Select Committee on Children, Schools and Families Minutes of Evidence

Examination of Witnesses (Question Numbers 100-119)


22 OCTOBER 2008

  Q100  Mr. Pelling: I want to follow up John's question and Lord Young's earlier comment. As for producing quality of apprenticeship, surely the kudos will really come when people feel confident that their earning power will be significantly improved by the apprenticeship. What will the Government be able to tell people about the prospects for improved earning power if you secure the step change in the quality of apprenticeships?

  Lord Young: There is an easy answer to that. If people receive little or no training, their potential earning power is severely reduced. With an apprenticeship, they will get a guaranteed accredited qualification. They will get a quality experience both in what they learn while getting their technical qualification and in their work-based training, which John rightly emphasised. It has to enhance their potential earning power and their career fulfilment. People can unfortunately be described as a mere shelf-stacker, implying that they have no skills whatsoever. That has been limited to a tiny, narrow, experience and we are trying to lift people out of that description. That is why apprenticeships are important, not just across the areas that John described and the heavy engineering end that our Chairman described, but right throughout industry.

  Jim Knight: It is fundamental to each one of the 180 apprenticeship frameworks that they can each tell a story. If you complete the apprenticeship successfully, and apprenticeship completions are up significantly over the past few years, that will improve your life chances, earning potential and so on. The Training and Development Agency is an example that will be of interest to this Committee. It has developed and renewed the apprenticeship framework for teaching assistants. I am keen to see an expansion of apprentice teaching assistants in our schools. We need to be able to tell the story of how that will in turn deliver work that is satisfying in every sense, including payment. We are setting up the support staff negotiating body. That will be part of telling that story. Obviously you have the opportunities, once you are trained and employed as a teaching assistant, to progress as a higher-level teaching assistant. We are developing those support staff roles on and on. That is a story that we can tell as we try to encourage people into that apprenticeship.

  Q101  Chairman: A teaching assistant can become a teacher, eventually.

  Jim Knight: Yes. I am sure that many of us know examples in our constituencies of individuals who have perhaps started by volunteering in schools, become a teaching assistant, continued training, done an OU course, got the degree and then gone into the graduate teacher training programme and become a teacher.

  Chairman: That is proper progression.

  Q102  Mr. Slaughter: Can I carry on a little bit about the employer side of the matter? I do not know about my colleagues, but I am not sure that I am persuaded by your answers so far. You rightly said that the Government's record is very good so far—since the Labour Government came into office, the numbers of starts and finishes of apprenticeship schemes have tripled—but is it not getting more difficult now to ensure that employer places are there? I cannot see much in the Bill that will do that. The Bill seems almost—John used the phrase—symbolic. It is almost as though the Government are drawing attention to what they have done so far and saying that they wish they could do more, and that they put the resources in and tried to make it attractive to young people. But if there is not a commitment by a substantial number of large and medium-sized employers to do this, will it not fail?

  Jim Knight: I urge you to read clause 21, which is a long clause—it goes on for a couple of pages. It is principally about the duties of the LSC. To deliver on the guarantee set out in clause 3(e), the LSC will have to work extremely hard on engaging employers. To be able to do this it is, for example, expanding its current field force of 230 people to 400 staff, going out and working with skills brokers who have that day-to-day contact with employers to encourage them to take on apprenticeships. We have some specific work going on at the moment with ConstructionSkills, the sector skills council for construction. Obviously with the decline in house building at the moment there is a particular issue there. We have managed to grow to over 20,000 apprenticeship starts in construction and we have aspirations to go much further, but we have to be able to work quite closely with them as the economy changes, to ensure that we can continue to fulfil those. Public sector construction will play quite an important part in that. For example, this autumn we are acting to specify the provision of apprenticeship places as part of constructors' obligations in getting involved in Building Schools for the Future; and on 27 October, the use of procurement will form part of our discussions with our ministerial colleagues on how the public sector can do its bit in apprenticeships. In essence, the LSC will have to deepen the use of existing apprenticeship agreements. It will have to look at other sectors and parts of the country where there is not a strong tradition of apprenticeships and then forge strong relationships with employers and employer groups, to get them to see the value of getting entrants into their industries, particularly when times are tough economically. We can successfully ride out the economic circumstances only on the basis of skills. We share with the CBI and other employer organisations the strong message that now is the wrong time to stop investing in training and skills for the work force. Obviously, we also saw the announcements that John Denham and others made yesterday about trying to help small and medium-sized businesses by using some of the Train to Gain money to achieve that.

  Lord Young: You are right to emphasise the size of the task. For a start, there is a battle for hearts and minds with small and medium-sized enterprises. I have been going out and meeting groups from SMEs that are signing up to the skills pledge, and we have had the 100,000th company sign up to Train to Gain, so interest is increasing, but it will be a difficult time. What do we seek to do? Well, we seek to remove obstacles. Is engaging apprentices now complex and difficult? Yes, it is difficult for an employer, so we want to remove the obstacles. The national apprenticeship service will provide a single point of advice and guidance for employers interested in apprenticeships. We will soon be rolling out the first trials of the vacancy matching service, so that employers can register their vacancies and those seeking apprenticeships can find them. It is also important to ensure that employers feel that those apprenticeships are relevant to their industry or occupation. The programme has to be demand-led, so we are working with the sector skills councils so that they can help to design the frameworks. They cannot just design any old framework, however; it has to meet the criteria defined in the blueprint. To sum up, one part of this is about removing obstacles to make it easier for employers to engage apprentices. The other part is winning the battle for hearts and minds in the way the Minister just described. Employers have to believe that having better skilled staff will prepare them to survive the challenges they are going through and to come out of this situation with a stronger company.

  Q103  Mr. Slaughter: Is not the problem that you are relying extensively on persuasion and on trying to convince people that something is in their interests? I am interested in what you said about procurement as a route, but are you not trying to push water uphill, in the sense that the whole organisation of the employment sector and the economic circumstances are going the other way? A generation or two ago there were large organisations, in both the public and the private sector, that were almost hardwired to provide apprenticeships. That was the case in central and local government, nationalised industries and big firms, but we no longer have that. We are also possibly in an economic downturn in which there will be opportunities to come. My experience of local government, going back 20 years, was that we would take over something that had been privatised and where all the apprenticeships had gone, renationalise it and bring the apprenticeships back, and now it has been privatised again and they have all gone again. You can try to hold the waters back, but the general trend is towards cutting costs, whether by Gershon in central Government or elsewhere, but is not the net effect that apprenticeships are some of the first things that go, and all of the good will expressed here will not change that?

  Chairman: We do not have time for both Ministers to answer each question.

  Jim Knight: I cannot pretend that it is going to get easier, because of the economic circumstances. I discussed that yesterday with the LSC's chair and chief executive and others. I have asked them to do a piece of work about it—crystal ball gazing really, because it is very difficult to predict exactly what is going to happen in the future. More difficult economic circumstances will, in some ways, create a driver for young people to want to acquire more skills. It is not going to be as straightforward for them to go and get other work with lower levels of skills, so the demand may increase, but it is going to make supply more difficult. That is why it is really important that the public sector steps up to the plate. John Denham has an apprentice working in his private office.

  Lord Young: So have I.

  Jim Knight: So has Tony. Even at that simple level, there is more that we can do. If I could get an apprentice teaching assistant in every school—a slightly ambitious aspiration—that would be 23,000 apprenticeships. There is a lot more that we can do across the public sector. At the moment, we are talking a lot about what the public sector is doing, as we take over a few of the things that the private sector gets up to. It is important that we drive this forward. We have set up a structure at permanent secretary level—led by Ian Watmore, the Permanent Secretary at DIUS—with ministerial champions in every Department to drive it forward. The Ministry of Defence has a very strong tradition in this area, and we need to learn from those that are doing well. Obviously, we must work with the private sector as well, and we have some employers that are hugely committed to this—organisations such as BT and Rolls Royce—but we need to deepen and widen it into other sectors, perhaps with the public sector taking a lead. We also need to listen to voices such as the CBI, which is very strong on this.

  Q104  Mr. Slaughter: Do you see part of the problem as being work force mobility? Again, when you go back a generation, an employer who was prepared to put the investment into an apprentice, might expect—although obviously the apprentice would not be indentured for life—that that investment would be repaid. That is no longer the case, for a number of reasons. Is there anything in the Bill that can deal with that issue?

  Jim Knight: There is nothing in the Bill that deals with that specifically, beyond what is in the clauses around the apprenticeship frameworks, which are really designed to make it easier for sector skills councils. It is important that it be done sector-by-sector. There are employers who are working discretely themselves, and they have the confidence to be able to do it and to take the risks around mobility. As we have also seen with Investors in People, if you can get a group of employers locally—we have training associations that are also looking to set up together at the smaller end of the employer range—they are not taking a risk on their own. They are sharing the risk. If they are training people who then go and work for one of their competitors, but they have confidence that their competitors are also training people whom they can then employ, they are sharing the risk and there can be a positive outcome at the end. We have seen that with IiP and, equally, we can we can see it with apprenticeships.

  Q105  Fiona Mactaggart: I am glad that the effort is being put in, but it seems to me that the reality on the ground is different. I got an e-mail from the mum of a 17-year-old lad in my constituency, except he is not in my constituency anymore. The previous e-mail that I received from her told me that he had already written 99 letters to employers, that he had done all the college bit of his apprenticeship and that he could not find an employment placement. He has found one now—in Leeds. She quite reasonably feels that her 17-year-old son being based in Leeds to do his plumbing apprenticeship is a bit much, although she is very glad that he has got the place. I am wondering whether we have sorted out the tension between the need for the young person to get broad and balanced training across a sector, so that they have the base that can give them the flexibility that they will need in future, and a world in which companies have become more specialised and cannot offer that flexibility. I do not see the Bill as providing any intelligent way of resolving the tension that exists in the modern world.

  Jim Knight: The guarantee in clause 21(2), in proposed new section 3E(2) of the Learning and Skills Act 2000, specifies a test of reasonableness in paragraph (2)(c), with the phrase "within the person's reasonable travel area." Say you want to be an apprentice plumber and you live in Slough. I do not think that any court would judge that Leeds was within a reasonable travel area of Slough. The Learning and Skills Council—the Skills Funding Agency, as it will become—and the NAS (National Apprenticeship Service) within that will have to work very hard in places such as the south-east to ensure that they have the engagement of employers wanting to take on apprentices within the reasonable travel area of every young person in this country, even those in Slough. I was pleased to see, when looking at the statistics yesterday for 16-to-18 apprenticeships, that there was some growth. Although the big growth that we are seeing is in adult apprenticeships, there is some in apprenticeships for 16 to 18-year-olds. The really spectacular growth is in the London area. So, we are starting to see some signs of change, but we have a lot further to go. That is why we have placed quite a robust duty on the LSC in that important clause, by stating "within the person's reasonable travel area", to try and tackle exactly the problem that you are talking about.

  Q106  Fiona Mactaggart: There is no mechanism that I can see for the LSC to deliver, because there is no duty on the employer. There is no bribe for the employer—no special arrangements. Employers are under greater tension now. I have had a really positive response from employers in Slough—one of the most productive areas in the country—to our demand for more skills training and so on. They all say, "Fine," but they really keep not turning up stuff—they say nice stuff, but they cannot do it, because they are so focused on their bottom line at the moment. I do not see how giving a duty to the LSC is going to make employers do what they need to do.

  Chairman: Lord Young, how are you going to do it?

  Lord Young: You used the word "bribe". I do not know whether you can bribe employers, but I think that, first of all, we have to remove the obstacles, because there are still obstacles. We have to make it easier for them to do it. Secondly, we are paying for the training. We are not paying wages, but we are paying for the training costs of apprenticeships. That is a significant cost. What will make employers do it? I think that we are down to convincing people that, if they want to improve the performance of their company, a better skilled or better trained work force will do that for them. So, there will be a multiplier effect, if you like. Obviously, the more that we can persuade to do that, the better. I do not think that we are arguing that we do not have a job to do or that there are no difficult circumstances, but it depends whether you see the glass as half full or half empty. We certainly do not see it as half empty. We do not have a situation where there are no apprenticeships. Our task is to drive up the numbers and to persuade and demonstrate to employers that there really are tangible advantages. Now, contained in the Bill, as the Minister has already said—

  Jim Knight: Please call me Jim.

  Lord Young: As Jim said, there are a number of things that we believe will do that. The one-stop shop is a place for employers to go to—the vacancy matching service. The proof of the pudding will be in the eating. We are not in any way underestimating the size of the task. I think that our focus, not just on large companies, but on small and medium-sized enterprises, is also important.

  Jim Knight: I think putting a duty on employers, tempting though it might be, would be the wrong thing to do. Employers have got to want to do this, if they are going to give apprentices the experience that we want them to receive. If they are reluctantly bringing in these young people to give them some training because the law says that they have got to, those young people will not get the experience that they need. We have to engage employers and we are doing that through skills brokers. Train to Gain is starting to have an impact in being able to work with employers, understand their skills needs and offer subsidised or free training. It is easier to engage larger employers than smaller ones. We can work with sectors by looking at the supply chain of larger businesses. Having gone through their procurement, we can look at how they can encourage employers to offer apprenticeships. There are things that we can do. My take is that imposing a duty on all employers would be unwieldy and would probably not give the outcome that we want.

  Q107  Fiona Mactaggart: I absolutely agree. I was not arguing for imposing a duty, because I do not think that that would work. I was shocked at a meeting I had with three cutting-edge biotechnology companies in Slough—

  Lord Young: What size were they?

  Fiona Mactaggart: They were reasonably large. They were medium-sized to large companies such as UCB Celltech and Lonza. I was talking to them about training because I wanted them to engage in this issue. They were talking about having difficulties with technician-level skills. Because the development of biopharmaceuticals is relatively new, there is no traditional route. I spoke to them about apprenticeships and suggested that instead of handing the problem to the Government, they should converse with each other and work together to develop an apprenticeship scheme. I was shocked that they had no ideas at all about apprentices. Their first response was that they cannot carry the cost of people who are not performing for a long time. That is an obvious point about apprenticeships. We give tax breaks for research and development. Apprenticeships are like R and D. You are investing in your future in the same way that you do with R and D. However, we do not provide tax breaks for employers in the same way if they invest in apprentices. I am not saying we should mandate that they must be provided, but if we structure the financing using tax breaks for a group of companies like those in biopharmaceuticals, they could be up for it and put their management energy into making it happen. The brokers have not been anywhere near them and do not know what they are like. All of the goodwill at the moment is just not landing.

  Chairman: I ask colleagues to keep their questions a little shorter and the Ministers to make their answers a little shorter, as we are still on section 1 of four sections of questions.

  Jim Knight: Tony and I both have brief things that we want to say.

  Chairman: Lord Young?

  Lord Young: This is a point I had forgotten. Next year we will be starting a trial of wage subsidies for small and medium-sized enterprises.

  Q108  Chairman: You mean providing wage subsidies?

  Lord Young: Yes, that will be trialled. We are also talking about meeting over-training costs of some large employers to get them to train beyond their needs to support supply chains. Those are the two approaches being tried.

  Jim Knight: From the scenario you set out, there are clearly areas and sectors that we have not got into. In addressing the geographical disparities, we will go to areas that have different sorts of industries from the rest of the country. The relationship between apprenticeships and other qualifications is also important. One of the most enthusiastic backers of the phase 4 science diploma is the pharmaceutical industry. We are seeking to engage the biotech industries in that. For example, you could do a Level 2 diploma at 14 to 16-years-old and go on to do a Level 3 apprenticeship to develop the skills of a laboratory technician. The pharmaceutical industry is crying out for those sorts of skills. That underpins why companies such as AstraZeneca are on the diploma development partnership for science. They see a clear gap in the qualifications set-up for delivering those skills.

  Chairman: Everyone wants to come in on this section so we will quickly hear from Sharon and Paul before we move on.

  Q109  Mrs. Hodgson: You answered questions about employee mobility and the fact that employers might train up apprentices who will then take their skills elsewhere. I am interested in the employer commitment to offer real jobs to these apprentices at the end of their training, especially in light of the fact that we may be going into an economic downturn. I am wondering what safeguards or guarantees there will be for the young people, to stop what happened in the 1980s with the youth training scheme, where young people were trained up over a period but there was never a real job at the end of it. Employers used the YTS (Youth Training Scheme) as a source of cheap labour, so I am wondering if there are any guarantees in this scheme that that will not happen.

  Jim Knight: In terms of the Bill, this would be contained in the apprenticeship agreement, where we are making sure that this is defined as an agreement between the employer and the learner. In that respect, the agreement would be similar to an employment contract. In terms of guarantees, it is difficult to say that it would be more of a guarantee than an employment contract, but it would be difficult to say that it is less than the guarantee that you would get in an employment contract. I think that the apprenticeship agreement is significantly more robust than the YTS in that regard. We have taken some care to define the agreement in clauses 16 to 20 of the Bill, to provide some clarity and some robustness in that regard.

  Lord Young: The only thing that I could add to that is that we are talking about a much better product than the YTS for a start. What has the young person got? Unfortunately, regardless of apprenticeships, you cannot guarantee any job within a company necessarily; the company might collapse. What has the individual got? Well, they have got a clear set of both transferable skills and genuine craft skills.

  What is the recipe for survival in a downturn? Is the recipe having no skills or having a range of skills? I would say that the recipe has got to be having a range of skills. There is no absolute guarantee, but we are saying that we will not have a situation where there is not a genuine contract between an employer and an apprentice in order to qualify for the term "apprentice".

  Q110  Paul Holmes: To return to the financial issue that Fiona was talking about, the British Chambers of Commerce, in the evidence that it submitted to the Committee, said that businesses, especially small and medium-sized enterprises, will require financial incentives and support for apprenticeships. Nick Edwards from Lewisham College told the Committee that, as long as colleges are well paid for delivering training for apprenticeships, employers should also be paid for the training part of it. Jim talked about Train to Gain, but the fear is that witnesses have said that employers will use Train to Gain because it is free up to Level 2 and they will not use apprenticeships because there is no money for them.

  Jim Knight: As Tony has just said, we are trialling the wage subsidy for SMEs, because we need to build some evidence to see whether that is an issue. I think that there is varying feedback on whether wage subsidy will be the answer. Some people argue—that is why we are trialling it—that it is the tipping point that pushes employers into deciding that they want to do it. However, most people agree that people are involved in apprenticeships not because of the wage subsidy, but because they value these young people or adults who are working in their workplace and doing a good job for them. In the end, that is where we want to get everyone to. We do not want them to be motivated to do it because of wage subsidy, but if wage subsidy creates the tipping point, it is worth pursuing. That is why we are trialling it.

  Q111  Paul Holmes: But look at Denmark, for example. A few years ago, the old Education Committee looked at further education and adult skills training in Denmark. Denmark has a system where there was the employer levy on everybody and everybody took part in providing apprenticeships. We were told that they felt that they had already paid for that through the levy, so they might as well make use of it. As I said before, the fear here is that you get Train to Gain, all the evidence for which so far says that most of it is deadweight money, with employers using that money for things that they were providing themselves initially. Now, however, they let the state pay for it, and that will just work against everything that you are trying to do.

  Jim Knight: I am not sure, particularly at this point in the economic cycle, that imposing a levy on all employers is the wisest thing to do.

  Q112  Paul Holmes: I was not suggesting that it was, although a year or two ago the skills White Paper was saying on every page that this is the last chance saloon for employers and that if they do not put the money up and start training, perhaps we would have to do something about it. That is what you said in the skills White Paper, but is Train to Gain going to undermine what you are trying to do with apprenticeships?

  Jim Knight: No.

  Lord Young: No, I do not believe that it is. I honestly think that we have to persuade employers that there is a real advantage to their survival in training their current employees and in bringing fresh blood into the company through apprenticeships. There is no side-stepping that, which is why we have the apprenticeship ambassadors, the other 400 people going out there working. There are no short cuts to this. I would not like to engage in what has become almost an ideological argument about whether to have a training levy or not. We are not in that situation at the moment.

  Q113  Chairman: But Tony, people say that there is a lot of unspent money from Train to Gain. Can that be switched across to help apprenticeships or not?

  Lord Young: We are trying to use some of that Train to Gain money to offer SMEs training to improve their business techniques, management training and so on. I do not know whether it will be pushed into the apprenticeship area.

  Q114  Chairman: Could it be? It would be terrible if it went back to the Treasury unspent.

  Lord Young: I do not think that it will be under-spent in the current circumstances.

  Jim Knight: John committed £350 million of the £1 billion yesterday to the various packages for SMEs, in terms of relaxing some of the rules, breaking some things into bite-size chunks as regards qualifications, and allowing groups of SMEs on business parks in order to do things together. We must leave something for Train to Gain, having taken £350 million out. I am sure that Tony and his colleagues in the Department for Innovation, Universities and Skills will be making sure that they use it.

  Lord Young: The other issue is that Train to Gain is being used for apprenticeships, I am advised.

  Q115  Chairman: Is it?

  Lord Young: So I am advised by my officials.

  Chairman: Edward, you will lead us through 16-to-19 apprenticeships and we are going to step up the pace.

  Q116  Mr. Timpson: I shall be as brief as I can. We have spoken at some length about the careers opportunities for young people through the Bill, but also about career fulfilment. On that second point, one of the provisions in the Bill is that people seeking an apprenticeship need to have two sectors. First, what is the rationale behind that? Is there not a danger that you will have young people who have a desire in a particular profession or career path, for which they have also shown aptitude, but that because they have had to put forward two sectors they end up in the default sector, where they do not have the desire or potential career fulfilment that you are looking for?

  Jim Knight: I think that two is the right balance. I understand your point—that if we limited it to one it would be the one thing that a young person might want to do—but a lot of people are not absolutely clear about one thing. There might be a couple of things that they would be interested in doing, and if you can offer the guarantee, it gives young people more rather than less. If we went beyond two, the guarantee would become very weak. The chances are that we would not be far off being able to deliver a choice of three as it is, so we need something that is a strong driver to the system, but I think that restricting it to one would deny some opportunities to young people and we do not want to do that.

  Lord Young: That is right.

  Q117  Mr. Timpson: Perhaps we can attack it from a slightly different angle and consider a situation where a young person has a particular career path that they want to follow, but there is no demand within that sector for the apprenticeship that they are looking for. What happens then? Does the Learning and Skills Council or its successor step in and ensure that there is an apprenticeship for them, or are they left to wait until it arrives, which may be too late?

  Jim Knight: If a young person has said that they want to do—

  Q118  Mr. Timpson: Suppose they say that they want to go into rail engineering and the response is, "I'm sorry, there are no opportunities for apprenticeship in that sector, however, would you like to go into retail?"

  Jim Knight: They would specify their two sectors, so one of them would be rail engineering and the other would be something else. The duty in the draft Bill would be on the LSC to guarantee a place within a reasonable travel distance for them in one or other or both of those sectors. If they are in Falmouth and they want to do rail engineering, it may be reasonable to offer that at some distance away where rail engineering is taking place, perhaps in the wonderful town of Crewe. That is where the test of reasonableness will come in. There are some niche occupations where there will not be that many geographical locations where it is reasonable to offer that apprenticeship. That is why the vacancy matching service is very important. We can put all those vacancies up nationally and people can see, even if they want to get into a fairly niche apprenticeship framework, where they are available and where they can go to do them. If they want to become a plumber in Falmouth and everybody needs plumbers—

  Mr. Pelling: Especially Joe.

  Jim Knight: Joe is a plumber; he does not need one at all; he is his own plumber.

  Q119  Mr. Timpson: What we need to establish is whether this will be an employer-led apprenticeship scheme or one where the young people who are looking for apprenticeships are given a helping hand by the duty placed on the LSC. Can you clarify whether a young person who is looking for a particular sector for an apprenticeship and it is not available to them can come to you for help?

  Lord Young: Obviously you want to try to satisfy young people's requirements, but we cannot guarantee that there will be apprenticeship places in all occupations in all locations. It might be nirvana but I do not think that we are going to get there, are we? Life is full of difficult choices. When young people are making career choices now they are tending to think a bit more about what is likely to be available when they have gone through whatever it is that they are going to do, whether that is an apprenticeship or academic qualifications. They may want to do rail engineering, but they might find that it is not on offer locally and they might consider doing some similar form of engineering. We will obviously try to ensure that the maximum choice is available, but it would be wrong to imply that it will always be there. It will not in current circumstances. I do not think that is different from any time in the past when there were thousands and thousands more apprenticeships available. They were not always available in every place in the country. You had to look at the labour market. Our job is to drive up the number of quality apprenticeships that are available and to give people a reasonable choice, which we are trying to do with the two-sector definition. That will be quite a challenge in itself.

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