Baroness Sharp of Guildford
Main Page: Baroness Sharp of Guildford (Liberal Democrat - Life peer)Enterprise Bill [HL]
Baroness Sharp of Guildford Excerpts
Lord Stevenson of Balmacara (Lab)
My Lords, as we move on to this session on apprenticeships, I want to reassure the noble Baroness the Minister that we are very supportive of what is being planned here generally. We will make a few points and ask some questions of a probing nature, but we do not intend to do anything that would in any sense be too aggressive, and I hope that our comments will be taken in the spirit in which they are intended.
I am slightly short-handed today because, unfortunately, my noble friend Lord Mendelsohn is unable to be here—although I hope he will join us later—so I am largely on my own. I shall be slightly scrabbling to make some of the points that I had thought that others might be making, so your Lordships may find that today has a slightly surreal feel to it, as I gloss over some of the more difficult and trenchant issues. However, I shall be heavily reliant on others who put their names down against the amendments and who, I am sure, will be equally testing and trying for the Minister.
On the group of amendments starting with Amendment 49DA, in which we have a number of amendments and which is on the generality of the new approach to apprenticeships that the Government say that they wish to take—which, as I said, we are broadly in favour of—I wish to make three main points.
First, Amendment 49DA, which is a probing amendment, picks up on an issue that has been raised with us by a number of local government bodies and other agencies. They feel that the powers being taken to set targets for public bodies on the number of apprentices that the Government would wish them to have appointed by the end of the Parliament, in pursuit of this very ambitious target of 3 million new apprentices within that period, will cause real problems. Could the Minister therefore explain what negotiations and discussions she has had with local government and other agencies on these points?
For example, one issue that has been raised with us is that there is quite a range of development in the sector in terms of who is ready to take on an increased number of apprentices and who is not—and we are talking about a very significant increase if we do the calculations. What figure do the Government have in mind overall for the sectors concerned, and would they be receptive to having further negotiations and discussions with those bodies in order to try to arrive at an equitable basis on which this could operate? We are not against the proposal—it is a good thing that everybody should be set stretching targets—but we slightly regret that there is not more in the Bill tying the increase to contracts, procurement issues and other activities in which, in previous Bills, we have discussed how one could lever up the numbers of apprenticeships. Specifically on the target for public bodies, we would like to have a bit more information about how it will work in practice.
Secondly, it is glaringly obvious that the Government feel strongly that apprenticeships will flow only if targets are applied to the public sector—we did not know that targets had come back into fashion, but that is obviously a nice thing to see in a Bill of this nature—but it has been pointed out that there is no target for the private sector. Why is this? Is there some other force here that we are not aware of that is preventing the Government taking what seems to be the logical step? If we are to get to the 3 million target, there surely has to be an obligation—we would perhaps put it no stronger than that—on the private sector, which will carry a large proportion of this. Of course, money will flow in support of those, so there should be no net cost to them in relation to how the targets will be reached. I am sure that it would be to the benefit of the country as a whole if both the public sector and the private sector were jointly engaged in this process.
Thirdly, on Amendment 49EB, there has been a lot of concern, expressed very often by my noble friend Lord Young, about the quality of apprenticeships. Indeed, he mentioned it in the debate in this Room only a few days ago in relation to a statutory instrument that had been put forward. The numbers are one thing but the quality is very much another. Obviously, the quality will be tackled, through the Bill and the Act, by creating the term “statutory apprenticeship”, and that is a good thing. However, the amendment suggests that there may be more return if the restriction on statutory apprenticeships could focus on the higher-quality and the higher-skilled elements. In other words, they should be at levels 4 and 5 in the training schemes and not at levels 1 and 2.
I am sure there are other points that others will wish to make on that, but that gives the flavour of the way in which we want these amendments to be considered. I beg to move.
Baroness Sharp of Guildford (LD)
My Lords, I rise to speak to our Amendment 50 and to the other amendments in the group. Before doing so, I should declare my interests. This is not at present in the list in the register because it is very new, but I am very recently president of the AoC Charitable Trust. I am also an honorary fellow of the City & Guilds Institute and a patron of the 157 Group.
I think we have similar probing questions about this clause and, in particular, about the definition of precisely what is and what is not a public body. That is really what Amendment 50 is about. It raises questions about the slightly odd wording at the end of new Section A9, which says that,
“‘public body’ means … a public authority, or … a body or other person that is not a public authority but has functions of a public nature and is funded wholly or partly from public funds”.
There are difficulties with such a definition. For example, Kids Company is largely funded by public funds. Is that a public body? A lot of charities are largely funded by public funds for one reason or another. Are they public bodies? I certainly would not have thought of them as being public bodies. Or are you going to take the ONS definition? The ONS, for example, is now classing housing associations as public bodies, although a lot of the money they receive does not come from the public sector. However, equally, the ONS does not class the Student Loans Company as a public body in spite of the fact that the Student Loans Company receives all of its funding from a public body. Therefore, as I say, that definition strikes us as being extremely loose, and I think it is necessary to know precisely what the Government have in mind when giving such a definition in the Bill.
In general, I share very much the view of the noble Lord, Lord Stevenson, in asking questions about how far the Government should go in setting targets here, there and everywhere for public bodies—so much for localism, if I might say so. To provide that “The Secretary of State shall set such targets” leaves very little discretion to the locality. One would hope that, actually, the whole thing was done very much in conjunction and consultation with localities. A great many local authorities, such as in Birmingham, work very closely with local enterprise partnerships and do set targets for themselves. Indeed, as I shall go on to explain later, they also set targets for vulnerable young people who should be taken into apprenticeships. This clause raises lots of questions on which we need some clarification.
Lord Hodgson of Astley Abbotts (Con)
My Lords, I have added my name to Amendment 50, and will pursue the point made by the noble Baroness, Lady Sharp. It will not surprise the Committee, given my interest in the charitable and voluntary sector and the reports that I have written for the Government, that my line of questioning follows that which the noble Baroness has just raised.
It is absolutely clear that many charities and voluntary groups carry out functions which the Government find difficult to fulfil. The Government can provide the vanilla flavour, but the more difficult and challenging aspects of our society may often be better addressed through smaller, local voluntary groups. They will therefore have, in the words of the Bill,
“functions of a public nature”,
and be,
“funded wholly or partly from public funds”.
Rather than wait until today’s debate, I asked the Minister’s officials to throw a little light on the matter, and they very kindly wrote back. My question was whether the definition of a public body under Section A9(7) would cover bodies such as the Charity Commission and some charities. The answer was:
“The Charity Commission would fall within the definition of public body (it’s a non-ministerial department and therefore part of the civil service). No targets can be set for charities unless they are also public bodies prescribed in the regulations. We will set out the full list of public bodies for whom a target may be set in regulations. There will be an opportunity for those affected to respond to a consultation on this during the passage of the Bill through Parliament”.
We are discussing it in Parliament today, but I have not yet seen the regulations, although I may have missed them. This is a trifle too opaque. The sector is entitled to greater clarity now so that we can provide the appropriate level of scrutiny.
We are all very much aware of the deficiencies in the process for scrutinising regulations or statutory instruments—we had a clear example of that last week. I very much hope that, if my noble friend cannot give a direct answer this afternoon and tell us where the list is, she will be able to promise us clarity before we reach Report, at which time we could have a further, better and more focused debate on this issue, which means a lot to individual charities and voluntary groups. They need to know exactly what lies in store for them.
Baroness Neville-Rolfe
We will come on to discuss contracting out, which is the subject of the next amendment. I hope it will enable me to reassure the noble Lord on that point. SMEs also come up later. His points are extremely well made. This is a very important area. There is a lot of cross-government consensus that we need to have a step change in apprenticeships. Germany and Switzerland have classically done a better job. With the levy, the change and the move to proper frameworks and at least a full year for every apprenticeship, we are trying to move into a different place.
The provisions in this Bill do not answer all the questions, but they do some useful things. With the noble Lord’s agreement, I hope we can move on to the next amendment and talk about what we are going to try to do for contracting out.
Baroness Sharp of Guildford
Before the Minister sits down, perhaps I could interject briefly. I wondered whether the noble Lord, Lord Young, had actually looked through the list of amendments and noticed that we had the following one, as was rightly said, on public procurement, and the subsequent one, which is on small and medium-sized enterprises. However, I put it to the noble Baroness that she says there is a lot going on with apprenticeships at the moment. I think a very real problem has arisen, which is that the Government are constantly changing the goal posts in relation to apprenticeships and this poses a real problem for a lot of companies.
As is very clear indeed from the Ofsted report that came out last week, what has been happening is not satisfactory and needs to be changed. One of the problems facing the whole sector is constant instability. We have a situation in which the employer ownership pilots were going on, and we have the trailblazer pilots going on, and then suddenly the Government intervene with the apprenticeship levy, which changes the whole game once again. The whole thing is thrown up in the air and a lot of companies are very uncertain as to quite where they are going to be going. Take the construction industry: there is already a construction industry levy—is the other levy to be on top of that? I know there have been consultations about it, but we do not know yet what is going to happen. Therefore, I put a plea to the Government and the Minister: please try to establish a broad framework for setting apprenticeships and then do not fiddle with it for about three years to give it a chance to bed down.
Baroness Neville-Rolfe
I have to say I agree that having a good vision and a good framework for this important area of policy is essential. Obviously we came back in May—to the surprise of some of us—and we are trying to move forward with a new approach to apprenticeships, which does include a levy because we think that that is a good way of getting funding into this absolutely vital area. Of course I, like everybody who used to be a huge employer in their former lives, recognise the importance of certainty for employers. However, I do not think that we should apologise for trying to improve the framework. We should do that. We should then give the new arrangements a clear run. However, we are at that point in the process where policy is being formed. We are bringing in a levy, which is still the subject of consultation. We are rightly in the Bill trying to move forward on a couple of small and important issues, including this business of the definition of apprenticeships, where I feel that having sanctions, as there are for degrees, will actually help to improve the recognition of this vital employment category.
“( ) The apprenticeship targets set for prescribed public bodies under subsection (1) may include apprenticeship agreements entered into by sub-contractors working for the prescribed public body.
( ) The prescribed public body may in turn set apprenticeship targets for their sub-contractors.”
Baroness Sharp of Guildford
My Lords, in moving Amendment 49E I will speak also to Amendment 50A, which is purely consequential. The purpose of the amendment is explicitly to try to pull in the clout of public purchasing to encourage companies that are contracted to public sector organisations to take on apprenticeships, and to encourage private sector organisations to pick up the baton.
I have two very good examples of where this has been done pretty systematically. One is the Olympic Park in 2012. The noble Lord, Lord Gardiner, knows this example quite well. It is quite an inspiring example. The original target for apprenticeships in the park was 350, but it ended up with well over 450; 12% of them were black, Asian or ethnic minority, compared to 5% generally within the country; 64% came from London and 30% from the boroughs involved with the Olympics, the eastern London boroughs, so apprenticeships were being provided for local people. In addition, 6% were women, whereas in the construction industry only 3% of apprentices are generally women, so they managed to double that even though 6% is pretty abysmally low. They had only a 6% dropout rate from the apprenticeships, whereas nationally the dropout rate at that time was about 25%.
An evaluation was done and it is interesting to look at the success factors. The report says:
“Many activities were undertaken to deliver the Apprenticeship Programme”,
including:
“The tangible ownership and driving influence of senior project leads”.
That is very important. Senior management was involved and absolutely behind it. The report also says:
“Robust and effective working relationships were fostered with a number of colleges and training providers”.
This is what we are all saying these days: partnership between industry and the training providers—colleges, independent training providers and, for that matter, schools—is vital. The report also points to:
“Full stakeholder engagement that included relevant industry bodies”—
it was not just the firms themselves but the sector skills agencies, the funding agencies, national and local government, and the trade unions were all involved in helping to design the programme and get it moving. There was also:
“The implementation of a contractual requirement that three per cent of a new contractor’s workforce be apprentices”—
picking up the 3% that the Minister was talking about and deliberately putting a target on the subcontractors. The report also points to:
“Implementing a follow-up monitoring process, in partnership with the National Apprentice Service”.
It was followed up, it was well monitored and the figures are there. Finally, the report points to:
“The active promotion of construction as a positive career choice”.
The noble Lord, Lord Young, was quoting figures earlier. As he was saying, sadly we have not seen a very considerable increase in the number of apprenticeships in traditional areas such as construction and mechanical engineering. The big growth has been very much in the service sectors, particularly care, retail and hotel and catering.
I also quote this from the evaluation, because it makes an important point:
“Something very positive and supportive was in place in the environment that the ODA”—
the Olympic Delivery Authority—
“created on the build programme and the markedly low drop-out helped to promote apprenticeships among those employers who were reluctant to take on young people, some of whom feared a high turnover and a wasted investment”.
That was a very positive experience.
I also quote another example, which the noble Baroness, Lady Corston, who is sat behind me, will know. Last week we had in evidence to the Select Committee on social mobility and skills a presentation from Crossrail’s director of talent and resources, Valerie Todd. I found her testimony extremely impressive. Crossrail needed some 3,500 skilled workpeople. It realised that it had not nearly enough people, so it set about training them with three main aims: to ensure that those who came on site recognised what safety precautions were necessary; to inspire future talent; and to provide local jobs.
Crossrail has taken on more than 300 apprentices and linked them with local schools. It has gone to the local schools and recruited apprentices from areas where it has been working. Some 39% of them are from black, Asian and ethnic minority groups and 20% are women, quite a number of whom have come in through both the construction and civil engineering areas, but also to some of the secretarial and administrative areas. This also applied to subcontractors. Crossrail worked very closely with its subcontractors. As Ms Todd has said:
“They all knew that if they were going to bid for our work they were going to have to support us in achieving these goals”.
Both these examples of what has been achieved by a deliberate attempt to use public procurement to raise the numbers of apprentices in private companies are very inspiring. They have clearly achieved well. Both are planned examples. As drafted, the amendment purely says that:
“The apprenticeship targets set for prescribed public bodies under subsection (1) may include apprenticeship agreements entered into by sub-contractors working for the prescribed public body”.
It is not a “must”; it is a “may”. We are not saying that they have to, but it is a useful way of doing it and I suggest that it is one we should back. Using public procurement to promote apprenticeships is something that has been widely discussed and approved of. It would be nice to see the Government doing something about it. I beg to move.
Lord Young of Norwood Green
I rise to support the noble Baroness, Lady Sharp. She has quoted two contracts. I had a personal involvement with both, ensuring that there were targets and that we met them. They were both very good, but one of the last points that the noble Baroness made was that Crossrail ensured that not only the main company but its supply chain, which was distributed throughout the country, had an apprenticeship target. I would like to see a “must” rather than a “may”, but if the Government said that they accept the amendment, that would be a step forward and an important signal. I look forward to hearing the Minister’s comments.
Baroness Neville-Rolfe
Sorry, I had thought that the living wage amendment was in a different group.
Baroness Sharp of Guildford
I regrouped it. Today’s list is different from the one that was circulated at Friday lunchtime.
Baroness Neville-Rolfe
I think the answer is that we do not have the information with us. Perhaps we could take that away in the usual way and see what we can do in terms of an estimate and come back.
While I have the Floor, I will respond to the point about charities that was raised under the previous amendment but is also relevant to this because in the public sector work is often contracted out to charities. To be clear, if charities are not on the ONS list for the public sector, current thinking and emerging policy is that they will not be in scope. In practice, it is very unlikely that many charities would qualify in this process.
Baroness Sharp of Guildford
I thank the Minister for her response, and all those who have participated in this debate.
It is a little disappointing that she is not more forthcoming on this. I recognise that she has made provision for major public contracts but, first, as I understand it, that is to be negotiated with the contractors —it is not mandatory for large public contracts. Secondly, a large number of smaller contracts go through public bodies on which it would be useful for there to be some nudging. The “may” that I would have put in would very much be nudging those subcontractors to think about apprenticeships and think whether they could not carry them through. We are concerned about the lack of apprenticeships in small and medium-sized companies, and this is one way in which to encourage those companies to come up with proposals for apprenticeships. It would be an opportunity for the Government to nudge things in that direction. As the Minister made clear, big contracts began only in September this year, so we have a long way to go. What can be achieved, as is shown by the Olympic Park and Crossrail, is very considerable. I hope that we see something a little more positive from the Government some time. I beg leave to withdraw the amendment.
“( ) An apprenticeship target shall specify what proportion of the number referred to in subsection (2) is to be reserved for apprenticeships for young people—
(a) who were looked after children; and(b) who need help with physical or learning disabilities.”
Baroness Sharp of Guildford
My Lords, this amendment is concerned with care leavers and those with special educational needs and disabilities; its purpose is to open up apprenticeships to those two groups of young people. Some of them are perfectly able to undertake such an apprenticeship—I recognise that not all young people with special educational needs and disabilities are in a position to take up apprenticeships, but some of them are. The feeling is that it is important that they should have the opportunity to do so. Something like 8% of those with special educational needs and disabilities currently have apprenticeships of some sort, compared to 16% nationally.
Looked-after children, it is well known, achieve less highly at GCSE than their counterparts; they often miss out on parts of education, partly because they have a chaotic family background, or there may be a history of abuse in their background, and so forth. Barnardo’s has been very concerned about the issue of these young people leaving care. I refer to evidence that it gave to our Select Committee on Social Mobility, picking up a remark that one such young person made, that school really did not help them at all. We were told:
“These young people often leave school with few or no qualifications and need alternative options outside of the school environment if they are to achieve their potential. Some need provision that allows them to catch up on what they have missed and Barnardo’s services offer a variety of Level 1 courses … These young people also often want the option of practical-based learning, that clearly links to a real job. Barnardo’s services offer a range of qualifications that focus on occupational skills. These include foundation awards … NVG levels 1-3 and pre-apprenticeship programmes. The young people we work with can undertake these qualifications in a range of work areas including floristry; painting and decorating; business; horticulture; hair and beauty; construction; and catering”.
It is important to recognise that some of these young people, because of the chaotic backgrounds that they come from, need time to catch up and move forward. For example, Birmingham sets aside for care leavers a proportion of the apprenticeships that it takes on as a local authority. I think that a number of other local authorities do that.
In relation to those with disabilities, it is a similar story. Some of them need longer to catch up and get themselves ready for an apprenticeship than others, yet they benefit from them. Ofsted’s report states:
“Too few disabled people or those with learning difficulties become apprentices. In all further education and skills providers in 2013/14, over 16% of learners disclosed a learning difficulty or disability compared with only 8% of apprentices. Only one of the providers in our survey demonstrated that they had supported an apprentice with dyslexia to pass their functional skills test”.
We do not have my noble friend Lord Addington here.
Baroness Sharp of Guildford
I am sure my noble friend will talk about dyslexia. Ofsted said:
“Only one of the providers in our survey demonstrated that they had supported an apprentice with dyslexia to pass their functional skills test while one other had made adjustments for a disabled apprentice. However, such examples of providers and employers encouraging disabled people or those with learning difficulties to succeed on an apprenticeship were rare”.
It is important that such people are considered. Figures indicate that the proportion of apprentices who have learning difficulties or disability has decreased. It was 11% in 2010-11, and it decreased to only 8% in 2012-13. The success rate of all apprentices completing their framework rose considerably from 55% in 2005-06 to 73% in 2011-12. In the same period, the success rate for those with disabilities rose from 49.5% to 69.9%. That is a very high rate of success on the part of those with disabilities. The success rate is now 75%. The differential between the two is not very great.
Back in 2012, there was a comprehensive review—the Little and Holland review—Creating an Inclusive Apprenticeship Offer. It made 20 recommendations, including: clarifying funding to support apprentices with learning difficulty or disability; raising the awareness of providers and employers of funding sources, such as access to work and learning; the promotion of on-the-job support in terms of job coaching and mentoring; review and better monitoring of the self-declaration process so that underrepresentation by specific groups can be addressed; and the removal of barriers to access and completion in the form of qualification requirements. The Government seem to have been very slow in acting on those recommendations. Will the Minister update us on what is happening?
On barriers, English and maths remain a major issue. I do not know whether my noble friend Lord Addington will add anything on that. He has been very concerned about the shift to GCSE English and maths and the difficulty that some of these young people face. They used to be able to qualify with more examinee-friendly functional skills. I beg to move.
Lord Addington
My Lords, when I look at the apprenticeship system and the newly created apprenticeships, it is quite clear that there is a degree of fear within the system that the exam will not be taken seriously. This means that various standards have been clung to, particularly in English and maths, so that the apprenticeship will be as good as something else. This is quite clearly inappropriate if you do not take other steps for groups which have struggled in the traditional sector. Dyslexia was a classic example. As I dug into it, it became almost farcical. People were saying, “Employers like it”. Then you had employers saying that yes, they wanted functional skills so that people could do the job, not a qualification. That was said to me more than once. A degree of paranoia was building up because people were not saying, “This is a test that allows you to do a job”.
The groups mentioned here are always going to struggle. If you do not want them in the apprenticeship system, it is about time somebody turned round and said, “It’s not for you”, and provided something else for them. I do so hope that that will not be the case, because it means creating an entire new examination and qualification system. I hope that the Minister will be able to tell us that the Government are taking practical steps to allow people in.
Lord Young of Norwood Green
My Lords, I concur with all that the noble Baroness, Lady Sharp, and the noble Lord, Lord Addington, said. This problem has been raised again and again. I think that the noble Baroness said that there should be some examples of best practice employers. We need to look at why they can take on young people in these circumstances to become good-quality employees capable of completing apprenticeships. Let us look at those employers who are putting this into practice; there may not be many, but there will be some.
Baroness Sharp of Guildford
I cited the example of Birmingham City Council. Both Crossrail and the Olympic park set themselves targets.
Baroness Neville-Rolfe
My Lords, this amendment would require that, when setting public sector apprenticeship targets, the Secretary of State must also impose targets on public bodies in relation to the number of young people who were in care and those with special educational needs or disabilities. I am very grateful to the noble Baroness, Lady Sharp, for bringing the issue alive, for bringing up the findings of the Social Mobility Committee and for talking about Birmingham as an exemplar of good practice—because we must capture and celebrate good practice in all these areas. I was encouraged to hear of the improving completion rate that she mentioned.
The Government do not feel that it is appropriate to specify a proportion of the public sector target for young people leaving care or with physical or learning disabilities. We are trying to keep our targets simple. Apprenticeships are real jobs with training. As with all other jobs, employers have to make the final decision about who they hire for any apprenticeship that they have advertised. I know this having run apprenticeships myself when I was in business. Apprenticeships are employer led, so we are not able to ring-fence apprenticeships for particular groups as to do so would mean requiring employers to hire particular people for their vacancies. I am not sure that that would work.
However, although we would not want to interfere in employers’ decisions about who to recruit, we believe that more can be done to ensure that people from a diverse range of backgrounds are in the best possible place to apply for and secure an apprenticeship. The Government are committed to ensuring that care leavers are aware of the support and opportunities that are available to them. The Government provide full funding for apprenticeship training under the existing frameworks for entitled 19 to 23 year-old care leavers, and a number of local authorities already offer apprenticeships to care leavers, as has been said.
I have quite a long list of what we are doing to help care leavers, but in the interests of time I will set all that out in a letter, alongside information on what is being done in various different ways so that care leavers can access programmes such as traineeships to get the support they need to get ready for an apprenticeship. The noble Baroness also mentioned a review. In turn, I will mention Peter Little OBE, who undertook a detailed review for the Government of the inclusiveness of apprenticeships for people with learning difficulties or disabilities. Perhaps it would be helpful to set out the information I have in a rather extensive note. I have tried to explain why accepting this amendment would be a problem, but I will set all that out.
It is good to see the noble Lord, Lord Addington, here because of all that he has done on support and accessibility. Apprenticeships are accessible. In 2013-14, almost 40,000 people with disabilities or learning difficulties started an apprenticeship. We can do more. We can continue, as he said, to look at English and maths requirements within apprenticeships to ensure that they do not create a barrier, and the use of reasonable adjustments for disabled learners has been promoted through the skills funding rules. The SFA—the Skills Funding Agency—has published an evaluation of a series of diversity and apprenticeship pilots which looked at innovative ways to increase accessibility for underrepresented groups.
We judge that the measures we are undertaking can give confidence that the Government are ensuring in the right way that apprenticeships are accessible for people of all backgrounds, including care leavers and people with special educational needs and disabilities. I hope that noble Lords have found my explanation helpful and will look forward to my letter, and that on this basis the noble Baroness will withdraw her amendment.
Baroness Neville-Rolfe
I will certainly undertake to look at that point and discuss it further with the noble Lord, if I need further clarification, so that I can give him a proper answer.
Baroness Sharp of Guildford
My Lords, I am grateful to the Minister for her response and I look forward to the letter that she is going to send me. I hope that she will update us on precisely what is happening in relation to the Little report. My information is that not enough has been done already and it would be very nice to see a spur applied to some of the implementation.
Again, I am a little disappointed by the Government’s response. They do not hesitate to set targets not only for local government but for all kinds of public bodies, yet they are not prepared to write into those targets a much lesser target in terms of taking on young people who we all know need to be offered these opportunities. Access is a recurring theme whenever we talk about apprenticeships and, for that matter, education and training provision for younger people. There is no doubt that access is difficult for them. Opening the doors by means of something relatively gentle in terms of a target for these bodies to aim for need not be as prescriptive as the Minister suggests; it could just nudge them in the right direction.
I look forward to the Minister’s letter and may return to this issue once I have read it. I beg leave to withdraw the amendment.
Lord Young of Norwood Green
Perish the thought: my humble apologies to my noble friend. I welcome this, perhaps because I had anticipated this debate. The Minister indicated that she would be dealing with quality, so I presume that this is the occasion on which she will deal with it. In the debate on the statutory instrument, I raised the issue of the Ofsted report quoted in the Times, which states:
“Some apprentices were not aware that they were classed as such, while others did not receive broader training or support to improve their English and maths. In the retail, catering and care industries, inspectors found apprentices cleaning floors, making coffee or serving sandwiches. Other employers used apprenticeships—which are wholly government-funded for those aged 16 to 18 and part-funded for older apprentices—to accredit the existing skills of their staff, Ofsted said. Sir Michael will tell business leaders in the West Midlands”,
where this survey took place,
“that employers, teachers and training providers are among the ‘guilty parties’ who must improve. ‘The fact that only 5 per cent of our youngsters go into an apprenticeship at 16 is little short of a disaster,’ he will say”.
That is a really serious and worrying criticism given the number of apprenticeships in the areas that he described.
The noble Earl, Lord Courtown, gave us a letter today. I have had a chance only to skim through it and think about whether it really does give an assurance that quality will be capable of being achieved in the drive to increase by a significant amount the number of apprenticeships. In the letter he says:
“An ‘approved English apprenticeship agreement’ carries the status of a contract of service. That means that employment and health and safety laws apply. The apprenticeship agreement confirms that the apprentice is undertaking an apprenticeship and specifies the standard they are working towards completing”.
That is good. I will not quote everything in the letter, but he then says:
“In addition to this, we have also introduced a new ‘Statement of Commitment’ which is signed by the employer, training provider and apprentice and sets out the key expectations, roles and responsibilities of each party involved in the apprenticeship and complements the approved English apprenticeship agreement”.
That is okay. However, what I really wanted to know was how we are going to check that, though they may have signed these agreements, they are actually delivering what they say they will. He said:
“In addition, the Skills Funding Agency … runs the apprenticeships helpline which was given an expanded remit in the summer, enabling anyone involved in an apprenticeship—not just the apprentice—to raise concerns about any element of how the apprenticeship is being delivered”.
The next sentence I found really interesting and I would welcome a comment from the Minister:
“The SFA have rigorous checks in place and have embarked on a programme of staff training to ensure that these issues are dealt with effectively”.
What exactly does that mean? There are an awful lot of apprenticeships going on. The noble Lord, Lord Hodgson, talked about mystery shoppers. I do not know whether the SFA will be the mystery shoppers, but a serious point is being raised. How are we going to ensure a number of things: that the quality of an apprenticeship is actually being delivered as per the contract, and that the training provider, in allocating a young person to an employer, is confident that that employer has a track record of delivering apprenticeships? How will we ensure that it is a safe working environment? I raised this issue previously. We had the appalling situation, I think just over a year or so ago, where a young apprentice went to work in the morning and never returned home—they died in an appalling workplace environment. Are we serious about enhancing the status of apprenticeships and ensuring that parents feel confident about the quality of apprenticeships?
The comment in the letter:
“The SFA have rigorous checks in place and have embarked on a programme of staff training to ensure that these issues are dealt with effectively”,
refers back to a point raised by my noble friend Lady Corston, who is not currently in the Room. She talked about young people employed for very short periods of time in what purported to be an apprenticeship but clearly was not. I have not heard of any periods as short as that, but certainly the Government declared that they would not support apprenticeships being described as such if they were for less than a year, which most people would say is about as short as one could get for an apprenticeship. Some might express concern that the period of time ought to be longer. However, my concern is whether the Skills Funding Agency will be able to deliver for the Government in terms of ensuring that there is real quality in apprenticeships.
Baroness Sharp of Guildford
My Lords, we on these Benches broadly agree with what the noble Lord, Lord Hodgson, said. There is no doubt that the push for numbers has meant quantity at the expense of quality. Only 6% of 16 to 18 year-olds go into an apprenticeship and about 80% of the apprenticeships that have been created have been taken up by people who are already in jobs. They have been doing a relatively low-level apprenticeship—what is known as the level 2 apprenticeship—which does no more than rubber stamp, giving them a qualification for the work that they have already been doing.
All that is detailed in the Ofsted report. I point out to the noble Lord, Lord Young, that Ofsted does inspect apprenticeship providers, and a report such as this, which is very damning indeed of the current system of apprenticeships, should wake the Government up to what has been proceeding. My noble friend Lord Stoneham and I have a subsequent amendment about higher-level apprenticeships. It is very sad that the number of apprenticeships at the moment undertaken at higher levels—even at level 3, which is the equivalent of A-level, let alone the proper technician, the old HND level, level 4, or level 5—is minimal. We are talking about 1% or 2% of apprenticeships. Those are the intermediate-level qualifications and skills that we desperately need in this country, but we are just not training people to that level at the moment.
To some extent, the whole business of creating 3 million apprenticeships is pulling the wool over people’s eyes as to precisely what we are doing about skills. I think that the Government are well aware of that and many of the reforms in hand at the moment are an attempt to raise the quality and answer the sorts of questions asked by the noble Lord, Lord Hodgson.
In Clause 19, the Bill defines what is a statutory apprenticeship. That is an important beginning, but we need to keep a wary eye out as to precisely how all this is carried through: what a statutory apprenticeship means and the quality of provision.
Baroness Byford (Con)
My Lords, I apologise to the Committee that I could not be here at the start of the sitting. I shall speak in particular to my noble friend Lord Hodgson’s amendment, because other amendments in this group state “may”, while that of my noble friend states “must”. That may make it more difficult for the Minister, who will probably say that she does not like that wording, but I hope that she will take on board the thrust behind it.
Having listened to the discussion around the Committee this afternoon, we are clearly all concerned about having minimum standards. There is nothing worse than people going into training or apprenticeships and coming out feeling that it was not worth while, there is no job prospect at the end and they have totally wasted their time. That is very bad for the individual, but neither is it good for the employer or the college helping them.
I would like to add two things to what my noble friend said so ably. First, two years ago, the Lord Mayor of London at the time, Fiona Woolf, put a lot of force behind apprenticeships within City livery companies. As people around the Committee will know, the City livery companies were guilds in the olden days and set standards, and many still do today. Secondly, the Minister knows of my interest in agricultural colleges. I was visiting an agricultural college local to me recently, opening new facilities to enable young people to have a better start. I was talking to one or two of the apprentices. It is interesting that one or two who came in, particularly on the engineering side, had not really thought of going on to take further degrees or any further educational training, but had become so inspired by what they were learning at that college that one or two, although not all of them, reconsidered doing a further level of training, which I thought was hugely encouraging.
What I want to add my voice to is the point about the quality of the apprenticeships being offered—and assessing it is absolutely crucial—and the job prospects for those young people afterwards, whether it is going in for further training or whether there is a job at the end. Some I talked to were very clear that, after the training that they were getting, they were very hopeful that a job would follow because they had gained skills that a couple of days earlier they certainly had not got. From listening to the various contributions from around the Committee this afternoon, I am well aware that this is not a common factor among everybody; there are some good training schemes, but some are poor.
In my noble friend’s Amendment 50AA, he calls for,
“minimum standards for an apprenticeship agreement”,
which should be looked at after the first 12 months, and then the Secretary of State should consult those that the Secretary of State,
“considers appropriate on the details of such regulations, prior to publication”.
My noble friend’s amendment has given us a good steer, and I hope that the Minister will be able to give us something positive. Clearly, with my noble friend’s amendment, it is a question not of “may” but of “must”, providing a great direction to this Government on how we need to improve the quality while at the same time encouraging more people to take up apprenticeships as a further step to wherever they go in life. I support my noble friend’s amendment.
Lord Stevenson of Balmacara
My Lords, our Amendment 49J and Amendment 52 in the names of the noble Lord, Lord Stoneham, and the noble Baroness, Lady Sharp, are really two sides of the same coin. The worry we share, I think, is that the apprenticeship levy system, which we have already discussed and which is raising some concerns among those who will be involved in it, may have an impact on existing training and expenditure. Obviously, if the result of bringing in the levy is to reduce the overall quantum of money that is going into training, that would almost certainly be a bad thing. We want to grow the training budget, not reduce it. I look forward to hearing what the Minister has to say about that, as well as about the issues that are raised in Amendment 52. I beg to move.
Baroness Sharp of Guildford
Amendment 52 is in my name and that of my noble friend Lord Stoneham. As the noble Lord, Lord Stevenson, said, both these amendments are asking for a review. We have been talking about the quality of apprenticeships. I say in passing that although many of us have been rather negative, there are quite a number of extraordinarily good apprenticeships in operation.
I spoke earlier about what happened at the Olympic Park, and that is an example of how apprenticeships can be created, but one only has to look at companies such as BAE Systems and Rolls-Royce, which offer an absolute gold standard in terms of apprenticeships. Other companies are aspiring to do the same, and those sorts of apprenticeships are extraordinarily good. They offer not only higher-level apprenticeships but a route to progression. Sadly, there have been some bad examples—picked up by, among others, Ofsted—and it is important that in pushing forward the number of apprenticeships, they aspire to best practice rather than picking up worst practice. The idea of producing an annual review and asking the Secretary of State to report on such an annual review is to pick up this whole notion of the quality of apprenticeships and make sure that they are the sorts of apprenticeships that one would like to see.
The other aspect of this is that this part of the Bill is expressly about creating apprenticeships in public sector bodies. Our Amendment 52 asks for a review of how far this is working within the framework of the public sector and what impact it is having in both public and private sectors. However, I think we have had enough discussion of the general issue of equality and the need to promote equality that I do not need to go any further.
“A10A Public sector support to help establish apprenticeships in small businesses
(1) The Secretary of State, acting in conjunction with the Small Business Commissioner, may by regulations require a prescribed public body to provide arrangements which facilitate small businesses (as defined in section 2 of the Enterprise Act 2015) entering into apprenticeship agreements.
(2) The arrangements specified in subsection (1) may require the prescribed public body to provide resources on an interim basis to help the small businesses establish a joint body to oversee and manage the negotiation of apprenticeship agreements which meet the conditions set out in section A1(3)(a) and (b), and to ensure that the terms of the agreements are adhered to.
(3) Any resources provided under the terms of subsection (2) shall be for a specified period.”
Baroness Sharp of Guildford
My Lords, Amendment 50B relates to an issue on which we touched earlier; namely, the question of small and medium-sized businesses and the availability of apprenticeships. The difficulty is that many small and medium-sized businesses find it quite difficult to organise apprenticeships. The Government have done their best to cut back the amount of bureaucracy involved; nevertheless there still is quite a lot. One only has to read Clause 19 and see precisely what is and is not a statutory apprenticeship to recognise that there is a lot of paperwork, including, initially, the setting up of an agreement, the contract with an apprentice and getting the terms of the contract correct and so forth, and subsequently making sure that the various points in the agreement are fulfilled. If you are a small or medium-sized business employing a dozen people or less, the extra bureaucracy seems formidable.
Until recently, training providers—further education colleges and the independent training providers—often handled the paperwork for a small and medium-sized business in return for them providing the work-based training. But with the development of employer ownership, training providers are no longer encouraged to do this. Another solution lies in group training agencies. This model has been around for 40 years, primarily in the engineering industries, but it has now spread out on a more general basis as a model of industry provider/partnership. As Ofsted put it, they have,
“responded very effectively to the training demands of industry. Training companies”—
that is, independent training providers—
“that are members of GTA England generally provide high-quality training. Of the 23 GTAs that were inspected between January 2010 and April 2015, 21 (91%) have been judged good or outstanding for overall effectiveness. This compares with 79% of the 386 other independent learning providers inspected that were judged good or better over the same period”.
The amendment proposes that a specified public body—probably a local enterprise partnership, or its equivalent; but it could be a local authority or a further education college—should be tasked with the setting up of a GTA in their local area to build up the appropriate partnerships with industry, and especially to bring in the SMEs and their local partners. I note that in some cases where SMEs are part of supply chains, they are organised by the larger companies and may operate on quotas set by them for taking on apprentices, but in any locality, many small and medium-sized businesses could be good trainers. In Germany, on the whole, it is the smaller companies that are doing the training. They could be involved in apprenticeships, but many of them are not at present because they find the barriers to entering apprenticeship agreements too great. I beg to move.
Baroness Neville-Rolfe
Small businesses are of course the cornerstone of our economy, and high-quality training opportunities such as apprenticeships can be key to supporting their growth and success. It is essential that the apprenticeship system works for those employers as well. The majority of existing apprenticeships are in fact with smaller businesses. Significant progress has been made in ensuring that apprenticeships are accessible to them.
Small businesses are directly involved in all phases of the process to develop apprenticeship standards. When new standards are submitted, evidence is required that small businesses have been involved and that they support the development of that standard. I know that from the work that I have done in the electronics sector. A variety of mechanisms is used to engage small business throughout that development—face-to-face consultation events for automotive standards and online consultation for electrotechnical standards. Small firms have been actively involved in the craft trailblazer. We engage with representative organisations that represent smaller businesses. We have even made a small travel fund available, which smaller employers can use to attend meetings to develop standards.
Most important of all, the apprenticeship grant for employers also provides employers with fewer than 50 employees with a £1,500 incentive payment for up to five new apprentices aged 16 to 24. This will continue to be available until 2015 at least.
There is also a wide range of apprenticeship training agencies—ATAs—and GTAs, as the noble Baroness, Lady Sharp, made clear. They employ apprentices and place them with host employers who may be unable to commit to employing an apprentice directly. For employers, this makes it easier to take on an apprentice. Good-quality ATAs will be able to continue to operate once the apprenticeship funding reforms have been introduced. The SFA also runs an apprenticeship helpline.
There are also lots of good examples, including case studies of apprentices and employers, on the SFA’s “Find an apprenticeship” website. I have various publications here which I am happy to share.
We believe that this is the right approach to SME support. We think it would be complex and confusing to require public sector organisations to duplicate the effort and provide additional resource to facilitate small businesses entering into apprenticeship agreements. We are putting small business at the heart of the way we are going forward. For the same reason, we are unconvinced of the merits of involving the Small Business Commissioner, whose main role is to address payment issues, particularly late payments, and to focus on that until we bring about a serious culture change. I hope noble Lords will have found my answer helpful and that the noble Baroness will feel able to withdraw her amendment.
Baroness Sharp of Guildford
I think there is a problem that is missed by the current arrangements; that is, within any locality there are quite often small and medium-sized businesses that are put off by the bureaucracy involved and do not get picked up by any of the current arrangements. Yes, there is masses of information and you have to be proactive in seeking it out. The amendment is very much a “may” amendment rather than a “must” amendment but in some rural areas and areas that fall between the core cities—in which the push is going forward because they are taking over skills—this is often not the case. I see it where I am, in Guildford, because we fall betwixt and between the Coast to Capital LEP and the Enterprise M3 LEP. However, many small and medium-sized businesses might well benefit if they were pushed a little bit in this direction. Neither the independent training providers nor the colleges are really being encouraged at the moment to pick up the tab of going to seek out people to provide apprenticeships for, in the switch to the employment ownership pilots. This is an area where a particular public body—local enterprise partnerships are an obvious example—could be useful in providing the initiative.
I will withdraw the amendment for the moment but we might return to this issue on Report because I am not really convinced that this is an appropriate answer.
“( ) In describing an apprenticeship that is a statutory apprenticeship scheme, P must also stipulate whether the apprenticeship is a higher level apprenticeship or not.”
Baroness Sharp of Guildford
We have already talked about the Ofsted report and the rather negative picture it paints of problems with the present level of apprenticeships, but one thing we have not talked about very much is the importance of trying to fill the skills gaps by the training of those at the higher levels.
The big skills gaps are particularly in engineering and construction and at technician level with STEM subjects. These gaps used to be filled by the concept of the HND, or the equivalent of the foundation degrees, but we have seen an enormous drop in the number of HNDs and foundation degrees being undertaken in the past few years. The number of young people going through to these higher-level apprenticeships—above level 3—is absolutely minute, yet it is vital that many more young people should progress through. Having done a satisfactory apprenticeship, perhaps coming in with their A-levels, they could go directly into a level 4 or level 5 apprenticeship; or those who have started by doing a level 2 apprenticeship, enjoyed it and gained a lot from it, could be given the opportunity to move up to level 4 or level 5, the degree-equivalent levels. We are extremely anxious that the vocational route should be seen as equivalent to the typical academic route. It is very important that it acquires this status. Only if we see a fairly substantial number of young people being able to move through the progression routes in apprenticeships to these higher-level apprenticeships will we see this.
The amendment, which calls for a report on the number of higher-level apprenticeships that shall be stipulated, requires us to concentrate on this issue. I beg to move.
Lord Young of Norwood Green
I support the noble Baroness’s amendment. She is right about the need to increase the number of higher-level apprenticeships. As I understand it, from a briefing I had from SEMTA, part of the problem is getting young people to see that this is not an either/or choice between a vocational and an academic route. People with the highest level of qualification feel that, if they are to progress to a degree, they have to go down the academic route. There are lots of opportunities for them to go down the higher-level apprenticeship route. The apprenticeships are there; we are not getting the take-up. This is another point on which to emphasise the importance of career guidance if we are to solve this problem.
The noble Baroness is right to draw attention to this part of the regulation. It is a useful and necessary emphasis. I referred earlier to the number of engineering and STEM apprenticeships that will be needed over the next five to 10 years. It is estimated to be 830,000. Not all of those will be higher level, but a significant number will.
Baroness Neville-Rolfe
My Lords, this amendment seeks to require that a person, when offering a statutory apprenticeship scheme, must stipulate whether it is a higher-level apprenticeship. This is already a non-statutory requirement for the “Find an apprenticeship” service and is covered through an apprenticeship agreement. The amendment would insert a new subsection into new Section A11 of the Apprenticeships, Skills, Children and Learning Act 2009 to provide that a person commits an offence if, in the course of business, they offer a course of training and describe it as an “apprenticeship”, unless the course or training is a “statutory apprenticeship”. I do not believe that that is the right thing to do.
Improving quality is central to our reforms, as we have agreed. Employers are developing new standards to ensure that apprenticeships meet the skills needs of their sectors, in exactly the areas that the noble Baroness, Lady Sharp, spoke about: engineering, STEM and construction. In STEM, for example, apprenticeships have increased by 42% between 2009-10 and 2013-14. The starts at age 19-plus are up 83%. This is a long-term change programme. We all know how long and difficult those are.
The published trailblazer quality statement sets out a range of measures to improve quality, including the requirement for all apprenticeships to demonstrate progression and to involve sustained and substantial training of at least 12 months. The Government are committed to the expansion of higher apprenticeships, with a fivefold increase in higher apprenticeships since 2009-10. To date, there are more than 50 higher apprenticeships available up to degree and master’s level in areas such as life sciences, law and accounting. We need to get the message out that there are these possibilities and that they can create just as good a career as going to university if someone has the appropriate bent for apprenticeships.
In the circumstances—it is getting late—I ask the noble Baroness to withdraw the amendment.
Baroness Sharp of Guildford
I thank the Minister for her reply. I think that we are very much in agreement here that this is an area where we wish to see expansion. I also agree that it is a slightly strange place in which we have managed to put this amendment. With that, I beg leave to withdraw the amendment.
The Deputy Chairman of Committees
I have to inform the Committee that if this amendment is agreed to, I cannot call Amendment 51A by reason of pre-emption.
Baroness Sharp of Guildford
My Lords, the noble Lord, Lord Stevenson, has already made the case for Amendment 51A. When I read this part of the Bill, I was jolted and thought, “Good heavens, why trading standards?”. In the briefing that it provided for us, the LGA was very unhappy about it being trading standards. It said:
“We are concerned about the proposal (clause 19 (7)) in the Bill to make local trading standards teams responsible for enforcing the protection of the term ‘apprenticeships’. The LGA has consistently highlighted the expanding number of statutory duties that trading standards teams are responsible for, at a time when budgets and staff in the service have reduced by an average of 40 per cent over the last four years. Government has recognised the issue and is currently undertaking a review of trading standards with a view to identifying key service priorities, yet in the past month alone it has introduced two new statutory duties for the service”.
It seems very odd for the Government to be introducing a statutory duty in an area where trading standards has no expertise whatever. Local enterprise partnerships have much more knowledge of what is going on with apprenticeships than trading standards. It is really rather absurd that we are looking to a body with no background or expertise in the area. We should be looking for a body that has some expertise and can do the job without too much difficulty.
It should be acknowledged that local enterprise partnerships are at the moment very sparingly funded; they do not have a vast amount of money at their disposal and, whether one likes it or not, this responsibility will require some resources, particularly if the body is required to make regular reports to the Secretary of State about what is going on. If we place that duty on local enterprise partnerships, we should know that they have sufficient resources to fulfil it.
Baroness Neville-Rolfe
My Lords, this is an important area; enforcement is always important. The amendments relate to the enforcement of the measure to protect the term “apprenticeship” from misuse. They would require local enterprise partnerships to fulfil that function rather than trading standards. Noble Lords will know the high opinion that I have of trading standards, and I am glad to be able to put it on the record again.
As the apprenticeship brand grows, so does the risk that the term “apprenticeship” could be misused to refer to lower-quality courses. Therefore, as the noble Lord, Lord Stevenson, explained, we intend to follow the precedent for enforcement that applies to unrecognised degrees, which is in the Education Reform Act 1998. Trading standards has a duty to enforce that legislation using its powers in the Consumer Rights Act 2015. That has ensured that UK-based operations with a physical presence are closed down, and there have been a number of prosecutions over the years. Since 2003, there have been successful enforcement cases against more than 18 offending bodies, with the closure of 10 and prosecution of a further three. In practice, although the duty extends to all trading standards teams, to answer the question asked, cases have tended to be concentrated in a couple of areas.
We are exploring whether it would be sensible to assign one trading standards team to act as the lead authority, with the ability to build the enforcement capability and expertise to deal with the challenge. This would be in line with the approach taken for other functions, such as the Illegal Money Lending Team, which is based in Birmingham City Council—another namecheck for that council—and tackles cases across England.
To respond to the noble Baroness, Lady Sharp, we judge that trading standards bodies would be more appropriate to enforce the measure than local enterprise partnerships because of trading standards’ specialist enforcement powers, history and experience. Trading standards will be there to carry out enforcement as a backstop, but with the SFA there—to respond to the question from the noble Lord, Lord Stevenson—to encourage compliance. As set out in the impact assessment, we anticipate that the number of prosecutions will be very few, because we know from experience of degrees that this can have a totemic effect. We are in active discussions with the Department for Communities and Local Government, the Local Government Association and the Better Regulation Development Office to ensure that the requirements of trading standards in this area are achievable, effective and proportionate. I hope with that explanation of how we plan to take these provisions forward, the noble Lord will feel able to withdraw his amendment.