Apprenticeships — Question for Short Debate

– in the House of Lords at 5:38 pm on 26th March 2014.

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Photo of Lord Young of Norwood Green Lord Young of Norwood Green Shadow Spokesperson (Business, Innovation and Skills) 5:38 pm, 26th March 2014

To ask Her Majesty’s Government what action they are taking to increase the number and quality of apprenticeships for 16 to 18 year-olds.

Photo of Lord Tunnicliffe Lord Tunnicliffe Opposition Deputy Chief Whip (Lords)

My Lords, by our normal conventions, we would start the QSD but there was wide expectation in the House that there would be a vote now and at least half of our speakers are not present. Perhaps I may put it to the government Whip that she adjourns the House during pleasure for 10 minutes so we can all assemble for the next debate.

Photo of Baroness Jolly Baroness Jolly Baroness in Waiting (HM Household) (Whip)

I beg to move that the House do now adjourn until 5.39 pm.

Sitting suspended.

Photo of Lord Bates Lord Bates Lords Spokesperson (Department for Work and Pensions), Lord in Waiting (HM Household) (Whip) 5:39 pm, 26th March 2014

I beg to move that the House do now adjourn for a further five minutes.

Sitting suspended.

Photo of Lord Young of Norwood Green Lord Young of Norwood Green Shadow Spokesperson (Business, Innovation and Skills) 5:56 pm, 26th March 2014

My Lords, now that we are all sitting comfortably, we can begin. In a recent debate about apprenticeships I was accused of being churlish, so I will endeavour today to keep my criticism constructive and reasonably positive.

The beginning of March was National Apprenticeship Week. Should we be celebrating? I will give the Government one cheer. They definitely recognise the importance of apprenticeships and vocational training. There is more investment in training and I was pleased to see the announcement in the Budget. However, announcing expenditure is one thing; driving up the number of apprenticeships is the real task that we face. Surely, the major question that we need to address is the nearly 1 million NEETs in the 16 to 24 age category—those who are not in employment, education or training. I took those statistics from the Library briefing.

We can muck around with statistics, but at the end of the day that is the problem we face. Even if we look at different groups, eventually we will be faced with people looking for jobs and apprenticeships. Of course, the situation with graduate recruitment is not particularly rosy, either. However, I want to focus on the 16 to 18 year-olds because they are the most important group. If we do not find a way of motivating and incentivising them, we know their capacity to lose hope in ever gaining meaningful employment and all the bad things that can flow from that.

When the Government quote figures on apprenticeships, I have complained time and time again because they always include the over-25s. I have said that I am not going to be churlish and so I hesitate to use the word “disingenuous”. However, the figures are certainly misleading. My fear is that it could lead to complacency. Although the government statistics have shown significant growth in the number of apprenticeship starts between 2008 and 2012-13, the recent trend for numbers of apprenticeship starts for 16 to 19 year-olds has actually shown a decline in both 2011-12 and an alarming 12% decline in 2012-13 from the previous year. Those are figures from the Skills Funding Agency. In the period reported, apprenticeship starts as a whole increased by 113%, which makes you think, “Good”, until you disaggregate it. The growth in apprenticeships for the 16 to 19 year-old age group during the period was only 12%, while apprenticeships for those aged 24-plus grew by an astonishing 293%. I will come back to the question of apprenticeships for those aged 25 and over.

One of the good results of calling a debate—I am grateful to all noble Lords who have agreed to participate in it—is the briefing you are sent. I received a really interesting briefing from the City & Guilds Group. It points out that apprenticeships are still seen as being “just for the boys”. For instance, the difference between the advice received by men and women is particularly notable in the construction industry, where only 0.6% of women are encouraged to make it their career compared with 12% of men. The same worrying statistics can be seen throughout apprenticeships in relation to the advice that young women are given as opposed to that given to young men. We need to work a lot harder if we are going to encourage more young women to take up apprenticeships.

The area I want to focus on now is the construction industry. I recently received a letter from the noble Viscount, Lord Younger of Leckie, giving a breakdown of construction apprenticeships. The figures set out in his letter suggest that things are looking reasonably rosy. However, perhaps I may suggest to the Minister that he looks at a report on construction apprenticeships issued just yesterday by a cross-party group of parliamentarians. It states that some 182,000 construction jobs will need to be filled by 2018, but last year only 7,280 construction apprenticeships were completed. The report includes some recommendations that were made in the 2011 review by Doug Richard:

“Apprenticeships should be redefined.They should be clearly targeted at those who are new to a job or role that requires sustained and substantial training … There should be recognised industry standards at the heart of every apprenticeship”,

which should be linked to professional registration. The report also recommends that all apprentices should achieve NVQ level 2 in English and maths. Doug Richard thinks that apprentices aged over 25 should not actually be called apprentices. I would be interested to hear the Minister’s response to those recommendations. The Chartered Institute of Building has talked about a 33% decline in apprenticeship starts in construction. Surely that is another worrying statistic.

The Minister should take a look at the briefing provided by the Local Government Association. I shall start with the positive. It states:

“We welcome the measure in the Budget 2014 to extend subsidies to create youth apprenticeships. However, it will not resolve the structural issue facing young people. This requires ambitious reform, bringing skills and employment services together around local labour markets”.

The briefing says that the current system is not working for 16 to 19 year-olds. The number of under-19 apprenticeship starts rose for a bit, but then declined over the past couple of years. It goes on to say that the increase in apprenticeships can largely be seen in only a small number of sectors that are generally associated with low skills. It also talks about instances of large employers using apprenticeship funding to subsidise training for existing employees, and issues with leading apprenticeship contractors effectively exploiting their workforce.

The Government are seeking to improve the qualifications and the skills requirement for apprenticeships. I am not arguing about that, but where I think that the Government do need to be careful is with regard to the new GCSE requirements in both English and maths. These are demanding requirements. It is interesting to look at the briefing from the Oxford Cambridge and RSA organisation, which says that the really important thing about getting qualifications for young people and improving their ability in English and maths, which we know is an employer requirement, is to ensure that learning is contextualised. We can see that feedback coming. The noble Lord, Lord Baker, is not present today but if you look at the success in university technical colleges, you know that that is good advice.

As I have said before, the quality of careers advice in most schools is still appalling, with very few examples of young people being encouraged to go for apprenticeships. The drive is still to push people towards A-levels even though we know that there is real need and demand for apprenticeships. What more could the Government do? Time and time again I have made the point that if the Government really want to send a positive signal to employers—boy do we need to do that as the best statistic I have found on how many employers recruit apprentices is 13%—surely it is time that they made it clear that bidders for public procurement contacts will be required to indicate the number of apprentices they are going to employ. To drive up the number of apprenticeships, as we should be doing, and to win the battle against youth unemployment, we ought in a way to be putting the country on a war footing. We ought to be determined not to have another lost generation of young people.

In the Local Government Association briefing there are some good examples of authorities such as Lincoln which has appointed apprenticeship champions and driven up the numbers of apprenticeships for those aged 16 to 18. We need to ensure that all schools, colleges and universities are themselves recruiting apprentices. We ought to drive up the number of group training associations and apprenticeship training agencies. I look forward to the Minister’s response and I thank those who are going to participate in the debate.

Photo of Lord Monks Lord Monks Labour 6:07 pm, 26th March 2014

I thank my noble friend Lord Young for initiating this important debate. Unlike him and certain others here, I was never an apprentice but I went to a boys’ technical school and most of my contemporaries went into apprenticeships in manufacturing or in construction. A decade later I was working on the training brief in the TUC in early 1970s, and the apprenticeship system started to collapse—I do not think that there was any direct relationship between my presence in the TUC and what was happening in the country. The apprenticeship system had covered 44% of boys leaving school at the minimum age and about 4% to 5% of girls, but those numbers plummeted, particularly for boys.

Why was that? First, there was a feeling among employers that those who were doing the training were losing staff to those who were not—that poaching was rife—and the lack of a collective approach was a factor. Industrial training boards, instead of being strengthened, were weakened. I must acknowledge too that there was a growth of a youth culture of having money. If you could earn more money at the age of 16 in a labouring job than you could in an apprenticeship, the lure of the youth culture was a major factor that turned many young people away from apprenticeships. Later, other factors clicked in as universities expanded. The attractions of higher education—“uni”, as became the common phrase—became overwhelming to many young people, and was supported by parents. The privatisation of a lot of the utilities in particular, which trained more people than they needed themselves, contributed to this collapse in apprenticeships outside of some blue-chip companies and one or two exceptional industries.

We have come a long way from the apprenticeship model which has survived, albeit not without problems and pressures, on the other side of the North Sea and of the channel. I well remember a visit I made to an apprentice school for motor mechanics in Vienna, where I took part in a discussion in English with the students. I told them their English was excellent and they said, “All our drawings are in English; we have to work in English”. Their apprenticeships were done in a foreign language, which was extremely impressive and showed the high quality of the apprenticeships and the veneration of the concept which existed there. Where we have 11 apprentices for every 1,000 employees, Germany, Switzerland and, I think, Austria—as well as, interestingly, Australia, which is a different culture and more like ours in some ways—have round about 40 per 1,000 workers. Switzerland has a lot of apprentices and not so many young people going into higher education. The university route there has not got the same cachet as it seems to have here. However, we know that even in those countries apprenticeships are under pressure: a lot of young people are aiming for higher education and some employers are looking to substitute much cheaper and shorter training courses, linked to specific jobs, for more expensive ones. It is not a paradise over there, but we succumbed to these pressures to a greater degree and earlier than others.

I am also in the camp welcoming the resurrection of apprenticeships which was started under the previous Government and has been continued under this one. There is a lot to be proud of. There is a lot of agreement in this area, although from our side, as my noble friend indicated in his opening speech, we would like things to go more quickly and more purposefully on this issue. The point he made about procurement was very important—we should know what employers are doing. Looking at what training is going on and the apprenticeship model in particular should be part of the purchasing process of public authorities. Investors in People may be a very useful initiative for this purpose.

I know the Government have started to think about this, but we need to do more to make sure that the minimum wage is properly paid. At the moment, the estimate from the latest apprentice pay survey is that 30% are being paid illegally, which is a very high figure: three out of 10 kids, and in some cases adults, are not getting what they are entitled to. We also know that the whole scheme in most sectors is still geared towards white boys—if I can put it like that—rather than girls or ethnic minorities, who do not feature too strongly in quite a lot of sectors.

The other point to make is about the importance of employer and union co-operation in this area. I was very proud when I was at the TUC of being one of the instigators of Unionlearn, and of the idea that unions could use their influence to get people to have a go at learning who did not have the experience of getting glittering prizes at school and for whom learning was frightening. We could reach parts that employers on their own could not, and that relationship was very important. Although welcoming the Government’s commitment to supporting Unionlearn, I ask the Minister whether they intend to continue that commitment into the future and to give that very worthwhile and big-scale scheme the support it really deserves.

Photo of Lord Addington Lord Addington Liberal Democrat 6:14 pm, 26th March 2014

My Lords, my involvement with apprenticeships started with the noble Lord, Lord Young, a good few years ago when the Bill went through. At that time it was pointed out to me that everybody had to pass an English and maths test, and the language was, “Give the employers what they want. They want good English and maths”. I stood up and said, “What about dyslexics?”. Noble Lords said, “Of course, we do not want to remove anybody from employment here”, and I went away. I made a huge mistake that day because initially the Act stated that everybody needed English and maths, and that was seen to be the priority. It was decided that this overrode the Equality Act—wrongly and illegally—and we got ourselves into a horrible mess, which was resolved only three and a half years later during the course of a Bill. I just point out that anything, no matter how well intentioned, can go wrong, and apprenticeships are right there with everything else. Nobody intended it to happen, but then officials decided, “This is what we had said and we defended it”. Most politicians saw the mistake and said, “That cannot be right”, and then we had to fight our way—more or less machete our way—through the levels of resistance. I take a big slice of the blame pie for not coming back to the noble

Lord, Lord Young, at a later stage in that Bill to demand an explanation of what should happen, but I could not quite believe that anybody would do anything that dumb. My naivety, after nearly three decades here, still surprises me.

Where are we now? We have the apprenticeship system, which takes over most of the further education training in this country. Everything is being drawn towards the apprenticeship system. Yet how are hidden disabilities and disabilities generally being dealt with in this system? People with dyslexia are the biggest group; I do not think anyone has argued about that. It is reckoned to be about 10%—20% in certain parts of the state, but we use 10%. We still have a problem in that we have only just got the examination system to take on board that reasonable adjustments should be made to the online test to use technology that is well established in higher education. We have only just got that in. There are increasingly worrying signs that the trainers and providers within the colleges do not know what they are doing with the dyslexic in the classroom. Therefore, neither do colleges and their support work. Can my noble friend give me some idea of how this has developed over time and what pressure will be exerted to make sure that colleges, employers and trainers all understand this vast array of difficulties that they will encounter?

Why is it important here? It is because dyslexics should be overrepresented in something that uses practical skills. At the moment, in higher education you are fine; we have a very well established system there with the DSA. I declare an interest in that from one of my outside activities. However, in the further education sector we do not have that culture. It is there to an extent in schools but it is still hit and miss. If you are to get into that tough-to-reach 20%—the 20% who were not getting five GCSEs—you must be prepared to deal with these groups. You must have a very well established SEN structure that knows how to deal with young adults. If we are talking particularly about the young, we are talking about somebody who has already failed within the classroom and for whom this is a bad experience and a bad place to be. If you do more of the same, you will fail again.

What are we going to do about this? We have to try to get in here. I never wanted to become the person who has to stand up and make the same speech, or a variation on the same speech, every time we talk about apprenticeships. I am sure I could bore your Lordships’ House on other subjects with equal vigour. But we need a structure here that goes on. We have established for colleges, trainers and employers an incentive to go on, because they can get them, finally, through the exam. I deliberately concentrate on that because that was the model we went through in schools for getting through O-levels when they started and now for GCSEs, A-levels and degrees. If you have a reason to get the person through and they can pass, or stand a realistic chance of passing, suddenly everybody can buy in. That process will be quicker and easier if we insist on having decent training in that process.

We are starting on a process. The entrance-level qualifications are probably very important to this group I am talking about, so I think that level 2 has a place for getting people at least involved in their training. However, unless you can ensure that the experience of receiving training is there, you will not maximise it and get the people involved. I look forward to hearing what progress will be made, because we cannot ignore this, and dyslexics are only one group within a very large group.

Photo of Lord Martin of Springburn Lord Martin of Springburn Crossbench 6:20 pm, 26th March 2014

My Lords, I congratulate the noble Lord, Lord Young, on obtaining this debate. I was gently reminded by the noble Lord, Lord Macdonald of Tradeston, that three of us taking part in this debate were all born within a mile and a half of one another: himself, the noble Lord, Lord Haughey, and I was on the north side of the river. Glasgow is also well represented by the noble Lord, Lord Macfarlane, who is a good friend and was an employer in my constituency through Diageo and employed many good apprentices.

When I had the privilege of being Speaker, I was shocked that this Palace of Westminster did not employ any apprentices. I called together the heads of the craft departments, including catering and banqueting, and asked them if they would co-operate in an apprenticeship scheme. All of them agreed to do so. The apprenticeship scheme has been very successful. I was stopped by a young person recently who told me he had applied for the Speaker’s apprenticeship scheme and had now qualified as an electrician. I asked him whether his mum and dad were proud. He said, “They were so proud on the day that I completed my apprenticeship”.

That is the important thing about an apprenticeship: it not only gives dignity to the young person, it gives dignity to parents and grandparents—everyone in the family. When you look round this very Chamber, Pugin himself was an apprentice. It was not through university that he did the marvellous things that he did here, it was because he was an apprentice. We have upholstery, carpet-laying, the beautiful Throne with the gilt decoration, the ornate brasswork—all of that can be passed on to apprentices. If they are not able to continue their employment in the Palace of Westminster, we have given them a skill that they can go anywhere in the world with, and they are able to use their hands.

I congratulate the Government on ensuring that the £1,500 can go not only to those aged between 16 and 18 but those aged up to 24. It should be remembered that some young men and women, because of circumstances—perhaps because they were not paying attention or because they could not get employment in the area they were living in—have to come into apprenticeships late. It is good that the Government have made a facility to give grants to employers that are willing to give adults apprenticeships. Why should it be only school leavers who get training in apprenticeships? It should be the case that anyone who wants to learn is never refused.

As we know, the £1,500 gives protective clothing to the young person who is employed. It is not about an employer getting something extra. Whenever they get that £1,500, it is handed over to the apprentice by giving them tools and protective clothing. I say to the

Minister: I hope that the good work has continued. I hope that the House authorities remember that it would be a sad day if we were encouraging private employers to take up apprenticeships but did not do so within the confines of our own building.

I have mentioned before in supplementary questions that there are areas—in Scotland, Ireland and parts of England, such as the north-east—which are remote and rural. They may be lovely places to spend your childhood but, when it comes to getting an apprenticeship, there are not many employers around. If a trainee goes to university, there is a hall of residence. If, however, a youngster wants to get into, say, the aero-engine division of the aircraft industry, it may be that there is no accommodation for them. They may have to go perhaps 30, 40 or 100 miles away from home with no relative to put them up. I hope that we will be able to accommodate our apprenticeships and our craft apprentices the same as we do students. I do not see any reason we cannot do that. In fact, it would be a sad day if we could not.

I know that the Government and employers have a lot on their plate. In the old days, however, when you had big employers—the shipyards and Rolls-Royce, which I worked in—no one gave a great deal of thought to being self-employed because you went from one big employer to another. Nowadays, young craftsmen have to think in terms of being self-employed. I hope that, in an apprenticeship, there is some education given to youngsters to say, “Look, don’t be frightened of becoming self-employed”.

Photo of Baroness Prosser Baroness Prosser Labour 6:26 pm, 26th March 2014

My Lords, I, too, would like to thank my noble friend Lord Young for securing this debate. In last week’s debate in this Chamber on the future of employment, among others the noble Lord, Lord Giddens, addressed your Lordships’ House and suggested a slightly scary scenario relating to the growth in the influence of technology and the use of robots. He set out what this would mean for the future job prospects of today’s and tomorrow’s youth. I am not going to concentrate on that particular dilemma, although I hope someone in Government or in a think tank is doing so. Suffice it to say the world of work has already been turned upside down with the help of technological innovation and the influence of globalisation. Without looking at the changes yet to come, we know that the range of skills and the areas of knowledge required by today’s labour market are very different from those needed 20 or 25 years ago. The question of how we increase the number and quality of apprenticeships is, therefore, welcome indeed.

First, let us consider how we think young people are being prepared to take up an apprenticeship. We need trained and able people in various sectors of the economy, but none more so than in science and engineering. It is agreed and understood that the country has a severe shortage of people qualified in these fields and that, of those who are, too many are concentrated within the older age range. If this problem is to be dealt with by the new, young blood, why are we paying so little attention to the importance of good-quality careers advice? We are the only country in the developed world which spends more on careers advice for older people than it does for the young. The Department for Education spends just 0.04 % of its budget in this area.

Why is not more effort being made to encourage, enable and reward schools and colleges for engaging with employers and for widening their horizons to get more girls into the traditional STEM areas of study? This is not beyond the wit of man—or, for that matter, woman. For example, girls could be taught in separate classes for maths, science and computer studies, allowing concepts to be presented in ways more appealing to girls. This does not have to be a permanent arrangement but a “separate to integrate” approach. Work recently done by the TUC shows very serious stereotyping within the take-up of apprenticeships. The statistics read as though it were 1914 rather than 2014: health and social care—83% female; vehicle maintenance and repair—98% male; children’s and young people’s workforce—93% female; electrotechnical—98% male. The salary returns for these particular choices also tell us why the gender pay gap is so alive and well. I know that many of the better employers are trying hard to break down these stereotypical barriers, but government can play a part as well. How about fiscal incentives for companies to give girls more taster days and more opportunities for work experience?

Secondly, what are the Government and the public sector in general doing to play their part in improving the number of opportunities for apprenticeships? Greater participation by government departments would send a very important message. In addition, the leverage of procurement is a powerful tool, as has already been mentioned. Government and public contracts over a certain value should carry with them the absolute requirement for the contractor to engage with the apprenticeship programme, and to ensure that opportunities are available in equal measure to both male and female applicants and to applicants from the black and minority ethnic community.

I have just a couple of final thoughts. In 2011-12, almost 84% of the growth in the number of apprenticeships was in just 10 sectors of the economy, and those mostly in low-paying areas. We are not keeping pace in engineering and construction, where we need to up the game. We also need to keep a watchful eye on standards within apprenticeships. A one-year training course is not an apprenticeship. Ensuring that the skill level reaches level 3 and above will be important to support and monitor. The role of sector skills councils is important here. They can help employers find their way around funding options and can help to ensure that training programmes are bought into and understood by the workforce as a whole.

I hope that the Minister will bring this debate to the attention of his counterparts in the Department for Education, because this is an interdepartmental responsibility and the policy will be successful only if there is an interdepartmental response.

Photo of Baroness Sharp of Guildford Baroness Sharp of Guildford Liberal Democrat 6:32 pm, 26th March 2014

My Lords, I join others in thanking the noble Lord, Lord Young, for bringing this important debate to the House. It is about the number and the quality of apprenticeships that government has been able to establish. Like the noble Lord, I started by looking at the statistics. As he pointed out, starts in apprenticeships are up. Between 2009-10 and 2012-13, they increased from 270,000 to 495,000. I pay tribute to the previous Labour Government for laying the foundations for this increase. Equally, the coalition Government have done much to build on the foundations that were laid then and we see it in this figure of 495,000, which is almost the half a million that has been cited.

However, like the noble Lord, Lord Young, I noticed that the increase was not evenly distributed. The numbers for the 16 to 18 year-old group were down by 4%. The number of 19 to 24 year-old apprenticeships was up by 42%, but the big increase, as the noble Lord pointed out, was in the over-25 group, which saw a rise of 350%. In terms of numbers, therefore, there is undoubtedly an increase. The noble Lord, Lord Monks, mentioned that the nadir point for recruiting apprentices was in the early 1990s, when the number of apprentice starts was below 100,000. It has been building up since then.

On quality, the noble Baroness, Lady Prosser, talked about looking at where the increases in the number of apprenticeships have taken place. In health and social care, they were up by 197% between 2009-10 and 2012-13; in business, administration and law, they were up by 84%; and in retail and commercial enterprise, they were up by 64%. This compares with construction, planning and built environment, in which they are down by 7%. In engineering and manufacturing technology—vital to rebalancing the economy—they are up 24%, which is still well below some other areas. In information and communications technology, they are up by 2%. Looking at those figures, I reflected on the fact that we frequently praise the German system of apprenticeship but we should recognise that this applies to 15 to 19 year-olds and provides them with a foundation of skills for life. This compares with the United Kingdom where our young people are not going into apprenticeships, in spite of the fact that the Government pay all the costs for 16 to 19 year-olds. It is rumoured that the Government may well ask employers to contribute rather more than they do at the moment. I fear that, if that happens, it will kill apprenticeships for 16 to 19 year-olds although they are a vital part of our raising of participation.

What is holding it up? First, I agree with the noble Baroness, Lady Prosser, and others that careers education has a major influence. There are still far too many schools where apprenticeships and vocational training are seen as second best to university. Most teachers know very little indeed about vocational routes to work. We need to make sure that schools are getting proper careers advice from properly trained and experienced careers advisers and that young people get the face-to-face advice that many of them need.

Secondly, the Government are putting a great deal of emphasis on employer ownership of apprentice training. I confess to some reservations about this because there remains a huge dearth of apprenticeships. My figures show that 9% of UK firms take on apprentices, though the noble Lord, Lord Young, mentioned 13%. This is a very small proportion. There are a huge number of applications to Rolls-Royce and BAE Systems, whose apprenticeships are the cream. However, the average apprenticeship advertised by the National Apprenticeship Service gets six applications. We do not have enough of them and we must encourage firms to provide more. The answer probably lies in encouraging our small and medium-sized businesses to take them on. The £1,500 per apprentice that came in the Budget already applies to small and medium-sized businesses. Many of these SMEs are put off by the bureaucracy attached to apprenticeships and we need to encourage the expansion of group training systems and apprentice training agencies who take on the organisation of apprenticeships.

In a report published in 2007, your Lordships’ Committee on Economic Affairs concluded that apprenticeships were the most satisfactory route to skills below the graduate level and should be the standard method for providing education and training for young people in the 16 to 18 age group not going to university. We are still a very long way away from that.

Photo of Lord Best Lord Best Crossbench 6:38 pm, 26th March 2014

My Lords, I am grateful to the noble lord, Lord Young of Norwood Green, for instigating this debate and for stealing half my thunder by drawing attention to a report on construction industry apprenticeships which was released recently from a cross-party group of parliamentarians from both Houses, chaired jointly by the right honourable Nick Raynsford and myself. It was entitled No More Lost Generations: Creating Construction Jobs for Young People. If I only manage to impart one suggestion tonight to this House and to those outside who are following our debate, it is that everyone with an interest in the subject of apprenticeships should google “no more lost generations” and look at our report. It was written by Denise Chevin, supported by the Chartered Institute of Building and the Construction Industry Training Board, with input from the excellent charities doing great work—albeit on a small scale—to get young people into fulfilling construction jobs.

Our report highlights three stark facts. First, there are still well over 950,000 NEETs—young people between 16 and 24 years old not in employment, education or training. That figure was quoted by the noble Lord, Lord Young. Secondly, the construction industry is now expanding once again and will be creating 182,000 extra jobs alongside the need to recruit 400,000 building workers to replace those retiring over the next four years. Thirdly, despite these big numbers, there were only 7,280 completed apprenticeships in the sector last year, which was half the number of the year before. So we have 7,000 apprentices for a £100 billion-a-year industry that needs to draw in nearly 600,000 new workers by 2018.

In the absence of sufficient numbers of home-grown employees, the contractors—as they did for the construction of so many of the Olympic Games facilities—will import their labour from other countries, particularly from eastern Europe. I bow to no one in my admiration of building workers from Poland and the other A8 countries—the globalised labour market of the 21st century means that the skills of overseas workers can provide the construction industry with a labour force that provides quality at relatively low cost—but turning our backs on our own young people has huge financial and social costs. At the launch of our report, the deputy chair of the Construction Industry Training Board, Judy Lowe, quoted the extra cost to society of a NEET who never obtains a qualification or acquire the skills to hold down a proper job: £165,000. For young people who need the self-respect and sense of purpose that comes from being in employment, failure to acquire the necessary skills can lead to pretty miserable lives.

With the economy now recovering and the nation investing in construction in infrastructure—for example, Crossrail, HS2, power stations and, most labour-intensive of all, housing—we can get a double benefit by also creating the jobs that the young of this country need. Government support is vital. Training objectives need to be incorporated into public contracts. Moreover, the Chancellor has extended government support for housebuilding through the Help to Buy scheme, resulting in big jumps since the Budget of the share price of Persimmon, Bovis Homes, Taylor Wimpey and others. Perhaps the tit-for-tat should be a commitment from the housebuilders to skills training for home-grown talent.

Local authorities and housing associations can insist that companies bidding for their work must employ more apprentices. The use of planning requirements can support this. Local authorities also have the local contacts and local knowledge, crossing boundaries through the local enterprise partnerships, to be a focal point for initiatives that are tailored to the particular employers’ requirements in their locality.

To bring all this together and take forward the recommendations from the No More Lost Generations report, we called for a summit of construction leaders, convened by the Construction Industry Training Board and the Department for Business, Innovation and Skills. This could do for training what the 2001 construction summit did for safety. That summit led to a sea-change in attitudes to accidents and fatalities on building sites, to very great effect. A construction training summit would agree a new apprenticeship strategy, bringing together industry leaders, specialist contractors, housebuilders, local authorities, social landlords and central government. The response Nick Raynsford and I have received from the Construction Industry Training Board’s chairman, James Wates, has been very positive. The CITB is setting up an apprenticeship commission to take forward this plan and report to a construction training summit.

We have also had a positive response from BIS Secretary of State Vince Cable. His sympathy for these aims is well known and I hope he will agree to jointly sponsor the construction leaders summit later this year. What is certain is that it would be the height of folly not to use the revival of construction in the UK to provide fulfilling careers for tens of thousands of our young people who must not be another “lost generation”.

Photo of Lord Lucas Lord Lucas Conservative 6:45 pm, 26th March 2014

My Lords, I must declare an interest because I am running a social enterprise in this patch, the Good Careers Guide, which you can

Bing if you do not want to Google. We have been having a wonderful time with companies. There is such a spirit of collaboration abroad—with them, with their organisations and with schools organisations, too—and there is a real determination to get together and solve the problems of how kids comprehend careers, of how businesses get on with schools and of how apprenticeships become valued as a decent alternative to academic education. I say to the noble Lord, Lord Best, that the construction industry is as enthusiastic as any other, and I shall look forward to his conference and hope that we may end up as part of it.

To return to the subject in hand, which is on how to increase the number and quality of apprenticeships for 16 to 18 year-olds, I think the answers are about information, appreciation and support. It is very hard within the context of a school to find that out what 16-to-18 apprenticeships are out there. We need a place where people can go to find out—but not, as the Deputy Prime Minister said, a UCAS, which is a horrible, inward-facing and unco-operative organisation. What we need is something that is facing outward and that sees its business as running an API, not a fortress, so that all sorts of institutions that have contacts with young people can easily get at the information on apprenticeships which they need to advise them. I think that would be a great way forward and I very much hope, if Mr Clegg has anything to do with it, that is the direction that he eventually takes.

Second is appreciation. There is a general feeling that apprenticeships are of mixed quality. That is not good. That is how we came into the business of the Good Careers Guide, taking the genetics of the Good Schools Guide and seeing what we could do for apprenticeships. It is proving immensely popular with companies, I am delighted to say. They really see the need to be seen as quality providers. It is important to parents particularly, and to others who are advising young people, that they understand where an apprenticeship leads to. How will it be rated by other employers once it is completed? Where will it lead to in terms of a career? The progression is immensely important, as the noble Lord, Lord Young, commented.

In that context, it is important to say to the Government that they are on the wrong track when they say that,

“once the reformed GCSEs are implemented, all apprentices will use GCSEs … to meet the English and maths requirements”.

What is important is context. If you are in an apprenticeship, what is motivating you is the context. The mathematics and English you use must fit in with that context. English and maths GCSEs are designed to move people on to A-levels; they are not designed for the whole variety of employments and apprenticeships that are out there. What is important is that the English and maths that one learns in an apprenticeship is part of a progression which leads—as, again, the noble Lord, Lord Young, said—to recognised professional qualifications. The English and maths should be sufficient for that, but there should be no barriers on the progression of apprentices. They should be able to move on to degrees and what they have achieved as an apprentice should be recognised as sufficient for that. I hope that the NHS will wake up to the idea that you can start as an apprentice and end up as a nurse, which does not seem too hard to ask when you can start with Barclays as a NEET who has just come from jail and end up as a bank manager. There are companies out there which take progression seriously, and it is time that our public sector did so, too. We must pay apprentices properly; they should not be seen as a source of cheap labour but should receive proper remuneration.

We should also concentrate on support. Most of our employment comes from small and medium-sized enterprises, but it is difficult for them to take on the bureaucracy and the responsibility of an apprenticeship. The big companies can manage it—they have big HR departments, which can do what is required. We need to build up for smaller companies a structure of training providers which not only provide the training but do the pastoral care, too, looking after every aspect of the apprentice’s needs. The SME will then be able to concentrate on giving them a job and will not be asked to do things which go beyond its capacity. That is happening: PricewaterhouseCoopers organises it for the smaller companies and the financial industry; several of the sector skills councils have similar schemes; and QA, which is one of the training providers, is in that business. We are beginning to see that happening, and it needs to happen much more widely.

To quote one of the senior executives of a company whose training provision we were reviewing: “Apprentices are a total delight. They are quickly very productive, excited, eager, and bring new life to the business”. If tired old people like us can be cheered up by taking on apprentices, let us do more of that.

Photo of Lord Macdonald of Tradeston Lord Macdonald of Tradeston Labour 6:51 pm, 26th March 2014

My Lords, in his Budget Statement the Chancellor said,

“we have doubled the number of apprenticeships, and I will extend the grants for smaller businesses to support over 100,000 more”.—[ Official Report , Commons, 19/4/14; col. 789.]

That is, of course, welcome news. It builds on the progress made by previous Labour Governments and strengthens the cross-party consensus on the importance of vocational training.

As other noble Lords have already argued, more needs to be done, but we have surely come a long way since the 1990s, when apprenticeships were in danger of dying of neglect. By the time Labour left office in 2010, apprenticeships had increased significantly to almost 500,000. The forecast for this year is 931,000, for apprentices of all ages. While respecting the caveats of my noble friend Lord Young regarding the statistics, under Labour and now the coalition, apprenticeships are again being given the priority that they deserve.

I thank my noble friend and fellow engineer Lord Young for initiating this debate. I speak on the subject fondly, having served a five-year engineering apprenticeship after leaving school at 15. It is a rare pleasure, as my noble friend Lord Martin said, to speak in the company of two other time-served Glasgow craftsmen.

The focus tonight is on 16 to 18 year-olds and how best to improve the number and quality of the apprenticeship opportunities on offer. That concern is understandable. While those of my generation started their apprenticeships at 16, most of our recent successes have been in placements for those aged 19 and over.

Remarkably, as has been mentioned, many of the new apprentices are over the age of 24, as my noble friend Lord Young highlighted.

The time served has gone down from five years to perhaps just one year, a minimum length introduced in 2012 to strengthen the quality and standard of training. On the positive side, while apprenticeships were once largely in manufacturing and almost exclusively male, today I am told that half the new apprenticeships are won by women. I say “won” because I read that the demand for places is 12 times the number of jobs on offer.

Other major changes are in the range of the jobs on offer. The top sector now for new apprentices is business, administration and law, which makes up 31% of the total. Next comes the health, public services and care sector with 24%, then retail and commercial enterprise with 20%. The traditional apprenticeship sector, engineering and manufacturing technologies, is in fourth place with 13%. However, that equates to 66,000 new apprentices, which is not negligible.

The breadth of these sectors, across both public services and private companies, offers job opportunities to applicants from very diverse backgrounds and with different attributes and educational qualifications. In our rapidly changing economy, this change in the nature of apprenticeships is both inevitable and largely positive. However, the particular problems of 16 to 18 year-olds remain a concern. In 2012-13 the number of apprentices from this age group was marginally lower than it was back in 2009-10. This may be explained in part by the requirement introduced last year for young people to be in education or training until they are 17—that age will be raised to 18 next year. On the plus side, the youth contract for 16 to 17 year-olds, launched in 2012, offers employers an enhanced grant of £2,200 per annum per head for each new recruit not in education, employment or training—the NEETs. The Government also forecast a boost in apprenticeships for 16 to 18 year-olds this year, up from 179,000 to 257,000. That is quite a jump so I hope that they hit that target.

Your Lordships will be aware that many 16 to 18 year-olds would like nothing more than a job in our creative industries, where talent, drive and creativity often trump academic qualifications. The appeal is even greater when the commercial creative industries have a growth rate much higher than the rest of the UK economy. These creative industries are now estimated to make up almost 5% of all UK employment. The subset of arts and culture inside the creative industries employs more than 100,000 people directly and another 150,000 indirectly. However, at a meeting of the Performers’ Alliance here in Parliament yesterday, actors, musicians and writers complained that the recent changes to the curriculum in English schools meant that the teaching of arts and cultural subjects was suffering from the Department for Education’s emphasis on science, technology and engineering—the so-called STEM subjects. In a debate in your Lordships’ House last week, the accusation was made that music and drama classes were being cut back severely and that the number taking art GCSE had fallen by 14% between 2010 and 2013.

The fear is that pupils who might not aspire to university could be denied the creative input that might help them into an arts-related job on leaving school. Looking at the figures produced by the Government, apprenticeships for arts and culture jobs seem surprisingly limited—just 1,000 out of a total of 500,000. I know that there are many excellent skills programmes in the creative sector but they are often skewed towards highly qualified graduates and well connected interns. The initiatives of the Arts Council, UK Music and the BBC to offer more accessible apprenticeships are welcome but still number only in the hundreds. Does the Minister think there is a particular problem with availability of apprenticeships in the creative industries, and what measures might be taken to ensure that they increase in number and are made more accessible to those from less privileged backgrounds, especially for 16 to 19 year-olds?

Photo of Lord Stoneham of Droxford Lord Stoneham of Droxford Liberal Democrat 6:58 pm, 26th March 2014

My Lords, I declare my interest as chair of Housing 21, which benefits from funds for apprenticeship training in care and housing management services. I ought to begin by apologising for being churlish in calling the noble Lord, Lord Young, churlish the last time we had a debate on this subject. I think it was an initial reaction but it was also disrespectful given his deep commitment to this subject and, indeed, what he said today.

Maybe I should go on to say that the doubling of apprenticeships by this Government is one of their major achievements but it was built on the foundations laid by the previous Labour Government. All of us—such as the noble Lord, Lord Macdonald, and I—who were in the newspaper industry will remember, as the noble Lord, Lord Monks, told us, the devastation of apprenticeships in the 1980s and 1990s. One of great achievements of the past five years is that we have recovered from that devastation. This is against the background of a 7% fall in output; in many previous recessions, we would have seen a doubling of unemployment. Youth employment was high at the time of the recession, but it could have grown even more. Undoubtedly, the growth of apprenticeships has helped in the greater flexibility of the labour market in countering some of those trends. As a country, however, we still have a lot to understand as to why that flexibility has been so successful in countering the employment trends of the recession.

Getting the number of apprenticeships up has been a major achievement for the Government, but they have also been trying to address quality issues and to ensure that we are improving the quality of the training on the ground. We have heard today in the debate about the various efforts of the Government to improve the qualification standards, the Richard committee and the initiative to drive aspirations by including a route to university standards through the apprenticeship system. It is a remarkably popular initiative, and the problem for us is that supply is still not meeting demand.

Productivity and competitiveness in the economy can be addressed only through greater skills development and business development. As we go forward, the debate has shown us today that there cannot be any complacency in the sector. It is so important to us, as the economy starts to recover; we are already aware of significant skills shortages, which often take five to six years even to address, let alone to overcome.

What areas should our debate conclude need most attention? Many have been raised already. First, there is a continuing initiative to improve the standards of qualifications and training. We have to be careful that we do not get involved in excessive regulation, but we also have to make sure that, when we allow employers to have a greater say in the training requirements, they also make sure that those requirements are wide enough to deal with the wider needs of industry and not just their own companies.

This debate is meant to concentrate on the 16 to 18 year-olds, where we have heard that there is still disappointment on the training figures. The Government have estimates on what they expect to do this year. Perhaps the Minister could tell us whether we will see an improvement. That shift is important because the major beneficiaries of the expansion have been the over-25s, which may not be a bad thing. It may be that we have not dealt with that age group well before due to the problems that I mentioned earlier, such as the destruction of that sort of training in the 1990s. However, we must certainly address the 16 to 18 year-olds.

We have heard that the figures are still very disappointing in construction and engineering. I shall read the report of the noble Lord, Lord Best—I am glad for that prompt—but, although construction is a cyclical industry, we know that there are huge skills shortages that need to be addressed.

I welcome the suggestion in the Budget that there is to be further help for small employers. However, as the noble Lord, Lord Young, told us, there is huge capacity there; with the small number of firms taking up this initiative, there is a great potential to publicise and extend what we are doing.

Finally, we have heard about the importance of raising aspirations in our schools and the standing of apprenticeships. The noble Baroness, Lady Prosser, said that we need to give more attention to careers guidance. I hope that the progression to university-level qualifications through the apprenticeship system will provide an alternative route to self-improvement and career progression. The Government have made major inroads, but they must keep up the pressure to do much more.

Photo of Lord Haughey Lord Haughey Labour 7:04 pm, 26th March 2014

I begin by thanking my noble friend Lord Young for posing this Question today. The key word in the Question is “quality”. Some of the statistics that have been mentioned tonight may not relate to apprenticeships as we know them. My noble friend said earlier that some of these courses may be for only one year, and judging by some of the things that I have read in the past few weeks, some of the courses are for only six or 12 weeks, so I do not know how they can be billed as apprenticeships. A lot of people think that many apprenticeships have been watered down.

As someone who benefited from an engineering apprenticeship and is very proud to speak as the third member of the Glasgow apprenticeship union, the achievement of which I am most proud is that, over the past 20 years, I have managed through my own business to create 350 apprenticeship placements. Most of these people still work in the business today.

Some of these short-term training programmes presented as apprenticeships are very misleading. We will probably find that the 480,000 apprenticeships created over the past five years will not reflect the quality of the 480,000 or 500,000 in the previous five years. It is nothing short of tragic that 900,000 young people find themselves unemployed today. We have to create hope for these young people. It is due to the lack of opportunities that so many still find themselves out of work.

The biggest concern for me has already been mentioned: the decline in apprenticeships in the construction industry. The building of houses used to be a barometer of how the economy was doing—as my noble friend Lord Best mentioned. I read with interest in the last few days of the huge increase in the profits of builders and developers due to the Government’s guarantee scheme. Surely, we must be able to use this as a lever to guarantee apprenticeships in that industry.

Today, I sat through a debate on the Green Deal. I have to declare an interest here: I am involved in that sector. This initiative should absolutely have guaranteed thousands of new jobs in the central heating and cavity wall insulation industries. Unfortunately, that scheme is falling apart; day by day, it is becoming unworkable. I urge the Minister to revisit and have a look at what the Green Deal and the ECO deal were supposed to do in relation to apprenticeships.

Rather than having a go at the Minister, I would like to propose a suggestion to him. The Green Deal and the ECO deal have not worked, and there are more than 200,000 buildings in the UK that are more than 50,000 square feet. We have carried out a scientific test in our own building in Glasgow. If we created a position for a young apprentice energy champion in every building throughout the UK, the Government could award carbon credits or tax credits to the companies and we could create hundreds of thousands of jobs overnight—cost neutral. We have had a young energy champion in place in our building in Glasgow for the past nine months, working with Strathclyde University. We have done tests and we are saving between £8,000 and £12,000 a year. We pay the young person £15,000 a year. This is only by going about, turning off computers and switching off switches. He has also done something absolutely amazing: there are 900 people in my building who now think about energy efficiency every day. I urge the Government to have a look at this. This is a way in which we can generate jobs and give hope to 900,000 young people.

The great thing about this scheme is that it is an equal opportunities scheme. We have heard today about the lack of girls taking up apprenticeships. This scheme also could lead, through training, to that young person progressing from an energy champion to a fully qualified facilities manager earning perhaps £25,000 a year.

Photo of Lord Layard Lord Layard Labour 7:08 pm, 26th March 2014

My Lords, I apologise for having missed the deadline, but I would like to ask one simple question. In 2009, the previous Government’s apprenticeship Act guaranteed that, by 2015, there would be an apprenticeship for almost every 16 to 18 year-old who wanted one. That was a clear statement of priorities and a marching order to the National Apprenticeship Service. Unfortunately, the present Government repealed the guarantee and focused the biggest development in apprenticeships, as many noble Lords have said, on the older age group. Was that not a massive error and will the Government now revert to the priority for 16 to 18 year-olds that was embodied in the previous strategy?

There are many Cassandras, probably on both sides, who say that we will not get employers to be interested in young people under 19. Suppose we accepted that argument: what would follow? It would be catastrophic because there would be permanently high youth unemployment and millions of people who would probably never get a real skill. The top priority has to be getting people off to a good start at the very beginning of their working lives. The best evidence for that was mentioned by the noble Baroness, Lady Sharp: a number of OECD studies show that the countries with the lowest youth unemployment and the best level of skills in the lower-skilled parts of the workforce are those countries with the largest number of apprenticeships for school leavers.

What is the problem? In spite of some things that have been said this evening, the problem is not mainly with the aspirations of young people; it is with our employers and the way in which they are approached by the apprenticeship service. More than half of all large employers still have no apprentices. By contrast, in 2012-13, 800,000 young people aged between 16 and 18 registered as applicants for apprenticeships. How many got an apprenticeship? It was one in seven. That is the problem—the supply of apprenticeships is not there and that is a terrible reflection on the record of the National Apprenticeship Service as a generator of apprenticeships. It has simply failed, I suspect partly because it has not been told that that is what the service is meant to be doing for that age group.

What is the Government’s priority? Is it 16 to 18 years-olds or not? If it is, will the Government tell the National Apprenticeship Service very clearly that that is the top priority?

Photo of Lord Popat Lord Popat Lord in Waiting (HM Household) (Whip) 7:12 pm, 26th March 2014

My Lords, I welcome the opportunity to set out what the Government are doing to increase the quality and availability of apprenticeships for 16 to 18 year-olds. I am grateful to the noble Lord, Lord Young of Norwood Green, for tabling this important and timely debate on a topic that, given his apprenticeship background, is obviously dear to him.

It was a pleasure to listen to the informative contributions of so many Peers. I refer, in particular, to the noble Lord, Lord Haughey, who has come a long way from being an air conditioning and refrigeration apprentice engineer. His success in now running a company with 11,000 employees worldwide shows what an apprentice can do. I hope that his story inspires a new generation of apprentices. We appreciate the number of jobs that the noble Lord’s group creates for young people, who are often given number one priority.

This topic is close to my heart. I had no formal education before joining a company as a trainee accountant. That opportunity to learn on the job enabled me to qualify as an accountant. Life is all about learning, irrespective of age. Now I am doing a new apprenticeship at the Dispatch Box.

I commend my honourable friend the Skills Minister, Matthew Hancock, for his tireless enthusiasm and energy. He has delivered real improvements on apprenticeships and helped to give better life choices to countless numbers of young people across the country. From listening to the debate, it seems that we are on the right path but there is a lot more to do. As the noble Lord, Lord Young, said earlier, we should not get complacent about what we are doing with apprenticeships.

Apprenticeships benefit employers, apprentices and the economy. We need to ensure that world-class apprenticeships are in place for years to come. We have seen a record 1.6 million people start an apprenticeship since 2010. Yes, we have made enormous progress, and apprenticeships are very important to the futures of our young people, but there is so much more that we need to do. We are not complacent about what apprenticeships deliver, or how accessible they are to different people. We have made a commitment to deliver 2 million apprenticeship starts in this Parliament.

Apprenticeships have always been about quality, as the noble Lord, Lord Lucas, said earlier. We have removed poor training provision and introduced a rule that every apprenticeship has to be for a minimum of one year. Over the past two years we have removed more than 54,000 short duration apprenticeships. Despite that, the number of apprenticeships for those aged 16 to 19 lasting a year or more has gone up by 30% between 2011-12 and 2012-13. Our aim is to raise the bar even further.

Apprenticeships are open to all. Because they are real jobs that lead to nationally recognised qualifications, recruitment decisions must rest with employers for apprenticeships as much as for other jobs. Our priority is to work with employers to increase the number of apprenticeship jobs for our young people. Apprenticeships must be high-quality, rigorous and focused on what employers need. We are using the apprenticeship reforms to address some of the barriers that employers say they face in recruiting apprentices. The reforms we are making will put employers in the driving seat of developing high-quality apprenticeship standards that deliver exactly the skills they need. Routing funding to employers will put them in charge of securing the most appropriate quality training and making providers more responsive to their needs.

Trailblazers led by employers and professional bodies are leading the way by collaborating and designing world-class standards for their sector. In the past, apprenticeships have been based on frameworks that run into hundreds of pages, often written in complex and technical language. The new standards are short, concise and written in a language that employers really understand. That will make apprenticeships very attractive to a large number of 16 to 18 year-olds.

We have already made great progress. The first 11 new apprenticeship standards have been published in occupations from aircraft fitter to software engineer. Phase 2 Trailblazers are already under way, covering an impressive 29 sectors and involving more than 340 leading employers.

In the future every apprentice will train towards the achievement of an employer-designed standard. The demand for higher standards will also stretch apprentices by setting higher expectations for achievement in English and maths and the introduction of a grading system will ensure that excellence is seen and widely recognised.

My noble friend Lady Sharp and the noble Baroness, Lady Prosser, mentioned the duty of schools to secure access to independent careers guidance for all pupils in years 8 to 13. That is exactly what we are doing. The guidance also will include information on apprenticeships.

We want it to become the norm for our young people to go into an apprenticeship or to university—or both, in the case of some higher apprenticeships. We are striving for apprenticeships to be held in the same high regard as university degrees. Giving young people the choice of routes to the skills and knowledge they need by providing careers advice and guidance at the right time has never been so important.

We want our schools, colleges and universities, together with the National Careers Service, to engage, inspire and help young people to make the right choices. The noble Lord, Lord Young, and the noble Baroness, Lady Prosser, pointed that out. Apprenticeships deliver and offer the ideal opportunity for ambitious young people to learn while earning a wage and also, of course, for employers to recruit the brightest and the best.

Higher apprenticeships are the key to providing able young people with the opportunity to undertake apprenticeship training at a level equivalent to a degree. The Budget announced £10 million in each of the next two years to support employer investment in apprenticeships up to postgraduate level. This will complement the additional £40 million announced in the autumn Statement for a further 20,000 higher apprenticeships, more than doubling current volumes.

We know that some people have the potential to benefit from an apprenticeship, but cannot secure a place with an employer immediately. Our traineeships programme is helping 16 to 23 year-olds to develop the skills and experience they need for apprenticeships and other sustainable employment. We recognise that some of our younger apprentices require a greater level of supervision, guidance, education and introduction to the workplace. To address this under the new funding system, a simple one-off additional payment will be made to the employer once any 16 or 17 year-old is settled in their learning and workplace, having completed the first three months of their training.

A number of noble Lords mentioned the position of small and medium-sized enterprises. We are offering the apprenticeship grant for employers, which is a payment of £1,500 to smaller businesses offering a young person an apprenticeship. To date, the scheme has already helped 49,300 new apprenticeship starts. The additional £170 million over the next two years that was announced in the Budget will enable us to support the current very high demand for the grant by funding 100,000 additional incentive payments to employers. That represents a major boost to the job prospects of young people, in particular those aged between 16 and 18. However, this is just part of the success story of today’s apprenticeship programme. Figures show that 181,300 people aged 16 to 18 participated in an apprenticeship in the 2012-13 academic year, with an impressive total of 868,700 people overall participating in that academic year. That is a record number.

Apprenticeship starts for those aged 16 to 18 have broadly remained stable despite youth employment rates dropping by 39% over the past 10 years. This is the subject of today’s debate. It is a concern for us and for the department, and I am glad that the noble Lord, Lord Young, has raised the subject. I will ensure that I take it back to the department, to make sure that progress continues to be made at all times.

Despite all this success, too many small businesses are still not engaged with apprenticeships. We are working with the Federation of Small Businesses and other stakeholders to ensure that our reforms are small- business and micro-business friendly. That is why all new apprenticeship standards will be approved only where they meet the needs of small businesses across the sectors.

I am grateful to the noble Lord, Lord Best, for sending me a copy of the report of the parliamentary inquiry entitled No More Lost Generations, also mentioned by the noble Lord, Lord Young. It headlines that we have 1 million NEETs aged 16 to 24. We are looking at a forecast of around 182,000 new construction jobs by 2018, but so far only just over 7,000 young people have completed an apprenticeship in the industry. We have to do better than that. The report arrived only this afternoon so I have taken just a brief look at it. However, the noble Lord can be assured that I will go through it and take it up with the department. It is interesting because it points out that one way of creating jobs for young people and giving them the skills they need is by training them for the construction industry. It is a sector that is going to grow further. If we do not do that, I am afraid that we will end up importing construction workers from the European Union, and that is something we want to avoid.

Several noble Lords, including the noble Lords, Lord Young and Lord Macdonald, talked about support for 16 to 18 year-olds. On 4 March, we announced the second phase of the Trailblazer apprenticeship standards in 29 industry sectors, including the STEM professions, services and others. Apprenticeship training for 16 to 18 year-olds is fully funded by the Government to provide incentives to employers. The National Apprenticeship Service has been tasked with redoubling its efforts to support more 16 to 18 year-olds into apprenticeships.

The noble Lords, Lord Stoneham, Lord Monks and Lord Young, all mentioned the role of public procurement in terms of the use of government procurement to grow apprenticeships. Public procurement is a key means of upskilling local workforces and reducing youth unemployment. Including a requirement to take on apprentices can play a valuable part. The Government support the appropriate use of apprenticeships in procurement, as they can contribute to encouraging growth in the economy.

The noble Lord, Lord Monks, raised the issue of how apprenticeships can be seen as being “just for the boys”. Girls are being encouraged into apprenticeships as part of the broader push on the STEM subjects, but the noble Lord was correct when he said that the percentage of girls taking up apprenticeships is low. We need to encourage more young women to come forward. He also mentioned the minimum wage. From the information I have, an apprentice earns on average around £200 a week, although the minimum wage is only £2.68, which is due to rise to £2.73 in October.

My noble friend Lord Addington referred to the difficulties that those suffering with dyslexia have in undertaking apprenticeships. As a vice-president of the British Dyslexia Association, he speaks from great experience. Final data from 2011-12 show that 21,110 dyslexic learners participated in an apprenticeship programme. Dyslexia should not present a barrier. We shall continue to monitor this and to do more about it.

My noble friend Lady Sharp touched on a number of issues that I know she has championed. She is right to highlight the historical emphasis on pursuing academic routes over vocational routes. This Government have taken considerable steps to even this playing field and have given every young person a choice, but we continue to look for other ways of furthering this agenda.

I have not covered all the areas that noble Lords have raised this evening but I promise to write to them. I shall follow up with the department as well to ensure that it takes action. A lot is happening, but we need to do a lot more. I thank the noble Lord, Lord Young, for initiating this important and timely debate.

House adjourned at 7.26 pm.