Examination of Witnesses (Questions 1-19)
Rt Hon John Denham MP and Mr Stephen Marston
20 MAY 2008
Q1 Chairman: Welcome, Secretary of
State and Mr Marston. Thank you very much for spending some time
here with us this afternoon. As you will be aware, the Committee
has a continuing interest in apprenticeships and this should give
us an opportunity to get up-to-date. I do not know, Secretary
of State, whether you would like to say anything by way of introduction.
If not, we will just go straight into questions.
Mr Denham: Perhaps I could just say very briefly
that I am pleased to be able to come here this afternoon. We found
the report that the Committee did last year extremely helpful
and extremely timely; it came just after the new department started
and when we were looking ourselves at the apprenticeship system
and the way we wanted to go. I think the input that was there
right at the very beginning, really, from the Committee was enormously
helpful. So I would like to place that on the record. I hope you
feel that we have, at least, learned something from what you said.
Q2 Chairman: Thank you very much
for that. Perhaps I can start the questions. There was a recent
report from your Department, which I think was on the pay of apprenticeships,
which found that apprentices received less on-the-job and less
off-the-job training in 2007 than in 2005, and the figures were
quite startling. Off-the-job training decreased, on average, from
5.5 to 3 hours per week and on-the-job from 12 hours to 8.5 hours
per week. We wondered whether you might tell us why you think
that has happened, whether there is any action that you think
the Government might take to change the trend or perhaps even,
as there has been some legislation suggested in the pre-Queen's
speech, whether there might be a clause which addresses that issue.
Mr Denham: Certainly that last point I will
come to in a moment, but I can respond positively on that. Yes,
if you get these sorts of figures in a report you obviously have
to take them seriously. I think we are at the stage, at the moment,
of trying to do some further work by looking at inspection reports
and, possibly, by asking Ofsted to go and look at this in more
detail to understand the figures. What we do need to understand
is that the figures reflect how apprentices themselves see their
own training, and therefore we should respect it. But it is, also,
of course, the case that probably (one can only say that for the
moment) more on-the-job training is delivered in a structured
way, compared with perhaps the situation a few years ago. So the
strict demarcation into training off-the-job and on-the-job may
not always be as clear to the apprentice, but I do not in any
way wish to dismiss the figures—it is something we do want
to understand. That is why we are looking at the inspection reports
and we are considering asking Ofsted to go and have a look at
this. When we publish the Draft Apprenticeships Bill it will include
proposals for an apprenticeship blueprint, which should help us
set a proper national framework which sets out the expectations
that apprentices have of what they should get from an apprenticeship—not
necessarily, I think, in terms of an absolute strict number of
hours, because that is bound to vary from situation to situation,
but at least the levels of training which should be available.
So I hope, because that blueprint will become part of the framework
for apprenticeships and become part of what defines a proper apprenticeship,
we should be able to deal with some of these issues through that
mechanism. So we have both a commitment to understand what is
going on and, I think, a commitment to find the right framework
to deal with it.
Q3 Chairman: So no minimum proportion
of time devoted to training?
Mr Denham: We are cautious—I think I would
say that to the Committee this afternoon—to say that across
the board of the entire range of apprenticeships that will exist
in many different settings and many different occupations we should
define a minimum number of hours or a minimum proportion. We need
to look at this in more detail as the National Apprenticeship
Service develops the blueprint and starts to specify the content,
when it will be clearer whether we need to go any further than
that. At the moment, I would be honestly picking a figure out
of mid-air and saying: "This is what I think the minimum
number of hours should be".
Q4 Lord Layard: I can see there is
a great problem in relation to on-the-job training and the exact
definition of what that is, but off-the-job is a relatively clear
concept. I had the impression, and I think other people had the
impression, that there was a commitment to the equivalent of a
day-a-week off-the-job. Is that wrong?
Mr Denham: I do not think there is a fixed commitment
to off-the-job training in such a sort of strict, numerical way.
I think it is perfectly true that we very often talk about apprenticeships
as having, typically, that sort of balance of the amount of time
you spend at work and the amount of time you spend away, obviously
(quite a lot of apprenticeships will do three weeks on the job
and a week at college—there are all sorts of different structures)
but we have not, to the best of my knowledge, defined it as rigorously
as that. I do think, my Lord Chairman, as we develop the blueprint,
we need to make sure it has enough content to really safeguard
the value of the apprenticeship as a system of training. I will
certainly say to the Committee we will look at these issues in
more detail with the NAS as they develop it. Just at the moment,
though, I am cautious about saying to you: "Yes, we think
we could easily define a set number of hours" and say that
would always be appropriate in all the circumstances.
Chairman: The minimum of one day a week was something
that we recommended in our report.
Q5 Lord Macdonald of Tradeston: As
you may recall, Secretary of State, our report drew attention
to the way in which the Government's Train to Gain scheme offered
employers more favourable funding arrangements for training to
Level 2 than are offered by funding for apprentices. Has this
situation been rectified?
Mr Denham: We were slightly unclear about the
Committee's recommendation on this point. Typically, it will cost
us about twice as much to support an apprentice doing an apprenticeship
to Level 2 as the same person simply doing a Level 2 through Train
to Gain. We think they are more expensive for us because it is,
if you like, a premium product. So we were a little unclear what
the Committee was identifying here as an anomaly. It certainly
is not the case that a Train to Gain qualification pays more in
terms of training costs than the apprenticeship.
Lord Layard: I thought the issue was whether the
employer was expected—if the person was over 18—to
pay for their off-the-job training. Have I got that right?
Q6 Chairman: I think that regulation
has now been changed by the LSC. On the other hand, we understood
that employers might receive some compensation for the employee
pay.
Mr Denham: Right. I can see the point. It is
quite true that in the Train to Gain system there is wage compensation
for smaller companies training up to Level 2. It is not always
taken up by employers but it is within the system. That does not
currently exist uniformly on apprenticeships, but we did say in
the apprenticeship review that we want, over the coming year,
to pilot a wage compensation mechanism for apprenticeships. So
if that is the issue, the Committee is quite right, that existed
in Train to Gain. At the time of your report it was not there
at all for apprenticeships. It obviously is potentially quite
expensive but we do want to find the resources, at least, to pilot
it and to see whether it would be a cost-effective way of supporting
apprenticeships in small companies.
Q7 Chairman: Certainly the evidence
we took in our report suggested that the level of incentive and
where the incentive went to is extremely important. Therefore,
the relative incentives between schemes are important as well.
Mr Denham: Yes.
Q8 Lord Best: Still on the Train
to Gain, in terms of the distinction in responsibilities with
the new National Apprenticeship Service and the relationship of
both of them to employers, is there a little bit of a danger of
overlap, duplication or a lack of clarity as to the respective
responsibilities of the two bodies?
Mr Denham: No. We work very hard to make sure
there is not any confusion. I understand why the issue has been
raised. For the larger employers, who will, at the moment, engage
with the National Employer Service in the LSC, one of the reasons
for having the core staffing of the National Apprenticeships Service
in the LSC is so that one point, effectively, can engage with
a major employer across a whole range of training, because many
companies that we deal with will be offering apprenticeships and
also utilising Train to Gain. So we want that to be a coherent
discussion. For smaller companies, and particularly those that
need to be approached about these issues, the Train to Gain brokerage
(which I suppose truly does cold-calling and rings round and tries
to offer an engagement in discussion about training needs) will
be able to encourage both support for apprenticeships and support
for Train to Gain, as we have it at the moment. The National Apprenticeship
Service will be there to offer the support. Once somebody says
"Yes, I am interested in exploring an apprenticeship",
the National Apprenticeship Service is there to discuss in detail
with the employer how that would be supported, what sort of framework
should exist for the apprenticeship, and so on. So we, hopefully,
provide the advantages, from an employer point of view, of a single
initial point of contact to get the discussion going, but, secondly,
of the specialist and bespoke service to support those employers
who want to offer the apprenticeship. We will work very hard to
make sure that the system is clear to the employer who wants to
engage in the system. What we have tried to avoid doing is a system
that entirely separates out different types of training, because
many employers will want to discuss the whole of their training
needs, not talk to one person about one and another person about
another.
Q9 Lord Kingsdown: We have an executive
summary of the Government's "World-class Apprenticeships"
paper, and it is a terrific survey, if I may say so, and a great
glimpse for the future. May I just ask you one question about
progress for the present, up to now? That is to do with the so-called
"matching service"—matching up applicants with
apprenticeship places—which is proposed in our report. I
think this says that it has already being piloted. Has much been
learnt so far from the pilot, and can we look forward to a national
service from this?
Mr Denham: Yes, the national service should
roll out from September of this year. We have it being piloted
at the moment in Hampshire, in the Isle of Wight (which is where
my constituency is), in Cambridgeshire and in the West of England.
I checked this morning: in Hampshire something like 17,000 people
actually registered with the service (this is potential trainees)
which I think is very encouraging. That is a couple of counties
which, together, I think, offer about 6,000 apprenticeship starts
per year, so it suggests a potential demand and interest out there.
We certainly know we are getting more inquiries; we know that
we are getting more people wanting to apply to do apprenticeships;
we know that employers are registering with this because they
want to make their apprenticeships available. It is a little early
yet, I think, to be absolutely clear how successful the service
is at directing the unsuccessful applicant to an apprenticeship
vacancy that might be available somewhere else, but I think we
are confident that that will grow in time. The service we have
at the moment is limited geographically. For example, the Hampshire
service does not exchange information with the West of England
pilot. The national service, of course, will be a national system,
and so information will be available around the country.
Q10 Lord Kingsdown: Will the availability
of places, though, for apprentices be uniform over the whole country?
Presumably not, when this is universal.
Mr Denham: No.
Q11 Lord Kingsdown: How does it match
up to the need?
Mr Denham: For example, in London we are, per
head of population, much less well-provided with apprenticeship
places than in other parts of the country. Where we want to get
to is a position where employers routinely see it to their advantage
to register their programmes on the matching service. So, for
example, in the hinterland around London, where there are generally
more places on offer, that would enable somebody who is in London
to identify something which may exist a few miles north, west
or south of the city, and to make an application there. Obviously,
at the same time, we will be doing a lot of work to build up the
number of vacancies and the number of opportunities in London.
The idea is simply that somebody is able to check to see if there
is not a vacancy in their chosen field in their area; there may
well be one available elsewhere, and that is quite important.
We have, certainly, parts of the country where, at the moment,
people struggle to fill the apprenticeships they offer, even though
they are quite highly prized ones to Level 3. Bringing that information
to a wider audience will help people to fill them.
Q12 Lord Turner of Ecchinswell: I
wonder whether you could comment on the issue of the progression
or, at the moment, relative lack of progression from apprenticeships
through to higher education—people who have an apprenticeship
and then manage the transition through to higher education routes.
It is something that our report commented on, as indeed other
reports have commented on. It would be desirable that there are
as many routes as possible for people to enter higher education.
I wonder whether you could comment upon what you perceive as the
policies that can help address that and whether they are at all
complicated by the division of responsibilities between the schools
area and the skills and universities area—at least in relation
to teenage apprenticeships.
Mr Denham: I do not believe that the division
of responsibility between two partners is a complicating factor.
We work very closely together. The Chief Executive of the National
Apprenticeship Service will report directly to the two Secretaries
of State for the two departments, and we are working very hard
at official level to make sure the structures work closely together.
I agree with you about the importance of progression and I think
it is a hallmark of a number of the most successful and most widely
praised schemes—the BT scheme and the Rolls Royce scheme,
and others—that a significant number of apprentices do progress
on to university. I think, particularly, with the development
of foundation degrees providing a further vocationally orientated
degree as an option, that will grow. We are doing two or three
things, in practical terms. One is we are encouraging, up and
down the country, lifelong learning networks to sign agreements
which exist between higher education providers, FE colleges and
other training providers in an area, and they will often set out
quite explicitly the commitment they make to encourage transitions
from one form of training to another. It is not uncommon for those
agreements, for example, to commit some higher education institutions
to offer a place to anybody who achieves a Level 3 qualification
in an area, and that would be Level 3 whether it is expressed
as A Level or a Level 3 vocational qualification. There are a
number of those agreements in place. So we would encourage higher
education providers to include apprenticeships to the appropriate
level within those agreements at local level. The second thing
we are doing is working with UCAS and HEFCE to give a proper weighting
to the apprenticeship framework. Two of the most popular ones
for higher education progression -the IT apprenticeship and the
engineering apprenticeship—now have tariff points exactly
the same as an A Level has a tariff point, so it can be counted
and seen by a university as having a certain weight and certain
rating for university applications. If we get the right progression
agreements, if we have the right accreditation of achievement
in apprenticeships and, crucially, we also have employers who
see this as quite a natural way of developing a member of their
staff—so the apprenticeship is not the end of the training—that
will lead more people to come through this route.
Q13 Lord Paul: Our report called
for Government funding to be paid directly to employers offering
apprenticeships in order to encourage them to supply more places.
You have partly accepted that in outline plans for an "apprenticeship
credit" to put Government money towards the training costs
for 18-19 year-olds. Is there any particular reason why other
age groups have not been included?
Mr Denham: I do not want to disappoint the Committee,
my Lord Chairman, because we probably have not quite accepted
the point as fulsomely as it sounds. There are two issues here:
one is we want to make the value of an apprenticeship training
more visible to employers. Many employers still do not understand
quite how much public money is available to support an apprenticeship.
The credit voucher, which we will begin to put in place in some
areas of the country later this year, is an attempt for an 18-year-old
to say (if they were, for example, thinking of doing an engineering
apprenticeship): "I am worth £15,000", and actually
getting the employer to see that. That process is part of a much
bigger project in my department which is to develop personal skills
accounts and a virtual purchasing power for people across the
whole range of vocational qualifications. It is making the money
that we make available much more visible to the employer. It is
not a real cash pot, so the individual does not have the money
to pay over as a cheque. Once you have got the employer engaged,
the system funding the apprenticeship is as the rest of the system
operates, but we think that by making the financing more visible
it will have a bigger impact. We did look in some detail during
the autumn at the Committee's proposal to pay the money direct
to employers. There are quite a lot of circumstances where we
already do that. Many of the big, national companies that engage
with the National Employer Service have a direct contract for
the delivery of apprenticeships. Our judgment is still that many
smaller companies would prefer not to be taking on all of the
extra administration that goes with handling the money directly,
and prefer to work through a training provider. So we have not
switched the whole system over to moving all the cash to employers.
I think there is a difference of view here between the Committee's
judgment of what we should do and where we are. We are concerned
seriously that if we mandated the system to move in that direction
some employers would not want to participate because of the extra
responsibilities that come with it.
Q14 Chairman: May I press that a
little further, for a moment? The big issue here is the SMEs—the
big companies, fine, a lot of them have traditions in apprenticeship,
and which way it is paid does not matter too much one way or another.
The key thing is how do you incentivise SMEs who do not have apprenticeship
schemes at the moment to take them up? It is very easy for SMEs
to say: "I have too many other things to do and I do not
want to take this on as well." Therefore, the nature of the
incentive—and it is partly the level of it financially—and
whether it comes to them or goes elsewhere, I think, is quite
important here. This is an area which has been a road paved with
good intentions for many decades back; this is an issue of execution,
and one of the reasons why the Committee put forward the suggestion
was that you have, somehow, got to crack that business of the
SMEs. SMEs respond to money. That is the area I think you need
to look at.
Mr Denham: I think there are two or three things.
We accept, at least in principle, though we have to squeeze the
budget, that ways to compensation, ways to subsidies for SMEs,
may be an important way in this area. So we are contributing towards
the wage costs at some point as well as the training cost, and
that is the most direct financial subsidy that we envisage in
the "World-class Apprenticeships" document. The second
thing I think we have to do is to tackle what is perceived, and
sometimes rightly, as the bureaucracy that surrounds this for
the smaller employer. One of the reasons that we think the smaller
employers may wish to work with training providers or Group Training
Associations is that somebody else can deal with all of that.
That does not actually preclude us trying to reduce the bureaucracy,
because I am not yet convinced we have got on top of all the bureaucracy
that is in the system, but if we can make it financially worthwhile,
if we can deal with the bureaucracy—and there are some issues
around flexibility, particularly for the employment of younger
apprentices at 16 and 17 (which is a difficult debate but one
that we need to look at)—we just need to make it as simple
as possible for the SME. My sense is if we can do those things
effectively we will address most of the concerns that are there
in the SMEs that genuinely wish to train and commit people, but
we have some way to go yet, I think, until we can say we have
delivered all elements of that package.
Q15 Lord Paul: Why not extend it
beyond 18-19 years?
Mr Denham: Apprentices do go on. There is a
reality about the way the system operates at the moment, and may
do, for good reason, for sometime to come, that quite a few employers
will look to recruit at 17, 18 or 19—and certainly beyond—rather
than at 16, partly because of perceptions, and sometimes realities,
about what you can allow a young person to do in the workplace
when they have only just reached that age. Some of these issues,
of course, we will have to revisit again, anyway, as we raise
the participation age, because many of the people who will be
staying and training to 18 will be on work-based training, they
will not be in colleges and they will not be in schools—that
is the way we see these things going. We certainly, also, want
to extend the use of apprenticeships outside the area that we
usually regard as "young people". So, for the first
time this year, we have included a budget line for about 10,000
apprenticeships a year aimed at those over 25, and that in part
is responding to a clear demand from employers to be able to offer
the same model of training to workers who are trying to re-skill
mid-career, as well as the young people coming through.
Q16 Lord Layard: I wanted to ask
you about the guaranteed apprenticeship, because I suppose that
to get that in place by 2013 is, perhaps, the biggest single challenge
facing the system. I wonder if I could ask three questions related
to it. Who is actually going to be responsible for it being delivered?
How many more places do you think this will require for 16, 17
or 18-year-olds, and how generally, between now and then, are
you going to make sure that you have got to a position where it
is actually deliverable?
Mr Denham: The National Apprenticeship Service
will be in the lead, working with the LSC, and then it will be
the Skills Funding Agency working with the employer community
to increase the number of apprenticeship places, and it will be
the NAS and the LSC which will be responsible (particularly the
LSC) for ensuring that there are sufficient places available to
meet the apprenticeship guarantee. So in organisational terms
within government, it is clearly the National Apprenticeship Service
which has the lead there, and that is why we will be looking for
a very high-profile and very capable chief executive to lead that,
because that is a big challenge. We expect there to be a number
of elements in getting the numbers that we need. We will clearly
have far fewer apprenticeships available in the public sector
than the public sector is as a proportion of employment in this
country—so there is potential for extending apprenticeships
there. There are some very successful models of it but it is not
widespread. We are, obviously, in general, going to be continuing
to look for new employers that want to offer apprenticeships for
the first time. We are in discussion with a number of major employers
that have big apprenticeship schemes to look at different ways
in which they could "over-train"—that is, take
on more apprentices than they need for their own needs—and
that is particularly attractive in the sort of industries where
you may have a major lead company and then a large number of much
smaller supply companies. If a major company can over-train, knowing
that people will be employed in the supply-chain companies, that
is another way of drumming up extra places. So there will be a
whole range of activities to create new places. In central Government,
my own Permanent Secretary, Ian Watmore, has taken the lead for
pushing central Government apprenticeships, and we have a target
of 500 across Whitehall to contribute. There will be a lot of
this type of activity. You have asked about the numbers, quite
fairly. I have to say to the Committee, my Lord Chairman, we are
trying to do the detailed modelling at the moment of the number
of apprenticeships that we will need to meet the various targets
that have been given, both in terms of the initial guarantee in
2013 and the one-in-five target we have in 2018 at the moment.
I hope to have those very shortly and we will certainly share
them with the Committee. I am not confident about giving the Committee
robust numbers just at the moment. We will let you have those
as soon as we feel confident in them.
Q17 Lord Layard: I am sure you must
be discussing this with the Treasury. Can one take the point of
view that, given the definition of the guarantee, the funding
principle has to be that this is, essentially, demand-led—there
must be enough money to meet the demand for something which is
guaranteed? Is that an argument that is accepted in this area?
Mr Denham: Inasmuch as such arguments are ever
accepted. I suppose the way I would put it is that it is going
to be pretty difficult for my department to deliver the ambitions
we have got if we do not have the money to do it. You would expect
me to say that. Each Comprehensive Spending Review comes along
and we have to argue the case and we have to have our projections
and make the case, but clearly the implication here is that to
achieve the sort of expansion that seems likely you will need
investment to back it up, and we will be looking for that support
from across government to do this.
Q18 Chairman: for schools to encourage
apprenticeships. A school can see itself as a good school if it
gets lots of people to university but it does not brag much about
getting people into apprenticeships. Yet, just as getting over
the hurdle of SMEs is extremely important if you are going to
succeed, so getting schools incentivised into having some of their
children (or a substantial number) go off to apprenticeships is
equally important. It is one of these blockages that you have
to get past. So, do you not really need to be much more proactive
in this area?
Mr Denham: You are right, my Lord Chairman.
There are some broader issues which we want to address, which
is the culture of celebration which should exist around apprenticeships.
We have made some good starts in the recent past with the National
Apprenticeships Your "World-class Apprenticeships" paper
proposes "supportive work to help careers guidance staff
in schools" inform students about apprenticeships. It also
states that National Apprenticeship Service staff may be invited
to schools' career evenings. In our evidence we found it quite
clear that schools often failed to provide information to pupils
about apprenticeships and, back on the point I made earlier about
incentives, there are no great incentives Week and far
more places now have apprenticeship ceremonies but we are still
nowhere near the level of recognition of an apprenticeship that
we get, for example, with GSCE and A Level results publication
every summer. So there is a broader cultural issue. On information,
advice and guidance, this is something that we are actively discussing
with DCSF. It is important to us. I need to put this broadly.
I think we have a number of issues across information, advice
and guidance, and in a different part of this there is the issue
about young people not being advised about STEM subjects. In another
part of the advice and guidance to young people is the question:
are young people advised properly about the right university for
them to apply to? So we have to deal with information, advice
and guidance about apprenticeships as part of a wider set of work
to ensure that all young people get guidance which is appropriate
to them. We certainly want to be sure that apprenticeships are
included there and that the National Apprenticeship Service is
able to make up for any shortfall of personal knowledge and experience
of apprenticeships which may be there amongst school staff. One
of the things, which is no criticism of people doing the job at
the moment, is that it is going to be quite rare for somebody
doing careers work in schools to have had personal experience
of being an apprentice. That means as you want to get people in
to talk about it you have got to have the National Apprenticeship
Service to do it. The most recent Educational and Skills Bill
puts a statutory responsibility on schools to give impartial careers
advice, and there will be—once it gets through Royal Assent—guidance
coming forward on how to do that. I think you will find, in the
Draft Apprenticeships Bill, there is a specific reference to careers
advice on apprenticeships there. So that strengthens that message
further. We have not completed this work yet, but the discussions
that you would want us to be having with DCSF are getting under
way now, we are looking into all of these issues and we will want
to move on all on them.
Q19 Lord Macdonald of Tradeston: Your
proposals talk about "significant staffing of National Apprenticeship
Service staff at regional and sub-regional level". Could
you comment on the extent to which the NAS staff will operate
at local authority level to ensure both that schools inform pupils
about apprenticeships and, also, that sufficient apprenticeship
places are available to meet demand in each local authority?
Mr Denham: We will need to make sure that the
service is staffed and structured in a way that enables that sort
of advice to be available at local level. As the Committee will
know, under the proposals that are out to consultation at the
moment, the responsibility for commissioning 14-19 services is
being devolved to local authority level, although, given the nature
of doing this and the amount of cross-boundary movement of students,
and so on, you have, local authorities will be expected to do
this collectively and, perhaps, with a lead local authority commissioning
on the part of others. Clearly a key part of 14-19 planning is
going to be planning the availability of apprenticeships and helping
to secure those. So as the local authorities develop their commissioning
role we will need to make sure the National Apprenticeship Service
can provide the right guidance and support to them in doing that
effectively, including the work to produce the right number of
apprenticeships. It will not, I suspect, be as crude as one person
in each local authority because the commissioning by local authorities
will be more sophisticated than that and they will cover a wider
area, but where those key decisions are being taken on 14-19 planning
we will need to make sure the NAS can provide all the support
that is needed.
|
