Apprenticeships

Lord Young of Norwood Green Excerpts

Thursday 14th March 2013 Lords Chamber

[Lord Young of Norwood Green]

My Lords, I thank the Minister for repeating the Statement. However, we cannot help feeling that this is another lost opportunity on the Government’s part. On one level, we do not challenge their commitment to apprenticeships as they have certainly tried to drive up the number. However, there is a danger in going for volume without ensuring that the quality is sustained, as was mentioned in the Richard report. One of the things the Government are doing, which we welcome, is making sure that apprenticeships are real jobs lasting for a minimum of one year. That has not been happening over the past few years and some young people have been exploited and have not gained a proper qualification, so that step is a welcome improvement. However, is it enough in the current situation of very high youth unemployment, which must concern us?

I welcome another matter that the Government have addressed: namely, that the retraining of older employees will not be badged as apprenticeships but will be proper retraining, as it should have been. However, we are concerned that fewer than 10% of employers in this country employ apprentices. That is not an easy problem to solve but it requires determined, imaginative action from the Government, which we do not believe they have shown in their response to the Richard review. Yet again, they have ducked the Select Committee’s recommendation that every government procurement contract should contain a commitment to apprenticeships.

This week is National Apprenticeship Week, which we initiated when in government. It is a worthwhile event which celebrates the importance of apprenticeships. When I attended the Crossrail apprenticeship awards ceremony, I could not help reflecting that its 400 apprenticeships came about because the previous Labour Government had insisted that they had to be an inherent part of its contract. That applied not only to Crossrail but to the Olympics, where we managed to establish 300 apprenticeships. I have yet to receive a satisfactory response from the coalition Government on why they will not make apprenticeships a requirement of public procurement contracts. If they want to send a signal about their commitment to employers, surely they should insist that apprenticeships are part of any public contract.

There are also lost opportunities in relation to the Richard report. He wants his recommendations to be taken as a whole rather than as a “pick and mix”, which the Government have tended to do. I know that they say they will come back to it, but the real concern is that time is marching on and the need is there now. For instance, on supporting small businesses, we know what some of the successful measures are in terms of SMEs. We know that getting them together to be part of group training associations or hubs that encourage small businesses to take on apprentices works. Why have we still not got apprenticeship schemes in every school, college and university? If you want to signal that apprentices are a necessary part of their environments and that there are real opportunities, getting those organisations to take on apprentices would be a first-rate example.

I hope that in her response the Minister will tell us exactly how the Government will increase the pathetically small number of employers who take on apprentices. The record of FTSE 100 companies is not much better—only about one-third of them do so. This remains a lost opportunity and the Government are not making real and determined efforts to ensure that an apprenticeship will be available for all those young people who want one.

We know that demand enormously outstrips the supply. I have previously cited the example of BT; for 300 apprentice places—although the figure may have increased—there were some 25,000 applications. It is harder to get a BT apprenticeship than it is to get into Oxford or Cambridge. We remain in that situation because, first, we are not providing an example through government procurement contracts and, secondly, we do not have a determined drive to ensure that more companies take on apprentices.

Some local authorities are doing well, but why are not all local authorities having apprenticeship drives? Why do not all local employment partnerships ensure that apprenticeships have to be an inherent part of their programmes? The noble Baroness can cite a large figure of 500,000 apprenticeships—I have said that there are problems about their quality—but that is not enough if one looks at the participation rate of companies. I still go around talking to employers who seem to have little or no idea that they could, to their benefit, take on apprentices. The Government need to do a lot more and ensure that every school has links to the business community. They need to ensure that apprentices go back into schools and colleges to give out the message on how good apprenticeships are.

At a meeting of the All-Party Parliamentary Apprenticeships Group, attended by about 30 young apprentices, I asked them, “How many of you were advised by your teachers in your school to take up an apprenticeship?”. About two hands went up; the vast majority of young people are still being propelled towards the academic path. There is nothing wrong with that, except that it is not suitable for them all. The guidance that is given in schools and colleges is still nowhere near good enough. If you want to improve that situation, you have to make sure that there are links to the business community. It would not harm primary as well as secondary schools to do that. When young people see apprentices coming back to the school, saying what a great experience an apprenticeship is and how it has changed their lives—how they can earn while they learn—it is one of the most powerful messages that they can get from people who were part of their peer group.

I look forward to the Minister’s response. I have a whole range of questions that I should like to put to her on the Richard review. Will she confirm whether the Secretary of State for Education will provide funding to deliver improved awareness in schools of apprenticeship opportunities, as recommended by the Richard review? What measures does Secretary of State for Education intend to take to ensure that apprenticeships are properly promoted in schools? What measures does the Minister intend to take to support smaller businesses to engage with the apprenticeship system?

We should not have to wait yet another six months or so. There are easy options, some of which I have described, that the Government could be taking now. Concepts such as group training associations are nothing new—in fact, the National Apprenticeship Service should be driving them—but more determination on the part of the Government is needed. They should give out a very positive signal that if you want a government contract, you have to commit yourself to taking on a number of apprentices. If the HS2 goes ahead—I hope that it does—one would need only one apprentice for every £1 million of investment to generate some 33,000 apprenticeships. That is a sobering thought, but it will not happen unless it is made an absolute requirement. There could be so much benefit. If one considers what Crossrail did, how it engaged with its contractors and SMEs and got them to take on apprenticeships, one can see the benefit of that approach.

I still think that the Government’s response to the Richard review is a lost opportunity and I look forward to the Minister’s response.

[Baroness Garden of Frognal]

I thank the noble Lord for his reply. I am sorry that in parts of it he was rather more negative than he usually is on this subject. However, I pay tribute to him and to his Government for what they did to revive the apprenticeship scheme in their time, and we are building on that and taking it forward.

Perhaps I may take up some of the noble Lord’s questions. He mentioned the high level of youth unemployment, which is mercifully coming down, although not fast enough. Of course, we have a revitalised apprenticeship programme, which, alongside an employability skills programme, will help young people to take up opportunities. We also have the traineeship programme in place, and that, too, will be of assistance to young people in getting back into employment. National Apprenticeship Week is certainly a great success. It is raising the profile of apprenticeships this week and has gone from strength to strength. It was interesting to see that the apprentice of the year was a young woman engineer at British Aerospace. She is obviously doing an awful lot for gender equality in STEM subjects, as well as personally raising the profile of all the good things that apprenticeships can do.

The noble Lord mentioned, as he has done before, public procurement and having a set number of apprenticeships for every public procurement exercise. Of course, we support the appropriate use of public procurement to promote the take-up of apprenticeships, but under EU law we cannot make contracts conditional on hiring workers or apprentices, so the Government leave—

[Lord Young of Norwood Green]

We did not find that to be a problem. That was said to me when I was a Minister, yet we challenged it and were able to bring about those apprenticeships. I am just asking the Minister not to accept that. We have never called for a set number of apprenticeships, although there are various formulae. I find what the Minister says regarding apprenticeships being part of a public procurement contract incredible. I had exactly the same response but we challenged it and were able to bring about apprenticeships with Crossrail and the Olympics. I urge the Minister and the Secretary of State to challenge that and to show determination.

[Baroness Garden of Frognal]

I note what the noble Lord says. Obviously we try to encourage firms to take apprentices, but we use that route rather than making contracts conditional on it. However, I know of the success of the Crossrail apprenticeship scheme and how well that worked.

The noble Lord mentioned awareness of apprenticeships, and that links into careers information, advice and guidance, which of course is now statutory in schools. As part of that, they now have to give information about apprenticeships as well as about higher education and other opportunities. We have recently heard the Prime Minister reiterate that it should now be the norm for young people to go into either higher education or an apprenticeship, so we are putting a great focus on that. One of the things that Ofsted will monitor in schools is how well careers information, advice and guidance is delivering that aspect of opportunities for young people. The noble Lord is absolutely right: there is a real issue concerning the number of young people, parents and employers who are aware of the range of opportunities that are available. The more publicity we can get for this programme, the more we will be able to engage all those parties in seeing the benefits of apprenticeships for all.

We know that apprentice alumni go back into schools. Obviously there is not a particularly co-ordinated programme but we are aware that it happens and that it can be extraordinarily effective. Any former pupil going back into a school to talk with enthusiasm about what they are doing is a tremendous motivator for the next generation, and we will certainly do what we can to encourage that.

Of course, apprentices have to be in a job. So far as concerns insisting that schools, colleges and so on take on apprentices, it is important that a job is identified for them beforehand. Again, there is an ongoing programme of raising awareness and of making the opportunities available.

The noble Lord talked about the links between businesses and schools. We know that these are absolutely crucial, and work is ongoing in this respect. We are not waiting six months for any of this to happen; it is all ongoing at present. Discussions take place between employers and education providers—schools, businesses and higher education—to make absolutely sure that employers are aware of the benefits of having apprentices and that young people, and indeed adult returners, are aware of the possibilities of apprenticeships.

Going back to careers information and guidance, Ofsted will have a review in the summer to assess just how well the delivery of apprenticeship careers advice is going. We will keep a monitoring eye on that.

The noble Lord mentioned demand outstripping supply and a number of cases where the extremely efficient apprenticeship schemes are hugely important. He said that time was marching on but we are now taking action. I hope that the Opposition will see that in many ways this is a cross-party initiative. As I said, we are building on the work that his party did in government, and we hope that we will be able to take it forward so that it becomes a very exciting and vibrant programme.

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[Baroness Garden of Frognal]

I apologise if I gave the impression that the heritage industry was small. I was trying to make the point that many of the component parts of it are very small. The noble Lord is absolutely right that it is a very important part of tradition and, of course, of the tourist industry, to which it makes a great contribution. However, it is much more important than that, too: it includes a very diverse range of skill and work areas and it is vital that we do not lose sight of these.

[Lord Young of Norwood Green]

My Lords, I will take advantage of the fact that we have not exhausted the time. This is a really key issue. I apologise if I sounded negative. I do not want to be negative but just want to get the Government to recognise the size and scale of the problem. Even though the Minister says that youth unemployment is coming down, as I am sure she knows, in some parts of the country it is not and the levels are very high, so I want to try to inject a sense of urgency into the situation.

The Minister did not really respond to the point that I made about there still being only a very small number of businesses participating in apprenticeships. What positive steps are the Government going to take? For instance, addressing the very worthwhile point made by the noble Lord, Lord Cormack, about heritage craft skills, the difficulty with those small businesses—sometimes it is just one person on their own or a small group—is, first, that they face what they see as an administrative burden and, secondly, that they worry about whether they can carry an apprentice and create that job. That is why, again, they need to be encouraged to create their own little hubs and group training associations, where some of that administrative burden can be shared.

I am critical because, as I have said, there is a danger that in the first attempt we are driving up volume rather than quality as well, although that is being addressed, which I welcome. Interestingly, one my noble friend Lord Grocott’s point, I met a young apprentice accountant as part of the Crossrail scheme. When we talk about apprenticeships, we seem to forget that what they involve is much more wide-ranging than manual skills: there are over 200 apprenticeship frameworks. We have gone well beyond what used to be regarded as the traditional route. In relation to the higher level—

[Earl Attlee]

My Lords, I think the House has been very tolerant. The noble Lord is speaking in Back-Bench time.

[Lord Young of Norwood Green]

I did wait to see whether there were any further Back-Bench speakers and there were not, so I took the opportunity. If there are any, I will give way. However, as there are not, I will just use the opportunity that we have.

On higher-level apprenticeships, again, there is a view that it is an either/or choice: you either take an apprenticeship or you go to university. However, it should not be an either/or choice because, as we know, higher-level apprenticeships can lead to university degrees. I will end on that.

[Baroness Garden of Frognal]

I was in no way complacent about youth unemployment. We all know that it is a disastrous start for many young people if they cannot get into a job and into work when they finish their compulsory education. The noble Lord mentioned getting employers more involved. There is now, for instance, a £1,500 start-up to help SMEs get their first apprenticeship scheme going. We have seen 6,800 starts between February and October 2012, and there are a further 12,100 in the pipeline.

As for small and medium-sized enterprises, an increasing number of employers are coming on board and taking on apprenticeships. As for the larger firms, discussions are ongoing with some of the major firms that take significant numbers of apprentices. The noble Lord mentioned BT. There is also BAE Systems and Rolls-Royce. Some very large firms have extraordinarily well established apprenticeship programmes, and the Government are in constant dialogue with them to try to ensure that best practice can be passed on and that it is made as easy as possible for employers to take on apprenticeships. One of our other challenges is to reduce the bureaucracy so that there are no unnecessary disincentives to employers taking on apprenticeships. Of course, more work needs to be done, and we very much look forward to the results of the consultation and to ensuring that we take that implementation forward in the autumn.