Memorandum 11
Submission from Edexcel Ltd
SCRUTINY OF
THE DRAFT
APPRENTICESHIPS BILL
The thrust of this submission is that the Bill,
as presently drafted, would appear not to address the following
issues:
— the 7:1 imbalance between potential
apprentices and employer places, illustrated by the 70% disinterest
on the part of surveyed SMEs;
— the critical success factors which
would make apprenticeships attractive to employers and lead to
effective policy implementation;
— ways in which the blueprint and frameworks
might accommodate effective in-house training by large employers;
— opportunities for leadership on the
part of public sector employers; and
— key obstacles to increased participation
by potential apprentices of all ages.
The Bill would therefore appear to fine-tune
a system which, as presently conceived, will not achieve policy
objectives.
1. Does the bill meet the Government's policy
objectives to set up a system of world class apprenticeships in
the most effective way within a reasonable time frame?
1.1 No. The Bill does not adequately address
the main constraints on provision of apprenticeship places by
employers, which are well illustrated in the recent Apprenticeship
Survey carried out by the Federation of Small Businesses and which
are likely to be even more significant in the current climate
of economic uncertainty. Key findings are reproduced in section
1.2.
1.2 Out of 1200 employers surveyed, only
26% currently employ apprentices on a recognised programme. Of
those which do not,
— 28% too many demands on time,
— 27% too much bureaucracy,
— 22% use their own training schemes,
— 21% have concerns about the quality
of trainees,
— 22% cite other reasons, and
— only 6% see apprenticeships as irrelevant
to their business.
1.3 Indeed the ratio of applicants to places
based on LSC findings from 2005 would appear to be 7:1. This would
suggest that the current system for providing apprenticeship places
is not functioning effectively. In order for this Bill to address
that shortfall, policy attention should address the reasons why
employers are choosing not to provide places. Account also needs
to be taken of those particular sectors, such as construction
and engineering, in which the anticipated net benefits to the
employer of training an apprentice may often be negative. Suggestions
for ways in which the Bill might meet the Government's policy
objectives are offered in response to question 6.
2. Is the bill workable?
2.1 The bill is workable insofar as its
measures lie under public control. The essential ingredient however,
ie the willingness of employers to provide places, does not lie
under public control and the Bill contains little incentive for
employers to increase these.
3. Will the bill lead to a renaissance in
apprenticeships?
3.1 No. The critical factor limiting such
a "renaissance" will be hard-nosed commercial cost/benefit
decisions taken by employers about the expected benefits to their
business of training apprentices compared to costs in terms of
time and effort. The projected benefits to society may be high
but the net benefits to employers will be decided on a private
and case-by-case basis. Assertions of social benefit will not
engage private employers.
4. What is the cost?
4.1 We are not able to comment on this point.
5. What impact will the bill have on current
institutional structures?
5.1 The Bill will have some impact on current
institutional structures as the National Apprenticeship Service
will have to carve out a new presence for itself in the labour
market between employers on the one hand, and providers of education
and training on the other. This process will take time and skilful
liaison, at the same time as the LSC is wound up, while other
replacement agencies, such as the Skills Funding Agency and Young
People's Learning Agency are developed. Meanwhile, Sector Skills
Councils are continuing to refine sector qualification strategies
and in some cases are struggling to secure buy-in from their sector
and sub-sector employers. There will therefore be some institutional
adaptation over the next three years as staff, expertise and business
links move between agencies and bed down before beginning to contribute
to policy implementation. Such "institutional churn"
may prove to be lengthy and expensive, without necessarily making
significant progress.
6. Is there anything missing from the draft
bill?
6.1 Yes. The Bill needs to address the main
drivers which will encourage proportionate participation by both
employers and potential apprentices, given the 7:1 imbalance between
the two recorded by the LSC in 2005.
6.2 As far as employers are concerned, the
national "blueprint" and the development of apprenticeship
frameworks and standards needs to reflect more clearly the interests
and contribution of micro, small and medium sized enterprises,
in their own right. Many SMEs appear to believe that their concerns
and priorities are not fully understood or communicated by Sector
Skills Councils. The blueprint and frameworks therefore need to
be developed with the direct input of SMEs, eg through more representative
intermediaries such as Federation of Small Businesses, in order
to meet the needs of the majority of employers. They will also
need to be sufficiently flexible to accommodate successful in-house
training programmes of large employers whose structures may differ
radically from the current Apprenticeship model. Public sector
employers are particularly under-represented in providing placements,
hence their concerns need to be researched, understood and addressed
more effectively.
6.3 The apprenticeship "blueprint"
and frameworks should further be designed to offer employers significant
scope to accredit practical skills developed through the employer's
day to day core business activities, rather than conforming to
national qualifications which may allow little connection with
workplace priorities. Currently a proportion of employers find
that some of the central features of the apprenticeship framework
do not meet their needs. For example, National Vocational Qualifications
are found to be overly rigid and bureaucratic, lacking consistency
in assuring occupational competence, and focusing on assessment
rather than supporting learning and skill acquisition for the
kinds of learner attracted. The assessment facility preferred
by employers is increasingly on-demand and onscreen, offering
greater flexibility and presenting fewer obstacles than traditional
portfolio compilation. Technical Certificates would appear to
be more widely appreciated and the BTEC suite of short courses
makes a valuable contribution to this provision, drawing on Edexcel's
many years of experience in supporting vocational skill development.
6.4 Arrangements for compensating employers
need to be more direct and prompt, so that the cash flow vulnerabilities
experienced by many small firms, especially those in the supply
chain of large firms which often pay their small suppliers inordinately
late, are not exacerbated by taking on an apprentice. Moreover
78% of respondents to the FSB survey said they would employ an
apprentice if financial support was available from the Government,
presumably at a commercially attractive rate or possibly through
tax credits. This would appear to be a direct and effective policy
instrument.
6.5 The obstacles of apprenticeship administration
and management may be significantly reduced by "Group Training
Associations" taking on the role of employer, providing a
single point of accountability where an apprentice divides their
time between a number of organisations, as with recruitment agencies.
This would confirm clearly who "owns" and takes responsibility
for the apprentice and facilitates management, administration
and communication, removing a key obstacle to employer engagement.
6.6 There are markedly fewer placements
provided by central Government departments or local authorities
compared to private and voluntary- sector employers; this gap
is also amenable to policy intervention and offers the opportunity
for public sector leadership.
6.7 As far as potential apprentices are
concerned, a key barrier is seen as the required level of prior
NVQ or Technical Certificate certification, ie a Level 2 Apprentice
must have a Level 1 achievement recognised by qualifications.
This may not allow adequate scope for adult workers to gain credit
for competences they may have demonstrated in the workplace for
many years, and which could indeed be passed on to younger learners.
There is a case therefore for introducing more flexible and responsive
ways of accrediting prior achievement and capability.
6.8 If the reputation of apprenticeships
is to be enhanced, apprenticeship agreements as a contract of
service should include reference to the legally entitled minimum
apprentice wage, along with arrangements under which wage rates
will be monitored. (Indeed 82% of the 1200 firms responding to
The Federation of Small Businesses Apprenticeships Survey 2008
support an increase in the minimum apprentice wage to £110
per week). Moreover the apprentice should have information and
access to redress where employers fail to pay the minimum wage
if core learning about "employers' responsibilities"
is to be meaningful. Furthermore, communications to employers
about the relative attractiveness of "low wage" apprentice
labour should be reconsidered in order to raise the public esteem
in which apprenticeships are held.
6.9 There is a key problem of access to
placements by apprentices, especially in the economic downturn
and in certain sub-regions and sub-sectors of geographic disadvantage,
where choice of sector is limited. There may also be problems
of access to public transport on grounds of cost and provision,
if what is thought to be a "reasonable" travel area
proves unattractive to potential apprentices. Travel concessions
for apprentices would be useful here.
6.10 The are significant "integration
challenges" presented to young women, ethnic minority and
disabled apprentices, working in industries dominated by an "unrepresentative
demographic". The support of the TUC in helping diversify
the apprentice workforce is to be welcomed and such measures will
undoubtedly build the reputation of apprenticeships.
6.11 It is crucial that the provision of
apprenticeship places does not focus disproportionately on the
needs of the 16-19 age group which will shrink in size between
now and 2020. SEMTA report, for example, that the skill set of
workers employed in engineering-related trades aged 50+, who are
likely to retire over the next 10 years, is significantly missing
from those aged 40+, with an urgent need for investment in training
and mentoring before those valuable skills are lost. The boundaries
of this bill therefore need to be widened to take account of the
contribution of apprenticeships across the full span of people's
working lives and should avoid a disproportionate focus on the
16-19 age group.
6.12 Collaboration between schools, colleges
(both Sixth Form and GFE) and Work-Based Learning providers, as
a feature of local partnership working, would provide an effective
means of ensuring that effective information, advice and guidance
is provided in this respect. The involvement of employers in providing
information on apprenticeships, possibly in collaboration with
Business Link and as co-ordinated sub-regionally by skills partnerships,
would also ensure an appropriate perspective.
October 2008
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