Trades and Apprenticeships

Janet Daby Excerpts

Tuesday 17th December 2024 Westminster Hall

[The Parliamentary Under-Secretary of State for Education (Janet Daby)]

I congratulate my hon. Friend the Member for Portsmouth North (Amanda Martin) on securing this important debate. I thank her for speaking so passionately about the importance of apprenticeships as a route into the construction sector and many other vital industries. I will endeavour to respond to all the points she made. I would also like to thank the other Members that have contributed to the debate: my hon. Friend the Member for Peterborough (Andrew Pakes) and the hon. Members for Strangford (Jim Shannon), Wokingham (Clive Jones), and West Worcestershire (Dame Harriett Baldwin).

Everyone across this Chamber cares about young people and fully accepts that young people need to be in apprenticeships, where that is suitable for them. If it is right for them, it is also right for getting the economy going and ensuring the growth in our country that we so desperately need. It is right that we put our efforts as a Government towards making sure that young people succeed in this area. However, I would also say that we have inherited a picture that is not as positive as the shadow Minister laid out.

We know that around a third of vacancies in the UK are hard to fill due to a lack of skills in these sectors, with large shortages in construction and information and communications. Skills shortage vacancies make up a significant proportion of all vacancies in construction, information and communications, manufacturing and health and social work. We have actually inherited a picture where many companies and organisations are finding they cannot employ people because they do not have the relevant skills, and we have millions of people that need to be in work that do not have the skills for certain jobs where they could fulfil their potential.

Between 2020 and 2035, the construction industry will need an additional 1,143,000 people in the workforce, in order to take account of additional workers and to replace existing workers. As Members have said, we really do have our work cut out for us.

All Members will recognise the long and proud history of apprenticeships and trades in this country. Apprenticeships in England can be traced back to the middle ages when craft guilds were first established—they are part of our DNA. The first national apprenticeship system of training was introduced as far back as 1563.

Despite that long-standing history, especially in construction, it is concerning that, in recent years, we have seen declining apprenticeship opportunities in vital occupations such as bricklaying, plastering, plumbing and so on, particularly for younger people. It is of great concern that, following reforms of apprenticeships, including the introduction of the apprenticeship levy in 2017, apprenticeship starts by young people under 25 fell by almost 40% according to data published by the Department for Education. It is also concerning that so many workers and employers have told us they find it difficult to access the skills they need, particularly in critical areas such as construction trades.

The UK construction workforce is just over 2 million people, according to the latest figures from the Office for National Statistics. Despite an average of 38,000 vacancies advertised per month, almost a third of construction employers report that finding suitable skilled staff was their key challenge, as I have already mentioned. In addition, our labour market and skills projections suggest that between 2020 and 2035, we will need to work hard to make sure there are more than a million people to replace people in this sector.

We need reform of our skills system so that we are able to meet such demands. That is exactly what this Government are going to do, and have begun to do. It is clear that the skills system is fragmented and has lacked a clear plan, which has resulted in a lack of clarity around which sectors need prioritising and has led to a skills landscape that is confusing to learners and employers.

There has been lots of concern, as has been mentioned, about the drop-out rate of young people in apprenticeships. That is of course very concerning, and there are different reasons for those rates. Surveys have been done and people move on for many reasons, such as other employment or promotion, or finding the apprenticeship difficult. The situation is being reviewed and assessed.

The issues have been compounded by insufficient investment in skills, which has led to a decrease in adult participation in further education and training. To address that, the Government have established Skills England, a new body that will tackle skills shortages and support sustained economic growth. Skills England will help to ensure that the skills system is clear and easy to navigate for young people and adults, strengthening career pathways into jobs across the sector. It will increase the quality and quantity of skills development in the workplace. It will work together with combined authorities and other places with devolution deals, as well as other regional organisations such as employer representative bodies, to ensure that regional and national skills needs are met at all levels—from essential skills to those delivered via higher education, in line with the industrial strategy.

We have also set out plans for a more flexible levy-funded growth and skills offer, building on the current apprenticeship offer. I assure hon. Members that the Government are listening to employers. Employers have told us that the current apprenticeships offer is inflexible and that the system does not work for them. We want to support employers, not only in the trades, but in all sectors, to develop the skills that they need to thrive. That is why we have introduced a more flexible levy-funded growth and skills offer that will provide employers with greater choice.

As a key first step toward greater flexibility, we are introducing new shorter-duration apprenticeships and foundation apprenticeships, as employers have told us that not all roles or all learners need a minimum of 12 months’ training. We are responding to employers who have said that more support is needed to generate a pipeline of talent that can access occupationally specific apprenticeships, and we are exploring the best way in which shorter-duration apprenticeships can better meet the needs of specific sectors such as construction, where occupational competence can be reached in less than the current minimum duration of 12 months, or where individuals have relevant prior learning.

We will, of course, protect the elements that make apprenticeships work so well and ensure that they retain the credibility and prestige they hold with employers. Our new work-based foundation apprenticeships will focus on ensuring that training is directed towards real vacancies. They will provide young people with a broad training offer, with clear and seamless progression into their next opportunity, whether that is the next level of apprenticeship or other valuable occupational learning. We will work closely with employers and providers. The Government will make sure that we get this right.

[Jim Shannon]

I thank the Minister for her positivity and for her response to the hon. Member for Portsmouth North. I hope I have not jumped the gun with this point—perhaps the Minister is coming to it. Has she had discussions with those back home in the Northern Ireland Assembly about working together to progress things in a positive way for everyone?

[Janet Daby]

I thank the hon. Member for his intervention and for his earlier speech. We are working with our devolved Administrations and are committed, along with them, to making sure that we get this right for young people. I thank him for his contributions about, and concern for, young people needing to complete their apprenticeships. I am very willing to engage further with him on these conversations.

In addition to the declining numbers of apprenticeship opportunities in recent years, it is also concerning that only around half of apprentices go on to achieve their apprenticeships. The latest available data for the 2022-23 academic year shows that the apprenticeship achievement rate was 54.3%. In the construction sector, the achievement rate was slightly lower, at 52.7%. Although that represents an increase on the previous year, as in so many areas of the skills system, we need to do much more. We all know that apprenticeships, when completed, deliver great outcomes, so it is critical that we work together with employers, learners and providers to make sure that more apprentices achieve. The Government are working hard to deliver that.

There are concerns around the English and maths requirements for apprenticeships, which are sometimes a barrier to completion and achievement. We are looking carefully at this policy to make sure that we set high standards while supporting apprentices to achieve. We will continually improve other areas of apprenticeships, including end-point assessment, to ensure that they are robust yet proportionate and aligned with key professional qualifications. I am clear that this is a partnership, so we will also make sure that employers and providers have the support and challenge that they need to improve by sharing best practice and improving guidance, alongside an inspection and accountability system that drives improvement.

I welcome the work of the Construction Industry Training Board to support construction apprenticeships in key trades, such as bricklaying and carpentry. The CITB, which is sponsored by the Department, provides financial support to both construction employers and learners. Employers can claim £2,500 a year per apprentice while individuals complete their apprenticeship and a £3,500 achievement grant on successful completion of their full apprenticeship. Apprentices that go on to complete their apprenticeships can look forward to wage returns and more secure employment.

I gently remind my hon. Friend the Member for Portsmouth North that the Chancellor set out in the Budget that the apprenticeship minimum wage will increase by 18% from April 2025, from £6.40 to £7.55 per hour. The median annual earnings for apprentices achieving a level 3 apprenticeship in the construction, planning and built environment sector in 2015-16 were £21,730 one year after studying, rising to £29,620 five years later. We will ensure that many more apprentices, including those in key trades, see those benefits in the future.

As my hon. Friend mentioned, small and medium-sized enterprises are a key area of interest. They are a driving force in the construction sector, playing an important role in providing local opportunities to young people, and we provide a range of financial support to help them to take on apprentices. For non-levy paying employers—they are likely to be smaller employers—we pay 100% of the apprenticeship training cost for young apprentices aged 16 to 21. We also provide £1,000 to employers when they take on apprentices aged under 19, in recognition of the additional support that younger apprentices may need when entering the workplace. Employers can choose how best to spend that, and they are not required to pay anything towards employees’ national insurance contributions for apprentices up to the age of 25.

I strongly encourage any young person to consider a rewarding career in the trades, whether that is as an electrician, scaffolder or plasterer. My hon. Friend the Member for Peterborough spoke so passionately about apprenticeships being an excellent entrance to jobs and occupations. It is a brilliant route for young people, and I could not agree with him more. The Government are really ambitious for young people, where it is right for them, to pursue apprenticeships, and it is our job to make sure that we give them every opportunity to do so. This Government are about breaking down barriers and ensuring that young people have those opportunities.

The Government have an ambitious plan for rebuilding Britain. We have committed to building 1.5 million homes in England to ensure that people have access to quality housing, and skilled trades are absolutely necessary if we are going to achieve that target. We are working closely with industry to ensure that we have a skilled workforce to deliver that commitment. Last month, we announced a £140 million package of industry investment to create 32 home building skills hubs in areas that need more housing. The hubs are an example of how sectors can use existing flexibilities to solve skills shortages and support growth. They will make use of existing flexibilities in our apprenticeship system to deliver fast-track home building training and apprenticeships for skills in critical demand for home building, including groundwork, site carpentry and bricklaying. The Government are committed to building on that type of innovation.

I am enormously grateful for the support that my hon. Friend the Member for Portsmouth North has given this agenda today and for all the very significant and relevant contributions. The hon. Member for Wokingham spoke about his local area and the support that is needed. He emphasised the decline in many of the apprenticeships that are needed for young people, and he asked for a meeting. I invite him to write in and I will endeavour to ensure that my noble Friend, Baroness Smith, will have a meeting for that very important discussion.

Hon. Members have raised some important concerns about skills shortages in critical trades, and about the perception of careers in those vital occupations. I am grateful for the considered contributions of everyone who has spoken. It is clear that there are widespread skills shortages in vital industries, such as construction. We will all need to benefit from young people being in those jobs at some point or other in our lives, and it is especially needed for our country when we are looking at growth. I have set out today how we will begin to tackle this issue, starting with the establishment of Skills England and by developing a more flexible and levy-funded growth and skills offer. Those actions will support employers and learners across the country in accessing high-quality skills training.