Apprenticeships

APP 28

Written evidence submitted by Centrepoint

Summary

· Many apprenticeships schemes are not working for disadvantaged young people – low-income young people are less likely to access apprenticeships and are disproportionately pushed into non-traditional, poor quality placements which can offer little in the way of long-term reward.

· A new focus on post-apprenticeship progression is needed - focusing on acquisition of broader skills and knowledge would help young people’s employability after completing their apprenticeship.

· A new drive for quality must not come at the expense of accessibility – young people of below average attainment must be able to access apprenticeships. Accessibility can be aided additional pre-apprenticeship provision.

· The government should take a more active role in stimulating demand for apprenticeships – this should include ensuring that public money always comes with conditions on apprenticeship creation.

Introduction

1. Centrepoint is the leading national charity working with homeless young people aged 16 to 25. We are a registered social housing provider, a charity enterprise and a company limited by guarantee. Established 40 years ago, we provide accommodation and support to help homeless young people get their lives back on track.

 

2. The disadvantaged young people that Centrepoint works with can face huge challenges in successfully accessing education and training programmes. This is reflected by the fact that over half (55%) are not in education, employment or training (NEET) when they arrive at Centrepoint. [1] Around one in five young people (18%) at Centrepoint are enrolled in vocational qualifications, including apprenticeships by the time they move on from our services into independent living.

3. A careful analysis of the problems that these young people face can shed light on why the current system of apprenticeships often does not work for disadvantaged young people, and suggest ways to improve the prospects of these and other vulnerable young people who are furthest from the labour market.

The broader picture: an anti-apprenticeships economy?

4. It is important to briefly sketch some of the reasons why in recent history apprenticeships have not delivered for young people in the UK, both compared to our own past and to other neighbouring countries. It seems plausible that it is in part nature of the UK economy, including the flexibility of UK labour market that mitigates against successful take-up of apprenticeships by disincentivising employer investment.

5. This can come about through a variety of mechanisms - one fairly straightforward cause is the loss of industrial jobs in Britain over the last half century, leading to a corresponding lack of demand in those areas of the economy traditionally associated with apprenticeships. Other changes are more complex, but nevertheless important. While a skilled workforce is vitally important in some sectors of the economy, in many – including those which have seen growth in apprenticeship provision recently – other factors are seen as more reliable drivers of profitability, at least in the short term. These include outsourcing labour, offshoring production and preference to rely on ‘free’ basic education and training provision for up-skilling workers. [2]

6. While these broad factors affect all potential apprentices, they are particularly likely to disadvantage those young people who are furthest from the labour market. These young people are, for example, those workers who can be most easily displaced by unskilled, migrant or foreign labour. This suggests that in the medium to long term, a successful apprenticeship strategy will rely upon broader macroeconomic and labour market measures, such as government or industry bodies setting mandatory skills levels for a wider range of jobs. It may also require government to intervene to stimulate demand for apprenticeships, for example through rules on public procurement.

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

7. The National Apprenticeship Service has been proactive in engaging employers and training providers and managing the increase in investment for apprenticeships. Having a joint Minister for Further Education, Skills and Lifelong Learning between BIS and DfE has also been helpful in ensuring effective joint working between the two departments.

8. However, as outlined below, there are a number of pressing issues to consider. One important issue is the current lack of transparency about routes into and out of an apprenticeship, with the entry requirements for each and clear routes of progressions on to higher level vocational training or into work often unclear. The former Shadow Secretary of State Andy Burnham’s proposal for a UCAS-style system of admission for apprenticeships may be something that NAS, along with Ministers, would like to consider in improving the transparency of the apprenticeship offer for both employers and prospective apprentices.

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

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

9. As figure 1 shows, the increase in apprenticeships in the 2010/11 academic year has largely been as a result of an increase in 25+ apprenticeships. In the four years to 2010/11, starts by apprentices aged over 25 increased by almost 6000%. By contrast starts among under 19s and 19-24 year-olds has increased, but at a much slower rate.

10. The reasons for this are not entirely clear. However, evidence has come to light that this phenomenon is partly the result of an increase in in-work training programmes, with existing employees - who are likely to be older - re-categorised as apprenticeships. Existing lower-level training programmes such as Train to Gain also appear to have been re-branded as apprenticeships in some cases. Indeed, in the first full academic year for which the current government has been in power, eight out of every 10 additional apprenticeships created went to people aged over 25. [3]

11. One prominent case that has come to light recently is that of the supermarket chain Morrison’s. During National Apprenticeship Week last year, the Minister for FE and Skills, John Hayes, held the number of apprentices being taken up at Morrison’s as an example of the success of the Government’s policy – with 7,000 new apprenticeships created. [4] However, it has now been suggested that a large majority (85%) of apprentices at the chain are 25+ and part of the existing workforce, and almost all (99%) of the apprenticeships were at level 2. [5] This is a potentially worrying development, with the risk that some independent training providers use the system to offer employers bulk low-quality apprenticeships to subsidise training of existing, older staff.

12. The challenge of providing sufficient apprenticeship places for young people under 25 is particularly acute in light of the squeeze on the youth job market, as well as the raising of the participation age in 2013/15. The government needs to urgently investigate how apprenticeships for the 16-18 group in particular can be grown so that there are sufficient opportunities for young people at this stage. A recent Association of Colleges survey of members found that the number of 16-18s enrolled in level 1 and entry level learners on college courses, declined by, 6.6% and 6.4% respectively over the last year. [6] These figures, if they continue, will re-enforce the need for a sustained increase in 16-18 apprenticeships, or pre-apprenticeship courses, at a level accessible to these young people.

13. There is also a separate challenge about how well apprenticeships prepare young people for the labour market. We know that young people change their jobs much more frequently than older people, and in quite significant ways. As Alison Wolf has noted "The young person who follows first a level 2 course in a vocational area, then a level 3 one, and then goes on to a long-term career in that secto r is the exception not the rule " . [7] It is therefore important that apprenticeships for young people are general enough to give them a set of transferable skills, which they can use in other areas. Currently, many apprenticeships are too specialised to allow this to happen. We recommend that the government looks at reforming mi nimum standards to ensure that a more comprehensive general skills component is included in all apprenticeships.

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

14. The issue of quality is key to the success of apprenticeship policy moving forward, particularly if employer demand is to increase. A key question here is the following: how can quality standards be improved and maintained while still ensuring that apprenticeships are accessible to young people who may lack even basic knowledge and skills?

15. As raised above, with the example of Morrison’s, there is the potential problem of in-work training programmes that should probably not be classed as apprenticeships, but are in fact being categorised as such. While such in-work programmes are valuable, it is possible that such example can serve to tarnish the apprenticeship brand, with the potential of a negative impact on employer demand. It is also important to note that such practices might impact upon analysis of the return on investment offered by apprenticeships. [8]

16. Many of the young people that Centrepoint supports disproportionately go into non-traditional apprenticeship sectors, in areas such as retail, business and administration and health and social care. While the quality of some apprenticeships can be good, many young people report to us that the quality is poor, with little provided in the way of actual learning, and few opportunities for progression.

17. The current government’s introduction of a statutory minimum number of learning hours (280 hours, with a minimum of two hours per week not provided in work) is welcome for these reasons. Recent regulation on 16-18 apprenticeships, for example, mandating that they must last for at least 12 months will also be useful in providing some guarantee of quality. However, it is worth noting that the minimum standards in this country are low compared to European standards, where apprenticeships standardly include at least one day a week in college. [9]

Conclusion

18. To ensure that apprenticeship policy works for young people, Centrepoint urges the select committee to impress upon Minsters the need to ensure that apprenticeship provision is better targeted at young people who are out of work. In addition, while improving quality is rightly a central aspiration for the government, this should not come at the expense of accessibility. Particularly in light of the crisis of youth unemployment, and the raising of the participation age, apprenticeship provision must become a viable option for young people who are NEET, or at risk of becoming NEET and studying at a low level.

3 February 2012