Memorandum submitted by CBI (E&S 05)
1. The CBI is the UK's leading business organisation, speaking for some 240,000 businesses that together employ around a third of the private sector workforce. We speak for all sizes of business from multi-national organisations to start-up firms - all of whom will be affected in some way by the raising of the education participation age.
2. The CBI supports the Government's proposals to raise the participation age. This is a necessary step, as part of a package of measures, to help young people improve attainment in essential literacy and numeracy skills and also tackle the problem of 16-17 year olds who are not in education, employment or training (NEET).
3. But compulsion in isolation will not lead to the necessary improvements in young people's attainment and participation. These proposals must be part of a wide package to ensure young people see value in staying on at school or college, or entering the labour market and undertaking work-based training. Focus must remain on improving educational outcomes before the age of 16 - and on providing good careers advice on all options and more high quality apprentice programmes.
4. The CBI fears that firms currently offering valuable work opportunities will be discouraged from providing these in the future by the requirements on employers to police participation and the financial penalties for employers who inadvertently fall foul of the law. The Government must be mindful of the potential unintended consequences that could result from its proposals if young people who would have chosen employment opt for unemployment rather than attending training at school or college. Many of the existing NEET group and those 16-17 year olds in employment have become disengaged by classroom-style education and may disrupt the learning of others if they are forced back into education. Of those young people currently thriving in an employment situation, some are in employment with training leading to a qualification, but others would be resistant to taking qualifications and only appreciate the importance of qualifications later on in life.
5. To mitigate against these unintended consequences:
● apprenticeships must be reformed to ensure more employers are prepared to participate and other qualifications must be reformed so they meet employers' needs
● the government must ensure high quality careers advice to all young people at key stages
● better understanding is needed from training providers (colleges and private providers) of business needs and work organisation
● fines and penalties must be proportionate and not penalise employers who act in good faith.
The CBI supports the Government's proposals to raise the participation age as a necessary step to improving attainment and reducing NEETs
6. Business's key concern is to improve literacy and numeracy attainment of young people; currently just 46% of young people achieve 5 GCSEs at grades A*-C including English and Maths. The CBI/Pertemps Employment Trends Survey indicates that 50% of employers are dissatisfied by school leavers' literacy and numeracy skills.
7. Around 8% of all 16-17 year olds (over 100,000 young people) are currently NEET and completely inactive - an increase on 1997 figures (7.1%), although numbers have fallen since their 9.5% peak in 2005. A high proportion of these students has no qualifications - just 2% achieving 5 or more A*-C GCSEs are NEET at 17, in comparison to 59% of those with 0-4 GCSEs at grades D-G.
8. Britain's rate of staying-on in education post-16 is relatively poor by international standards; the UK ranks 23rd out of 26 OECD countries for the number of NEET 15-19 year olds, falling behind our major EU and G8 competitors. The Government has a laudable aim to ensure 90% of 17 year olds are participating in education or training by 2015 (up from 76% now) - yet even if this were achieved, the UK would still lag behind key OECD competitors.
Young people must have a range of high quality school/college or work options to
9. It is vital that there are engaging 16-19 academic, vocational and work based routes. A variety of high quality options must be available, from traditional GCSEs and 'A' levels to the new Diplomas. Young people need to understand the options open to them, what they can expect and what will be expected of them if they start work at 16 or stay on in full-time education.
10. Those 16 and 17 year olds not currently engaged in any form of education or training are those most likely to have been disenchanted with formal, school-based style learning. They are likely to see little value in staying on if this is the only option open to them - more of the same for a further two years is unlikely to lead to any substantial improvement in their attainment - and could lead to the disruption of learning for others. It is therefore vital that, together with a high quality 16-19 academic route, there must be similarly engaging vocational and work-based choices available to young people - particularly the less academically inclined.
11. The Government has launched an ambitious plan for the roll out of Diplomas - a move supported in principle by CBI members. But the jury's still out on whether they will be successful - we have outlined three key tests the diplomas will have to pass if they are to be successful and gain employer buy-in. They must:
· ensure more young people enter the world of work with vital literacy and numeracy skills
· stretch our brightest children - rather than become a dumping ground for the less academically able
· be attractive to young people currently disenchanted with the education system, those who currently leave school and further learning as soon as they are able.
12. The Diplomas, if implemented successfully, could offer good quality vocational qualifications - although employers currently report that they know little about the Diplomas and a recent NAO report highlighted that 45% of Diploma consortia have not yet involved employers. The first five programme lines will be launched this year and they will need to deliver skills relevant to the sector and must deliver the quantity of students appropriate to employer demand.
But firms offering valuable work opportunities will be discouraged by duties to police participation and financial penalties for falling foul of the law
13. Many young people learn valuable skills in a job - work provides a very different learning environment to school and college. At present, around 74% of 16-17 year olds are in full-time education with a third of these also employed in some form of part time job. Nearly 100,000 (7%) are employed and in work-based learning leading to recognised qualifications such as an apprenticeship. A further 65,000 (5%) are currently in work, developing valuable employability skills and receiving on-the-job training, but not leading to a QCA-recognised qualification.
14. Duties for those employers who do not provide training which leads to a recognised qualification (Clause 6) will include:
· to ensure a young person has a course arranged; the Bill requires employers to take 'all such steps as are reasonable to ascertain that the person has made appropriate arrangements for training or education' (Clause 21)
· to provide time off for a young person to attend training and arrange working time to permit attendance (equivalent to one day a week) (Clause 25).
The Local Education Authority will issue enforcement notices (Clause 27) and penalty notices followed up by fines (Clause 28) to employers who fail to meet these new legal duties.
15. The CBI is concerned that these new duties may deter employers from employing 16-17 year olds, especially when firms can recruit unqualified over 18 year olds or well qualified migrant workers. This would result in fewer employment opportunities for young people which provide valuable on-the-job training and help develop essential life skills.
Apprenticeships must be reformed to ensure more employers are prepared to participate and other qualifications must be reformed so they meet employers' needs
16. Apprenticeships are a valuable route to successful careers for many young people but completion rates remain comparatively low - an average of 53%, compared with Denmark, the Netherlands or Germany who achieve rates of between 60% and 75%. Employer-provided schemes have generally high completion rates - CBI members report rates as high as 90% - and successful employers attribute this to dedicated and highly-qualified training staff who mentor and support young people through the apprenticeship and associated self-development and team-building activities.
17. The government has committed to an ambitious target of 500,000 apprentices a year by 2020. The CBI has developed a 12 point plan to help increase employer involvement. This plan addresses the three main barriers that deter employers from getting involved which need to be addressed. Firstly, more young people with the ability and attitude to succeed need to be encouraged to take up an apprenticeship; the apprenticeship framework needs to be fit for purpose and flexible to meet business needs; and finally business support, particularly for SMEs, must be provided in an accessible and effective way.
18. The CBI proposes qualifications must be reformed so they meet employers' needs. Employers primarily train for employee competence to raise business performance. Too many CBI members report that the recognised qualifications available are often out of date and irrelevant to their business - and do not reflect their specific skills needs. Findings by IRS, for example, indicate that NVQs, SVQs, and National Occupational Standards were used by only 32% of employers.
19. Under the Government's plans, employers will have to provide training for young people that lead to recognised qualifications. Yet employers will only see value in employing young people and arranging training towards qualifications if an employee is developing 'economically valuable skills' - i.e. those skills that will lead to improvements in productivity and business performance.
20. The CBI has welcomed the current QCA work on accrediting employers' in-house training within the qualifications system, as this should help build more employer relevant qualifications. Sector Skills Councils have an important role in ensuring their sector's qualifications are fit-for-purpose - and qualifications reform must be their number one priority. These reforms should ensure that employers and young people see the point in getting involved in qualifications.
The Government must ensure high quality careers advice to all young people at key stages
21. There should be no bias towards or against vocational or work-based routes. Careers advice must be offered by experienced and knowledgeable careers advisers with experience of the labour market and the world of work in order to provide in-depth, specialised advice on the choices facing young people. Clause 66 states that careers advice must be presented in an impartial manner - which is welcome - but this does not go far enough. There needs to be more capacity in the system to provide in depth careers advice.
22. While the CBI also welcomes the new quality standards for Information, Guidance and Advice (IAG), the Government should consider a strengthening of the system against which national careers services can be benchmarked. The OECD has produced guidelines which focus on providing advice at key transition points, development of career management skills, investigation and experience of learning and work opportunities, access to labour market information and access to individual guidance from qualified practitioners independent of particular institutions. The CBI proposes four key benchmarks, by which the careers service should be held accountable.
23. At present, Information, Advice and Guidance on vocational routes is often poor quality and not communicated well to young people and there is a worrying bias in favour of going to university. An EEF/SEMTA survey revealed that three quarters (83%) of young people were not told of the apprenticeship opportunities open to them. This is particularly the case in schools with sixth forms which promote academic options above other post-16 routes of progression. Advice should also present a full range of careers to both young men and women and point out the implications of choosing certain careers. Ninety-seven percent of those studying for apprenticeships in childcare were women whereas the number of female engineering and construction apprentices were 3% and 1% respectively. The careers service has a key role in challenging misconceptions by young people and providing good quality IAG on the options available to them.
Guaranteed guidance at 11, 14 and 16
24. All young people should receive one-to-one careers advice from qualified practitioners at key transition points such as 11, 14 and 16 when young people make decisions regarding their subject choices and whether to continue in education. This would cost £120 million a year. If the participation age is raised to 18 - careers advice at 16 will be particularly crucial for young people in deciding which route to take. Employers believe good careers advice is crucial and should not be lost within personal and general advice services for young people.
Experienced and knowledgeable advisers
25. Young people must be offered in-depth, specialised advice on their choices by independent, experienced and knowledgeable careers advisers with experience of the labour market and the world of work. One of the reasons Connexions has failed to deliver high quality careers advice is that too many advisers are unable to offer the specialised and dedicated service young people need. For example, around two-thirds of staff in schools providing careers advice do not have the relevant qualifications. This situation must improve with more qualified advisers accessible to young people with more qualified advisers accessible to young people.
Understanding the world of work
26. Young people must be given information on the world of work and the current skills and employment needs of the labour market. This will help them understand the impact of their choices on their future careers; particularly on future salary levels. Education-business links are crucial in making young people aware of the world of work and should be encouraged.
Better understanding is needed from training providers (colleges and private providers) of business needs and work organisation
27. It will be crucial that training providers are focused on business needs. The Bill requires (Clause 25) that an employer must permit the person to participate in training 'so far as is reasonable' in regard to the needs of the person, the circumstances of the business and the effect of the person's absence from work on the running of the business. Employers may have to rearrange the young person's working hours so they can attend their training. Therefore, in order to avoiding deterring employers from taking on a 16-17 year old, it is essential that courses should be available at times to suit the employer and that training providers offer training that meets the employers' skill needs.
Fines and penalties must be proportionate and not penalise employers who act in good faith
28. Under the Government's plans a young person would notify the employer of their training arrangements and state the times when they will be undertaking this (Clause 24). The Bill requires employers to ensure the young person has training arranged, if this does not happen, then following an enforcement notice, Local Authorities will enforce a fine - 'the amount of the financial penalty...to be determined in accordance with regulations'. Any fines must be proportionate as responsibility primarily lies with the young person. It is vital that the guidance following this legislation makes clear that the employer's duty is to require information from the young person and they should not be penalised if it is subsequently found to be false.