Apprenticeships

Baroness Jones of Whitchurch Excerpts

Thursday 14th October 2010 Lords Chamber

[Baroness Jones of Whitchurch]

My Lords, I add my thanks to the noble Baroness, Lady Wall, for initiating this debate. She has an admirable reputation for taking forward the work of the skills sector and has already made a significant contribution to this debate. As my noble friend Lord Sugar and others have identified, the previous Government had a great deal of which to be proud in terms of their experience in the apprenticeship world. They rescued the concept of apprenticeships and made them a realistic alternative training route for hundreds of thousands of young people with, as we have heard, more than a quarter of a million apprenticeship starts estimated to take place in 2010. In addition, their enlightened move to make all young people stay in education or vocational training until the age of 18, combined with the funds to make it happen, transformed young people’s prospects and recognised for the first time in many years that alternatives to academic study were more attractive to many young people and could equally lead to successful careers.

But this strategy was very much a work in progress. Although we were moving in the right direction, it requires continued commitment and investment to embed modern apprenticeships as a genuine alternative training choice for all young people, and it also requires a much greater buy-in from UK employers. A recent report from the London School of Economics, which may be the one to which my noble friend Lord Layard referred, identified that competitor countries still have much higher levels of apprenticeships. For example, England has only 11 apprenticeships per 1,000 employers compared with Germany, which has 40 per 1,000. Only 8 per cent of employers in England offered apprenticeships in 2009, whereas the much higher rates in Germany very well illustrate that apprenticeship is embedded in their culture and linked to a commitment to lifelong vocational upskilling. So the UK is missing out on a vital resource that would help in the industrial and technological race of the future.

At the same time, City & Guilds surveyed employers in 26 countries and found that most believed that hiring students with vocational qualifications in the business sector was better than taking on university graduates, but they also admitted that only a small proportion of their apprentices subsequently went on to be promoted to senior management roles, thereby highlighting the problem that they are still undervalued by many in the business community.

The baton has now been handed over to the coalition Government and it will be interesting to see how they intend to take the challenge forward. So far, I have to say that the omens are not encouraging. The first decision of the coalition was to water down the Conservative manifesto commitment to create 400,000 extra apprenticeships and college places in the next two years. Now there are no longer targets, only warm words and aspirations. As to the report of the Select Committee on Economic Affairs—I bow to the interpretation of its findings of the noble Lord, Lord Wakeham—I took away from it that the key to a successful apprenticeship policy is effectively to measure demand; how many employers would be prepared to create places and how many young people have been turned down on application. This would give the Government a clear steer and precise projections with which we could all judge whether they were being successful. Figures and targets matter.

With this in mind, like others, I read with interest the speech by the Minister of State for Further Education at the Institute of Directors a couple of weeks ago. I was looking for evidence of the investment in training and apprenticeships which might be coming down the line. I was disappointed. The only figure mentioned was the reallocation of the £150 million train-to-gain budget which has successfully allowed 1.5 million workers the chance to experience workplace training, many for the first time. It seems that spending on these second chance learners, many of whom have had a poor initial education, is no longer a priority. Can the Minister clarify whether this is the case?

In his speech, the Minister acknowledged the role that skills can play in stimulating growth. That is good; we can all agree with that. However, it is not clear how the Government are planning to invest in the extra training and apprenticeship places now to ensure that UK workers are skilled up and ready to take on the challenges of the new competitive world when growth kicks in. It is fairly obvious that training takes time—often years—so where is the funding and investment strategy from government to drive up our skills base and prepare us now for the new global business opportunities?

Without drive and impetus the skills training agenda will go into decline. The latest unemployment figures mark a worrying trend—jobseekers up and vacancies falling; more and more young people joining the ranks of the unemployed. The fear of the recession is already skewing opportunities for vocational training. We now see unemployed graduates applying for vocational training opportunities which they would previously have regarded as being beneath them, while other young people who might previously have gone to university are applying for apprenticeships as a guaranteed job in a difficult economic climate, thereby squeezing out those for whom the posts were originally intended. So just at the time when we were beginning to establish modern apprenticeships as a respectable alternative career choice, demand is vastly outstripping supply, with the traditional target recruits facing rejection and disillusionment.

Where are the new apprenticeships going to come from? Seemingly, not from the public sector. The anticipated level of cuts promoted by the Government across public services has created, effectively, a recruitment freeze. No new jobs are being created, not least in training posts. What is more, in the recent report of the Learning and Skills Council into barriers to creating new public sector apprenticeships, lack of funding was highlighted as a major issue, and this is clearly going to get worse. When cuts of this magnitude are contemplated, it is a sad fact that training budgets are the first to be hit. So, unless the Government are going to intervene and ring fence funding for public sector apprenticeships—which so far they have shown no intention of doing—we will lose a generation of newly skilled young people ready to take forward the public services of the future.

Already opportunities in the construction sector have been hit hard. The previous Government had ambitious plans to use the power of public procurement to drive up skills and apprenticeships in the construction sector which, in the recession, was increasingly relying on the public sector for business. However, the Government’s deeply unpopular decision to cancel the Building Schools for the Future programme and to decimate the housebuilding grant to the Homes and Communities Agency has made a mockery of that strategy. It is clear that without active government intervention, the overall number of public sector apprenticeships will fall.

So we come back to the central question: where will the new apprenticeships come from? I may be a cynic, but when the Minister of State talks about a new partnership between government, employers and the individual, I interpret it to mean that government will pay less and employers and individuals will pay more. I hope that the Minister will be able to disabuse me of this conclusion, not least because I do not think that such a strategy will work.

I believe that, first, because, when the economic climate is tough, neither employers nor individuals will have the additional spare capacity to invest in skills training, particularly when the future is so uncertain. Secondly, is it not in all our interests, rather than those of just individual employers, that we have competitive, well qualified public and private sectors to compete on the world stage? I will be interested to hear what the Minister has to say on this. Most importantly, I hope that the Minister will be able to give us some real facts on how much the Government intend to invest in apprenticeships and skills training in the coming years and what their target recruitment levels for apprenticeships are. Only then will we be able to monitor whether this strategy is working and how successful it will be. I look forward to hearing her response.