Thank you, my Lords. I apologise that, on the previous occasion, I committed the offence of forgetting to unmute.
I am aware—as are many other noble Lords—of the deficiencies of the apprenticeship levy. However, as the noble Lord, Lord Addington, almost said, we should be careful before we throw the baby out with the bathwater. It has done a lot of good. It has focused employers’ minds on the importance of apprenticeships. We have an Institute for Apprenticeships which is involving employers in creating new standards. I agree with the noble Baroness who said that there was a need for reform. But a consultative process is going on. I ought to have declared my interest as a national apprenticeship ambassador.
Employers already have the ability to use apprenticeship levy money to support not just supply chain companies but other companies outside their supply chain, and there has been a better take-up of that. Indeed, the Government have made more of the apprenticeship levy available. My concern at the moment is that, if we are really looking for growth in apprenticeships, this needs to be in the area of small and medium enterprises, especially in small and micro companies. Those companies frequently complain that the administration is too complicated, and that they find it a burden. We should bear in mind that many are saying, “Look, I’m struggling just to keep my business afloat and now you want me to take on an apprentice”. My response is to be understanding We need to work on helping them to remove some of that administrative and basic training burden. I also say to them, “Look, having a young person whose digital skills might be a lot more advanced than yours can often be of benefit to your company”.
I agree that some of the apprenticeship levy money has been spent in the wrong place. My concern is the 16 to 18 group, where the levels of youth unemployment are exceedingly high. I have already acknowledged the work of the job coaches, but more needs to be done on that front. So I am in favour of reform of the apprenticeship levy. I do not think that we should call it something else. We are just beginning to see a much better understanding by both parents and potential apprentices of the value of apprenticeships. I was interested in a recent development. UCAS, which used to be the clearing house just for those interested in going to university, has now opened another portal where people will be made aware of apprenticeship routes and vacancies. So reform is needed, but I still think that the basic concept is right. There are always areas where things could be improved, perhaps including the role of the Institute for Apprentices.
The apprenticeship levy is a bit like the curate’s egg—good in parts. I think the Government are aware of that, which is why there is a consultative process. I welcome the opportunity for the Committee to have this debate.