Apprenticeships

Baroness Neville-Rolfe Excerpts

Thursday 17th March 2016 Lords Chamber

[Baroness Wilcox]

To ask Her Majesty’s Government how many apprenticeships have been created since 2010 compared to the previous six years; and what they are doing to spread best practice amongst employers of apprentices.

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills and Department for Culture, Media and Sport (Baroness Neville-Rolfe) (Con)]

My Lords, there have been 2.7 million apprenticeship starts in the last six years, and 1.2 million in the previous six years. We have introduced reforms to encourage employers to design high-quality apprenticeships; announced the new institute for apprenticeships; delivered National Apprenticeship Week, which is this week; and established a new Apprenticeship Delivery Board, which is encouraging more businesses to deliver high-quality apprenticeships.

[Baroness Wilcox (Con)]

I thank my noble friend for that Answer. I do not think she mentioned this but maybe I should: this is National Apprenticeship Week, which is why I am on my feet today. I almost brought in my father’s indentures with me, but I thought that would be showing off. For many young people taking the apprenticeship training route, it is important that they earn while they learn. By how much has the minimum wage for apprentices risen over the last year?

--- Later in debate ---

[Baroness Neville-Rolfe]

My Lords, all apprentices must earn while they train. It is a real job. In October 2015 the apprenticeship national minimum wage increased by 21% to £3.30 an hour, and this October we are increasing it again by 3% to £3.40 an hour. Of course, most apprentices are paid much more than the minimum wage.

[Baroness Garden of Frognal (LD)]

My Lords, a number of key stakeholders, including colleges, training providers and small businesses, are not represented on the Apprenticeship Delivery Board, which the Minister has just mentioned. That being the case, how will the board be able effectively to ensure and promote best practice?

[Baroness Neville-Rolfe]

My Lords, consultation has been a key feature in all the work that we have been doing on apprenticeships. I certainly take the noble Baroness’s point that we need to ensure that those particular groups are properly consulted and helped with good practice. We will be publishing a lot more material on how the apprenticeship system will work in coming months.

[Lord Watts (Lab)]

My Lords, how many of the apprenticeships that the Minister has just set out would be recognised as real apprenticeships in Germany?

[Baroness Neville-Rolfe]

Not all of them, I suspect. This gives me the opportunity to say that I think we are doing the right thing and that the levy will help to correct two decades of underinvestment in apprenticeships and insufficient attention to quality. Our whole approach is to increase standards, make every apprenticeship last at least a year and generally change the whole basis of training in this country.

[Lord Aberdare (CB)]

My Lords, I welcome the growing number of apprenticeships, and I met some very impressive apprentices at a dinner in the House yesterday evening. To meet the Government’s target of 3 million by 2020, many more SMEs will need to be persuaded to offer apprenticeships. What are the Government doing to encourage SMEs and make it easier for them to offer apprenticeships?

[Baroness Neville-Rolfe]

There are two things. First, we need a much greater level of awareness; I spoke about that in my first Answer. Secondly, we need incentives. Of course the levy will provide more funding that can be made available, and 98% of employers will not have to contribute to that levy at all. There is also the apprenticeship grant for employers, which provides £1,500 to small businesses taking on their first new apprentice aged 16 to 24.

[Baroness Warsi (Con)]

My Lords, I congratulate the Government on the huge amount of work done on apprenticeships, especially the new progress on university apprenticeships. But is my noble friend aware of reports showing that female apprentices earn less than males, are likely to receive less training than males, and are more likely than males to be unemployed at the end of an apprenticeship? While I congratulate the Government on all the work they are doing, could they look at this area and ensure that the gender pay gap and other differences in the wider workplace do not start to play out between men and women in apprenticeships, too?

[Baroness Neville-Rolfe]

Apprenticeships are of course subject to the same equality duties as any other employment, and 53% of starts in 2014-15 were female. But my noble friend makes a good point: are females finding it more difficult to finish? That is an interesting contribution to the debate, which I will certainly reflect on.

[Baroness Whitaker (Lab)]

My Lords, will the Minister tell the House what proportion of black and minority ethnic people, including Gypsies and Travellers, have taken up apprenticeships?

[Baroness Neville-Rolfe]

My Lords, 10.6% of those starting an apprenticeship in 2014-15 had a BME background—an increase from 8% in 2009-10. We have set ourselves a target of increasing the proportion by 20% by 2020. I do not know whether those figures include Gypsies, but I will let the noble Baroness know.

[Lord Polak (Con)]

My Lords, will the Minister join me in paying tribute to the businessman David Meller and Nadhim Zahawi of the other place, who chair the new Apprenticeship Delivery Board? In the light of the Chancellor’s comments yesterday in the Budget on his commitment to extend further education loans to the over-19s, how many apprentices will benefit from this extension?

[Baroness Neville-Rolfe]

To quote my noble friend’s response to a previous question, my briefing does not cover the answer to that question. The Chancellor made it clear that we are giving levy employers a 10% top-up to their monthly levy contributions—but I shall write to my noble friend about the education side.

[Lord Stevenson of Balmacara (Lab)]

My Lords, 96% of apprenticeships are restricted to levels 2 and 3; I am sure we would all like to see that extended. There is also a problem about age, as in recent years most apprenticeships have gone to those aged over 24, although the target age is much younger. Will the Minister also comment on how apprenticeship completions are going? According to the latest figures, they are down from 76% in 2010-11 to 68% in 2013-14—something that must be reversed.

[Baroness Neville-Rolfe]

The noble Lord is right to be concerned about the decline in completion rates. What seems to be happening is that as we are raising standards, requiring the apprenticeship to last for a year and generally toughening up, completion rates are falling. We will publish an operating model in April and information on funding rates in June. In that work, and in the quality work that we are doing, we need to take into account the essential importance of ensuring that youngsters are able to end their apprenticeships as well as begin them.