Only a few days to go: We’re raising £25,000 to keep TheyWorkForYou running and make sure people across the UK can hold their elected representatives to account.

Donate to our crowdfunder

Programme-led Apprenticeships

Ministerial Statement – in the Northern Ireland Assembly at 10:30 am on 20th October 2009.

Alert me about debates like this

Photo of John Dallat John Dallat Social Democratic and Labour Party 10:30 am, 20th October 2009

I have received notice from the Minister for Employment and Learning that he wishes to make a statement regarding programme-led apprenticeships.

Photo of Reg Empey Reg Empey UUP

During a debate on 22 June, I announced that I would introduce a new programme-led apprentice­ship aimed at school leavers as a further intervention measure in light of the recession. That announcement was prompted by the declining jobs market and the strong indications that school leavers would be exceptionally hard hit. The unemployment trends over the summer have confirmed those fears. Failure to address the issue would have presented further problems in subsequent years, such as the assignment of many young people to the not in education, employment or training category and gaps in the skills pool when the recession ends and growth begins.

In the lead-up to that announcement, and since then, I was aware that there has been considerable interest by Members and some industry sectors about how programme-led apprenticeships would impact on employers and the traditional and preferred employer-led apprenticeship model. In making this statement, I want to say up front that this intervention was not a knee-jerk reaction, but a measured response that added to earlier interventions that I had put in place. The new temporary provision secures apprenticeship training.

ApprenticeshipsNI, the employer-led provision, must always be the preferred option. It is our best training model, but it requires the continued support of employers. In the past year, we have seen a number of employers that have, historically, run apprenticeship programmes — such as Northern Ireland Electricity, Bombardier, Wrightbus and companies in the electrical sector — postponing their annual intake or reducing it significantly. That is why I had to take action to introduce an alternative measure to the employer-led route.

A programme-led apprenticeship does not mean a lesser or second-tier qualification; it offers quality training and the same level of qualification as the employer-led route.

Programme-led apprentices will spend more time with the training organisation, and a strong emphasis will be placed on skills training in a simulated work environment. Time spent in the real work environment will be in the form of a one day a week work placement, with an opportunity for a block placement of six to eight weeks during the summer.

Training will follow the same apprenticeship framework, and it will allow for a seamless progression to the employer-led route should the young person secure employment at any time during their training. Similarly, if an employed apprentice who is under 18 is made redundant, they can join the programme-led route to continue their training.

The new provision will involve an additional cost to the Department of approximately £6·3 million. To have used that money for a wage-subsidy scheme that was to be paid directly to employers would have drawn in issues such as European Union regulations on state aid, and it could have displaced existing higher-paid jobs. Therefore, the funding is targeted at the individual, not the employer.

In a pre-prepared statement that I gave to the House, I included enrolment figures for the scheme up to 6 October 2009. I now have updated figures that show that in the period from the scheme’s inception on 7 September 2009 to 19 October 2009, a total of 2,763 trainees enrolled. Those figures demonstrate clearly both the scale of the demand for the training and the potential problems that could have arisen had I not acted. The young people involved have voted with their feet in very large numbers.

Had I not introduced the programme now, provision would still have been made under the existing Training for Success pre-apprenticeship scheme. However, some 2,000 trainees from last year would have been due to leave that scheme with limited job prospects. Programme-led apprenticeships will extend those apprentices’ training for a further year, allowing them to complete a full level 2 apprenticeship framework.

In addition to the 2,763 programme-led apprentices who have enrolled since 7 September 2009, most of the pre-apprenticeship intakes from last year have now signed up to complete their second year of training under the programme-led scheme. That means that over 4,700 apprentices are now participating in the scheme.

Some of the arguments that have been made against the initiative are that we are overtraining apprentices, that there will be too many young people trained with too few jobs for them to move into and that too many young people will not be trained to the correct level for some sectors. However, what would the alternative have been? Is it not better to have a pool of young people who are equally equipped to compete for the jobs when they come, rather than to have unskilled young people with few or no qualifications or experience?

Those young people will also be well on track to attain a higher skill level, as required by their employer, when they begin work. The employer-led programme will assist with that training.

I accept that in the lead-up to announcing the programme-led apprenticeship scheme, discussions with the industry sectors could have been more complete. However, I also recognise that the scheme could never meet all the demands of all the sectors. In responding to social issues such as this, there will always be tension. In this case, that tension was between the needs of the young school leavers and the business needs of the employers. However, the House should be assured that departmental officials will continue to work with employers and their representatives. Hopefully, Members will appreciate that the new provision meets social and economic needs, as it goes a long way to meet the requirements of employers while protecting the Northern Ireland skills base for when we emerge from the recession.

I am content that the programme-led apprenticeship scheme will provide opportunities for young people to follow their chosen careers, to acquire relevant qualifications and to be exposed to the world of work. It will produce young people who will be experienced, qualified and ready to meet the needs of employers when the eventual upturn in the economy arises.

Photo of Sue Ramsey Sue Ramsey Sinn Féin

Go raibh maith agat, a LeasCheann Comhairle. I thank the Minister for his statement. I had a meeting with the Minister just over two weeks ago, at which we discussed some of the issues and concerns that had been brought to my attention. I suggested to the Minister that if he made a statement to the Assembly, that would allow other Members to ask questions, as there is some confusion out there, and nobody is better placed to answer those questions than the Minister.

The Minister said that he is responding to social issues and the economic downturn, and we have all had to respond to the recession in different ways. Does he envisage any scenario in which programme-led apprenticeships will last beyond the current economic downturn? I understand that the programme-led apprenticeship scheme is at capacity, and the Minister has given amended figures in his statement. However, when does he believe that the numbers will level off, or have they already levelled off? Is there a danger that the scheme will need to be expanded because of the possibility of more apprentice redundancies?

Photo of Reg Empey Reg Empey UUP

The scheme is a response to the current economic downturn. We have undertaken to keep it under review, and it will be reviewed at least annually. I believe that the numbers are levelling off. From 6 to 19 October, approximately 100 extra apprentices signed up for the programme-led apprenticeship. We are pretty well reaching the stage at which it is too late for people to enrol, because if they enrol now, they will have missed a substantial amount of the programme. Therefore, the numbers are levelling off. However, we had always estimated that there would be provision for between 2,500 and 3,000 places. The figure of approximately £6·3 million for the cost of the scheme was based on having around 3,000 apprentices in post by this stage.

I can confirm to the Chairperson that we said that we would keep the situation under continuous review, because it is a response to a particular set of circumstances. I know that the Committee has argued consistently — as have others — that the best way forward is to go down the employer-led route, and I agree. However, the employer-led route means that an apprentice must have a contract of employment and, in effect, be an employee. We all know that some of our major companies either have failed to recruit apprentices this year or have drastically reduced their numbers. Therefore, what were we to do with the young people? We have more than 4,700 young people in a good programme. If we had done nothing, those 4,700 young people would be out there somewhere. Although the situation is not ideal or perfect, we are in a far better scenario than had we sat back and done nothing.

Photo of Thomas Buchanan Thomas Buchanan DUP

I welcome the Minister’s statement and his reassurance that programme-led apprenticeships offer the same quality of training and the same qualifications as employer-led apprenticeships. There was some concern that that was not the case, so I welcome his reassurance.

Will the Minister outline any other options that he considered in response to the rise in apprentice redundancies before he went down the programme-led apprenticeships route? Now that there has been time to consult on the programme-led apprenticeship scheme, will the Minister inform the House whether those who were sceptical about the scheme at the time have now bought into it?

Photo of Reg Empey Reg Empey UUP

The answer to the Member’s last question is that people’s scepticism has, to some extent, been assuaged. Some organisations felt that the scheme would lead to a significant reduction in standards. There is a difference between the two schemes. The employer-led scheme means that an apprentice would spend far more time on a practical job with an employer.

The programme-led scheme, on the other hand, involves the provision of a simulated working environment, which could be in a college or with another training provider. There is no doubt that the better of the two options is for an apprentice to be with an employer in the actual work environment. The programme-led scheme is the next best possible scenario to that.

Let me be clear: the qualifications that the apprentices will be seeking are fully accredited. An apprentice will gain a qualification that is fully accredited and fully recognised; however, the amount of time spent on placement with an employer will be substantially less. That is the essential difference between the two schemes. I would much prefer the scheme to be with an employer, but in circumstances where employers are not taking on apprentices, or are drastically reducing the number of apprentices that they are taking on, what alternatives are open? That is the dilemma that we faced earlier in the year.

The Member asked what other options were considered. We were lobbied, and the suggestion was made that the Department should give a subsidy to employers to maintain or take on apprentices. However, once state money is given to companies, it opens up a Pandora’s box of European interventions. For example, if we are subsidising someone’s wages, questions will be asked about whether it is state aid. It would open us up to all sorts of issues, and, in fact, it is quite possible that those subsidies would be challenged by the European Commission. Quite frankly, in some cases, we would have a hard job standing up to the criticism. We took the view that we should concentrate our resources on the individual, not on the company, and on the employee, not the employer. By doing that we avoid all the European issues that could trip us up.

There have also been other interventions, including the establishment of Skillsafe, which is designed to help an existing apprentice who, for instance, may be put on short time by an employer. Through that scheme, the Department will take up the slack for one or two days by paying that apprentice at least the minimum wage and providing free training during the time that they are working short time. There has not been a large take-up of that scheme, but those who are availing themselves of it find it helpful. We considered a series of interventions and felt that, on balance, the programme-led scheme offered the best option, without our having to tangle with the European Commission and get into all sorts of arguments there.

Photo of John Dallat John Dallat Social Democratic and Labour Party 10:45 am, 20th October 2009

I call Rev Dr Bob Coulter, and in doing so I add my congratulations on his important milestone, which takes him a little bit outside the range of the apprenticeship scheme.

Photo of Robert Coulter Robert Coulter UUP

Thank you very much, Mr Deputy Speaker. Having been an apprentice at one stage, very long ago, I appreciate your kind words today.

I welcome the Minister’s statement, and congratulate him on the time and energy that he has given to solving the problem. Will the curriculum for the programme-led apprenticeship scheme be designed and governed by the industry, and not by remote academics?

Photo of Reg Empey Reg Empey UUP

I do not know whether the Member is speaking in his capacity as a remote academic. I repeat the point: some industry representative bodies have expressed concern to the Department, the Committee and other Members that somehow, by going in this direction, we would be diminishing apprenticeships in some way. However, when one examines what those organisations have been saying, we see that they are dramatically reducing the number of apprentices that they were going to take on. We have a dilemma. I want employers to take the lead in providing apprenticeships — we all want that — but the employers simply were not providing the places.

The unemployment rates for young people in the UK as a whole are far higher than the national average. In other words, a huge slice of unemployment is concentrated in the younger age group — under the age of 24 — and Northern Ireland is no different. Therefore, the problem had to be resolved by providing people in that age group with work. In the UK, growing numbers of people are classified as “NEETs” — young people not in education, employment or training — although the problem is not quite as bad in Northern Ireland as it is in other regions.

Our measure has taken 4,700 of the young people who might not otherwise have had anything and put them in a simulated work environment in which they can work towards obtaining an accredited qualification. No matter how one looks at it, that is a far better scenario than those people being unable to get a job in the current circumstances.

I accept the argument that, to some extent, we are shielding them from the labour market for at least a year. As I said, people in the pre-apprenticeship programme have now moved on to the programme-led scheme, so many young people are now part of that scheme. An upturn will be needed after a year so that those in the pre-apprenticeship scheme who have moved on to the employer-led scheme can seek their qualification at the end of the current year. It is my hope that, by that stage, the economic recovery will have started.

We will review the scheme, and I assure the Member that we are doing everything that we can to ensure that a high-quality training regime is in place. All schemes will be subject to inspection by the Education and Training Inspectorate. There will be no half measures; the regime that is in place to produce quality will remain exactly as it should, subject to full inspection by the inspectorate.

Photo of Pat Ramsey Pat Ramsey Social Democratic and Labour Party

I thank the Minister for coming to the House with such a detailed report, and I hope that programme-led apprenticeships are a success. I understand that the training organisations that are part of the Training for Success scheme are saying that placement levels are as low as 25%. Can the Minister, therefore, explain how he hopes to engage with and encourage employers that are not normally associated with apprenticeship schemes, such as employers in the public sector and in the community and voluntary sector? What is the real incentive for employers to become involved?

Photo of Reg Empey Reg Empey UUP

The Department continuously engages with employers. During our contact with employers earlier this year, it became obvious that many of them were going to stop taking on apprentices completely, or at least drastically reduce their numbers. Some excellent apprenticeship schemes are run by some of the best employers in Northern Ireland. The Department received that news some months ago, and we were very concerned.

The Member asked whether the public sector could be encouraged to be associated with apprenticeship schemes. The public sector employs a huge slice of the workforce, and, therefore, it is appropriate that it starts to pull its weight by providing apprenticeships. I have written to ministerial colleagues, and we are at an advanced stage of negotiation with other Departments. We are getting a positive response, not only from the Departments but from non-departmental public bodies (NDPBs) and other agencies.

I believe that, because of the positive response that we have been receiving from Departments, apprenticeships in the public sector will be provided as soon as possible. That means, I hope, that a new avenue will open up to people. The Department for Employment and Learning is making arrangements to try to put such arrangements in place.

An undertaking was made to link the issuing of public contracts and the employment of apprentices by the successful contractor. That has happened only to a minimal extent, and Pat Ramsey’s Foyle constituency is the only place where it has occurred. I understand that eight apprentices were taken on as part of a public contract there. The scheme has not rolled out to the extent to which I believe it should have done, however. Therefore, there are questions to be asked.

I assure the Member that I believe that employers will respond, provided people receive qualifications under the scheme. Employers will not have to revisit the issue because much of the work will be done for them. They will be able to take on people who already have skills and qualifications, which would be easier than training someone from scratch.

Photo of Anna Lo Anna Lo Alliance

I thank the Minister for his statement. I strongly welcome his intervention in rolling out programme-led apprenticeships. Like other MLAs, I receive representations and letters from various industries. They have concerns about the future of modern apprenticeships.

We must be realistic. I agree with the Minister that, although we can discuss the pros and cons of the two different programmes, at the end of the day, what will we do with youngsters who leave school? It is much better to give them focus. That could be attending college and, perhaps, one placement day each week. It is much better to give young people that focus so that they can be categorised as active. Going to college and working towards qualifications will focus those young people on getting out of bed in the morning and looking forward to better prospects when the downturn is over.

Pat Ramsey asked the Minister about exploration with the public sector. I am pleased to hear that there has been a good response from that sector. What about the community and voluntary sector, which is a big employer? Has the Minister spoken to the Northern Ireland Council for Voluntary Action (NICVA), for example, on exploring possibilities?

Photo of Reg Empey Reg Empey UUP

I am pleased that the Member got to her question in the end. She is correct: we must be realistic. I believe that we have been realistic.

The Member may recall that, a few weeks ago, the Department announced a programme that, over two years, will create 4,000 job opportunities in the voluntary and community sector, whereby people who have been unemployed for at least 30 months would be employed by that sector for six months. We will give the voluntary and community sector the opportunity to take on 1,000 people for six months and to roll that out over two years.

The sector has responded positively. The programme is being taken up across the board. That means that people who have been unemployed for at least 30 months will have the opportunity to apply for a real job with a proper employment contract. When people finish the six-month period, it will be included on their curriculum vitae when they begin to search for a job. The first question that people are asked by potential employers is when they last worked. People will now be able to answer that question.

The voluntary and community sector is pulling its weight, but we can ask it only to do so much. The Member will be aware that the sector faces huge funding issues. If the scheme works, it offers significant opportunities to people who have been unemployed long term. However, we also want to reach people at the other end of the scale when they start off their working lives.

As far as the Department is concerned, Northern Ireland’s important voluntary and community sector, which is still a significant contributor to the economy — it accounts for around 5% of economic activity — is pulling its weight. Given the financial constraints in the sector, there is little more that we can ask it to do at present.

We will look closely at whether the scheme works. If it does, we will take great satisfaction from that; however, if it is not working, we will have to revisit it and come back with some other suggestions.

Photo of David Hilditch David Hilditch DUP 11:00 am, 20th October 2009

I welcome the Minister’s statement. I appreciate his work and that of his Department in what is a very difficult area in the economy at the minute.

I welcome the idea of progression on the employer-led route and the clarification that those who have been made redundant are also able to avail of the programme-led route. There is a small group of people who have been in apprenticeships and, although they have not been made redundant, have continued to work as labourers, particularly in the building industry. If, at this stage, they wish to drop back into the apprenticeship scheme, is that an option?

The Minister gave us some very encouraging figures; is it possible to have those figures broken down by constituency?

Photo of Reg Empey Reg Empey UUP

I will reflect on the latter question and see what information can be provided. Normally, we are able to provide figures based on where people reside, but we are unable to provide figures on how many people are working in a constituency. We can give the Member figures based on people’s addresses; if the Member wishes to write to me, I will be happy to provide him with those. We cannot provide details of whether an individual is employed in, for example, the Member’s constituency, East Antrim; however, we can tell him how many people on the programme-led apprenticeship have addresses in his constituency. That is as close as we can get. I will endeavour to provide the Member with those figures.

The construction industry has provided one of our biggest challenges. There are slightly more than 1,600 apprentices in construction this year, and, as I understand it, that is around half the number that there would have been a year ago. That is a major concern. The Member will know that we have made provision for apprentices who are put on short time. A scheme is in place, Skillsafe, which can help apprentices to make up the short time by giving them at least a minimum-wage payment.

The construction industry has particular needs. The Member will recall that I made a statement last week on the Construction Industry Training Board (CITB) and the changes that we are making to it. The sector is in a fairly volatile situation, and contractors are struggling to get enough work to keep them going. Therefore, it is very hard to get consistency of apprenticeships among employers. We are working as best we can with the companies, and we have taken steps to try to ease the burden on them by taking a lot of the smaller companies out of the levy. However, the number of apprenticeships has dropped by roughly half, and that is a substantial drop.

It would be foolish of me to say that there was going to be any early change to that situation. The construction industry is in a very difficult position, and it is one of the areas that we are keeping under review. However, if we look at our colleges, we can see that there has been substantial investment in the estate to provide high-quality environments in which people can train in construction skills. There is excellent provision pretty much everywhere. However, it would be misleading of me to tell the Member that I foresee any early improvement to the situation in that sector.

Photo of Paul Butler Paul Butler Sinn Féin

Go raibh maith agat, a LeasCheann Comhairle. I thank the Minister for his statement. He raised the issue of apprentices getting simulated work experience rather than real work experience.

The Minister mentioned the public sector. I am looking at the reply that I received from the First Minister and the deputy First Minister about capital projects over the next two years. In that period, 232 major capital construction projects will be put out for advertisement, worth somewhere in the region of £2 billion. There will also be an additional £279 million for smaller works.

The Minister touched on that, but he did not get into the detail. I appreciate that there is criticism from employers about simulated work experience for apprentices. However, if the Executive are rolling out a programme of capital projects over the next two years, it is up to the Minister to devise proposals so that we can tap into those projects.

Photo of John Dallat John Dallat Social Democratic and Labour Party

Does the Member have a question?

Photo of Paul Butler Paul Butler Sinn Féin

Does the Minister accept that we need to look at the public sector, given that the Executive are rolling out such programmes?

Photo of Reg Empey Reg Empey UUP

The Member makes a reasonable point. I touched on the issue in answer to Mr Ramsey. However, given that it has to be dealt with at the contract stage, it might be more fruitful for me to write to the Minister of Finance and Personnel, who is responsible for the procurement directorate. Any conditions that one applies have to be implemented at the contract stage; in other words, they must be contained in the contract.

If I am interpreting the Member correctly, he is saying that that level of public spending is an opportunity to ensure that apprentices are engaged at the stage when the contracts are let. That would have to be done by DFP through the Central Procurement Directorate. I will write to the Minister of Finance to inform him of the Member’s views and ask him what steps CPD is taking to ensure that apprentices are engaged at the contract stage.

As I said, the roll-out has been very sporadic and has only had a marginal impact, but the Member has a fair point: there is potential to do better.

Photo of George Savage George Savage UUP

I also congratulate the Minister and his Department on the work that they are doing with young apprentices. What is being done for those who are not so young and have lost their jobs? Is anything being done to reskill them?

Photo of Reg Empey Reg Empey UUP

As the Member knows, we removed the age limit for apprentices last year. Almost 40% of apprentices are now aged over 24, which would not have been possible until last year.

As I said to Anna Lo, we have introduced a scheme with the voluntary and community sector in which people who have been unemployed for 30 months or longer, many of whom tend to be in the older age spectrum, will be offered a six-month contract of employment. Those jobs will be paid and will have a proper contract. The participants will be able to put the jobs they do on their CVs. During the six months, they will get help with their CVs and receive extra training for interviews. Therefore, in addition to a job, the participants will have access to that form of training and, depending on their employer, other forms of training. That scheme deals with the long-term unemployed who, by definition, tend to be further up the age spectrum. All our programmes aim to get people back to work. The Member will know that there has been, in many cases, more than an 80% increase in the past year in the number of unemployed people registering in each jobcentre. The rate varies substantially from one jobcentre to another, but that is the overall increase.

We offer opportunities to those individuals. For instance, we offer the Pathways to Work programme to people who have become ill or are on incapacity benefit. That programme allows those people to be interviewed consistently up to six times. We offer them all sorts of opportunities, even the chance to start a business. We provide assistance for the first 26 weeks, and, if the business does not work out, the people who are involved suffer no loss and their benefits are maintained. Therefore, a range of programmes helps people right across the age spectrum. We must remember that we want to value and help people from when they leave school until the end of their working life. If we follow the example of my good colleague Rev Coulter, the Member will ask me the same question in 20 years. I look forward to that.

Photo of Claire McGill Claire McGill Sinn Féin

Go raibh maith agat, a LeasCheann Comhairle. Like other Members, I thank the Minister for his detailed statement. I will put my question into context: the statement mentions the programme-led apprenticeship scheme. It states:

“Time spent in the real work environment will be in the form of the one day per week work placement, with opportunity for a block placement of 6 to 8 weeks during the summer period.”

The Minister referred to rather large employers, such as Bombardier and NIE. What is the record of those companies in trying to do something over and above reducing the number of apprentices that they are taking on at this time? Those companies should be pressed to do more.

Photo of Reg Empey Reg Empey UUP

Those two employers have probably had among the best apprenticeship schemes in Northern Ireland for many years. I have visited both training centres: NIE’s at Nutts Corner and Bombardier’s on York Street. I have no doubt that, if Bombardier had not used an aggressive and significant apprenticeship programme for many years, that centre would be closed. Many employers walked away from apprenticeships 15 or 20 years ago, but that company did not. I believe that that is why it is still in business. Its record on apprenticeships is exemplary.

NIE has a fantastic training centre. However, it was, sadly, not able to take on any apprentices this year. That was a big blow, because it normally takes on around 40 young people each year. I visited those apprentices either last year or earlier this year; they do fantastic work. They have a wonderful facility, and they were really getting to grips with a technical and difficult but rewarding job. The fact that NIE did not take on any apprentices this year is a reflection of the economic circumstances.

NIE was one of the best examples of a company in Northern Ireland that was committed to apprenticeships. It has made significant investment in apprentices by providing training facilities and staff to teach people. However, because of the economic circumstances, it was not capable of providing the usual numbers this year. We are in regular and constant touch with those providers, because we are looking ahead to next year and hoping that, where organisations have been unable to take on trainees or have reduced their numbers, the situation will change. If a training centre does not have a first-year intake, that will create an imbalance. In other words, there is no first year, so the second and third years will be affected, and that will disrupt the whole programme.

The time that is spent in the real working environment is the big difference between employer-led and programme-led apprenticeships. I would prefer young people to be in employer-led apprenticeships, where they are constantly in a real work environment. Alongside the colleges and the other training providers, we are trying to give young people the best possible simulated work environment that we can create. It is not perfect, and it will never be a complete substitute for what happens in a business, but it is the best that we can do. We have to realise that there is only so much that government can do. The available jobs are, in most cases, in the private sector, and there is no substitute for working in a real business.