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Volume 541: debated on Monday 27 February 2012

Apprenticeships are now providing a record number of opportunities for individuals and employers, and the benefits that programme delivers can be felt across every community in our country and every sector in our economy. Apprenticeships deliver strong wage returns for individuals and boost their career progression; deliver higher productivity and a motivated workforce for employers; benefit communities by supporting social mobility and employment opportunity; and help to build a workforce equipped with the skills needed to compete globally.

Apprenticeships are delivering results, and the momentum that has been created will continue to reap rewards in terms of future growth in the programme. Delivering these results for individuals and employers depends upon ensuring that the value, impact and brand of apprenticeships remains strong and continues to be strengthened, raising the status of vocational learning and so for vocational learners. In this way the real and perceived value of apprenticeships impacts upon the self-worth of those that complete them and the view that others have of their achievement. So it is right that we now look to build upon this growth and momentum with a renewed and relentless focus on quality—to help ensure all apprenticeships are as good as the best, to identify and root out any instances of poor quality provision, and to raise the bar on standards.

Last year, statutory standards for apprenticeships came into effect for the first time. Following which I announced a series of further measures to improve the quality of the programme, and asked the National Apprenticeship Service to develop a comprehensive quality action plan. Now I want to direct you to the progress that has been achieved so far and the next steps.

In delivering these improvements, we will work closely with the FE and skills sector, who are best placed to drive up quality, and continue to strive to give the sector the freedoms and responsibility to tailor their provision to meet learner and employer need.

Short duration

First, an apprenticeship must involve significant new learning and time spent achieving competence and confidence in the job, which is why I am taking steps to ensure all apprenticeships are of a sufficient length to allow this learning to be embedded. Following my announcement in December, the National Apprenticeship Service will shortly publish the detail of a new 12-month duration requirement for all 16-18 year olds. This will come into effect for all starts from August 2012, although we expect many providers to change their delivery models before then.

NAS and the agency are pressing ahead with their comprehensive review of all short duration programmes:

87 training organisations providers, subcontractors and directly funded employers delivering apprenticeships of short duration (six months or less) warranted review by the agency and NAS.

29 cases have been brought to a satisfactory conclusion. These will continue to be monitored to ensure that issues do not occur and in preparation for the new requirements on duration from August 2012.

Where cases have been concluded, providers have changed their delivery models to be fully compliant or ended the delivery of frameworks that do not meet the requirements.

Most providers have revised their programmes to meet the challenge in quality standards that are required.

So far, the review has identified 10 primary contractors and three subcontractors where the agency and NAS have significant and unresolved concerns. NAS and the agency will work closely with these providers to conclude a full investigation of the specifics of the cases and identify suitable resolutions, including improving, adapting or, if necessary, withdrawing provision.

Following major reviews, in the case of three subcontractors, prime contractors have decided to end their contractual relationship.

At least one case has been referred to the agency’s special investigations unit.

It has been made clear to providers that contracts which meet funding requirements technically but fail to meet the more comprehensive quality standards we expect of apprenticeships are not acceptable. The agency will significantly tighten the contract and funding guidance from August 2012 to eliminate poor practice.

The reviews of the majority of the cases that remain will be finalised by April 2012.

Provider management and Subcontracting

Secondly, in order to ensure that all those who are being funded to deliver apprenticeship training are fit for purpose and fulfilling their responsibilities in a proper manner, I have asked the National Apprenticeship Service, working with the Skills Funding Agency, to strengthen monitoring, reporting and subcontracting arrangements to ensure quality concerns are thoroughly and systematically identified and managed routinely:

A new “enquiry panel”, which will report directly to me, will manage contractual and quality weakness as it is identified, outlining the shape and scale of any investigations being undertaken.

The agency will ensure that the contracting system is strengthened to remove any ambiguity and to protect the quality and standards of the apprenticeship programme through the funding rules, policies and contractual obligations of training organisations and employers.

A new contractual clause will be introduced to ensure training organisations and employers act within both the stated policy intent as well as the regulations of the system. Failure to uphold standards will constitute a breach of contract.

The agency will publish clear guidance on the funding that can be drawn down when an apprentice has prior learning—ensuring a clear link between delivery and investment by the Government. New funding guidance will clearly stipulate these requirements.

Effective immediately, all subcontractors over a value of £500,000 will be required from now on to pass the same due diligence test that we apply to lead providers; meaning that subcontractors will be regulated through the Register of Training Organisations. We will work to extend this condition to all subcontractors by December 2012.

From February, the agency will publish the list of all subcontracted provision that amounts to over £100,000.

The agency will publish the list of training organisations that breech its terms and conditions once all legal action and recovery of funds has been completed.

The agency will enforce minimum levels of performance on all apprenticeship providers. We are currently reviewing these to ensure that the thresholds that apply to apprenticeships are suitably rigorous.

Lead providers are now contractually required to publish details of subcontractors. We will withhold payments to any lead provider that fails to do so.

Wider next steps

Taken together, this strong and decisive action is already having a positive impact on the overall programme. But constant vigilance is necessary to ensure that every aspect of the apprenticeship programme is recognised as meeting the high quality standards I have set; to protect the taxpayer’s investment; and most importantly to ensure the greatest impact on young people, employers and the wider economy.

So over the coming months, still further measures will include:

Taking steps following our commitment to introduce minimum durations for apprenticeships for under 19-year-olds, to ensure adult apprenticeships are also of sufficient length to deliver and embed learning.

An NAS review of a number of apprenticeship frameworks and models of delivery which have been identified as needing quality improvements.

Published revised guidance on the application of SASE, and a commitment to review SASE periodically to ensure its currency and relevance

Publication of a revised quality delivery statement by NAS setting out how apprenticeship framework content should be delivered, and including final details on the new delivery and funding rules.

Confirmation of our commitment that all apprentices who do not have level 2 in English and maths should have the opportunity to progress towards this.

As these detailed measures set out, we will take every necessary step in the months ahead to protect and improve the quality of the apprenticeship programme, so that we can be confident that, as more people than ever have the opportunity to undertake an apprenticeship, they will receive the high quality training that learners and employers deserve.