Apprenticeships

APP 52

Written evidence submitted by the Apprenticeship Ambassadors Network

1. This submission is made on behalf of the Apprenticeship Ambassadors Network (AAN). The AAN is a group of business leaders committed to the development of the Apprenticeship programme. It was formed in 2006 under the chairmanship of Sir Roy Gardner (Chairman, Compass Group plc). The creation of AAN was one of the recommendations made by the Modern Apprenticeships Task Force in July 2005.

2. A bit of background on the Network, it is an independent, employer-led body that promotes the benefits of Apprenticeships to employers by making the business case for them (a list of the membership is shown at Annex 1).

Executive Summary:

Q1: The National Apprenticeship Service (NAS) fulfils a vital role in promoting apprenticeships to employers and others and helping with their take up. However, there is a need to do more to bring new employers on board and to assist SMEs.

There is some disconnect within the Department for Business, Innovation and Skills (BIS) on higher level apprenticeships and between BIS and the Department for Education (DfE) on apprenticeships for 16 to 18 year olds. It is more for Government to resolve these issues.

Apprenticeships should be the responsibility of a single Government Department.

Q2: The extra funding for apprenticeships is essential. Although employers bear the bulk of vocational training costs their training budgets are under pressure.

Priorities for expenditure might include important growth sectors and support for more disadvantaged groups such as NEETS to access the programme.

Q3: There is general satisfaction with quality which underpins the rationale for employers taking part in the initiative.

There should be more level 3 apprenticeships but not at the expense of fewer at level 2.

Q4: Bonuses should help more SMEs to take part, but any bonus system should be as simple and non bureaucratic as possible.

Q5: The purported 100% funding for 16 to 18 year olds doesn't always reflect the true cost to employers. There should be full funding for 19 to 24 year olds as many are not as job or training ready as their younger counterparts. Consideration might be given to a revised funding system which takes account of such factors.

3. We attach great importance to the brand of Apprenticeships and recognise that they have endured for over 500 years and over that time the economy and structure of work has altered dramatically.

4. We support the work of the National Apprenticeship Service (NAS) and our aim is to promote and champion Apprenticeships and in particular to get more employers engaged. We also provide feedback on policy and other issues affecting Apprenticeships to BIS and DfE.

5. We took the view that there should be a dedicated Apprenticeship Service with a clear focus on Apprenticeships and increasing employer engagement. Further we wanted its leadership to be undertaken by a senior figure from the world of business who would be an influential voice with employers.

6. The NAS was launched in April 2009. Its role and structure was complicated by the machinery of Government changes introduced in 2007 when Apprenticeships became a joint responsibility of two Government departments (Department for Children, Schools and Families and the Department for Business Enterprise and Regulatory Reform). This dichotomy of Government leadership has continued with the involvement of BIS and DfE. We remain of the view that the Apprenticeship programme should be the responsibility of a single Government department and our views correspond with the original vision set out in "World Class Apprenticeships".

7. "World Class Apprenticeships" envisaged the creation of a (new) National Apprenticeship Service (NAS) with end-to-end responsibility for the Apprenticeship programme, including ultimate accountability for the national delivery of targets.

8. In 2010, we commissioned a report [1] to look at the way the Apprenticeship system worked in a number of European countries and Australia. Dr Hilary Steedman from the Centre for Economic Performance at the London School of Economics and Political Science undertook the research and reported on England’s performance, compared with those other countries.

9. We were interested to see what lessons could be learned. There were some clear differences including the role of employers in the system and their "ownership" of the programmes. A higher proportion of large employers participated in Apprenticeships. Our funding rules were more complex and we were not as effective at getting the benefits of Apprenticeships into schools – an issue that has always been of concern to the Network.

10. English Apprenticeships were significantly shorter than their European counterparts but more highly paid. The striking difference was the size of their Apprenticeship programmes.

11. As a proportion of 1,000 employed persons the apprenticeship numbers were:

- Austria 33

- Germany 40

- Switzerland 44

12. The figure for England was 18 which has now risen to 20 (beating France and Ireland).

13. Dr Steedman has reviewed and updated the study (Annex 2). She has now provided research which shows that 40% of Apprenticeship starts in 2010/11 were adults aged 25 and over.

14. Interestingly, except for Germany where 8% of starts are 24 or over, there are practically no adult apprentice starts in continental European countries.

Q1: 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 DfE)

15. The general consensus of AAN members was that NAS has been successful in its prime role of raising the awareness of apprenticeships with both employers and young people, in promoting the benefits of apprenticeships to employers especially and in influencing the development of policy. Many point to positive experiences in their dealings with local and national NAS staff who are informative, professional and quick to resolve any problems. The benefits of a 'one stop shop' were mentioned. NAS's role in helping resolve any problems between employers and SSCs in relation to framework design and approval was also valued.

16. Those who used the on-line vacancy service found it effective. Reasons for not using it were more because of high volumes of speculative applications from young people direct.

17. However , some members had reservations about NAS’s performance. It was thought that it was becoming too strategic and a more 'hands on' approach was sometimes necessary, especially in helping SMEs to become involved. Some larger companies said that SMEs were turning to them for assistance instead.

18. It was also thought that NAS could be more pro-active in marketing and promotion. One of our members thought it might help performance if the system was performance driven with staff receiving financial incentives.

19. There was also some criticism of the overall training, education and 'back to work' architecture. Some thought that within BIS there should be greater clarity on the role of NAS and the S kills F unding A gency (SFA) on the funding and oversight of apprenticeships, though it was not clear how many were aware of the Departmental directive of August last year which gave a more independent role for NAS. Some employers have long complained about problems in the funding arrangements for higher apprenticeships where there is some uncertainty about the respective responsibilities of NAS and HEFCE.

20. There was a need for a more 'joined up' approach between Departments, especially BIS and DfE in relation to apprenticeships for 16 to 18 year olds. Although BIS had apprenticeship policy responsibility at Ministerial level for this age group and there was a joint BIS/DfE apprenticeship unit it was felt that DfE's relentless focus on schools and academic learning could be a problem. An example of this is careers advice and guidance where new arrangements might not ensure that young people get the independent and comprehensive advice on vocational options to which they should be entitled.

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

21. Perhaps unsurprisingly all respondents though that the extra funding was necessary. Apprenticeship acquired skills are making a vital contribution to the Government's plans for growth and although employers meet the lion's share of funding the state's contribution is essential.

22. Suggestions for priority expenditure include:

- important growth sectors, such as manufacturing

- targeting by region, taking account of unemployment and NEETs numbers

- pre-apprenticeship provision, especially for NEETs

- more help for SMEs

- 100% funding for 19 to 24 year olds (see question 5)

- help for employers who train numbers beyond their immediate requirements to support  firms in their supply chain and SMEs in the sector.

- more funding to help address the defects of the education system up to the age of 16, e.g. for key or functional skills.

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

23. There was general satisfaction with quality. Employers saw a sound business case for investing in apprenticeships where retention and completion rates were at an all time high. However, it was thought that more could be done to advertise and promote the success of apprenticeships in order to encourage more employers to come on board. The brand image had suffered recently by adverse publicity about "short duration" apprenticeships.

24. It was thought that there should be more level 3 apprenticeships but not at the expense of fewer at level 2. There was a need for more apprenticeships at all levels, up to and including level 4.

25. The importance of level 2 apprenticeships is not always recognised by Government and others. They are often the appropriate level for meeting many skills needs in sectors such retail and services and although progression to level 3 is encouraged where opportunities arise it can be difficult for young people to meet the supervisory requirements of some level 3 frameworks.

26. Some members outlined difficulties in securing funding for level 4 apprenticeships . There are also problems in finding suitable training providers.

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?

27. It was thought that bonuses would encourage more SMEs to take part, however, it would be useful to see what lessons can be learnt from the current £1,500 SME system introduced last October. Bonuses might also be considered for particular frameworks or regions.

28. Bonus systems, especially for SMEs should be a simple and non bureaucratic as possible. There could be staged payments - for recruitment, completion and continuing employment post completion.

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

29. Some thought that the current level of 'full funding' for 16 - 18 year olds fell somewhat short of 100%.There was agreement however that there should be full funding for 19 to 24 year olds as many in this category had left school several years ago with few or no qualifications and had a subsequent poor employment record. They required more help than younger apprentices with the learning process and in meeting for example key or functional skills requirements.

30. Consideration might be given to funding arrangements based more on prior achievement and learning needs than just age.

3 February 2012

Annex 1

Apprenticeship Ambassadors Network Members – February 2012

Sir Roy Gardner, Chairman, Compass Group plc (Chairman)

Sir John Cassels CB, (Special Adviser)

Simon Bartley, President, WorldSkills International

David Bell, Chief Corporate Development Officer, JC Bamford Excavators Limited

Phil Bentley, Managing Director, British Gas

Richard Brasher, Chief Executive, Tesco UK & ROI

Stuart Britton, Chief Executive, RDL Corporation

Mark Clare, Group Chief Executive, Barratt Developments plc

John Cridland CBE, Director-General, CBI

Martin Donnelly, Permanent Secretary, Department for Business, Innovation & Skills

Martin Dunford OBE, Chairman, Association of Employment and Learning Providers

Ian Ferguson CBE, Chairman of Trustees, MetaSwitch Networks & Data Connection Ltd

Professor Bob Fryer CBE, Chairman, Campaign for Learning

Christine Gaskell MBE, Member of the Board for Personnel, Bentley Motors Ltd

Roger Goodman, Group Corporate Development Director, MITIE Group plc

Richard Harpin, Chief Executive, Homeserve plc

Rod Kenyon OBE, Director, Apprenticeship Ambassadors Network

George Kessler CBE, Joint Deputy Chairman, Kesslers International Ltd

Ian Livingston, Chief Executive, BT Group plc

Nick Maher, Chief Executive, Industry and Parliament Trust

Anthony Massouras, Chief Executive, Mimosa Healthcare Group Ltd

Grahame Millwater, President, Willis Group

Eddie O’Connor, Chief Executive, Mainstream Renewable Power

Frances O’Grady, Deputy General Secretary, Trades Union Congress

David Owens, Chief Executive, EnServe Group Ltd

Greg Penn, HR Director, Nissan, UK Operations

Tony Pidgley, Chairman, Berkeley Group Holdings plc

Martyn Price, Chief Executive, Consign Construction Skills Solutions Ltd

Andrew Ramroop OBE, Managing Director, Maurice Sedwell Ltd

Dean Royles, Chief Executive, NHS Employers

Rear Admiral Al Rymer, Director of Training & Education, Ministry of Defence

Ian Sarson, Group Managing Director UK & Ireland, Compass Group plc

Terry Scuoler, Chief Executive Officer, EEF

Surinder Sharma, National Director Equality and Human Rights, Department of Health

Simon Swords, Managing Director, Atlas Computer Systems Ltd

Hayley Tatum, Executive People Director, Asda

Mike Turner CBE, Chairman, Babcock International Group plc

Nigel Whitehead, Group Managing Director, Programmes and Support, BAE Systems plc

Annex 2

Apprenticeship Participation by Age 2009/10: Australia, Austria, England, France, Germany, Switzerland

An update on ‘State of Apprenticeship’ September 2010

In Table O.1 (REV 2012) above, total numbers in apprenticeship in three of the seven countries have fallen slightly in the latest year for which figures are available compared to the previous year. In Austria and Germany this may in part the effect of continuing falls in numbers in the relevant (young) age groups. In Ireland, where construction took a large share of apprenticeship places, the economic downturn is largely responsible for a slight fall. Numbers in France are unchanged. Both Australia and England have increased the number of apprentices per employed persons between 2008/09 and 2009/10. In the latest year 2009/10, Australia, Germany and Switzerland have twice as many apprentices per 1000 in employment as England. France and Ireland have somewhat fewer than England while Austria has around 50 per cent more.

However, the age composition of apprentices is very different between, on the one hand Australia and England, characterised by short (average one year) apprenticeships with less off the job training compared to the other five countries where apprenticeships last an average of three years.

Forty per cent of apprenticeship starts in England 2010/11 were adults aged 25 and over. Only Australia has a higher proportion of starts aged 25 and over (46%). Except for Germany where 8% of starts are aged 24 and over, there are practically no adult apprentice starts in continental European countries.

In England, Germany and France, proportions of apprentice starts aged 19- 24 (Germany 19-23) are similar to the proportions of 16-18 year olds starting apprenticeship. In Austria almost all (92%) of apprentice starts are under 19, in Switzerland nearly 80 per cent are under 19. England has the lowest proportion (29 %) of apprentice starts aged under 19 (Figure 1 above).

Figure 2 below shows that apprentice starts aged 25 and over are a recent development in England. In 2008/09, for the first time since numbers of apprentices 25 and over were first published in 2005/06, starts aged 25 and above accounted for a quarter of all starts. This dropped to less than 20% in 2009/10 but doubled to 40% of all starts in 2010/11.

As might be expected from numbers in apprenticeship (Table O.1 Revised 2012) and the age of starting apprenticeship, both Austria and Switzerland have high proportions of 16-19 year olds (Austria 15-19) in apprenticeship; in Austria a third of this age group is in apprenticeship and in Switzerland nearly half. England and France have just below 10% of under 19 year olds in apprenticeship and Australia has just over 10%. Germany has one fifth of 19-24 year olds in apprenticeship, in Austria, England and France the figure is 5 % or, in Australia and Switzerland it is slightly more than 5% (Figure 3 above).

Figure 4 shows the probability for a young person aged 16-24 of being in apprenticeship at any one time. In Germany and Switzerland around one fifth of this group are in apprenticeship and in Austria the figure is just under 15%. Australia, England and France all have less than 10% of the group in apprenticeship.

It can be seen from these comparisons that the reported reluctance of English employers to offer apprenticeships to the under-25 age group and their enthusiasm for older apprentices is not observed in other European countries. The average age of starting apprenticeship has risen in, for example, Germany but the vast majority still start their apprenticeship before the age of 25. It must be recalled, however, that in continental European countries where most apprenticeships are of a three-year duration the cost of taking on and training a 16 year old can be partially offset by the contribution of a well-trained 19 year old. Furthermore, apprentices in these countries, unlike in England, do not have employed status – in Austria, Germany and Switzerland they have the dual status of learners and trainees. The difficult transition from full-time education to full-time work is less abrupt and managed over a longer time scale. If English employers are to be convinced to employ more 16-19 year olds apprenticeship structures may need to be modified to better accommodate the needs employers and of young sixteen to eighteen year olds.

Hilary Steedman

29 January 2012