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I too thank my noble friend Lord Young of Norwood Green for introducing this debate. I declare an interest as a board member of a multi-academy trust in Cambridge and vice-chairman of one of the university technical colleges set up under the auspices of the Baker Dearing Educational Trust. I also have past form: until recently I was chancellor of BPP University, which is a provider to most of the big law firms and accountancy firms of the teaching of degree-level apprenticeships.
I was unable to take part in the debate on Tuesday this week on the Independent Panel Report to the Review of Post 18 Education, but I take this opportunity to congratulate the panel, its chairman Philip Augur and his DfE team on their work. The opening paragraph ought to resonate with us all. For those of us who have forgotten since Tuesday, it states:
“Post-18 [or ‘tertiary’] education in England is a story of both care and neglect, depending on whether students are amongst the 50 per cent of young people who participate in higher education (HE) or the rest”.
The report goes on to say that,
“universities and university students are both cared for and cared about”,
adducing the fact they receive over £8 billion in funding and most of the media comment and attention—and, for that matter, most of the political attention too.
In the debate on the Higher Education Bill in 2017, 180 Members of your Lordships’ House, many of them chancellors of universities, spoke, whereas in the debate on the Technical and Further Education Bill, which set up the Institute for Apprenticeships, now IfATE, 18 Members—fully 10% of the number of Members who spoke on universities—spoke on a Bill which sought to increase opportunities for the other 50% of our children. It seems to me that the independent panel was right on the button in its opening comments.
As my noble friends have noticed, apprenticeships historically were how most people gained employment and qualifications and were a prime instrument of social mobility. The huge increase, now up to 50% of our young people, mandated by Governments particularly over the past 10 years, has rendered apprenticeships less important to many of our learners. However, they are key to improving productivity, which has stalled, at least in part because of skill shortages, and they retain their importance for increasing social mobility, which also seems to have stalled.
The big success story in increasing apprenticeships has been degree-level apprenticeships. I have a problem with them. Speaking as an ex-provider, degree-level apprentices are mostly not new employees; they are being used publicly as a substitute for employing graduates. Many big firms prefer to take on apprentices at 18 rather than graduates at 21 because they can train them properly and in a way that is useful to them. These apprenticeships are immensely popular with students and their parents because the apprentices emerge free of debt and with a guaranteed job or a recognised qualification.
One large accountancy firm, for example, writes that it is now tending to reduce the number of graduate trainees in favour of the 18 year-old apprentices so they are now about half and half. However, while these are new apprenticeships, they are not new employees. These are not, in some sense, new opportunities. Mostly, as Augar points out, these degree-level apprenticeships are operated by large firms in service industries—I do not know how much they are substituting for graduate trainees—but there are also employers in manufacturing industry who run successful schemes, Rolls-Royce being the prime example.
It would be easy to conclude that a degree-level apprenticeship conveys automatic advancement to a good skilled job, and that at that level very little care or state intervention is required to ensure that the learners succeed. However, having been chancellor of BPP University, which teaches accountancy and law, principally, for students on degree-level courses, I can say that it is not entirely problem free. The Government have sought to mandate that 20% of these apprentices’ time must be spent in formal learning, but we found that it could be very difficult to extract competent young people who are earning money for their employers—ironically, often on government contracts—to ensure that they get the time off for formal learning. It is difficult for any training provider to insist on a large and profitable client releasing its people for 20% of their time, but it is vital for the learner. I would like to be clear that that would be enforced. In 2017, I urged the Government to mandate it in statute, but they preferred to do it by mandating IfATE. I am sure that it remains necessary that training providers for these degree-level apprenticeships be regulated and considered, even though many university departments, as well as the private sector trainers, are training providers.
I think there is a risk here, as identified by Skills Minister Anne Milton. She was concerned that it would mostly be educated middle-class parents who got their children to take up apprenticeships. I agree with this perception. My experience of parents’ evenings at the university technical college of which I have the honour of being a governor, and which produces both BTEC and STEM A-level pupils, is that it is the middle-class parents who are looking forward to qualifications post A-level, with a view to getting their offspring on to these apprenticeships. I think that growth in this sector will, if not interfered with, take care of itself, but it needs to be looked at with a view to introducing regulation. I am concerned that these are expensive degree-level apprenticeships and they drain the available levy provision.
The problem lies with increasing apprenticeships that convey level 2 to 5 awards. As Augar identified, there is a gap everywhere in level 4 and 5 provision that stands in the way of progression beyond level 3 for many of our young, and that goes also for apprenticeships. There are very few apprenticeships at levels 4 and 5, and they are urgently needed to enable progression beyond level 3 for those who do not for one reason or another go on to university.
Perhaps even more critical is the shortage of level 2 and 3 apprenticeships, although in Cambridgeshire several sixth-form colleges are providing proper skills training in subjects such as healthcare and hairdressing. They take students to level 3 and, indeed, provide a de facto qualification that will get them into a skilled job. However, full apprenticeships have a role to play at this level, particularly for students from low-income homes, where the cash earned by the learner is critical. That is also true of level 2 apprenticeships. The cash is a great help, particularly to low-income families.
During the passage of the Bill, I and colleagues, including four former Secretaries of State for Education, found ourselves wondering whether employers could be expected to pay enough attention to the social need to involve all our young. Back then, we were not confident. We all understood that employers have their own agenda, and several of us, including my noble friend Lord Young, who introduced this debate, were particularly doubtful that levy funds would be used by employers to set up new apprenticeships at the lower level to enable more of our young to progress.
It is clear that we were right to be doubtful. It is clear, too, that many employers decided to recoup any levy funding that they provided by taking the easier route of using the funding to train people they already had up to and including the level 6 qualification—the degree-level apprenticeship. A briefing paper from the Royal Academy of Engineering—received, I imagine, by most of us—makes my point for me. The academy asked for the levy to be made more flexible so that it could be spent on different things. That, to me, is a clear sign that it is not really intending to spend it on exactly what we asked it to be spent on.
That is not to castigate employers, who need to look after their businesses, ensuring that they are profitable and improving productivity. However, they would prefer to do it naturally, rather than enter the difficult field of taking on new apprentices, perhaps in a part of the organisation that does not have them already. Nor do I think that you can make employers responsible for engaging in improving the social process. That, I believe, is a matter for government, requiring government weight and money behind it. We have heard that, disappointingly, much of the levy fund has been drained. The one question that I would like to ask the Minister is whether he is prepared to see an increase in direct funding to enable these apprenticeships to take place.
In short—it had better be short, as I can see that I am running out of time—I welcome the opportunity afforded but I think that it is going to the wrong place. By and large, it is going to existing employers, who are using it to upskill—in a way that is fine; it is not a waste—and to degree-level apprenticeships, which, I agree with Augar, ought to be financed under the normal loan rules.