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.