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Apprenticeship Levy — [Caroline Nokes in the Chair]

Part of the debate – in Westminster Hall at 3:47 pm on 11th February 2020.

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Photo of Michelle Donelan Michelle Donelan Government Whip, The Parliamentary Under-Secretary of State for Education 3:47 pm, 11th February 2020

My right hon. Friend gives me more credit than my position is due. I am afraid that I do not set the budget, but I assure him that we are keeping everything under review. As he knows only too well, the apprenticeship levy is worked on in conjunction with the Treasury. We will be considering the impact that it has on businesses, on social mobility and on opening up apprenticeships in the long run, so that the system is not only sustainable but opens door after door for young and older people in our communities.

Hon. Members mentioned SMEs, and I assure them that we are putting those on the same footing as big business. The apprenticeship service includes an award-winning digital service to support employers to manage their funds and choose the training they need from a register of approved providers. We are rolling out the benefits of that service to smaller employers too, moving away from the previous procured contract system to give SMEs more choice than ever over the opportunities that they create. Putting employers that do not pay the levy on the same footing as big businesses will allow them to choose the training providers that suit their individual needs. As that transition takes place, we are supporting SMEs by making funding available for more than 15,000 additional apprenticeship starts this financial year. I hope that addresses some of the points raised by my hon. Friend Jo Gideon.

I note the comments of my right hon. Friend Robert Halfon, the Chair of the Education Committee, which I formerly served on. He talked about the issue of gaming, and mentioned second degrees. We have to be really careful, because there are a number of sectors in which we have to recruit more people because we have skills gaps, including the NHS and the police, so we actually want people to do a second degree to get into those sectors. I hear the concerns about that and the MBA debate. I want him and other Members to know that I am personally looking at that to ensure that we get it right.

We are confident that our work to improve the working of the levy will respond to the rigidity of the system, which hon. Members mentioned, and open up more opportunities for individuals and businesses. I assure hon. Members that we will continue the progress with this so we support employers in the sector. However, as my hon. Friend the Member for Gloucester said, starts have fallen since our ambitious reform programme began. We will continue to carefully monitor falls in apprenticeship starts at level 2 and by younger people, as our reforms bed in and the balance of the programme continues to shift. Apprenticeships at level 2 can provide significant returns to individuals and may be the starting point for further progression—or, as my hon. Friend John Howell neatly said, act as the ladder of opportunity. However, it is also vital that young people and those from disadvantaged backgrounds can realise the benefits of apprenticeships at higher levels, so we will continue to look at this.

[Sir Gary Streeter in the Chair]

I want to stress the importance of quality, because apprenticeship standards are central to driving forward our reforms. Employers often told us that the quality of the training was inconsistent and inappropriate. Standards today ensure that apprentices train for a minimum of a year, with at least 20% off-the-job training, and receive a rigorous assessment at the end. All apprentices will be starting on these high-quality standards by the start of the 2020-21 academic year. We listened to employers’ concerns around their engagement in developing the apprenticeships. We have established the independent Institute for Apprenticeships and Technical Education, which was mentioned several times. It is working with employers of all sizes to ensure the standards deliver for them.

When we reach National Apprenticeship Week 2021 and look back on the achievements of the coming year, I am confident that we will still be proud of the progress we are making. By this time next year, all apprentices will be starting on high-quality standards, developed by employers to deliver the skills they need.