Apprenticeships

APP 109

Written evidence submitted by CITB-ConstructionSkills

Introduction

1. CITB-ConstructionSkills is the Industry Training Board for the construction industry across Great Britain. We are also the licence holder for the Sector Skills Council for construction – a partnership between CITB-ConstructionSkills, the Construction Industry Council and CITB-ConstructionSkills Northern Ireland. Established as a Sector Skills Council in 2003, we use our skills intelligence and insights to ensure ‘right skills, right place, right time’ for the construction industry. We have levy raising powers and invest these employer funds in training grants and the delivery of skills and training solutions.

2. CITB-ConstructionSkills is well qualified to comment on apprenticeships:

· As an Issuing Authority we are setting apprenticeship standards, with a high-performing 83% framework achievement rate in England.

· As an Awarding Body, certifying over 12,000 Apprenticeship qualifications in 2011.

· At any one time we oversee 15,000 Apprenticeships, through our Managing Agency role, many for SMEs who we also help with time-consuming administration.

· Our National Construction College is Europe’s largest construction training provider, for over 30,000 people through courses including Apprenticeships in specialist occupations not offered in mainstream FE colleges.

· Our training grants have supported over 51,000 Apprenticeships in the last five years, by incentivising employers to recruit and helping to off-set the costs of taking on an apprentice.

· We also run high-profile recruitment campaigns aimed at employers and recruits to promote Apprenticeships, resulting in over 150,000 visits to our careers site B-Constructive in the last three months alone. We also run SkillBuild – the biggest UK wide skills competition for apprentices

3. Our labour market intelligence – the Construction Skills Network – predicts that, despite a fall in employment this year of 41,000 people, construction will need to recruit an annual average of 46,000 people to meet industry skills needs from 2012-16. Apprenticeships will be a vital component in the delivery of these skills for local and national growth.

4. CITB-ConstructionSkills response to the BIS Select Committee Inquiry into Apprenticeships reflects the views of CITB-ConstructionSkills members of staff , employers , trade federations and training providers , collated through our national network of Skills for Growth Forums.

5. We would welcome the opportunity to provide further information on the points we have raised in this response .

Q1. How successful has the National Apprenticeship Service (NAS) been since it was created in April 2009? Has it helped bridge the gap between the two funding Departments? (BIS and Department for Education)

6. NAS has faced a big challenge in managing the different policy drivers of BIS and DfE. According to a recent National Audit Office report, NAS has "returned good value for money" in delivering apprenticeships. However, working to two Government departments has undoubtedly created tensions. Within the DfE, following the Wolf Review, less priority is seemingly given to vocational education and training for 16-18 year olds, with policy focusing more on broad based education for young people. BIS on the other hand has been keen to promote an expansion of Apprenticeships with employers and in sectors where take-up has been low. The overall result of these different approaches is few additional places taken up by 16-18 year olds and a significant increase in Apprenticeships for those aged 25 plus (68% of the new increase in apprenticeships from 2006 to 2011), at a time when NEETS numbers have increased.

7. NAS has promoted Apprenticeship volumes, irrespective of age and length, but this could potentially damage the apprenticeship brand in the long-term. NAS has had success with the introduction of vacancy matching services, along with the promotion of Apprenticeships, leading to the number of apprenticeships doubling between 2006 and 2011 to nearly 443,000. However, to date, one in five of these Apprenticeships have been short-term six month courses. This compares with our own Apprenticeship frameworks, which are typically 18 months for Level 2 and 12 months for Level 3, following on from a Level 2 course (effectively 30 months). This has led our employers to question if we are seeing a watering down of quality, which will ultimately damage the apprenticeship brand. If the drive is volume, there is always a risk that currently NAS targeting contributes to this problem.

8. NAS involvement in the issuing of Apprenticeship frameworks is causing delays and confusion. It is the role of SSCs as Issuing Authorities to ensure compliance under the Qualification Certification Framework (QCF) and Specification of Apprenticeship Standards for England (SASE). However, in some cases, NAS will not release funding for Apprenticeship frameworks approved by an Issuing Authority, if they believe that a particular framework does not meet SASE requirements. This has caused delays and confusion with employers as Apprenticeship frameworks issued to the UKCES and Alliance web-portal by Issuing Authorities, remain un-funded by NAS. This process needs to be improved, to ensure employers are able to access the Apprenticeship courses their employees require and they expect will be delivered once announced by an Issuing Authority.

9. The NAS Single Certification process is unnecessary and burdensome. NAS have contracted out the process of Apprenticeship certification, as part of change to a Single Certification regime under the Apprenticeship, Skills, Children and Learning (ASCL) Act. As a result of certification being taken away from Issuing Authorities a new layer of time-consuming bureaucracy has been created – with unnecessary online processes and checking and different approaches across nations. To resolve this issue, powers of certification should be returned to Issuing Authorities.

10. Budgets for Apprenticeships should be transferrable across departments. At present, DfE Apprenticeship funding not spent in a given year cannot be transferred to other Apprenticeship programmes requiring additional funding. Improving departmental coordination and flexibility could ensure all Apprenticeship monies are spent as intended. Additionally, across the DfE, SFA and HEFCE there is the opportunity to better join apprenticeship policy and pricing on the range of Apprenticeships offered.

Q2. Is the extra funding promised by the Coalition Government necessary for apprenticeships? How can this funding best be spent?

11. We agree that Apprenticeships are a very effective vocational route that it is right for Government to invest in. There is a strong case during a recession for the Coalition Government to s upport the expansion of A pprenticeship s . Funding can help incentivise employers to take on young people and offer them structured training , enabling businesses to prepare for future growth and avoid potential skills shortages in the future. Funding, if properly targeted , can also help young people enter or re-enter the labour market . F or some it may be a better choice, avoiding the levels of debt that graduates face following the introduction and additional increases in university fees. If the incentives are right, it is possible to encour age SMEs in particular to consider taking on a pprentices . However, our experience is that SMEs often require additional support, which is one of the strengths of having a Managing Agency as an option or by introducing "shared apprenticeship" schemes .

12. Apprenticeships in response to 16 – 24 year old NEETs groups will give a bigger return of investment in the long-term. The Government need s to be clear a bout its policy objectives for A p p renticeships and may need to vary its approach during different phases of the economic cycle. In recent times the approach seems to have been to increase th e numbers with the result (see paragraph 6) that the biggest rises are for those aged 25 plus , in sectors where it could be argued employers are getting a subsidy for training that they would not have expected in the past. Our view is that wherever possible priority should be given to those aged 16-24 , even if this means fewer places at higher cost. This is because it is the younger age group that are most vulnerable and all the evidence shows that if the country fails to support 16-24 year old NEETs for long periods of time then they will end up costing the nation significant sums in the future.

13. Quality is more important than quantity and Government needs to invest in "real" apprenticeships. It seems strange during a time when DfE is reducing the value of a large number of vocational qualifications, questioning their rigour, that we have seen the introduction of a variety of short duration A pprenticeships in some sectors, which would not have been considered sufficiently robust in the recent past. Instead, the level and type of training qualification should be demand-led by employers, high-quality and flexible to the different costs of training needed to be provided. For example, in construction the cost of delivery for Specialist Apprenticeships in niche or newly evolving area , such as for steeplejacks, crane operators or steel framing , where demand is low nationally (so needing national residential facilities, or which needs costly equipment or consumables) requires higher funding rates than for other trades. Government could further help sustain the supply of Specialist Apprenticeship places in the next two years, as a special case, permitting Apprentices who complete Level 2 and wish to move on to Level 3 Special Apprenticeship Programmes (but are then aged 19 and over, attracting nearly £5,000 per capita less public support) to acce ss the full rate, if they agree to progress with no break in time .

14. Creative solutions in recessionary times will be vital in combatting employer reluctance to commit to taking on an apprentice. T he construction sector will not have achieved pre-recession levels of Apprenticeship recruitment (20,400 for 2007/08) by 2015 without additional commercial activity or funded interventions. The recently announced Apprenticeship bonus is welcome and will complement a wide range of activities we already have underway  to encourage new blo od into construction including A pprenticeship grants, Shared Apprenticeship Schemes for SMEs, Green Deal Apprenticeships, National Skills Academies for Construction , University Technical Colleges and our ‘Client-Based Approa ch’ guidance to encourage more A pprenticeshi ps through public procurement. The national roll-out of our Shared Apprenticeship Schemes alone could contribute to a 10-15% increase in construction Apprenticeship numbers over the next three years, working with employers (primarily focused on SMEs) and local authorities.

15. Government must look to discourage pre-Apprenticeship feeder qualifications in areas where demand for skills in current and future years is low. By monitoring FE supply statistics against labour market information an accurate picture of industry demand for apprenticeships can be developed. The Construction Skills Network provides forecasts of skills ‘demand’ across construction to 2016 (details can be found at www.cskills.org/csn). When this is matched against accurate ‘supply’ information (see paragraph 8) of current skills and training provision in specific areas of construction, a better understanding of "real" industry skills needs and associated Apprenticeship requirements – as part of the vocational training mix, to meet these needs – can be developed. A lack of data provision on the supply of Apprenticeships across England is further impacting on the planning of skills provision. NAS is in a unique position to offer insights into the supply and demand of apprenticeships but is not currently making this data available in a timely fashion. NAS could regularly share standard and current Apprenticeship data detailing achievement rates by age, geography and occupation, making it easier to detail the ‘supply’ of Apprenticeships into industry. When matched with labour market intelligence on skills ‘demand’, this would allow for the better management and use of public funds in meeting "real" employer skills needs.

Q3. Are apprenticeships of a high enough quality to benefit apprentices and their employers? Should there be more Level 3 apprenticeships?

16. Issues concerning the quality of Apprenticeships have been covered above.

17. Employers across construction are concerned about Government suggesting that all apprentices should aim to be Level 3. The Construction sector has a long and proud history of offering a significant number of Apprenticeships at Level 2 and indeed there are managers of companies in our sector that have successfully progressed from these Apprenticeships to management levels and above. Level 3 Apprenticeships numbers should only be increased to meet predicted skills demands for the sector – not broad policy drivers on Apprenticeships over all sectors. In construction the key issue is that there should be appropriate progression levels in place and funding regimes should not disincentivise progression from Level 2 to 3, as can be the case under current arrangements. We are also concerned that the new Apprenticeship Certificates in England – offering Bronze, Silver and Gold standards for Intermediate, Advanced and Higher level Apprenticeships – risks de-valuing an Apprenticeship in occupations only offering qualifications up to Level 2. For example, across plastering Apprenticeships third-place (or bronze) is now the best that can be achieved. This will make it harder to attract young people into these occupations which, in this example, will directly impact on the provision of skills in support of key initiatives such as the Green Deal.

18. Flexible contracts should be introduced to increase take-up of L3 Apprenticeships in construction. This would increase provision and boost the volume of higher-level Apprenticeships. SFA contract requirements make raising Level 3 qualification volumes harder and limit growth in training provision. At present, funding at higher 16-18 rates for Level 3 can only be secured by signing an apprentice up to three years from the start. If such a learner then completes Level 2 but is not capable of achieving Level 3, this has a negative impact on a provider’s performance statistics (the learner is classed as an early leaver). S o most construction a pprentices take a two-year programme; better candidates sign a fresh contract for Level 3. Successful Level 2 a pprentices transferring to a Level 3 programme are recorded as an extra start by the SFA, (counting the same person twice). The majority of these apprentices will be over 19 when they start Level 3, mean ing that they are only entitled to the reduced 50% rate for 19 – 24 year olds. Current funding reductions at 19+ impacts more severely on construction Level 3 starts than in other sectors. With a flexible delivery contract the Apprenticeship would be recorded once and exempt from these funding reductions .

19. Funding issues with Higher Apprenticeships in construction should be quickly resolved. Our work on the development of Higher Apprenticeships across the construction sector is currently being made more difficult by the impact of the QCF realignment in September 2010, which moved our Management and Construction Contracting competencies from Level 4 to Level 6. Due to this, the frameworks do not meet SASE requirements, which place Level 6 qualifications beyond the scope of the standard. This popular framework should be allowed to continue within England, as it currently is in Wales.

Q4. Apprenticeship bonuses – how should they function? Will they encourage the involvement of more small and medium sized businesses to take on apprentices? If not what will?

20. The £1,500 subsidy for SMEs taking on an apprentice is welcome. The bonus will complement a range of activities and initiatives that CITB-ConstructionSkills is carrying out to encourage SMEs to take on apprentices including our own apprenticeship grants, Shared Apprenticeship Schemes, Green Deal Apprenticeships, National Skills Academies for Construction and ‘Client Based Approach’ guidance designed to encourage more apprenticeships recruitment through public procurement. We are working closely with the National Apprenticeship Service to see how we can make the grant work best for construction.

21. Incentives for 16-24 year olds should be paid at a flat-rate across age groups, regardless of the existing 19+ funding arrangements. We are supportive of a flat-rate payment of any incentive, as this could partially alleviate inequalities faced by the construction sector under the current 50% training arrangement for those aged 19+. However, this should be harmonised upwards and not downwards.

22. It is important to understand broader ‘barriers’ to SMEs, other than funding, in taking on an Apprentice. These ‘barriers’ range from perceptions of Apprenticeships as being peripheral to a business needs to the fear of apprentices moving on form a business. There are also a range of additional concerns from the unseen costs and commitment of time in training an apprentice – such as putting in place Apprenticeship plans and inductions, reviewing progress and providing hands-on mentoring and support – to questions around health and safety and insurance. Our Apprenticeship products (see paragraph 21) are designed to mitigate against these additional barriers and our digital Positive Image campaign is working to dispel myths and encourage the take-up of Apprenticeships in construction by all groups in society. Government funding in support of Apprenticeships should consider all barriers to SMEs in taking on an apprentice.

Q5. Is the current funding arrangement for training of apprentices of 100% for 16-18 year olds and 50% for 19-24 year olds appropriate?

23. As previously stated (see paragraph 19) , f lexible contracts should be introduced to increase take-up of L3 Apprenticeships in construction. Without these contracts in place we will continue to see current funding reductions at 19+ impacting more severely on construction Level 3 starts than in other sectors. Additionally, at present training providers are reluctant to provide Level 3 construction courses due to the combination of reduced funding levels and higher drop-out rates. Flexible contracts will go a long way to bridge this gap and should be funded by Government. We estimate i ntroducing flexible delivery contracts would cost a maximum of £14m per annum in construction trades.

10 February 2012