Apprenticeships

Chris Kelly Excerpts

Monday 19th December 2011 Commons Chamber

[Chris Kelly (Dudley South) (Con)]

I should start by declaring an interest as a non-executive director of my family’s business, which has a long-established apprenticeship scheme.

Apprenticeships are a shining success in the first year and a half of the coalition Government. The figures paint a hugely pleasing picture, with the number of new apprenticeship starts in my constituency of Dudley South sharply up, as in most other parts of the country. In 2009-10 the number of new apprenticeship starts in Dudley South was 550, and in 2010-11 that number has grown to 910. That is a two thirds increase compared to 2009-10 and, more importantly, 360 more young people have been given access to the life-changing opportunities that an apprenticeship and skills for life provide.

Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime, so I would like to use this opportunity to thank all the employers in my constituency who have taken on apprentices, and especially those who have taken on apprentices for the first time recently. As the son of an apprentice, I make a commitment that any business in Dudley South employing apprentices that makes contact with me wanting a visit from their local Member of Parliament will get one, as I think it is absolutely right to celebrate the best in business.

I would like to make a special mention of the National Apprenticeship Service website, apprenticeships.org.uk. It has been re-developed and is now easier to use for both employers and apprenticeship candidates, so I congratulate the Minister on his Department’s effective use of communications technology. It is good to see the roll of honour there, giving deserved recognition to those businesses that are playing their part in training and developing our future work force.

Things are certainly heading in the right direction. In the academic year 2010-11, 442,700 people started apprenticeships—as the Minister has mentioned, a 58% increase on the number who started in the previous year. Much of this increase is due to more people aged 25 and over starting apprenticeships. The majority of people starting apprenticeships chose frameworks in the service sectors, such as business administration and retail, and a majority of apprenticeship starters were, for the first time ever, female. So apprenticeships are not just for school leavers, and are not just for the traditional industries, such as metal bashing, for which the black country is famous, but also for the service sector. This is particularly relevant to the Dudley borough, where Stourbridge college’s hospitality and retail academy is sponsored by Westfield, owners and operators of the Merry Hill shopping centre in Brierley Hill in my constituency.

The early figures are encouraging, but my right hon. and hon. Friends on the Front Bench are not complacent, and that is why the Government have introduced incentives to support up to 40,000 young apprentices in 2012-13. The Government will offer an incentive payment of up to £1,500 to small businesses, the final payment of which, quite rightly, will not be made until the apprenticeship has been completed and the apprentice has progressed to sustainable employment.

I recognise that money is tight at the moment, but will the Minister see what more he might be able to do on this incentive payment? For every £250 increment in the payment, there will be a huge increase in the number of employers willing to take on an additional or new apprentice. Further, will the Minister ask his Department to undertake some research, if it has not already done so, on the effects on take-up of increasing that payment offer to £1,750 or £2,000?

The British Chambers of Commerce published a recent report on apprenticeships that found that time, cost and inexperience were barriers to taking on apprentices. It also found that a fifth of firms with fewer than 10 employees, and also a fifth of those with between 10 and 50 employees, recruited an apprentice from 2010-11. That rose to over a third of companies with 100 to 249 employees, and to over a half of all companies with more than 250 employees.

The £1,500 maximum payment will clearly be important in incentivising small and micro businesses to take on apprentices, but the BCC is right also to identify time and inexperience as barriers. That is why I am pleased that the Government have responded by reducing red tape, ensuring that employers are able to advertise a vacancy within one month of deciding to take on an apprentice and have them ready to start work within three months, and removing all excess health and safety requirements for apprenticeships. In the new year, the Government will be enabling businesses to design, develop and purchase the apprenticeship and other training programmes that they need through a £250 million pilot fund.

In 2009, 30% of large employers with over 500 staff offered apprenticeships while only 5% of small businesses with two to four employees did so. This is precisely where we need to see the next increase in take-up coming from. Small and medium-sized enterprises account for almost half of the private sector in the UK, yet just 2% of small businesses employed apprentices in 2009. I generally do not like bandying statistics around, but that truly is a damning one. So this Government’s incentive payment to employers, along with the £250 million pilot fund and proposals to slash red tape, will clearly help to address this past failure. Like Dr Adam Marshall, director of policy at the BCC, I commend the Government for

“offering real help to firms and apprentices alike”.

One of those small business that I have talked to is in my constituency of Dudley South and it recently hosted me for a visit. The business, Generic Punching Systems in Netherton, has been helped by this Government to take on two apprentices. It is a family business with the managing director’s son and daughter working alongside their father in production and accounting roles. The other two employees are new apprentices. I commend GPS for investing in the future by taking on and training up new apprentices. My only concern however is that the managing director told me that he had not found it possible to employ apprentices through the local college system, and that is something that we need to be mindful of. Instead he uses his personal network within the area to identify willing and able candidates to be interviewed for apprenticeships. I commend the Government for their work thus far.