House of Commons - Innovation, Universities, Science and Skills

Select Committee on Innovation, Universities, Science and Skills Seventh Report

4 The National Apprenticeship Service

The establishment of the National Apprenticeship Service

The Government stated in World-class Apprenticeships that it would create a new National Apprenticeship Service and "assign to it the end-to-end responsibility for the Apprenticeship programme".[98] The draft Bill does not, however, create a National Apprenticeship Service. Instead, it places a number of responsibilities on the Learning and Skills Council, which will manage the National Apprenticeship Service. The Government plans to dissolve the Learning and Skills Council by 2010. The National Apprenticeship Service will then become a "discrete service, led by a Director reporting to the Secretaries of State of DIUS and DCSF, and managed within the Skills Funding Agency",[99] which is expected to come into being in the autumn of 2010 when the Learning and Skills Council ceases to exist.[100]

In its evidence to us parts of business was supportive of the creation of the National Apprenticeship Service[101] with its focus on promoting apprenticeships, but the British Chambers of Commerce believed that the change was "an unnecessary part of a long history of organisational change" in further education by the Government and that, despite "its faults, a slimmed down and less bureaucratic LSC would have been the natural home for national co-ordination of apprenticeships."[102] David Way, National Director of Apprenticeships at the Learning and Skills Council pointed out to us that the Council could point to achievements such as increasing numbers of apprenticeships and increasing completion rates "comparable with the rest of Europe".[103]

We therefore asked the Ministers why, in the face of success, change was needed. Jim Knight explained that the winding-up of the Learning and Skills Council was a consequence of the Government's proposal that all young people will stay in education or training at least to 18 years of age and to transfer to local authorities the responsibility for commissioning and funding education and training for all 16-18 year-olds. He said that as a result "you are taking away the majority of the funding […] from the Learning and Skills Council and you are left with something else."[104] Mr Way considered that "high quality people from the Learning and Skills Council [would be] transferring to the National Apprenticeship Service because the nature of the work it involves is going to be attractive to many people in that organisation".[105] The relevance of the raising of the education and training leaving age to 18 was not examined in detail in the documentation accompanying the draft Bill. From the perspective of support for apprentices we consider that the winding-up of the Learning and Skills Council poses particular challenges at an important time. The primary cause for the change falls outside the scope of our inquiry and is unrelated to improving and promoting apprenticeships. We took limited reassurance from the Learning and Skills Council's evidence about continuity and are concerned that the establishment of the National Apprenticeship Service may be seen as the by-product of a wider reorganisation, which is principally concerned with the raising of the education and training leaving age to 18. We recommend that, in the documentation accompanying the finalised legislation, the Government set out in detail the organisational implications of the raising of the leaving age on the expansion and operation of apprenticeships and reaffirms the central position of the National Apprenticeship Service.

The responsibilities of the National Apprenticeship Service

The Government explained in World-class Apprenticeships that the National Apprenticeship Service would operate both at national and sub-regional level and would have the following functions.

a) Overall responsibility for delivery of the Government's policy on Apprenticeships, including achievement of the targets set by Government.

b) Co-ordinating the funding of all Apprenticeship places. The Service will also be responsible for initiatives designed to stimulate greater employer involvement in the scheme.

c) Assessing potential providers for quality and value-for-money; approving those that offer a high standard of delivery and monitoring performance over time using a suite of qualitative and quantitative performance indicators.

d) A national information and marketing service.

e) Establishing and maintaining a national matching service for employers and would-be Apprentices, to enable employers to advertise their positions and prospective applicants, anywhere in the country, to search for them and apply as appropriate.

f) Development of a model Apprenticeship Agreement.

g) Responsibility for administration of the Apprenticeship "credit" initiative.

h) The specification and provision of all future management information, and its dissemination to various partners such as the Commission for Employment and Skills.

i) Promotion of Apprenticeships.

j) Management of a task force initiative to overcome the particular barriers to the growth of the programme in London.[106]

The draft Bill places a number of responsibilities on the Learning and Skills Council, which will pass to the National Apprenticeship Service. These are set out at clauses 21 and 22 but are shorter than the list in World-class Apprenticeships. They provide:

a) a duty to exercise its functions with a view to securing that apprenticeship places are available in sufficient number and variety for there to be suitable places for suitably qualified people who want one;[107]

b) a requirement to secure the availability of arrangements relating to employment under an apprenticeship agreement and for courses of training or study for each of the qualifications required under recognised frameworks;[108]

c) a requirement to encourage employers to enter into apprenticeship agreements;[109] and

d) the statutory basis for the national apprenticeship vacancy matching service.[110]

In our questions to the Ministers and officials we sought to find out how the National Apprenticeship Service would operate but we were not able to form a detailed picture. For example, one essential issue is the National Apprenticeship Service's local and regional structure. The Government's strategy is clear: "The primary role of the NAS field force will be to work with employers locally and regionally."[111] There is, however, no requirement in the draft Bill for the National Apprenticeship Service to consult with local employers and the documents published with the draft Bill provide no detailed information on the operation of the Service at a local level. While Mr Way was confident that work in the Service was "going to be locally based and directly dealing with employers"[112] and Mr Knight said that it would "need to be able to relate to employers at the appropriate level",[113] we were not able to establish how the arrangements would work.

Stephen Marston, Director General of Further Education and Skills at DIUS, stated that the National Apprenticeship Service "would be a bigger, better service than we have now" and he was able to tell us that overall the number of staff would expand "from about 250 now to about 400 in future for the National Apprenticeship Service."[114] No information was provided in the supporting documentation to set out what these staff would do at regional or local level, where they would be based or the costs or recruiting and establishing them. One area that we would expect to explain in detail is how the National Apprenticeship Service would interface with local authorities—for example, one key question, is what happens when someone starts an apprenticeship at 17 or 18 and does not complete it until 19 or 20, how will his or her transfer from the local authority part of "the system" to the National Apprenticeship Service be handled. We were unable to form a conclusion on the operation of the National Apprenticeship Service—for example, its relationship to the existing National Employer Service which contracts with large employers for apprenticeships—because little information about its operation was provided with the draft Bill, supporting documentation or in response to our questions. Nor were we provided with evidence to be able to judge whether the Government's claims that the National Apprenticeship Service would provide an improved service were justified. Given the future importance of the Service this lack of information is completely unsatisfactory. We recommend that, to accompany the finalised legislation, the Government produce a detailed memorandum setting out how the National Apprenticeship Service will operate at national, regional and local level to fulfil its functions, setting out the proposed number of staff to carry out each function, along with a budget showing the costs of setting up and running the Service.

TARGETS FOR THE NATIONAL APPRENTICESHIP SERVICE

The Government has accepted "Lord Leitch's aspirations for 400,000 Apprentices in England by 2020".[115] In its strategy set out in World-class Apprenticeships the Government said that the Director of the National Apprenticeship Service will report to the Prime Minister, twice-yearly, on progress against targets.[116] The Government explained that

we want to ensure complete clarity in our measures in the future so that we can accurately set targets and report on progress against them. We will therefore be focusing on the two most instructive metrics: the number of people starting an Apprenticeship in the year ('starts') and the percentage of those who complete that Apprenticeship ('completion rate').[117]

We appreciate that work on formulating targets may not yet be finalised but it would have assisted our scrutiny and it will assist the House's consideration of the finalised legislation to have indicative targets showing their range and stringency. In our view the completion rate target may not be sufficient to provide an accurate measure of quality—for example, it would not pick-up those progressing from apprenticeships to advanced apprenticeships. In view of the functions allocated to the National Apprenticeship Service we conclude that it is important that the targets on apprenticeships measure the starts and completion rates of apprenticeships by sector and size of business, charting milestones towards the Government's aspiration of 400,000 apprentices in England by 2020. In addition, the targets need to provide an accurate measure of quality of training. We recommend that the Government draw up and publish with the finalised legislation an indicative set of targets for the prospective National Apprenticeship Service.

DATA TO BE COLLECTED BY THE NATIONAL APPRENTICESHIP SERVICE

The accurate measurement of progress against targets will depend on the data that the National Apprenticeship Service collects. There was agreement by the witnesses representing employers that, as Richard Wainer from the CBI, put it "data collection is important as long as it does not place undue burdens on the businesses".[118] He considered that currently "the quality of data we have around apprenticeships is pretty poor. From a policy perspective, it is very difficult."[119]

To monitor progress towards the objectives of the Government's policy, data on other aspects of apprenticeships will need to be collected.

a) During the course of inquiry—as we note in chapter 5—we discovered that the majority of new apprentices were not new recruits to a business but existing employees "who are in work and converting them to apprentices".[120] The information we obtained on these "conversions" is set out in a memorandum from the Learning and Skills Council.[121] Although the Council said the figures they supplied may be overstating the number of conversions, the percentage of conversions rose from 73% in 2005-06 to 77% in 2006-07.[122] Data showing the proportions of new recruits and conversions will be essential to show whether apprenticeships are growing as a route for new entrants to the labour market.

b) As we noted in chapter Error! Reference source not found., the number of advanced apprenticeships as a proportion of the total number has been falling recently. A continuing fall could be an indication that progression from apprenticeships to advanced apprenticeships was stalling. Data showing the progression of apprenticeships to advanced apprenticeships and to higher education will be essential to show that the improvement in quality is being achieved.

c) The Government stated in World-class Apprenticeships that "English Apprenticeships suffer from serious diversity problems, which are more marked than labour market patterns in general."[123] Data will need to be collected to measure whether these problems are being addressed.

We conclude that the collection of accurate and timely data on apprenticeships will be crucial not only to the measurement of progress against targets but also informing the formulation of policy. But the requirements to supply data have to be such as not to impose an undue burden on business. We recommend that the Government draw up and publish with the finalised legislation its plans for the collection of data on apprentices and apprenticeships and for the publication of data. The data required will need to differentiate between new entrants and those converting from existing employment to an apprenticeship, track the progression to apprentices and identify characteristics such as age, gender, ethnic background, disability and sector.

PROMOTION OF APPRENTICESHIPS

We detected that the production of the draft Bill itself was seen a proof of the importance that is attached to apprenticeships and the need to promote the skills that are essential for many apprentices. As Tom Wilson from the TUC put it: "part of the purpose of this Bill […] is to concentrate a lot of energy and resources on questions [about the skills apprentices require] and make sure they are given the attention they deserve."[124] We applaud this sentiment. But once any legislation is enacted there need to be structures in place to sustain the promotion and improvement of apprenticeships. While we note the provision at clause 21(5) requiring the National Apprenticeship Service to encourage employers to enter into apprenticeship agreements, we question whether this duty is sufficient to achieve the ambitious target set in the Leitch review of skills for 400,000 apprentices in England by 2020.[125] The scale of the task was highlighted by the Federation of Small Businesses which told us that in a "recent survey, we found that only five per cent of the people taking on apprenticeships were aware of wage contribution on offer to small businesses" for apprentices.[126] In our view there is a need for a stronger duty to promote and enhance apprenticeships than is provided in the draft Bill. We recommend the legislation impose a duty on the National Apprenticeship Service to promote and enhance apprenticeships.

Sector Skills Councils

There are currently 25 UK Sector Skills Councils licensed by the Government. They are employer-led organisations covering approximately 85% of the UK workforce from manufacturing and transport to finance and IT. As well as providing a voice for employers they have the following goals:

a) to reduce skills gaps and shortages;

b) improve productivity, business and public service performance;

c) increase opportunities to boost the skills and productivity of everyone in the sector's workforce; and

d) improve learning supply including apprenticeships, higher education and National Occupational Standards.[127]

A major part of the draft Bill is concerned with the "Apprenticeship frameworks". A framework outlines a programme of learning against which the Government will provide apprenticeship funding.[128] Frameworks are currently defined by Sector Skills Councils in accordance with the basic guidelines laid down in the national apprenticeships blueprint.[129] The draft Bill would give many of the existing arrangements "for the very first time […] statutory force and backing to [the apprenticeships] framework in order to position apprenticeships as a permanent part of the education and training landscape".[130] The Government explained that:

It is our intention that [Sector Skills Councils] will approve Apprenticeship frameworks for their sectors which will be based upon updated national occupational standards. These would be included in the ready-made bank of qualifications, designed to meet the requirements of employers in each sector. In future, any organisation wishing to offer an Apprenticeship simply needs to submit to the relevant Sector Skills Council a short description of its plans, the qualifications and units it wishes to utilise, and how they meet the requirements of the strengthened Apprenticeships blueprint. [Sector Skills Councils] will provide support to employers to develop frameworks.[131]

The evidence we received from the Sector Skills Councils did not indicate that the Government's proposals in respect of apprenticeship frameworks were flawed.[132] There were, however, some reservations. One area of concern was which body would issue completion certifications in the new system. The draft Bill provides for a certifying authority to issue an apprenticeship certificate to a person who applies to it who satisfies the appropriate conditions.[133] In responding to out written questions the Government explained that the National Apprenticeship Service would issue the apprenticeship certificates.[134] SEMTA[135] said that Sector Skills Councils should "retain the role of 'certifying authority' if apprenticeships are to retain their value, employer-focus, coherence, and sector-relevance."[136] The Government explained that this change would ensure that there was "a nationally consistent completion certificate"[137] issued by the National Apprenticeship Service, although under the new arrangements the certificate would have sector skills council branding as appropriate to the apprenticeship framework completed.[138] Ofsted, in its response to the Departments' consultations welcomed the "proposals to issue Apprenticeship Certificates" and saw "this as an important mechanism to raise the profile and importance of apprenticeship programmes".[139] We conclude that the Government's proposal to replace completion certificates issued by Sector Skills Councils with a "national" certificate issued by the National Apprenticeship Service fits with the proposals in the draft Bill to achieve national recognition for apprenticeships. We also conclude that the draft Bill will not, and should not, substantially change the existing structures and roles played by the Sector Skills Councils.

National Apprenticeship Matching Service

Clause 22 provides the statutory basis for the National Apprenticeship Vacancy Matching Service. The service would enable employers to advertise their positions and prospective applicants, anywhere in the country, to search for them and to apply. The National Apprenticeship Service would be responsible for the initial commissioning and building of a technology platform, based on the successful regional trials, which are currently underway.[140] The National Apprenticeship Service would also be responsible for the ongoing management of the full Matching Service, including dedicated customer service staff.[141]

As with our scrutiny of other aspects of this legislation little information about the organisational and operational arrangements for the National Apprenticeship Matching Service was available. We were surprised to be told that details of the cost savings from the introduction of the National Matching Service would not be available until 2012.[142] The absence of information has precluded detailed scrutiny. The evidence we received was in favour of the concept of a Matching Service but a number of concerns were expressed. The Federation of Small Businesses questioned whether the Service would overlap with the work of Group Training Associations and suggested that "if it is going to make any point make it one and not two different things for a small business to understand".[143] The British Chambers of Commerce, CBI and the Alliance of Sector Skills Councils said that the Matching Service would have to be based on local areas and local needs.[144] The Association of Colleges went further:

we are concerned that it might detract from some of the things that are working there. One of the things that actually does work now is the relationship between a provider and the employer, and that is something that has built up over time, it is not something that happens very quickly. Therefore, we might actually be able to grow apprenticeship provision because of the arrangements we already have with an employer.[145]

In the absence of detailed information we reach no conclusions about the National Apprenticeship Matching Service. But on the basis of the evidence we received we are able to make a number of recommendations, which should guide the Government's formulation of the arrangements for the operation of the Service. We recommend that the National Apprenticeship Matching Service be designed to complement, not replace or duplicate, existing arrangements for putting prospective apprentices in contact with employers, and that the primary focus of the Service be on meeting local needs. The results of the trials currently underway should be published before the Second Reading of the Bill. Finally, we recommend that the Government draw up and publish with the finalised legislation its estimates of the costs for the setting up and running the Matching Service.

98 World-class Apprenticeships, para 4.7 Back

99 DCSF and DIUS, Raising Expectations: enabling the system to deliver, Cm 7348, March 2008, paras 30 and 10.8; see also Appendix 1, Error! Reference source not found.. Back

100 DCSF and DIUS, Raising Expectations: enabling the system to deliver, Cm 7348, March 2008, para 7.10; see also Appendix 1, Error! Reference source not found. and Error! Reference source not found.. Back

101 Q 1 Back

102 Ev 45 Back

104 Q 190 Back

105 Q 99 [David Way] Back

106 World-class Apprenticeships, para 4.8 Back

107 Draft Apprenticeships Bill, clause 21, new section 3E inserted into the Learning and Skills Act 2000 Back

108 Draft Apprenticeships Bill, clause 21, new section 3G inserted into the Learning and Skills Act 2000 Back

109 Draft Apprenticeships Bill, clause 21(5) Back

110 Draft Apprenticeships Bill, clause 22 Back