Business, Innovation and Skills Committee - Minutes of EvidenceHC 83-II

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Oral Evidence

Taken before the Business, Innovation and Skills Committee

on Tuesday 13 March 2012

Members present:

Mr Adrian Bailey (Chair)

Mr Brian Binley

Julie Elliott

Rebecca Harris

Margot James

Simon Kirby

Mr David Ward


Examination of Witnesses

Witnesses: Professor Nick Petford, Vice Chancellor, University of Northampton, Len Closs, Principal, Northampton College, Mike Griffiths, Headmaster, Northampton School for Boys, Dr Ann Limb OBE DL, Chair, South East Midlands Local Enterprise Partnership, Councillor David Mackintosh, Leader of Northampton Borough Council, and Councillor Jim Harker, Leader of Northamptonshire County Council, gave evidence.

Q244 Chair: Good afternoon and thank you for agreeing to come before us today. It is, as far as I know, the first ever BIS Select Committee meeting in Northampton, and I should like to take the opportunity to thank everybody who has made it successful so far; I’m sure that will continue this afternoon. I just have a couple of announcements to start with. First of all, for those who may not be familiar with the system here, you will need to press your button to speak into the microphone; it won’t pick up your voice automatically.

The second thing is that we have a lot of questions and not much time to get them all answered, so if you could make your replies as short as possible, I am sure they will be just as informative. I do not need every member of the panel to answer every question. Don’t feel under any obligation to do so. Obviously, if somebody says something you feel you can either add substantially to or need to subtract from, then fair enough, please do chip in, but don’t feel the need for everyone to speak.

Before we start the questioning, could I ask you to introduce yourselves, starting with Nick Petford on my left here, just to check the voice transcription levels?

Professor Petford: Hello, my name is Professor Nick Petford, Vice Chancellor, University of Northampton.

Len Closs: Good afternoon, I’m Len Closs. I’m the Principal of Northampton College.

Mike Griffiths: I’m Mike Griffiths. Headmaster of Northampton School for Boys.

Dr Limb: Good afternoon, I’m Ann Limb. I am Chair of the South East Midlands Local Enterprise Partnership.

Cllr Mackintosh: Councillor David Mackintosh, I am the Leader of Northampton Borough Council.

Cllr Harker: Good afternoon. I am Councillor Jim Harker, Leader of Northamptonshire County Council.

Q245 Chair: Thank you very much. I will start with a definitional issue: from a training provider’s perspective, what is an apprenticeship? Who would like to lead on that? What do you think are the main elements that constitute an apprenticeship?

Len Closs: Chair, I will take that, as a college that is also a training provider. From our point of view as a training provider, an apprenticeship is a package of learning and skills development, combined with elements of functional skills in mathematics, English and information technology and a number of soft skills as well, in line with the Specification of Apprenticeship Standards. That package is delivered within a framework, all of whose elements are necessary for the apprenticeship to be awarded at the end of an assessment period. The apprenticeship contains mandatory onthejob and offthejob elements.

Q246 Chair: Thank you. Does anybody wish to add to or subtract from that? I will go on to my next question. There has been some criticism that some of the courses that are labelled as apprenticeships are not, in fact, that. How important do you think it is that there is both an understood definition of it and that the brand of apprenticeship is kept strong?

Professor Petford: I’ll respond to that, if I may. I think it is very important that we, as a society, have a shared and very wellrehearsed understanding of what we mean by apprenticeship. From our perspective at the university, I am not sure we have such clarity at the moment. I think that is causing issues, because we pick up-on the grapevine, anecdotally-that there are some workbased courses calling themselves apprenticeships when perhaps they don’t deserve to have that particular title.

My understanding of apprenticeships is based on my thoughts when I left school at 16, when an apprenticeship was four years’ hard graft with one day a week at a local FE college paid for by the employer. I do not think apprenticeships are like that today; I wish they were. Perhaps my colleagues from FE would like to say more on that.

Q247 Chair: Would anybody like to add to that?

Len Closs: Yes, Chair. Certainly, I would support the view that clarity about what an apprenticeship is-and, as it were, the currency of the term-is very important, because from the points of view of further education, and training and skills, I do believe that these frameworks still are the major route into employment for significant numbers of both young people and retraining adults in particular skills areas.

I do, however, agree that there is enormous variability in the apprenticeship frameworks that exist at the moment. There have been some key issues, I think, that have challenged that validity, particularly in respect of the length of qualification, which Nick has alluded to. I think we have moved on from the old days of four-year apprenticeships. I think there are many excellent apprenticeship frameworks in existence already and, indeed, some of them provide full licence to practise, so they are current and valid qualifications in many respects. However, attention always needs to be given to quality, and I fully concede that the apprenticeship route may not be the best route into employment in some areas of the economy.

Q248 Mr Ward: It has been suggested that part of the very large explosion in the number of apprenticeships can be attributed simply to a rebadging of Train to Gain. I notice you have had involvement in Train to Gain. Is that a fair criticism?

Len Closs: That would be an unfair criticism of my college in terms of how we treat apprenticeships as a training provider, but I think it is fair to say that, anecdotally, within the system-and amongst college colleagues and other training providers, too-there has been a fear that the drive to meet certain numerical targets as regards the rolling out of apprenticeships has meant sometimes that the term "apprenticeship" has been ascribed to training programmes that might be better described as employerbased training. I have no particular proof of that. I can only repeat the concerns that, I guess, are fairly alive among training providers in the sector: that sometimes-perhaps to get numbers through, rather than because of the quality of the frameworks themselves-there has been a drive just to sign people up to these things. There is a need to look more closely at what those people’s skills and training needs are and, indeed, what the economy needs in paying for that training.

Q249 Chair: What steps are you taking to ensure that apprenticeships are seen as high quality? I appreciate this question is not relevant to everybody on the panel. Len, have you got a comment?

Len Closs: Well, we take quality very seriously at the college. Colleges, generally, have fairly rigorous quality assurance processes to try to ensure that all our learning programmes-including apprenticeships-are of the highest quality. We have very rigorous processes: we work closely with the learners who are engaged in the programmes and the employers who are, ultimately, the customers of those training programmes to keep up standards and to try to ensure that the frameworks-as they are being delivered-are meeting the needs of both those client groups.

Mike Griffiths: Clearly, in terms of quality, if one is going to sell these to young people-for a start, for credibility-the term "apprenticeship" has to actually mean something. My understanding-from the research I’ve done, admittedly at a fairly small scale recently, since I knew I was going to appear-is that there is a lot of concern about quality. There needs to be some sort of mechanism in place to ensure that, if this provision is going to have the badge of apprenticeship attached to it, it has to mean something. There should be some sort of guarantee, so that young people-when they are opting for it-are opting for something that is known to be valued as a future direction, and that is going to be a genuine progression route for them.

Q250 Chair: If I could just introduce another element into the discussion, a fellow Select Committee, the Public Accounts Committee, recently spoke with top officials from the National Apprenticeship Service and the Skills Funding Agency, and neither could really be very specific about exactly how much of the money they were given was actually being used to deliver training on the ground.

This echoes a previous inquiry carried out by this Committee, which talked about the sheer complexity of provision and, if you like, the layers of administration. What proportion of Government funding that you receive goes directly into training as opposed to administration?

Professor Petford: Well, I cannot comment on that as a university, because, of course, as you know, we do not do apprenticeships at universities, although as a big employer in the town we would be very keen to take apprentices on, which is a different set of questions, really.

Just to recap, I think the previous question is a very hard one to answer. What I would like to say is that we are keen as a university-and as a sector-to make sure there is absolute rigour in the apprenticeship system as it runs presently, because apprenticeships feed through to foundation degrees, which is where universities do get involved in the vocational skills agenda.

Len Closs: I can’t answer the question directly, Chair, because I frankly do not know. What I do know is that the funding we receive for apprenticeships across the board is pretty tight. Obviously, the funding is more favourably disposed towards 16 to 18-year-olds, because we get complete funding there, whereas there are expectations with regard to fees and employers’ contributions coming into play for 19-plus apprentices.

I think it is worth the Committee knowing that, of the target numbers that we have got for the year-the maximum contract value numbers-we are currently ahead of schedule for 16 to 18-year-olds for this time of year, so we are more than meeting the expected schedule of placements for 16 to 18-year-olds. We are only about halfway towards our 19-plus and adult targets in respect of the number of placements, and that is significantly, we think, to do with small and medium enterprises in Northamptonshire finding it difficult to stump up for their bit, even though we are already subsidising fees.

To bring it back to the question specifically, it is therefore pretty much a marginal business case to run apprenticeships as an element of college provision on the funding that we get. Probably, if we were merely charged with delivering adult apprenticeships, we would not do it because unquestionably we are subsidising that provision quite significantly from 16-18 apprenticeships on the one hand, and the broader college funding that we get for mainstream provision of further education on the other.

Q251 Chair: Sorry, can I just probe you a little further on this? Is it fair for me to summarise by saying that, first of all, apprenticeships are pretty marginal to, if you like, your core provision? Secondly, the amount of funding you get-in comparison to the amount that employers are going to provide for post19 provision-renders it almost irrelevant, and the real problem is getting employers to come forward to basically contribute their proportion of the funding. Is that a reasonable summary?

Len Closs: I think that is reasonable, Chairman. When I used the term "marginal", I guess I was saying that, largely speaking, for apprenticeship provision, overall funding-in probably equals cost-out, and therefore it just about balances, but it does that by placing that part of the business within the broader college’s financial position as well.

Taking the adults on their own, I know it does not balance, so the funding that we get directly from central Government does not meet the direct cost of providing the adult apprenticeships. And whereas we would like to be in a situation where employers are paying 50% of that cost, more often than not that does not happen. Indeed, some providers will be offering that provision at nil charge to the employer just to make sure they get the placements. It is a challenge, really, to build up and make viable adult apprenticeship provision on its own.

Q252 Chair: Do you think there is a case for the Government increasing the proportion of the total cost that it will subsidise for a post19 apprenticeship?

Len Closs: I think there is a case particularly for 19 to 24-year-old adults-the lower-age range, as it were. Broadly speaking, the 50% charge is reasonable. The difficulty is that, in an area where there are large numbers of smaller employers, it is challenging, sometimes, to make the financial case to those employers for buying in that apprenticeship. I would certainly argue that there are cases-particularly, perhaps, where people in the 1924 age range have suffered some disadvantage in the past-where, if some way could be established, there would be a case for extending the subsidy for that age range.

Q253 Chair: And do you think there is a case for making that subsidy to the employer?

Len Closs: I understand that a pilot is under way to put some of this funding in the employers’ hands to buy the training. Insofar as we try and work closely with employers to meet their specific needs, broadly speaking I support that, with very strong conditionality around that funding, I suppose, in terms of exactly how that employer is allowed to dispose those funds. We come back to an earlier question about suspicions that it has not always been best used in the past.

Professor Petford: Can I just echo that? I think there is anecdotal evidence, again, that some employers-certainly, the big volume house builders-would see this as a way of soaking up cash. If the money goes straight to them, then it might not end back where it should really be, which is in the FE sector. There’s also a concern that some of the shorterterm apprenticeships, socalled, are purely focusing on the needs of the employer and not the apprentice. I think that is an important question that needs to be looked into, because if employers are provided cash to train apprentices and not actually skill them in a deep way-just in a very narrow way-that is not looking after the individual. It is purely looking after the interests of the employer, and that is not right.

Chair: I can assure you that we will be questioning representatives of certain sectors on that issue at a subsequent hearing. I think it is time I brought my colleague Brian Binley in now. He will have questions for some of the other members of the panel as well.

Q254 Mr Binley: Yes, and I am going to be a bit robust, because it’s well known that I believe the educational establishment has let down a number of generations of this country’s students and now workers. First of all, before I go on to that, to explore it a little further, I wonder if I can ask Mr Griffiths what proportion of your 16-year-olds decide to take vocational training, such as apprenticeships, as opposed to the more academic route to socalled higher education? Therein lies my prejudice, Mike.

Mike Griffiths: At my particular school, over 70% of students stay on into our sixth form, where it is an A-level route. The great majority of them then go off into higher education, whether it is in a form that you approve of or not, Brian.

I think in the last three years there has been one student who has been a NEET. They all either go on to college or employmentbased training, so it is quite successful. My personal view is that-broadening it out into vocational education generally-as a country where we fall down is that there is not parity of esteem. As long as we think of these things as layers rather than as parallel routes through, we are always going to have this problem. I get really annoyed when the basic underlying assumption is that you do vocational training or a vocational course if you are incapable of doing an academic one. There is almost a belief that, if you are not up to it, there is a layer that is accessible to you. We need parity of esteem for the different routes and the acceptance that some youngsters will prefer a different route through from other people. Do not ask me how on earth we crack that, because I think it is something which has been riven in our system certainly for the 40 years that I have been involved in it.

Q255 Mr Binley: You hit exactly the point I wanted to; I knew you would and I am grateful. I am going to go to Jim Harker now, who is the chairman of the county council responsible for educating the young people in this county.

When we went to Sheffield, we were told by a young apprentice that, when he went to the sixth form to do A-levels, the minute he said, "I want to do an apprenticeship," they turned their noses up-"I didn’t even get invited to the awards ceremony." These are pretty frightening words, to my mind. Jim, what are you doing to change our education system?

Cllr Harker: Well, with your Government’s help, we’re doing a lot. We have got two out of the 13 University Technical Colleges being established in Northamptonshire, which are just for that particular purpose. There are 13 in the country and two in Northamptonshire-and thanks very much for that.

Mr Binley: It’s not us; we’re Back Benchers.

Cllr Harker: We are very pleased and grateful to the Government. We don’t want that to stop, unfortunately, because the UTCs were established at Silverstone and Daventry-in the south of the county-and that is fine. However, we want to make sure there is a network of these technology opportunities for young people at 14 years of age going through, to prepare them for apprenticeships or skilled work in the higher performance technology industries that are important to 21st-century Northamptonshire’s economy. As you know, we are historically 19th-century industries, such as boots and shoes, and steel at Corby and that sort of thing. The intention of the county council and our partners is to make a big change in that direction, and to emphasise and concentrate on 21st-century electronics, performance engineering, computer sciences and all of those sorts of thing. To do that, we need a cascade of educational opportunities, I suppose. We have the university; we have the colleges; we now have the UTCs being established, all of which give young people the opportunity to take technical qualifications.

The county council is going to launch-in two weeks’ time, actually-a scheme of its own to promote apprenticeships in the county, and it is a scheme which I believe most public sector areas could emulate. We are going to require any capital works going out to tender after 1 April to provide one apprenticeship per £2 million of capital cost, on the basis that now 50% of a structural project is labour. So, every £1 million that the county council spends on labour will require one apprentice. That can be quite extensive when you talk about things like the Corby Link Road, which we started work on in May, which is £29 million. It really is a positive step for the County of Northamptonshire to provide the requirement for tendering contractors to actually keep those apprentices. More importantly-

Chair: I have to hurry you up.

Cllr Harker: Very quickly on that, they are going to be for the duration of the apprenticeship, as well. Even though the contract might only last 12 or 15 months, the contractor has got to guarantee the provision of that apprenticeship for the whole term of the apprenticeship. There are a few other things but we can talk about those later.

Q256 Mr Binley: That is good news. Can I come to Dr Limb, who has a massive responsibility for Bedfordshire, Buckinghamshire and Northamptonshire? The flow of skills is absolutely vital to you. Do you want to comment on this point?

Dr Limb: I wanted to pick up the point about the 70% of pupils at Northampton School for Boys that go and do an academic route. It is a fair bet that a number of those will become lawyers or doctors, and they’ll probably do an apprenticeship as part of that training-perhaps through pupillage, or internship if they do a medical degree. I wanted to make the point about the perception of what apprenticeship means, and this whole issue of jamming people down one route or another, academic or vocational, and then trying-falsely, in my view-to get a parity of esteem between the two. It just doesn’t happen. Kids know that, if you are doing an apprenticeship, you are doing something very different from if you are doing A-levels. Part of what we have to try and crack is a way through for young people, so that they don’t perceive that one route is a lesser route than another, when precisely the people we think of as academic do apprenticeships in their training.

Q257 Mr Binley: The law makes the local council a pressuriser in this respect: you have the responsibility for the whole of your area; although not directly responsible for education, you nonetheless can bring pressure to bear. How are you doing that?

Cllr Mackintosh: I think it is important to tie all of these things together. We heard earlier, when we visited some local companies, that effectively they feel on their own. We have come here to listen to what the county council and the further education sector are doing: some fantastic work to bring things together. I think there has to be some form of brokerage to work out what skills are required, how they are facilitated and how we make sure they are put in place through the further education sector and the county council, but, also, that there is that facility to bring those skills together with the employers to meet their needs. I’m very pleased that this week we have been awarded £100,000 through the Enterprise Zone Skills Fund, which-through a scheme led by Northampton College, in partnership with Moulton College and Tresham College-will allow the development of a skills plan, through assessing the needs and requirements of companies located within the Enterprise Zone. Here in Northampton, we do have the largest in the country, so it is a really important area, both for the Government’s policy and for us in delivering improvements to the local economy that have a major impact not just on Northampton, not just on our wider county, but on the whole of the South East Midlands region. It is very important that we get this right, and I think this brokerage is very important; that is at the forefront of what we are doing at Northampton Borough Council.

Q258 Mr Ward: I go back to the 70%, again. If this was an inquiry into how to support young people to get into university, I am sure you could give a really good story about how you provide support to young people: visits to universities, talks about subject areas and so on. Where is that level of support for those who don’t want to go to university to do something else?

Mike Griffiths: In my particular school, we employed somebody who used to be employed by Connexions. She has developed a workrelated learning programme for right the way through from year 7 to year 13. She is at every parents’ evening for years 7, 8, 9 and 10. She gives talks; she sees the pupils. Every year 10 pupil has an individual onetoone interview with her, and again in year 11, where she will explore with them what the different options are post16.

We have a scheme whereby youngsters who go to college, for instance, are still able to access our awards schemes as well. However, we accept that we cannot-as an individual school-provide the whole range of opportunities in one particular place. We have chosen to focus on one particular aspect, but we are not very good at other things. And we think, for some youngsters who want to go down a particular route, a far better option is to go to somewhere like Northampton College or Moulton College, or, indeed, another sixth form that is providing a different opportunity.

But we spend a lot of money in addition to what we can get from our Connexions link, which I know is disappearing. We have employed our own careers advisor, who we make sure is fully trained so that our students, I think, are well aware of the different opportunities. But she would say-she did say to me before I came here-that she finds the biggest problem is youngsters who want trade qualifications; it is very difficult to get apprenticeships in trade qualifications.

It was interesting, particularly in view of what Brian said earlier and the implications about universities and whatever else, that her perception was that, for those wanting trade qualifications, not only was it harder, but in particular it is who you know, not what you can offer. She finds it is very difficult for youngsters who want a trade to actually find an apprenticeship, because the ones that are available go to friends of friends of friends. Although we hear it in other areas of English life and social links and whatever else, it actually works throughout, that, again, if you don’t know somebody who can get you in, then it is very difficult.

Q259 Chair: Len Closs indicated that he wished to speak. Could I just remind witnesses to be as brief as possible? This Committee has got a train to catch.

Len Closs: Just in support of Mike, I would want to say two things about the situation here in Northampton. Firstly-I am not sure he will welcome me saying this-I think we are two of the older members, now, of what is called the Northampton Heads’ and Principals’ Group. There is good collaboration between schools, colleges and FE providers here in the town, which means that we liaise constantly on shared provision and, indeed, to a certain extent we see our responsibilities as together, towards the whole of the town, rather than to our individual institutions.

Secondly-and I think this is quite important-the panel will have probably been made aware of some concerns from the FE and skills sector about the new freedoms schools have to provide independent information, advice and guidance: maybe those freedoms will result in fewer youngsters coming forward for skills training and apprenticeships in the future. That is a fear. We have done some analysis in Northampton that shows that exactly the opposite is happening, and that schools in Northampton are referring as many, if not more, young people to our college for appropriate vocational skills training, including apprenticeships, as has been the case historically when they were obliged to do it and when Connexions existed in a more proactive way. So I see that a very positive sign, at least in terms of the local collaboration that takes place and makes sure that young people get what they need.

Q260 Mr Binley: This is my final question, actually. Can I congratulate, you, Mike, on being president-elect of one of the leading educational professional bodies in the country? I am not saying what it is because I’ve forgotten, quite frankly, but you will be in a very important position to influence the experience of work and work placement in a preleaving school scenario. I wonder whether you have thoughts on how you might spread that particular activity, and Jim, you may have thoughts about how you would do that in the many hundreds of schools you have got under your control too. This is about work placement as a method of introducing young people to the world of work, and hopefully getting rid of the idea that not working can be a career.

Mike Griffiths: In terms of work placement, are you meaning during their time within the school?

Q261 Mr Binley: I am looking for that connect between school and the workplace, and I am looking to find out how you might think about enhancing that in the job you are going to have, which is a national role.

Mike Griffiths: It is the Association of School and College Leaders, by the way-ASCL.

Mr Binley: Thank you for that, Mike.

Mike Griffiths: I haven’t got a magic wand; I am not entirely sure I want one. This is something that has been a sore for a long time: actually getting sufficient, good quality work placements. What tends to happen is that in, for instance, the days of work experience, all schools tend to want it at the same time. There are restrictions on what ages it can be, so the number of decent work placements is not always there. My experience with my own school, which is possibly unusual, is that we were disappointed with the quality of what was going on: it was actually not helping our students to have a good attitude towards places of work, and so we stopped doing them at that stage. What we do is arrange work placements for students who volunteer to do that in their holiday time, if they want to.

It is a bit like with apprenticeships; getting good quality is the issue. Nearly everything that I have read about in the last few weeks has said that this has been the key. A lot of people have emphasised that, rather than necessarily simply getting more and more and more, that actually it is the quality that is important, and whether they actually lead to something later on.

We have to work incredibly hard with employers to ensure that they have a positive attitude towards work placements, because there is not a lot of point in twisting arms and them reluctantly taking on young people.

Q262 Mr Binley: What are you doing, Jim, about the employers?

Cllr Harker: As you know, Brian, the county council doesn’t have a lot of direct input into schools anymore. One area we do place importance on is inspiring young people to think that the opportunity to work in these high-performance, 21st-century, engineeringtype businesses is a good thing. We need to do that to satisfy our employers in the town. You have probably heard from Cosworth, for instance. I was told the other day they need to interview 80 people to get one young engineer out of that. So, we need to do something to satisfy our employers. They way we do that is to inspire young people to train into those sorts of industries, and we are doing so in a few innovative ways. For instance, we have linked up with Richard Noble, the world land speed record holder, and his Bloodhound project-he is going to design a 1,000 mph car. We have got a contract with him to take his team, and his car in fact, around to the schools in Northamptonshire, give them a pep talk, and link them with the whole of his development programme; so he will feed in all of his data and information as it is generated-

Chair: Sorry to interrupt. We actually were briefed on that. It is very relevant, I agree.

Cllr Harker: That is a county council project. Brian asked what we were doing, and that is the sort of thing. We have to inspire young people.

We do it as well through things like the Young Leaders scheme. We link very directly with the Northamptonshire school young leaders-elected by their own communities-and we put a lot of investment into developing leadership skills, particularly of young people, again using Northamptonshire organisations such as NAYC to do it.

Dr Limb: May I make just a brief point? I think there is a role for the LEPs, here, to encourage employers. Obviously, LEPs are quite a new body, but they are local authorities-whether they are county councils or unitary authorities-working with employers in the private sector, and they are private sectorled. I think we cannot expect just the training providers-schools, colleges and universities-to be the ones that beat the drum and say, "Come and do apprenticeships." We have got to play our part in getting employers on side. The South East Midlands LEP, next week, is having an annual conference at which it will be asking all the employers present-some 350-to pledge to either adopt a NEET, become a business mentor to someone or, indeed, to take on an apprentice. So, just flying the flag and getting the LEPs to do more is possibly one way forward in the future.

Chair: We are getting very short of time. If you can keep your answers as brief and to the point as possible I would be grateful.

Q263 Julie Elliott: One of the main measures that the National Apprenticeship Service is judged by is the quantity of apprenticeship starts. We have received mixed evidence about this so far. I wonder what your opinions on that are, and whether you think that the number of starts, or the number of apprenticeships the National Apprenticeship Service sells in effect, is the right measure of success.

Mike Griffiths: No.

Q264 Julie Elliott: Has anybody else had any dealings with the National Apprenticeship Service?

Dr Limb: My answer to that question is no, too. In preparation for today, I got some statistics off the website and had to do all the analysis of it myself. I couldn’t really see quite what the NAS itself was doing, nor-to go back to a point made earlier-what the Skills Funding Agency is doing either.

From an employer’s point of view, those national agencies mean absolutely nothing. What does mean something is the local provider fixing up the right kind of apprenticeship training, to the right kind of quality, so I have a big question mark in my mind about what those two national bodies are doing.

Q265 Julie Elliott: Some other figures are telling us that the number of higher level apprenticeships-the ones that are equivalent to foundation degrees-is growing. Is it your experience that you are finding the numbers of people doing those things are growing, and are you encouraged by that? Do you think that is the way forward?

Professor Petford: At the university, as I say, we don’t do apprenticeships so it is hard to comment directly on that, but we are seeing an increase in students wishing to do foundation degrees, which are progression routes on from the advanced apprenticeship schemes. So, we would welcome that continued trend to get people into foundation degrees. That may well be the end of the line; that is a good enough thing. If you come away with the skills of a foundation degree, that could set you up for a very productive working life without carrying on, there and then, to university. Of course, this is in the bank, so if you wish to go back 10, 20 or 30 years in the future, you still have a whole suite of credits behind you that you can, if you like, cash in and get a final degree at some stage down the line.

Can I just make one quick point about something earlier? I am aware of the time. It is about this really crude way of assessing how successful the scheme is by the number of starts. That is crazy, obviously. No one with any sense would want to think about it like that. The problem is-and universities also work like this as well-that there is this number of completions; that is a really crude stick as well. I think it is more along the lines of the qualification gained: what did you get out of it; also, where was your destination; where did you end up? There are more nuanced ways of measuring how successful the apprenticeship scheme is than the ones that we have at present.

Len Closs: May I also add something on the question of higher level apprenticeships, very quickly? At the moment-certainly locally, from our position as a training provider-the jury is very much out on higher level apprenticeships, and we are finding it difficult to identify those frameworks that seem appropriate to develop beyond level 3. Many of the apprenticeships that we offer are naturally in occupations that lend themselves to levels 2 and 3. We only offer one at level 4 at the moment, which is AAT, which is accounting technicians. Quite often, if you are, say, in an area like care, when you get on to level 4, you are really talking about leadership and management qualifications, rather than furthering the care standards that form the backbone of the level 2 and level 3 qualifications.

Julie Elliott: I think that is a very clear answer from you on the way things are measured.

Q266 Margot James: A previous witness told us that fewer than half of businesses use Government apprenticeships, and the main reason seems to be the need to tailor training more to the needs of the business. Is that your experience?

Len Closs: If I may say this, nearly all the frameworks that we are using with learners in the workplace are standard frameworks, essentially. It seems to me that at the moment we have very limited capacity to work directly with the Sector Skills Councils on what you might call bespoke training. We have explored this to a certain extent with City & Guilds in trying to develop bespoke training around business improvements techniques etc, but we find that our capacity to deal directly on this basis is limited. While it is not a direct answer to your question, the fact that we are not able to persuade employers-we are selling an offtheshelf product-may be the reason why we are not always getting as many apprenticeships out there as we would like.

Q267 Margot James: Before other panellists come in, if they want to, I was also going to ask how training providers ensure that employers have the flexibility they need while ensuring consistency of quality. Are you saying it is difficult to get that employer engagement to start with?

Len Closs: There is an element of selling an apprenticeship to an employer, and I think it either stands or falls at that basic interaction where the employer will make a judgment as to whether the framework that is sold at that particular point is sufficiently suitable and meets the employer’s need as well as the apprentice’s needs or not.

What I am saying is that many of those frameworks are inflexible in the sense that the SASE defines that fairly well, so an employer is going to be making a judgment of a fairly black or white nature.

Q268 Margot James: Does anyone else wish to comment on that?

Dr Limb: Can I just make one point about employers? I think it is really important to distinguish between the sizes of employer as well. Clearly a bigger employer with a Director of HR and with schemes and processes all set up will be able to find their way through this much more easily-and we know this is the case-than the vast majority of small, medium and even midsized companies which comprise, largely, most of our economies. So I think one of the difficulties that we have is making it easier for SMEs, really, to take on apprenticeships.

Q269 Margot James: And have you come across any models that work in that regard? If firms are not using Government frameworks or the NAS, what are they using?

Dr Limb: I think they used to call it "Sitting by Nellie," didn’t they? I nearly gave that as an example of the definition of an apprenticeship. It is learning the job on the job, and I daresay we cannot capture this information because we will not know how many-just to choose an example-plumbers in Northampton may well be training up a young woman or man to do that job with it not being registered anywhere.

Len Closs: It is perhaps worth mentioning that, in fact, there are some contradictions from our perception in this. Quite often, when you talk to employers, they will say that many times the skills they find lacking in potential employees are functional and soft skills, i.e. those outside their immediate expertise. When we talk, sometimes, to employers about the whole apprentice framework, it is actually those bits they do not want; they place more emphasis and value on the National Vocational Qualification, which is the competency specific to that occupation, and are more concerned about the time spent doing the skills that sit around that within the SASE specification.

Q270 Margot James: A last question to Dr Limb: I think you mentioned in your submission that your aim is "to create the right environment for businesses to grow." What does that look and feel like in Northampton, that right environment, and how would you connect your growth agenda to upskilling the local workforce?

Dr Limb: I think the key to it is ensuring that businesses feel that they are shaping the agenda, rather than being done unto. I don’t have a magic wand to sprinkle this over the heads of every employer in Northampton and say, "Get engaged." However, I do think we can build up a culture of wanting to be involved in something, which is actually why Northampton Alive as a movement is so important, because people will get behind it and see what is involved in it.

By creating the right environment, I think it is really about making sure, if somebody wants to succeed, all of the elements are in place so that they can succeed. You can’t make a seed grow, basically. You just have to put it in the soil and change the conditions around it so that it will grow.

Cllr Mackintosh: Just to really agree with Ann’s point, over the last few months we have been building this programme of trying to articulate what is happening in our town, and that is a programme of regeneration, right through to delivering the Enterprise Zone. The Government announced our Enterprise Zone last August to great fanfare, but we have found that a lot of people do not understand what that means. There is a lot of misunderstanding about the process, when it starts and the impact it will have for local businesses. We, as a council, but working together with our partners-that is the whole spectrum of people involved, in both the public and private sectors-have been out there, talking about what it means and the benefits it can bring for our town. Certainly, the feedback we have had from our launch of Northampton Alive on Friday has been absolutely fantastic, with people asking us, "How do we get involved? What can we do?" Certainly, I hope that that network of bringing people together will help us to grow and develop as a town, but also provide the skillsets we need to make the Enterprise Zone work.

It is all very well to encourage companies to come and locate here and to give them every incentive in the world, but if they have not got a workforce here, and if they cannot provide places for these people to live and go to school, then we are failing. As a collection of local authorities and the private sector all working together, we need to make sure this is a success. I think some of the initiatives we have started are the seeds of making that happen, but that is really fundamental to it.

Q271 Simon Kirby: We have heard mention of the Government’s pilot scheme to inject, I think, some £250 million directly into the employers; is this a good idea? Will it help businesses shape the agenda? And will it change how training providers operate?

Cllr Harker: Can I make a point alongside that? I think it perhaps ought to be categorised in terms of sector targeting. In Northamptonshire, for instance, there are currently, I’m told, 97 apprenticeship vacancies at the moment, but they are in the service sector and the business support sector. There are lots of young people that want the more traditional apprenticeship opportunities, which are not so much there. So perhaps it would be worth just thinking about sector targeting when you start giving the money out.

Professor Petford: I think it is important to hold in mind at all times that the workplace in the UK is not homogenous; it is heterogeneous and it is all scales. Ann has pointed out rightly that most people don’t work in big companies; they work for sole traders or they are one, two or five person bands. How do you reach that group? That is the question you need to ask yourself. They are the key constituents, simply because that is where most people work. It is not the BPs and the Tescos; it is the small traders. And they are probably not that interested; if it is overly bureaucratic, forget it. The challenge, really, for politicians is to address that particular market.

Len Closs: I said earlier that, generally speaking, the money to employers was a good idea. I favour particularly the grant aiding that is proposed to provide, I think it is, £1,500 grants to small employers in particular because, as I alluded to earlier, small employers find the fees problematic. If the money is going to employers for those kinds of purposes-to ease the burden of apprenticeships for employers-I think it would be a good thing. I am less familiar with and therefore a little bit more dubious about the Employer Ownership of Skills initiative, which is whole deal more money; it was that I was referring to when I said I would want to see the criteria for constraining their expenditure before I could comment.

Mike Griffiths: Sorry, can I also make the point that you would expect me to, coming from the schools sector? If all this extra money is going to apprenticeships and everywhere else, it is at the same time as there are significant cuts happening to budgets for post16 in schools and colleges.

Q272 Simon Kirby: I didn’t quite expect to get so many answers, but thank you for that. I have one final question, really wrapping it up. We mentioned earlier that certainly small and medium-sized businesses saw the financial burden as a problem-the actual money was off-putting in some ways.

Do you think that-talking specifically about 19 to 24-year-old provision-there is also a perceptual problem, in that apprenticeships are seen traditionally for younger people only? Is it only the money that is the problem when it comes to these small and medium-sized businesses coming forward?

Len Closs: From our point of view, I do not have any evidence to suggest that. For the 19 to 24-year-olds, that may be more of a concern for the potential apprentice at that age than it is for the employer, but I honestly don’t have feedback from employers to suggest that they consider age-particularly at the younger age range you have mentioned-as a barrier.

Chair: Any further comments? Well, would you believe it, we have finished on time. Can I commend you all for your brevity and thank you very much for your contribution? It will be incorporated into our recommendations that will be coming out in a few weeks’ time. Thank you once again. I also give a special thank you to David Mackintosh for allowing us to use the facilities here, which are absolutely superb, and to enjoy the hospitality of the Council, which, again, I think everyone would agree was absolutely superb as well. Thanks very much.

Examination of Witnesses

Witnesses: Peter Mawson, Chief Executive, West Northamptonshire Development Corporation, Paul Southworth, Chairman, Northamptonshire Enterprise Partnership, David Rolton, Chairman, Rolton Group, Milan Shah, Chair of the Governing Council for the University of Northampton, Alan Ainsworth, Head of Public and Community Affairs, Barclaycard, and John Harley, Director, ACS Office Solutions, and Board Member, Brackmills Industrial Estate Business Improvement District, gave evidence.

Q273 Chair: I have listed as witnesses Peter Mawson, Paul Southworth, David Rolton, Milan Shah, and it is now Alan Ainsworth, which is five.

John Harley: My name does not appear on that list, although I was asked to come and attend the meeting in writing.

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Q274 Mr Binley: Who did that?

John Harley: Well, I got a letter from you, Brian.

Q275 Mr Binley: Did I do it?

John Harley: Yes. It came together with a list of managers, and I am on that.

Mr Binley: Then it is my fault and I apologise, but he is a bloody good chap and he ought to be there.

Chair: I am sure you are very welcome.

Mr Binley: Can I tell you that John runs a company with 15 apprentices? It is only a small company but he really concentrates on apprentices and, I think, can give us a lot of information of value.

Chair: I do apologise for the obvious breakdown in communication, and I have no hesitation in blaming my colleague, Brian Binley.

Mr Binley: Absolutely.

Q276 Chair: Could we just have your name and title?

John Harley: My name is John Harley. I am a Director of a local company called ACS Office Solutions, and I also sit on the board of the Brackmills Business Improvement District.

Q277 Chair: Good. Thank you. I will invite the other members just to introduce themselves for voice transcription purposes. We might as well go across there. It is Milan next.

Milan Shah: Hi, I am Milan Shah. I am Chair of the Governing Council of the University of Northampton and a retired board member of the local chamber of commerce.

David Rolton: I am David Rolton. I am a founder of a number of engineering companies. I am an SME; in my case, it’s a self-made engineer. I am also a member of the board of Northamptonshire Enterprise Partnership.

Paul Southworth: Paul Southworth and I am the Chairman of the Northamptonshire Enterprise Partnership.

Peter Mawson: Peter Mawson, Chief Executive of the West Northamptonshire Development Corporation.

Alan Ainsworth: Alan Ainsworth, Head of Public Affairs for Barclaycard.

Q278 Chair: Thanks very much. You were possibly in when I introduced the previous panel. If I could just repeat my comments then: we have quite a few questions. Please do not feel that every one of you has to answer every question. I am mindful that we have a train to catch, although I am sure we would love to stay and hear every word that you may have. Just try to be disciplined and only contribute if you feel you have something to add to or subtract from what somebody else has said. On that, I will invite David Ward to open the questioning.

Q279 Mr Ward: Thank you very much. On the quantity-versus-quality argument, which we were discussing earlier in terms of the number of apprenticeships, we have some figures before us which show the growth in apprenticeship framework achievements within the East Midlands: the number rose from just over 10,000 to just under 18,000 between 2005-06 and 2010-11. You are from different walks of life but all have an East Midlands focus. What is the contribution that any of you have made to that large increase in apprenticeships within this area?

David Rolton: I will go. In my case, the answer is "nil". We have a real problem in terms of the lower-skilled grades within our organisation that were the bedrock for taking on young people and letting them go-formerly-to night school or then on to day release and university and eventually chartered engineer. Those skills now are pretty much instantly accessible over the internet and into the third world, whereby you can pick up and put down the service at much cheaper cost, and it is a real barrier to taking anybody on.

Q280 Mr Ward: Presumably, you do recruit.

David Rolton: We recruit at a higher level.

Q281 Mr Ward: For your business, working up from the metaphorical shop floor is not a route. You would come in at a higher level.

David Rolton: No, it has pretty much disappeared. You have to combine it with the construction industry to which we are related, which, of course, is the economic regulator, and every recession results in probably a 50% staff loss. You do all the investment, and the risk you run is the employment risk. Also, in training, you run the risk of them being poached, effectively, as well. Whilst you do try to do it-and, historically, for 32 years, we have done our best-in the last probably seven or eight, the internet has made quite an exceptional difference. You need the skills, and you still need high-level skills, and the skill level probably rises in our business because of it. You tend to do more clever things.

Q282 Mr Ward: Presumably there was a serving of articles or whatever it may be called in your professional field.

David Rolton: Most of the recruits probably go to university directly, and what we have lost are probably the sandwich students, who were really good. You could take them for a year out, and they would come and work for us for a year and then go back to university. That was a really great ground for finding people. Now, we tend to take only people with exceptional skills at a higher level.

Q283 Mr Ward: There are still 7,600 there. Has anybody else contributed to those?

Milan Shah: I am a spice trader by profession, so, really, the only way to learn my trade or my craft is work-based learning. It took me seven years to do that in the traditional apprenticeship manner. My own firm has experienced double-digit sales growth for the last five years. It has created jobs. It has been investing in machinery through the recession and through the credit crunch. We have been doing all the right things, but whether or not we have created apprenticeships is a separate question. In fact, we took on an apprentice. I talked to my management team and they trawled through their records, and we did take on an apprentice for engineering/maintenance. It didn’t last. I think the person didn’t turn up after about three or four months. The management team took a view that it is easier just to train people up who have come from the job market. So we are creating jobs, we are creating work, and we are creating value-added work and up-skilling the economy, but the particular label of apprenticeships is one it seems that my team has floated in and out of.

Q284 Mr Ward: David explained, understandably, why it is unlikely to be an appropriate route for recruitment. By contrast in yours, with this need for a strong work experience and learning on the job, it would seem to be a very appropriate route.

Milan Shah: Think of us as being in the food industry. We are manufacturers of food ingredients, once we have imported them into the UK. Only 2% of the food industry workforce is below 18. For example, if you look at the skewing of the funding, it is not conducive to drawing people from the food industry into apprenticeships. Also, we import materials from all around the world, so we are fully exposed, as a business, to the forces of globalisation. What that means is that supply chains are unbundled. It means that there is trade not in goods but in tasks.

If we really are going to compete, we need to have a very flexible labour force at our end. I think Mr Rolton would agree with that from his perspective. To that extent, we need a workforce that can be re-skilled from time to time, retraining mid-career. The perception of an apprentice being somebody straight out of school is only one perception; we need to make sure that people understand that, if the British economy is going to re-skill itself from generation to generation and mid-career, then apprenticeships-entry routes into a new career-have to be available to people further into their lives as well.

Q285 Mr Ward: Can I just come to Alan, because you have had 1,000, I think? That is a national figure for Barclays’ commitment to the apprenticeship scheme.

Alan Ainsworth: Yes. That has not kicked off yet although we have announced that we are going to take on 1,000 over the next 18 months as a pilot programme. That will be a 12-month apprenticeship for those 1,000 people, and we are really looking forward to it. Historically, our minimum recruitment criteria have been five GCSEs at grades A to C, which is probably not atypical, but we have realised that we are not attracting certain groups of society into our workforce and, therefore, potentially the workforce as a result of that policy. We think there is something to be gained from increasing the diversity of our workforce and not being so specific around academic qualifications, so we have used apprenticeships as a way of seeing if we can find a way to provide financial services training and a financial services career to a far broader pool of people.

Q286 Mr Ward: What is your experience of the National Apprenticeship Service itself? Limited, I have no doubt, in your case, David, but what about the others? Has it been supportive in your quest for 1,000 apprenticeships, Alan?

Alan Ainsworth: Yes, I think so. We heard from previous witnesses that, when you are a big organisation, you have the resources to create a scheme, which is a very bespoke Barclays scheme, so perhaps we do not need the support of various other services. What we have found, though, is that we have had to stamp our own label on it, if you like, to ensure that we do deliver the quality, so that, when people come out of that 12-month period, they have a really useful qualification. Our aim is, clearly, to keep those people in Barclays, but what is also important is that this apprenticeship-level 2-will give them something that is portable into the world of work going forward.

John Harley: I have a somewhat different experience from my colleagues here in that we operate in the service industry. Our company supplies computer systems and office-furniture systems, 17 years trading from the town and a growing business. We have invested in the same way as Milan’s business, as he explained. We had a headcount of 72 when the credit crunch was at its worst point, and we now have a headcount of 114. During that time, I have employed 15 apprentices, 14 of whom have now been given permanent posts within our business. None of the local educational organisations-and this sounds like a criticism-ever engaged with us. We came across a local commercial outfit who were delivering NVQ training but went out of their way to try to get these young people placed. We partnered with them and it has been a huge success-very talented young people, none of whom went on to college but are now training in accountancy, in IT and in warehousing.

We have heard a lot about the efforts of the local partners here, but here in this county the biggest employer is logistics and there is no logistics training in any of our colleges in this county. There is plenty of hairdressing, but there is no logistics training, and it is the biggest employer in the county. We have to change our mode of thinking, I think.

Q287 Mr Ward: Was that a training provider or was it an agency?

John Harley: It is an agency that actually delivers the training as well and has trainers qualified to deliver NVQ.

Q288 Mr Ward: But none of those through the National Apprenticeship Service.

John Harley: No, I am not sure where they get the funding. To expand that, sitting on the board of the Business Improvement District in Brackmills, I am quite passionate about getting these young people into work. We have 150 businesses on Brackmills Estate and there are 12,500 young people working there. We felt it would be a good idea about six months ago to make a commitment to employ 150 apprentices on the estate, which, after all, is only one for each business. They run from very small businesses through to global companies. We thought we would start with the Skills Funding Agency. We asked them how many apprentices were employed in our postal district, and the answer we got back was appalling. They said there were 1,500; 97 of them were employed by my company. So, as a base, how many apprentices are there employed in any given area and what is your action plan around it? I think the whole thought process has to change.

Q289 Chair: Just before we go on, did you write back to them and tell them that that was a concern?

John Harley: I did not engage with them, Mr Bailey, at all. I sit on the board of the BID; one of the board members was given the task to engage, and that was the feedback we got: that it was a hopeless situation. We employed the local university and college to undertake an engagement with the employees, and the feedback they got was patchy. As a group of businesses, we have decided to do it ourselves. After six months, we are now employing 38 apprentices in those businesses. It needs some action and it needs the schools to invite us in. We have never, ever been invited into a school to address the children, for instance.

Q290 Mr Ward: I think it was Paul next.

Paul Southworth: Just to add to what John has said, the reality we have here is an enormous mismatch, because, as the local LEP, we are very heavily engaged with the private sector. For instance, we have most of the major companies represented on our board; and, of course, through our Ambassador Programme, we link with the majority of the SMEs through the county. What we are hearing from the employers is the jobs are there. On the other side of the coin, we have 4,500 unemployed people between the ages of 18 and 24, so something is wrong. The reality is exactly as John has just outlined: the employers tell us over and over again that those coming out of the schools-not necessarily further education, but those who do not want to go into further education-are applying for jobs for which they do not have the skills. There is a tremendous mismatch between what is being taught and there is no linkage between secondary level, let alone further education and the employers. Until we get that linkage together, we are not going to solve this problem.

Milan Shah: Following on from Paul’s comments, if you take Northamptonshire as a microcosm of the country and the issues facing the country, it is quite instructive. In anticipation of its setting-up, we invited in a representative of the National Apprenticeship Service in March 2010 to present to the precursor to our LEP-it was called Northamptonshire Enterprise Ltd-what it was going to do for our economy and how we could work with it, because we were going to bring all the partners around the table to ensure that we could deliver the goods on the ground.

What came out of that discussion was that, essentially, it was there to promote apprenticeships. There were four senior board members of Northamptonshire Enterprise sitting at that table and we pointed out, "What about the schools? Will the schools instil the employability into the individuals coming out so that we can take them on, as employers? What about the schools in terms of directing people towards this type of training rather than A-levels and other routes that might or might not be appropriate?" The Apprenticeship Service was quite clear and said, "That is not our remit". I appreciate that it is not their remit but somebody has to do it, because, looking back at things two years on, those same problems are still there.

If I go back and talk to employers, as I have been over the last couple of years, in terms of what they have picked up on apprenticeships, the National Apprenticeship Service has done a sterling job in terms of promoting awareness. As a market campaign, it has been superb. Whether it is value for money is a separate issue; I do not know what it costs, but I would be interested, as a taxpayer. In terms of marketing and raising awareness, excellent; in terms of actually brokering apprenticeships, I do not know. You would have to go a lot further and you would have to look at your performance metrics.

Q291 Mr Ward: I think I ought to move on now, which is a shame, because that is really interesting, but this is also interesting. I am really interested in this one, which is, I think, Peter’s, to do with construction. I have this document, which I am going to nick and take back to Bradford, which is to do with this wonderful scheme called Construction Futures. I am really interested in this and how you do it, and particularly how you can make it contractually binding, as someone who has tried to get local jobs for local people from development schemes. Is this legal? Is there not some European law that is stopping us doing this?

Peter Mawson: I am sure it is legal, and let the record show that I said that it is entirely legal! For those who are not as familiar as perhaps you are, Construction Futures is about using the planning system and Section 106-contracted relationships between developer and planning authority to establish the skills for people, and the training, placement and apprenticeships, as a direct result of approving the planning for a particular development with a national house builder or logistics or whatever. This is about apprenticeships into the construction industry. It uses a very small contribution from the Section 106 monies that would come from the approval of a development to set a system up. It requires developers to commit to a certain level of either apprenticeships or placements within a scheme. I think perhaps the Committee knows that the construction industry is a particularly difficult area to get apprenticeships established.

Q292 Mr Ward: I understand that.

Peter Mawson: First into recession, last out of recession; skills drain away from that particular sector; and it is populated by many small sub-contracted arrangements and, therefore, it is very difficult to embed apprenticeships within that environment. What, with partners, we have designed is a modelling system that allows us to work with major developers to establish what the training, placement and apprenticeship opportunities might be in a long-term development, and have them contract and commit to deliver apprenticeships over time. If they then choose to pass that on into the sub-contract market, they can do that, so long as the apprenticeships are monitored and maintained.

Q293 Mr Ward: What if the applicant is not a developer?

Peter Mawson: If it were a contractor direct, or if it were a local authority, public-sector body or whatever, the same would apply. That contractual obligation then, effectively, runs with the land with the planning permission, so it is enshrined within the approval.

Q294 Mr Ward: Is it legal?

Peter Mawson: Absolutely. Also, just to add to the earlier question, we will have brokered the placement of 20 apprentices over the last 18 months. That is a relatively small number compared to that we have been hearing about, but it is a very difficult sector.

Q295 Mr Ward: In fact, I think it was Jim in the previous session, from the county council, who was talking about being able to incorporate this also into procurement, which, again, is a fascinating area in terms of providing incentives for creating apprenticeships on the back of council contracts.

Peter Mawson: If I may add to that, the example that Cllr Harker used was another construction procurement programme, but of course it does not have to be construction-related. It could be the procurement of an ICT contract or social care or whatever it may be. Wherever the public sector is procuring, there could be an embedded policy to require the provision of apprenticeships within that particular programme. I think the critical point is to work in partnership, be it with the developer or the service provider, to establish what, truly, is the right level of apprenticeships within a particular programme of delivery. This can become very aspirational very quickly.

I think what we have established in Construction Futures is that we can work very closely with, in our case, major developers to establish precisely what the right level of apprenticeship and placement might be. We will have brokered the delivery, with partners, of some 2,000 training weeks over the course of that period and, as I say, the 20 apprenticeships or whatever. It is about establishing, with the developer or the provider-whatever it is-truly what can be borne by that particular market.

Chair: Can we move on? We are falling a little behind time.

Q296 Rebecca Harris: This might be going slightly back to the interesting conversation we had earlier on here, but the success of the apprenticeships scheme really is probably that it is up-skilling our workforce, giving employees the skills they need to get on in life, and matching, therefore, of course, with the needs of business better. The Forum of Private Business has told us that apprenticeship frameworks should be more flexible for firms’ needs and, therefore, there is a difficulty there to make sure we get the balance for the Government between the flexibility that the firms want and the quality we need. It was really just what you thought about how we ensure we get that balance right.

David Rolton: Good afternoon. I would like to start by echoing Jim and the word "inspiration" earlier on with young people. Particularly in engineering, I think it is the key to getting them engaged. A lot of young people can only see what is in front of them rather than some academic goal. Engineering itself in the UK is grossly undervalued, generally, and is increasingly having to raise its skill set, because that is what we are good at. We are good at the clever stuff and, when it comes to making it, we seem to drift away. The issue I have is with the word "apprenticeship", actually, because the definition of it is to learn a trade from a skilled employer for a low wage for a fixed period. That is really inspiring to a young person. We need to do something about that, and what the engineering industry really needs-the Cosworths of the world etc-is to give people a really fantastic idea of what is in front of them: an open goal way beyond anything that an apprenticeship, in that definition, might produce. And the opportunity to-

Q297 Chair: Can I just interrupt you there? We have had this debate about apprenticeships being a good brand, and what you are actually saying-

David Rolton: It is rubbish.

Q298 Chair: -is that this may be the received wisdom but, actually, from a young person’s perspective, it is not.

David Rolton: It is 19th century in a 21st-century world to me, but that is one opinion. I am just one opinion.

Q299 Chair: It is a very interesting opinion.

David Rolton: I think, if you are a young person, you want get in the open goal on engineering. You could be the MD of a Cosworth, not somebody just operating a turning machine or something like that. Your skills level will change as an engineer probably four or five times in your career-it has already changed four times for me-and the skills that probably you came out of university with 40 years ago, as I did, are not the skills you now need. They need to be much higher to get employment, because, as I said earlier, in terms of the mundane ones, we have taught the rest of the world and they do it more cheaply. We need to be right up there, and the word "apprenticeship", to me, is just not cutting it. It does not cut it for me and I would not use it with young people.

Q300 Chair: Could I just ask: do any others on the panel agree with that?

Paul Southworth: To a degree, I agree with it. The reason for that is that what we are seeing, in talking, again, to employers, is that there is, whether we like it or not, a perceived negativity between youngsters and, more importantly, their parents to the whole aspect of apprenticeships. We hear it all the time. The perception is that apprenticeships are lower skilled, cheap labour. I am not saying that is the fact-we know that is not the fact-but that is how they are perceived. What we have started to do through the LEP is, would you believe, parent counselling on apprenticeships. We have started to have forum groups, where we are talking to parents to get their opinions and find out what they would like to see. In fact, what we have now produced is a guide to apprenticeships that we have started to put out around the county to try to change that perception, but we do have to change it.

Q301 Julie Elliott: I am quite interested in your view on apprenticeships: that you say you have to sell it to parents. Is this perception that you are talking about, which I think is different to my experience, around the good-quality four-to-five-year apprenticeship schemes that can lead to higher qualifications, or is it around some of the things that are termed "apprenticeships" and can be as little as a 14-week training programme?

Paul Southworth: I think it is probably the latter, if I am honest.

Milan Shah: There is a market for skills-employers demand skills. Whether or not we badge it with the term "apprenticeships", the training will go on to the extent that there is a demand for it and to the extent the employer can recoup value from it.

I would like to introduce two points: firstly, it seems there is a risk that the word "apprenticeship"-and nobody has a monopoly, Lord Sugar included, over the word "apprenticeship"-is a contaminated brand both to the individual employee, or potential employee or apprentice, and to the employer. The only people who understand it clearly, in my estimation, are the providers of the training. I think the learning providers are very clear on what apprenticeships are.

The further point I would like to make is that, again, in a very straightforward market, the employer would train the employee. Within our firm, I asked my management team what their experience of apprenticeships was, and they said, "Normally, people come to us and say, ‘Can you pay for this training?’" and there is a form they fill out and it is part of their training needs analysis. If the training is for something that is above and beyond what they need to do their job-somebody recently came and wanted to qualify as an accountant-that moves them into the realm of transferable skills and of poachability discussions that some employers often have. That is absolutely fine: we will still pay for it, we might split the cost with them or we might pay for it and they take some day release. These are old-fashioned terms but this is how it works.

The point is: if there is some economic value in that transaction, it is split between the people who will benefit: employer and employee. Does the Government have a role within that? That is a question that has to be asked.

Q302 Rebecca Harris: Interestingly, when I was in business, I found that giving my staff transferable skills helped with retention, because they felt they should stay, rather than-

Milan Shah: I would fully agree.

Q303 Rebecca Harris: That might be something that some businesses may need persuading a little bit on. You have probably answered, to some extent, my second question, which is how we should balance the Government’s desire to up-skill the whole UK workforce on occasions when, actually, there is no demand for higher skills from employers, particularly at the moment, given the economic crisis-

David Rolton: Sorry, there is a definite requirement for higher-level skills, and the higher the better.

Q304 Rebecca Harris: There was a suggestion slightly earlier on, I think from Professor Petford, perhaps, which was that, sometimes, employers are not actually helping with apprenticeships in terms of giving them skills that the employee will need to take them forward in life, but just make sure they have the skills that are useful just for that job alone, and are holding people back. Do you think that happens?

David Rolton: I think it is almost back to front. You have academia looking down at the employer. You have to start with the job, actually. Start there-start with somebody who is employed. The employer wants to improve the lot for himself and for his employee, like we did 20 years ago, with, as I said, night school, day release and so on. It goes on. If you can inspire those young people and make them interested in your business, they do tend to stay. You do run the risk of the employment laws of the UK and of poaching. And, somewhere down the track, they will probably leave you. All you can do is try to be in front of them in terms of how you are pulling them into the next bracket. It is a delicate balance for an SME. It is okay for a company that has 50 or 60 people, but for people with only five, it is very difficult.

Q305 Mr Binley: I am very supportive of very high-level skills, but I am equally concerned about the poor quality of very low-level skills, quite frankly. We have not talked about that at all today, yet so many of the jobs out there that our own people are not taking lie within that bracket. If I may say, in my own company, we gather information to make databases for business-to-business publishing companies. It simply needs somebody to gather information on the telephone and record it sensibly onto a computer. We do a simple spelling test of 10 words-middle-range words like "business", "supervisor" and "asset"-and the number of people who do not get two of them is amazing. This is still a real problem. Do you come across that problem and are you specifically doing anything to help change that situation? Does anybody want to have a go?

Paul Southworth: Again, from the LEP point of view, what we have now set up, in fact, is a skills strategic board, where we are particularly focusing on a cross-section of SMEs as well as training providers to link the two together and create a strategy that will help that particular situation.

Q306 Mr Binley: Is there a real problem here among those people who make up the majority of that group called NEETs, or am I wrong-am I missing the point?

Paul Southworth: No, it is a big problem.

Q307 Mr Binley: Can I ask Alan to come in on this? You are widening your spectrum.

Alan Ainsworth: We are widening our spectrum. To build on the previous conversation, what is the problem we are trying to fix here? The problem that we would like to contribute towards fixing is the million people who are young and not in education, employment or training. How we can get them prospects and make them employable? We think that the apprenticeship programme that we are developing will do a lot of that. We anticipate-we have not started it-that many of those people will need a lot of pre-employment training. Our programme will provide, following some assessments, around four weeks of pre-employment training to get people up to a level. We also anticipate that a lot of training will be required on the job and, of course, in the City & Guilds and the BTEC that we will provide as part of the 12 months of training. That is a much greater level of training than we would anticipate with someone coming in with five GCSEs or above. Our hope and our expectation is that we will provide aspiration and hope for a lot of people, and not only will we necessarily recruit the thousand people who we are hoping to recruit to Barclays, but perhaps by adding our brand to this there will be other people attracted to this who may not get to Barclays but may go elsewhere.

Q308 Chair: Can we just pick up the discussion that we had earlier on the quality of apprenticeships? The Government is obviously aware of, if you like, the potential contamination of the brand. In November last year, it announced a range of measures designed to improve the quality of apprenticeships. From your perspective, what do you think are the things the Government should be doing to improve the quality?

Can I rephrase that, since it has obviously caused a degree of consternation? If you can take a leap in imagination to think of yourselves as knowing this problem and being in the Government, what would be the essential elements that you would put to ensure that apprenticeships were quality and delivered what they were intended to do?

John Harley: Could I offer an opinion?

Chair: We have a competition now-yes.

John Harley: I have no idea as to how the places of learning are funded. I have a perception, but not based on your information. However, it is about determining what is required in the workplace. For instance, we are living in an age of technology, and I think the local places of learning should offer more technical training courses. We have heard about engineers and what have you, which is important. If I look at my business, at the number of young people who are taught usable skills around IT compared with the number of hairdressers, or, as I alluded to earlier, at the fact that we employ in this county thousands and thousands of people in the logistics industry, I wonder where are the young people coming in with those skills when the local places of learning are not running courses for them? I think the Government are responsible for ensuring that the training-vocational or otherwise-fits the requirement of the community.

Q309 Chair: I saw somebody else indicate earlier-was it Peter?

Peter Mawson: If I may come back to the construction example, I think there is a danger of centrally imposed policy and position on this because, to reiterate what has been said, it is about local circumstances in local markets. Following the trend that I was talking about earlier, say there was a national presumption within planning policy that this model that we have described does work-and clearly it does. Having that central acceptance supported by local policy acceptance and adoption, looking at the local markets that we operate within-and most of the narrow construction sector is very much locally oriented-and identifying the local needs and tuning the requirements of the marketplace to the provision in academia is a fundamental issue in terms of getting that alignment correct. I think we heard earlier that there is some disconnect. Certainly we identify, outside of the providers that we work with, when we have tried to take the model into other areas, that there is a serious disconnect between the academic providers and that which is required in their marketplace. The KPIs, that they operate to, seem also not to deliver the right outcomes, generally, for the young people.

Q310 Chair: Does anybody else wish to add to that?

Paul Southworth: Just a very brief one, and that is to say that you mentioned the word "quality" and we heard before the word "flexibility". I think the quality of apprenticeships is going to relate to the sectors themselves and, therefore, what we saw as an example in Church’s this morning is that they have had to go it alone because they have developed their own apprenticeships. That is a quality apprenticeship. Again, coming back to the earlier discussion from the earlier panel, if the funding goes to the employers to develop their own specific apprentice scheme related to their sector, I think the quality will automatically rise.

Milan Shah: Just very briefly, there are two concepts of quality: one is minimum standards, and that is something I am very familiar with from chairing the council at the university. We have minimum standards in HE. That is a form of quality. The other is fitness for purpose. My particular view is you have to have some system of safeguarding minimum standards but, beyond that, much as Mr Southworth is saying, I think the funding should flow in the right direction. If the funding were to flow, as it is about to do in HE, through the student-in this case, the apprentice-or from the employer, which is the Employer Ownership of Skills pilot you alluded to earlier, normally it is the case that fitness for purpose is more likely to occur in a market where the funding is flowing from the people who are buying the service or the good.

Q311 Chair: The interesting thing about the Church’s example was that we have Sector Skills Councils, in effect, designing frameworks for apprenticeships, and we have bodies to monitor that those frameworks are of the appropriate quality. Yet, you have a company like Church’s, which is delivering what, by any normal interpretation, would be a very in-depth apprenticeship over a long period of time, but very specific in its skill set, which does not seem to have any accreditation or qualify for any Government funding. On the other hand, we seem to have a whole lot of short-term apprenticeships in certain areas that seem to attract large amounts of Government funding. That brings me on to my next question, which was, if you like, the short courses issue and the potential damage to the brand that it does. Have you, as panellists, any experience of this?

David Rolton: Excuse me, Mr Bailey, could I just go back to the funding? Would you permit me, just for a second?

Chair: Yes.

David Rolton: For the SMEs, if you are a small company you perhaps have one or two young people who you are taking on to train. Could that funding be directed at some sort of relief from the risk of employment? If you are taking these people on-and you are taking only a couple on-the chances of perhaps not landing the right person or the right attitude can be quite high. With the laws of employment in the UK, that is quite a deterrent to an SME. That is a severe risk, where he has perhaps two people out of six in his organisation. Rather than direct funding-money just given to him-is there some way the funding could be directed to some form of relief?

Q312 Chair: Sorry, I am not quite clear what you mean by "relief".

David Rolton: I mean relief from employment legislation.

Q313 Chair: Yes. I think that is an area that is certainly worth developing. I am not quite sure that it is totally within the compass of this Committee, but yes, I am sure your comments have been noted.

David Rolton: Thank you.

Q314 Chair: Did somebody else wish to come in?

Peter Mawson: Only to add that I think, within Construction Futures, we draw a very clear distinction regarding work-based placement and experience that run alongside academic courses, which could be for 14, 18, 25, or 40 weeks-whatever they may be. We see those as entirely distinct from apprenticeships that tend, within the construction industry, to still adopt a traditional line. I think the devaluation of the brand, if it were to occur in the construction industry, would be because we had moved away from that assumption that apprenticeships are lengthy blends of academic and on-the-job training that, ultimately, do take a long time to secure the qualification.

Q315 Simon Kirby: I think the question has already been answered but I will just summarise what I think your position is, and you can disagree with me: apprenticeships should be more employer-led rather than training-provider-led and you broadly welcome Government money being made available so that businesses can be in the driving seat. Have I got it right?

Paul Southworth: I think some pump-priming of the initiative would get the private sector more involved than they currently are.

Alan Ainsworth: From the Barclays perspective, I think we are probably in a different position to SMEs, in that the reason we have done this is not anything really to do with Government funding. This will cost us significantly more as an enterprise than anything we would get back from Government, but that has not really featured. The reason we are doing this is because we think it is a good thing to do and the right thing to do to try to find ways to get people who currently have no realistic job opportunities in the financial services sector to have those.

Q316 Julie Elliott: I would like to ask a question, Alan, about your scheme because I think it is quite an interesting scheme. It has caught the attention of the media because it is quite a big thing that you are offering. There are a couple of things I would like to know about it. You are, obviously, targeting it at a group of people who are not particularly engaged with any of the employment processes in place at the moment, so how will you recruit the people to come on to your scheme? What criteria are you going to use? At the end of it, if they successfully complete whatever your scheme is going to offer, will they have any qualifications? Will they have an offer of a permanent job? Are you paying them a rate for the job while they are doing the scheme?

Alan Ainsworth: I guess there are three questions there. I will try to deconstruct them. In terms of how we are going to find those individuals, that has always been the tricky thing for companies such as us, because, at the moment, or prior to developing this scheme, we do not have the capability of attracting people who are difficult to reach. It stands to reason. We are working with a third-party company called Elmfield, which has the tentacles out there to speak to Jobcentre Plus and various other agencies. Part of this is about finding constructive ways to tap into the broader market that is out there. Clearly, that is difficult and it is why we are calling this a pilot. We do not yet know how we are going to do it but we have come up with quite a number of different routes, including the partner that we are working with.

In terms of the second question around qualifications, the qualification will be a BTEC in Providing Financial Services. We will also provide City & Guilds around literacy and numeracy. Clearly, through the year of working with Barclays, whether in a branch, a contact centre or a processing centre, we hope those people will develop other skills as well. We anticipate about 30% of the time the person is there to be spent on development, whether on a course or doing something in-house in terms of learning. We hope and believe that the frame that we have developed alongside the apprenticeship scheme will give people something that will enable them to develop a career within Barclays-and that is what we would love to happen-but, if they cannot, they have something transferable and portable into the world of work more broadly.

In terms of pay, while they are on the scheme they will earn the same amount as somebody who is not on the scheme, so they will be recruited into entry-level positions on that pay for the grade. At the end of the year, provided those individuals pass the performance assessment criteria that everyone else has to pass, and they pass the qualifications, they will be offered full-time employment within Barclays.

Q317 Julie Elliott: The Department has told us that they are going to prioritise investment around apprenticeships to where it is going to get the best results-where the returns are going to be greatest, in effect. Where do you think that is going to be? Is it going to be around age groups or sectors? What is your general view on where you think that is going to be?

Milan Shah: I think it depends, quite critically, on what the primary purpose of this apprenticeship programme is. It is a flagship scheme for the coalition. In the short run, we have a million in terms of youth unemployment. That is a serious issue that needs to be tackled. I can see that a lot of the headline-grabbing initiatives are focusing on that. Some of them, actually, run counter to what might be a long-run sustainable solution to our real issue as the UK, which is supply-side constraints on skills. It hampers our long-term growth capacity. Those are two totally different issues and I think we are mixing up the two in apprenticeships.

I will give you a concrete example: if I wanted to push more people through apprenticeships, I would not be targeting SMEs at this particular time, and I would not be going for diversity of sector, because they are hard to reach. As Dr Adam Marshall of the British Chambers of Commerce said, go for the 100-249 employers; they are the most likely to give you the short-term boost in apprenticeships, if that is what we are after. There obviously has to be some growth in aggregate demand in the economy to pull them through, but that is where you are more likely to get it. Equally, if a business has already put in place the infrastructure and has had the experience of running an apprenticeship scheme, you are more likely to get them to take a second, third or fourth person than going to a fresh business and trying to set up the infrastructure from scratch.

In the short run, if what we are trying to do is to tackle the issue of youth unemployment, which is a serious issue for us to tackle not only as a society but as an economy, those are the sorts of tactics that we need to deploy. The long-term strategy, in my opinion, in terms of apprenticeships has to be geared to what the Germans and others around the world are doing, which is to tackle our supply-side constraints as an economy.

Q318 Margot James: The current funding framework provides for apprentices aged 16 to 18 to get 100% funding and older apprentices-19 to 24-just 50%. Do you think that is about right, or do you have a different view?

Milan Shah: If I just briefly repeat what I said earlier, in my sector-the food industry-we rarely are going to be tapping into the market at under-18. It is less than 2% of our workforce in the food industry-and remember that we, the food and drink sector, are the largest employer in the manufacturing sector. The second argument I would again repeat briefly is that people are going to retrain within their careers, so we really should not be ageist about this. That is the long-term issue and, if I were designing a scheme for the long term, I would not design it as we have now. The short-term issue is that we need to tackle the lost generation of youngsters that we face at the moment, so I fully agree with the priorities at the moment but I would like to see a sunset clause in that.

Q319 Margot James: Does anyone else have a view?

David Rolton: To me, you could almost define it by saying, "Don’t finance the training of jobs that will be displaced by technology in the future".

Q320 Mr Binley: How do you know which jobs they will be?

David Rolton: That would be wonderful.

Mr Binley: Where are you going to get your dustmen from?

Chair: Could I just say we could probably have a much wider debate than specifically we require today, notwithstanding that it is a very interesting subject.

Q321 Margot James: I think Mr Mawson wants to come in.

Peter Mawson: Only a very brief comment, just to say that I do not think funding is the entirety of the solution. I would not want us to leave here with that presumption that, if one pours more money into the problem, the problem will go away. I think it is much more deeply seated than that and more broadly based than that.

Q322 Margot James: Can I direct your attention to the 25-year-old-plus group? A large proportion of the apprenticeship growth has come from people over the age of 25. What is your experience of the over-25s?

Milan Shah: Not my experience, but my observation is that some form of continuing professional development-or lifelong learning, as we used to call it-is going to occur; whether or not it should be badged as an apprenticeship, I do not know. I was quite astounded by the eight-fold growth in the over-60s applying for apprenticeships. I thought that was absolutely astounding. I do not know what it tells us. I would not close the door on older members of society retraining through apprenticeships. I think it is going to be critical to the flexibility of the UK labour market in the long run.

Q323 Margot James: Does everybody agree with that? Can I just ask you: should we be concerned about some companies? We had the example of Morrisons given us by another witness, telling us that 85% of apprenticeships at that company are performed by members of the existing workforce. Do you have any issues with that?

David Rolton: It is back to who you know.

Q324 Margot James: Or who you work for, I suppose.

David Rolton: I think, from the perspective of an SME, you have the employment risk-I keep talking about it. If you know somebody, you have a better degree of security, so it is inevitable, I guess.

Milan Shah: If I could use the word "substitution", whenever public funding flows it is very difficult to disaggregate or look at causality issues. We have had lots of experience of it; for example, the Northamptonshire Enterprise Partnership deploys public funds. We are very careful to make sure there is some additionality and not some substitution.

Alan Ainsworth: This scheme that we are developing is not available to existing Barclays employees so, for us, it will not happen.

Margot James: Thank you. That is interesting.

Q325 Mr Ward: Alan, would you employ those people if they were not apprentices?

Alan Ainsworth: That is a great question. I would doubt it. The point of this is to try to access a market that we currently do not tap into.

Q326 Mr Binley: If I may, Mr Chairman, is it also about ensuring that they stay the course on the basis that, in order to succeed, they need to stay the course? I am thinking about the remedial bit again and providing the level of skills that you would normally expect to exist within the people you are taking on at the moment. Do you need a longer period of time and do you need to keep them there?

Alan Ainsworth: We do not know all the answers yet. This is a pilot programme that we have not begun. One of the reasons for doing this is, as I said, we want to tap into a group of people who we think have the right attitude and aptitude but not necessarily the academic qualifications. We always have challenges to keep good-quality people in every role that we have, and it may be that, by investing a lot in this group of people, we might get better levels of retention. We do not know that yet.

Q327 Mr Ward: Just to try to sum up all this, I am not so bothered about Barclays because I think Barclays will be all right. If we begin with the end in mind, the end we want is growth in manufacturing, engineering and construction. We want growth in that part of the economy. How much are apprenticeships the answer to that problem?

Paul Southworth: I think, from our point of view, being very parochial now, that challenge is upon us. We now have the Enterprise Zone. We are targeting ourselves to try to attract about 400 companies into that zone. The emphasis of the zone will be on high-performance technologies, which automatically means that our need for apprenticeships over the next five to 10 years is going to be absolutely huge, so we have to be focused on it.

David Rolton: I think it is one of a number of hurdles to manufacturing.

Q328 Chair: Can I thank you? I am just trying to, if you like, summarise the issues which I think have arisen from the comments that we have had. We undoubtedly have an overall skills shortage and we have, if you like, an employment profile that is going to require a higher level of skills across the board and in proportion to the total skills base that we have at the moment. We have several areas that stand out: first of all, there are the 1 million NEETs and young people unemployed, and a skills and employability requirement for them. We have the up-skilling of the existing labour force, and then we have the issue that, I think, historically we would have called "apprenticeships". That is the issue of fairly long-term, high-quality training, specifically or especially in the manufacturing sector to broaden our manufacturing capacity.

At the moment, we have an all-embracing apprenticeship scheme of delivery that seems to be delivering huge numbers in the one area of post-24 up-skilling, some progress in the lower area and, again, some progress but with great difficulty in terms of improving apprenticeships for manufacturing and broadening our skills base in that area. Would that be a reasonable summary? Is there anything that you, as representatives of providers and so on, would say is incorrect or would like to add to?

John Harley: May I just say that there is a part that Government has to play in it and there is a part that the media has to play in it, as well as companies and society as a whole? There are an awful lot of talented young people in the United Kingdom but all we seem to talk about is a lack of skills. They are talented, they need to be given the opportunity and they will rise to the challenge. Our nation has fabulous, young, talented people who need to be given an opportunity rather than keep talking about the lack of skills, the lack of desire from employers and where the funding has to go to. It is about time that we started talking about this talent and how we are going to get it mobilised.

Milan Shah: Very briefly, our university here within this county-the University of Northampton-was number one last year for value added. It is not really where you start from; it is where you end up in life. That is something that we used to tell our students-in fact, at graduation last year. I think the same applies if you are not at university.

Chair: Can I thank the panel and finish on that more upbeat note than perhaps we have had through all the deliberations? Just to make the general point, yes, I agree entirely. I am often amazed at the sheer drive, enthusiasm and potential aspiration of our young people. The issue really is how we, as a Government, through the agencies that we create to deliver the funding for them, can maximise their potential. Part of the object of this particular exercise is to try to make recommendations so that the enormous resources that are put into this are used to maximum effect on behalf of young people. I thank you very much for all your contributions today, and they will of course be incorporated in our final Committee recommendations. I might also add that, if, in retrospect, you think there is an answer that you would like to have given to a question that we neglected to pose to you, do feel free to write to us and we will be very happy to incorporate that as well. Thanks very much.

Prepared 5th November 2012