Clause 67

Education and Skills Bill – in a Public Bill Committee at 5:45 pm on 26th February 2008.

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Apprenticeships: functions of Learning and Skills Council for England

Photo of John Hayes John Hayes Shadow Minister (14-19 Reform and Apprenticeships)

I beg to move amendment No. 49, in clause 67, page 38, line 15, leave out ‘contract of employment or a’.

Photo of Hugh Bayley Hugh Bayley NATO Parliamentary Assembly UK Delegation

With this it will be convenient to discuss the following amendments:

No. 50, in clause 67, page 38, line 19, leave out ‘contract of employment or a’.

No. 51, in clause 67, page 38, line 26, leave out paragraph (b).

Photo of John Hayes John Hayes Shadow Minister (14-19 Reform and Apprenticeships)

The amendments relate to clause 67, which, as the explanatory notes state, amends sections 2, 3 and 4 of the Learning and Skills Act 2000 to ensure that the Learning and Skills Council

“is under a duty to provide proper facilities for apprenticeships for 16 to 18 year olds and reasonable facilities to those over the age of 19...The wording of the clause makes clear that it covers both employment under a traditional contract of apprenticeship with an employer, and the modern form of apprenticeships with the involvement of a separate training provider as well as an employer.”

The intention of the amendments is to ensure a return to traditional employer-based apprenticeships, rather than apprenticeships based with an independent training provider. We believe that all apprenticeships should be employer-based.

The Government recently published a review of the apprenticeship system, and the Under-Secretary of State for Innovation, Universities and Skills, the hon. Member for Tottenham, and I have already had some exchanges on the matter. I presume that he will speak at some length on the clause, as it is important to the  success of the Bill. He knows that I welcome some aspects of that review, not least because it responds to criticisms of the system—made not only by me, I hasten to add. It is helpful that it redefines what should comprise an apprenticeship with a stronger emphasis on mentoring, workplace-based training and, indeed, employer engagement of the kind that I just mentioned. Although some of the detailed recommendations in the review are welcome, my criticism is that it will reinforce the Government’s bureaucratic approach to the provision of skills training. The Under-Secretary, whom I imagine will respond to the debate on this group of amendments, knows that my central criticism is that by reinforcing the role of the Learning And Skills Council and reducing the role of sector skills councils in the management and funding of apprenticeships and skills more generally, the review, like the rest of Government policy, fails to meet the central charge in the Leitch report that we need a demand-led system.

Lord Leitch made it clear that centrally driven bureaucracy must be streamlined if it is to deliver a system that is more responsive to employer demand, but the review means that most apprenticeships will be delivered by agencies rather than by employers. Essentially, the Government prefer a nationally planned, target-driven approach to the flexible and dynamic training provision that is necessary in an ever more advanced economy. We believe that employers must lead the apprenticeship system if we are to raise the skills level. The continuation of a centrally driven, target-based model will fail to ensure that all apprenticeships result in greater employability, which is the ultimate test of the system’s effectiveness.

It is worth elaborating a little on the scale of the problem that we face in respect of apprenticeships. There is a shortage of apprenticeship places owing to a lack of employer engagement. As a result, the Government have consistently missed their targets for apprenticeship numbers. In 2003, the then Chancellor of the Exchequer, who is now Prime Minister, announced that apprenticeship numbers would rise to 320,000 by 2006. In fact, there were only 239,000 apprentices in training in 2006-07, and numbers are falling. The figures released in December show a decline in apprenticeship numbers at both level 2 and level 3.

At one time, all apprenticeships were a level 3 qualification, equivalent to an A-level. Indeed, most people’s picture of an apprenticeship is of an eager young learner gaining a practical competence at the side of an experienced craftsman that is bound to lead to enhanced employability. Usually, because such apprenticeships were linked directly to an employer, people went straight into a job. Although that is still true of many apprenticeships—there are some excellent apprenticeships abroad—it is not true of all apprenticeships. By changing the badging of training, and calling many things apprenticeships that do not match that traditional model, we have risked the brand. That is why I welcome some parts of the review, which begins to address those concerns.

At the end of the day, the problem with the creation of level 2 and programme-led apprenticeships, is that that has disguised the fact that we are training fewer people at level 3 than we did 10 years ago. The decline in numbers in the past year, which I mentioned, is part of a steady decline in the number of trainees in level 3 apprenticeships. The number of level 2 apprenticeships  has grown over the same period, but one wonders how many of those apprenticeships deliver the goods or do what is intended.

Apprenticeships are not what they used to be, and declining employer involvement has meant that many apprenticeships are much more classroom-based and have their origins in the youth training schemes of the past. The House of Lords Economic Affairs Committee reported last summer—I have referred to that report a number of times—that most of the increase in apprenticeships over the years is the result of converting Government-supported programmes of work-based learning into apprenticeships. All that new training has been below level 3. Lower-level training has increased at the expense of higher-level training. Of the 239,000 apprentices I mentioned, only 97,000 are at level 3.

The essence of our concerns, as embodied in the amendments, is that the Government have failed to provide an apprenticeship system fit for purpose, largely because of their supply-driven approach. The vast majority of apprenticeships are delivered by training providers rather than by employers. Work-based mentor training is often limited. In its last report, the adult learning inspectorate warned that some apprenticeships could be achieved without the apprentice

“having to set a foot in a workplace”.

The bureaucratic funding mechanism for apprenticeships means that, as the Economic Affairs Committee concluded, employers are

“marginalised at the end of a long chain of administration”.

One expert witness told the Lords inquiry:

“There is a key problem for both the young people and the employers in terms of finding each other...for quite a lot of employers, they do not actually know how to really access the system.”

The apprenticeship review is, in a sense, the final nail in the coffin for the Leitch report. One of Lord Leitch’s key recommendations was that the Government should move forward from a supply-side to a demand-led skills training system. The Leitch report concluded that

“history tells us that supply-side planning of this sort cannot effectively meet the needs of employers, individuals and the economy. The Review recommends a fully demand-led approach, with an end to this supply-side planning of provision.”

Consequently, Lord Leitch recommended that

“planning bodies, such as the LSC...will require a further significant streamlining.”

The review reinforced supply-side planning by proposing the establishment of a national apprenticeship service. That service is part of the Learning and Skills Council’s responsibilities, and the LSC will be responsible for the achievement of the targets set by the Government, including the determination and publication of the strategy for expanding places by region, sector and age group, consistent with the Government’s published national plans. Such an approach is not consistent with a demand-led system.

We must be bolder in responding to local and sectoral demand as required, rather than simply working a system around a series of national, predefined, Government-set targets. I am not sure that the Government have even begun to grapple with that problem. The  Leitch review recommended a much larger role for sector skills councils, which would be part of the demand-led system that Lord Leitch described, and which I support. Leitch argued that the councils should be responsible for approving vocational qualifications, as well as taking a lead role in collating and communicating sectoral and labour-market needs.

Following the apprenticeship review, the National Apprenticeship Service—in other words, the Learning and Skills Council—will be responsible for determining the qualification level of apprenticeships. The role of sector skills councils will be reduced, and their role in funding, commissioning and managing information on apprenticeships will be taken away. The creation of the National Apprenticeship Service adds to the confusing array of organisations with overlapping responsibilities that crowd the skills sector. The NAS will be responsible for a national information and marketing service for apprenticeships, which will exist in addition to the careers and training advice provided by schools and colleges, local authorities through Connexions, and the proposed adult careers service and skills brokers to be introduced as part of Train to Gain.

In 2001, the Cassels review of apprenticeships recommended that the system be led by employers, with training providers acting only as apprenticeship agents with a clearly defined role. In 2002, the LSC accepted that recommendation but it was never implemented. The notion that training providers are better placed to deal with those matters than employers themselves is fanciful. Under the apprenticeship review, training providers will continue to have responsibility for co-ordinating apprenticeships, which means that employers will be marginalised at the end of a long chain of administration. As an aside, with your indulgence, Mr. Bayley, the review says very little about the further education sector, which is still waiting for deregulation, years after the Foster report, which preceded the Leitch review, recommended that FE colleges be set free with a radical programme of deregulation—a view which I enthusiastically support.

The amendments are essential for two reasons. First, apprenticeships are central to driving up the national skills level, as the current system is simply not fit for purpose. Secondly, although I acknowledge that the Government have taken steps towards addressing the problems in the apprenticeship system and I recognise the Minister’s personal commitment to doing so, I still do not think that they have grasped the core message that lies at the heart of all of the reviews of the apprenticeship system and of the Leitch report, which is that we need to move to a less bureaucratic, less target- driven, less centralised and more responsive system, with employers in the driving seat and sector skills councils, which are employer-focused, playing a critical role.

Unless we do so, we will not get the apprenticeship system that we need and deserve. Without that, the Bill will falter, because many of the young people we want to engage should be travelling down the route through an apprenticeship to employment. I believe passionately in the principle of apprenticeships, and I know that the Minister does, too. I just want to have a frank debate—a non-partisan debate, in fact—about how we can get apprenticeships right. I do not claim to have all the answers, but I am certain that the system must reflect  genuine employment need and the best way to determine and deliver that objective is to have employers as the central component in the system.

Photo of David Lammy David Lammy Parliamentary Under-Secretary (Department for Innovation, Universities and Skills) (Skills) 6:00 pm, 26th February 2008

I am pleased to be able to take over from my hon. Friend the Minister for Schools and Learners to talk about apprenticeships. The last time I was in your constituency, Mr. Bayley, I was looking at apprenticeships at York Minster. I am pleased, too, that the hon. Member for South Holland and The Deepings has come closer to the Government position on apprenticeships since the publication of the apprenticeship review. I agree with him that this should be a non-partisan issue on which we can agree. I set my comments very much in the context of the apprenticeship review, which was in turn informed by our plans to raise the participation age following the Leitch review on skills and the introduction of an entitlement to an apprenticeship place for every suitably qualified young person in 2013.

Clause 67 is a small but important step in moving towards our ambitions for the apprenticeships programme, including the apprenticeship entitlement. Apprenticeships are implicitly included in the Learning and Skills Council’s existing statutory duties, as laid out in sections 2 and 3 of the Learning and Skills Act 2000, to secure the provision of facilities for education and training. However, apprenticeships are not mentioned in the legislation, so the clause addresses that omission by making explicit the Learning and Skills Council’s duty to furnish provision for apprenticeships that is the same as the provision for other post-16 education and training options. I hope that everyone welcomes that.

We have had a great deal of debate this afternoon about Oxbridge and independent schools. I am pleased to return to another group of young people who deserve our attention and our efforts to make the system more equitable on their behalf. In the context of raising the participation age, the clause is a signal to the system that the Government are serious about apprenticeships as a route that young people can take to fulfil the duty to participate. The effect of the clause will be to drive the way that the Learning and Skills Council funds provision and engages with employers in meeting the 2013 entitlement. For adults, we are equally clear that apprenticeships form a key part of our response to Sandy Leitch’s recommendations.

The amendments undermine the clarity and intended effect of the clause. Apprenticeships funded by the LSC can involve an individual in a contract of apprenticeship or a contract of employment, and the inclusion in the clause of

“training provided in connection with a contract of employment” is a recognition of that fact. That does not mean that every employer has to provide training, nor does it imply that every contract of employment must include training provision. It simply means that apprenticeships are covered by the LSC’s duty to secure the provision of facilities for education or training. The majority of people engaged in LSC-funded apprenticeships participate under contracts of employment, rather than contracts of apprenticeship.

To be as comprehensive as possible, the Bill includes both forms of contract, and our intention is to legislate  in a forthcoming Bill to remove the legal ambiguity surrounding apprenticeships. The effect of amendments Nos. 49 and 50 would be to remove the duty on the LSC to secure the provision of facilities with regard to apprentices employed under a contract of employment, and I am not sure that is what Opposition Members want. They have stressed many times during our debates and elsewhere their support for apprenticeships as a major route for young people and adults alike. Furthermore, amendment No. 51 would remove one aspect of the clause that is crucial to increasing the number of quality apprenticeships.

Clause 67 provides that the LSC’s role in encouraging employers to participate in training should encompass the kind of situation covered by apprenticeships. That provision will complement the wider measures to engage employers set out in the “World-class Apprenticeships” strategy. May I say very gently to the hon. Member for South Holland and The Deepings that he made an unfounded assertion about workplace provision? I understand his concerns, but I want to reassure him about the position, as he has got this wrong. Apprenticeships and advanced apprenticeships meet the requirements laid down by the modern apprenticeship advisory committee, chaired by Sir John Cassels. Those requirements are that apprenticeships involve on-the-job training; engage a young person to earn while learning, and closely involve employers. As I have explained previously, both in Committee and in the House, people on programme-led apprenticeships are not counted—I repeat, not counted—as being on an apprenticeship until they have a contract with an employer.

The hon. Member for South Holland and The Deepings (Mr. Hayes) will recall the evidence that we heard from the Prince’s Trust, Barnardo’s and other organisations, and I hope that he acknowledges that there is a role for programme-led apprenticeships for young people who are not quite ready for a fully fledged apprenticeship with an employer. Those young people may not have the soft skills that we have discussed in Committee. Nevertheless, they can get on that road with a programme-led apprenticeship. Such apprenticeships are not counted within the figures, but the young person can move on to another apprenticeship for which they are prepared.

Photo of John Hayes John Hayes Shadow Minister (14-19 Reform and Apprenticeships) 6:15 pm, 26th February 2008

I entirely acknowledge that there are many young people unprepared to take up an apprenticeship because of the absence of skills. Indeed, the House of Lords Select Committee report to which I referred earlier says that there are 300,000 such young people, who often lack core and soft skills. However, in respect of work-based training, the adult learning inspectorate warned:

“Some apprentices can potentially achieve the full requirements of the apprenticeship framework without having to set foot in a workplace.”

Why does the Minister think that the inspectorate said that? If I have got the wrong impression about apprenticeships, it has too.

Photo of David Lammy David Lammy Parliamentary Under-Secretary (Department for Innovation, Universities and Skills) (Skills)

I asked my officials to scour the extensive House of Lords Select Committee report to find that quote. We were able to find expressions of concern that the Adult Learning Inspectorate still had about programme-led apprenticeships, particularly in  engineering. However, the suggestion that most apprenticeships do not involve an employer is just wrong. The hon. Gentleman will recall that when I put that suggestion to some of the individuals who gave evidence to the Committee, including the principals and the Campaign for Learning, they were staggered by it and indeed they said that they just did not recognise it. They said that apprenticeships must involve an employer.

I therefore think that there is confusion here, and I know what lies behind the confusion. As the hon. Gentleman said, we have sought to ensure that we have a statutory definition of apprenticeships in the apprenticeship review. While we do not include programme-led apprenticeships in the figures, we acknowledge that we need to make a clear distinction between programme-led apprenticeships in a college, which are sometimes undertaken as preparation for an apprenticeship, and full-blown apprenticeships. I think that the problem is confusion about descriptions, but it is not the reality of the experience of our apprentices as we understand it.

Photo of John Hayes John Hayes Shadow Minister (14-19 Reform and Apprenticeships)

It is important that we clarify this matter. I do not want to delay the Committee unduly, but there are two points to explore. The first is the issue that was identified by the adult learning inspectorate. Let me say, for the hon. Gentleman’s benefit, that the reference is from July to August 2006. I am happy to provide it for him so that he will not have to scour any further. The inspectorate is concerned about those apprenticeships in which there is no workplace element. There is a second, parallel, concern about employer engagement and what constitutes an employer. It is right that many apprenticeships have a significant and implicit relationship with employers. Among the best apprenticeships are those run by Rolls-Royce and Honda. Many of the employers concerned are training providers. I am interested in the Minister’s view on what constitutes an employer and how an employer is defined in that context.

Photo of David Lammy David Lammy Parliamentary Under-Secretary (Department for Innovation, Universities and Skills) (Skills)

The hon. Gentleman has made that point before, and I have inquired into it in some detail. It is not possible for an apprentice to achieve an apprenticeship if they are based solely with a training provider—by that I mean someone whose main activity is education and training. Some employers, usually large employers such as BAE Systems or Honda, set up separate training arms for their apprentices. It is important to acknowledge that trend among some of our larger employers. At a time when the Government and the Opposition are keen for apprenticeships to increase, we would not want to see that development end. That is not the same as the apprentice merely spending his time at a local college. The large employer is able to become the training provider because of the financial means that they have and because of the staff that they can employ to do the training. Again, there is some confusion about descriptions that has led some to suggest that one can get an apprenticeship solely by spending time at a training provider. That is not the case. An apprentice has to be with an employer.

The hon. Member for South Holland and The Deepings will also know that in the review, we recommend group training associations, which is something that he called for. Implicit in that recommendation is the understanding that it can be very difficult for small businesses to offer  apprenticeships, and that the relationship that they have to have with the learning and skills council is something that they may find daunting or some way removed from their usual pattern of business. That is why we recognise the desirability of the model of a group training association, whereby a group of small employers hand over the necessary bureaucracy and accreditation that go with an apprenticeship to a central hub.

Group training associations already exist. I have visited the Birmingham electrical group training association that provides that part of the west midlands with a lot of its electricians. That might be described as an apprenticeship with the training provider, but such a description is not accurate. It is the training provider working in partnership with electricians in the west midlands. I hope that that answers the hon. Gentleman’s points and that we can move on from some of the confusion, understanding that the Government’s desire is to get the statutory definition right, to bring clarity and to ensure quality in the apprenticeships offered.

The hon. Gentleman has expressed concern that a new national apprenticeship service will be a supply-driven, centrally based, target-oriented model. I want to reassure him that that is exactly the opposite of what is envisaged. For the Government to count training as an apprenticeship, an apprentice must have spent a period of time as an employee and have the status of an employee at the time of completion. In addition, the role of the sector skills council in articulating employer demand will be central to everything that happens as we roll out our ambitious apprenticeship plans.

“World-class Apprenticeships” makes it clear that the new national apprenticeships service will work in partnership with sector skills councils. Indeed, the report introduces a set of new and revised functions for sector skills councils, including promoting the take-up and spread of apprenticeships, branding national completion certificates, maintaining a bank of qualifications from which frameworks will be formulated, working with the national apprenticeships service to communicate quality-assurance messages and information on apprenticeships to employers, and sharing information management.

Photo of Charles Walker Charles Walker Conservative, Broxbourne

I am grateful to the Minister for giving way for one of my rare appearances in this Committee. I do not want to be argumentative and I hope that he does not think that I am being argumentative, but how will we benchmark whether our apprenticeships are world class? That is an over-used phrase. Could we not use more modest language and say that they will be very good apprenticeships? In that way, nobody would be disappointed if they do not end up being world class.

Photo of David Lammy David Lammy Parliamentary Under-Secretary (Department for Innovation, Universities and Skills) (Skills)

The hon. Gentleman makes an interesting point, but it is right that we have bold ambitions for the young people who take that learning and employment option. We have spent much of this afternoon talking about Oxbridge; I want that same level of aspiration for the group of young people who take the apprenticeship route. We want to encourage quality and to legislate for quality. We will be able to do that as a result of the apprenticeship review and we can aspire to world-class apprenticeships. Frankly, if Germany and Australia are able to have apprenticeships that most of the world  look to and say that they are good, I am quite sure that we can extend the tradition of companies such as Rolls-Royce and British Telecom and set up such apprenticeships as our ambition.

The clause is but one of the building blocks that we need to put in place on the road to rolling out the entitlement in 2013 and expanding apprenticeships to meet the ambitions set out in response to the Leitch review. The apprenticeship review said that we will go further in legislative terms to give statutory force to the 2013 entitlement. The clause supports that direction of travel. The amendments would exclude the majority of apprentices from the duties on the LSC and cloud the message that we are sending to the system. I hope that the hon. Member for South Holland and The Deepings is sufficiently reassured that he can withdraw his amendments.

Photo of John Hayes John Hayes Shadow Minister (14-19 Reform and Apprenticeships)

We have had a long debate on apprenticeships and I do not want perpetuate it longer than the Committee will tolerate, so I will abbreviate my remarks. I only want to pick up on one thing that the Minister said—although I could no doubt debate the issue with him all day and all night—about group training associations. He is right to say that the Government emphasised them in the review. I called for that in my party’s mid-term policy review; they are a useful way of involving small and medium-sized enterprises, which we did not talk about earlier in this regard, but which are vital to the success of the policy. Many of the young people that the Bill deals with will find their training opportunities and their employment opportunities in SMEs. I never waste an opportunity to elevate their calls in our considerations. Group training associations provide a very effective way of allowing such businesses into this network.

We have had a long debate and, in the spirit of the Minister’s response, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 67 ordered to stand part of the Bill.