Business, Innovation and Skills CommitteeWritten evidence submitted by Rolls-Royce

Background

1. Rolls-Royce is a world-leading provider of power systems and services for use on land, at sea and in the air, and has established a strong position in global markets—civil aerospace, defence aerospace, marine and energy.

Rolls-Royce employs over 39,000 skilled people in offices, manufacturing and service facilities in over 50 countries. Over 11,000 of these employees are engineers. Annual underlying revenues were £10.8 billion in 2010, of which more than half came from the provision of services.

The firm and announced order book stood at £61.4 billion at 30 June 2011, providing visibility of future levels of activity.

2. Rolls-Royce invests significantly in its people in order to maintain its reputation as a world class engineering company. Each year, the Company invests around £38m on training and vocational education.

3. The Company currently has 550 graduates on our Graduate Programme worldwide, of which 400 are based in the UK. 242 graduates were recruited last year and we plan to recruit a further 389 in 2012.

4. Rolls-Royce has 878 Apprentices on its development programme worldwide (654 in the UK). In 2011, we recruited 183 apprentices in the UK and in 2012 we plan to recruit a further 221. For our Apprenticeship Scheme we received over 3,000 applications for the 2011 intake and a similar number in the current 2012 cycle.

5. Our success might be judged by our 98% retention rate and an Ofsted grade 1:1 or perhaps that ex-Apprentices occupy up to 30% of our UK senior management roles.

6. In the UK Rolls-Royce delivers a Young Apprentice programme (for 14–16 year olds attending Rolls-Royce one day and school four days per week).

7. The 654 trainees employed by Rolls-Royce are in the main Advanced Apprentices and a rapidly growing stream of Higher Apprentices to meet its capability requirements.

8. Rolls-Royce in Derby has in 2011 started to train more Apprentices than its own requirement with a view of placing them into supply chain companies and other local manufacturing businesses, the first 16 started this programme in 2011 and by mid 2012 a total of 50 apprentices will have commenced training. The first three apprentices have been offered employment in supply chain companies.

9. For a number of years local manufacturing companies have used the Rolls-Royce apprentice training organisation and facilities to deliver the first phase of foundation skills training, currently there are 59 apprentices from non Rolls-Royce businesses.

10. Rolls-Royce invests around £1.2 million per annum in supporting further and higher education for our apprentices. The result is that over 50% of UK apprentices enter higher education courses before the age of 30.

Apprentice Training Agenda

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

11. One of the major challenges for the manufacturing sector is the replacement of their ageing workforce; Rolls-Royce also has the industry wide problem of an ageing population with 36% of our works populations over 50 years of age. For larger companies the training of apprentices is a key means of replacing retiring workers and introduces new skills and ways of working. The key is to have apprentice programmes designed to meet the needs of the future, for the high value add manufacturing sector.

12. Due to their size and scale, SMEs generally find the training of apprentices more difficult to establish and the critical basic skills off-the-job very difficult to deliver.

13. This year Rolls-Royce will be upgrading its Derby basic skills training centre in partnership with the Skills Funding Agency and the National Apprenticeship Service with the aim of increasing the number of Apprentices delivered to meet local SME’s and supply chain companies’ needs. The Department of Business, Innovation and Skills is providing £6 million of financial support for construction of the Academy. Rolls-Royce will invest to upgrade the centre with £5.2 million aero engines, £1.5 million of machine tools, £120 K of measurement equipment and £700 K of IT equipment.

14. The infrastructure of company training centres, Group Training Association centres and good quality FE based centres has shrunk in the UK. The limited manufacturing training capacity will be a major issue in the growth in the number of companies training apprentices for the engineering manufacturing sector.

15. Funding should be focused on encouraging those companies, Group Training Associations and FE Colleges who have good quality training provision to increase the numbers of apprentices trained by sharing these training facilities with other local manufacturing companies and for large companies their supply chains.

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

16. Apprenticeships shaped by employers to meet the future needs of the business can be a very good means of building capacity and capability as well as an excellent way of introducing skills and knowledge to support the introduction of new technologies.

17. Apprentices not only fill critical roles after their training programme they go on to grow within the business into both technical and operational management roles. In Rolls-Royce up to 30% of our current UK senior managers started their careers as Apprentices.

18. In 2007 Rolls-Royce introduced an Assembly & Manufacturing Leadership Development Scheme for apprentices who have shown leadership potential. The scheme is designed to fast track individuals to leadership positions and gains an MSc in Engineering Business Management with Warwick University.

19. Rolls-Royce apprentices have consistently been successful in meeting the requirements of their programmes with 98% successfully completing their training and over 85% successfully completing a Higher Education qualification (eg HNC/HND) and with approximately 50% progressing to a full honours degree.

20. The Rolls-Royce Apprenticeship programme is seen as a credible alternate route for some young people who achieve similar levels of end qualifications as the ‘A’ level/University path.

21. In the manufacturing sector it is critical to develop people to fill high volume manufacturing operators at level 2 as well as, skilled practical and technical roles at level 3 and technicians at level 4 & 5.

22. The numbers at each level needs to be driven by the high value manufacturing sectors requirements to replace an ageing workforce, support changing technologies and to enable companies to take advantage of business growth opportunities.

23. The key issue is that at each level:

(a)skills are developed to meet the needs of the role;

(b)that the education programmes support the understanding of the processes being worked on; and

(c)that the individuals demonstrate competency by performing the role to the required standard.

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

24. It costs around £70,000 plus pay and benefits to deliver each apprenticeship in engineering/manufacturing over three to four year programme.

25. The increase in the number of older apprentices along with the increasing number of ethnic minorities and female trainees taking up apprenticeships has had a very positive impact on the Rolls-Royce programme. Some of the older apprentices who have had employment in non skilled areas or in the armed services have been the most focused and committed apprentices having been given a second chance at a career.

26. Rolls-Royce supports the approach that funding should be focused on the 16–18 years olds because of the social needs to establish a route into work for school leavers. It is less understandable that the apprenticeship policy is to limit other funding to 19–24 year olds given people develop in different ways and at different times in their lives.

27. Funding should be focused on apprenticeship programmes that deliver skilled people on programmes and that meet the key principles of an Apprenticeship, regardless of starting age:

(a)skills developed to an industry standard;

(b)education and knowledge acquired to support the understanding of the skills; and

(c)the demonstration of competency in a role assessed by a “master” of the skill.

28. Introduction to work programmes are important to individuals entering the job market and for employers skilling the workforce. This type of programme can be good at developing skills; however the funding should be separate to apprentice training to avoid any undermining of the Apprentice brand.

For more information on Rolls-Royce apprentices:
http://www.rolls-royce.com/careers/what_can_do/graduates/apprenticeships/index.jsp

2 February 2012

Prepared 5th November 2012