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My Lords, this debate is an incredibly important one, certainly given the progress made in this area by this Government over the last four years, and I thank the noble Lord,
Lord Monks, for raising it, as well as all of your Lordships who have contributed with a wide breadth of experience. It is also interesting to hear about the various backgrounds that people speak from. Given that it has not been mentioned today, I thought that I should declare that I availed myself of a polytechnic education—I will just put in a plug for that.
I shall try, in the course of my responses, to address as many of noble Lords’ points as possible, although I have a raft of papers here with notes on. If I do not address everything, I promise to write to noble Lords whom I have neglected to respond to.
Just how much education and training can do to improve the prospects of young people and, indeed, the well-being of our society as a whole, is something that those of us on this side of the House are always eager to discuss. It is worth noting—and I also get these figures from government sources—that there are 91,000 fewer people not in employment, education or training at age 16 to 18 than there were in 2009, so this is at its lowest recorded level. Across the age group of 16 to 24, there is a significant improvement in those young people in employment, education and training, showing just how much progress is being made in this area.
Recognising the importance of education and training was one of the founding principles of the coalition Government. Since 2010, it has been one of the cornerstones of our programme for government. This is a principle based neither on accident of birth or parentage, nor on some whim of the state about who should and who should not get a chance in life, but on how individual effort and achievement must be encouraged and recognised. I sense that this is a point on which the noble Lord, Lords Monks, and I are likely to agree.
More than 50 years ago, the late Lord Robbins enunciated the great and good principle that higher education should go to those with the wish and ability to benefit from it. Of course, the noble Lord, Lord Layard, was closely involved in that work and is entitled to some of the credit for a principle by which successive Governments stood until after the turn of the century. This was also an era of targets and clutter—as the noble Lord, Lord Macdonald, called it—in the public sector. I point to one of those targets today—and many noble Lords have actually spoken about this. The target of 50% of young people going into higher education was a target that was never reached, as my noble friend Lord Baker pointed out. Even after the benefits that the successful introduction of tuition fees have brought to our universities and the highest-ever numbers of 18 year-olds applying, the latest provisional figures for 2012-13 show that still only 43% per cent of 17 to 30 year-olds are going to university, which is roughly the same proportion as under the previous Government.
The noble Lord, Lord Monks, and other noble Lords asked us today the highly pertinent question of what happens to all the others. At the time, this was a rather forgotten issue, although it would be unfair if I failed to acknowledge those enlightened individuals—and I speak now particularly of the noble Lord, Lord
Adonis, who is not in the Chamber today—who pressed for the creation of more vocational opportunities for those young people who do not go to university, alongside more places for higher study.
The economic crisis and the UK’s declining position in world skills indices made such calls even harder to ignore. Therefore, when they came to power, the present Government did not advocate further deepening the ancient division between our two societies of educational haves and have-nots, but instead pledged that there would be a place in work or high-quality training for every young person who does not go to university.
Despite all the pressures on public spending in recent years—and this has again been alluded to today—we have gone far towards delivering on that pledge. Notably, we have increased to their highest-ever level the number of people participating in an apprenticeship, set shortly to reach 2 million. We introduced a completely new programme of traineeships for those 16 to 24 year-olds who need to further develop the skills and experience needed to compete for an apprenticeship or other job. We introduced a new and better approach to vocational training in schools in the form of technical awards for 14 to 16 year-olds and tech levels for 16 to19 year-olds.
What we have today is not a forgotten 50% but a whole generation at last given cause to hope for the future, to look forward with confidence to succeed in the world and in life, just as apprenticeships have for literally centuries offered the skills that this will require. Of course, they continue to do so and with over 1.9 million delivered since the beginning of this Parliament, and nearly 850,000 people currently participating in an apprenticeship, we are well on course to meet the ambition of 2 million places by the end of the year, to which the Prime Minister has committed us.
Part of the reason for this is the Government’s willingness to invest even in difficult times. I say to the noble Lord, Lord Bhattacharyya, that this year’s Budget made available £170 million in additional funding over 2014 to 2016 to extend the apprenticeship grant for employers. This will fund more than 100,000 additional incentive payments for employers to take on young apprentices aged 16 to 24, providing a major boost to their job prospects. I confirm the point made by the noble Lord, Lord Sheikh, about the minimum wage being paid, although I take on board the issue raised in that regard by the noble Lord, Lord Young. I hope that he will write to me giving further details on the possibility that this may not be the case, and I will be very happy to reply to him.
From January 2015, the scheme will focus on companies with fewer than 50 employees as opposed to fewer than 1,000 employees, as is currently the case. Employers can receive £1,500 per apprentice for up to 10 new 16 to 24 year-old apprentices. This is already proving a powerful incentive, with 95,200 apprenticeship starts made using the grant since February 2012.
The Budget also made available £20 million in funding over the same period for new support for employer investment in apprenticeships that include an element of higher education up to postgraduate level, which will provide apprentices with the high-level technical skills that employers increasingly need, and to which many noble Lords alluded. This applies also to new starts for apprenticeships from the 2014-15 financial year. This will complement the £40 million funding over 2014 to 2016 for 20,000 more higher apprenticeships announced in the last Autumn Statement, more than doubling previous volumes.
However, an equally large reason for success lies in our willingness to engage with employers co-operatively and constructively. Many noble Lords have spoken of employers needing to engage, co-operate and take the driving seat in delivering future skills, but quality has to be the key here also. Quality is whatever commands the confidence of a potential employer in an individual’s ability to do the job. It makes sense, therefore, for employers themselves to be given the buying power needed to determine the skills content of an apprenticeship, from the traditional manual trades to the newer areas in which we find apprenticeships—areas such as IT and law. This is precisely what the funding changes we have introduced over the last couple of years are designed to do.
Without employers, meaningful vocational training just cannot happen. Learning on the job presupposes that there is a job on which to learn. There is absolutely no point in just telling employers to get on with it. A large number have already recognised the value of apprenticeships in meeting their businesses’ present and future skills needs. I am very pleased that the armed services, in which the noble Lord, Lord Monks, among other noble Lords, served his apprenticeship, remain a shining example of this.
That is a nettle no previous Administration have dared to grasp. But with about 1 million young people not in education, employment or training, we saw no realistic alternative. That is why the substantial extra investment in their prospects that I have mentioned, coupled with measures to increase their employers’ confidence in the programme, have been absolutely necessary. With that, too, young people themselves can be reassured that the qualifications for which they study have already been validated by those who will eventually judge what they are worth. How different from the days not long ago, before Professor Wolf’s timely review, when literally thousands of often meaningless qualifications and a plethora of competing acronyms, to which noble Lords referred, vied for the attention of students and employers alike.
Following my introduction, I should like to try to address every single point that noble Lords have made. I will start with the noble Lord, Lord Monks, who talked about us comparing badly to other countries in certain sectors and said that some apprenticeships were very much skewed towards the service sector. The national colleges and UTCs are responding to sectoral demand for the hard, STEM subjects. He also talked about the change in qualifications being confusing. The change is simple to understand: to give them a chance in life, students need to have maths and English GCSE by the age of 19. It is also simple to understand that young people can choose between doing a work-based training programme or a vocational, technical or university qualification.
The noble Lord, Lord Monks, talked about the Richard review and about employers being given more autonomy in terms of money going straight to them.
He also talked about the types of skills they will require. The trailblazer scheme, the UTCs and the national colleges have all gone some distance to address this. He also spoke about skill shortages. The UTCs, the trailblazers, the tech levels and tech awards should also start to address some of these problems. He also made a point about Germany making apprenticeships more glamorous. In this country, demand for apprenticeships is so high that we are not having to glamorise them. Germany suffers from the different problem of demographic change, which means it has fewer people to fill jobs, and it will have to address this in the future. By the same token, I have experience of companies in this country which have had to import skills from Germany. We must get better at providing the skills to meet the demands of employers.
My noble friend Lord Baker touched on the issue of the huge shortage in engineering. To hear his words has been music to my ears because for the last 10 to 15 years in local government it has been woeful. At the last count, there were 48,000 engineering vacancies for 24 people available to do them. He also talked about skills and put out the slightly controversial case for no exams at 16. I am not sure that I agree with him on that as I would not like to shock a young person into their first exam at 18 or 19. However, I thank him for his long-standing commitment to and hard work in improving technical education for 14 to 18 year-olds. Our investment in UTCs so far has led to 56 either open or preparing to open, providing 35,000 students a year with a high-quality technical education, driven by employers. I make the point again about employers being in the driving seat.
In terms of supporting 14 to 16 year-olds to develop practical and technical skills and knowledge alongside their GCSE study, the key stage 4 qualifications known as technical awards, which I have already spoken about, will be taught from September 2015. These will encourage an interest in technical subjects such as engineering and technology and others will develop practical skills such as woodwork or dressmaking. My noble friend Lord Baker made the point that apprenticeships should be for young people. The funding system prioritises apprentices up to 19 years old but we need more employers to offer young people a chance to show what they can do, assuming the best of them not the worst. This may be a bit of a gap in the system but the links between businesses, schools and colleges are absolutely key for the future.
My noble friend Lord Addington talked about apprenticeships requiring an English qualification, which is a specific challenge for those with dyslexia. Apprenticeships give young people the opportunity to develop a range of skills, and experts such as Professor Wolf have stressed how a good level of English and maths is essential to support career progression. As the noble Lord, Lord Monks, pointed out, other apprenticeship schemes considered to be world leaders include maths and language skills because they are so important. However, my noble friend is absolutely correct to say that we need to ensure that reasonable adjustments are available. The current skills funding rules include a statement making this absolutely clear, and we continue to seek other ways in which to promote adjustments to support learners. My noble friend also talked about support for dyslexia and the JISC. It is not being wound up; it is in a strong financial position and has secure funding for the short term at the very least. It is, however, restructuring and some regional centres may close. He also made the point about employers being more engaged and willing to play their part in assisting apprentices with dyslexia.
The noble Lord, Lord Bhattacharyya, talked about money shortages for employers. I have already gone some way in talking about that, but for every pound that an employer spends the Government will spend £2, up to a cap. He also said that the Government should fund courses that employers value. I wholeheartedly agree and that is why we are reforming apprenticeships to put employers again in the driving seat of design and delivery. This is why we have introduced the tech levels that I have spoken about for 16 to 19 year-olds, and all tech levels are backed by at least five employers or a relevant industry body. That is important in terms of giving confidence in the workplace and providing parity of esteem, which so many noble Lords talked about. Examples of the firms that are backing the tech levels include John Deare, Lovell, Proctor & Gamble and the Royal College of Veterinary Surgeons.
The noble Baroness, Lady Taylor of Bolton, talked about the cultural problem for women of apprenticeships, which seem to be skewed towards boys or men. I have looked at some of the figures and there is actually a challenge there in terms of engaging girls better. She also talked about some sort of technical baccalaureate. It was, in fact, introduced in September of this year. It is an alternative to A-level; I am not sure whether it is on the same basis as the Labour Party is suggesting but, for noble Lords’ information, the performance tables will be produced in 2016.
The noble Lord, Lord Rees, said that not everyone should have to go to university. That is the way in which this country needs to culturally change. Not everyone has to go to university. I went to a polytechnic and it is no shame to do an apprenticeship. In fact, some of the most successful people I know have done apprenticeships.
I am aware that time has run out and I am barely half way through answering noble Lords’ points. If I can, I will write to them in due course because I am aware that there are about 10 noble Lords left to respond to. I thank all noble Lords who have taken part in this debate.