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Volume 560: debated on Thursday 14 March 2013

With permission, Mr Speaker, I would like to make a statement about the future of apprenticeships.

Apprenticeships are back. Having existed in this country for more than six centuries, apprenticeships have through the ages provided the vehicle for skills and trades to be handed down the generations. At their best, they are an engine for social mobility and for giving employers and apprentices alike the skills they need to prosper. Although apprenticeships declined in the previous century, this century they have started to recover and grow, both in number—500,000 started last year, compared with the approximately 350,000 who started at university—and in stature, becoming a career choice in their own right.

Although that growth in numbers should be welcomed on both sides of the House—it is also good to be able to welcome the shadow Skills Minister, the hon. Member for Blackpool South (Mr Marsden), to his place—I think we will all agree that we must increase the quality of apprenticeships and make them relevant to today’s economy. We will not delay progress on making such improvements. Steps have already been taken to require every apprenticeship to be a real job and to mandate that, in most cases, an apprenticeship lasts a minimum of a year, and today we are announcing that we will further strengthen the provision of English and maths in apprenticeships. The employer ownership of skills pilot is putting power in the hands of employers to design qualifications and deliver apprenticeships in line with employer needs, and we are extending apprenticeships to higher levels of skills and into new professions, such as insurance, accountancy and the law.

We need, however, to go further. Last year we published a report by the former dragon from “Dragons’ Den”, Doug Richard, on the future of apprenticeships. I pay tribute to his work in producing that report, which called on us to put employers in the driving seat, giving them more control over qualification design, training delivery and funding. It called for quality and standards to be raised across the programme and for a focus on outcomes, stripping out bureaucratic processes. It also called for more open data, more awareness and more employer engagement in schools.

We wholeheartedly agree with the principles and vision of the Richard report, which, along with the response that we are publishing today, will be placed in the Library, providing a programme of reform that will be challenging for all involved in apprenticeships—providers, the Government, employers and apprentices themselves—which is absolutely right. Rigour and responsiveness will be our guiding principles. The Richard reforms build on the best of this historic programme, but will once again attune it to the needs of the modern workplace.

Specifically, we agree that apprenticeships should be targeted at those in new jobs or roles to train them for that role as a springboard for their future careers; that employers should be at the centre of designing apprenticeship standards and qualifications; and that assessment should be largely at the end, more independent and graded. We agree on the need to raise further the standards in English and maths, and that employers should be given greater control of funding to ensure that it is directed where it adds most value. Costs will be shared between apprentices, their employers and the Government. We agree that more open and accessible data are vital. We agree on the importance of improving awareness and engagement with schools, so much so that the Prime Minister has set out that it should become the new norm for young people to go to university or into an apprenticeship.

This is a widespread package of reforms, on which we will consult widely and which we will implement sensitively. The consultation will stay open until 22 May. We will carefully consider the responses over the summer. People should be in no doubt that apprenticeships are a force for good. These reforms will help Britain in the global race by supporting unambiguously those who want to work hard and get on in life. They will help give all people the chance to fulfil their potential. I commend this statement to the House.

I thank the Minister for his statement.

In one respect at least, the Government have dealt comprehensively with the Richard review: they have comprehensively fudged or ignored most of his main recommendations. It reminds me of the old saying from the Clerk in the Table Office that one will always get a reply from Ministers, but not always an answer. I have been through the 10 specific recommendations that Doug Richard laid out in his report on apprenticeships. With the exception of the redefinition of the apprenticeship outcomes and the other matters that the Minister mentioned in that respect, all of which we agree with and welcome, I would give his answers two and a half out of 10 or possibly three. [Interruption.] Government Members should compare forensically the recommendations and what the Government have said.

It would be interesting to hear what Mr Richard makes of the Government’s response to his report. Ministers and their advisers were clearly too nervous to obtain or include any comment from him in their press release. They also completely omitted any reference to Mr Richard’s central recommendation on incentives for employers to invest in apprenticeship training.

There is a depressing pattern in the Government’s responses to new ideas for apprenticeships. They pat their advisers on the head, but ignore the main conclusions of the reviews that they have set up. They ignored Jason Holt’s advice last year on boosting apprenticeships with small and medium-sized enterprises, such as the need for impartial face-to-face careers guidance for young people. They voted here on Tuesday against the proposal of the Business, Innovation and Skills Committee to use public procurement to boost apprenticeship numbers. Now they have sidelined the key recommendation of Doug Richard’s report, again ignoring the need for a proper programme of advice and work experience in schools.

I want to ask the Minister the following questions. One of the central points of Doug Richard’s report was the need to incentivise employers’ funding. Does the Minister see the recommendations on funding made by Doug Richard and Lord Heseltine as complementary? What view does Mr Richard take of that?

The Government response says only that they are moving towards improving the attainment of level 2 functional maths and English. Why have they ignored Richard’s key recommendation that people should have level 2 functional maths and English before the completion of an apprenticeship? Will the Minister do anything to introduce work-based learning to support entry to employment and apprenticeships, as recommended by Mr Richard? Will he confirm that the Secretary of State for Education will provide dedicated funding for face-to-face guidance in schools to deliver improved awareness of apprenticeships among students and parents, as Mr Richard recommended? What measures will he take to support smaller businesses engaging with the apprenticeship system, and what is the timetable for that? How will the Government implement the new definition of apprenticeships as recommended by Mr Richard, and when will they do that? Finally, why have they ignored Doug Richard’s proposal to make some off-site learning mandatory?

The Government have ignored the key point with which Mr Richard began his recommendations. He said:

“It is important to stress that the different elements must be taken collectively: they are interlinked and the system will only make sense and be deliverable if all the elements are adopted as a whole”.

The Skills Minister has failed completely in his second day job at the Department for Education to reanimate the dead hand of the Secretary of State, whose fingers are all over this report on the failures of apprenticeships, failure to deliver work experience, and failure to make changes to guidance. No wonder employers and business organisations are wringing their hands over the Minister’s failure to take up fresh proposals from Holt and Richard. It is just as well that the Labour party has set up a skills taskforce that will come forward with fresh ideas to deliver the step changes that employers need, and address the crucial issues raised by Holt and Richard, which the Government have shown they are ignoring.

I do not know whether the shadow Minister turned up after I answered several of the questions that he has asked. Given that the Government commissioned and welcomed this report, and put in place a consultation on the implementation of the principles within, I do not know how they can be ducking that report. If a report is published, and the Government publish a response setting out how they will take forward its recommendations, that is very much taking on that report and its recommendations, not the contrary.

On the specific questions, I do not know whether the hon. Gentleman was present when I said that employers will be given greater control of funding to ensure that it is directed where it most adds value, and that costs will be shared. That is the answer to his specific question on funding. We agree with the principles, we are working and consulting on the options, and we will come forward with a full implementation plan in the autumn.

On information, advice and guidance, it is, of course, vital that schools give independent and impartial careers advice, and we are implementing that statutory duty. On small businesses, the whole point behind making the funding co-funded by and flowing through businesses, is to make it easier for businesses to access that funding. The brutal fact is that at the moment, more than half of apprenticeships are in small and medium-sized businesses.

The biggest disappointment is that on a set of reforms that will improve and strengthen the quality of apprenticeships, there was not one positive word from the Opposition Front-Bench spokesman. I have no doubt that we will hear positive words from elsewhere in the Chamber about the value of apprenticeships and how they help everybody reach their potential, but there was not a single positive word from the Opposition.

Order. May I explain to the House that a very large number of right hon. and hon. Members will be seeking to catch my eye in the debate on NHS accountability, and I am keen to accommodate that Back Bench-inspired debate? We have business questions before that so I am not inclined to run this statement at length.

Flexibility is key for any work-related apprenticeship policy. Does the Minister agree that apprenticeships should not just be for school leavers? They need to be for the mum going back to work after having looked after her children, and for the man in middle age seeking a new career. Will the Government address this issue?

Yes, I agree strongly. For instance, soldiers leaving the armed forces often go through apprenticeships to retrain for civvy street. That is another important element.

The Minister knows that I passionately believe in getting the apprenticeship question right, and we should use the Richard review to do that on an all-party basis. There is currently consultation and I hope that Opposition Front Benchers and Government Ministers will work together. At the moment, only 10% of employers take on an apprentice. If theirs costs are not met and if they do not receive an incentive, I do not think it will happen, but I support trying to achieve an all-party success.

I agree. I enjoy working with the hon. Gentleman and I hope that those on the Opposition Front Bench come to their senses.

Large employers, such as QinetiQ in my constituency, do very well, with large numbers of apprentices every year going into jobs after four years. My concerns relate to smaller employers. Will the Minister reassure the House that the needs and relatively limited capacity of small employers to engage with changes to apprenticeships can be accommodated in his plans?

With a background in small business, I understand entirely. These plans will make it easier for small businesses to access apprenticeships.

In my constituency and across Oldham, 8.6% of young people are not in education, employment or training, and we have a lower than average number of 16-to-18 year olds in apprenticeships. As I understand it, the Minister is saying that there will be no response until autumn on the recommendations for engaging with employers. Can we therefore assume that, four years into this Parliament, the Government will have done little or nothing on apprenticeships?

No, I said that actions are already being taken forward and I have announced some direct actions today. We are introducing traineeships in the autumn, which aim to ensure that young people have the skills they need to get a job and to hold down a job. That is part of our response too.

People out in the world know that under this coalition Government the number of apprenticeships has risen dramatically. The Minister and his predecessor have done a huge amount of work. In considering recommendations to widen participation, will he look at accessibility in rural areas for those considering apprenticeships further afield or in an industry not based in their area, to ensure that everybody has the chance of an apprenticeship?

I served an apprenticeship, albeit in Germany. The success of apprenticeships in Germany is the result of the fact that they are not seen as an alternative for those who cannot go to university, but are seen as an alternative route to achieve the same aim. Will the Minister continue to stress that apprenticeships can be an alternative route, and that this is not just a question of either/or?

In my constituency, more than 1,000 apprentices made a start in the past full year. Could we use this opportunity to thank the providers, colleges and employers that have made such a brilliant effort to give young people a great start in life?

National apprenticeship week is all about celebrating exactly the sort of people my hon. Friend mentions.

Following on from the question asked by my hon. Friend the Member for Birmingham, Edgbaston (Ms Stuart), will the Minister reiterate the importance of ensuring proper awareness of apprenticeships in schools and beyond as an alternative? That is a recommendation of the Richard review, and it is vital if we are to see the take-up of apprenticeships and for them to be taken seriously.

The new norm set out by the Prime Minister—that young people go into either an apprenticeship or university—is an important step. On the implementation of schools’ statutory duties, Ofsted has said that that will be a priority in how it assesses schools, and that is important. Some schools do brilliantly, but I want all of them to come up to scratch.

Businesses in Worcester are already benefiting from the Government’s incentives to small and medium-sized enterprises to take on apprenticeships, and that is why we have seen the number of them more than double, with more than 1,000 taking them up. Can I urge the Minister to keep on pressing on both the quantity and the quality of apprenticeships?

Yes, that point is very well made. The fact that more than half of apprenticeships are in SMEs is a good sign, but we need to ensure that as we increase quality, we also increase the numbers as much as possible. The fact that apprenticeships are becoming more rigorous will help to encourage employers to get involved.

With the demise of the professional careers service, how will the Minister ensure that the advice given to our young people in schools will be sufficient and that it will cover issues of diversity in making career choices?

That is an important point. The statutory duty on schools is critical in ensuring that that happens, but there is more to it than that. From this summer, for the first time, the destination of people leaving school to go not only to university but into an apprenticeship has been published. With the statutory duty and the Ofsted inspection on the back of them, those destination data will help to push things in the right direction.

The number of apprenticeships in Skipton and Ripon, and in Yorkshire more generally, has doubled. Will my hon. Friend confirm that under this Government, work will be the focus of apprenticeships, in contrast to the classroom-based programme apprenticeships that we saw under the previous Administration?

Indeed; we have already shut down the programme apprenticeship route, as it offered an apprenticeship without a job. One of the central arguments in the Richard report, with which I entirely agree, is that apprenticeships are about getting the skills required to do a skilled job. Of course that is absolutely critical.

I am also one of the few former apprentices in the House. Will the Minister confirm that the average length of stay on an apprenticeship programme has significantly decreased? Does he agree that short-term programmes and courses for adults are not proper apprenticeships, and that they simply dilute and discredit the apprenticeship brand?

Yes. The quality of apprenticeships is vital, and that includes the length of an apprenticeship. We have introduced a minimum duration for apprenticeships, and we insist that, in all but exceptional cases, they should last for the minimum of a year. That is in the report, but it is an area in which we have already taken action.

Apprenticeships have been one of the Government’s big success stories so far. In Chester, the number of apprenticeships has more than doubled, with 900 people starting one last year. When I talk to companies and businesses, however, I find that micro-businesses find it difficult to take on apprentices. Does the Minister have a view on how we can encourage companies with only one or two employees to take on an apprentice?

We are making it as simple as possible. I studied at West Cheshire college in my hon. Friend’s constituency. Colleges and other providers can help small businesses to bust some of the bureaucracy, but I want to bust some of the bureaucracy myself to make it easier.

Increasing skill levels will be among the critical long-term policies for turning around the slump in living standards, which is worsening under this Government. Will the Minister learn more from the German approach, in which larger companies receive stronger encouragement and have greater obligations to take on apprentices than is the case in the UK?

I certainly agree that ensuring that everyone reaches their potential through apprenticeships and increased skills is vital. An apprenticeship involves learning and doing a job, and encouraging companies to come to the table is vital if we are to make this happen. Through the reforms and the principles set out in the Richard report, to which we have responded today, that is exactly the direction we want to take.

On Tuesday, I was fortunate enough to go to the annual Macclesfield apprenticeship fair, where I saw a wide range of organisations offering apprenticeships. They included McCann Manchester, Siemens and Cheshire East council, as well as the local hospital. What steps is my hon. Friend taking to increase the number of quality apprenticeships in the widest possible range of industry sectors?

Small businesses in Hull tell me that the flat rate that they are paid to take on an apprentice does not take into account the particular needs of small businesses, and that it is the same rate as that paid to larger businesses. Will the Minister support the introduction of a differential rate for small businesses taking on apprentices?

We have introduced a grant of £1,500 for small businesses taking on their first apprentices, precisely to help them with the bureaucracy that the hon. Lady mentioned, and I would encourage her to tell the small businesses that she talks to that it is available. The take-up has been good, but we need to ensure that everyone who could benefit from it knows about it.

Does my hon. Friend agree that employers will welcome the greater control of funding so that they can direct resources to where they need them most?

I hope that they will. I welcome my hon. Friend as the apprenticeship ambassador in Parliament, as was announced today. His role is to ensure that we expand apprenticeships, listening to both parliamentarians and businesses as we take these reforms forward.

The Minister will be aware of the stark gender segregation in STEM apprenticeships. Will he tell us what steps he is going to take to achieve an increase?

Yes, we have specific pilots to deal with this issue. The employer ownership pilot involves a consortium led by Rolls-Royce, BAE and others and it is aimed at increasing the number of women engaged in engineering. The best argument in favour comes from apprentices themselves. The apprentice of the year is a female engineer who works on the Typhoon Eurofighter. She is an inspiration, and it is the arguments that she puts—better than me—that will help to encourage girls and young women to look to engineering as an exciting career prospect.

Can the Minister find it within himself to praise the General, Municipal and Boilermakers Union for its initiative with British Gas? Will he acknowledge that it is precisely the green skills apprenticeships that they are piloting together that will be the engine of growth?

The engine of growth can come from all sectors in our economy. Apprenticeships have support across the piece. For instance, I find myself agreeing with Dave Prentis of Unison on the importance of employer ownership, so this is an area in respect of which many different parts of society and economy—including, no doubt, parts of the GMB—can work together to ensure that skill provision is made available.

Following the question put by my hon. Friend the Member for Kingston upon Hull North (Diana Johnson), when I speak to small businesses, they tell me not just that they do not have enough money to take on apprentices—[Interruption.] I will continue when the Minister is listening. The small businesses that I speak to tell me that not only do they not have enough financial support to take on apprentices but that the money they receive covers only a small percentage of the actual costs. Will the Government’s proposals tackle this?

Of course, the extra support we have given to small businesses is important, but the crucial point is this: apprenticeships are good for the whole economy; they are good for tackling skills shortages; they are good for apprentices, but they are good for employers, too. So it is right for all three—the Government, apprentices and employers—to pay their part towards the costs of apprenticeships because all three benefit from them. That is one reason why this is such a successful scheme.