House of COMMONS
MINUTES OF EVIDENCE
INNOVATION, UNIVERSITIES, SCIENCE & SKILLS COMMITTEE
and MR STEPHEN MARSTON
USE OF THE TRANSCRIPT
Taken before the Innovation, Universities, Science & Skills Committee
Mr Phil Willis, in the Chair
Mr Tim Boswell
Dr Brian Iddon
Mr Gordon Marsden
Mr Rob Wilson
Witnesses: Lord Young of Norwood Green, a Member of the House of Lords, Parliamentary Under Secretary of State for Skills and Apprenticeships, Department for Innovation, Universities and Skills, Rt Hon Jim Knight, MP, Minister of State for Schools and Learners, Department for Children, Schools and Families, and Mr Stephen Marston, Director General of Further Education and Skills, Department for Innovation, Universities and Skills, gave evidence.
Q123 Chairman: Could I welcome to this, the final evidence session of the IUSS Committee's examination of the draft Apprenticeships Bill 2008, and indeed congratulate him on his new appointment, Lord Young of Norwood Green? We welcome you to the Committee and congratulate you on what is an interesting appointment in the Lords. We also welcome Jim Knight, the Minister of State for Schools and Learners in the Department for Children, Schools and Families, and last but by no means least, an old friend of the Committee, Stephen Marston. It is very nice to see you back. Lord Young, why on earth do you need this Bill?
Lord Young of
Q124 Chairman: I know, but, with respect, Lord Young, all that could have been done quite easily, without a full bill. You could have tagged a couple of clauses onto any passing piece of legislation if you had wanted simply to put in that formal structure. Does it not now appear that every time you want any change to the apprenticeship structure you have to go back for primary legislation?
Lord Young of
Mr Marston: That is right. The things that we think may well need revising tend to be in the secondary legislation. What we are trying to set up here is a long-term stable framework for ensuring the growth and quality of the apprenticeships programme. That should not change. On the contrary, what we are trying to do for the very first time is give statutory force and backing to that framework in order to position apprenticeships as a permanent part of the education and training landscape.
Jim Knight: If you look at it in simple terms, which helps me if nothing else, you have got the specification of the standard. That is variable by clause 13 by order. You have then got the framework, and that is really quite a flexible thing. Obviously, there is some legislation there, but the framework is developed by the Sector Skills Councils and employers, and then you have got certification. The bit that would really burden this would be if we were specifying the standard in detail in primary legislation that we then could not vary by order.
Q125 Mr Boswell: Can I ask a question about Wales? I have a Welsh educational involvement myself to a limited extent, which tends to be the statutory question on this. We made some enquiries of the National Assembly and also the Welsh Affairs Committee here, and I think it would be fair to say on their evidence that they really want to know how the legislation is going to work. Frankly, we had a similar problem when the FE legislation went through and there were some queries about that. I am sure it can be made to work, but, given that there are these doubts, I suspect this may reflect a failure to consult adequately with the Welsh Assembly. Do you think you have got through that now? Are you on track with them and are you going to produce something which will be aligned with their interests and requirements? If I may just say, and it may save a point later on although I think the Chairman may want to say something about this, they have, for example, an ability to offer a portfolio rather than a specific set of qualifications. Is that kind of thing going to cause some unease, although I am more concerned now with the general issue?
Lord Young of
Q126 Mr Boswell: Why do you think they did not think they were, or do you think this was just a misunderstanding?
Lord Young of
Jim Knight: Obviously, there is discussion going on between us as to which aspects of the Bill they would want to be a part of. The current state of play is that they would want to be a part of the majority of it, but there are aspects of it, for example, clauses relating to IAG and to the entitlement, which they do not consider to be something they want to pursue in Wales, and that is fine, but some of the fundamentals about the apprenticeship programme, and, crucially, the way apprenticeships are designed and the way they can move across the border, across Offa's Dyke, we will be doing for England and Wales and I think that is quite important.
Q127 Chairman: There is an issue within the Bill that Wales is virtually never mentioned other than in the title and yet the provisions of the Bill will apply to Wales. There does not seem to be any recognition that Wales in many ways has been ahead of us in terms of developing the framework for apprenticeships. Why is that?
Jim Knight: To some extent it is a creature of a draft bill and the timing of parliamentary business. Obviously, you could take more time in coming up with a firm draft where you have ironed everything out with Wales and the Welsh Assembly Government, or you can publish the draft Bill and have this sort of scrutiny, while we carry on our discussions with the Welsh Assembly Government, and then once it comes into something that is then introduced into Parliament, obviously, we will at that point have to be clear with our friends in the Welsh Assembly Government which bits they want and which they do not.
Chairman: Okay, that is a very fair answer.
Q128 Mr Marsden: Lord Young, could I warmly welcome you to your new position, both as a member of this Committee but also as Chairman of the All Party Parliamentary Skills Group. Obviously, in that capacity I have looked quite closely at the list of responsibilities you have, which I gather include the Sector Skills Councils. Clause 26 of the proposed draft Bill would require the Secretary of State to specify sectors of skill, trade or occupation for the purposes of the legislation. I was just wondering whether you could give us some examples of how that might happen, but, perhaps as importantly, whether this cuts across in any way the process of re-licensing of Sector Skills Councils that is currently being undertaken by the UK Commission for Skills.
Lord Young of
Q129 Mr Marsden: My understanding is that clause 26 of the Bill requires the Secretary of State to specify sectors of skill, trade or occupation for the purposes of the legislation and I was just wondering if you could give us some examples as to how that might happen in relation to apprenticeships.
Mr Marston: Our expectation is that we will use the framework of the Sector Skills Councils. We have 25 Sector Skills Councils now. They are already developing the national occupational standards that drive the apprenticeships frameworks. Our assumption is that they will carry on with that primary role in defining the apprenticeships frameworks for each sector. The reason it does not state that goes back to the Chairman's comment that it is possible that there may be an apprenticeship framework you want outside of the Sector Skills Councils network and so we are expecting to use the Sector Skills Councils 25 structure but this allows us in exceptional cases to do it a different way if we need to. On the re-licensing, we have said that we will consider proposals for changing Sector Skills Council footprints, the definition of the sector that they cover, as part of re-licensing if people want to put forward proposals for different and better footprints. We are not assuming that that will necessarily happen. If it does then the new licensed Sector Skills Council with its newly defined footprint will take on the role of occupational standards frameworks for its new sector.
Q130 Mr Marsden: Just to be clear, you do not see the provisions of clause 26 having any implications for either expanding or contracting the existing number of Sector Skills Councils?
Mr Marston: No.
Chairman: One of the things as a Committee we were very enthusiastic about was this entitlement to an apprenticeship, Lord Young, particularly for young people, and perhaps you might want to start with this, Jim. I will ask Tim Boswell if he would like to follow up on how this is going to be done.
Q131 Mr Boswell: Can I just ask the legalistic question first, which is, is this right to be offered an apprenticeship something that is going to be enforceable in the courts? If a young person wants to be an apprentice and is refused that, for whatever reason (I am not seeking to canvass that but it might happen), will he or she have legal redress and can they sue and, if so, do they sue the LSC or its successor or the Minister but, I presume, not the employer? What happens?
Jim Knight: Although I am not a lawyer, the legal advice that I have been given is that the effect of this clause is that technically the duty applies to the Learning and Skills Council or the successor organisations and that, yes, there would be the ability of the individual to pursue through the court a failure of the Council to fulfil its duty as set out in clause 21. I think in practice, like, for example, the duty on a local authority to ensure there is proper provision for every child and every learner to go on until 18, which is another piece of legislation, having that as the last resort is the driver to making sure that the authority does the job. Nobody is expecting there to be a huge number of court cases as a result of this. It is just that you have to have something that is the last resort in order to change the behaviour.
Q132 Mr Boswell: I will accept that. Is there any differentiation in relation to the skill or competence of the apprentice? They will have to meet certain entry conditions for the framework. Supposing they cannot meet any of those, whether it is because of learning or other disability. Does the duty fall? What happens then?
Jim Knight: Yes, there are entry requirements in respect of the entitlement and it is quite important to understand that there is a difference there between entry to the entitlement and entry to apprenticeships. For example, you could go on to go into a Level 3 apprenticeship with three GCSEs A*-C equivalence even though the entitlement would say that that only kicks in when you have got five, so there is that difference. In respect of those with the SEN, Stephen might be able to help me out.
Mr Marston: I will try. It will depend whether the nature of the SEN means that they do or do not meet the entitlement conditions.
Q133 Mr Boswell: They have an entitlement, do they?
Mr Marston: Yes. If they have a particular form of SEN but still meet all the qualifications and other requirements the entitlement is triggered and then all of the wider legislative protections around disability will apply.
Q134 Mr Boswell: I just wanted to ask one other question about the distribution issues. We will do one which is double-headed to save time. Rurality or distance - it is not going to be much use if, say, one of our children is offered an apprenticeship in Northumberland if they are 350 miles away. Is there an understanding that it has to be within a reasonable distance?
Jim Knight: Yes, and we all know as law-makers that "reasonable" is often used in law. You will see in clause 21(2)(c) that it says within the person's reasonable travel area. How that would be interpreted I think depends upon the nature of the apprenticeship they are interested in pursuing and they will be specifying two sectors that they want to pursue apprenticeships in. For example, if they were living in rural Northamptonshire and they wanted to pursue an apprenticeship in marine engineering then it is different from plumbing or hairdressing, in which case you would expect it to be within reasonable travel distance of home.
Q135 Mr Boswell: My final question is the other one: what about programme-led apprenticeships? British Chambers of Commerce are very leery on this. Perhaps Lord Young would like to oblige us. Do you think there is a case for them continuing? Are they a second best or are you seeking to phase them out?
Lord Young of
Q136 Mr Boswell: So any provider of a programme-led apprenticeship would not be able to offer it as an apprenticeship?
Lord Young of
Q137 Chairman: Jim, in terms of this subsection (2)(c) that you just mentioned, which says "within the person's reasonable travel area", that is a massive cop-out, is it not? Will you define "reasonable travel area"?
Jim Knight: As I say, there is that difference between different sorts of apprenticeships. When you are setting this out you have to do so in a way that is sufficiently flexible to cope with not just well over 100 apprenticeship frameworks that we have at the moment but also that we would want the National Apprenticeship Service to be able to develop in new sectors and new areas. You will understand that in Harrogate there will be some that are like Dorset, where you would expect hairdressing and plumbing and electrical, the care sector; there are some that are pretty much universal economic activities that take place all over, and so my definition of a person's reasonable travel area is that they would be available locally to them.
Q138 Chairman: So if a student in Harrogate, seeing as you mentioned it and not I, -----
Jim Knight: I am trying to relate to you.
Q139 Chairman: For instance, to do an apprenticeship in fishing, which is perfectly reasonable because the east coast has a number of fishing ports, you would regard that travel of roughly an hour and a half to two hours as reasonable, each way, each day?
Jim Knight: Ultimately, technically it would be for the court to judge and people who are commissioning and making those decisions about reasonableness will have in mind what would stand the test in court, if it ever got there, but yes, you may make provision for them to be able to travel, perhaps not on a daily commute, perhaps on a weekly commute, in order to be able to access that apprenticeship.
Q140 Chairman: I was hoping you would say that because nowhere in the Bill does it say that there will be a duty on the Secretary of State through the various organisations to provide accommodation support for those living-away-from-home costs.
Lord Young of
Q141 Mr Wilson: As I understand it, the Government wants to put the employer right in the driving seat of the whole apprenticeship system. Indeed, we had evidence from the Chamber of Commerce weeks ago that they should be right at the heart of the system, so what does this still do when you take into account that businesses want freedom from all the red tape, the costs, the multiplicity of agencies they have to deal with? How does this Bill deliver those things that business actually wants?
Lord Young of
Q142 Mr Wilson: I want to know about the obstacles to business.
Lord Young of
Mr Marston: The consequence of that is that there are some components of this draft Bill that are designed very much to help employers, particularly by saying, as we touched on earlier, that an apprenticeship must always contain an employment relationship. The point about bureaucracy though not in the Bill itself, is in the way we put all these provisions into place, and there is absolutely a commitment to make sure that that is simple and streamlined and responds to those concerns from the BCC and others.
Q143 Mr Wilson: It is very expensive to train people these days and apprenticeships are a very big commitment for businesses. We have got evidence from Network Rail that it costs about £60,000 to train an apprentice over three years. The business is going to want a pretty good return on that sort of investment. Again, how does this Bill deliver a return on investment for all that cost commitment?
Lord Young of
Q144 Mr Wilson: Where is this analysis? Is it an internal departmental thing or is it something we have?
Mr Marston: I think some of it is in the impact analysis. There is other published evidence about the effect of training on business bottom line and survival rates.
Q145 Mr Wilson: The Chancellor told us at the weekend that we are about to enter a recession, if we are not already in one, that will be deep and prolonged, as he put it. What impact do you think that might have on a business-led apprenticeships system, as is proposed in this Bill?
Lord Young of
Jim Knight: Clearly, there are a lot of things that are difficult to predict as we look forward on the economy, but it is probably fair to predict that in terms of demand for apprenticeships that might increase as a result of an economic downturn because people who might otherwise think it was okay to continue on a fairly low-skilled basis would see the benefit of spending time uprating their skills.
Q146 Chairman: Why would employers, when they are shedding workers, want to take on more apprentices?
Jim Knight: That is what I am saying. On the supply side of apprenticeships you have more difficulty potentially in terms of employers wanting to take them on. That is why it is significant that the CBI, the TUC and the UK Commission for Employment and Skills wrote an open letter to employers this week, and I am not sure the Committee has seen that. It is a really strong letter setting out all the arguments why it is in businesses' best interests to invest in skills, to invest in apprenticeships. There is targeted work that we will also do with an expanded workforce in the National Apprenticeship Service. We have currently got a field force of some 230. That will expand to 400. Currently we are doing some targeted work with Construction Skills, for example, around sustaining construction-based apprenticeships because whilst we have got a reduction in the amount of housebuilding going on we have got public sector building going on and we need to maximise our leverage through procurement and other routes in order to sustain that in construction as well as win the arguments with employers.
Q147 Mr Wilson: But even in the answer from Lord Young and you, Jim, there does seem to be a tension at the very least in what you are saying. On the one hand you are saying, Lord Young, that you hope that apprenticeships will not drop, but they probably will, and, Jim, you are saying that they will probably increase.
Jim Knight: No, what I am saying is that demand from young people, from potential apprentices, may well increase, so that side of things may be made easier. I think it would be extremely complacent of us to believe that it is not going to make it slightly more difficult in respect of engaging employers. That is why we need to deepen what we are doing in the public sector because we have more leverage over the public sector. There is huge room for expansion of apprenticeships in the public sector, and it will also be targeted with our expanded resource that we are putting into this. It is human resources and marketing resources. This is the tip of a large iceberg in terms of the legislation, and we will bring all of that to bear on ensuring that employers are persuaded that it is good for their medium and long term future to invest in apprenticeships.
Lord Young of
Q148 Mr Wilson: Government-provided wage subsidies, at least to apprenticeships?
Lord Young of
Q149 Mr Wilson: To what level? Will you be paying at least minimum wage?
Lord Young of
Q150 Mr Wilson: How will the Bill make sure that apprenticeships deliver to existing employees, that they do not just accredit existing skills but take them on from where they are?
Lord Young of
Q151 Chairman: Lord Young, you have missed the point. The point is that we heard clear evidence both in this and indeed in our Leitch inquiry that the largest group of apprentices is those already in work, already being trained, and that this is really a re-badging exercise which is going on. The question that we want answered is how does the Government justify the dead-weight costs which are there to meet your targets but are not doing anything extra for the employee?
Jim Knight: Can I start and then others carry on? I know there is a statistic out there that over 70 per cent of those starting apprenticeships are currently in employment. When you look beneath the surface of that what you find, and it is spread fairly evenly between young people and older people starting apprenticeships, is that there are quite a number of employers who will take people on first and then decide whether or not they are suitable for an apprenticeship, and there is a certain amount of logic attached to that. Equally, amongst young people it might be that they are working part-time and then they decide that they want to pursue an occupation with that employer and so they apply for an apprenticeship. There are all sorts of reasons why starters might be in employment at the point at which they start. In terms of this being just a badging exercise, my response to that would be that we are deliberately putting this in the hands of employers. I do not know that there are very many employers that would be complicit in a badging exercise. They will want to pursue apprenticeships because they are adding skills and value to their employees and getting the consequent benefits of in improvement retention rates and improved productivity as a result. They are not going to faff about helping Government achieve their targets, if that was the implication.
Q152 Chairman: I think the implication is they get money for it. Perhaps you would let us know, Jim, how many apprentices come from this trial basis. Do you have some stats on that?
Lord Young of
Q153 Chairman: You do not know, do you, really?
Lord Young of
Q154 Chairman: That is all right.
Lord Young of
Q155 Chairman: I do not disagree with you. All we have asked you for is have you any stats to support that?
Mr Marston: Yes, we have got some stats.
Q156 Chairman: Rather than have a debate could we perhaps have those stats? That is all we want.
Jim Knight: I have many tables in front of me.
Mr Marston: Chairman, might I just add one other point which I think is relevant to this? One of the best pieces of evidence we have is the rates of return to apprenticeships, which are very good. In other words, if you go through an apprenticeship programme on average you will earn a higher wage than if you do not. Why would employers pay a higher wage to people if all that was happening was the badging of skills they already had? If you look at the effects of this, the outcomes in the business, employers think it worth paying more to somebody who has been through an apprenticeship programme. That is the strongest evidence we have that this is genuine skills development. Yes, it is at work, yes, it is in the workplace, but it is genuine skills development. People are gaining skills they did not have before and qualifications they did not have before, and that has a value for them.
Chairman: You will let us have the facts on that.
Q157 Mr Marsden: Jim, I wonder if I could take you back briefly to what you have just said about the public sector, public procurement and the economic downturn. You talked about using public procurement as a lever to try and encourage more private sector procurement. We notice today that the Government has made a further announcement about doubling the apprenticeship commitment in the public sector and that is very good and all the rest of it. The reality, certainly in the short term, is that in particular small businesses are going to be extremely reluctant initially to take on people in this area, so you are going to have to work much harder on that. Is it the case that you are anticipating in the short term that the potential slack in take-up in the private sector will be matched by take-up in the public sector?
Jim Knight: I do not anticipate that there is some kind of magic read-across. We are not going to focus on the public sector and just ignore the private sector.
Q158 Mr Marsden: Have you done any modelling yet on the likely consequences of the economic downturn in terms of what you expect the public sector as opposed to the private sector to produce over the next 12 months?
Jim Knight: The modelling that we have
done is at an extremely early stage, partly because it is an ever-moving
target, but when I, with Siôn Simon, had the ministerial oversight meeting that
we have regularly with the Learning and Skills Council, we effectively
commissioned an urgent meeting with them to discuss the model that they are
working in respect of how this will work for apprenticeships but also some of
their other activity. It is worth
saying, Chairman, that when we appeared before your sister committee, the
Q159 Mr Boswell: We have already touched on the Group Training Associations. Can you give us a bit of a feel as to how proactive you want to be about this? Would it make sense in the definitive Bill to put a duty on the Secretary of State to encourage the growth of group training where that is appropriate, and indeed in effect offer access to group training for everyone right down to the micro business - I am talking about the employers - and obviously then the apprenticeship follows from that.
Lord Young of
Q160 Mr Boswell: I would not disagree with you, having been a member of one. Nevertheless, it is a question of whether you will actually assume a duty to do that.
Lord Young of
Jim Knight: The only thing I would add to what Tony has said is that between the two departments we have also got to ensure that we have the resource to stimulate them. Clearly, we have a certain amount of resource for the NAS to spend on apprenticeships and they have to balance up the various things - the vacancy matching service, some of the other promotion that we do, the structural things that you do with GTAs and so on. That is the context against which we would have to look at things like duties and how widely we can create an expectancy that everyone will be able to get help in setting up a GTA.
Q161 Mr Boswell: What about having a subsidy for the employer, particularly if they are a small business? Are you thinking about that?
Lord Young of
Q162 Mr Marsden: One of the issues that the Federation of Small Businesses expressed reservations about on the Government's proposals when they gave evidence to us, although they were broadly supportive, was that you really have not in their view done enough to address the issue of informal bite-sized learning. We know from the evidence out there that the current apprenticeship structures are ones that a lot of small businesses find difficult to cope with and therefore will a more bite-sized, portable approach to training and development come within the framework agreement arrangements which are envisaged in the legislation?
Mr Marston: The way we are expecting that to work is that an apprenticeship programme is intended to be a way of acquiring a serious breadth of skill, knowledge, competence and understanding that you can use in the workplace.
Q163 Mr Marsden: With respect, Stephen, that is rhetoric, and that is always the case. What it comes down to in brass tacks is that small employers are telling us that the structures that have been produced are not appropriate for the sort of work patterns they have and that nothing has been done to address that.
Mr Marston: The apprenticeship programme is an important part, but only one part, of the support that we are trying to offer to SMEs with training. We had a previous discussion in the Committee about Train to Gain and one effect of last week's announcement on the packages for SMEs is that we will in future be supporting in private sector SMEs more bite-sized, unitised training. But an apprenticeship should be a serious, heavyweight training programme that enables a young person or an adult to make a step change in their ability to contribute in employment. It is really not about short, bite-sized chunks. If that is what you want to do that is absolutely fine for business and we will support it through Train to Gain but it is not what an apprenticeship programme should be about. That should be a serious qualification to equip you with a breadth of skill you do not otherwise have.
Q164 Mr Marsden: With the Chairman's indulgence, and it will be a quick retort but it is also a quick question, with respect, if we adopted that principle in respect of higher education half the university courses in the country would be blasted off the curriculum. The idea that because you do something on a sequential, modular, credit-based basis, if you want to look at it that way, it is not consistent with some form of strong apprenticeship or strong learning programme, is one that I think most people would regard as really rather silly.
Lord Young of
Mr Marston: What we have said, and it is here in the Bill, is that one component of all apprenticeship frameworks must be a defined principal qualification or qualifications. By all means, as part of the wider qualification reform programme qualifications will be unitised, and people will be able to do chunks of training, but the point of this is that we are trying to work towards a worthwhile, valuable qualification.
Q165 Chairman: I think it is absolutely fair, Lord Young, and I hope you do not get the impression that we want anything other than a high quality apprenticeship programme. I think we are at one on that.
Lord Young of
Q166 Chairman: But would you accept that the specification of apprenticeship standards provided in clauses 11-15 in the draft Bill are absolutely essential to having a high quality apprenticeship scheme?
Lord Young of
Q167 Chairman: The answer to that is yes, I hope.
Jim Knight: It is slightly bizarre.
Lord Young of
Q168 Chairman: The question is why therefore have you not published a draft specification in the Bill because the draft specification would give us an idea as to what your thinking is and it is absent?
Lord Young of
Q169 Chairman: So why not a specification? We understand what the blueprint is because that is in existence at the moment but you are saying it is going to be different from the blueprint, so why have you not got a draft specification?
Lord Young of
Mr Marston: Chairman, you are right, we have not yet published the proposed form of the new blueprint, I am afraid. We will do that as rapidly as possible. We have put out in World-class Apprenticeships an outline of what that blueprint will cover and the way in which it will move on from the blueprint that already exists on a non-statutory basis.
Q170 Chairman: I think again we are at cross-purposes here. The point of having this scrutiny of the draft Bill is to see what the Government's intentions are and unless you produce a draft specification we do not know what your intentions are.
Lord Young of
Q171 Chairman: Thank you very much indeed.
Jim Knight: Chairman, obviously, the explanatory notes set out a little bit of the thinking and reference to the World-class Apprenticeships paper. Across all of that it is possible to see what we are talking about but you will get it at Second Reading.
Chairman: Thank you very much indeed.
Q172 Mr Boswell: May I turn to what could sound like an old chestnut, which is the relationship between apprenticeships and the wider qualifications framework? I am particularly interested in the core elements of apprenticeships as they are developed, and will the attainment of an apprenticeship be interchangeable with GCSEs and A-levels for the other area we have not talked about yet, which is entry to higher education or development?
Jim Knight: We set out in the qualification strategy of the two departments a few months ago how we wanted to move from this plethora - obviously, particularly as far as I am concerned, up to 19 - of qualifications that we were funding and distil it down in principle to a foundation learning tier that then underpins a three-pronged set of choices - traditional GCSE, A-level, the traditional vocational apprenticeship and then the bridging qualification in the form of diplomas. Obviously, there then needs to be an equivalence read-across and we have the development of the qualification and credit framework in order to offer that, particularly post-19, but the equivalence is there in respect of the NVQ levels and I know that there has been some discussion, for example, about being able to move from a Level 2 diploma into a Level 3 apprenticeship, for example. There is no reason why you cannot do that. There may be some issues in respect of having the practical skills in detail that you would get at Level 2 in an apprenticeship that would then allow you to do a Level 3 apprenticeship. The diploma, being a sector-specific qualification rather than an occupation-specific qualification, may not give you some of those practical skills, so you might need to do some work in order to catch those up before you can then go on to do a Level 3. In principle what we are after is a level 2 is a level 2, be it a GCSE, an apprenticeship or a diploma, and a level 3 is a level 3 and so on.
Q173 Mr Boswell: A couple of follow‑ups. One is Rathbone have given us evidence and suggested that about 70 per cent of its apprentices have additional educational needs, that is of course not SEN but some forms of remedial support rather along the lines you mentioned. Will the Bill be able to cope with the educational needs of apprentices, specifically on moving from level 2 to level 3, for example?
Jim Knight: The overall delivery will and to some extent we get back to the extent to which we have already set out what would be in the standard or not. The standard will be specific on transferable skills, particularly functional skills. You will need to be able to develop the necessary competence at the necessary level in respect of functionality. We are building personal learning and thinking skills and functional skills into the diplomas quite deliberately but, similarly, the apprenticeship's standard, which the frameworks would have to deliver on, would include those transferable skills.
Q174 Mr Boswell: Will you be intending to have what you might call a marketing campaign among HEIs, for example, to make sure that once this is set out they are likely to take notice of what is on offer?
Jim Knight: Yes. Obviously this Committee is more expert than I on the independence of universities and how important it is to win their hearts and minds rather than tell them what to do and we will be working very hard to do that.
Mr Marston: One other component of the blueprint will be that it requires frameworks to set out progression routes so you can see how you can move from an apprenticeship to an advanced apprenticeship and on into higher education.
Mr Boswell: That is helpful.
Q175 Mr Marsden: Lord Young, your colleague, Jim Knight, has just mentioned about hearts and minds and the HE sector. I will resist the temptation to ask you to comment on, I think it was, Lyndon Johnson who said that when you have them by the balls their hearts and minds will follow, but we will not go down that route. What I would like to ask you, if I may, is there is clearly a big issue as to the extent to which apprenticeships and vocational qualifications in general will be accepted by higher education institutions. The Edge Foundation have suggested that a provision on the face of this Bill which might entitle all apprenticeships to access to a higher education course in parallel to their apprenticeships would be useful in that process. Do you think that sort of provision would prove that apprenticeships are a genuine alternative to A levels, diplomas and other full‑time courses in terms of accessing HE?
Lord Young of
Q176 Mr Marsden: Do you agree also, in view of what we know about demography and the changes, that increasingly HE applicants themselves will be in an older age range and, therefore, this issue is an issue for adult apprenticeships as well as apprenticeships for young people?
Lord Young of
Mr Marston: To try to encourage that progression we are working with two of the current Sector Skills Councils, SEMTA and e-Skills, on looking precisely at the UCAS tariff equivalent of what goes into their apprenticeships and then we can take that as model to show how you can build progression routes from apprenticeships into HE.
Q177 Chairman: Gordon Marsden's question, I think, is really quite pertinent to whether in fact you are going to put on the face of the final Bill a requirement of higher education which is due to take this into account rather than just a pious hope that they will. The answer is no?
Lord Young of
Q178 Chairman: Why not, if it is that important?
Mr Marston: New primary legislation relating to admissions to universities would ‑‑‑
Chairman: Is it a requirement to consider? It would have to be in their admissions criteria.
Q179 Mr Marsden: It is a tweak on the balls rather than grabbing them.
Jim Knight: Surely if we can get UCAS, HEFCE and others without touching their more sensitive genitalia or parts of their anatomy to want to do it, then that is more persuasive in the end.
Lord Young of
Chairman: Could I say on a personal note, I find that an incredibly disappointing cop-out, that you are not prepared really to stand up to higher education and make sure that apprenticeship routes and vocational routes into higher education have got the same validity as you would have with GCSE and A level, but I will move on to Rob Wilson.
Q180 Mr Wilson: I will try and steer clear of balls for the next couple of questions. The British Chambers of Commerce have raised a pretty legitimate concern with this Committee and I hope that you can reassure us about it. David Frost said: "Simply to go for volume at the expense of quality will just consign this programme to the dustbin". It does raise a very pertinent point in that how do you ensure that quality does not suffer as you rapidly expand this apprenticeship programme.
Lord Young of
Jim Knight: Could I add, and then Stephen will mop up what is left, that beyond that importantly the frameworks sit with employers through the Sector Skills Council and sometimes employers by themselves, it is in their interests to ensure the quality. It is also something that we inspect. Ofsted inspects the provision and they do so on a proportionate basis, but we have that inspection of quality and then we have the performance management of the post-16 providers through the Framework for Excellence. In turn, by including apprenticeships' success rates as one of the measures within the Framework for Excellence for that element of apprenticeship which is delivered by training providers, we have got quite an important lever in ensuring quality.
Mr Marston: I want to add that I think the Committee and, indeed, David could take some comfort from what has happened over the past few years. In 2001-02 apprenticeship framework completion rates were standing at 24 per cent, they are now at 63 per cent. Over that period we have significantly expanded volume and dramatically raised quality. We will aim to keep that same combination of increased volume and higher quality as we continue to expand the programme.
Q181 Mr Wilson: As you have mentioned it, Jim, let us talk about Ofsted because in Network Rail's submission to us it said: "The LSC and Ofsted are bureaucratic and their auditing of our standards excessive". There is a tension, is there not, in these discussions? How are you going to balance the demand for quality with businesses' desire for less regulation?
Jim Knight: That is an ongoing tension, is it not? Network Rail have got two regulators because they are one of the four employers that are now accredited as an awarding body, so they have also got Ofqual as a regulator of them as an awarding body as well as Ofsted regulating their provision. That is something Ofsted are currently looking at at the moment in terms of whether or not we need to move more as a proportionate risk-based response to inspection so, where a provider, be it Network Rail or anybody else, demonstrates consistently that they are delivering quality, then perhaps there is a need to inspect them less frequently and that is something which Ofsted is working on at the moment.
Q182 Chairman: Could I lead you on to another area where hopefully you will put something on the face of the Bill and this is to do with diversity. There is a 40 per cent pay differential between male and female apprentices according to the 2005 apprenticeship pay survey. Seventy per cent of advanced apprenticeships are male and, indeed, black and minority ethnic groups are grossly under‑represented at all levels of apprenticeships. That is your information coming from the Government, Lord Young. Where on the face of the Bill is there any encouragement that there is going to be a direct approach to addressing these diversity issues?
Lord Young of
Q183 Chairman: There will be no requirements at all, there will be no requirements on the Inspection Service to inspect against diversity issues? Jim, will there or will there not?
Jim Knight: As Lord Young said, there will be measures in the Single Equalities
Bill, that is the more appropriate legislative vehicle for this particular
area. You can look forward to us being
able to listen carefully to what your Committee has said and reflect on it and
then see how we can reflect that in the Single Equalities Bill rather than
through this piece of legislation. I
would reinforce what Lord Young said in respect of careers education, that is
something we are improving in guidance to schools. One of the other strengths of having a
National Apprenticeship Service and having the rigour and the substance of the
NAS will be trying to chase after some of the geographical imbalances in
apprenticeship take-up. Simply by
addressing the issue of low take-up in the
Chairman: I think we would both agree this is an important issue.
Q184 Mr Boswell: Another important issue is the employment rights of apprentices. The Flett v Matheson case established the principle that where an employer does not wish to continue to provide an apprenticeship, there should be an obligation on that employer to try to find an alternative placement. I have to say, this is exactly what has happened to a constituent who has been in correspondence with me about this, for example. Why does the draft Bill not enshrine that principle in statute form?
Lord Young of
Q185 Mr Boswell: Following on from that, I think we would all agree, not only on the objective of increasing the apprentices but as far as possible trying to keep the law out of these circumstances unless it is essential. My understanding is you have suggested as Government that if there is dissatisfaction with the training an apprentice is receiving, this should be referred to an employment tribunal. I do realise that employment tribunals have a preliminary mediation function, you cannot just take it to the final resolution without an intermediate stage, but is there a case for getting the National Apprenticeship Service instead, for example, to take on that and attempt to sort this out?
Lord Young of
Q186 Mr Boswell: My next question was going to be what about having an Ombudsman, for example?
Jim Knight: We want the NAS to be quite a focused organisation, quite a focused service within the SFA. There are all sorts of reasons why it has been designed the way it has, but we want to put that expertise in employer engagement into one place. To have a tribunal service which sits within that is slightly awkward in terms of its focus. There is some quite complicated legal advice and discussion that I have been trying to keep up with in terms of the common law status of an apprenticeship contract. I am completely persuaded that moving the definition of the contracts we are talking about as service contracts, as the draft Bill does, so you have got the flexibility of employment contracts, you have then got the use of things like the employment tribunals, seems a very sensible way of keeping the NAS focused and keeping the contracts we are talking about relatively flexible.
Q187 Mr Boswell: Can we go back to the point - Lord Young almost floated it for me - about some redress procedure. There is some degree of inequality in the relationship between an apprentice and their employer, possibly on the scale, legal firepower, access to legal advice and all the rest of it, have you considered setting up some kind of apprenticeship Ombudsman or at least some vehicle through which individual apprentices can raise their concerns and grievances and obtain advice?
Jim Knight: I think we would always reflect on what people like yourselves would tell us about the need for such a service, then whether or not you would fashion such a service or whether you would look across the landscape at what is already there and whether or not there is something else that you could use would then follow.
Q188 Mr Boswell: I take it there is a sort of acknowledgment of the issue without necessarily having resolved the final outcome.
Lord Young of
Q189 Dr Iddon: I apologise for missing the bulk of the Committee, I am afraid I was on a three line whip in another Committee.
Jim Knight: I am sure it was a fascinating statutory instrument!
Q190 Dr Iddon: Yes, it was! Out of the Learning and Skills Council, which has taken a long time to settle down but I feel it has settled down now, we have another bureaucratic upheaval and out of that will come the National Apprenticeship Scheme. Why are we going through another major bureaucratic upheaval to reorganise the structures?
Jim Knight: I think the root of this lies with the decision that was made prior to the Machinery of Government change to raise the participation age to 18. In essence, and to cut a very long set of discussions short, once you have made that decision, then you are saying to local authorities, "You've got duties and responsibilities to ensure that every young person right up until the age of 18 has got a proper range of provision to meet their needs and their personal circumstances". Once you have given local authorities those duties, then it makes sense to transfer the commissioning of those post-16 education services to local authorities. Hence, you are taking away the majority of the funding then from the Learning and Skills Council and you are left with something else. That is then an opportunity to look at whether having made that decision you are going to have that break at 18 rather than at 16, which would then be reflected in the machinery of government change to say, "Are there things about what is left of the LSC's function, having taken away post-16 learning, that you would configure slightly differently?" and the answer was "Yes", hence the formation of the SFA and then within that the NAS.
Q191 Dr Iddon: Jim, the Committee has the current 2008 March costs of running the LSC and the manpower numbers here. Have you calculated the cost of running the NAS and the manpower required for that, and will it be more or less than the present structure?
Jim Knight: Stephen may have some of the detail, but clearly when we bring this into legislative effect, we will have to produce an impact assessment which will set that out in some detail in respect of the SFA, the YPLA and then how that works in respect of the NAS. Stephen, do you want to come in here?
Mr Marston: In World-class Apprenticeships we were very clear that the NAS would be a bigger, better service than we have now. It will need more staff. Very broadly, we are talking about a growth from about 250 now to about 400 in future for the National Apprenticeship Service. Yes, that part, the service that runs the apprenticeships programme, will be bigger than the resource we have now, but it will be sitting within the Skills Funding Agency. As Jim said, we are working through how the known budget and headcount for the LSC is best distributed between the Skills Funding Agency, including NAS, Young People's Learning Authority and the 150 local authorities, that is still discussion going on.
Q192 Dr Iddon: Will the NAS have a regional structure, in other words, will it be dealing with employers at a local level? Will it also be responsible for the quality of apprenticeships?
Jim Knight: It will certainly need to be able to relate to employers at the appropriate level. It will need to be able to relate to employers nationally because there are some, Rolls Royce, BT, those sorts of national employers, where it is most appropriate to have that relationship at that level, but equally at a regional and local level, working with local education-business partnerships, but working in its own right and working with skills brokers trying, as far as possible, for employers to have a single conversation is the aspiration. The skills broker brokers the needs of the employer and promotes certain things to them and then can bring in expertise from the NAS and bring in Train to Gain, the various things that we would be offering employers.
Lord Young of
Q193 Dr Iddon: Measuring the quality will be whose responsibility?
Jim Knight: With Rob's questions we discussed how you have got the role of Ofsted's inspection, but obviously NAS have the responsibilities in respect of both the standard and the certification and then the Sector Skills Council for the framework.
Mr Marston: The NAS themselves will not be inspecting or reviewing quality, what we will have through a development called Framework for Excellence is published information about quality standards, success rates for all providers and Ofsted reviewing the quality of the training programmes.
Q194 Dr Iddon: Are you expecting the NAS to collect a whole spectrum of statistics which will justify the new system being better than the present system in terms of various things like training quality, improving take-up, progression of apprentices through the different schemes and things like that?
Jim Knight: Undoubtedly there will be a reasonable amount of data collection within the context of our commitments in the Local Government White Paper and so on. My guess is that in the end what people will look at is the trajectory which was set out, culminating in the 2020 vision of one in five young people in an apprenticeship.
Lord Young of
Q195 Chairman: Can I say first of all to both you, Lord Young, and to Jim Knight, MP, there are a number of questions we have not been able to ask, will you be happy for us to write to you with those so we can get some brief response?
Jim Knight: Of course.
Chairman: On that note, can I thank you very much indeed, Lord Young, Jim Knight and Stephen Marston for your presence before the Committee. We have enjoyed looking at this draft Apprenticeship Bill. I think it is a good process. We thank you very much indeed for your time.
 HM Treasury, Leitch review of skills: Prosperity for all in the global economy - world class skills Final report, 2006
 Further education
 Information, advice and guidance
 Learning and Skills Council
 Special Educational Needs
 British Chambers of Commerce
 Small and medium-sized businesses
 Confederation of British Industry
 Trades Union Congress
 National vocational qualifications
 Higher education institutions
 Higher education
 University and Colleges Admissions Service
 Sector Skills Council for Science, Engineering And Manufacturing Technologies
 Higher Education Funding Council for
 Black and minority ethnic
 Skills Funding Agency
 Young People's Learning Agency
 Note from the witness: "24 per cent rather than 23 per cent"