Apprenticeships: SMEs

Michelle Donelan Excerpts

Thursday 13th February 2020 Westminster Hall

[The Parliamentary Under-Secretary of State for Education (Michelle Donelan)]

I congratulate the hon. Member for Slough (Mr Dhesi) on securing the debate. I warmly welcome his keen interest in apprenticeships and am particularly grateful for his work to celebrate local apprenticeships last week, which, as he pointed out, was National Apprenticeship Week. I believe that he visited a number of his constituents, including those completing apprenticeships in companies such as KFC. As he kindly highlighted, last week was a fantastic opportunity to bring the whole apprenticeship community together and shine a spotlight on how amazing apprenticeships are for social mobility, for our economy and for moving people forward.

It is fantastic that more than 8,000 people in Slough alone have started an apprenticeship since 2010, and that is over a range of areas, ages and sectors within Slough’s community. The hon. Gentleman may also be aware of a Slough-based company called Resource Productions, an SME that does an excellent job working in the film industry, with clients such as Disney and Pixar. Dominique Unsworth is its CEO and also a Government SME apprenticeship ambassador. Her work is vital in order to connect more SMEs with apprenticeships. She has recognised just how important it is to employ apprentices and spread that message. I am pleased to note that, at Ms Unsworth’s request, the National Apprenticeship Service is hosting an event with Slough Aspire on 31 March. If I am still in post, I shall try to come along, and I am sure that the hon. Gentleman will also attend.

As was pointed out, this is the second debate on apprenticeships this week. The first focused on the effectiveness of the apprenticeship levy. We should not forget that the apprenticeship levy funds apprenticeships for employers of all sizes, including SMEs that do not pay the levy. The Government recognise the need to ensure that our programme delivers for employers of all sizes—I know that that point was laboured by the hon. Gentleman and by other hon. Members. For that reason, we are making changes to benefit small employers, so that they can get the most out of apprenticeships. In fact, last month, we began to transition small employers that do not pay the levy on to the digital programme, which was mentioned. I will promise to meet the hon. Member for Slough so that we can look at the portal together to address some of the issues that he raised.

We are providing additional funding that will allow up to 15,000 more starts in the first three months of this year with smaller employers. That marks the start of the transition of smaller employers to using the apprenticeship service, allowing us time to listen to their feedback and time for smaller employers to become more familiar with our approach. We have already seen them take advantage of that in relation to early years education, pharmacy work and so on. The change will give employers a real choice of high-quality training provision and the opportunity to become more engaged in the process, as not having that has been one of the criticisms to date. Smaller employers will have access to a larger pool of training providers to deliver training that meets their needs and supports growth in their sector. To ensure that the transition is as simple and easy as possible for employers, we have worked with SMEs to test the service and have engaged with a range of employers and providers, acting on their feedback and instigating improvements.

We recognise that SMEs provide many people with their first step on to the career ladder, and we want to ensure that neither younger people nor smaller employers are denied the opportunity to participate in apprenticeship schemes. That is precisely why we provide £1,000 to both employers and training providers if they take on somebody aged 16 to 18. We know that younger people can face additional challenges in starting and applying for apprenticeship schemes. Social mobility is something that I am particularly focused on ensuring that we do better on, as is driving up the number of young apprentices on schemes, which the hon. Gentleman mentioned. We also pay 100% of the cost of training for the smallest employers—those with fewer than 50 employees—for that age group. Last month, we extended the use of levy transfers to cover the full cost of training for 16 to 18-year-olds and for receiving employers with fewer than 50 employees, helping more small employers to support apprenticeship starts.

We are proud to have launched, in January, the third phase of our Fire It Up campaign, which is aimed at changing the way people think about apprenticeships by demonstrating that they are an aspirational choice for anyone with passion and energy, and that they can enable them to go so very far.

We are ensuring that the message of apprenticeships is being heard in schools. That was touched on in the debate earlier this week. The National Apprenticeship Service has developed Amazing Apprenticeships—a website and resource portal for schools and teachers. Meanwhile, our Apprenticeship Support and Knowledge project is ensuring that teachers can promote apprenticeships to their students and have information available.

Just like the hon. Gentleman, we want more people to be able to benefit from the positive changes that we have made to apprenticeships, and across sectors—a point raised by the hon. Member for Birmingham, Perry Barr (Mr Mahmood). I want to let him know that 200 of the 510 standards are for construction, engineering and manufacturing, and they have been designed in conjunction with businesses. That pool is growing all the time.

[Mr Khalid Mahmood]

I appreciate what the Minister has said, but the central question is this. When these apprenticeship training schools or colleges are set up, the capital support that they need for the equipment is more important. Will she look at that?

[Michelle Donelan]

I thank the hon. Gentleman for his comment. IfATE does evaluate the cost of putting on each apprenticeship scheme, and I regularly meet its representatives. In fact, I met them this week. I know that it is their priority for this year to look at the budgets that they set per standard.

The hon. Member for Kingston upon Hull West and Hessle (Emma Hardy) mentioned the question of money, and whether we had originally anticipated that all businesses would use all of the fund. We do not and did not anticipate that all businesses that paid the levy would need or want to use all the money; but we have put them in the driving seat to ensure that it works for them and their individual business model. We have been pleased to see the number of businesses that have transferred some of their unspent money to support smaller businesses within their supply chain.

The apprenticeship levy means that more money is available than ever—a big point to labour. This year we have increased available investment in apprenticeships to more than £2.5 billion—double what was spent in 2010-11 in cash terms. Our reforms mean that apprentices starting apprenticeships today benefit from apprenticeships that are of higher quality. Apprentices now receive substantial and sustained training, with their apprenticeships lasting a minimum of 12 months and featuring 20% off-the-job training and an assessment at the end.

We are pleased that the new apprenticeship standards across all levels are being designed and driven with industry, because they have to work for the employers. In fact, starts on standards represented more than 63% of all starts reported in 2018-19, showing that employers are already making the switch.

Quality is key. Today we have talked a lot about quantity and access, but we did not labour the point about quality. That is a priority of the Government, and has to be a priority for the businesses that the apprentices feed.

[Alan Brown]

On quality, will the Minister address the point about ensuring that when companies take on apprentices, there is a long-term future for them? What are the Government doing to ensure that there is not a continual churn of apprentices, as companies may use them to fill short-term labour gaps?

[Michelle Donelan]

Of course, an apprenticeship is a job. We want to ensure it stands out on any CV as a gold standard, lasting that apprentice throughout their career, whichever employer they go to in the future. Longevity within companies is important. I am happy to meet the hon. Gentleman to discuss how we can better foster the retention of apprentices. Our data to date is extremely promising.

To ensure that apprentices receive a high-quality training, we have strengthened the register of apprenticeship training providers. Any provider that receives an inadequate Ofsted assessment for apprenticeships will be removed altogether from the register. We realise that we must go further to ensure that these opportunities are accessible to people from all backgrounds, whether they are starting a job or progressing in their career.

Small and medium-sized enterprises, most of which do not pay the apprenticeship levy, are integral to our economy, as was mentioned. The hon. Member for Kilmarnock and Loudoun (Alan Brown) mentioned Government procurement. That is an essential issue. In the December 2019 Conservative party manifesto, we committed to a significant number of apprenticeships in every big infrastructure project that this Government undertake. In the next year, thousands of smaller employers will transition to the apprenticeship service, giving them more control over their apprenticeship needs.

We are listening to the concerns of businesses, including SMEs, about the apprenticeship levy, and we are committed to ensuring that the apprenticeship programme continues to provide opportunities for people of all backgrounds, fulfil the needs of employers of all sizes and deliver for the economy more broadly. I thank the hon. Member for Slough for highlighting apprenticeships in this debate and encouraging further focus on SMEs as we continue to improve the apprenticeship system. I assure him that we will continue to listen to all stakeholders, including SMEs, to ensure that the apprenticeship system works for everyone.