I beg to move,
That this House has considered apprenticeships funding.
I am pleased to bring this important debate to the House and I thank the 55 Members from six parties who helped to secure it. I speak, of course, as a former Universities and Skills Minister, and I am well aware of how important apprenticeships are across the country. There is a further education college in every constituency, so cuts in funding will directly affect thousands of young people all over the UK. It is therefore disappointing that the Government published initial details of those cuts in August without any parliamentary debate or scrutiny.
I do not want to be churlish, so I thank the Minister for the letter that I received from him at 26 minutes past 6 last night. I am grateful for that. That was 56 days after I first wrote to him about those cuts, 45 days after the Prime Minister said during Prime Minister’s questions that she does not recognise the cuts, 21 days after the Minister batted away questions on the cuts during Education questions, and a timely 15 hours before I opened this debate. Unfortunately, the letter says nothing that I did not already know.
It is important to acknowledge that the Government have listened to concerns raised by the further education sector and opposition from Labour Members of Parliament in particular. The written statement that the Government made last Tuesday goes some way to mitigating the worst effects of the cuts, particularly for 16 to 18-year-olds and disadvantaged areas, but that U-turn is a very different line from the one taken by the Department on 9 September in its response to my letter to the Minister, when it made no mention of a consultation or change of heart and stated that the cuts of up to 50%
“will help to ensure every young person, regardless of background or ability, has the chance to take their first step into work”.
As is always the case with funding announcements, the devil is in the detail. Despite the Government’s U-turn, areas such as my constituency of Tottenham will face huge cuts. Tottenham is rapidly regenerating, and with the Government apparently committed to building the homes needed to tackle the housing crisis, there should be opportunities for my young constituents to get skilled jobs in the construction sector, yet the Government are cutting funding for 16 to 18-year-old construction apprentices in Tottenham by a staggering 37%. According to the College of Haringey, Enfield and North East London, funding will be cut by 28% for 16 to 18-year-olds in Tottenham in customer service, 38% for those wanting to go into business administration, 43% for engineering apprentices, and 45% for hairdressing apprentices.
I ask the Minister why. Why does he think that my constituents, who live in one of the country’s most deprived constituencies, should not be able to participate in the construction that is happening across the capital? Why should they not be afforded the opportunity to become engineers? Why do his Government prioritise the academic stream with their new scheme to expand grammar schools while cutting funding for those with vocational backgrounds who want to be construction or engineering apprentices? It is a simple question: why?
I congratulate my right hon. Friend on securing this debate. The Institute of the Motor Industry described the original cuts as a “car crash”. I suppose a U-turn is not a bad idea when faced with a car crash, but that organisation is still warning that a lot of employers in the motor industry simply will not be able to cope with the existing shortfall in funding and the complexity of the existing frameworks. The Minister really needs to do more work on that if he is to answer the criticisms that have been levelled by both employers and potential apprentices.
Order. Let me give an early reminder that interventions should be brief.
Absolutely. Nissan might have decided to stay, but it may look again at the decision if apprentices do not come forward and participate in the industry. That is very important.
I praise my right hon. Friend for his outstanding leadership on this vital issue. Apprenticeships transform lives. Warren Shepherd, an apprentice in Erdington, moved into the house of his dreams as a consequence of gaining an apprenticeship and becoming a time-served engineer in the Jaguar factory. Erdington is rich in talent, but it is one of the poorest constituencies in the country. Does my right hon. Friend agree that if the ladder of opportunity is kicked away for people like Warren, the Government can talk until the cows come home about social mobility and building a strong economy in the midlands, but they will not be willing the means to deliver that?
My hon. Friend is absolutely right. I say to the Government, “Put your money where your mouth is for the great young people of cities such as Birmingham.” That is what this debate is about.
I congratulate my right hon. Friend on securing this debate. He has been pursuing this subject for a long time. Our hon. Friend the Member for Birmingham, Erdington (Jack Dromey) raised a real question about the Government’s boasts and commitments to west midlands manufacturing. They have made great play of manufacturing, but in Coventry, for example, further education funding has been cut by 24%. That raises serious questions.
My hon. Friend is absolutely right. Services now account for 80% of this country’s economy. If we are to build manufacturing and have young people who are able to construct wonderful buildings such as Coventry cathedral, which was levelled during the war, we need apprentices.
In my constituency, apprenticeships are booming. At the new Bridgwater and Taunton College, which is soon to become a university, the first nuclear apprenticeships have started to fuel training of young people in that booming new industry. For Taunton Deane, everything that the Government are doing is positive—particularly the levy that will come in next year and fuel many more apprenticeships.
I encourage the hon. Lady to get into the detail, because that may not be the picture after the cuts that are coming. She may also have seen that the axe is, sadly, falling heavily on disadvantaged areas. I do not know whether there are pockets of deprivation in her constituency, but that is an underlying theme in this debate.
Will the right hon. Gentleman give way?
I will not. I ought to make some progress, because I am conscious that many Members wish to speak.
The national picture is also worrying. Analysis by FE Week of the new funding rates found that children’s care, learning and development apprenticeships now face cuts of between 27% and 42%, compared with between 36% and 56% in August. Hospitality and catering funding will now be cut by between 34% and 45%, compared with between 41% and 60% in August. As the principal of the College of Haringey, Enfield and North East London told me, those cuts will only make it harder to get young people into apprenticeships.
Even after the Government’s U-turn, nine out of the 10 most popular apprenticeships still face cuts ranging from 14% to 51%. The best case scenario is average cuts of 27%; the worst case scenario is average cuts of 43%. The Department for Education was presented with that analysis last Thursday morning, less than 48 hours after it published details of the cuts on the gov.uk website, yet no response has been forthcoming. I look forward to hearing what the Minister has to say about the detail of the range of those cuts—after all, he has had plenty of time to prepare.
Will the right hon. Gentleman give way?
I will not at this stage.
I now turn to the disadvantage uplift—the additional funding to support disadvantaged areas that I referred to earlier. That was quietly scrapped completely in the proposals published in August. Last week’s statement promised a
“simplified version of the current system of support for people from disadvantaged areas”,
yet the Minister has told FE Week that that is guaranteed only for one year, while the Department undertakes a review to work out how best to support disadvantaged young people to undertake apprenticeships. One year? Why does it take so long to work out what needs to be done for disadvantaged young people? It is clear: give them an opportunity! It is quite straightforward, and that requires resources.
What does this mean? Will Parliament be told what is going on or will Members of Parliament have to find out through the media? It sounds to me like more cuts will come in a year’s time. Will the Minister confirm today what will happen to support for disadvantaged areas in 12 months’ time? Will the support be maintained or cut? If it is to be cut, may I reassure him that I will be back here, along with many other Members of Parliament, to oppose that once again?
On Tuesday, the Secretary of State told Parliament:
“Apprenticeships transform lives and are vital in making this a country that works for everyone.”
Apparently, the changes made since August
“will ensure apprenticeships are high quality…and provide opportunities for millions more people.”—[Official Report, 25 October 2016; Vol. 616, c. 6WS.]
If the Government are serious about social mobility, will the Minister explain today why the Government are pushing ahead with cuts of anything between 27% and 45% for nine of the 10 most popular apprenticeships? Does he have a response for Paul Warner of the Association of Employment and Learning Providers, who warned:
“It is completely self-defeating to cut funding, because that is just preventing disadvantaged young people from getting on”?
The apprenticeship levy will raise £3 billion from large employers and will replace all current Treasury funding of apprenticeships. If the Government are making a saving by passing the cost of funding apprenticeships to the private sector through the levy, why cannot the Treasury give some of that money back to reverse the funding rate cuts and provide support for disadvantaged areas? I hope the Minister will be able to explain.
It is also important to look at the context in which the cuts are happening. The Brexit vote was underpinned by people living in our post-industrial towns in the north and the midlands and in our seaside towns, who are feeling left behind and left out of economic growth. Youth unemployment stands at 13.7%, with 624,000 people aged between 16 and 24 unemployed; more than 100,000 of them have been unemployed for at least a year. The unemployment rate for 16 and 17-year-olds is a staggering 27.7%. It is interesting to look at other countries. Relative to population size, we are doing worse than Slovakia, worse than Hungary, worse than Ireland, Poland, Portugal, the United States, Canada, Australia, Estonia and New Zealand. We are doing four times worse than Germany, three times worse than the Czech Republic and twice as badly as Japan, Denmark and Sweden in terms of the proportion of our young people who are not in education, employment or training.
Last year, the Treasury found that
“the UK’s skills weaknesses…are of such long standing, and such intractability, that only the most radical action can address them.”
I ask the Minister: is this the radical action that his Treasury was talking about?
In fact, the national picture is that the youth unemployment statistics are down to 13.7%, which is down on last year, down from the height, and close to the lowest they have ever been, which was 11.1%.
Unless the hon. Gentleman is suggesting that the figures I just quoted are wrong, we should not be happy with the picture of youth unemployment in our country. Many Members in the Chamber are well aware of the young people walking our streets literally because there is not enough to do. I might just remind him that I have seen two riots in a generation, so I know something about idle hands making very dangerous work indeed. We need to put these young people to work. We need apprenticeships for them. We need more than rhetoric from the Government, and we certainly do not need cuts in this part of the economy.
The Royal Institution of Chartered Surveyors has warned that
“we are in the grip of our worst construction skills crisis in almost 20 years.”
That skills crisis will hold back big infrastructure and house building projects. Post-16 education was cut by 14% between 2010 and 2015 and last year the Public Accounts Committee warned of a “financial meltdown” in further education.
Further education is just about on its knees. Most of the Members in this House grew up in a period when they could go into an FE college that was open well into the evening, not just for young people but for adults—adults could also get into FE and skill up. I ask hon. Members to find me an FE college open past 8 o’clock in the evening where an adult can skill up and I will give them a beer. It is not happening! We should not be having a debate in Britain about grammar schools; we should be having a debate about night schools. Bring back night schools! Instead, we see cuts in funding for young people and no mention of the importance of adult education in an economy that will be more reliant on talent on its own shores in the coming years.
I agree with the right hon. Gentleman that vocational education is incredibly important for young people and the economy, but will he bring a little more balance into his argument and recognise that since 2010-11 vocational education has improved? The UK has made progress in international rankings such as PwC’s recently published young workers index and in 2020 we will spend double what was spent on apprenticeships in 2010.
I would rather not rely on PwC reports, if the hon. Lady will forgive me. I would rather rely on what I see happening in the country. We have a lot more to do. I gently remind the hon. Lady, who is a new Member, that having been Minister for Skills in the previous Labour Government I am well aware of how Labour lifted apprenticeships from their dismantling under the Tories. We were down to 5,000 apprenticeships across this country, and completion and success rates were on the floor. It was the Labour Government who lifted up apprenticeships, put all the effort in and grew them to a figure by the time we left office. Now, unsurprisingly, this Government are about to dismantle them.
The National Audit Office found that the Department for Education must do more to ensure that all apprenticeships meet basic quality requirements and that the Department had not even set out how an increase in apprenticeship numbers will deliver improvements in productivity. There are real concerns that some employers are hiring staff as apprentices to undercut the minimum wage of £5.55 an hour for 18 to 20-year-olds and pay them the apprentice minimum wage of £3.40 an hour. One in five apprentices reported that they had not received any formal training at all and Ofsted reports found that 49% of apprenticeship programmes require improvement or are inadequate. The Government’s own “Post-16 Skills Plan”, published in July, states that
“Reforming the skills system is one of the most important challenges we face as a country. Getting it right is crucial to our future prosperity, and to the life chances of millions of people.”
Why is further education and skills training more generally always the poor relation of higher education? Why did it take a huge campaign by the sector and Labour Members even to bring this debate to the House?
Announcements on higher education are pre-briefed to the Sunday papers, together with opinion pieces from the Prime Minister and TV interviews, while apprenticeships funding cuts are snuck out of the back door on a Friday afternoon in the middle of the summer recess in the hope that no one will see them. In a written statement placed before Parliament last Thursday, the Secretary of State committed the Government to a
“fundamental mission of social reform to deliver our vision of an education system that works for everyone”
as part of delivering on
“the Government’s vision for an economy that works for all”.—[Official Report, 27 October 2016; Vol. 616, c. 16-17WS.]
I therefore ask the Minister a simple question: can he explain today how cuts in apprenticeships funding of 30%, 40% or even 50% fit into that mission to deliver an education system and an economy that works for all and not just for the privileged few?
Colleagues, Front-Bench speeches will begin at 10.30 am, which gives us 40 minutes for the eight people who have caught my eye, so there are five minutes per speaker.
It is a pleasure to serve under your chairmanship, Mr Streeter, and also a real pleasure to follow the right hon. Member for Tottenham (Mr Lammy), whose first-hand experience and wealth of knowledge were apparent. He delivered his speech with passion—good luck to the shadow Minister following that. My hon. Friends and I can probably be grateful that the right hon. Gentleman is not on the Front Bench; it was an impressive performance.
For me, the importance of apprenticeships is summed up in the fact that 90% of those who complete one will go on either to work or to further training. That compares fantastically with the figures of 80%, which is the percentage of the working age population in work, and 48%, which is the percentage of people with a disability who are employed—up 4% but still considerably less than 90%. I will focus on people with learning disabilities, who in this country have a 6% chance of having a meaningful, sustainable career.
I know that the Minister is incredibly passionate about this subject. When I was the Minister for Disabled People, he was lobbying me to do something about it. My view was transformed after a tricky television interview in which I was told that Governments of all political persuasions have tried, tweaked and made changes, and made almost no difference, with the figure bobbing between 5% and 6%. I went on a visit to Foxes Hotel in Bridgwater—a working hotel, which took on young adults with learning disabilities who were taught independent living combined with practical working skills in the hotel and restaurant. That was done in conjunction with local restaurants, hotels and care homes. Of the young adults who completed the three-year course, 80% ended up with one of those employers, and half of them—about 46.6%—were paid, in contrast to that figure of 6%.
I was so impressed that I asked representatives to meet me at Westminster, and I asked them, “Why can’t we just have one of those in every town?” It would not necessarily be a hotel; the key is to identify the skills relevant to each town. In Bridgwater, tourism, care homes and restaurants are where the jobs are; in other towns it could be manufacturing or engineering. Our constituencies each have their own skills gaps. The reply I received was that the frustration lay in the work placement training. There was sufficient funding to take on almost as many students as they could fit into the hotel for the first two years, but the one year in a work placement was the bit that cost the money. I said, “But surely that is an apprenticeship?” They patiently train someone who will typically take a little longer to get the skills, but the advantage for employers is that, with that support and patience, they get someone who will probably continue in their role for the next 25 years—and will probably be the happiest person in the workforce. It is a win-win situation, but there was a problem, as I have explained.
I met the Skills Minister and we formed a taskforce chaired by the present Under-Secretary of State for Transport, my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard). Knowing that a reshuffle was coming up and that potentially the two of us might no longer be troubling the Front Bench, we set a three-and-a-half-week time limit. I am delighted that the taskforce concluded, and we signed off to say that more would be done to make apprenticeships available for those with learning disabilities—in particular, exempting them from the grade C in GCSE maths and English requirement, which for too many of those young adults was a hurdle too great. In effect, it would give them a slightly different version of apprenticeships, but fundamentally provide the funding for which the Government will put in £2.5 billion per year by 2020, and give those young adults something real and tangible. My request of the Minister, who was so desperate for that to happen, is that he will personally champion it and push it as quickly as possible. I hope he will make sure that providers understand about the opportunity.
I have two other requests. There are still too many employers—particularly small employers—who do not know the advantages of apprenticeships. I was a small employer before I became an MP. That was in the years when there were only 5,000 apprenticeships a year. I do not recognise that because I took on apprentices. Too many small employers do not know about apprenticeships. We send out a business rate mail-out every year. Please can a leaflet be included in that, saying “This is how you recruit an apprentice and this is how you benefit”?
Finally, when the Minister meets Education Ministers, please will he lobby them about university technical colleges? It is ridiculous that we allow children to enter them only halfway through their secondary schooling, rather than at the beginning. Too many talented future engineers and mechanics who could go on later to apprenticeships stay at their existing school, because of the friends they have made. It is a silly age at which to bring them in. The Minister is passionate and focused, and I look forward to his response.
It is a pleasure to serve under your chairmanship again, Mr Streeter. I congratulate my right hon. Friend the Member for Tottenham (Mr Lammy) on securing this important debate.
I am proud to be one of the few MPs currently in the House who completed an indentured apprenticeship. I remember being offered a place as an apprentice bricklayer as a teenager and nearly dancing with joy. Back then, an apprenticeship was very much something to aspire to. It was a path that people chose because they, and especially their parents, understood the brand. In many families, young people were told, “If you get an apprenticeship, you’ll always have a trade to fall back on.” However, successive Tory Governments devalued their reputation. It was the last Labour Government who breathed new life into apprenticeships, with capital support for new buildings and substantial increases to vocational funding models. The Government claim that they want to create 3 million apprenticeships by 2020. That is a laudable aim, but in this House I have repeatedly said that rather than having arbitrary targets on numbers, we need to assure quality. I do not want the House to get me wrong; if all the projected 3 million apprenticeships are at level 3 with a decent wage rate, I am in.
Faced with increased university tuition fee debt, young people are now choosing vocational routes into the workplace instead of academia, but the Tories have overseen one of the worst skills shortages in living memory. Research from the Liverpool city region apprenticeship hub suggests that the number of apprenticeship starts in Merseyside and Halton has fallen by almost 25% over the past five years. The Minister will know that construction sector output is vital to his Government’s macroeconomic policy; but the Union of Construction, Allied Trades and Technicians has warned that urgent action is needed to tackle the growing skills shortage, and the Construction Industry Training Board has forecast that the industry requires nearly 50,000 new entrants a year up to 2020. That far exceeds of the number of construction apprentices currently undergoing training, which is roughly half the figure given.
As a member of the Business, Energy and Industrial Strategy Committee, I realise how important apprenticeships are. About three weeks ago in Derby we opened the National Construction Academy, which offers valuable, meaningful apprenticeships for that vital industry. Does the hon. Gentleman agree that the plans to extend that around the country are a good thing, and to be commended?
I said earlier that it is question of whether the apprenticeships are proper level 3 ones— high skill, high quality, and in high-demand areas. I would of course welcome any initiative to increase people’s opportunity to get a proper job at the end of an apprenticeship programme. However, the Minister is presiding over an exacerbation of the problem and not tackling the fundamental issue.
In the Liverpool city region, the number of national vocational qualification level 3 apprenticeship starts last year was a fraction of the total needed simply to backfill the numbers retiring or leaving the industry. That simply cannot be allowed to continue. The Tories have a track record of failing young people from disadvantaged backgrounds. They scrapped the education maintenance allowance, trebled tuition fees and took away maintenance grants for university students and replaced them with loans, saddling the poorest with ever more debt. That tells us all we need to know about Tory ideology; they want the best only for the privileged few, not for the many.
Our devolution deal, with an area-based review for our city region, at least provides us with the opportunity to shape training better, on the basis of local need—if the Government grasp the nettle. At this point I should declare an interest. Devolving the skills agenda further would allow the incoming metro mayor to implement a skills strategy that would train the next generation of tradesmen and women, equipping them for the high-skill, high-paid, high-aspiration jobs that we need to build and sustain our future economic growth. However, central Government have not devolved apprenticeship funding and delivery and they have full control over the new apprenticeship levy that employers are obliged to pay if their wage bill tops £3 million a year. Will the Minister agree to meet me to discuss how the metro mayor of the Liverpool city region will be able, as it states on page 8 of the devolution deal, to
“collaborate to maximise the opportunities presented by the introduction of the apprenticeship reforms (including the levy) and work together on promoting the benefits of apprenticeships to employers”?
What exactly does he believe that collaboration between the Government and the metro mayor will entail? How does he envisage us maximising those opportunities? Does he agree that it is imperative that, following the upcoming spending and apprenticeship reforms, metro mayors have local control over and are directly responsible for apprenticeship funding and influence over the employer levy? If not, will he explain how he believes it is possible for a metro mayor to achieve improvements and address skills shortages locally without those powers? Apprenticeships must be at the heart of that strategy.
If we are to do that, we must also provide our young people with the proper advice and guidance to make informed decisions. It was an act of civic vandalism by the Government to dismantle the Connexions service when they came to power, which has left us with a system in which vested interests give partial advice to young people about their career options. If elected as the metro mayor for the Liverpool city region in May 2017, I intend to develop an independent careers and advice service that serves the best interests of all of the young people in our area.
Devolution provides us with the opportunity to make funding allocations based on the knowledge of local leaders across the city region, which is better than guesstimates from Whitehall mandarins. Will the Minister specifically address the points I have raised, unlike his colleague, the Minister for School Standards, the hon. Member for Bognor Regis and Littlehampton (Mr Gibb), who shimmied and sidestepped last week like Philippe Coutinho?
The hon. Gentleman quite correctly anticipated that we are one speaker down, so each Member now has six minutes to speak, not five. Well done to him.
It is a pleasure to serve under your chairmanship, Mr Streeter. I also congratulate the right hon. Member for Tottenham (Mr Lammy) on securing this important debate.
Apprenticeships provide a fantastic opportunity for young people to get on in life, while at the same time raising the productivity of the businesses that they join. On visits to schools around Bolton West, I hear concerns raised about getting that first job and having the required experience. That is obviously a great concern upon leaving school or university, but it is less so if someone chooses an apprenticeship because practical experience is built into the course. Businesses often raise the same concerns about people’s preparation for the world of work. Apprenticeships are key to solving that problem, because the potential employee not only will have the practical skills but will have been trained with a specific job role in mind, and will therefore be job or industry-ready.
It is really important that apprentices go into an improving and increasingly successful economy. The continuing economic recovery in Britain over the past six years is a fantastic achievement by the coalition Government and the present Government, and means that anyone doing an apprenticeship or any other course will have a job to go into afterwards.
Is it not also true that there is a significant return for the taxpayer—especially when compared with universities, where the return is much less—of £26 to £28 for every £1 that the Government put into apprenticeships? Promoting apprenticeships is a good thing for the taxpayer.
I agree entirely. Apprenticeships are a fantastic investment in the economy but also a great investment in the individual.
There is still a problem with the perception of apprenticeships; I sympathise with the hon. Member for Liverpool, Walton (Steve Rotheram) in that regard. We need quality apprenticeships. It seems that companies often find resistance within the school system when trying to recruit people for apprenticeships. That could be to some extent due to the recognition of apprenticeships—their reputation has become tarnished over a period of time—or to the fact that schools need to achieve academic targets to be recognised as successful, rather than targets on the number of people going into an apprenticeship.
Training providers and employers in my constituency, such as Alliance Learning in in Horwich and MBDA in Lostock, are working to change those negative perceptions with the delivery of superb apprenticeship programmes. MBDA delivers fantastic apprenticeships, but people are often unaware of the level to which they can be taken. For example, someone can be paid to study and gain a full bachelor’s or master’s degree in subjects such as advanced systems engineering.
I am delighted that the Government are continuing to support young people in moving into work by allocating £1 billion to the youth contract and ensuring that apprenticeships for under-25s incur no national insurance costs for employers.
I agree with much of what the hon. Gentleman has said. Does he agree with my suggestion in the Public Accounts Committee that a UCAS-style system for young people would help them to navigate their way through the system? It could also help employers to receive young people, rather than young people having to send hundreds of applications themselves.
I am sympathetic to that idea. If someone goes down the academic route, they have the path laid out and guidance. Apprenticeships do not have that, and perhaps it would help if we had that system in place, but there is a huge range of different kinds of companies and organisations providing apprenticeships, so I can see there being significant problems with that that are perhaps not there with the more academic route.
Since 2010, my constituency of Bolton West has seen an increase of more than 4,000 apprenticeships. Hon. Members will be pleased to know that I have an apprentice in my office in Westhoughton. However, employers have raised concerns with me about the introduction of the apprenticeship levy in 2017. The additional tax is being levied for the best of reasons, but it may disrupt existing training programmes as employers that currently provide excellent training will have to reconfigure what they do in order to recoup some or all of the levy.
We must also be cautious not to force companies to rebadge existing training programmes to hit the Government’s target of 3 million apprenticeships in this Parliament. What assurances will the Minister give to companies with existing training programmes that are anxious about the introduction of the levy, and that feel as though they have to contrive their courses in such a way as to recoup some of the money they will be losing?
I want apprenticeships to become an increasingly normal route for ambitious young people, as well as for employers that are dedicated to growing their own talent and increasing the skills base of the nation.
It is a pleasure to serve under your chairmanship, Mr Streeter. I congratulate the right hon. Member for Tottenham (Mr Lammy) on securing this important debate.
Apprenticeships are an important part of the labour market and should always be about employment and employability. Many young people are offered a precious route into the workplace that would be barred without the support offered by employers and the Skills Funding Agency in England and Skills Development Scotland. However, that route into employment must take into consideration the life experiences of the young person entering the workplace. Many of the young people are coming from supportive backgrounds, with parents who can help them into employment by doing simple tasks; any parent of a teenager will know that the toughest task in the day is getting them out of bed. If there is not a supportive parent there to do that, or to wash their clothes or make sure that there is food in the fridge, those barriers become much greater.
Years ago, I taught a young boy called Sean. His mother was not on the scene and his father had addiction issues, so Sean, as well as getting himself to school in the morning, took his five-year-old sister to school, and as a result was often late. Sean needed an understanding employer to enable him to move successfully into the world of work. For the first couple of years, he was much more time-intensive than other new starts, but through the perseverance and tenacity of that employer he is now one of their most valued and loyal members of staff.
It is well understood that employers would be unable to invest so heavily in intensive training without Government support, particularly for young people from disadvantaged backgrounds. Would the employer have taken on the extra risks associated with young Sean if that support were cut?
I also have particular concerns that there is not a strategic view of the skills being developed through the apprenticeship programme. According to a recent National Audit Office report, the Department for Education has not set out how it will use the increase in apprenticeship numbers to deliver improvements in productivity, or how employers will be supported to deliver the apprenticeships that offer the most value to the economy. We have a situation where an unscrupulous employer can take on an apprentice in an already saturated area of the labour market, so that when the young person moves on, there is no real prospect of employment. Meanwhile, areas such as science, technology, engineering, maths and digital continue to struggle with shortages. This levy does not seem to be taking that into account or delivering on it.
BAE Systems is a large employer in my constituency and it is committed to its apprenticeship programme. At the moment, it has 2,036 apprentices in full-time training, and 67 started in September this year. BAE is also using over-training as part of its strategic plan, so if it perceives it will need to fill 30 positions, it trains up 40 young people to ensure that the skills shortage in supply lines can be met. It is disappointing that the UK Government have been unable to have the same strategic foresight as many responsible employers.
The concerns raised by many Scottish employers are different from those discussed this morning. Although apprenticeship policy is devolved, the levy is UK-wide. Many employers in Scotland will be paying into the levy pot, but it is not yet clear whether all the revenue generated will find its way back to Scotland. Essentially, this employment tax has been introduced across the UK to deliver on the UK Government’s ambitions in England. The levy undermines the Scottish approach to modern apprenticeships, which, unlike what we are hearing about this morning, is not just about vocational jobs or vocational training; it is also about degree-level apprenticeships. Employers throughout the UK need Government support to train apprentices, but employers in Scotland need assurances that the levy paid in Scotland will come back to Scotland, to support our apprentices.
I thank the right hon. Member for Tottenham (Mr Lammy) for securing this debate. When we consider the skills gap in pretty much every vocation going, a debate on apprenticeships and on ensuring people have the skills they need is timely indeed.
With your permission, Mr Streeter, I would like to briefly talk about my own experience. I left school at 15 and served a traditional apprenticeship as a Cornish mason in the construction industry under a Conservative Government. That skill has enabled me to feed my family and build my home, and it has supported me during a very long journey to become an MP. The apprenticeship also enabled me to stay in west Cornwall, where I grew up. That can be a significant advantage of serving an apprenticeship.
During the previous Parliament, I had a small construction business and took on an apprentice site carpenter. While I enabled him to get a trade, I also saw how the modern apprenticeship programme works in practice. More recently, I have taken on an apprentice in my constituency office and, even in those few years, I have noticed an improvement in the advice and support available to employers.
As Members can tell, I am a big fan of the apprenticeship programme. It is an important part of our young people’s journey to skilled employment. In spring this year, I hosted an event with the Cornwall Apprenticeship Agency. Local employers could come along to my constituency office and quiz a representative of the agency to find out about the pros and cons of offering that form of on-the-job training. I was very pleased to hear the speech from my hon. Friend the Member for North Swindon (Justin Tomlinson). During his time as Minister for Disabled People, he encouraged me a great deal to look at how we can support people with learning disabilities, and I ran one of his reverse job fairs just two weeks ago, so I thank him for that.
In a rural part of the country such as west Cornwall, a modern apprenticeship really is an important part of a local young person’s career path. For so long, Cornwall and the Isles of Scilly have suffered because our young people have found they must leave the county to find the skills and jobs they need. That has left us in a situation where we have a chronic shortage in many sectors, especially construction, farming and engineering. Quite often, these potentially well-paid jobs have disappeared because we have not had the people to fill the vacancies.
My hon. Friend is making a passionate case. I come from Somerset, which is not unlike Cornwall in terms of its skills shortages and gaps. We are below national productivity levels. It is important that businesses design these apprenticeships, and that is what the Government’s new scheme is all about. We do not want bland apprenticeships in any skill; we want them tailored to business, which is what my local businesses are all coming to me and saying. I, too, am going to run a course, because people want the knowledge to go forward.
That is a fantastic point. When I stood in the election and finally won, I met and worked with local businesses, and they kept telling me that they need courses provided by the college to provide the workers they need and the training their young people need. It is important that businesses lead the way in ensuring that they have the skills they need to move forward.
We have massive vacancies in Cornwall, and clearly we cannot continue like this. The modern apprenticeship programme, if communicated properly and successfully delivered, gives young people the opportunity to train locally, work locally, live locally, shop locally—in my part of the world, it is important that we look after our local retailers—and go on to raise a family locally. Rather than just welcome the Government’s ambitious target regarding the number of apprenticeships, it is essential that we meet it, simply because we do not have the people to do the jobs whom we need at the moment.
I heard the points that the right hon. Member for Tottenham made about funding. However, the great challenge we face is to engage more small businesses to take on apprentices. It makes sense that the Government are focusing on and prioritising funding, meaning that 90% of all funding for small businesses will be met by the Government. It makes sense that small businesses do not pay anything towards training people under 18 years of age. The real challenge is not so much the amount of money but how it is spent, as well as improving links between our schools and employers, so that young people and their families are aware of the opportunities available to them in the areas where they live. That would have a significant impact on the skills gap in west Cornwall and across the country. I welcome this debate, but I argue that we should concentrate on how we equip and enable young people to do apprenticeships, rather than fall out about the money available.
I call the one and only Jim Shannon.
It is a pleasure to speak in this debate, Mr Streeter. May I first thank the right hon. Member for Tottenham (Mr Lammy) for presenting an excellent case? We are all here because we feel passionately about this issue. I have spoken about apprenticeships many times in this House—unsurprisingly, Mr Streeter—and when I was a Member of the Legislative Assembly in a previous life. There is a reason for that: apprenticeships are a vital part of our country’s future. It is essential that we do not leave ourselves with skills gaps and that we have knowledge, ability and opportunities at every age group and level.
I want to give a Northern Ireland perspective to the apprenticeships scheme and speak about something that is close to my heart—the Prince’s Trust. I often have pointed to the great apprenticeship schemes at Bombardier and other major employers throughout Northern Ireland. I welcome the fact that the importance of this training has been recognised in Northern Ireland. In my constituency, there is an opportunity for everyone in pharmaceuticals, food processing, light engineering and agri-food, which is a growth industry.
I congratulate the right hon. Member for Tottenham (Mr Lammy) on securing this debate. Does the hon. Gentleman agree that we need an investment of time and effort by Government and those in the hospitality industry to bring forward apprenticeships in catering to underpin that industry?
I thank the hon. Lady for that important comment. The tourism sector can, should and must grow. One way of doing that is through the apprenticeship scheme; she is absolutely right. I fully support that, as I am sure all of us here would.
Businesses and companies must step up to the bar and be prepared to take people on. That is why when the scheme was announced I openly welcomed the initiative to create provision for 3 million places—how tremendous to have help in ensuring that work schemes are available to young men and women alike. However, I was not so excited when I realised what exactly was happening with the scheme. That is why I congratulate the right hon. Member for Tottenham on bringing this issue to the Chamber for consideration. What seemed to promise more help in fact seems to have the opposite effect, with the number of apprenticeships for perhaps the most vulnerable group—16 to 18-year-olds—being cut. I know that the changes impact all ages of apprentices, but time demands that I focus on only one strand, and that is young people.
I will never forget reading the dire statistics from research by the Prince’s Trust two years ago, which laid bare a direct link between joblessness and suicidal thoughts, as well as self-harming, alcohol and drug abuse. The figures do not make good reading but they are the reality for many people.
About one in three—35%—of youngsters in Northern Ireland experienced mental health issues, compared with the UK national average of 19%, which is almost one in five. The research also revealed that long-term unemployed 16 to 25-year-olds are twice as likely as their peers to have been prescribed anti-depressants and to believe they have nothing to live for. Over one in three—34%—young people said that they always, or often feel down or depressed, compared with a national average of 32%, with the long-term unemployed significantly more likely to feel that way. Over one in four—29%—said that they feel like an outcast, compared with 24% nationally, with the report finding that the long-term unemployed are significantly more likely to feel that way. Over one in five—21%—admitted that they feel like a waste of space, against the national average of 17%, with the long-term unemployed more than twice as likely to feel that way.
Those stats tell the story of young people and how they feel about their lives in Northern Ireland. They show why Northern Ireland Members are here today and why we are pleased to be able take part in the debate.
A point was made earlier about some schools perhaps looking at the content of skills and at keeping the level up, but surely careers officers in schools play a pivotal role in helping to advise young people to go down the vocational route.
My hon. Friend always brings a wealth of knowledge to these debates and I thank him for his intervention. Careers officers and school staff have an important role to play.
The correlation with the figures is clear, which is why, with others, I have fought and pressed for more apprenticeship schemes and why, with great respect to the Minister, I was so disheartened to see the details of the new scheme. I was pleased to hear of the so-called U-turn, but the Government must rectify the shortfall and do what they said they would do: create more apprenticeships and more training opportunities.
We will all have read the figures provided by Government and the figures, which are disputed in articles such as those by FE Week, that indicate that the introduction of two measures to arrest the decline—paying an extra 20% on the funding band limit for 16 to 18-year-olds, and promising £60 million of
“additional support in areas of disadvantage”—
has not and will not stop or address the shortfall. Indeed it is alleged that most frameworks will still feel cuts of 20% or more.
My hon. Friend the Member for Belfast East (Gavin Robinson), who has just left the Chamber, has done exceptionally good work in his constituency for the apprenticeship schemes in Bombardier. I am conscious of the time, Mr Streeter, so I will hurry along. It was announced that the cuts to construction skills at level 2 would range between 27% and 50%. Later, it was announced that they would range between 14% and 37%, which could still devastate the sector. In sectors such as hairdressing—I do not have worry about that—and engineering, FE Week analysis revealed that at levels 2 and 3 there could still be maximum cuts of some 50%.
I stand firmly with the right hon. Member for Tottenham and thank the Government for the changes, but they are not enough. We already have a society in which too many young people feel worthless and they need the help and attention that these schemes provide. Let us do what we can for young people. They are crying out for help, support and particularly hope. Let us give them that hope today in this debate and from the Minister.
It is a pleasure to follow the hon. Member for Strangford (Jim Shannon), who always manages to make a meaningful contribution to such debates. I am particularly pleased to have caught your eye, Mr Streeter, and to follow so many excellent speakers. I want to pick up one or two points made by the right hon. Member for Tottenham (Mr Lammy), whom I congratulate on securing this important debate.
I take a slightly different tack because I warmly welcome the Government’s commitment to apprenticeships. Like the Minister and my hon. Friends, I, too, had an apprentice in my office shortly after the election in May 2015.
I am the chairman of the all-party group for youth employment. Every month, we look at the youth unemployment statistics. The former chairman, my hon. Friend the Member for Norwich North (Chloe Smith), sensibly changed the name of the group from youth unemployment to youth employment, which is a much more positive outlook. I fully applaud her decision and have continued with that tradition.
We looked at the unemployment statistics every month. We had the benefit during the last session of looking at the evidence in Impetus Private Equity Foundation’s youth jobs index and report. We looked in detail at the unemployment statistics and they are still too high; the right hon. Member for Tottenham is absolutely right. They are nearly three times overall unemployments, but in the last quarter the unemployment rate for 16 to 24-year-olds was 13.7%, which is lower than a year earlier, at 14.7%. That is still too high and it is higher than its lowest level: 11.6%. However, its highest ever rate was 22.5%.
Next year, the all-party group will look at the pathways from education to employment, and apprenticeships will feature highly on the agenda. The Minister has been invited, or will be invited, to meet the group—he may not know it yet. We warmly look forward to him coming to the group, because I know his commitment in this area.
One point has not been made in the debate, or at least if it has, I have missed it. The apprenticeship levy has been much discussed, but funding must be sustainable. However, I know that smaller businesses will welcome the Government’s model because 98% of businesses will not have to pay the levy. They will pay 10% of the training costs and the Government will pay the balance—90%—so the majority of businesses in my constituency will welcome the funding arrangement and the fact that they have to contribute only a relatively small amount.
Time may not permit, but I am going to attempt to mention two businesses in my constituency and give examples of where they are going in relation to apprenticeships. First, PME Group is a marine engineering group. You will be interested, Mr Streeter, to know that it recently won the 2016 south-west national apprenticeships award in the small employer of the year category. I invite him the Minister to consider the model because almost 50% of its staff have completed or are in the process of completing an apprenticeship. Other businesses may also care to look at that model.
Secondly, TestLink, which is based in Upton in my constituency, repairs and services ATMs—the cashpoints we all rely on when we run out of money. It was recently named one of the 20 mid-market companies of tomorrow. A large number of its staff are on apprenticeships. Not all of them are young or would be in the age group covered by my all-party group for youth employment, but they are benefiting from an apprenticeship and the skills and qualifications that come from it.
Time also permits me to mention the Dorset young chamber programme, which was launched last month. I am part of the steering group that, I hope, will set it on the right course. It provides a link between schools and businesses in the area. So far, three schools have been linked up with local businesses. It is a great initiative under the chief executive, Ian Girling, and I am delighted to be part of it.
I want to pick up a point made by the hon. Member for Liverpool, Walton (Steve Rotheram) and my hon. Friend the Member for Bolton West (Chris Green) in relation to the quality of apprenticeships. Both Members are right, but I strike a note of caution: quality does not necessarily mean a higher level. I believe we can have a quality apprenticeship even at level 2 and that those apprenticeships are perfectly valid and necessary, and that there is still a market for them. I agree that all apprenticeships must be of a high quality, but that does not necessarily mean of a high level.
Marion Fellows (Motherwell and Wishaw) (SNP): It is a pleasure to serve again under your chairmanship, Mr Streeter. I thank the right hon. Member for Tottenham (Mr Lammy) for this very important debate. If my voice gives out in the middle of my speech, it is a sign of how important the subject is. I declare an interest as a former further education lecturer who helped to train many apprentices.
In his speech, the right hon. Gentleman described passionately the effect of cuts in his constituency and the effect of the proposed cuts on prospective apprenticeships for young people. Those in pockets of deprivation will suffer more. That is not the message the Prime Minister gave on the steps of Downing Street. Figures for those not in education, employment or training—NEETs figures—in the UK are much worse than they are in other developed countries, and skills shortages are holding back economic progress. That is a problem we have in Scotland, too. I appreciated his reference to idle hands making very dangerous work. Having taught young people, I know the difficulties in mental health and other areas when they are not gainfully employed in doing what benefits them, which the hon. Member for Strangford (Jim Shannon) also mentioned.
The construction skills crisis is the worst in decades, as has been mentioned. Construction Industry Training Board figures are alarming. I came to London and had never seen so many cranes, but I do not know who is operating them. We need to look at that.
The hon. Member for North Swindon (Justin Tomlinson) spoke about apprenticeships for those with learning disabilities, and about hospitality training offered in Bridgwater, where workplace training cost money but was not recognised as an apprenticeship. I thoroughly commend his efforts towards getting the academic element reduced for those who will never pass it, but who could turn out to be the best employees a company has. I was at a Department for Work and Pensions event in my constituency on Friday asking employers to take on more people with disabilities of all kinds—the apprenticeship programme must take that forward.
The hon. Member for Liverpool, Walton (Steve Rotheram) spoke about the drop in apprenticeships in Liverpool. He and many other Members touched on the lack of will from the UK Government to fund deprived areas. The hon. Member for Bolton West (Chris Green) said that companies find resistance within the schools system. As a member of the Education Committee, I can confirm that we have spoken to various experts who say that it is very difficult for young people in schools to get good careers advice leading them towards apprenticeships because the focus in schools is on the academic side and on moving on to universities. Again, I can relate to that from my own experience. Not all schoolchildren want to progress academically, but they all want jobs. Apprenticeships could be the best route forward.
Will the hon. Lady give way?
Certainly, but please do not fight over me.
Does the hon. Lady agree that under the Labour party under Tony Blair, every child was encouraged to go to university? What is her view on whether that put a different focus on apprenticeships? I wonder whether that had an influence on the change of thinking within our schools.
I cannot entirely agree with the hon. Lady, but over the years there has been a focus on degrees. For example, nursing was not an apprenticeship but training. Everyone agrees now that that is not the best route for the entire school population and that we should look at improving our skills base. We are one of the best economically developed countries in the world but our skills base is falling behind that of other developed countries.
My hon. Friend the Member for Glasgow North West (Carol Monaghan) spoke of the need for Government support. She also spoke about the National Audit Office report that pointed out that the Department for Education has not set out how it will increase apprenticeship numbers to deliver improvements in productivity, or how employers will be supported to deliver the apprenticeships that offer the most value for the economy, including in construction, digital and all the skills gaps.
The hon. Member for St Ives (Derek Thomas) mentioned his experience of apprenticeships, both as an apprentice and as an employer. Modern apprenticeships are definitely the way forward and the message has to be got out that apprenticeships now are the not the same as the apprenticeships of 20 or 30 years ago. The one and only hon. Member for Strangford—to coin your phrase, Mr Streeter—gave a comprehensive view of Northern Ireland, focusing on the mental health issues faced by young people there. That is reflected in the mainland countries as well. We need to look after our young people and provide what is best for their futures.
The hon. Member for Mid Dorset and North Poole (Michael Tomlinson), a member of the all-party parliamentary group on youth employment, said that the unemployment statistics are coming down. That may be the case, but we very much need to focus on what we offer young people. He also said that small businesses will welcome that initiative because they will not have pay the apprenticeship levy but will get 98% of their training costs back. He recommended that we look at the quality of apprenticeships and how they are managed. That subject is close to my heart. We should not just give out apprenticeships. I remember the youth training scheme. I taught YTS trainees, so how old am I? It was a way of getting people off the unemployment books, but it did not lead to long-term stable employment for many. The apprenticeship programme must not hark back to those days. I do not believe that it is trying to do so, but this is a warning that it must not.
Essentially, the employment tax is being introduced across the UK to deliver on the UK Government’s apprenticeship ambitions in England. The collection of the levy is a reserved matter, and Scottish Ministers are working to ensure that Scotland gets its fair share. Will the Minister tell us what progress is being made in that regard? The levy undermines the Scottish approach to modern apprentices and was introduced without any consultation with the Scottish Government, despite apprenticeships policy being devolved to the Scottish Parliament. That is not me raising a grievance. Those issues must be addressed. There is already a well-run, well-managed modern apprenticeship programme in Scotland, run by Skills Development Scotland in conjunction with employers. We want to ensure that things in Scotland improve what we have already started.
It is very important that Scotland’s share of the funding is used to support the delivery of the 30,000 modern apprenticeships by 2020 that the Scottish Government have mentioned. We have been working hard with employers and have had consultations. We have introduced new types of apprenticeships—a foundation apprenticeship and graduate apprenticeships—because apprenticeships should not be one size fits all. Yes, they should be for school leavers, and yes they should be for older people, but they should also be for graduates and young people still at school. That ties into the idea of careers, and of helping young people into careers in which they will be able to find work for many years to come, which would benefit the economy.
There is a strong focus in Scotland on doing more to tackle under-representation in modern apprenticeship programmes. A modern apprenticeship equalities plan published on 2 December last year includes specific employment and improvement targets for modern apprentices in relation to black and minority ethnic backgrounds, care leavers, disabled people and a gender balance. We need to get more young women into apprenticeships. That happens with science, technology, engineering and maths, but we need to look across the board at a gender balance in all industries, because that will prove to be best for all our young people. The Scottish Government with Skills Development Scotland are working with partners to develop foundation apprenticeships from schools, so that young people who are still in school can get work experience and then, possibly, leave school and move straight in to a proper, more advanced modern apprenticeship.
My final remarks, Mr Streeter, will be on another thing that is interesting in Scotland and does not seem to happen here. On the worth of qualifications, which has been touched on in the debate, it is important that apprenticeships are of quality and allied to a quality framework. Some doubt is being cast on some apprenticeships. Ofsted has already looked at Jaguar Land Rover and is cutting its marks—it is no longer good, in that sense, and will have to improve what it does. In Scotland, the Scottish Credit and Qualifications Framework is a unified framework that covers both vocational and academic skills. The Minister should look at having something similar in England to make absolutely sure that our young people get the best-quality apprenticeships possible, at whatever level they undertake them.
It is a great pleasure to serve under your chairmanship, Mr Streeter. I warmly congratulate my right hon. Friend the Member for Tottenham (Mr Lammy) on an absolutely splendid speech and on the inspirational lead he has given in challenging the Government on these issues, with 55 Members across the House helping to secure this debate.
We have had an excellent, positive debate across the Chamber today, with individuals offering their experiences, the range of which I have been particularly impressed by. I warmly thank my hon. Friends from Birmingham—my hon. Friend the Member for Birmingham, Northfield (Richard Burden) and my hon. Friend the Member for Birmingham, Erdington (Jack Dromey)—and my hon. Friend the Member for Coventry South (Mr Cunningham) for their interventions, as well as my hon. Friend the Member for Liverpool, Walton (Steve Rotheram), who had very important things to say about how we should take forward apprenticeship budgets in future.
My right hon. Friend the Member for Tottenham really hit the nail on the head when he talked about the glacial pace of the Government’s response. We know this matter was left in the Minister’s in-tray to deal with when he took office, but, as my right hon. Friend said, the elephant in the room remains adult skills and night schools. The Minister will have to confront those issues, as well as clearing up the mess he was left to deal with in the first place.
I wrote to the Minister at the beginning of August when the original proposals were made, underlining then what the problems would be. I said that
“these changes have the potential to cause catastrophic consequences for young people in the most deprived areas,”
and that they
“offer a damaging lack of support for young apprentices and further weaken…attempts to widen participation and increase social mobility”.
I also said that, as a Blackpool MP as well as shadow Skills Minister, I was really concerned about getting small employers on board.
With apprenticeships—my goodness me! If wishes and exhortations and five-year plans from this Government could move mountains, we would have not 3 million apprentices by 2020, but 6 million. However, as we know, the devil is in the detail, and the Government’s attempts to use a one-size-fits-all approach have not worked.
The Minister was present at the FE Week campaign event that I hosted on 14 September. I have seldom heard in a packed Committee Room in this House as uniform a chorus of concern across the piece. Concerns are shared not only by me and my right hon. Friend but by leading figures across the sector, including the Association of Employment and Learning Providers. Those expressions of concern and the investigative work done by FE Week in putting this process together have driven the partial U-turn.
I congratulate the Minister and give him full credit for having shaken up his officials—and perhaps even shaken a few extra coppers out of the Treasury’s pockets—and for listening to the concerns. It was said of Julius Caesar that he came, saw and conquered; the Minister has come and seen but he has not yet conquered, because the devil is in the detail, as my right hon. Friend said. Plenty of questions about the proposals remain unanswered.
Let me give an example from the analysis done by FE Week since the U-turn on Monday. Before the U-turn, cuts of 27% and 50% to construction skills at level 2 were calculated; after it, the cuts still ranged from 14% to 37%, so there is little to be complacent about. Those cuts could still devastate the sector, as we have heard. In other areas, such as hairdressing and engineering, it is not necessarily good news either. The Government are struggling post-Brexit to orchestrate an industrial strategy. FE Week analysis has revealed that at levels 2 and 3, there could still be a maximum drop of 49% to 51% respectively. There is huge potential and a pressing need for high-quality apprenticeships in the service sectors, social care, leisure and visitor services, yet we know from the analytics that children’s care, learning and development—an absolutely crucial social care issue—could be cut by 42%, and hospitality and catering by up to 45%. No one has told me where the tablets from Sinai are saying how the funding will be delivered beyond year one. There are big questions about that, so will the Minister tell me what conversations he has had with the Treasury in advance of the autumn statement?
I am sure the figure of £3 billion—or £2.5 billion for England—that will eventually be raised by the apprenticeship levy will continue to be bandied around, but as we know, only £1 billion of that is new funding; £1.5 billion is going to the Treasury. I ask the Minister, when he is looking at the money we will need beyond year one, what is he already doing to knock on the Treasury’s door?
The cuts are going to hit a wide range of employers and providers, including in the third sector. I remind the Minister of a letter that he had from YMCA Training, which said that despite the disadvantage uplift, there is the loss of youth contract funding, which will not help support for the most hard-to-reach young people. Mark Dawe, the chief executive of the Association of Employment and Learning Providers, also remains to be convinced, even about the details of the current proposals. He recently commented online:
“I hope…we review the deprivation payments, as…committed”
“Personally I can’t see how a system allocating £600, £300 and £200 just on frameworks can equate to a system that was paying up to 32% on”
“funding cap…ie over £8.5k in this scenario for one learner compared to £600.”
The Minister has to address those really important issues.
We all want to know what the situation will be at the end of the year. Will we revert to the situation as it was last Monday? Will the Minister pass on to his right hon. and hon. Friends the message that it is not too early to be thinking about what they do when they have spent the £60 million? A 20% uplift for 16 to 18-year-olds is a necessary step to replace valuable funding that would have been lost under the previous proposal, but will the Minister tell us how that compares with previous measures?
As someone who, like so many in this House, has always been keen on supporting people with disabilities to progress in the world of work, I welcome the learning disabilities taskforce that was led by my parliamentary neighbour, the hon. Member for Blackpool North and Cleveleys (Paul Maynard), but it is important to stress that these issues have to be taken forward to completion, because we know that on completion disabled people will do a lot better.
The Government’s equality assessment included the aim to achieve gender parity in the working population by 2030, but I see little detail on how that is likely to be done in terms of what the Government are doing on apprenticeships funding. The Minister may want to comment on that.
For the last few months, we have, with a wide range of stakeholders, been pressing the Government for more detail on the levy. Despite last week’s revised paper, there are still issues, particularly about the digital apprenticeship delivery, that I remain to be convinced on. The Confederation of British Industry certainly is not. It said that
“six months out… major questions remain about its readiness.”
The EEF said that the
“Government must carefully prepare a final implementation plan…mindful that employers as well as Government need time to prepare for the sea change”.
How is the Minister going to reassure businesses and providers on that detail?
What is the Government’s capacity to deliver all this? As Paul Warner, the policy director of the AELP said, the Department faces “capacity challenges”. The head of the Skills Funding Agency’s technical and professional education admitted to a workshop last week that she was unsure of capacity and resources. The Government have scrapped the UK Commission for Employment and Skills; staffing levels at the SFA are down 50% from 2011; and now the Government, with their hastily thrown together Technical and Further Education Bill, are saying that the Institute for Apprenticeships will have responsibility for all technical education. That makes considerable sense, but where will the money and other resources come from?
Just last week, the Minister was asked by my hon. Friend the Member for Hove (Peter Kyle) what budget would supply funding for the costs of the Institute for Apprenticeships. He was told:
“It is expected that part of its budget will be provided by funding freed up from savings across the Department.”
Well, that is a vague response. It does not show us the money or give us the confidence to believe that the Minister will be able to take these things forward in the way we need.
Just six months out from the implementation of the levy, the Institute for Apprenticeships and Technical Education still has a shadow chief executive working two days a week. We know that there are worries about rebadging and the unintended consequences of forcing employers to reduce investment in other areas; and there are still substantial worries about small and medium-sized enterprises. The Minister still has to address those big concerns. We need to look into how large employers can help to retrain, reskill and supply a lot of those surplus apprenticeships.
In conclusion, the Government need to look at other issues, as well as this short-term stopgap. They need to look into the performance of careers and enterprise, as a lot is needed on that. They also need to look into devo-max, giving some power back to the people and areas of the country to produce the apprenticeships that our people deserve.
It is a pleasure to serve under your chairmanship, Mr Streeter.
I congratulate the right hon. Member for Tottenham (Mr Lammy) on securing this important debate and on the work he has done, but I was disappointed that he did not feel that it was right to mention the £13.4 million spent by the Government in his constituency on the new digital college, which I was proud to open with him only a couple of weeks ago; the 920 apprentice starts in his constituency over the past year; the Government’s doubling of apprenticeship spending to £2.5 billion by 2020; the 619,000 apprentice starts that we have had since May 2015; or even—dare I say it?—the record on people not in education, employment or training. The previous Government left us with 1 million unemployed young people. Between 2014 and 2015, the proportion of 16 to 18-year-olds in education or work-based learning increased to 90%, which is the highest figure on record, and the proportion of 16 to 18-year-old NEETs fell to 6.5%, which is the lowest rate since records began. I was also disappointed that the right hon. Gentleman did not mention the 500% increase in higher apprenticeships since 2010, the £7 billion to be spent on further education and training, and the extra incentives given to the frameworks. His speech was partial and disappointing given his record in standing up for apprenticeships and skills.
I congratulate my many hon. Friends, and hon. Gentlemen and Ladies of all parties, on their thoughtful speeches. My hon. Friend the Member for North Swindon (Justin Tomlinson) was a brilliant Disabilities Minister. We are very supportive of the work done by him and my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard) to encourage more disabled people into apprenticeships. We fully accept their recommendations and we are implementing them.
On the levy, we are increasing the incentives to employers and providers by £1,000 each for those on a healthcare plan or those from care homes; specific disabilities providers will get an extra £150 a month, and up to £19,000 will be provided for adaptation. My hon. Friend the Member for North Swindon will know about the £2 million that we put by for support for mental health apprenticeships; that money supports roughly 2,000 participants. It is worth mentioning traineeships, on which something like 19.7% of those with learning disabilities are represented. That has not been mentioned in this debate.
I am very happy to meet with the hon. Member for Liverpool, Walton (Steve Rotheram), and I am meeting him on Thursday about another issue. There are no existing plans to devolve the levy funds to specific areas. We are creating a system that simplifies funding across England, making it easier for employers to navigate. We will be reviewing how the disadvantage funding works over the next 12 months.
There were some thoughtful speeches, including from the hon. Member for Glasgow North West (Carol Monaghan). I say to her and to the hon. Member for Motherwell and Wishaw (Marion Fellows) that the devolved Administrations will get a fair share, and we hope to make the announcement shortly. The hon. Member for Glasgow North West made important points about apprentices getting real jobs. It is good that 90% of apprentices stay in work. Surveys show that the satisfaction of those apprentices is incredibly high.
I could talk about many of the issues raised today, but in the time available I want to go through those raised by the right hon. Member for Tottenham and Labour’s Front-Bench spokesman, the hon. Member for Blackpool South (Gordon Marsden). Hon. Members have to see what the Government are doing in the overall context of the £2.5 billion increase by 2020. A huge amount is going towards increasing funding rates for STEM frameworks—that too was not mentioned by Opposition Members. Just under half of 16 to 18-year-olds will attract more funding thanks to the uplift in STEM frameworks. Huge amounts of money are going into support for disadvantaged apprentices, as was acknowledged by the right hon. Gentleman and others today. A significant amount is going towards helping small employers, as those with below 50 employees will pay no training costs at all. There are all kinds of other incentives. Some 25% of frameworks will be replaced by the new apprenticeship standards by the end of the year.
I am sorry, but I cannot give way because very little time remains.
More money will be spent on standards. A huge amount of money is going into the system to ensure that 16 to 18-year-olds and those who are socially disadvantaged are properly represented. Many of the frameworks that apply to adults are the same as those applied to 16-year-olds, yet the ones for 16 to 18-year-olds can cost double the amount. The surveys and the evidence show that they do not need to cost as much, and that, often, only a few hundred pounds would make a difference.
We are moving into a new world. The apprenticeship levy is changing employer behaviour. Businesses will choose different kinds of apprenticeships because of the move to standards, and would-be apprentices will choose different kinds of apprenticeships. The way the discussion has gone among some Opposition Members, it is as if we were comparing apples with apples. However, the world is changing and we are now comparing apples with pears.
Will the Minister give way?
I will not, because I only have a few minutes left to speak, and I think that the right hon. Gentleman had a fair crack of the whip.
We are putting a huge amount of money into FE funding, guaranteeing that £7 billion will be spent on FE funding and training. We have put money into a transition year and traineeships. Of those who do traineeships, 60% are aged 16 to 18 and 50% go on to get work, apprenticeships or education. Some £50 million has been spent on traineeships thus far—again, that was not mentioned in the debate.
Of course, we are doing a lot of work on welfare reform to help with jobcentres and so on. An enormous amount of money is going towards helping 16 to 18-year-olds and people from socially disadvantaged backgrounds. To use some frameworks as a way of saying that the Government are not helping the poorest is entirely wrong. I have five priorities for apprenticeships.
On a point of order, Mr Streeter. The Minister is reliant on the new standards, which only just over 3,000 apprentices have taken up. More than 99% are on the current frameworks, which is the subject of the debate, and the Minister has not addressed that at all. He is trying to hoodwink the House.
That is not a point of order. The Minister may continue.
The right hon. Gentleman should check his statistics. There have been more than 4,000 starts on standards, and 400 standards are in development. Many frameworks are going up, and we are putting a huge amount of money into uplifting the STEM frameworks. That is what employers want, and we are designing an employer-led system.
We are raising the prestige of apprenticeships, helping the socially disadvantaged, and introducing the levy to change behaviours and so that the cost is borne evenly throughout society. We will reach the target of 3 million; as I said, we have had 619,000 since May last year. We are raising the quality of apprenticeships through the Institute for Apprenticeships and through degree and higher apprenticeships, which many thousands of people have taken up.
The Government are transforming the country into an apprenticeship nation. I am proud of the work that has been done, and of the officials who have worked hard to ensure that we listen to employers, as we said we would when we first announced the levy.
It is disappointing that the Minister has said nothing about funding cuts. He has been reliant on the extra £2.5 billion that he said is coming in. He is robbing Peter to pay Paul. Will he confirm that there will be funding cuts that will lead to deserts—
Order. We must move on from this excellent debate to a debate on another interesting subject.
Motion lapsed (Standing Order No. 10(6)).