time study to meet the duty set out in that Act. We consulted on the possible options available to young people in this regard, and that consultation agreed with the three routes that are proposed in the 2008 Act. These are: self-employment; working not for reward, for example by volunteering; and holding a public office. In all these instances, the requirements are the same as those set out for full-time employment in the 2008 Act. These ways of working must be full-time and accompanied by accredited part-time study or training.
In summary, these regulations amend and give detail to the 2008 legislation to ensure that it is still fit for purpose and allows young people to undertake the full range of opportunities that will stand them in the best stead for their future lives. I therefore commend them to the Committee.
Lord Young of Norwood Green
I thank the Minister for her comprehensive introduction to these statutory instruments. As she rightly said, they bring into force legislation that we introduced in 2008, which I think, without appearing to be overly indulgent, was a smart bit of legislation. Rather than raising the school leaving age but the participation age took into account the fact, as the Minister said, that not every youngster wants to stay on in full-time education.
I want to draw out a few things raised by the Minister. She talked about the study programmes, and I wonder whether she can come back to that in her reply, as I am interested in that. The Minister gave a figure on the youth contract support but unfortunately I did not have time to note it down. Who will be employed in that? It seems that it might refer to young people who have not been in significant employment or education. I do not know whether it related to the NEETs.
A group of people that I am particularly interested in is those with disabilities. I was at a specialist school that deals with autism last Tuesday. In talking to a group of 15 and 16 year-olds when we got to the end of the visit, it was interesting how small their chances of employment are. I think that in their experience, they have managed to have one or two jobs but it is really very difficult, and I wondered whether they were going to be included in that youth contract support.
The other questions that I wish to raise are in my general contribution. As the Minister rightly said, we raised the participation age in the Education and Skills Act 2008. It was a Labour Party policy. We agree that if Britain wants to seek to maintain its competitive edge, it is absolutely essential that we upgrade our skills base and ensure the well trained workforce which is essential to that. We know that part of our challenge is the long tail of poor performance within the 16-to- 18 age group, so raising the participation age—as I said, it is not the school-leaving age—is an essential part of confronting that challenge. We are certainly not seeking to oppose these powers today but I have a number of questions, which I would be grateful if the Minister could answer.
While we are happy to agree that self-employment, volunteering and holding an office could combine with part-time study to meet the duty to participate, we remain unclear as to the precise description of holding an office. There seems to be no explanatory guidance, so I would be grateful for some examples. If they are not available, I am sure that the Minister can write. I would also be keen on an update on the Minister’s discussions with the Department for Work and Pensions on how the requirements for education and volunteering align with benefits conditionality, as set out in the July 2012 consultation, and what impact, if any, universal credit will make.
Within the consultation, there was some concern that home schooling might be exploited as a loophole when raising the participation age. I would be grateful for the Minister’s thoughts on how this will be addressed. We saw only last week the vulnerable situation that many young carers find themselves in, so I would be grateful to know what special considerations have been given to young people with caring responsibilities. It seems clear that if we are not to repeat the mistakes made in relation to some low value apprenticeships, which were revealed in the Government’s system, we need a proper system of agreements to ensure that young people are not simply engaged in low-level activity at work but learning decent skills and having proper training. The consultation document speaks of working with relevant organisations to draw up such agreements. Can the Minister explain how that will be taken forward?
Chapter 3 of Part 1 of the Act puts duties on employers to take certain actions in respect of young people who meet the duty by combining work with education and training. The Minister has said that these duties will not be brought into force at this stage and that the possibility of commencing them will be kept under review. I would certainly like some indication of the timetable of that review and who will be conducting it. Finally, a series of responsibilities are placed on local authorities by this legislation to ensure compliance. Will these apply to pupils in academy and studio schools, and in university technical colleges?
Perhaps the real challenge in raising the participation age is that we are inevitably going to raise expectations—at least, I hope we are—that at the end of this process the young will find a job. That is going to be the biggest challenge, no matter who is in power, and I do not wish to make light of it. We know of the significant numbers of young people who are now in unemployment; it is nearly 1 million. It was disappointing to see that if you looked at the number of apprenticeships in the 16 to 18 year-old group, in 2012-13 that had dropped to 69,600 compared to 79,100 in 2011-12, which is a 12.1% drop. Although I pay tribute to the Government’s efforts to increase the number of apprenticeships, there is sometimes a lot of emphasis on the overall figure, which includes a significant number of those aged 19 and above, whereas for us and society as a whole, the biggest challenge is the 16 to 19 group.
Baroness Garden of Frognal
I thank the noble Lord for his comments and agree with him that raising the participation age was a very good move to make to the breadth of possibilities to young people. On the figures which he said that he had not had, the study programme is for 16 to 19 year-olds with qualifications and extended work experience. On the youth contract, there is intensive support for 70,000 of the most disengaged 16 and 17 year-olds. That was in my opening remarks.
To pick up some of the noble Lord’s points on this, the raising of the participation age will indeed be reviewed annually from spring 2014. We have not yet agreed the members of the review team, but they will be agreed later this year. He asked about holding an office. Obviously, that may be a bit more difficult for 16 to 17 year-olds, but we have already had the example of someone being an adviser to a police commissioner or a charity trustee. There are things that young people might find, and if they do, that will count for them.
The noble Lord mentioned young carers. They receive a carer’s allowance, and that could certainly be classified as a way of working for they would get credit. Home education is allowed under the scheme, and local authorities will check with parents to confirm that that is indeed taking place in a robust and proper manner.
We have published the document about re-engagement programmes and are involved with organisations such as the Prince’s Trust to try to assure them. On universal credit, we remain in discussion with DWP on how that will fit in with the orders.
The noble Lord also mentioned learners with learning difficulties. Of course, we recognise that too many children and young people do not get the support that they need and that their families have to battle for services, but we are reforming the special needs system. That will come through in the Children and Families Bill, which is in the other place at the moment and coming to us later this summer. That will provide points for debate, and we look forward to hearing the noble Lord’s views on those proposals, but we hope that that will be a distinct advantage for those with special educational needs. I think that I already mentioned the study programmes.
There is a good story to tell on apprenticeships. I will always give credit to the noble Lord and his Government for what they did to beef up apprenticeships and increase the numbers going through. The coalition Government have taken that forward, with significant increases in the number of apprenticeships. They will be looked at again in the light of the Richard review. We are engaging more and more employers in taking on apprentices and some of the bigger companies such as BAE Systems, BT and BP have well accredited schemes. Some of them have more applicants for places than for some of our best universities. That is raising the profile of apprenticeships and the fact that young people, their parents and indeed their schools and careers advisers are aware of the possibilities of apprenticeships and what an excellent way they can be of getting into fulfilling careers. We have a great deal of work going on in that regard and obviously we will work with the noble Lord to make sure that that programme continues.
The noble Lord also raised again the possibility of making apprenticeships contingent on government contracts. Sadly, I have to disappoint him because I have no answer other than the one I gave him previously on that. It is for the employers to decide how that will proceed. I do not have a different answer. We have not found it possible to insist on it in the contracts. Of course, a great many government contractors have apprentices.
There may be one of two points that I have not covered: the noble Lord was raising them slightly more speedily than I was able to note them. But if there is anything I have not covered in those replies I will of course write to him.
Meanwhile, the legislation for raising the participation age will bring a historic and significant change to the English education system. It will bring benefits to young people, especially the most disadvantaged, and our country as a whole socially and economically. The Government are taking decisive action to improve the quality of education in this country and are providing support to the most vulnerable young people so that they can also continue in education and training. We want as many young people as possible to receive a high-quality education that will equip them to progress into higher education or sustainable employment.
The two instruments under consideration today should not be contentious. As I said at the start of the debate, one is technical in content only. The other is in line with both primary legislation and feedback from public consultation and is supportive of young people gaining experience from a range of valuable opportunities. I will come back to the noble Lord if there is anything that has not been covered.
Lord Young of Norwood Green
I have a couple of points before the Minister sits down. Her answer on public procurement was slightly different this time. Last time it seemed to be emphatic that there were legal barriers. I am challenging that. That does not appear to be the case, and I would welcome the Minister taking that away and giving me a more considered answer on that issue. I am quoting from the UK Office of Government Commerce guide.
I encourage the Government to look again. The Minister cited the large employers. Yes, they are good and if they were all like them we would not have a problem, but the difficulty we face is the point that the Minister made herself. Places are vastly oversubscribed. The demand is huge. We will raise the demand even further when we raise the participation age. My question to the Government is how we are going to meet that demand. Although the overall picture looks good, we still face the problem that in the 16 to 19 year-old age group there is a drop. I do not raise that to score any political point. I want the Government to succeed in this area, but somehow I do not detect enough urgency in the Government’s approach to this.
The more you meet young people—I go out and speak to lots of sixth formers—the more you realise the chances of a group of them getting more and more disillusioned and saying, “What is the point? When I get to the end of this what are my chances of getting a job?”. We know what the figures are for unemployment in various parts of the country.
We really should be straining every sinew to ensure that we give a work experience or job opportunity to every young person. That should be the target, and not at some distant point. If we do not do that, we will be in danger of creating another lost generation, and a generation that becomes disillusioned does not always respond in the most constructive way, as we witnessed not all that long ago. Therefore, I hope that the Government will reflect on this. There are lots of good intentions within these two statutory instruments and I do not challenge any of those.
There is one other point to which the Minister might reply in writing. We also need to check on the quality of training that employers provide. We know that lots of young people are going into a job. For those who want to do so and can get a job, that is great, but we want to make sure that every employer who takes them on has a proper training programme laid out, otherwise that will be another objective. I am not sure whether that was covered in the Minister’s response. If she does not have the answer to it now, I would welcome a reply in writing. Other than that, we will be supporting these instruments.
Apprenticeships
Debate between Baroness Garden of Frognal and Lord Young of Norwood Green(11 years, 8 months ago)
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Baroness Garden of Frognal
I thank the noble Lord for his reply. I am sorry that in parts of it he was rather more negative than he usually is on this subject. However, I pay tribute to him and to his Government for what they did to revive the apprenticeship scheme in their time, and we are building on that and taking it forward.
Perhaps I may take up some of the noble Lord’s questions. He mentioned the high level of youth unemployment, which is mercifully coming down, although not fast enough. Of course, we have a revitalised apprenticeship programme, which, alongside an employability skills programme, will help young people to take up opportunities. We also have the traineeship programme in place, and that, too, will be of assistance to young people in getting back into employment. National Apprenticeship Week is certainly a great success. It is raising the profile of apprenticeships this week and has gone from strength to strength. It was interesting to see that the apprentice of the year was a young woman engineer at British Aerospace. She is obviously doing an awful lot for gender equality in STEM subjects, as well as personally raising the profile of all the good things that apprenticeships can do.
The noble Lord mentioned, as he has done before, public procurement and having a set number of apprenticeships for every public procurement exercise. Of course, we support the appropriate use of public procurement to promote the take-up of apprenticeships, but under EU law we cannot make contracts conditional on hiring workers or apprentices, so the Government leave—
Lord Young of Norwood Green
We did not find that to be a problem. That was said to me when I was a Minister, yet we challenged it and were able to bring about those apprenticeships. I am just asking the Minister not to accept that. We have never called for a set number of apprenticeships, although there are various formulae. I find what the Minister says regarding apprenticeships being part of a public procurement contract incredible. I had exactly the same response but we challenged it and were able to bring about apprenticeships with Crossrail and the Olympics. I urge the Minister and the Secretary of State to challenge that and to show determination.
Baroness Garden of Frognal
I note what the noble Lord says. Obviously we try to encourage firms to take apprentices, but we use that route rather than making contracts conditional on it. However, I know of the success of the Crossrail apprenticeship scheme and how well that worked.
The noble Lord mentioned awareness of apprenticeships, and that links into careers information, advice and guidance, which of course is now statutory in schools. As part of that, they now have to give information about apprenticeships as well as about higher education and other opportunities. We have recently heard the Prime Minister reiterate that it should now be the norm for young people to go into either higher education or an apprenticeship, so we are putting a great focus on that. One of the things that Ofsted will monitor in schools is how well careers information, advice and guidance is delivering that aspect of opportunities for young people. The noble Lord is absolutely right: there is a real issue concerning the number of young people, parents and employers who are aware of the range of opportunities that are available. The more publicity we can get for this programme, the more we will be able to engage all those parties in seeing the benefits of apprenticeships for all.
We know that apprentice alumni go back into schools. Obviously there is not a particularly co-ordinated programme but we are aware that it happens and that it can be extraordinarily effective. Any former pupil going back into a school to talk with enthusiasm about what they are doing is a tremendous motivator for the next generation, and we will certainly do what we can to encourage that.
Of course, apprentices have to be in a job. So far as concerns insisting that schools, colleges and so on take on apprentices, it is important that a job is identified for them beforehand. Again, there is an ongoing programme of raising awareness and of making the opportunities available.
The noble Lord talked about the links between businesses and schools. We know that these are absolutely crucial, and work is ongoing in this respect. We are not waiting six months for any of this to happen; it is all ongoing at present. Discussions take place between employers and education providers—schools, businesses and higher education—to make absolutely sure that employers are aware of the benefits of having apprentices and that young people, and indeed adult returners, are aware of the possibilities of apprenticeships.
Going back to careers information and guidance, Ofsted will have a review in the summer to assess just how well the delivery of apprenticeship careers advice is going. We will keep a monitoring eye on that.
The noble Lord mentioned demand outstripping supply and a number of cases where the extremely efficient apprenticeship schemes are hugely important. He said that time was marching on but we are now taking action. I hope that the Opposition will see that in many ways this is a cross-party initiative. As I said, we are building on the work that his party did in government, and we hope that we will be able to take it forward so that it becomes a very exciting and vibrant programme.
Baroness Garden of Frognal
I apologise if I gave the impression that the heritage industry was small. I was trying to make the point that many of the component parts of it are very small. The noble Lord is absolutely right that it is a very important part of tradition and, of course, of the tourist industry, to which it makes a great contribution. However, it is much more important than that, too: it includes a very diverse range of skill and work areas and it is vital that we do not lose sight of these.
Lord Young of Norwood Green
My Lords, I will take advantage of the fact that we have not exhausted the time. This is a really key issue. I apologise if I sounded negative. I do not want to be negative but just want to get the Government to recognise the size and scale of the problem. Even though the Minister says that youth unemployment is coming down, as I am sure she knows, in some parts of the country it is not and the levels are very high, so I want to try to inject a sense of urgency into the situation.
The Minister did not really respond to the point that I made about there still being only a very small number of businesses participating in apprenticeships. What positive steps are the Government going to take? For instance, addressing the very worthwhile point made by the noble Lord, Lord Cormack, about heritage craft skills, the difficulty with those small businesses—sometimes it is just one person on their own or a small group—is, first, that they face what they see as an administrative burden and, secondly, that they worry about whether they can carry an apprentice and create that job. That is why, again, they need to be encouraged to create their own little hubs and group training associations, where some of that administrative burden can be shared.
I am critical because, as I have said, there is a danger that in the first attempt we are driving up volume rather than quality as well, although that is being addressed, which I welcome. Interestingly, one my noble friend Lord Grocott’s point, I met a young apprentice accountant as part of the Crossrail scheme. When we talk about apprenticeships, we seem to forget that what they involve is much more wide-ranging than manual skills: there are over 200 apprenticeship frameworks. We have gone well beyond what used to be regarded as the traditional route. In relation to the higher level—
Lord Young of Norwood Green
I did wait to see whether there were any further Back-Bench speakers and there were not, so I took the opportunity. If there are any, I will give way. However, as there are not, I will just use the opportunity that we have.
On higher-level apprenticeships, again, there is a view that it is an either/or choice: you either take an apprenticeship or you go to university. However, it should not be an either/or choice because, as we know, higher-level apprenticeships can lead to university degrees. I will end on that.
Baroness Garden of Frognal
I was in no way complacent about youth unemployment. We all know that it is a disastrous start for many young people if they cannot get into a job and into work when they finish their compulsory education. The noble Lord mentioned getting employers more involved. There is now, for instance, a £1,500 start-up to help SMEs get their first apprenticeship scheme going. We have seen 6,800 starts between February and October 2012, and there are a further 12,100 in the pipeline.
As for small and medium-sized enterprises, an increasing number of employers are coming on board and taking on apprenticeships. As for the larger firms, discussions are ongoing with some of the major firms that take significant numbers of apprentices. The noble Lord mentioned BT. There is also BAE Systems and Rolls-Royce. Some very large firms have extraordinarily well established apprenticeship programmes, and the Government are in constant dialogue with them to try to ensure that best practice can be passed on and that it is made as easy as possible for employers to take on apprenticeships. One of our other challenges is to reduce the bureaucracy so that there are no unnecessary disincentives to employers taking on apprenticeships. Of course, more work needs to be done, and we very much look forward to the results of the consultation and to ensuring that we take that implementation forward in the autumn.
Apprenticeships
Debate between Baroness Garden of Frognal and Lord Young of Norwood Green
Baroness Garden of Frognal
I pay tribute to my noble friend, who for many years has been a doughty champion particularly of those with dyslexia, and who has raised awareness of the difficulties that they face. If there is a problem with access to assessment, as he described, it should be taken up first with the centre but also with the awarding body. There is a duty on all awarding bodies to make sure that access to assessment is appropriate to whatever the learning disability is. Certainly the final penalty that the body would pay would be to lose awarding-body status. However, one would hope that the duty it had to its students would kick in long before that happened.
Lord Young of Norwood Green
My Lords, will the Minister confirm whether her action plan includes government departments? Have the Government monitored the number of apprenticeships in government departments that are held by people with disabilities? If this is in the action plan, will the requirement be extended to public procurement contracts?
Baroness Garden of Frognal
My Lords, there is certainly an action plan to increase the number of apprentices with a disability throughout the workforce through all sorts of employers. Certainly, government employers will be included in that plan.
Government Procurement Policy
Debate between Baroness Garden of Frognal and Lord Young of Norwood Green(13 years ago)
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Lord Young of Norwood Green
My Lords, I, too, thank my noble friend Lord Sugar for creating this opportunity to debate a subject of vital importance, especially in today’s economic circumstances, against a background of government policies that are not delivering the growth that we need but delivering, unfortunately, the highest level of unemployment for 17 years. I congratulate my noble friend on his customary and characteristically robust analysis, and I look forward to the ministerial response to some of the points that he raised. I am not sure that centralised purchasing is the total answer, but there are certainly savings to be made—we saw that in the recent Green analysis. I am certain that my noble friend is right to call for a more holistic analysis that goes beyond the lowest price. He made a valid point also about the restrictions that still exist in relation to SMEs.
To pay our way in the future, we need to build an economy that works; we need private sector growth, more people starting businesses and growing businesses succeeding in business. But we need that to work with public investment and procurement. To set this new direction, government cannot just stand at the sidelines. Government must use every tool purposefully and consistently to shape and support this business environment, from competition policy to taxation, and from regulation to procurement. That means developing institutions for collaboration and support, making sure that the right finance is in place, as well as the research base, the skills base and the other elements that support innovation and growth. It means investing in infrastructure, offering certainty in the policy environment and giving businesses the confidence to invest. It is active government, shaping markets, growing key sectors of the economy and supporting the growth of more companies which build value over time, invest long term, innovate, offer good jobs, pay fair wages, and train.
Governments cannot tell individual companies what strategy to pursue—we know that that will not work—but nor should they be indifferent to the choices that they make. There are many businesses already pursuing these strategies—it can make good business sense—but the policy environment does not always mean that this is the case. The challenge for policy-makers is how to create the framework so that that which is good business—socially valuable, sustainable—is also that which is most profitable, good business always being good business. This brings me back to procurement: getting it right so it can shape that environment and enabling procurement to play a critical role in the economy that we need for the future.
In government, we took steps to improve the way in which services are procured. In 2006, for example, we launched the Supply2.gov portal to make it easier for SMEs to access government contracts. In 2008, we commissioned a report on using public sector procurement to encourage SME growth. In the Pre-Budget Report, we committed to advertise government contracts worth more than £20,000 via a single, free online portal; to introduce measures to reduce bureaucracy and make opportunities more transparent for small businesses; to standardise the qualification criteria and encourage innovation by specifying outcomes rather than prescribing solutions; and to help SMEs get a fair deal when they were subcontractors.
Just before we left office, we set in the 2010 Budget central departmental targets to increase the proportion of central government procurement spend that goes to SMEs by 15 per cent throughout the supply chain. I know that this Government have a deep-rooted aversion to targets, but as we have heard a number of noble Lords say in this debate, it is all very well saying that one is going to encourage SMEs, but the track record to date shows that there is a lot more progress to be made.
This Government have sought to build on that legacy: they want 25 per cent of government contracts to be delivered by SMEs and to eliminate pre-qualification questionnaires for all central government procurements under £100,000. They have sought to introduce a one-stop shop that displays every central government tender opportunity and they want to iron out wasteful practices and unnecessary complexity in procurement processes. These measures are welcome but there have been contradictory signals too. The Government’s own adviser, Sir Philip Green, suggesting ways that government procurement would squeeze out SMEs and delay payments is an example. In recent months we have seen the case of Bombardier, which brought into focus the failure of the Government to recognise the significance of this procurement to our future competitive success, the consequences of which have placed the future of the train manufacturing industry in the UK in jeopardy. We believe it is essential that there is a UK-based train-building industry capable of designing, building and, of course, winning orders for those trains. We are urging the Government to outline the strategy for ensuring that this can happen, including for the new Crossrail rolling stock. We want to see UK rail manufacturing in a position to win these orders, not put at a disadvantage following the Thameslink decision.
This draws me to the fundamental question we need to consider—how we ensure that procurement is an engine for growth and how we improve the processes but, critically, the ambition that procurement can unlock. The Government are unfortunately missing this opportunity in our view. With £240 billion to spend, the Government are by far and away the UK’s biggest single consumer. Procurement can and should be a driver of growth, driving innovation, opening up markets, creating new markets and opening up to new businesses and new ways of doing things. That means putting procurement centre stage. We know that that has not always happened across government, local government and in the public sector. We must ask how we can demand more of procurement. How can this buyer power be leveraged to support the kind of economy we want to see? How can we make every single pound of spending create the most value to our economy and society? I suggest that it can be done in the following ways. We should build broader objectives into public procurement contracts, as we did with the Olympics. Construction contracts included clauses requiring the training of apprentices, creating 350 new apprenticeship places. For the life of me I cannot understand why the Government will not act in this area. There is no legal prohibition against doing that. When we have more than a million unemployed young people, it seems to me that every apprenticeship place that we can create is vital. Haringey is doing this; through its procurement process it has opened up business to SMEs and created new employment opportunities for many long-term unemployed people, while saving £8 million over five years. EU law is often put up as an obstacle to so-called “social clauses”, not least because they can limit competition. However, they do not have to, as the noble Lord, Lord Sugar, and other noble Lords have said. This is an area where we need to explore the full potential and test the boundaries rigorously and robustly. Other countries manage to do it and we have heard references to French and Dutch examples.
We need to create markets for innovative products and services. My noble friend Lord Haskel referred to the importance of innovation in design. When in government, Labour created the Small Business Research Initiative, using procurement to create markets for innovative companies which often lack financial backing during exploratory development phases. However, it remains very small; it is worth between £10 million and £15 million a year. By contrast, the US SBIR programme, on which it is modelled, has now been running for almost 30 years and is worth $2.5 billion a year. Properly scaled, we should probably have a programme worth something like £240 million in the UK.
I have already talked about Bombardier so I will not develop that further. However, I was grateful to my noble friend Lord Davies for giving a more balanced assessment of where we are going on Labour’s defence industrial strategy. I know from my experience of being a member of the Armed Forces’ Pay Review Body for four years that our record in ensuring that the forces had the best possible equipment was well appreciated. Labour's defence industrial strategy, which gave certainty to the UK industry, is being replaced by a commitment to buy off the shelf. There are arguments about whether this really is cheaper given the costs of adaptation. My noble friend Lord Davies demonstrated the importance of having a very strategic analysis in the area of defence.
This has been a very wide-ranging, important and constructive debate. I cannot possibly hope to deal with all the points that were raised. My noble friend Lord Puttnam said that there were ways of driving costs down and value up and mentioned the Promethean experience and the interesting incorporation of Phil Smith of Cisco on to the Technology Strategy Board. I share his optimism on that front. My noble friend Lord Kestenbaum made the important point about the need for government investment in vital areas such as global positioning satellites or the development of the internet protocol. Without those seed-corn investments it is doubtful whether important progress would have been made in those areas.