Apprentices: Financial Support

Robert Halfon Excerpts

Wednesday 8th March 2017 Westminster Hall

[The Minister for Apprenticeships and Skills (Robert Halfon)]

I congratulate the hon. Member for Luton North (Kelvin Hopkins) on securing this debate. I met him briefly in passing in the corridors of the House last week, and I said I was pleased that he had put in for and got this debate in National Apprenticeship Week. He has an unrivalled knowledge of apprenticeships, skills and further education, and he made a significant contribution to the Technical and Further Education Bill as it went through the House.

I will come on to the issues that the hon. Gentleman raised, but he will know that in his constituency, apprenticeship starts increased by 19% over the course of the previous Parliament, which I am sure he welcomed. Overall, apprenticeships have increased to 900,000, which I think is the highest number on record. He raised a number of issues that I would like to touch on, including resource, equality, the skills deficit, wages, the cost of living—the shadow Minister also touched on that—social mobility and social justice.

Before I start on all those things, the shadow Minister mentioned some of the things he has been doing in National Apprenticeship Week, which is a wonderful week to celebrate apprenticeships. It is very important as one of the rungs on the ladder of opportunity is increasing the prestige of apprenticeships and skills. It goes back to what the hon. Member for Motherwell and Wishaw (Marion Fellows) was saying: unless we increase the prestige of skills, we will have the situations she described.

I met incredible apprentices and young people learning skills at Bridgwater and Taunton College. One was learning to be a luthier to fix violins. EDF apprentices are helping to build Hinkley C. I met older apprentices, including a 47-year-old apprentice who was working for EDF. I met lab technicians doing apprenticeships. I asked to meet the Premier Inn apprentices in the hotel where I was staying in the first two days of my travels around the south and south-west. They were young 23-year-olds doing level 3 or level 4. One was very young and had already become an operations manager. I pay tribute to all those organisations, including the excellent college, the Premier Inn, Sunseeker—I went to visit its apprentices in Poole—EDF Energy and Hinkley Point, and I pay tribute to all the other apprentices I have met so far during National Apprenticeship Week. They show the best of apprenticeships.

The shadow Minister is right that we need to make the distinction between apprenticeships and apprentices. I often get told off for using the word “apprentices” rather than “apprenticeships”. He is looking at the individual, and that is very important. I am glad to see that almost everyone in the Chamber is wearing the new apprentices badge, which we have launched as part of the ladder of opportunity. We believe that apprenticeships offer young people that ladder of opportunity to increase the prestige, to meet our skills needs and to help those with social disadvantage to ensure that we get the jobs, security and prosperity that we need.

[Official Report, 20 March 2017, Vol. 623, c. 9-10MC.]The hon. Member for Luton North said we were not resourcing apprenticeships, but I take issue with him on that. By 2020 apprenticeship spending will have increased to £2.5 billion, almost double what it was in 2010. We have introduced a levy not only to change behaviours but to make sure we have funding for big businesses and small businesses to have apprentices.

[Kelvin Hopkins]

I thank the Minister for giving way. It is a pleasure to listen to him speaking. I said in my speech that the Government have made some moves but not enough. The outcome will be successful if we achieve the number of apprenticeships, trained apprentices and skills that we require for our economy. If that works, what has happened will be enough, but I suspect it is not yet really enough.

[Robert Halfon]

The hon. Gentleman is absolutely right. One of the rungs on the ladder of opportunity is widespread quality provision, which I will come on to. Although we have a huge amount of work to do—and the work is never done—statistics show that roughly 90% of apprentices get a good job afterwards, often in the place where they did their apprenticeship, or go on to additional education, which they may not otherwise have thought of. That is a pretty good sign of the way things are going, but I do not deny there is a lot of work to do.

Within the funding framework, millions of pounds go to employers—I could list them all here—and providers. Special help ensures we do everything possible to incentivise SMEs to take on 16 to 18-year-olds, and they pay no training costs if they have fewer than 50 employees. Huge amounts of money are spent on trying to encourage businesses, employers and other organisations to take on apprentices with learning difficulties and disabilities. Amazingly, in the construction industry, 10% of apprentices have disabilities. I was astonished when I first saw that statistic, which is a credit to the construction industry and shows that the things we are trying to do in terms of incentives for the trainer, provider and employer are having an effect. Given the funding pressures that the country faces, the money that is going into apprenticeships is a significant amount and it is something I strongly support.

The hon. Member for Motherwell and Wishaw said the Select Committee went to Gateshead College, which is an incredible and outstanding place. I went there a few weeks ago as part of the industrial strategy launch. The college embeds careers advice in every single part of the course. It does huge amounts of work for LDD apprentices and huge amounts of work to encourage people into apprenticeships. It is an outstanding college that does a lot of work on mental health. I am glad the Select Committee visited, and our job is to find out how to replicate what the college does across the country.

[Dr Poulter]

My right hon. Friend is right to outline the great successes of the expansion of apprenticeships across the country. I am sure he recognises the challenge of helping people from poorer and less privileged backgrounds into apprenticeships. Can he outline what steps the Government are taking to improve that situation?

[Robert Halfon]

I promise to answer my hon. Friend’s question, but I hope he does not mind if I answer it later because I want to deal with the points made by the hon. Member for Luton North, who initiated the debate. My hon. Friend raises an important issue. One of my key motivations in my job is to make sure that people from disadvantaged backgrounds can have the same equality of opportunity as everybody else, but I will come on to that in a minute.

[Marion Fellows]

On the question of careers, I met careers advisers and the students who talked to them. I think the Minister should address pre-college and what happens in schools to encourage children and schools to look at alternative academic progression.

[Robert Halfon]

The hon. Lady spoke thoughtfully in a previous debate on apprenticeships in this Chamber. She is completely right. I ask every single apprentice I meet—I have met a few thousand since being in post—“Did you get any apprenticeship or skills advice in your school?” and nine times out of 10 they did not. If they say yes it is usually because they have been to a university technical college or a place that specialises in technical work. That is depressing. I have mentioned before the story that Gateshead College told me about its own degree apprentice students and how the college was not allowed to talk to them about apprenticeships in their schools. It was the same with Heathrow airport and other apprentices I have met. That is shocking. We are reviewing our careers strategy and hope to publish a serious careers strategy in the coming months. We want it to be more focused on schools, and we are looking at the best way to incentivise schools to teach students about apprenticeships and skills, as not enough are doing that.

Women apprentices have been mentioned: 53% of apprentices are female. A survey showed that female apprentices earn more than men, so I do not accept the wage disparity point. However, very few do STEM subjects. If I go to a college that teaches healthcare, the room will be filled with mostly females and there might be one or two men, which of course is fantastic. If the subject is engineering or electrical, it is all men, and that has got to change.

There are enlightened employers. Among the Jaguar apprentices at Warwickshire College, 20% are women. There are lots of other examples of good employers and we need to encourage them, but a lot of that comes from careers advice in schools. I was told by one student yesterday that when they were given careers advice they were shown pictures. All the pictures of engineering jobs showed men and the nursing picture had a woman. That is why we face a problem. It is a cultural problem in our country, and schools need to do a huge amount more to promote apprenticeships. We are doing an enormous amount of work on that. We strongly welcome the Baker amendment, which the hon. Member for Blackpool South (Gordon Marsden) highlighted, because that will make it law that schools have to accept careers advice from further education and apprenticeship providers.

The hon. Gentleman said we were not doing enough on quality. Again, I take issue with that, although we have had a problem in the past. There were too many qualifications and an apprenticeship could mean anything. I remember speaking to people at a hotel. I said, “Have you got apprentices?” and they said, “Yes, we have got apprentices. In fact, we have a few in the kitchen who are here for a few weeks.” They were perfectly lovely people who genuinely believed they had apprentices. We have changed the situation and changed the legislation on apprenticeships. An apprenticeship has to be for a minimum of a year. Apprentices I met yesterday were doing two, three and four-year apprenticeships. They have to spend 20% of their time in training.

We have moved from frameworks to standards—we have had many discussions about that—because of the spaghetti junction of frameworks and qualifications. We have moved to standards that are primarily employer-led. From the beginning of April, subject to progress on the Bill in the Lords, the new Institute for Apprenticeships and Technical Education will design the new standards and training for apprentices so that employers will be given what they need, which has not necessarily happened in the past. Degree apprenticeships are not only about prestige, but quality. The Premier Inn apprentice I met yesterday is 23 years old. Having done levels 2 and 3 with the company, they were going on to do a level 4 and level 5 degree apprenticeship. That will transform the quality and prestige because it shows that apprenticeships are really serious and go up to different levels. They will offer students—again, as the hon. Gentleman rightly pointed out—an amazing chance to get a degree and earn while they learn. They will have no student debt and will be virtually guaranteed a job at the end of it. That is the future. That is what we need to encourage our young people to do.

When I visited Tyneside, I spoke to Accenture, which has degree apprentices, some of whom do not even have their GCSEs yet, doing coding. I said to Accenture, “How do you choose the people?” and it said, “It is attitude, attitude, attitude.” It offers people from disadvantaged backgrounds a chance to get a serious degree apprenticeship.

The hon. Member for Luton North rightly talked about the skills deficit. I have acknowledged countless times that we are way behind other OECD countries. Our skills deficit is a long-standing problem, and we highlighted it in the industrial strategy we announced a few weeks ago. That is why we put money into STEM apprenticeships and increased the frameworks by between 40% and 80%. We pledged £170 million to create the new institute of technology colleges and £80 million to set up national colleges focusing on nuclear, digital and the creative industries to try to change the skills base. We created an employer-led qualification to ensure that apprentice standards provide the skills that employers need. Through the Sainsbury reforms, which will be rolled out from 2019, every student aged 16 will be able either to continue with a traditional academic education, or to go down a state-of-the-art, prestigious technical and professional educational route. We are doing everything we can to address the skills deficit that the hon. Gentleman rightly highlights.

[Kelvin Hopkins]

I agree absolutely with what the Minister says about the importance of raising skills in STEM subjects in particular, but is it not the case that the failures are lower down in the school system, rather than at the further education or apprenticeship level? Is he saying to his colleagues in education that we have to do as much as possible to ensure that when youngsters reach the age of 16, their mathematics skills in particular are sufficiently good to make them useful apprentices and eventually good employees?

[Robert Halfon]

The hon. Gentleman is right, and he has highlighted that issue previously. My right hon. Friend the Minister for School Standards is resolute on high standards. They are his passion. I work with him and I know he is doing everything possible to ensure that students have the right qualifications in maths and English by the time they leave school. We are looking at things such as improving functional skills post-16. As I say, we are putting our money where our mouth is. We are investing in the new institute of technology and the national colleges. The Sainsbury reforms are being rolled out, and we are investing in STEM apprenticeships. We are trying to undo a 20 or 30-year skills deficit caused by Governments of all persuasions and employers not investing in training and producing the skills that our country needs.

It is important to highlight a few points about wages. The apprentice wage is £3.40 and will go up to £3.50 in April, but 82% of apprentices are paid more than the national minimum wage or the national living wage, according to data from 2016: apprentices earn £6.31 per hour on average. Wherever I go, I ask every apprentice I meet how much they get paid—I do not just look at the surveys—and most of them tell me that they get way above the apprentice minimum wage.

I want to make a wider point about the wage issue. It is important to note that apprentices are earning while they are learning. I want to do everything I can to help disadvantaged apprentices—I am going to come on to that point in a minute—but if those apprentices were in higher education or studying at further education colleges, they would not be earning while they are learning. Apprentices are earning while they are learning, and 82% of them get more than the national minimum wage or the national living wage. When we consider the benefits and that kind of thing, we need to reflect carefully on the fact that apprentices are earning money. Many of my constituents who are not apprentices—no doubt this is also true of other hon. Members’ constituents—earn the national minimum wage, but apprentices get training and education in the knowledge that 90% of them will get jobs at the end. That does not mean that there is not a problem. Some apprentices come from very low-income backgrounds—I think 25% of them come from the poorest fifth of areas in the country. It is important to put that fact on the record. I will come on to child benefit in a minute.

[Kelvin Hopkins]

The Minister is making a fair point about apprentices earning a wage, but families—particularly those on modest incomes—are acutely aware of the tipping point where the benefits that those people might get if they were in education outweigh the wage they might get if they were in an apprenticeship. When incomes are tight, such marginal differences make a difference to the choices families make.

[Robert Halfon]

I am acutely aware—I see the pressures on my constituents—of the pressures that families face, and I do not want to create disincentives for families who are working but struggling. Often, one member of the family works in the day, one works at night and the son or daughter does an apprenticeship, yet the family are struggling to keep their heads above water. I accept that. We announced that we will be doing a serious, committed review—this relates to the question that my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter) asked—of how to get more apprentices from disadvantaged backgrounds. We have a £60 million fund to incentivise providers to take apprentices from the most deprived backgrounds, and FE colleges can use some of their bursary money to help apprentices with travel and overcome some of the other obstacles that have been raised.

[Dr Poulter]

I hope my hon. Friend the Minister recognises that that is inadequate for many students living in very rural areas. Some colleges cover vast geographical areas and some students have to do 100-mile round trips daily to attend college. They also have to pay for transport or car and petrol money to get to the workplace where they are doing their apprenticeship, which is a real disincentive in some rural areas. Will my hon. Friend the Minister look at the challenges that rural apprentices face?

[Robert Halfon]

I accept the premise of my hon. Friend’s question. I have been to rural areas to meet apprentices, and the younger ones in particular say that the cost of transport is a problem. We are looking at that as part of the social mobility review for apprentices. Again, if those apprentices were just going to an FE college they would not be earning any money, and if they were at university they would have to have a loan. At least they are earning, and the vast majority of them are earning more than the apprentice minimum wage. We have to strike a fair balance between the needs of the people my hon. Friend describes, which are very real, and fairness to taxpayers on low incomes, in terms of the overall costs and benefits. It is open to colleges to give apprentices bursary funding to help them with bus travel, and many do so.

[Gordon Marsden]

On the review—this is the first I have heard of it, but I welcome it—I urge the Minister, in connection with the points I made earlier, to look not only within the Department but at some of the broader issues, such as the 16-hour rule and the relationship with the Department for Work and Pensions.

[Robert Halfon]

We announced the review in November last year, with that final announcement on the levy. I am working closely with my hon. Friend the Minister for Employment at the DWP. I cannot say that we will come up with a magic solution, or that there is a magic funding pot, but there are other issues, such as those to do with benefits and so on—for example, if a single parent were working in a coffee shop but wanted to do a teaching assistant apprenticeship and the wage was literally the minimum of £3.40. We are looking at all those, although I hope that when universal credit comes through fully it will deal with some of the problems. As I say, we are committed to that. We also have a £60 million fund.

In addition, the National Union of Students has its Apprentice extra card. I helped to launch it and worked with the scheme in the previous Parliament when I was a Back Bencher. My predecessor, my right hon. Friend the Member for South Holland and The Deepings (Mr Hayes), attended the launch. Apprentices, as young people under 25, are also entitled to some rail discounts and so on.

The hon. Member for Blackpool South talked about traineeships, to which I am very committed. We have spent more than £50 million on them. There were more than 24,000 traineeship starts between August 2015 and July 2016. Fifty per cent. of trainees progress into apprenticeships and 94% of employers consider traineeships an effective way of increasing young people’s chances. Traineeships are part of the £5.4 billion 16-to-19 budget funded by the Skills Funding Agency. It is also important to note that almost 20% of those who do traineeships have learning difficulties or disabilities. I think that is a wonderful figure. We would like to increase it further, but it is pretty high already.

We also still have the target to increase black and minority ethnic take-up of apprenticeships by 20%, and we have said that publicly. We are doing everything possible to increase apprenticeships in the public sector, with a new 2.3% target. I have been asked about apprentices with disabilities and we are working hard to implement the recommendations of the Maynard taskforce, led by my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard). We agreed with everything it suggested and our aim is to have full implementation by April 2018.

I thank the hon. Member for Blackpool South for mentioning council tax. I will discuss those matters with my counterparts in the Department for Communities and Local Government, especially if, as he says, apprentices are not getting rebates to which they are entitled. I will look into what we can do about that.

Before I conclude, I apologise, Ms Ryan. I should have said at the beginning of my speech that it is a pleasure to serve under your chairmanship.

Yes, we have a lot of work to do. The hon. Member for Luton North has highlighted how we need to continue to work on quality, to ensure that those 3 million apprentices have quality apprenticeships. He is right to highlight that we need to do everything possible to help the socially disadvantaged. I am not saying that we have all the answers, but the statistics show—the numbers show, not just me—that we are helping. The individual stories show that we are helping in human as well as numbers terms. Whenever I go around the country, I speak to as many people as possible. Almost every Thursday I go around colleges and meet apprentices. This week, had it not been for this important debate, I would probably have been in a college early this morning, before the Budget. We are investing in the skills and the quality, and we are creating and doing everything possible to create a ladder of opportunity to ensure that apprentices from all backgrounds may climb it to the jobs, security and prosperity they need.