Small Business, Enterprise and Employment Bill

Lord Young of Norwood Green Excerpts

Wednesday 14th January 2015 Grand Committee

Moved by

[Lord Young of Norwood Green]

35L: Clause 38, page 36, line 8, at end insert—
“( ) duties to require an appropriate number of apprenticeships.”

[Lord Young of Norwood Green (Lab)]

My Lords, first, I apologise for not being here for the earlier part of this debate but I was detained at another meeting. I want to focus on what I think your Lordships know is one of my abiding interests: how we can create more and better-quality apprenticeships, and ensure that the demand for them is sustained and encouraged in our educational establishments.

I have raised on numerous occasions the question of ensuring that apprenticeships should be a natural part of the process of procurement in public service contracts. In my brief ministerial career, I remember encountering some suggestion that this could not be done for legal reasons. Nevertheless, we proved that it could. If the Minister has not already been to see Crossrail, I extend an invitation to her to go and have a look at what it is doing. It is a first-class example of a company in that, when we engaged in negotiations at an early stage of that contract, we got a commitment that it would recruit up to 400 apprentices. Actually, it has gone beyond that number. What is as interesting as the numbers involved is how it has gone about it. It has encouraged every company in its supply chain to adopt a very positive and constructive attitude towards the creation of apprenticeships. These are of good quality, they cover a wide range of occupations and the gender balance is pretty good. If noble Lords get the opportunity to attend an apprenticeship graduation ceremony, when the apprentices who have done best in their areas are acknowledged, it is something worth doing. That is an example of best practice.

I have tried to ensure that the amendments I am speaking to, from Amendment 35L to Amendment 35W, are coherent in their approach. I shall focus on local employment partnerships. Many public procurement contracts will derive from local authority activities and, after all, since local employment partnerships are a government creation, they ought to contain within their objectives the development of an apprenticeship strategy with appropriate objectives and a consequent annual review. I am interested to hear the ministerial response to this idea. It seems to me that if local employment partnerships are to continue, and I suspect that they probably will, part of their raison d’être ought to be the creation and sustaining of apprenticeships.

Building links with all the educational establishments, be they schools, colleges, university technical colleges or universities, is fundamentally important. Some of these institutions are already doing this, but the record is still very patchy. What are we trying to achieve? I have debated apprenticeships with the Minister a number of times and although the Government are keen to quote the large figure of 2 million, my response to that is not to criticise their ambitions and the work they have done in this area, which includes such things as Trailblazer apprenticeships, but just to get some perspective on it. My perspective is that if we look at the breakdown, many are in the area of adult apprenticeships: I think it is 50%-plus. Our concern should be that we have seen some decline in apprenticeship numbers in the younger age ranges.

That is one area of concern that we are trying to address. Another is that it is still quite a small number of companies that recruit and employ apprentices. The figures vary a bit depending on where you go, but if it hits one in five we are lucky. If we look at the FTSE 100, it is still only about a third. We are trying to create a climate in which we encourage more companies to participate. There are opportunities to do that. If we look at best practice, it is interesting that when I went round some universities and talked to them about apprenticeships, the reaction of some was an almost puzzled response. Then you pointed out to them the sorts of occupations concerned and the fact that some significant employers take on apprentices, and the universities realised that they needed to be involved. They also need to be involved, as many of them are, in encouraging entrepreneurship and the creation of small businesses.

--- Later in debate ---

[Lord Young of Norwood Green]

I thank the Minister for her response and all those who have participated in this debate. To address some of the points that were made, it certainly is not our intention to put off smaller companies in any way. I am always puzzled by how we think that training and apprenticeships are to take place: is it always the responsibility of some other company? My experience tells me that, when you finally succeed in encouraging the smaller and medium-sized enterprises to employ and recruit apprentices, the feedback is very positive indeed, on both sides. The deterrent is usually that those enterprises have not done them previously or that they are worried about the administration costs et cetera. We are fully aware of that. If we are trying to create a climate in which we increase the number of companies participating, we have to start somewhere. Is this amendment an unreasonable proposition? We do not believe that it is, which is why I quoted the example of Crossrail; I could have quoted the Olympic model as well, which was another success story. There were no legal barriers in those examples.

The noble Lord, Lord Hodgson, said that his experience was that young people are put off apprenticeships because they see them as time-based qualifications. I am puzzled if they are put off. The example I usually give—I will give it again—is of BT. I forget what the current figure is, but it is probably about 500 apprenticeships and 25,000 applications. I do not think that that sounds like young people being put off because they see it as a time-based qualification. Anyway, apprenticeships these days are not as long as the seven-year type of thing that they used to be; they are shorter and more honed. They have a lot of attraction for young people, who look down the more conventional academic route and see the costs of that against the ability not only to earn while they learn but to impress their employer with their enthusiasm and capability. We know that the demand is there on both sides. We need more people to go into industries such as manufacturing, construction and science.

I do not believe that anything we are suggesting would increase the amount of red tape. How it is done is important. It should accompany what the Government are doing; we see it as an intrinsic part of developing better participation. Of course, we need to see what the track record is. Surely we should be able to ask ourselves why some local employment partnerships and local authorities are so much better than others at encouraging the creation and development of apprenticeships. We will be able to do that only by collecting some statistics. I do not see that as a huge burden going back to small businesses. After all, some of this information is being collected anyway. Therefore, I really was not convinced by the ministerial response to that.

As we are currently in Grand Committee, I will withdraw the amendment but with a view to possibly returning to this issue at some stage. I thank the Minister for her response and beg leave to withdraw the amendment.

Amendment 35L withdrawn.