Apprenticeships — Motion to Take Note

– in the House of Lords at 11:46 am on 15 October 2015.

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Moved by Baroness Prosser

To move that this House takes note of the process for monitoring the availability and quality of apprenticeships, and the mechanisms for ensuring an appropriate spread of apprenticeships across the labour market.

Photo of Baroness Prosser Baroness Prosser Labour 11:53, 15 October 2015

My Lords, I am pleased to be able to introduce this debate today. Let me start by saying a few words about why this subject is so important. We have a low-wage, low-skill economy putting severe pressure on individuals, families and our economy overall—I would be really grateful if people did not converse while I am trying to speak. We have a serious skills shortage, especially in engineering skills of all kinds and the skills required for construction and developing new technologies. We have a particular productivity problem—the productivity puzzle—exacerbated, some would say, by our low-wage, low-skill economy. The Recruitment & Employment Confederation has cited skills shortages as the No. 1 problem facing its members, so if we want to be a real global player and stop relying on imported labour to see us through, we need to up our game.

The Government have pledged to support 3 million apprenticeships by 2020. This must not be a “never mind the quality feel the width” proposal. It will take a bigger and better effort by government departments to co-operate and co-ordinate, coupled with determination to introduce and seriously apply the proposed training levy, and a recognition by the Chancellor of the Exchequer that cutting the money granted to FE colleges is penny wise and pound foolish.

What is meant by the term “apprentice”? I heard someone on Radio 4 describe an apprenticeship as “the moving of learning from head to hand to head”. That is a nice, elegant way of putting it. Over the past few years, the term has been used as a catchphrase for the most meagre of training programmes of scant duration with little or no recognisable qualification at the end.

The TUC has welcomed the consultation on the use of the term “apprentice” but has warned that making it a criminal offence to use it and claim support under the apprenticeship scheme for short-term training which would have had to be provided anyway—for example, in the retail trade—will succeed only if mechanisms are in place to enforce action and monitor and inspect sectors of the labour market where such misuse and abuse is known to be prevalent.

As well as possible abuse, the Government must also monitor take-up of opportunities across the economy. Figures produced for the 2014-15 report of the House of Commons Education Select Committee show that efforts to engage young people in apprenticeships are not proving that successful. During the period 2009-10 to 2013-14, the number of under-16s taking up offers halved from a measly 400 to 200. In the same period, the number of 16 to 18 year-old starts saw a modest increase of just over 3,000. Conversely, again in the same period, the number of starts for those aged 45-59 increased fourfold from 10,000 to 41,850. Is this what the Government were looking for? It takes us back, I suspect, to the misuse of the term and possibly the misuse of the support made available to employers.

The Government’s plan to address the question of misuse and abuse, as mentioned above, will, no doubt, go some way towards redressing this imbalance. However, the Education Select Committee also has called for a rebalancing of current funding, giving more emphasis to support for younger trainees. Are the Minister’s Government going to support this proposal?

The question of more directed support for the younger worker has also been raised by Oxfam, which has concerns about the more vulnerable young person. It suggests ring-fencing funding to deal with the particular needs of care leavers and putting more emphasis on ensuring equality of access, with the intention of reducing gender inequality within the UK. Will any of the suggestions put forward by Oxfam be supported or addressed?

The needs of younger people cannot, of course, be dealt with without looking at what is happening in our schools, where all the evidence tells us that far too many pupils receive poor information, advice and guidance, and some receive no advice at all. In many cases, young people are actively discouraged from taking the apprenticeship route. Careers advice in schools does not have a good history. It has been poor for many a long year, mostly because it is not seen as a specialism but is tacked on to the duties of a class teacher. The very unwise decision taken by the previous Secretary of State to devolve careers advice to individual schools has left the system in an incoherent mess with no overall strategy or recognised standards. However, the major problem is that the recognition and reward system for schools is based upon the percentage of pupils attaining good GCSE and A-level results, and on the numbers of pupils retained in the sixth form. Small wonder that many schools actively discourage the apprenticeship route, with some refusing to allow local manufacturing companies to come in to talk to pupils. I understand that a new destination test is to be introduced, whereby where a young person ends up at some point in the future will contribute to a school’s standing, but horses and stable doors come to mind here. When is the Department for Education going to wake up to the problem that gives schools a real conflict of interest?

Before moving on to more positive areas, I must register the concerns of those engaged in further education. This sector seems to be the poor relation when it comes to funding. The grant per pupil varies across the sector, but funding reductions for post-16 learning reduces the FE sector’s ability to deliver the Government’s apprenticeship agenda. In addition, sixth-form colleges, unlike schools and academies with sixth forms, have to pay VAT on purchases, providing a very uneven playing field for that part of the education sector charged with delivering vocational learning to pupils, some of whom may well be needier than many others.

There is also room for improvement in the arrangements for regulation and oversight. Currently we have the Education Funding Agency, the Skills Funding Agency, the Higher Education Funding Council for England, the FE Commissioner and Ofsted. That sounds like a system devised for the sitcom “Yes Minister”. The Association of Colleges has called for a review of these arrangements. Is there any intention to rationalise what must be an expensive, confusing and unnecessary plethora of governance?

Earlier this year, this House established a Select Committee on Social Mobility. The TUC submitted evidence and noted the findings within the UKCES report Working Futures, which flagged up the mismatch between apprenticeship starts and the future requirements of the jobs market. There will be precious little social mobility if young people are training to do jobs that are declining or disappearing altogether. What steps are the Government taking to address this problem and to ensure that there is a fit between training offered and long-term job opportunities?

Now for something a little more positive. We welcome the proposed training levy. Some of us remember the training levies of yesteryear and could not understand at the time, nor since, the reasons for their demise. We very much welcome the requirement for companies procuring contracts valued at £10 million-plus to demonstrate a clear commitment to apprenticeships. However, we would go further and say that those major contractors must play their part in training for the future. We have a very good example in Crossrail, and if it can do that, so can others. The recently announced £70 billion injection into the transport sector will also require skilled labour to carry projects forward, and will give another opportunity for employers to commit.

We also welcome the new degree apprenticeship in professional management. The Chartered Management Institute has said that only 13% of current managers have any management qualification at all. That is not good enough by any means, so this initiative is therefore welcome. I am also pleased to be able to include here the excellent example set by the Nuclear Decommissioning Authority. Obviously, this industry requires a highly skilled and safety-aware workforce, and it has wasted no time in establishing multilevel training arrangements delivered across the country, from Cumbria to Bridgwater in Somerset and from Wales to northern Scotland. Across eight sites between 2012 and 2015, 423 new apprentices were taken on, and this autumn will see a further 215 starts. In order to protect the integrity of the supply chain, the NDA has supported the community apprenticeship scheme and the supply chain apprenticeship scheme. These schemes will help to ensure the continuing availability of skilled labour for the nuclear industry and, to that end, funding support is available to employers engaged within the industry.

I cannot conclude my remarks without a mention of the serious gender imbalance, particularly within the STEM areas of employment. As well as committing to apprenticeships, companies should be required to take positive action to bring in under-represented groups, something Crossrail has again dealt with successfully.

Finally, I will give a shout-out for those girls and young women who take up apprenticeships in the beauty industry. I am not the only person in this Chamber, male or female, who needs a good hairdresser—some may say I need it more than others—or who enjoys a massage or a manicure, and so on. Training lasts for three years and is quite intensive. The only problem with these jobs is that they are not anything like as well paid as many skilled jobs that are generally done by men. However, we may need to have that debate another day.

Photo of Baroness Chisholm of Owlpen Baroness Chisholm of Owlpen Lord in Waiting (HM Household) (Whip)

My Lords, I remind all noble Lords that apart from the noble Baroness, Lady Prosser, the noble Lords, Lord Watson and Lord Stoneham, and my noble friend Lord Courtown, there is a five-minute limit on speeches. It will be much appreciated if noble Lords keep to that time limit.

Photo of Lord Macdonald of Tradeston Lord Macdonald of Tradeston Labour 12:05, 15 October 2015

My Lords, I thank my noble friend Lady Prosser for initiating this important debate and for opening it so well.

Since the 1997 Labour Government, there has been cross-party support for increasing the number of apprenticeships. By reducing the skills gap in key sectors of the economy, the shared intention is to close the productivity gap between the UK and other leading nations.

Craft apprenticeships were once well regarded, but their reputation now suffers from recent experience of too many badly defined, short-term schemes that neither trained well nor paid well. Ministers have been repeatedly criticised in debates on this subject in your Lordships’ House for putting quantity before quality and for tolerating questionable criteria to hit their targets.

The pledge of the new Conservative Government is to create 3 million new apprenticeships by the end of this Parliament—up from the 2.3 million achieved over five years of the coalition Government. While many important questions have still to be answered, some of the measures recently announced by the Prime Minister deserve at least a tentative welcome.

We on the Labour Benches have in past debates urged government to link the award of public sector procurement contracts to the provision of apprenticeships by competing companies. With its procurement budget now totalling over £50 billion a year, the Government now agree that this would significantly boost apprenticeship numbers, and the No. 10 press notice promises that,

“all bids for government contracts worth more than £10 million must demonstrate a clear commitment to apprenticeships. In particular, employers’ bids will be reviewed in line with best practice for the number of apprentices that they expect to support”.

Can the Minister give the House more detail on how “best practice” in apprenticeships will be defined and then implemented?

The Department for Transport has also announced a target of 30,000 apprenticeship places in its sector by 2020. Will this be encouraged by writing new training requirements into regulatory contracts with the train operating companies, Network Rail and the supply chains? Can the Minister also say if there are any plans to extend contractual obligations on apprenticeships in other sectors that are subject to economic regulation?

The introduction of an apprenticeship levy on large companies is also proposed, to start in April 2017. As my noble friend Lady Prosser said, this policy should again be welcomed in principle. There are successful levy fund training systems in over 50 countries around the world, according to the Government. However, some in UK business are more querulous. Microsoft is concerned that its existing successful training schemes will be disrupted. The CBI wants large businesses which will pay the levy to decide how best to spend it. The British Chambers of Commerce complains that government is too focused on large employers. Smaller companies employing fewer than 250 workers will presumably not pay a training levy. Will they then not have access to the levy pot? Can the Minister say how apprenticeships will be boosted among the smaller companies, which of course employ the majority of the UK workforce?

In response to criticisms of inconsistent, poor-quality schemes, the trailblazer groups, led by employers and set up in 2013, are now publishing their approved standards to create apprenticeships worthy of the name. There are now 140 trailblazer groups, responsible for more than 350 standards and working across a far greater range of jobs than ever before. Again, this is progress that deserves cross-party support.

However, given the history of overpromise and underdelivery in regard to skills training, we can confidently anticipate future concerns being debated in your Lordships’ House, particularly when we factor in the impact that the digital revolution will have on so many sectors of our economy. Digital skills are already essential for all trainees, so I conclude with a plea. Your Lordships’ Select Committee on Digital Skills, of which I was a member, as was the Minister, published its report last February, and a debate on its findings now seems somewhat overdue, even by the measured pace of this establishment. Perhaps the Minister could use his influence to have digital skills scheduled for debate some time soon.

Photo of Baroness Garden of Frognal Baroness Garden of Frognal Deputy Chairman of Committees 12:10, 15 October 2015

My Lords, I thank the noble Baroness, Lady Prosser, for introducing this debate and focusing our attention once more on the importance of apprenticeships. She has been a doughty champion of equal opportunities and work-based training, and both of these the growth in apprenticeships will help to address.

The level of interest in this subject is seen in the many informative briefings which have come from those with first-hand experience of apprenticeships: educational organisations, colleges, awarding bodies, charities, industry and employer organisations. I thank them all but can speak on only a few of the important issues that they raise. I shall leave to others the financing and apprentices levy. In my few minutes I shall focus on three aspects: the lack of knowledge and understanding around apprenticeships; the emphasis on the quantity of apprenticeships—how will the target of 3 million starts impact on the quality of the training and learning?—and continuity and long-term planning for skills and training.

With regard to lack of knowledge, as the noble Baroness, Lady Prosser, said, we have discussed before in this House how a crucial factor in enabling young people to follow the path which best suits them is careers information, advice and guidance. Even at primary school, children can be enthused about learning if they are made aware of future jobs and careers which capture their imagination, including skills-based jobs. If their curiosity is aroused young, they will be much better informed when they leave school.

Recent research revealed that nearly half of parents do not really understand the alternatives available for their school leaver children. With the best of intentions, schools will tend to advise pupils on the academic destinations they know best; hence they will encourage them to go on to university or college—again, as has been mentioned, with the incentive that this ticks the boxes on which they have to report.

Where apprenticeships are suggested, research has found that nearly twice as many men as women apply. Women tend to be in lower-paid routes and have worse job prospects than men, particularly in those industries that have long been male dominated, such as engineering and construction—industries which are in need of all the skilled workers available, not just the male ones.

Picking up on the remarks of the noble Baroness, Lady Prosser, will the Minister say what incentives are offered to schools to promote and celebrate their school leavers who have been accepted on apprenticeships? Most schools will publish with pride their university entrants. Why not their apprentices? It would be a simple way of drawing to the attention of parents, teachers and other pupils the fact that apprenticeships are something to aspire to, commendable and thoroughly worthwhile.

There is a danger that, in chasing numbers, quality is put to one side. If we really want apprenticeships to be highly regarded, it is vital that training and assessment continue to meet the highest standards. It is also vital that not too many of those 3 million should be level 2 apprenticeships, with the brand thus becoming associated with a lower-level qualification.

There is great expertise in providers of part-time higher education, who, with government support, could be a cost-effective resource in making apprenticeship training less of a barrier, particularly for SMEs. Can the Minister assure the House that there will be no pressure from government that leads trainers or employers to cut corners to meet targets?

Thirdly, I will mention the churn and change in skills policy. I declare an interest in having worked for City & Guilds over a period of 20 years, long before I was involved in any way with politics. Time and resource was spent—some might say wasted—when successive Ministers brought bright ideas which had been tried and discarded, but apparently not recorded as such in the corridors of power. Where is the collective memory? City & Guilds research shows that in the last 30 years, there have been 61 Secretaries of State responsible for skills and employment policy; at least 13 major Acts of Parliament; and seven major national reviews of skills and training policy, which have made more than 200 recommendations. The policy area has flipped between departments or been shared with multiple departments no fewer than 10 times, and at least 19 different major vocational programmes and initiatives have been introduced. What hope is there for the colleges and trainers who have to provide medium-term and long-term programmes for training, or for employers who have to run their businesses while watching out for changes to policy, terminology, criteria and funding? I appeal to the Minister for greater stability and continuity in the skills agenda. Can he assure us that changes will be made only once previous initiatives and the numerous recommendations have been fully considered?

The value of getting it right is high. Apprenticeships enable young people and adults to gain additional skills, find job satisfaction and contribute to the country's economy: but we do need to get the processes and mechanisms right. I look forward to hearing the other contributions.

Photo of The Bishop of Derby The Bishop of Derby Bishop 12:16, 15 October 2015

My Lords, I, too, thank the noble Baroness, Lady Prosser, for introducing this debate so clearly and raising so many important issues. I also commend the Government’s aspiration for 3 million apprenticeships and for greater flexibility and a range of standards. I also endorse the point made by the noble Baroness about the reality of a skill shortage and the urgency of us tackling this agenda. I remind the House that apprenticeship comes from an understanding of learning and that it is not just about skills, but about skills learnt in the workplace—that is, in a real context. That, of course, shapes people to be citizens as well as workers. I hope that understanding of apprenticeship will remain at the centre of this initiative and not get pushed to one side by a more narrow focus on skills per se.

I want to make a number of points and ask the Minister two or three questions. The first point is on the link between learning and the workplace. I live in Derby, and our local Derby College trains more than

2,000 apprentices a year. It has recently introduced 10 employer academies. These employer academies allow people who are learning in the college to be linked with employers who have particular business and skill requirements, so that during their learning students can get bits of work experience, and they are guaranteed an interview for an apprenticeship at the end of the process. We have to drive this whole culture, as others have said, back into the learning in schools and colleges. I know that the Government have commissioned Prospect to do work with schools, but could the Minister say what he thinks of the importance of initiatives such as employer academies to further the link between learning and the workplace at an early stage pre-apprenticeship to prepare and encourage people?

My second point is about the levy. A number of employers—especially large employers—in the part of the world where I operate have expressed some concern about a possible tension between the centralising of funds through the levy and the desire for employers to design and deliver learning in their own place and according to their own requirements. That needs to be looked at very carefully, and I would be grateful if the Minister could comment on the tension between the centralising of funding and a desire for delivery, ownership and control to be local.

My next point, to which the noble Lord, Lord Macdonald, has alluded, is about scale. I have heard concerns from small and medium enterprises about the burden of managing the funding and assessment processes for small businesses. There has also been some concern about the current inspection system, which is much valued, being downgraded. It will be easy for big employers to do this, but, as the noble Lord said, most people in the world of work are in small and medium enterprises. Can the Minister comment on how funding and assessment can be done realistically at that level and on the future of the current inspection system?

Finally, the noble Baroness, Lady Prosser, mentioned gender. It is good that just over half of people in the apprenticeship system in 2013—51.9%—were women, but some of the evidence suggests that women are more likely to be paid less, to receive less training and to have fewer job prospects upon completing apprenticeships. Of course, that is part of a wider issue in society, but I would be grateful if the Minister could comment on how he sees the urgency of this gender imbalance in levels of pay, levels of training and job prospects for women in apprenticeships.

Photo of Lord Lingfield Lord Lingfield Conservative 12:20, 15 October 2015

My Lords, this is a welcome debate and I, too, thank the noble Baroness, Lady Prosser, for securing it. I remind your Lordships of my interest as the chairman of the Chartered Institution for Further Education, one of the Government’s new initiatives, which I am delighted to say received the Great Seal on its royal charter just last Friday and has therefore been officially in existence for just less than a week.

I warmly support the Government’s target of 3 million new apprenticeships by the end of this Parliament and, like the right reverend Prelate, congratulate the

Government on the fact that, of the 2013-14 starts, well over half were women. In the early 1990s, the Conservative Government launched modern apprenticeships, which provided the model that we use today. They ensured that young people worked towards a recognised qualification, acquired skills and earned a wage at the same time. However, as the noble Baroness, Lady Prosser, said, the new 3 million target will not of itself deal adequately with the high level of vacancies caused by the skills shortages in so many sectors. To be effective, they must be really good-quality apprenticeships—as the noble Baroness, Lady Garden, said, we hope that many of them will be at level 3—and be recognised widely as such by students, teachers, parents and employers.

Like the noble Baroness, Lady Prosser, I was anxious when I heard of the view expressed by the Ofsted chief, Sir Michael Wilshaw, to the Education Select Committee that too many schools fail to promote apprenticeship to their pupils, wishing to hold on to them for financial and prestige reasons and pushing them, in too many cases, towards weak university courses. It is a sad fact that they are then saddled with huge student loans and often poor employment prospects with which to face paying them. The problem is that most school teachers followed the conventional sixth form and university path while young and so do not understand apprenticeship and too often think of it as a second or third-order option for their pupils.

So we badly need to promote the cause of apprenticeships as a viable and worthwhile alternative and a sure course towards employment. The Industry Apprentice Council’s survey this year showed that 40% of apprentices rated their careers guidance as either poor or very poor. Only 16.2% of those surveyed said that they were actively encouraged to undertake an apprenticeship, while 21.2% said that they were actively discouraged. This must change and there is clearly a need to improve the quality of information concerning apprenticeships that young people receive—many, understandably, have huge misconceptions about what they entail. At the moment, schools are simply encouraged to give guidance about apprenticeships; the Minister should conceive of the fact that it should be compulsory information for all secondary schools.

I want to use my last few words to draw attention to a high-quality apprenticeship development centre, also in Derbyshire, run as a partnership between Toyota and Burton and South Derbyshire College, with a dedicated facility within the manufacturing area of the college’s campus. This is well known to schools, students, parents, teachers and employers alike as a provider of first-quality apprenticeships because, of course, of the Toyota brand coverage. During the past two years, Toyota and the college have worked together to offer the apprenticeship programme to other small employers and to supply chain partners of Toyota so that they, too, can benefit from the high level of training development and discipline that is part of the Toyota ethos.

There are many other good examples of larger firms looking outwards in this way and giving apprenticeships real prestige. These are actively championed by the Government and will help us to continue to secure economic growth in this country and the high quality of technically skilled young people that that requires.

Photo of Baroness Morgan of Huyton Baroness Morgan of Huyton Labour 12:25, 15 October 2015

I would also like to thank my noble friend Lady Prosser for this timely debate today. There is always a danger that we fall into collective patting on the backs and a warm glow when we talk about apprenticeships. In some ways, what we should really be proud of, arguably, were the old-style apprenticeships, so I would like to ask today: how do we look at what worked, learn the lessons of success and failure and modernise for today and tomorrow’s world of work?

We often ask in some bemusement why we do not do skills training as well as Germany, to take one example. The answer is pretty simple. We had a fully functioning system like other European countries. In the 1950s, over half of male school leavers went into apprenticeships. Decline really accelerated from the 1970s with recession and falling numbers of jobs in traditional industries. Unfortunately, successive Governments did not then reform and update apprenticeships; they pretty well destroyed them. Out went the core employer-apprenticeship relationship with a combination of quality workplace learning and more formal education; out went the expectation that employers would contribute to the off-the-job costs; and out went the strong and flexible connection between the needs of the local employment market and what was offered via apprenticeships. What came in? A well-meaning but poorly conceived new centralised system of national vocational qualifications based on competencies promised great progress on productivity, but it did not really deliver.

Apprenticeships became popular again with all parties from the 1990s, but the focus since then has been on numbers, not quality. There have not been apprenticeships as we would collectively envisage them, with some very notable and high-quality exceptions. The apprenticeship scheme in the past 20 years or so has been characterised by being heavily focused at level 2, at GCSE level, not a higher level, as required by the economy. Typically, it involves a low-skilled worker who receives pretty poor training. They have been heavily skewed, too, to workers over 25 years of age who previously would have been trained by employers, not on government-funded schemes. The Digital Skills Committee, which I chaired, received candid evidence from a range of employers who said that skills training at FE colleges is too often inadequate to their needs. They also admitted that, since the 2008 recession, they have largely ceased to fund proper training and, because of skills shortages, fear that if they train employees they will be poached by others. Recent Ofsted reports have said much the same thing.

In summary, a combination of central targets for apprenticeship starts and the outcome-based funding system has incentivised providers of training to engage in a drive to the bottom. Large numbers of short, low-level and often low-quality apprenticeships have been favoured over more rigorous, longer, high-quality apprenticeships. That has been coupled with drastic cuts in FE colleges, which are likely to get worse, affecting largely low-skill, poorly educated, often disadvantaged young people. I confess that I scratch my head that funding lunches for all primary children is a higher priority than FE colleges.

Building on the Richard review and the trailblazers programme, there needs to be fundamental reform. In this context, I strongly welcome the new levy. It is essential that apprenticeships are funded at the sort of level that our competitors have done for many years. But I am anxious rather than excited about the 3 million target. I am sympathetic to writers of manifestos—I have certainly been there myself—but we must not again chase numbers rather than quality.

So what do we need? Apprenticeships have to, again, reflect labour market needs, develop young people’s skills to a high level and make a real contribution to increasing productivity. As in Austria, Denmark, France and Germany, we need high-quality, on-the-job learning and high-quality, off-the-job learning in education and training. This is a very big jump from where we are now. We also need to focus on developing advanced level apprenticeships. There is lot of noise about higher apprenticeships but in reality the numbers are tiny. Yet this is precisely where we need to focus our efforts if we want a genuine alternative to university, and if we want to meet the serious skills shortages that we know are present in our economy. That is precisely where our competitors deliver their numbers.

Core to the success of new apprenticeships is the involvement—indeed, the active and enthusiastic support—of employers. That has been seen in the trailblazers programme. Now we need to reform the whole system, to recreate the self-reinforcing mechanism that originally produced great apprenticeships. The new fund will certainly help enormously, but my plea today is to do quality as well as quantity—indeed, to put quality before quantity at first. If you want one measure, do not let it be the 3 million; let it be where apprentices are one year after they finish their scheme. That should be the key measure of whether or not they have the right jobs and whether they are meeting the needs of the local economy. I should be really interested to hear from the Minister whether that measure is being considered.

Photo of Lord Aberdare Lord Aberdare Crossbench 12:31, 15 October 2015

My Lords, I am a firm believer in the value and importance of apprenticeships—for apprentices themselves, for employers and for our economy. So, I very much welcome this debate. I, too, served with the Minister on your Lordships’ Digital Skills Committee and it is a great pleasure to follow our excellent chairman in this speech.

Our report in February included a call for more apprenticeships across the board, more digital apprenticeships, and also that all apprenticeships should include a digital skills element. I trust that the Minister is promoting that agenda in his current role. As a vice-chair of the apprenticeships all-party group, I have talked to many young apprentices all singing the praises of the paid apprenticeship pathway, as opposed to going to university. For this debate I have received input from too many industry employer and other bodies to list in my five minutes, but I thank them all.

I very much welcome the Government’s target of 3 million new apprenticeship starts in England during the current Parliament, although again I believe an even better target might relate to successful apprenticeship completions. Three key elements are required to reach that target: enough places from employers; enough applicants to take them up; and high enough quality to ensure that they lead to proper transferable skills and jobs.

According to the excellent Library note for this debate, there are, on average, 12 applications for every apprenticeship vacancy. Many more companies need to offer apprenticeships, especially SMEs, so it is disconcerting to hear about growing disquiet among employers about the proposed new funding and delivery model for apprenticeships, despite its being developed under the banner of employer leadership. This disquiet relates above all to the lack of clarity about how the proposed apprenticeship levy will work. There are numerous uncertainties and some scepticism about the Government’s claim that firms that are committed to training will be able to get back more than they have put in. That lack of clarity risks making training apprentices seem less rather than more attractive, with the levy viewed more as a tax than an investment. I hope that the Minister will be able to tell us when more detail on the levy will be available to set some of those fears at rest.

SMEs need specific help to offer apprenticeships. They get some extra funding but need other support, too, such as that provided by apprenticeship training agencies—ATAs—or by the automotive sector’s clearing-house approach to give SMEs access to suitable candidates, or by BAE Systems’ support for SMEs in its supply chain to take on apprentices. What are the Government doing to promote and extend schemes like this to enable many more SMEs to take on apprentices?

In a recent survey of more than 1,300 apprentices by the Industry Apprentice Council, itself made up of apprentices, 56% said that they found their apprenticeships through their own initiative; only 7% said that their careers adviser provided any input and another 7% that a teacher had helped. Some 40% believed that the careers advice they received at school was poor or very poor; 5% had had none at all. Ofsted found 80% of careers advice in school to be below the required standard and 89% of STEM teachers see providing careers information as part of their job, but only 10% know about apprenticeships. I could go on, but these figures speak for themselves.

I hope that the Minister will tell us how the Government plan to tackle the challenge of improving the awareness and status of apprenticeships beyond the limited but welcome provision in the Enterprise Bill. What about getting Ofsted to more formally inspect school careers advice, setting up a UCAS-style application system for apprentices, or giving a major boost to pre-apprenticeship activities such as work experience, traineeships and employer engagement? I declare an interest, in that I used to run a small business providing employability skills training. What about running programmes to increase teachers’ and parents’ awareness of apprenticeships?

I do not have time to cover the importance of quality for apprenticeships. Three million starts is not good enough unless they deliver real needed skills, up to a high level, with progression into real jobs. I am attracted by the idea of a new quality mark for apprenticeships, such as NIACE’s apprentice charter.

At present, I detect a sense of unfulfilled expectation among employers about the state of apprenticeships policy: employers are willing to pick up the ball and run with it, but need first to be clear about the rules of the game. I hope that the noble Earl the Minister will be able to give some indication of how the Government plan to progress the three critical strands that I have outlined.

Photo of Lord Bhattacharyya Lord Bhattacharyya Labour 12:35, 15 October 2015

My Lords, I congratulate my noble friend Lady Prosser on securing this important debate. I declare my interest as chairman of WMG at the University of Warwick. At WMG we are partners in Jaguar Land Rover’s Lifelong Learning Academy. I set it up. We have a budget of just under £1 billion. We train workers from across the industry, from advanced apprentices to senior managers. This experience has taught me the importance of updating curriculums and constantly improving the quality of training in classrooms and at work. Vocational learning must be relevant to future careers. Currently, we spend more than £3.5 billion in developing new products. Our competitors are in Germany.

I shall focus on how we can create high-quality apprenticeships. There is broad cross-party agreement on this aim, yet all Governments have struggled to deliver. It is a graveyard of acronyms, from TEC, YOP and YTS to LSC. The challenge we face is practical, not ideological. In Germany, 500,000 young people begin apprenticeships each year, leading to a status that they can take pride in, such as being called technician engineers. Here, apprenticeships have grown mostly among older workers. A decade ago, 80 people aged over 35 began an apprenticeship; last year, 80,000 did so. More than 2,000 people aged over 60 became apprentices. I am a great advocate of lifelong learning, but this is perhaps taking things too far.

Some of these apprenticeships have been of poor quality. In 2012, one supermarket created 50,000 six-month apprenticeships, while their private training provider made more than £12 million profit from these contracts. At the same time, the number of young people on advanced apprenticeships in engineering and manufacturing declined. To their credit, Ministers have learned from their on-the-job training and now argue that apprentices should be new entrants, on quality courses leading to a recognised status. Removing programme-led and short-term apprenticeships was a good start. Now we await the Ofsted report on apprenticeship quality, knowing that the Skills Minister, Nick Boles, has admitted it will expose a great deal of “bad practice”.

How can we fix this? Sir Michael Wilshaw has rightly said that,

“to have a truly effective vocational education system, employers must become more involved in its delivery”.

Today, trailblazer employer groups are setting new apprenticeship standards. However, progress is slow, with only 54 agreed. When new standards are agreed, there will still be much poor training and some bad employers out there. Ofsted is excellent, but its last annual report showed that it inspected just 16 employers and 40 independent learning providers that taught apprentices. It cannot monitor thousands of employers and hundreds of vocations.

In Germany, the dual system relies on the chambers of commerce supervising training, assessing quality, and setting exams. In Britain, there is no such established industrial partnership driving quality. There is no clarity on how standards will be monitored or inspected in the future. We must create the capability in industry to drive up quality in the workplace.

The apprenticeship levy could provide an answer. Levy payers will receive a voucher to buy training; underspend by other levy payers will increase the voucher’s value. We should use a proportion of this pool to also support apprenticeship standards. Employers should create sector funds responsible for updating standards, ensuring vocational training is of high quality, and insisting that students are treated well at work. Ministers are right that the levy must not subsidise firms that do not train; using the levy to support apprenticeship quality would only help firms who do train and apprentices who gain.

We have broad agreement on aims and strategies; now we must get the delivery right. Unless we do that, it will be another two or three years of more reports coming out and we will have no future. I hope the Minister agrees that employers must both contribute to funding apprenticeships and contribute to improving quality.

Photo of Lord Addington Lord Addington Liberal Democrat 12:41, 15 October 2015

My Lords, apprenticeships are one of those things which everybody hailed as a wonderful idea but nobody has been quite sure exactly what they are supposed to do; I think that would be the assessment finally coming through.

I was probably one of the first to say there were problems, because of one specific area I had experience of: dyslexia in taking the final assessment. I have since discovered, thanks to people at the British Dyslexia Association who have had a look at it for me, that in the new trailblazer guidance there is absolutely no mention of what to do about disability when setting up an apprenticeship. Effectively, it seems that the Equality Act is being ignored. There might be some guidance hidden—and if you dig back far enough there is a mention of some form of legal requirement—but nobody is telling you how to do it. Nobody is telling you how to handle this incredibly diverse, complicated sector, which is overrepresented in the NEET population, this thing we are supposed to be getting rid of with apprenticeships. We are not addressing it.

Then we go to the employers, who are quite convinced that if you have not got a GCSE in maths and English you are utterly unemployable, which means you have got to take an assessment. Other disability groups, including one I have had quite a lot of contact with over the years and have not always agreed with, the Alliance for Inclusive Education, have raised the concerns for every bit as long as I have. A different group, mainly dealing with people with learning disabilities, once again, feel excluded. Unless you start to address this problem, the apprenticeships are not going to touch one of the biggest groups we have employment problems with.

With the backing of this House, I managed to get people to say that those who had certain types of literacy problems or disabilities could take the final assessment. I thank this House for that and I thank your Lordships’ patience for allowing me to bore you for long enough to get it dealt with. Indeed, if it did not bore you it certainly bored me. But unless we start to address this properly, we are always going to miss; we are always going to have people left aside. Employers have got to be told, “It is the Equality Act”, but there are ways around this, and reasonable adjustment does not mean we are saying take someone who cannot do the job or access the training. We are saying that you have to do it differently. Certain groups will always be excluded from certain occupations—that is just the way it is—but far fewer than now. There seems to be a total lack of understanding or, indeed, a will to look at the way that changes in behaviour and the application of technology can change the situation. It will not change unless we bring those things together, as we have done in other education sectors. Indeed, higher education is a much better example; you can get through a degree far more easily and with far more support than you can get through the most basic of apprenticeships. That is an absurdity we have not dealt with yet. All the parties represented in this House have a degree of blame for that. We now have to try to address it.

I say to the noble Earl, who is a long-standing friend, can we please get some idea of how the Government are going to bring this forward? For instance, will they make sure that anybody who is teaching in the college-based parts of the apprenticeship has at least some basic awareness of the most commonly occurring disabilities, hidden or otherwise, or at least knows where to go and access that help? We are now encouraging a situation where they are effectively breaking the law. We are institutionally encouraging people to get rid of something that they are required to do under the Equality Act and dozens of bits of legislation before that. Unless we start to do some more work here, we are guaranteeing a level of failure in the system that is unacceptable. I hope we can start to get a coherent answer to this question, because at the moment we are merely storing up trouble for later down the line and, I am afraid, far more parliamentary time will be taken up on dragging awareness to this subject.

Photo of Baroness Warwick of Undercliffe Baroness Warwick of Undercliffe Labour 12:45, 15 October 2015

My Lords, I congratulate my noble friend Lady Prosser on securing this debate. When I asked the Library for a list of debates on the need for more apprenticeships, I was surprised at the number. It has been discussed in one form or another in this House 14 times in the past 12 months. In fact, I raised it on Tuesday during Second Reading of the Enterprise Bill. So if we are not making enough progress, the House has done its best to get the problem aired.

The Government are committed to creating 3 million apprenticeships by the end of this Parliament, which is an ambitious target. The Association of Colleges, which trained 294,000 apprentices last year, has said that this target can be met only by increasing the volume of lower level 2 and 3 apprenticeships. However, it is clear from the data provided in the excellent briefing from the Library that, although growth has occurred over the past five years, it has been among adults. Many young people leaving school are not aware of the range of pathways they could take, a point reinforced by several speakers today.

Earlier this year the House of Commons Education Committee urged the Government to ensure that,

“more employers commit to providing apprenticeships for young people”.

A recent report from Demos, a cross-party think tank, looked at the construction sector. It estimated that 434,000 recruits will be required simply to replace skills lost through older workers’ retirement. Yet the report concluded that more employers still need to be convinced that apprenticeships can work for their business. There are 12 applications for every apprenticeship vacancy. The challenge for the Government is to get many more employers on board.

I declare an interest as chair of the National Housing Federation, which represents housing associations in England. In my contribution to the Enterprise Bill debate earlier this week, I pointed out that housing associations, which are themselves businesses and employers, are committed to developing and supporting apprenticeship schemes and want to do a lot more. Over the past three years they have directly employed around 12,000 apprenticeship starters. I thought it would be useful to give a couple of examples of the way in which housing associations have developed their apprenticeship offers.

In Burnley, Calico Enterprise, a wholly owned subsidiary of the Calico Group, created Constructing the Future in 2010. This was one of the first shared apprenticeship initiatives run in partnership with the Construction Industry Training Board, which maximises public sector procurement to create construction apprenticeships. New contractors host an apprentice, with all the recruitment, selection and management remaining the responsibility of CtF. The programme has created more than 150 apprenticeships since its launch, with 85% moving into permanent employment. I very much support the call of the noble Baroness, Lady Morgan, for permanent employment following the apprenticeship to be an indicator of quality. CtF operates across the north-west with all the major housing associations, contractors, 12 local authorities and the majority of further education colleges.

L&Q, my second example, is one of the UK’s leading housing associations, owning and managing around 70,000 homes across London and the south-east. The L&Q apprenticeship programme has recruited 23 apprentices in the past 18 months and plans to recruit a further 20 apprentices every year. It pays all apprentices the London living wage, which ensures that its residents are able to join the programme and sustain their tenancies. They have retained 100% of their apprentices and 100% of them have completed successfully. Apprentices are provided with career progression support and mentoring as they approach the end of their apprenticeship. I could provide many more such examples, if there were time, but I will conclude with some lessons that we have learned about what more employers could do to support apprenticeships.

Employers should ensure that apprenticeships are embedded into their wider planning for workforce growth and skills development, that the training apprentices receive on and off the job is high-quality, and that apprentices have access to ongoing support, pastoral care and mentoring. Employers should seek to widen the talent pool from which they recruit, ensuring that their schemes are accessible and, ideally, go the extra mile to ensure that those who may face disadvantages in the labour market have the opportunity to benefit from an apprenticeship. Employers should look not only internally but to their wider supply chain and seek to leverage additional benefits from their spend with other organisations. Can the Minister confirm that these sound principles will be part of the Government’s discussions with employers in their provision of 3 million quality apprenticeships? Certainly, housing associations stand ready to play their part in helping some of the most disadvantaged people into apprenticeships and work.

Photo of Lord Mawson Lord Mawson Crossbench 12:51, 15 October 2015

My Lords, I thank the noble Baroness, Lady Prosser, for introducing this important debate because it is close to my heart. I left school in Bradford at 16, bored, and became a telecommunications technician apprentice with what was then the GPO. I was immediately thrown into the world of work and suddenly had to engage with adults on equal terms—at least, that was the idea. I had to get out of bed at 7 am, get in my dad’s car and go to work while listening to Terry Wogan chirping away on the breakfast show, which was a challenge for any teenager. I have spent the last 35 years as a social entrepreneur in both church and secular worlds, applying a business logic and principles to challenging social problems—I think that my colleagues and I have built more than 1,000 projects during that time—and those early skills, hard won through digging up roads, climbing telegraph poles, visiting customers’ houses and installing the old Strowger telephone exchanges, proved crucial in later life for the work of an entrepreneur. The culture was all about learning by doing, which is such a crucial skill and so relevant to the enterprise culture in which we all now live.

What now needs to happen to create greater availability and improve the quality of apprenticeships? What are the blockages? In a spirit of learning by doing, let me share with your Lordships what we have actually been doing on the Olympic Park in east London since the 2012 Games to challenge and break open some of those blockages. Here I must declare interests as a board member of the London Legacy Development Corporation and as chairman of the regeneration and communities committee. Since October 2012, the London Legacy Development Corporation has been delivering a large programme of construction works at Queen Elizabeth Olympic Park. Through this wide-ranging construction programme, our focus has been on the creation of job and apprenticeship opportunities in legacy for local residents, particularly for young people and under-represented groups who face significant barriers to entering or returning to the construction sector.

The approach to date has been very successful. More than 120 young people have benefited from apprenticeships, hundreds of local people have trained in industry-required trades and skills at the park, and almost 30% of our workforce has been from the local area. Building on this success, the park will benefit from a significant volume of construction work over the next decade, ranging from the cultural education quarter at the £2 billion Olympicopolis development to 1,500 housing units at East Wick and Sweetwater. The breadth and scope of the planned activities present a significant opportunity to continue the LLDC’s best-practice approach and address some of the country’s current and future demand for skills, particularly through the delivery of apprentices.

Our work is premised on a number of key lessons learned—principles and practices that have enabled us to work with industry in delivering a high number of apprentices at the park. First, a strong client commitment to delivering apprentices is key. Secondly, we are using our procurement process to assess a bidder’s track record and proposals for securing local socioeconomic benefits, including apprenticeship delivery. Thirdly, we are embedding commitments contractually and working in partnership with our contractors, operators, tenants and developer partners to deliver them. Fourthly, we are focusing on early intervention with contractors to understand their recruitment needs and apprenticeship opportunities, while taking a leadership role in co-ordinating delivery models to support those needs. Fifthly, we are commissioning bespoke, demand-led training programmes that future proof local young people by providing them with the skills required by industry. Finally, we require that apprentices are paid at least the national minimum wage to aid retention among people.

We have focused on innovative and joined-up delivery models. Apprentices are the solution to solving long-term skills shortages in a multitude of industrial sectors. However, in the construction industry, for example, changing trends such as higher levels of subcontracting and shortened construction programmes have made it difficult for many firms to offer traditional apprenticeships. In response to that, we have promoted the use of shared apprenticeship schemes on the site, using an ATA to work with prime and subcontractors to broker apprenticeship and job opportunities for local people in transformation.

What were the blockages? First, the public sector was setting unrealistic targets. Secondly, there was a need for a whole supply chain approach. Thirdly, there were poorly co-ordinated public sector supply-side responses from the boroughs and further education colleges. All the LLDC’s employment and skills work is underpinned by a firm commitment to being employer-led. Fourthly, low wages feed low retention rates.

We need to pay apprentices the national minimum wage. Our experience is that employers are willing to invest in motivated young people.

We all now live in an enterprise culture. Learning by doing needs to become the norm. What will the Minister do to ensure that those valuable lessons learned on the Olympic park are shared nationally across the country?

Photo of Lord Haskel Lord Haskel Deputy Chairman of Committees, Deputy Speaker (Lords) 12:56, 15 October 2015

My Lords, in their recent paper, Fixing the Foundations, the Government seek a higher pay and lower welfare society, giving people the chance to work and progress. Apprenticeships used to provide this but, as my noble friend Lady Morgan told us, the system did not adapt to the economic changes of the 1970s and 1980s and was virtually abandoned in favour of national vocational qualifications. Manifestly, they failed to deliver on pay, productivity and standard of living. As a result, in recent years, apprenticeships have come back.

Yes, apprenticeships came back in favour, but at the same time they became politicised by setting targets to be met speedily and cheaply, with little measure of quality, irrespective of age or need. Those wonderful apprenticeships at Rolls-Royce, Siemens, BAe, JLR and the places which the noble Lord, Lord Battacharyya, told us about have become the exception. As my noble friend Lord Macdonald reminded us, in last week’s report from the Sutton Trust, many lower end apprenticeships have become little more than cheap labour schemes.

Thanks to the noble Baroness, Lady Wolf, and the Richard review, we have come to realise how ineffective those apprenticeships are in raising our productivity and standard of living. The best schemes, which benefit the nation’s economy and people’s standard of living, take several years, involve a lot of input from an employer and require formal tuition, but only 30,000 positions have so far been higher than school GCSEs. The Government’s own apprenticeship survey found that 21% of apprentices are receiving no outside training.

I welcome the Government’s intention to raise standards above those laid down in May 2012 with the Trailblazer scheme, as recommended by the Richard review, but lots more is needed. The first thing is to take apprenticeships out of politics, abandon targets in favour of standards and priorities, and reduce complexity. Virtually all noble Lords who spoke are in favour of this—are the Government? To this end I would, like other noble Lords, welcome an apprenticeship levy.

In introducing this debate, my noble friend was concerned about the spread of apprenticeships. She is right because the world of work is changing, as your Lordships’ Digital Skills Committee reported. A lot of work is now done over the internet by independent contractors—the so-called human cloud. In accounting and legal, translation and languages, design and architecture, and computer and software, independent contractors are available, for instance, through firms such as Upwork which has 20,000 people on its list. Amazon has already prepared a platform for this which you can go on to today, so it is not just driving taxis or delivering parcels that is part of the IT economy.

If we fail to adapt our apprenticeship systems to this new way of working, as we failed to adapt in the 1970s and 1980s, there is a danger of this new style of casual labour racing to the bottom. The Minister and his department have to be creative and find a new form of employment that suits these changing circumstances and also incorporates apprenticeships. What are they doing about this? If all this is well done, we should see not only a higher standard of living based on sound economics but also the rise in skills that we need, rising productivity and a growing economy. These are things a good apprenticeship scheme will deliver to the economy, the kind of thing that my noble friend Lady Prosser spoke about when she opened this debate.

Photo of Baroness Humphreys Baroness Humphreys Liberal Democrat 1:02, 15 October 2015

My Lords, I also add my thanks to the noble Baroness, Lady Prosser, for securing this debate and presenting me with the opportunity to contribute to it today. I begin by paying tribute to my colleague, the former Liberal Democrat Business Secretary, Vince Cable, who, during the coalition years, took on the Liberal Democrat manifesto commitment to increase the number of apprenticeships and spearheaded the drive to ensure that this happened.

If we cast our minds back to five years ago when the coalition came into being, apprenticeships were uncommon and relatively low status, perhaps a second-best option for those deemed to have “failed” at school. My colleagues in the coalition Government insisted that more resources be put into good vocational training for the 60% who do not go to university. The results are beginning to be seen. It has been heart-warming to listen to the support given to the principle of encouraging young people into apprenticeships from all sides of your Lordships’ House today. I welcome the conversion of those who were perhaps initially sceptical.

There has been some criticism that the bulk of apprenticeship growth over the past five years has been among adults. According to the Association of Colleges, only around 6% of 16 to 18 year-olds are in apprenticeships. It says that this can be attributed to inadequate careers advice and young people lacking the relevant skills to enable them to be work ready. I think we would all agree that more needs to be done to overcome employer resistance to taking on young employees who might not stay the course. I also challenge the Government to reconsider their attitude to careers education and guidance, and to ensure that pupils have access to high quality, impartial and transparent careers advice on both academic and vocational routes.

A similar situation pertains in Wales. The Welsh Government’s flagship Pathways to Apprenticeships scheme aimed to get 75% of learners into an apprenticeship. However, even its own report published in July had to admit that it had missed its target by a large margin as just 35% of learners progressed on to their scheme in 2012-13. Some 32% said that there simply was not an apprenticeship open to them.

At the beginning of this year, I visited Ysgol John Bright, a Welsh comprehensive school in Llandudno. Its careers department had won a top award for the quality of its careers work and I wanted to see how a modern careers department operated so successfully—not a mean feat, these days. The careers education and guidance programme plays a key role in the raising of standards throughout that high-achieving school, helping to monitor pupils’ subject choices and progress, and providing the information that pupils need. However, I was met by the head teacher who told me: “If there is one message, and one message only, that you take away from here today, that must be that there is a desperate shortage of high-level apprenticeships in north Wales”. That is true.

North Wales covers a large area, of course, ranging from the rural west, through the coastal holiday resorts with their rural hinterlands, to the more industrial areas in the east of the region. It is logical that the availability of apprenticeships reflects the amount and type of industry and businesses in a particular area. Figures from the Welsh Government’s StatsWales website showing work-based learning programme starts reveal that last year, for the whole of north Wales, there were 15 level 4 starts in engineering, and 10 of those were to the east in Flintshire, the home of Airbus.

To a great extent, apprenticeships are a victim of their own success. Those young people armed with the relevant careers advice now see them as a viable alternative to university and the demand can only increase. Finally, will the Government introduce a new performance measure that counts how many apprentices gained sustained employment within 12 months of completing their apprenticeships? Will the Minister consider the proposal that a proportion of the funding currently given to providers is contingent on high performance against this new measure?

Photo of Lord Haughey Lord Haughey Labour 1:07, 15 October 2015

My Lords, I thank my noble friend Lady Prosser for securing this very important debate. For someone who served time as an apprentice that gave me the skills I required to virtually guarantee employment for the rest of my working life, it is vital that we do not allow the term “apprenticeship” to be hijacked for political gains. Much has been said by the Chancellor and Prime Minister about the creation of 3 million new apprenticeships during the term of their Government. Young people hearing that believe it is wonderful news and that there is a prospect of 3 million new, meaningful jobs. Unfortunately, that is not the case. In reality, a vast number of these apprenticeships are short-term training courses, mostly taken up by people already employed.

Most of the points I plan to raise have already been raised by my noble friends so I will not subject noble Lords who have taken the time to remain in the Chamber for this very important debate to repetitiveness. However, we cannot allow the term “apprenticeship” to be diluted. Some training providers have seen this as a Klondike. The model we have at the moment does not benefit the individual. As a large employer who spends a lot of money on apprenticeships, I would not be happy paying a levy for it to be spent in the way it is at present. I am really interested to find out what the Government mean by guaranteeing these 3 million apprenticeships as I do not know how that is possible.

I could give many bad examples of what is happening at the moment under the apprenticeship banner. Here is one. In Scotland, if you work in a bar and you want to attend a training course for a few nights a week, for maybe eight times, and learn how to pour a pint, you will get a certificate. This is deemed a modern apprenticeship. This is wholly unacceptable and I could give many, many cases. I could be here all day.

Over the last 30 years I have funded more than 1,700 meaningful apprenticeships. The true definition of an apprenticeship—as most people here would know it—is training in practical and theoretical skills that would give someone the tools hopefully to keep them gainfully employed for many, many years. Unfortunately, I do not think the vast majority of the 3 million apprenticeships that the Chancellor has announced fall into this category. The lack of investment in apprenticeships over the last 10 years, especially in the construction industry, will come back to haunt us. Therefore, I humbly request the Minister to return to this House and inform the noble Lords how many of these 3 million apprenticeships that have been talked about are new jobs.

I visited a school in Glasgow last week where I spoke to 600 children. I gave them my life story and at the end I was asked by at least six children where the adverts appear for all these new apprenticeships. I could not tell them. It is very important that we do not give false hope to young people. I also think that it has to be explained what these 3 million guaranteed apprenticeships really mean.

Photo of Lord Snape Lord Snape Labour 1:11, 15 October 2015

My Lords, like speakers from both sides of the House, I thank my noble friend Lady Prosser for the opportunity to discuss this important subject. The amount of interest generated by this subject can be seen by the number of speakers. Of course, the downside of that happy situation is that we all have to gabble through what we have to say in the shortest possible time. In my case, that might be a relief to noble Lords on both sides of the Chamber.

Reference has been made to the Sutton Trust report recently published, Levels of Success: The Potential of UK Apprenticeships. In the foreword to that report, the chairman of the Sutton Trust, Sir Peter Lampl, had this to say about apprentices and apprenticeships:

“For apprenticeships to be genuine paths to success for young people they will need to be more widely available and better understood. We need to increase the proportion of apprenticeships at level 4 and 5 (higher)—the best apprenticeships—in addition to ensuring that level 3 (advanced) rather than level 2 (intermediate) is the minimum standard for most apprenticeships targeted at young people. If the Government’s promise of three million apprenticeships is to lead to a genuine skills revolution, progression to level 3 must be inbuilt within most level 2 apprenticeships”.

Alas, the Government’s promise is like lots of other promises that have been made—more in hope than in expectation. The executive summary to the report says apprenticeships are disproportionately populated by those from less advantaged backgrounds, so failure in their provision disproportionately affects this group. As my noble friend highlighted when introducing this debate, there is a sharp gender divide in apprenticeships. For example, engineering apprenticeships remain male-dominated—96% of such apprenticeships are taken up by men. Beauty therapy apprenticeships are female dominated, with 99% being taken up by women. It has recently been reported that because of this imbalance, female apprentices earn over £1 an hour less than their male counterparts.

My noble friend Lord Bhattacharyya, referred to experiences overseas. The executive summary of the report says,

“Other countries, particularly Germany, Austria and Switzerland, have more effective apprenticeship programmes in terms of both the quantity and quality of provision and offer excellent examples of best practice”.

My noble friend Lady Morgan of Huyton referred to quantity and quality. I am afraid that quantity has taken precedence over quality in recent years, as various speakers have indicated, On 9 March this year, the International Business Times carried a report from journalist Samantha Payne headed, “Subway is looking for a sandwich maker apprentice in Newcastle upon Tyne”. Now, my Lords, I have eaten plenty of Subway sandwiches, and very good they are, but that does not strike me as a career for the future. Does one progress from white to brown bread to crusty rolls, perhaps to gluten-free? Who knows? But it does not seem to me to qualify as a description of an apprentice or to qualify such a person for a career in the future.

I would like to bring a case before your Lordships; I know the young person concerned—he drew the matter to my attention knowing that I intended to speak in this debate. Let us call him Joseph. He enquired about an apprentice’s job at an estate agency in Bromsgrove—coincidentally the constituency of the Business Secretary. The job was as an apprentice for 40 hours a week, it entailed taking calls in the office, making appointments to meet clients at homes or conduct viewings, for which obviously the young person concerned would need a car. It paid £2.73 an hour. There was no mileage or transport expenses, so who could afford to take such a job? But it masqueraded as an apprenticeship, as some sort of qualification for the future. The noble Lord, Lord Addington, said that if you did not have O-levels in maths and English, you were somehow written off. Joseph, the person who enquired about this particular job, had no fewer than six GCSEs and three A-levels, yet he could not afford to do such a job.

I am aware that the Government are conscious that the apprenticeship system is being abused and there is provision in the current Enterprise Bill before your Lordships’ House to do something about it. I would put two questions to the Minister. First, would he want his own son or daughter to have to apply for the sort of “apprenticeships” that I have just outlined? Secondly, can he give us some assurance that the Government will not just tackle these anomalies but stop these practices, which cause enormous distress and disillusionment among our young people?

Photo of Lord Lisvane Lord Lisvane Crossbench 1:16, 15 October 2015

My Lords, I join the chorus of congratulation to the noble Baroness, Lady Prosser, for initiating this debate. It is a subject of huge social and economic importance, and the debate is very timely. I start with a declaration of interest, or at least of a connection: my wife was an apprentice with Baker Perkins, a company mainly involved in heavy engineering. In the interests of marital harmony I am not going to be too precise about exactly when that apprenticeship was, but it was at a time when there were very few female apprentices, and even fewer female apprenticeships in heavy engineering.

In the limited time I have, I want to make two points—perhaps parochial in their way, but I hope with a much wider resonance. The importance of apprenticeships is clear and has been emphasised by every speaker in this debate so far. We readily give our political support to proper apprenticeships, widely available to young men and women of all backgrounds, and leading to sustainable long-term skilled jobs.

However, might we not also give our institutional support as a House? In my previous life as Clerk of the House of Commons I started the clerks’ apprenticeship scheme. My aim was not only to create worthwhile apprenticeships for people with few opportunities, but also to reach out to those who would never have thought of working for Parliament and having the privilege of doing so. I had the support of Eddie Stride, the CEO of London Gateway, and a fantastic in-house champion in Joanne Mills of the diversity and inclusion team. There were two cohorts, each of 10 young people, who have now been through their apprenticeships, gaining NVQs in business and administration. From what she said earlier on, I think that the noble Baroness, Lady Prosser, would be very pleased to hear that both cohorts had a majority of women and that both cohorts had a substantial majority of those with BME heritage. I am delighted to say, picking up a point made by the noble Baroness, Lady Morgan of Huyton, that the retention rate for both cohorts was 80% who found jobs in the House of Commons services, and of those who left Parliament, all went to good jobs elsewhere. The third cohort started just a few days ago.

A similar scheme in this House would be a vivid demonstration of our support for apprenticeships. At the moment we have just one apprentice, who is in the Parliamentary Archives, but I know that the Clerk of the Parliaments is keen to do something more ambitious: a proper apprenticeship scheme for the House of Lords administration. I warmly encourage him in that endeavour, and I am quite sure that it will have strong support from noble Lords on all sides of the House.

For my second point, I make no apology for returning to something I mentioned in my maiden speech in your Lordships’ House. We will shortly be faced with very difficult decisions on the restoration and renewal of this unique building. We await the advice of the Joint Committee, which has a distinguished membership from your Lordships’ House, including the Leader of the House, the Leader of the Opposition and the Chairman of Committees. Whichever option is finally chosen, I hope that we can support it through a Westminster academy of skills which could nurture the scarce skills needed for heritage restoration and, even more important, could be a dynamo for creating a wide range of craft apprenticeships continuing long after the restoration of the Palace of Westminster is complete. That would be a wonderful legacy for the next 150 years of this amazing building, and it would truly be an earnest of our support for apprenticeships.

Photo of Baroness Wall of New Barnet Baroness Wall of New Barnet Labour 1:21, 15 October 2015

My Lords, what a delight to follow the noble Lord, Lord Lisvane. I have never heard him speak before. He shared such interesting anecdotes with us. I, too, the almost-penultimate speaker, want to thank my noble friend Lady Prosser for this opportunity. I also thank Semta, which has supported me in putting together some of the facts in my speech.

Many noble Lords have quoted statistics. There are many, and they are quite diverse. We have heard statistics today that have had led to differences of opinion. One of the dilemmas that we—not just government but all of us—face is that only 10% of parents think that an apprenticeship is the best option for their child, according to AllAboutSchoolLeavers. Many speakers, including me, have challenged many Ministers about why schools are not obliged to talk to students about apprenticeships. There is that problem. There are ways of overcoming it, and many organisations have done that.

I shall briefly talk about MBDA, which is an engineering company that supplies Rolls-Royce and many other big companies in the aircraft industry. MBDA insists that when it brings young people in from school there has to be 50:50 young men and women. The result is that the number of young women who come through from that introduction is greater than that of young men. Some of us in the Chamber today will have hosted events.

I have heard young women employed by MBDA talk about their track through. They had the opportunity to go to university, so their qualifications were all there for it. Some mothers were worried about the fact that they would not have the opportunity to wear their best hats when they were going to come through that process. Every one of them will tell you the difference it has made to their lives compared to those of their friends who have gone to university. I remember very readily—and I am sure my noble friend Lady Prosser and perhaps even the noble Baroness, Lady Garden, will, as they were both there—a young woman saying, “I am the envy of my friends who went to university. I now have a Mini and they are still paying off debts”. That is an absolute recommendation for doing that.

I worry, like many others who have said this, and I am sure the Minister has taken it on board, that there are very different views about the levy in businesses of which I am aware. Some clarity and certainty has been asked for. I support that.

The right reverend Prelate the Bishop of Derby is not in his place, but I associate myself with his comment. Many of us who came through industry in the early part of our life were very clear about what apprenticeships were. They were about learning and developing and making sure that the skills that you had were worth while.

I associate myself with the comments made by my noble friend Lady Morgan of Huyton. I worked in the chemical industry. Apprenticeships there were apprentices carrying the rod for the plumber or whoever. Apprenticeships now are not about that, and business does not need that. What we all need, and what businesses need most, is sound apprenticeships. Again, the Minister has been pleaded with. Many of us have done it on many occasions. We must not dilute what an apprenticeship means. Good training, like at McDonald’s, KFC or anywhere else, is hugely important and benefits the consumer. Real apprenticeships, as they exist in engineering, are essential to maintain the level of skill and, more importantly, professionalism that apprentices come out with to make sure that their future is secure and growing.

Photo of Lord Young of Norwood Green Lord Young of Norwood Green Labour 1:25, 15 October 2015

My Lords, I, too, thank my noble friend Lady Prosser for initiating this debate and for her contribution. By the time we reach this part, most of the good points have already been made, but I am never afraid of reiteration, so I will do my bit to keep it relevant. Like the noble Lord, Lord Mawson, I was a telecom apprentice, but it was slightly before him as it was called the GPO when I joined. I gained a lot from that.

However, times have changed considerably. I do not quarrel with the Government having a target of 3 million, but, like many, I think the figure needs to be disaggregated. You cannot escape from the fact that, unfortunately, the vast majority of apprentices were people in existing employment aged over 25. Whether that really merits the title of apprenticeship, I am not sure. Of course, we understand the need for lifelong learning and for reskilling and retraining, but the area where many people think we ought to be focusing is on 16 to 19 year-olds or, at a stretch, up to those aged 24.

We have a double whammy: first, demand certainly exceeds supply. A number of noble Lords have made that point in this debate. Secondly, there are the requirements. I thank the Library for its note, which was very helpful. If you look at sector, subject area and age, it is illuminating. There is very little, if any, growth in the construction industry, certainly for under-19s and 19 to 24 year-olds—in fact, there is some decline. If you look at engineering and manufacturing technology, there is a similar picture. In 2012, the figure for under-19s was 114,000, but in 2014-15 we are down to 101,700. That is surely something that should be worrying the Government.

I concur with people who talk about the need for quality as well as quantity. It should be a matter of shame for us that recently a young apprentice started a day in a job and did not finish it because he died. How have we come to a situation in which we are sending young people into an unsafe working environment? When we talk about quality, I hope that is going to include safety.

We welcome the levy and how it is going to be distributed, but we still have the age-old problem that Governments for the past 20 or 30 years have had of getting more companies and SMEs involved in apprenticeships. I notice that, according to the Library Note, even under the trailblazer schemes the involvement of SMEs is quite low. That is worrying if we are serious about wanting to increase significantly the number of apprentices and to inculcate the idea—we should not have to, but clearly we do—in the whole of British industry that, if we want to succeed, it has to contribute towards creating the next generation.

We have a wide range of apprenticeships. I could not help smiling when my noble friend Lord Snape complained about Subway. I do not know what the career opportunities are at Subway, but do not knock the retail trade as a whole. McDonald’s runs a very successful apprenticeship scheme; indeed, you can do a foundation degree with McDonald’s. It is rather like what my noble friend Lady Prosser said about the beauty industry, if it is right to describe it as that. Apprenticeships are rich and varied, although of course we want more high-level apprenticeships.

The final point is about public sector contracts. My noble friend mentioned Crossrail. It is a textbook example of how to run a big project, create apprenticeships and involve the whole of the supply chain. That is the point that I really want to stress. It is not just about creating the hub. If you examine the Crossrail experience closely, you will see that it has encouraged its companies right through the supply chain and across the country. The interesting thing about Crossrail is that those of us who saw the wonderful TV programme know that one of the main people in charge of that engineering project was a woman. So I am ending on a positive note, and I look forward to the Minister’s response.

Photo of Lord Stoneham of Droxford Lord Stoneham of Droxford Liberal Democrat Lords Spokesperson (Business, Innovation and Skills) 1:30, 15 October 2015

My Lords, this has been a very good debate. I thank the noble Baroness, Lady Prosser, for giving us this opportunity for it, and for her experience in this field.

As the noble Lord, Lord Young, said, there is no point in repeating all the good points that have been made in this debate, so I will just stick to five themes that have come out of it. I think most of us accept that there is a need to monitor what we are doing here, but what we do not want to do is create an overbearing bureaucracy. We need to find out where there are problems. It has been mentioned in the debate that there are some gender problems; there are also, although I do not think this has been mentioned, some regional problems, in that some parts of the country, such as the north-east, are not getting their fair share of apprentices.

One of the things that we ought to be doing is matching what we are achieving with apprenticeships with where prime shortages are. If there is any sector that we ought to pay particular attention to, it is construction. There are extreme shortages there, and some of the delivery on apprenticeships is not as good as it should be. I hope that there will be ongoing work, particularly across industry, using working parties and LEPs, to identify where those shortages are and concentrate work on apprenticeships.

As my noble friend Lord Addington mentioned, we need to monitor where there are particular problems for those with disabilities, particularly those with dyslexia, and we should appreciate the contribution that those with those disabilities can make. A number of our leading entrepreneurs have come through problems with dyslexia to make a very profound contribution, once they got over the struggle that many experienced with our academic system.

I very much agree with the noble Baroness, Lady Morgan, that we should measure where apprentices are one year after the completion of their apprenticeships. And just as we regularly get surveys telling us how people get an earnings differential when they go through university, we should be promoting similar publicity about the advantages for people going through apprenticeships as well.

Three million is a tough target; I think that everybody in the debate has mentioned that. It is important that we do not just end up in a numbers game. Quality must be a preoccupation. The noble Lord, Lord Aberdare, mentioned that two-thirds of apprenticeships are not actually completed. We should be vigilant in looking at why that is, what the problems are and how we can improve those figures.

There are problems at both the lower end and the top end of skill profiles. We are clearly not getting enough 16 to 20 year-olds. We may want to consider that colleges do more to develop free apprenticeship courses to encourage people to go on to apprenticeships and to provide a source of supply for companies that are prepared to take them on in an apprenticeship at a later age.

My noble friends Lady Garden and Lady Humphreys, and the noble Lord, Lord Lingfield, all mentioned especially the importance of career advice in our schools. I think that everybody accepts that a cultural change has to be undertaken in local communities and schools to encourage more people through vocational and technical education. I would be interested to hear how the Minister thinks that the Government should be giving this a priority. At the higher level of skills, higher-quality apprenticeships should increasingly be seen as an alternative to university courses, providing a direct benefit to industry as well as being attractive as people will not be dependent on student loans.

The levy has been mentioned in the debate. Clearly there are lots of problems with the levy; in fact, the country has been struggling with a levy for training for the past 40 years, so we are going around in a circle here. That will not be helped by the unfortunate fact that, at the same time as we are expecting employers to make greater contributions on pensions and there are going to be pressures from the living wage, we will then expect them to have a levy for training. That is going to be difficult so, whatever we do, the Government must phase this in and concentrate particularly on the sectors with the most training needs. The key is to somehow incentivise small businesses to participate more but also compensate those companies that are doing their fair share of training but fear at the moment that they should not do more because their skills will simply be poached. I hope that the Minister will give some details of the timing and the progress that the Government are making in the consultation on the levy.

On the role of colleges, there has been a lot of discussion that colleges are critical to supporting training requirements, particularly for small businesses, and that they provide the vital source of support that small businesses need. It is an interesting fact, which has not been mentioned in the debate, that colleges educate and train nearly twice as many 16 to 18 year-olds as maintained schools and academy sixth forms. Some 70,000 16 to 18 year-olds undertake apprenticeships through local colleges. We have to ensure, as has been mentioned in the debate, that those colleges with good links to local firms and sectors that are dominant in their areas, and which are setting up training programmes associated with those firms, are the most successful. Obviously, we seek assurance from the Minister that the contribution of the colleges will not be restricted by a lack of funding.

Supply chains have been mentioned, mainly in relation to the public sector, which I fully support. I certainly support the good work that was done on the Olympics and is now being done on Crossrail. However, let us not forget the potential in the private sector for the supply chains and the procurement policies to deliver on this as well. The most successful sectors and larger firms can contribute to encouraging their suppliers to improve the skills base in their sectors. We have seen the great success over the last 15 years in the motor industry in getting assembly back into this country, but there is still a big job to be done in improving some of the supply firms to the motor industry in this country, and often it is restraints on skills that are stopping us developing those firms.

So apprenticeships are critical to raising the productivity and global competitiveness in this country. The issue deserves the strong attention that debates like this are giving it. It requires a strong partnership with industry and deserves continuity from Ministers in its delivery, as well as cross-departmental co-operation. The need for an ongoing commitment to quality in this area is overriding.

Photo of Lord Watson of Invergowrie Lord Watson of Invergowrie Shadow Spokesperson (Education) 1:39, 15 October 2015

My Lords, I, too, join in thanking my noble friend Lady Prosser for introducing this debate and giving us the opportunity to consider these very important matters.

Like everyone else who has spoken in the debate, I welcome the Government’s commitment to create 3 million apprenticeships by 2020. The demand for apprenticeships from young people far outstrips current supply. According to the National Apprenticeship Service, more than 1.4 million online applicants competed for 129,000 vacancies posted online last year, which was up 32% on the previous year. So—as has been mentioned already in the debate this afternoon—that is an average of about 11 or 12 applicants per apprenticeship, which of course means that a great many are disappointed.

Some 3 million apprenticeships in the next five years—an increase of almost 50% on the past five—is of course a very ambitious target. However, I do not criticise the Government for that, because it is always better to aim high. The task involved is clear from the statistics relating to 2013-14, the latest available yearly figures for apprenticeships. In that year there were just over 440,000 starts, which showed an overall decrease on the previous year. With 600,000 starts annually needed to meet the 3 million target, there will need to be a very substantial increase if that target is to be met.

With that in mind, the figures published yesterday are not encouraging. At best, they show minimal growth in the number of people starting new apprenticeships—although the figures are yet to be confirmed, which means that the final position might be worse. Not enough of those who want to take up apprenticeships—young people as well as those who are older—are receiving the opportunities they need for quality training and retraining to increase career opportunities. When the next annual figures are published we will need to see at the very least a distinct upward trajectory if the target is not to disappear into the distance.

Currently, only 15% of employers offer apprenticeships. That is a mere 2% more than in 2012 and—as other noble Lords, including my noble friend Lord Bhattacharyya, have said—is very low compared with many other European countries, most notably Germany and Switzerland, where 50% to 60% of employers offer them.

The introduction of the apprenticeship levy may help to increase the number of apprenticeship opportunities but a number of noble Lords—including the right reverend Prelate the Bishop of Derby and my noble friends Lord Macdonald and Lord Haughey—have commented on the fact that questions are being asked about how the levy will operate. I am delighted to welcome my noble friend Lord Haughey to the debate. He has a great deal of experience in building up a business and developing it to include many apprenticeships, as he mentioned. I have no doubt at all that, in his typical forthright manner, he will be writing to the Government to explain to them where they are going wrong with the levy and how it might be improved to make it more effective.

A major means of boosting the number of apprenticeships on offer would be to extend the Enterprise Bill provision for apprenticeship targets for public bodies to the private sector. That would certainly encourage more SMEs to become involved. Last week, David Cameron made social mobility the centre of his conference speech, although I have to say that today’s announcement that he has decided to turn the clock back half a century by allowing the creation of new grammar schools sends out entirely the opposite message.

Apprenticeships have the capacity to make a major contribution to social mobility but to maximise that contribution they need to be offered across the full range of employment and skills, ensuring that people across the country who may have been excluded for a number of reasons have access to them. We therefore believe that the approach in the Bill to public bodies should be extended to the private sector, both to assist in meeting the 3 million apprenticeships target and to spread training across the economy and provide opportunities in different geographical areas. The Government should also publish a strategy setting out how many apprenticeships they expect to be provided from each part of the private sector. Such a strategy should include a clear indication of the role to be played by further education colleges, which are key players in this yet have suffered wounding cuts to funding, with more to follow.

Recent apprenticeship reforms have resulted in employers being given control. An entirely employer-led design of apprenticeships runs the risk of narrow training that meets the needs of employers but not necessarily those of young people, or perhaps the employment market in general. That is a point not lost on the Engineering Employers’ Federation, which said in a submission to Labour’s Skills Taskforce that it is important for employers,

“to work closely with unions, colleges and quality training providers to ensure that the partnership works for both the employer and the learner”.

The Government should acknowledge—and benefit from—the role that trade unions play in apprenticeships. They have a strong track record of supporting young people in making the transition from training into secure employment.

One of the main reasons why we in the Labour Party want to see as many apprenticeships as possible created is that we know that good training leading to proper, meaningful work can play an important role not just, as I said, in promoting social mobility but also in reducing inequality in the country. This issue was highlighted in the recent report by the Sutton Trust which several noble Lords, including my noble friends Lord Haskel and Lord Snape, referred to. Perhaps unfortunately, that report attracted most attention because of the headline that it had found that the top-achieving apprentices—the relatively few with a level 5 qualification—will earn more in their lifetime than someone with an undergraduate degree from a university outwith the Russell Group. This underscores the logic of the provision in the Enterprise Bill for apprenticeships to be given equal standing to degrees because it will protect the term “apprenticeship” in law and begin to tackle existing misuse, often by unauthorised training providers. It was telling that some 40% of respondents to the Government’s recent consultation on the Enterprise Bill said that they were aware of the term “apprenticeship” being misused. Enshrining the term in law will help to enhance the reputation of apprenticeships, which should assist in broadening their appeal to employers who have not thus far engaged.

More importantly, the Sutton Trust report carried a warning that, although the best apprenticeships offer similar financial security as an undergraduate degree, the sector needs to bring about serious change if apprenticeships are to fulfil their potential as a vehicle for social mobility. In the current system, as my noble friend Lady Morgan highlighted, the majority of apprenticeships—some 60%—are set only at GCSE standard, which is level 2. Too many of them offer little value beyond traditional work experience placements and only marginally better lifetime earnings than secondary school qualifications alone. Over the past two years—this is an important statistic—there have been only an estimated 30,000 higher apprenticeships. As many noble Lords have mentioned, the fear is that too many of the new apprenticeships being created will be no higher than level 2.

For that reason, it is important that the Government should monitor the apprenticeships target to ensure that employers are not using apprenticeships for their own benefit simply by replacing existing jobs. All apprenticeships should provide a nationally recognised qualification, which will go a long way to making sure that apprenticeships provide people with genuine opportunities to progress to full-time employment when they are completed. My noble friend Lady Prosser covered it quite neatly when she talked about the fit between the two.

The Welfare Reform and Work Bill includes duties on Ministers to report annually on progress achieved in job creation and apprenticeships. In addition, the Enterprise Bill provides an opportunity to introduce a mechanism for monitoring the quality of new apprenticeships and who is gaining access to them. I hope the Minister will be able to say something positive on that important aspect of underwriting progress towards the 3 million target.

There should also be greater focus on 18 to 21 year-olds who are leaving education and joining the workforce but who also need to continue in training. The harsh facts are that the majority of apprenticeships currently go to those in the 22 to 25 year-old age group and 45% of all apprenticeships are achieved by people over the age of 25. That is not per se a bad thing, but as far as possible apprenticeships should be made available to those who most need them. Since the economic crisis, young people in their twenties have lost out most across a wide range of outcomes despite gaining higher qualifications than previous generations. I suggest to the Government that the targeting of future apprenticeships at 18 to 21 year-olds, who will be subject to the youth obligation and to restricted entitlement to housing support costs, would contribute greatly to the success of the planned growth in the number of apprenticeships offered.

The noble Lord, Lord Addington, mentioned the issue of equality. His comments on the Equality Act were very interesting and should, I believe, be pursued. Many noble Lords have questioned the gender aspect of apprenticeships, and it is undoubtedly true that simply having a majority of them taken by females is not enough. I will not repeat the comments made about the wage levels of the jobs that many female apprentices move into.

There are other problems with accessing apprenticeships. Only 9% of apprenticeships go to people from a BME background although that group accounts for 15% of the population. The Welfare Reform and Work Bill could be used to address this deficit. The Government should also consider ring-fencing a percentage of apprenticeships for vulnerable groups who may otherwise have difficulty accessing them, such as people emerging from care. Some 34% of all care leavers are not in education, employment or training at age 19, compared with 15.5% of 19 year-olds as a whole.

There are also, as my noble friend Lord Snape said, issues around academic entrance requirements. The Alliance for Inclusive Education has done some excellent work in this area, which has already been referred to, and if the Minister has not already seen its publications I urge him to arrange to do so. In many cases the entrance requirements are simply not capable of being met by people with some disabilities, particularly learning difficulties, and that problem has to be addressed.

This has been both a timely and an excellent debate, with contributions from many noble Lords with great experience of the subject. I am certain that everyone participating in it wants the same outcome: an extension of the apprenticeships available, leading to more real training, which in itself will lead to real, sustainable jobs. That would mean a huge amount to the many young people currently rather fearful as to what life has in store for them. I believe that we all have a duty to do what we can to create the foundations that will allow them to pursue a career and build a life that is rewarding in every sense of the word.

Photo of The Earl of Courtown The Earl of Courtown Lord in Waiting (HM Household) (Whip) 1:50, 15 October 2015

My Lords, I welcome the opportunity to set out what Her Majesty’s Government are doing to grow the apprenticeship programme, to explain the process for monitoring the availability and quality of apprenticeships, and to set out what is in place to ensure an appropriate spread across the labour market. I am grateful to the noble Baroness, Lady Prosser, for tabling this debate and to noble Lords, who have raised important points. I was particularly interested in the points made by the noble Lord, Lord Lisvane, concerning the need for apprenticeships and the possibility of their use in the restoration of this great palace. I will endeavour to answer all the questions that have been put but, where I cannot, I will ensure that I write to noble Lords and place copies in the Library.

Apprenticeships are real jobs that give people the opportunity to train, develop skills and become fully competent while employed in a role. They are already offered in 240,000 workplaces in England, from microbusinesses to blue chip companies such IBM, BAE Systems and Sky. We know that apprenticeships benefit individuals, employers and the economy. Improving skills is an important factor in increasing productivity and will be essential to the prosperity of our economy in the coming years.

For young people, apprenticeships can be the first step on the career ladder, for all ages a route to career progression and, for employers, a sustainable way of building a workforce with the skills that they need. While we would not want to interfere in employers’ recruitment decisions, we believe there is more to be done to ensure that people from a diverse range of backgrounds, as mentioned by the noble Lord, Lord Watson, including care leavers, are in the best possible place to secure an apprenticeship.

An apprenticeship advisory group helps government to understand and address any apprenticeship equality and diversity issues, as mentioned by many noble Lords, in order to reduce barriers and make apprenticeships as inclusive as possible. For instance, we are promoting reasonable adjustment for disabled learners. I know that the noble Lord, Lord Addington, has been involved in shaping amendments to the Children and Families Bill to support people with difficulties such as dyslexia in completing the English and maths requirements. I totally agree that this is important, and more needs to be done on the guidance to address the management of disabled apprentices, as well as the issue of employers ignoring the Equality Act. We will ensure that these important issues are reflected in the guidance.

Unlike in most other countries, women are, as mentioned by many noble Lords, well represented within English apprenticeship schemes, with 52.9% of all starts in 2013-14 having been women. We have made enormous progress but there is still much to do. Over the last five years, we have seen significant growth, as mentioned, with more than 2.3 million new apprenticeships. We are now committed, as other noble Lords have said, to 3 million new starts in this Parliament. This is a challenging commitment to deliver because, as I have said, apprenticeships are real jobs, so growth depends on employer demand. The noble Baroness, Lady Warwick of Undercliffe, in particular mentioned this issue. We are taking action to support the growth needed to meet our commitment, working with large and small businesses to begin or expand their programmes, and setting new expectations for public sector bodies, including through public procurement.

We will need to work hard to stimulate both demand and supply across the labour market. The benefits of the programme are clear. The latest research, as at June 2015, shows that adult apprenticeships at level 3 deliver £28 of economic benefits for each pound of government investment. Some 89% of apprentices and 82% of employers are satisfied with the programme, and a higher apprentice can earn £150,000 more over their lifetime. I noted what the noble Baroness, Lady Humphreys, told me about higher apprentices in north Wales.

It has been made easier than ever before to recruit an apprentice, and it is expected that young people will continue to benefit from the expansion of the programme. Incentives are in place to encourage employers to take on a young person. For example, training for 16 to 18 year-olds is fully funded; the apprenticeship grant for employers provides small businesses with £1,500 for each new young person they take on; and, from April 2016, businesses will not be required to pay employer national insurance contributions on earnings for apprentices aged under 25.

Young people’s engagement with apprenticeships is obviously a priority, but there continues to be a solid justification for the public funding of adult apprenticeships. Data show strong wage returns for this group: 16% for level 3 and 11% for level 2 per year between three to five years after completion.

The public sector will also play a full role in delivering more. Government will ensure that it is a model employer, developing a skilled workforce for the future. We are demonstrating this commitment via legislation. The noble Lord, Lord Watson, among others, mentioned the Enterprise Bill, which has laid out plans to set apprenticeships targets for public bodies. Many public bodies—in central and local government—already choose to build skills considerations into their procurement. High Speed 2 has a target of 2,000 in the construction phase, and a new college to train the next generation of world-class engineers provides a clear signal that apprenticeships are a priority area. The noble Baroness, Lady Prosser, along with other noble Lords, mentioned Crossrail. This is the largest procurement project across government and has exceeded its target of employing 400 apprentices over the life cycle of the project, which is due to complete next year. It is the Government’s expectation that more apprenticeships will also be generated through public sector procurement.

We all agree that apprenticeships must be high quality, rigorous and focused on what employers need. We have insisted that all must have a minimum duration of 12 months. Furthermore, in order to strengthen and safeguard the reputation of the brand—a point raised by the noble Lord, Lord Aberdare—we are providing protection for the term “apprenticeship” to prevent any misuse.

We have put in place reforms to give employers much greater control. Through our trailblazers, they are designing new apprenticeship standards, deciding which skills, knowledge and behaviours are required as part of a successful apprenticeship for occupations across sectors. Criteria that all new standards must meet have been set to ensure quality and consistency across all apprenticeships. I know that this is of concern to all noble Lords. Standards will also clearly specify any qualifications that are necessary to achieve and demonstrate full competence. There are more than 140 trailblazers involving more than 1,300 employers. So far, approval has been given to develop more than 350 standards. Of these, 187 have been approved and, as mentioned by the noble Lord, Lord Bhattacharyya, 52 are ready for delivery.

The demand for higher standards will ensure that apprentices are stretched. By setting higher expectations for achievement in English and maths and introducing end-point assessment, excellence will be seen and widely recognised. The development of new, more rigorous standards is being extended into sectors with little or no previous history of apprenticeships, such as financial services and the legal profession.

As the noble Baroness, Lady Prosser, said, we are expanding higher and degree apprenticeships to offer new opportunities in occupations such as nuclear, digital, nursing, journalism and surveying. They range from level 4 all the way up to master’s degree level, allowing young people the opportunity to combine a world-class degree with a high-quality apprenticeship. We are also giving employers greater control over funding through a simple apprenticeship voucher, so that they can buy the quality training they need and hold training providers to account. The UK-wide levy is being developed for all larger employers in the public and private sector to help fund the increase in quantity and quality of apprenticeship training. In England, for any firm that will be able to get back more than it puts in by training sufficient apprentices, control over funding will be put in the hands of employers via the voucher mechanism that I mentioned. Many noble Lords have asked how this will be taken further. Additional details will be set out at the spending review, but businesses will be given sufficient time to prepare for the change. A consultation on the levy was launched on 21 August and closed on 2 October. The apprenticeship levy will link larger employers directly to its skills investment and promote the value, and drive the uptake, of apprenticeships.

Monitoring, as was mentioned by many noble Lords, is an essential part of raising and maintaining quality across the programme. Ministers are currently considering the future model for the long-term governance of the system. They will say more about this after the outcome of the spending review. In response to the point made by the noble Baroness, Lady Prosser, about the numerous organisations involved in regulation and oversight, these organisations do different things. Some deal with funding and others with the quality of provision, but it is something we can consider.

If we are to get more young people to consider and take up opportunities, it is essential that they receive quality careers advice and guidance at the right time. As my noble friend Lord Lingfield said, since 2012 schools have had a duty to provide independent careers guidance to 12 to 18 year-olds on their options post 16, including apprenticeships. It has been made clear that schools should give employers and other providers the opportunity to inform pupils about what they offer. Ofsted is now giving careers guidance a higher priority in school inspections, and we are working with it to monitor carefully the impact of the statutory guidance. For young people who are not yet work-ready and need extra help, traineeships offer an opportunity to develop the skills and experience they need to compete successfully for an apprenticeship or other job. The noble Baroness, Lady Garden, asked for an assurance that there will be support from the Government to ensure that employers do not cut corners on quality. Yes, we are working with employer-led trailblazers as part of that scheme to develop the quality standards and assessment plans.

The noble Lord, Lord Macdonald of Tradeston, asked about women in science and engineering apprenticeships. Investment is being made in a wide range of initiatives that aim to inspire and engage young people with the opportunities that a career in STEM can provide. There is a commitment to ensure that the STEM workforce is diverse, reflecting wider society, and makes use of all the talents available to it. It is recognised that in some STEM disciplines, there is a particular shortage of women, for example in engineering.

The noble Baroness, Lady Garden, also asked what incentives were offered to schools to celebrate pupils who go on to apprenticeships. Destination measures produced by the Department for Education will now include those going on to apprenticeships. This will help to raise the profile of apprenticeships and of the need to celebrate in the future. As far as extending this to other sectors beyond public procurement, as mentioned by the noble Lord, Lord Macdonald, we are working with employers across all sectors to grow this programme.

The right reverend Prelate the Bishop of Derby asked me to comment on the future of the current inspection system and the information that schools provide for pupils. Ofsted is now giving this higher priority in school inspections, as I mentioned earlier. We are working with it to monitor the impact of the statutory guidance. My noble friend Lord Lingfield asked whether it should be compulsory for schools to offer information about apprenticeships. There is now a duty to provide independent careers advice for 12 to 18 year-olds, which includes apprenticeships.

A number of noble Lords—Lord Aberdare and Lord Macdonald, among others—made the point that small employers and SMEs are the backbone of our economy in so many ways. Yes, small employers will benefit. More details will follow the spending review and the evaluation of the recent consultation. Businesses will be given direct control over funding and how it is spent.

The right reverend Prelate also asked about the role of learning academies in preparing people for work. They are, as he said, really important. For example, national colleges help the United Kingdom to develop world-class technical skills to compete globally and address high-level skill gaps in key sectors of the economy.

The noble Baroness, Lady Morgan of Huyton, asked about information on where apprentices were one year after completion. All apprenticeships are real paid jobs, so, as with any jobs, individual circumstances change, as the noble Baroness is aware. We are reviewing current reporting arrangements where this important point is being considered.

The noble Lord, Lord Addington, asked about English and maths requirements. If a person with a disability completes all elements of an apprenticeship except for the English and/or maths requirements, they were unable to pass a key skills test because they felt that they were not offered appropriate reasonable adjustments, and they go on to pass the appropriate functional skills qualifications or GCSEs, they can apply for an apprenticeship certificate even if the rest of the apprenticeship was completed somewhat earlier.

The noble Lord, Lord Bhattacharyya, asked whether I agreed that employers should contribute to improving quality as well as quantity. I absolutely agree with that. The trailblazer system, as he knows only too well, is employer-led and is developing quality apprenticeships to meet their skills needs. He also asked whether we should use a proportion of the levy to monitor apprenticeships’ quality of standards. We are currently evaluating the responses to the consultation, and will ensure that that issue is considered.

The noble Lord, Lord Haskel, asked what we were doing to incorporate apprenticeships into the new ways of working online. The “Find an apprenticeship” website has between 12,000 and 20,000 vacancies at any one time. This can also be accessed through social media. On average, each apprenticeship listed on the website receives 10 applications.

The noble Lord, Lord Haughey, asked how many of the 3 million proposals were real jobs and where they would come from. As I said before, all these apprenticeships will be real jobs with a minimum 12 months’ duration and sustained and substantial training to ensure that the apprentices gain significant new skills. All new placements are required to have robust assessment procedures at the end of the apprenticeship.

A number of noble Lords with whom I had the honour and pleasure of serving on a committee chaired so ably by the noble Baroness, Lady Morgan, asked me outside this Chamber—as did the noble Lord, Lord Macdonald, inside it—about progress on securing a debate on the findings of the digital skills report. I will of course pass on the request to the usual channels.

This has been a quite excellent debate, and there have been many useful contributions from many Peers. Building on the many successes of the last Parliament, we have set out our key measures for apprenticeships, some of which I have outlined today and all of which will ensure that we continue to grow high-quality apprenticeships in a wide range of occupations across England. Again, I thank the noble Baroness, Lady Prosser, for highlighting these very important issues.

Photo of Baroness Prosser Baroness Prosser Labour 2:10, 15 October 2015

I thank the Minister for that response. Like him, I think this has been a hugely interesting and informative debate. I was particularly pleased that we had contributions to the discussion from all Benches of the House, which was important.

I recognise that this is a rather tricky matter in the sense that apprenticeships come under two government departments, which is always a bit of a recipe for more problems. When I read Hansard on Monday, should I discover that my important questions have not been answered, I shall look for the Minister’s correspondence in the Library.

I thank all noble Lords who contributed to the debate. Many points were raised which I had not really thought of myself, so I am grateful both for them and for the very interesting and diverse contributions that were made.

Whenever the question of apprenticeships is raised, it reminds me of a television programme from quite a number of years ago on the industrialists and entrepreneurs of the late 1900s. They were men who had made vast amounts of money and built significant organisations in shipbuilding, the arms trade, textile manufacturing et cetera. None of those men had sent their sons—nobody thought about daughters in those days—into those businesses. They had ensured that their sons went into the professions, as they called them—into medicine and law et cetera. We have an ongoing snobbery in this country about trade. It is up to all of us here to promote the value of trade and that sort of learning. I hope the Government will be prepared to give a good lead on this because we need a big cultural shift, so that we can begin properly to compare ourselves with other countries which do not have that history and that attitude. I thank all noble Lords and the Minister for their contributions.

Motion agreed.