Apprentices: Financial Support

David Simpson Excerpts

Wednesday 8th March 2017 Westminster Hall

[Kelvin Hopkins (Luton North) (Lab)]

I beg to move,

That this House has considered financial support for apprentices.

It is a great pleasure to serve under your chairmanship, Ms Ryan, and to introduce this important debate about apprenticeships and funding for apprentices.

Well-trained and highly skilled workers are vital for our economy, and for too long the apprenticeship route has been neglected. For years—decades even—apprenticeships and apprentices have been underfunded and poorly paid. That must change if we are to provide our economy with the skills that it needs and young workers with the opportunities and rewards that they deserve.

The Government have made some moves to boost apprenticeships, but those are too little and inadequate. Not only are apprenticeships under-resourced, but businesses, those with sector skills, universities and colleges have raised real questions about the potential quality of the new apprenticeships. Young people will be doubly disincentivised if both the incomes that they receive and the quality of their courses and experience are not sufficient.

The Government have set an arbitrary target of 3 million apprenticeship starts by 2020 and have introduced a 0.5% apprenticeship levy for any company with a payroll of more than £3 million a year. There has seemingly been little focus on the quality or content of those apprenticeships, potentially leaving young people without the high-calibre skills that they should be able to expect.

I have personally been concerned about the skills deficit in British industry since the 1980s and wrote much about the problem in those days. Research in the 1980s and 1990s by the National Institute of Economic and Social Research, led by Professor Sig Prais and others, drew comparisons with workers in continental Europe, notably Germany, and found Britain wanting. Maths skills were especially poor in Britain, and that remains a problem today.

In more recent times, the proprietor of an engineering company in Bedfordshire—my own county—has complained that he cannot find the employees he needs, despite repeatedly advertising. A motor industry supply chain manufacturer in my constituency could not find a single toolmaker in a town that used to be dominated by manufacturing, which employed many tens of thousands. We need to do better across all fields, not just in manufacturing.

Some comparisons are especially significant. Research by the National Union of Students and The Times Educational Supplement suggests that, in contrast to the benefits and finances available to higher education students, apprentices are being hung out to dry and treated like “second-class citizens”. Some apprentices earn as little as £3.40 an hour. They are also excluded from a number of means of support available to their counterparts studying in further education institutions.

[David Simpson (Upper Bann) (DUP)]

One issue that we face in Northern Ireland on apprenticeships is that 20 young people might start a course, but less than one third will finish it, whether they be electricians, joiners or plumbers. In the hon. Gentleman’s opinion, is that down purely to finances, or do we have to find another way of incentivising young people to finish their courses?

[Kelvin Hopkins]

I thank the hon. Gentleman for his intervention. I will touch on the issue of drop-outs later, but he is right that finances are a significant problem.

The research shows that a college student with one child could be eligible for more than £10,000 a year in financial support, and the families of such students could receive thousands more, but apprentices, including those on the minimum wage, earning as little as £7,000 a year, are not entitled to any of that. The Department for Work and Pensions does not class apprenticeships as “approved education and training”, and that affects the benefits that apprentices can receive. Specifically, when a young person takes up an apprenticeship, their family will become ineligible to claim child benefit and child tax credit. Further education students between the ages of 16 and 19 could be eligible for either a £1,200 a year vulnerable student bursary or a discretionary bursary. No bursaries are available for apprentices.

In many areas, students enjoy concessionary or discounted travel to college or university. For apprentices, there are some discounts, but only for the first 12 months of an apprenticeship and only for those apprenticeships leading to a serious qualification.

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[Marion Fellows (Motherwell and Wishaw) (SNP)]

It is a pleasure to serve under your chairmanship, Ms Ryan. I congratulate the hon. Member for Luton North (Kelvin Hopkins) on securing the debate.

I want to put a kilt on this debate, as everyone in this room would expect me to do, and in Scotland there is a good story to be told, but before I do that I will talk about my visit yesterday, as part of the Select Committee on Education, to Gateshead College. I was absolutely enthralled. It was like coming home for me, as a former further education lecturer, to see the commitment and enthusiasm in that well known and highly regarded college, and to see what it is doing with apprentices. It was very positive and I saw an example of a new type of apprenticeship—the PlanBEE—where apprentices are taken on at a much higher level and work within different companies in the north-east, gaining absolutely wonderful training that can eventually lead to a degree. The hon. Gentleman talked about funding; those are the types of course that also need to be funded to the maximum.

As some of my late preparation for this debate, I looked at the rates in Scotland and at what the Scottish Government have been doing. Scotland has led the way in many regards, because it has had modern apprentices for years, but the UK Government bringing in the apprenticeship levy and changing the law here has had a subsequent effect in Scotland. The Scottish Government consulted with employers across Scotland to see how they might best deal with the additional funding, so they set up a special skills fund. The distances in Scotland tend not to be so large in some cases, but are extremely hard in others. It is very difficult for some apprentices in the north of Scotland to secure work, but there is a real drive by the Scottish Government to look at how best that can be localised and help be given.

[David Simpson]

The hon. Lady is on a roll about Scotland. In Northern Ireland, the Government have new incentives for apprenticeships and there is now a closer working relationship between the business and education and apprenticeship sectors to tailor courses to suit industry, and to make sure we get apprentices for the jobs.

[Marion Fellows]

To that end, a lot of money from the Scottish Government is going to local colleges that are mandated to work with local employers. As I said, I have previous experience of this area. Now the focus has moved from being on when a large company goes bust and people need retraining, to getting business owners and companies in and saying, “What is it that you need?” and then planning courses around that.

--- Later in debate ---

[Marion Fellows]

I also have experience of that. For funding, the students had to be kept in colleges, but I used to do a lot of student counselling and I would counsel them to finish the course, even if they did not like or enjoy it, so that they could then move on to other employment and say, “Look, I hated this. I absolutely hated it, but I got there.” That shows proof of purpose and the fact that they can learn.

It is vital that across the UK we look at apprenticeships in a totally different light. This goes back to what I said earlier. Apprenticeships should not be cheap labour, but should be seen as a progressive and forward-looking thing for parents to consider. From my experience on the Education Committee, I know that there is often a real dearth of good careers advice for young people in schools; students are channelled into the academic route and schools want to promote that, and there is not enough good careers advice to show that some young people, especially those who are less academic, would benefit from a career starting at 16, 17 or 18.

Some of the young people I spoke to yesterday were highly qualified and had very good A-levels, but their peers and some of their families were horrified that they had not gone to university. They had chosen that route within the building and architecture sectors; it is an interesting and wide-ranging course, and those young people saw it as what they wanted to do. We need more of that across the UK.

When I studied to be a further education lecturer, I did a comparative education course. I looked at Germany, which the hon. Gentleman referred to, where there is true parity of esteem between the academic and non-academic routes, and that is reflected in the funding as well. We really need to promote that view across the entire UK. Apprenticeship is not a second chance or second choice, but is something we should actively encourage our young people to do because it will lead to good, well paying jobs that benefit the economy.

[David Simpson]

Another issue that is raised from time to time in Northern Ireland is apprentices being sponsored by companies to go into training colleges. With the economic crisis that we have had for a number of years, it has been very difficult for young people to do that. Is there another mechanism we could look at to encourage people to do that, rather than that route being solely based on sponsorship?

[Marion Fellows]

That is an absolutely crucial point and we do need some form of Government funding for it. Scotland still has education maintenance allowance for people going into college, but not for apprentices on day release. It still believes in funding, and our students do not pay fees. This is almost a case of chicken and egg—if there is not a thriving economy, it is more difficult. Government have to show business and industry how important it is that we carry forward a skills agenda that benefits everyone, but does not do it on the cheap as far as apprentices are concerned.