House of Commons Business, Innovation and Skills Committee
Apprenticeships
Fifth Report of Session 2012–13
Volume II Oral and written evidence
Additional written evidence is contained in Volume III, available on the Committee website at www.parliament.uk/bis
Ordered by the House of Commons to be printed 30 October 2012
HC 83-II [Incorporating HC 1843-i to 1843-vi, Session 2010-12] Published on 6 November 2012 by authority of the House of Commons London: The Stationery Office Limited £0.00
Business, Innovation and Skills Committee
The Business, Innovation and Skills Committee is appointed by the House of Commons to examine the expenditure, administration, and policy of the Department for Business, Innovation and Skills.
Current membership Mr Adrian Bailey MP (Labour, West Bromwich West) (Chair) Mr Brian Binley MP (Conservative, Northampton South) Paul Blomfield MP (Labour, Sheffield Central) Katy Clark MP (Labour, North Ayrshire and Arran) Mike Crockart (Liberal Democrat, Edinburgh West) Julie Elliott (Labour, Sunderland Central) Rebecca Harris MP (Conservative, Castle Point) Margot James MP (Conservative, Stourbridge) Simon Kirby MP (Conservative, Brighton Kemptown) Ann McKechin (Labour, Glasgow North) Nadhim Zahawi MP (Conservative, Stratford-upon-Avon)
The following members were also members of the Committee during the parliament. Luciana Berger MP (Labour, Liverpool, Wavertree) Jack Dromey MP (Labour, Birmingham, Erdington) Dan Jarvis MP (Labour, Barnsley Central) Gregg McClymont MP (Labour, Cumbernauld, Kilsyth and Kirkintilloch East) Ian Murray MP (Labour, Edinburgh South) Nicky Morgan MP (Conservative, Loughborough) Chi Onwurah MP (Labour, Newcastle upon Tyne Central) Rachel Reeves MP (Labour, Leeds West) Mr David Ward MP (Liberal Democrat, Bradford East)
Powers The Committee is one of the departmental select committees, the powers of which are set out in House of Commons Standing Orders, principally in SO No 152. These are available on the Internet via www.parliament.uk.
Publications The Reports and evidence of the Committee are published by The Stationery Office by Order of the House. All publications of the Committee (including press notices) are on the internet at www.parliament.uk/bis. A list of Reports of the Committee in the present Parliament is at the back of this volume.
The Reports of the Committee, the formal minutes relating to that report, oral evidence taken and some or all written evidence are available in a printed volume. Additional written evidence may be published on the internet only.
Committee staff The current staff of the Committee are James Davies (Clerk), Peter Stam (Committee Specialist), Josephine Willows (Committee Specialist), Ian Hook (Senior Committee Assistant), Pam Morris (Committee Assistant), Henry Ayi-Hyde (Committee Support Assistant).
Contacts All correspondence should be addressed to the Clerk of the Business, Innovation and Skills Committee, House of Commons, 7 Millbank, London SW1P 3JA. The telephone number for general enquiries is 020 7219 5777; the Committee’s email address is [email protected]
Witnesses
Page
Thursday 1 March 2012
Denis Hird, Chief Executive, JTL Training, Alex Jackman, Senior Policy Adviser, Ev 1 Forum of Private Business, and Graham Hoyle OBE, Chief Executive, Association of Employment and Learning Providers
Tuesday 6 March 2012
Professor Keith Ridgway CBE, Research Director, Advanced Manufacturing Ev 19 Research Centre, John Baragwanath OBE, Projects Director, AMRC, and Rt Hon Richard Caborn, Adviser, AMRC
Sharon Ward, Group HR Manager, Sheffield Forgemasters International Ltd, Ev 25 Alison Bettac, Group HR Director, Firth Rixson Ltd, and Richard Cook, Production and Personnel Director, AESSEAL plc
Peter Flinn, Specialist in high value manufacturing, Technology Strategy Board Ev 31
Kyle Johnson, Chris Parkin, Lewis Nicholson, Luke Shaw and Chloe Jones, Ev 33 apprentices
Tuesday 13 March 2012
Professor Nick Petford, Vice Chancellor, University of Northampton, Len Closs, Ev 39 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
Peter Mawson, Chief Executive, West Northamptonshire Development Ev 46 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
Tuesday 27 March 2012
Stephen Uden, Head of Skills and Economic Affairs, Microsoft UK, Ray Wilson, Ev 56 Director and General Manager, Carillion Training Services, Justin Owens, Human Resources Manager, Robinson Brothers Ltd, and Alex Khan, Managing Director, Education and Training, Babcock International Group
Norman Pickavance, Group HR Director, Wm Morrison Supermarkets plc, and Ev 66 Ged Syddall, Founder and Chief Executive Officer, Elmfield Training Ltd
Tuesday 17 April 2012
Martin Doel, Chief Executive, Association of Colleges, and Tom Wilson, Director, Ev 76 Unionlearn, TUC
Nick Linford, Author and Managing Editor of FE Week Ev 88
Thursday 26 April 2012
David Way, Interim Chief Executive, National Apprenticeship Service, and Geoff Ev 97 Russell, Chief Executive, Skills Funding Agency
Wednesday 16 May 2012
Paul Coxhead, Chief Executive, Logistics Apprenticeship Training Academy and Ev 118 Neil Bates, Group Chief Executive, Prospects Learning Foundation
John Hayes MP, Minister of State for Further Education, Skills and Lifelong Ev 124 Learning, and Gila Sacks, Deputy Director of the Apprenticeships Unit (BIS/DfE)
List of printed written evidence
(published in Volume II: Oral and written evidence)
Department for Business, Innovation and Skills Ev 137: Ev 152: Ev 216 Association of Employment and Learning Providers Ev 156 Association of Colleges Ev 166 Carillion plc Ev 170 Elmfield Training Ltd Ev 172: Ev 175 Forum of Private Business Ev 176 JTL Ev 181 Microsoft Ev 183 Wm Morrison Supermarkets plc Ev 186: Ev 188 National Apprenticeship Service (NAS) Ev 188: Ev 203: Ev 219: Ev 224 TUC Ev 207 West Northamptonshire Development Corporation Ev 213 BIS/DfE Apprenticeship Unit Ev 218
List of additional written evidence
(published in Volume III on the Committee’s website www.parliament.uk/bis)
157 Group Ev w1 A4e Ltd Ev w3 AAT Ev w7 ADS Group Limited Ev w8 Active Technologies Limited Ev w10 Alliance Sector Skills Ev w12 Apprenticeship Ambassadors Network Ev w15 Aspire Achieve Advance Ltd Ev w21 Asset Skills Ev w23 Association of Licensed Multiple Retailers (ALMR) Ev w25 Association of Teachers and Lecturers (ATL) Ev w32 Avanta Enterprise Ltd Ev w33 BAE Systems Ev w34 Barrow Training Partnership Ev w36 Bentley Motors Ltd Ev w36 Eleanor Moore, Workforce Development Co-ordinator within the Museums Ev w39 Development Unit, Bristol's Museums, Galleries and Archives, and Hala Osman, Performance and Evaluation Officer, Bristol's Museums, Galleries and Archives British Chambers of Commerce Ev w40 British Constructional Steelwork Association Limited (BCSA) Ev w44 British Gas Ev w45 British Retail Consortium (BRC) Ev w47 Professor Jill Brunt FRSA Ev w49 CFA Ev w50 CSCS Ev w57 Centrepoint Ev w58 Certified Computing Personnel (CCP) Ev w61 Chief Economic Development Officers Society (CEDOS) & the Association Ev w63 of Directors of Environment, Economy, Planning & Transport (ADEPT) Chris Berridge, Stonemason, Sam Fairgrieve, Bricklayer, Hayley Wright, Beauty Ev w66 Therapist, Ben Eaton, F1 Car Painter, Richard Sagar, Electrician and Business Owner, Linzi Weare, Hairdresser, Keith Chapman, Landscape Gardener and Business Owner, Joe Price, Carpenter Circle Housing Group Ev w68 CITB-ConstructionSkills Ev w70 City Gateway Ev w73 City & Guilds Ev w78: Ev w85 Cogent Sector Skills Ev w86 co-operative Group Apprenticeship Academy Ev w87 Crafts Council Ev w88 Creative & Cultural Skills Ev w90
DCS Europe plc Ev w96 EEF Ev w97 Edge Foundation Ev w100 Electrical Contractors' Association (ECA) Ev w108 Energy & Utility Skills Limited Ev w111 Engineering Construction Industry Training Board Ev w115 Federation of Master Builders (FMB) Ev w122 Federation of Small Businesses Ev w127 Financial Skills Partnership (FSP) Ev w129 Food and Drink Federation Ev w130 Professor Alison Fuller and Professor Lorna Unwin Ev w132 Fusion21 Ev w135 Gateshead Council Ev w137 Gatsby Charitable Foundation Ev w140 Greater Manchester Learning Provider Network Ev w143 Greater Manchester Local Enterprise Partnership Ev w144 Green Lantern Training Ev w147 HP Consultancy and Training Ev w149 Herefordshire, Worcestershire and Shropshire Training Providers Association Ev w151 Heating and Ventilating Contractors' Association (HVCA) Ev w152 Improve Ltd and the National Skills Academy Ev w155 Institute for Learning Ev w158 Institute of the Motor Industry Ev w160 Institution of Engineering and Technology (IET) Ev w162 Ixion Ev w164 JHP Group Ev w165 Richard Jenking Ev w168 KM Training Ltd Ev w171 Professor Ewart Keep, Cardiff University Ev w172 Lantra Ev w176 Professor Lord Richard Layard and Dr. Hilary Steedman, Centre for Economic Ev w179 Performance, London School of Economics and Political Science learndirect Ev w185 Learning and Skills Improvement Service (LSIS) Ev w187 Liebherr-Great Britain Ltd Ev w188 Liverpool City Council Ev w189 Local Government Association Ev w194 London Councils Ev w196 McDonald's Ev w198 Mayor of London Ev w202 Manufacturing Technologies Association Ev w206 Metaswitch Networks Ev w208 Mimosa Healthcare Group Ev w209 NCG Ev w211 National Childminding Association Ev w212
National Grid Ev w216 National Institute of Adult Continuing Education Ev w218 National Skills Academy for Nuclear Ev w220 National Specialist Contractors' Council (NSCC) Ev w222 National Union of Rail, Maritime and Transport Workers (RMT) Ev w225 National Union of Students (NUS) Ev w228 North West SHA Workforce Ev w230 North Yorkshire County Council Ev w231 Ofsted Ev w231 Open University Ev w234 Pearson International Ev w237 People 1st Ev w240 Recruitment & Employment Confederation Ev w244 Remit Group Ev w246 Rolls-Royce Ev w249 Paul Rowlands, Arenas Rigging Ev w251 Royal Aeronautical Society Ev w252 Semta Ev w253 Shropshire Training Provider Network Ev w255 Skills for Care & Development Sgiliau Gofal a Datblygu Ev w257 Skillset Ev w260 Skillsmart Retail Limited Ev w263 Sheffield City Council Ev w265 Sheffield Independent Film and Television (SHIFT) Ev w269 Skills for Justice Ev w270 Society of Motor Manufacturers and Traders (SMMT) Ev w276 Specialist Engineering Contractors' Group Ev w277 Strategic Forum for Construction Ev w278 SummitSkills Ev w279 Tradeskills4U Ltd Ev w281 UCATT Ev w282 UK Commission for Employment and Skills Ev w287 UK Contractors Group (UKCG) Ev w295 Unite the Union Ev w300 Visa Europe Ev w304 West Anglia Training Association Ev w306 West Berkshire Training Consortium (WBTC) Ev w307 West Lancashire Challenge Project Partners Ev w308 West Midlands Training Provider Network Ev w310 Michael Woodgate, Independent Skills Consultant Ev w311 Worcestershire Health & Care NHS Trust Ev w319 Working Links Ev w320
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Business, Innovation and Skills Committee: Evidence Ev 1
Oral evidence
Taken before the Business, Innovation and Skills Committee on Thursday 1 March 2012
Members present: Mr Adrian Bailey (Chair)
Mr Brian Binley Simon Kirby Paul Blomfield Ann McKechin Katy Clark Mr David Ward Rebecca Harris Nadhim Zahawi Margot James ______
Examination of Witnesses
Witnesses: Denis Hird, Chief Executive, JTL Training, Alex Jackman, Senior Policy Adviser, Forum of Private Business, and Graham Hoyle OBE, Chief Executive, Association of Employment and Learning Providers, gave evidence.
Q1 Chair: Can I welcome you and thank you for Q4 Chair: Presumably an organisation—for instance, agreeing to come and speak to the Committee today? Rolls-Royce—would have the capacity for that. I just have a few opening remarks. Obviously, we Graham Hoyle: Yes, indeed. But there again, if you have got a lot of questions and there are three of you, are going to take that as an acceptable example, it so I will repeat what I have said to many panels means you have to put some kind of differentiation in before: you do not need to answer every question if to say, perhaps, that this would not be appropriate for you feel that there is nothing to either add or subtract a small employer. What we have tended to do is to go from the answer given by another of the panel. Could for some kind of employer grouping over recent you just introduce yourself for voice transcription years—it used to be the purposes? We will start with you, Mr Hoyle. National Training Organisations; it is currently Graham Hoyle: My name is Graham Hoyle. I am Sector Skills Councils—who collectively have Chief Executive of the Association of Employment designed the framework, which, in fact, incorporates and Learning Providers. all the elements that I have mentioned. There is actually a great danger in having an apprenticeship Alex Jackman: I am Alex Jackman. I am Senior designed by an individual employer, including a large Policy Adviser at the Forum of Private Business. one. If I could just give you a personal anecdote from Denis Hird: Denis Hird, Chief Executive, JTL. many years ago when I first started working in the Ministry of Labour—some of you will not remember Q2 Chair: I will start off with a question to Mr Hoyle that nomenclature. in particular. There has been a big debate about what exactly constitutes an apprenticeship. How would you Q5 Chair: Ray Gunter, wasn’t it? define it? Graham Hoyle: Ray Gunter, yes. I could give you a Graham Hoyle: We have actually come up with a few other names, but I guess we have not got time proposed definition, and the key parts are: they must this morning. It was very interesting, as a very young be employed; they must be following a fit-for-purpose man, starting at the Bristol Employment Exchange, training programme designed by employers, critically; when the Government cut its funding for a big project, it must include elements that are properly and TSR-2, in the defence industry. I was confronted as a independently accredited; and it should be done on teenager with 40 to 50-year-old Rolls-Royce the job with support from off-the-job training—by all apprentices, who were acknowledged as the means—with elements that are learnt in a classroom Rolls-Royce apprentices. They were unemployed and or wherever. Basically, the learning should take place they were non-transferable. They were unemployed on the employer’s premises as part of a job under the and they were recognised to be at the top of their supervision, primarily, of the employers that they are tree, but so narrow were their skills that they were not working for and will be working for later on. It is a transferrable into general engineering. That taught me combination: employer-designed; must be employed; a lesson very early on about the dangers of narrow apprenticeship. independently accredited; and on the job. Those are Now we tend to do it through SSCs. It is not the only the key factors. answer. Certainly, they are employer-designed but they must have—and we have it now and I believe it Q3 Chair: Could you just amplify, shall we say, a is right—an element of transferability within them, in little on employer design? the framework, which allows people not to be trained Graham Hoyle: Yes. There are obviously different for one company—especially in this fast-moving ways of doing this. It could be that the individual world—but enables them to be fit for the purpose in employer designs an apprenticeship for themselves. that company, of course, and have sufficient cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:46] Job: 021099 Unit: PG01 Source: /MILES/PKU/INPUT/021099/021099_o001_th_BISC 01 03 12 CORRECTED.xml
Ev 2 Business, Innovation and Skills Committee: Evidence
1 March 2012 Denis Hird, Alex Jackman and Graham Hoyle OBE transferable skills so that, when they are required to, interesting argument, which I guess we perhaps won’t they can move on to other companies. You have this have today. They had to be fit for purpose, and for balance of generic transferable skills, which the most of the frontline operations in those sectors it is specific employer may or may not be overly interested at Level 2, not Level 3, so we have to be very careful in, and the particular skills that the employer needs to about our aspiration. That is what those sectors need. conduct their business at the end of the day. There is There are progression opportunities to move to a balance in there somewhere. Level 3 and, indeed, into higher apprenticeships, but Chair: Paul Blomfield has a supplementary question the fit-for-purpose mainstream route into a job—and, on this. indeed, progression—is through an apprenticeship, but they look rather different to the ones that we had Q6 Paul Blomfield: I represent a city with a long before 1994, which in this day and age with the tradition in steel and engineering apprenticeships, and economy we have got, looks rather limited and I think that most people would probably agree with— narrow. We have opened them up, which I think is a perhaps with different wording—everything that you perfectly good thing, but it means that the descriptors have said, Mr Hoyle, except that most people see an and the nature of those apprenticeships have changed apprenticeship as a route into a job. That was absent somewhat as we have embraced different industries from your definition. Was that deliberate? and sectors. Graham Hoyle: Yes, it was deliberate because in my definition—and I think it is an interesting point—an Q8 Mr Ward: One of the problems for the apprenticeship is employed from day one. The route hospitality industry, when trying to encourage training into the job is achieved by the actual start point of the and development, is the transferability. There is the apprenticeship itself, so in some respects the route into concern that once they are trained the staff will move a job precedes the actual attainment of an on for a few bob more. Is there a conflict on this issue apprenticeship. of transferability? Whilst they were with Rolls-Royce—or Nissan or whatever it may be— Q7 Paul Blomfield: Perhaps I should have been wouldn’t they be enticed or encouraged to go clearer: I mean a route into a career. The reason I ask elsewhere? It is a protection for the employer to have the question—and it is an issue we are going to come very specific training programmes for their employees back to in our inquiry, I am sure—is because in some to stop them going elsewhere. contexts it looks as if in-house training has been Graham Hoyle: It is an argument I still hear and there rebranded as an apprenticeship. In terms of getting the is some validity to it. It is still there. I have been in apprenticeship brand right, is this an issue we ought this field for—and I am going to say it—several to be looking at? decades: too long, probably. I have to say the Graham Hoyle: If I may, I would say two things on poaching argument, which has not disappeared off the that very valid point. The protection about in-house scene, has reduced dramatically, I would say, over the training and, if you like, the narrowness—which I last 10 years in particular. If you take hospitality— have already suggested is not a good idea—is simply as it is the example you use, but elsewhere this currently protected by the frameworks, which do is valid, too—it is the most extreme. There is a incorporate the generic skills, the basic skills and the transferable skills. That is part and parcel of a massive labour turnover in that sector anyway, which framework and is often covered by some of the off- is nothing to do with apprenticeships and nothing to the-job training. We used to call it day release. It is do with training. It is the nature of that particular still not a bad term; it is still pretty accurate. You still sector. What has happened very much over the last have that in frameworks, so you have this decade—and this is a very positive observation—is transferability element currently within the 200-odd that British business and industry have belatedly frameworks that we are following through at the signed up to the returns on investment and training, present time. That is the first point. and realised that it is something you have to do, The second point is that we do not want a big debate although there may well be some leakage. They have on jobs and careers. They have slightly different realised that it is absolutely essential to have high- meanings to different people. I think we do need to be quality—and I would say on-the-job—vocational careful. I was around when modern apprenticeships training in order to profitably run their organisations were introduced in 1994, and one of the big and businesses. That message has gone in. revolutions that happened when they came into being Twenty years ago, I was on platforms and we were all was that we opened up this form of training— bemoaning the fact that training was not seen as an apprenticeships—beyond the traditional male- investment; it was seen as a cost. Every time you had dominated industries of engineering, manufacturing a recession, the first thing that went were apprentices. and construction that they had operated in for a couple That has not happened this time. When the particular of centuries. We massively opened them up into the economic problems started a couple of years ago, it growing service sector in this country, and they were was interesting that almost on day one there was a designed on the same basis but also to be fit for full-page advert in the national press featuring about purpose within those sectors. 70 FTSE leaders saying, “We must not jettison Now when you start looking in hospitality, catering, training; we need to keep it going in order to be ready retail or care, they are huge industries and sectors in to deal with the upturn.” I will tell you now that I this country that have grown dramatically. First of all, have not experienced that kind of message coming they are not necessarily male-dominated, so that is an straight from the business sector. cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:46] Job: 021099 Unit: PG01 Source: /MILES/PKU/INPUT/021099/021099_o001_th_BISC 01 03 12 CORRECTED.xml
Business, Innovation and Skills Committee: Evidence Ev 3
1 March 2012 Denis Hird, Alex Jackman and Graham Hoyle OBE
So, yes, I do come across the poaching argument. It and would be very helpful to them—and most people is still there. I think it is narrow-minded, but it is would take a minimum period of time. We have just nothing like as big as it used to be. We just have to set it at 12 months, and my association agrees with accept that there is going to be leakage and poaching. that. We have had 12 to 13-week ones; that does not I do not think it is the big issue of the day. seem right, and some of them are run by members of our association. That does not seem to be sufficient to Q9 Chair: Can I just follow on? You have given a get the experience required in there. definition of an apprenticeship. I suppose, just simply, My biggest concern at the moment on length of stay is it important that there is a definition? Secondly, is that one of the other revolutions in 1994, which I should any definition of an apprenticeship—and again referred to, was that we took away time serving and you have partly covered this—refer to a minimum we also, at that stage, took away the length of stay and time to complete, or do you think learning and the entry age. Up until then, you became an apprentice at intensity of the experience is more important? 16 or 17, or you missed the boat. That has held Graham Hoyle: Those are two separate questions. generations down in terms of skills and development, Thank you. I think it is important, quite frankly, to which has done the country no good whatsoever. I have debates like this—and there are many other think the need to have a comprehensive framework to debates going on, though perhaps not as important as a level that the industry wants and can use is the this—based on different perceptions of critical thing, and we should then allow people of any apprenticeships: as they are, as they should be. Quite age, part-qualified, to finish the job off, quite frankly, frankly it is very difficult to have that debate if you as quickly as possible. It is in the interest of the do not have a core definition against which to individual, the company and the economy. When you compare. We have got apples and pears and oranges get to 19-plus, I am very edgy about putting in a being debated and it is a bit hard. minimum period—even one as modest as 12 I said in one of our papers recently that there are months—when we find 35 to 45-year-olds who have people—and there may well be people here today— got most of the way by accident, who can have a who focus on the traditional apprenticeship. I chance of being properly qualified, with all the kudos mentioned engineering, manufacturing. They tend to that brings, and who can contribute to their own future be three or four years; I can remember when they were development and profitability as well as their seven, certainly five, and they tended to be companies. If they have done most of it already and male-dominated and so on. That still happens— we suddenly say they have to stay and put in another though hopefully not the male-dominated bit—and 12 months, it will be debilitating and people won’t they still carry on at a high level. Indeed, one of my turn it on. colleagues here runs them, and very effectively, too. That is a perfectly good example of an apprenticeship: Q10 Chair: That was interesting. Now, we have got it starts at 16; it is job creation; it is very intensive— a lot of questions, so I do want to move on, but I do and I am not going to say high quality, as quality is a feel the need to bring in other members of the panel, dodgy word—it takes a long time; and it is technically if they wish to add or subtract from what Mr Hoyle at a very high level. That is excellent, but that is not has said. the definition, and we should not say, “That is the Alex Jackman: I would like to add, very briefly, if definition and everything else does not count.” I I may, that we sat on an employer panel looking at believe we need a definition that is very apprenticeships before the Growth Review, and we sat all-embracing, and I gave you an outline in answer to down and tried to come up with a one-page sales pitch your first question. to businesses to sell apprenticeships. We could not get The second one is very topical: the length and past the definition. We were curtailed a little bit by duration. Nearly all of the frameworks designed by the deadlines imposed on this by the Growth Review, Sector Skills Councils—the proxy for employers—do because we were reporting in time for that, but I think indicate a norm. The norm is incredibly helpful, that gives you some idea of the sort of identity crisis because that is what employers perceive they need to that there is at the moment with apprenticeships and get people to the level they can use. That seems to be the rate at which more and more courses—whether eminently helpful. We ought to take notice of it—and that is on-the-job training or not, and we will come to I believe the funding agencies do take notice of it— that later—are to be included within the definition. but it should be a norm where there are some On the transferable skills point, I would just like to exceptions. make a really quick comment. Our members are 99% In the so-called academic route of GCSEs, A-levels small employers, and even within the one business we and higher education, how do we celebrate those very value some of the apprenticeship being transferable bright young people who get their GCSEs aged 11 skills, because a lot of our members will want them and they get their A-levels aged 14 and they get their to be taking on different jobs within their business. Oxbridge degree aged 16? We see a few of them, Yes, that gives rise to the problem of poaching at the don’t we? They are frontline news, and everyone says, end or an individual getting their certificates going “Tremendous.” But you start saying that someone has off and creating their own company, but, nevertheless, got to the level required a little quicker than others having that transferable component is immensely because they are bright, and that suddenly is bad valuable. quality. I think that is inconsistent. The final thing I wanted to say is, with regard to the I think that the length of stay is important as a norm minimum time spent on apprenticeships, there is a for most 16 to 18-year-olds starting from scratch— little bit of a danger of throwing the baby out with the cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:46] Job: 021099 Unit: PG01 Source: /MILES/PKU/INPUT/021099/021099_o001_th_BISC 01 03 12 CORRECTED.xml
Ev 4 Business, Innovation and Skills Committee: Evidence
1 March 2012 Denis Hird, Alex Jackman and Graham Hoyle OBE bathwater. There are some very good 12 to 13-week Denis Hird: That is a fair point. courses that are around. As an example, Lidl run a Chair: In what was almost a complete mental management course, I think, as an apprenticeship, and aberration, I got Rebecca Harris and Simon Kirby after that 12 weeks they are put in charge of managing mixed up. It is, in fact, Simon I want to bring in now. a store, which is immensely scary for such a short I am sure you are very flattered. period, but that scheme is very highly regarded, so I think we have to look very carefully at the time limits Q13 Simon Kirby: Thank you, Chair; I am. The with apprenticeships, but not throw everything out. National Apprentice Service seems to be quite pleased with its progress to date. Do you agree it is doing a Q11 Mr Binley: I think there is something in front good job? of all of this. We have been talking about branding as Graham Hoyle: Again, I think we need to be quite much as we have been talking about anything else clear about which jobs it is doing or should be doing. during this whole discussion, and isn’t that the Inasmuch as the National Apprenticeship Service is problem? Shouldn’t we be having the situation where promoting apprenticeships, their benefits, and so on, a 12-week NVQ course—which can clearly work very one can say the figures speak for themselves. If you well in the boot and shoe industry from an operative look at the growth, both under the last Government perspective—has just as much status in terms of what and the current Government, there has been a very it means to the person who has got that as an strong growth. One has to say that the take-up and apprenticeship or a degree? Isn’t the branding of this growth of apprenticeships has gone up during that important and don’t we need to think about that first? period. As an organisation that has been promoting it, Denis Hird: Can I make a comment? Just to give you you have to give them some credit for that. a bit of background, I have 6,500 fully employed There has always been a little bit of concern, certainly apprentices doing an advanced Level 3 apprenticeship from my members—the providers who deliver them in building services, and that is at the top end of at the end of the day—that the sales force for getting apprenticeships. You will understand that electro- apprenticeships has always been the training technical is at the top end. The average length of stay providers, be that colleges of further education or is four years and two months, with success rates of independent third sector—they all in the same game— 80%, in 3,500 employers, many of them very small. and we are the people who are effectively knocking If we go on length of stay, I do recognise that in other on employers’ doors, ringing them up and so on and sectors arrangements are quite different. I have not so on. We believe we are best placed to do that. To just been in building services. For all my sins of the turn that into some kind of national sales force, with 1980s, I was in a little cottage industry called British the kind of staffing that the NAS has, is a non-starter. Coal. I was fortunate to be Head of Training for We have to be quite clear that we have always British Coal. Statutory appointment, driven by statute believed that there is a role for a national agency and time-based: it took me seven years to get a promoting the value of work-based learning in the definition of competency out of Her Majesty’s Chief form of apprenticeships, notwithstanding branding Inspector, because it was laid down in statute, so and definitions, and we believe they ought to almost getting one for apprenticeships may take a little be more focused on promoting that, though not to longer. employers except the very large ones, where I think Graham’s assessment is probably as close as individual providers have a bit of difficulty breaking we are going to get for a while, and I think it is a in. I can think of exceptions to that, but there is a good one and one that we support. In terms of length real chance that they can go in with the big national of stay on apprenticeships, we need to take into companies—and they have done some good work account sectoral needs and look at types of there—and the big local authorities, the National apprenticeships. For instance, while a Level 1 might Health Service and so on. We see a role there, but we be three months, it needs to recognise that a Level 2 do not believe they ought to be directly attempting to is different, a Level 3 is different and a Level 4 is get in to the millions of small businesses. Where I different. There may be a Level 5 that is a qualified think they could do more work is promoting the value engineer. People need to be able to see on a scale of apprenticeships through the education service, that there are different degrees of apprenticeships that making sure the next generation understand the benefit might infer different lengths of stay. Also, we have of that apprenticeship or work-based learning route. moved into a standards-based economy. If you take your driving test, it does not say that you must have Q14 Simon Kirby: That having been said, how 20 lessons before you can sit the test; you can sit the should we judge their success? Is it purely a test without any lessons. It is about competency, isn’t numerical issue? it? Graham Hoyle: It is difficult. My members would say that at the end of the day we deliver them, but we do Q12 Mr Ward: But the difference in that example is value the context within which we are able to work that the end test brings it all to an equal point. and sell our apprenticeship schemes. It is quite hard, Whether you have one lesson, no lessons or 100 therefore, to determine, because I do not think they lessons, it brings you to that point. In your example, can take sole credit for the increase. I give them part the 12 weeks at Lidl, that may be fully sufficient, but credit. My members would have me up in irons, I think the thing we are querying is calling that thing saying, “Hang on, Graham, we deliver all of this lot.” the same thing as something that has lasted four years. Clearly, you cannot differentiate it quite like that. I That is the question we are asking there. think it has got to be the extent to which the concept cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:46] Job: 021099 Unit: PG01 Source: /MILES/PKU/INPUT/021099/021099_o001_th_BISC 01 03 12 CORRECTED.xml
Business, Innovation and Skills Committee: Evidence Ev 5
1 March 2012 Denis Hird, Alex Jackman and Graham Hoyle OBE and the value of apprenticeships is increasingly being Government. We have used the wrong terminology. accepted by society as a whole, and they do deserve We may be getting close to where we can switch that some credit for that. over. You might see almost the same people doing almost doing the same job, but I would like to see it Q15 Simon Kirby: Does anyone else have a owned by employers pushing out that message, not comment? the Government on their behalf. Denis Hird: If I could make a comment on that, it would be that there are some very good people in the Q17 Mr Ward: Some of the figures that we have National Apprenticeship Service trying to do very had are immensely impressive: 78,000 apprenticeship good things, but we ought to be asking whether the opportunities; 500,000 apprenticeship accounts country needs an NAS or whether it needs a function, enabled. These are big, big figures. But I suspect that and what are those functions and where should they the people on the NAS database are not the people sit? I think the NAS is good for establishing national you have. On your database, you have got people who policy and maybe dealing with the media and want to do jobs in those particular industries; that is promoting the brand, and perhaps as a guardian of the what they want to do. I guess that this database brand. In terms of engaging with employers, that is includes people whose mums and dads have said to what I and my colleagues do day in, day out. Last them, “Ring this number up and get your name on year, we contacted 28,000 businesses. We had 25,000 that list.” applicants. We had 7,500 good quality young people. Alex Jackman: If I might just add, very quickly— We had 2,500 jobs. That is what we do, and we know and I will come to that point—in general the National everybody in the framework and everybody in the Apprenticeship Service is still a very young body. We industry backwards. Now, the NAS does not have that tend to get pretty decent feedback from it. Just under sort of expertise and I would not expect it to. My half of the members on our Training Skills Panel go question would be, “What do we need and where down that route when they are looking to take on an should it sit?” That is all I am saying: where should apprentice. it sit? Regarding recent developments, I accept that one month to advertise and the three months, I think, to Q16 Simon Kirby: Well, where should it sit? get a placement is still quite a long time, but given Denis Hird: That is not for me to decide. It is for the that on average it was around about six to eight powers that be that establish these organisations to months respectively beforehand, that represents a very think, “Well, what do we need to do; where should it positive leap. There were announcements about sit; what do we think the notional cost might be; and Health and Safety, not having to go above and beyond is it affordable in today’s climate?” national standards, and there are also a couple of Another thing I just wanted to say—and I am not small-business-specific proposals that are coming on being critical—is that there is a matching service. We stream in the coming months. It is a very young body. have all heard of the matching service, which has We do get quite good feedback on it and we would be aspirations—I just read yesterday—to be able to quite keen to see how it develops in the small business upload an employer’s vacancy in a month. It takes a arena, specifically. minute with us and has done for the last 20 years. In terms of how success should be measured, we are If an employer rings up today and says, “I want six very much focused on the idea that it should be apprentices off your approved list in my postcode outcomes: how many apprenticeships are finished? tomorrow at this time for an interview,” they will find That would give you an indication of how that if they select two we will have them starting on successfully NAS is matching up the candidates to the Monday morning on the apprenticeship with the small businesses. induction. It has worked for 20 years; it is demand led with employers. Q18 Simon Kirby: I was just going to say that Graham Hoyle: Could I answer Mr Kirby’s question speaking anecdotally from my Brighton experience, about where it should sit? I am very clear where it where the apprenticeship potential is perhaps outside ought to sit and we may well be moving towards the traditional sectors, would you agree with me that getting there. The promotion of apprenticeship and not only are NAS well placed to provide support to their value should sit with employers. Unquestionably, small businesses in particular but perhaps also to some the whole point is—whether it is our definition or of the sectors that have not traditionally been seen as something else—that it is about training programmes places where, if you were an employer, you might that are fit for purpose for employers to run their choose to have an apprentice. Do they serve a companies, industries or sectors. It is an investment marketing and information function in that particular with a return; I have used all those terms. We have case? almost cracked it when that message is fully taken on Denis Hird: I think NAS offer a great potential for board and sold by employers themselves to their signposting. I have been in many other industries. peers: you cannot afford not to be under this training Building services has a very good, solid internal game. I think we are getting quite close to that; I said arrangement that works very well and has done for I am optimistic. We have not been there in the past many decades. Other sectors do not have those when it has been wrongly positioned as a Government arrangements. They do not have a network where programme. It never actually has been; it has always employers, unions, industry bodies, employees’ been an employer-led training programme for associations and trainers come together for the employees, supported and sponsored by the common cause of bringing young people into the cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:46] Job: 021099 Unit: PG01 Source: /MILES/PKU/INPUT/021099/021099_o001_th_BISC 01 03 12 CORRECTED.xml
Ev 6 Business, Innovation and Skills Committee: Evidence
1 March 2012 Denis Hird, Alex Jackman and Graham Hoyle OBE existing structured apprenticeship programmes. In that Graham Hoyle: Although all of my members expect area, I think the NAS could potentially offer help in me to have funding at the top of my agenda for them, trying to bring those sectors into the arena, and I I think some of the issues we are talking about this would be happy to give up some of my company’s morning—getting the fundamental structures right— resources to help them have a look at how it are more important. I think funding is complicated, particularly works in our sector, to share good but at the present time we and the Skills Funding practice. That is the reason why we are all members Agency are looking at making that much simpler. This and work together in AELP to do that. We help each follows the expectation of a reduction in bureaucracy other, even in competition. I think NAS would have a and so on, which, of course, we all support. role to play in that. Some of my members have yet to get their minds Also, there is a huge opportunity for around this as well, but funding is simplified by taking pre-apprenticeships with schools and getting young an average position as opposed to having a very people interested in apprenticeships at a much accurate assessment—almost for each apprentice, but younger age. There is a role there they can play as not quite. There is an interesting balance there well. Of course, even with the resource that they have, between simplicity, or streamlining, and the fact that with that sort of demand it would be hard to facilitate that will move much more towards an average, which every request that came forward, but working together will make administration much easier but averages with all the bodies involved we could do something mean that there will be winners and losers within that very positive, and NAS would have a key role to play average pot. It is just an interesting one. in that. The bigger question, which is sometimes ignored Simon Kirby: That is very useful. within funding, is not so much the funding system but who is paying for what. I still think there is a big issue Q19 Margot James: Is the funding structure for to be resolved in clarifying exactly what the apprenticeships efficient? Government is paying for and what their contribution Graham Hoyle: That is your province, not mine. is to what I say is an employer-owned thing. Denis Hird: Seeing as we hold one of the Chair: We will be coming on to those issues later. Government’s biggest contracts, what can I say? We recognise that we are in difficult times. We recognise Q20 Margot James: How many official that we have had to take a unit value cut for the fifth organisations do you think are involved in the overall consecutive year, and our costs are rising so we bring funding of apprenticeships? It is not a trick question; in whatever efficiencies we can. I am very fortunate it is just to tease out the scale of the issue. because my organisation is a charity, so there are no Graham Hoyle: Again, Denis is closer there because highly paid people in it, including me. Every penny he is actually receiving the funding, though I am of surplus is reinvested into the front end of training. supposed to know about it. Basically, our funding is Any of you can come and visit my organisation, and received from the Skills Funding Agency for I can guarantee that I do not know of any other apprenticeships, and that includes the funding that organisation that takes a Crown pound and puts more comes from DfE through the YPLA. It does come money into the front end of training, and we are through a single point. That is something that was allowed to do that because we are a charity. won a couple of years ago. So—unless Denis is going Now, in terms of what employers want, bear in mind to correct me—we are contracted with one that, out of our 3,500 employers, 95% are SMEs and organisation. NAS, which we have just discussed, is if you look at the ratio, 6,500 employed apprentices interesting; they are not a funding organisation but in 3,500 companies requires quite a huge resource to they are, if you like, involved—some of my members be able to maintain. What we do is we hide the might say interfering—with some of these quality wiring—for want of a better word—from employers, assessments and deciding what does and does not all of the bureaucracy and all of that. They employ count, which gets very close to funding because it has the apprentice and we do everything else for them, an impact on it. How many are involved? It is really and it is all funded either by Government or from only the Skills Funding Agency on behalf of them and the charity. DfE, with NAS having a role that is slightly less than Now, with funding, inevitably, the target is the clear. Denis, is that accurate? guaranteed group, the 16 to 18-year-olds—because Denis Hird: Very much so, but if I may add to it, that is fully funded—but employers particularly like Chairman, the Skills Funding Agency works very those that are a little bit more mature, the 19-plus, but well. It is a seamless approach. It is built on trust. the funding is reduced to 50%, so what we do there is There are financial measures in there; there is we split the difference between us as a charity putting accountability on the programme; there are reviews— money in and the employee making a financial there is everything, and it works very well. contribution. Of course, we do not pay minimum Alex Jackman: Can I add very briefly—I know you wage; we pay industry-agreed rates with the union, would like to move on; I will be brief—that there is a which are quite extensive, so we have a compromise. pilot out there at moment from UK CES of What I am saying is that there will be—and still is £250 million, looking at employer ownership skills, and always has been—a demand for 19-plus, but I which I think will have some interesting results? That think we need to look at the wider 18 to 24-year-old is a pot of money that employers will be able to bid group and have a look at how best we can use the for and try to dictate a little bit more about the kind funding. Whatever we do, it has to be used in a full of skills that they want to get into their organisation, and proper way that offers value to the Crown. and that is something we hear from our employers cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:46] Job: 021099 Unit: PG01 Source: /MILES/PKU/INPUT/021099/021099_o001_th_BISC 01 03 12 CORRECTED.xml
Business, Innovation and Skills Committee: Evidence Ev 7
1 March 2012 Denis Hird, Alex Jackman and Graham Hoyle OBE all the time. They feel that ownership of the money the growth of apprenticeships—whoever takes the themselves will mean that colleges are forced, by dint, credit for it—is still in part constrained by the budget to become a little bit more flexible in what they can that has been allowed by the Government, on the basis offer. that they still are a major contributor. That complicates things even further as well. We are under Q21 Margot James: I just wanted to come back to some pressure now that the all-age concept of you, Mr Hird, on there being really only one apprenticeships has brought in adult starts and older organisation involved, because there are all of the worker starts. training providers, aren’t there? They are involved in the funding as well as the NAS itself and the Skills Q24 Paul Blomfield: Can I come on to that Funding Agency. It is not so much the awarding specifically? That is an area that we have received bodies, but there are many organisations involved in evidence on. I think a lot of people would be surprised the funding stream, wouldn’t you say? There are more to see the number of starts in over-35s, which have than you have indicated. been fairly significant. They would be gobsmacked to Denis Hird: There is a plethora. There is YPLA; there see the eightfold increase in over-60s in is European Social Funding; there are lots of what I apprenticeships call slush funds that people can tap into. Going back Graham Hoyle: It is a very small number, isn’t it? to the employer, we once gave money to individuals and called it the individual learning account. It got Q25 Paul Blomfield: It is a small number, but abused. Whilst employers would like it, if we were to nevertheless a significant area of growth. Is it give money to employers in our industry, they would something we should be concerned about? Most disengage from apprenticeships. The other thing, as people’s sense of apprenticeships is about 16 to 24- well, is to look at it from the funders’ point of view: year-olds. do they want to manage one contract and let us take Graham Hoyle: It is back to the definition of an all of the hassle and the risk, or do they want to apprenticeship and the way we move from the manage 3,500 contracts? How much is that going to traditional apprenticeships that I mentioned: 16 to 18 cost? The notion of employers having money comes job creation. That still happens and that is fantastic. It with a caveat, and it is called Government ticks all of the boxes. But apprenticeships have moved bureaucracy, which we manage because that is our day in the last 15 years—and branding was also rightly job. That is all I am saying. raised—to become a much more all-encompassing Chair: Can we move on to Paul Blomfield? A title for the skill development of UK plc. Now, either cautionary note: I think we are about one-sixth of the we like that and accept it, or we do not. We either way through the questions that we want to ask. At the limit the definition back down again—that is fine— current rate of progress, we could be here until three and find a different definition for the rest, but I will o’clock in the afternoon. Please keep both questions tell you now: we need the rest. and answers as brief and to the point as possible. I At the moment, personally I am very comfortable with will bring in Paul now. all-age apprenticeships. If people—and they do—have different perceptions about a tighter definition of Q22 Paul Blomfield: Still focusing on NAS, a apprenticeships, there is nothing wrong with that as significant measure of their success has been the long as we still make sure that the rest continues. I number of apprenticeships starts. Now, we have think—and it is a personal view—that there is a received mixed evidence on that. Do you think it is certain clarity with the right definition of talking about appropriate to measure them by the number of sells? work-based learning with an employer with all of the Alex Jackman: I would just repeat what I said earlier: ramifications for an employer. I think a much bigger focus should be on the outcomes, because that will give you an idea of how Q26 Paul Blomfield: Can I push you on what is well they are placing candidates. driving the growth in adult apprenticeships? Is it employer demand or is it the level of applicants? Q23 Paul Blomfield: Mr Hird, do you agree with Graham Hoyle: I would say it is employer demand, that? because all of the adult apprenticeships, as with all Denis Hird: Yes. Apprenticeship starts would not apprenticeships, are employed, and whilst there may happen without the employers or the provision well be applicant demand, as I would expect there to network that exists. In my own view, the way to be, that is going to be done within the context of the measure NAS is to have a look at their activity, and conversations within the employer. It is the employer hold them accountable and make them justifiable for with whom providers deal, not with the individuals. that, to see if it offers value for money to you or the Employers are absolutely releasing their employees people that are funding them, because they are not for continued training, so we would see the demand clinical measures. as coming from employers, though it is difficult to see Graham Hoyle: Again, as I mentioned before, I think how much pressure the employees are putting on in they clearly have to take some of the credit for the that. I do not know the answer to that; there will be growth in apprenticeships, which is what they are some. charged to do, but you cannot separate them out away Denis Hird: I just have a quick point. Because there from the providers and, indeed, the employers, as you is no, or limited, funding beyond 25, we fund places say. It is very hard to have a very firm measure in that out of the charity. We have to manage it because we situation, and in actual fact there is also the issue that have got limited resources. But last night we held our cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:46] Job: 021099 Unit: PG01 Source: /MILES/PKU/INPUT/021099/021099_o001_th_BISC 01 03 12 CORRECTED.xml
Ev 8 Business, Innovation and Skills Committee: Evidence
1 March 2012 Denis Hird, Alex Jackman and Graham Hoyle OBE awards at the Banqueting House next door, and we looked at me and said, “Dad, I’ve done a really good made a special achievement award to a gentleman in job; I know them all by name and have tried really his 40s. He had been in the armed forces, found it hard. I don’t know what you’re talking about. I went difficult to integrate back into meaningful work, got a to school, got my O-levels and went to university. I job as a labourer with an electrical company, and had have not input this route into my tutorship support for aspirations to become an electrician. We funded him my charges, for the reason that I’m not the careers as a charity—a great, great use of charity money. He teacher.” This ought to be known by all teachers. was so good we interviewed him as part of our Schools cannot deliver it; they do not have the national awards, and we thought that we could justify knowledge to do so. making a discretionary award for outstanding achievement. He was absolutely over the moon; it has Q28 Paul Blomfield: Should NAS be the agency that changed his life. does it? Alex Jackman: Finally, I do not think you should Graham Hoyle: I am saying it is a job they could do. underestimate the perceptions there are out there from I am not saying it has to be NAS, but that it would be employers about the employability of the younger a really good use of their time as they are promoting demographic. We received so many case studies— apprenticeships to promote them to individuals as well when we were putting together our response to this as employers. consultation—regarding 17 or 18-year-olds who are not able to turn up on time, unwilling to be in at seven Q29 Ann McKechin: The main source of o’clock or did not have a good phone manner. It was Government funding is between BIS and the those kinds of attributes. We got a lot of criticism Department for Education. Do you think NAS has about common sense: not learning, perhaps, about been successful in bridging the gap between these two Health and Safety basics at school. It was things like funding Departments? I would be interested in your that, which do have a huge impact when you looking experiences. to fill an apprenticeship, and it could explain why Alex Jackman: They have helped. To give you an some of the older apprentices are being taken on. example, we sit on an advisory board for the employer-led SME inquiry into apprenticeships that is Q27 Paul Blomfield: Is there not a challenge for us currently going on. That is the one to which Jason there in making sure there is proper pre-apprentice Holt has just been appointed. There is another group training, which a lot of employers are very within DfE that is discussing very similar issues. successful at? There is a NAS and Civil Service presence in both Chair: Perhaps I may make the general point that, groups, but I do not think there is one individual who given the uncertainties of political life and the sits on both. Whether or not that would help I am not proposed reduction in parliamentary boundaries, sure, but that is one element that shows you there are politicians are probably the last people to complain still steps that could be taken to improve it somewhat about apprenticeships for older people. with joint thinking, but overall the apprenticeships Mr Binley: Absolutely right. unit has done an awful lot to bring that policy Paul Blomfield: Taking that to heart, on a different together. point, Mr Hoyle, you have mentioned this morning, and in your written submission to us, schools and Q30 Ann McKechin: Following on from that, do young people. What do you think the role of NAS you think that support for apprenticeships should should be in schools? come from just one Department rather than two, and Graham Hoyle: I think there is a better role for them which Department should that be? to ensure that young people are fully aware of the Alex Jackman: No, I do not. I think funding should apprenticeship route, however defined, and the come from both Departments, as it does, but perhaps increasing benefits that can accrue right the way there is an element of improving the policy formation through to higher education for a small proportion. across both Departments. We are getting that progression route absolutely in place with higher apprenticeships and so on. In some Q31 Ann McKechin: Do Mr Hird and Mr Hoyle respects that makes it even more important to ensure concur? Is your conclusion the same, or do you have that young people in school and their parents anything to add? understand that the work-based learning route—the Graham Hoyle: I am not sure it is NAS that brings apprenticeship route—can offer progression to any the two funding streams together; it is really the Skills level if the ability is there. It ought not to be necessary Funding Agency that does it. The way different to do that because, surely, that should be being done Departments are delineated does tend to change from through some form of career service or school input. time to time. To say that it should be all one or the I have a daughter who is a schoolteacher. Colleagues other is an interesting political debate that is probably of mine have heard this story too many times. Quite not for me. Simplicity says that it is one, but there are recently, when sitting round our dinner table she told massive issues. If there has to be more than one, we us that she had just taken a whole year cohort of, I can accept it. As long as the funding comes together, think, 11 to 16-year-olds as their tutor—because of and it does through the Skills Funding Agency, I my age and generation, I have not got the years right believe we would cope and make the best of it. I think yet—and she took it very seriously. She took 30-odd that is where we are. youngsters through it, and some stayed on. I guess I Denis Hird: NAS has helped in that direction, but I was rabbiting on about apprenticeships, and she can go back to the DTI and DFES; they were the same cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:46] Job: 021099 Unit: PG01 Source: /MILES/PKU/INPUT/021099/021099_o001_th_BISC 01 03 12 CORRECTED.xml
Business, Innovation and Skills Committee: Evidence Ev 9
1 March 2012 Denis Hird, Alex Jackman and Graham Hoyle OBE issues. As a simple starting point, at least the into specific sectors, unless those issues are brought Departments ought to be singing off the same hymn to our attention by members. sheet. I think it would help to simplify and operate with clarity if the funding did come through one, Q36 Rebecca Harris: I would like to go back to the provided both Departments had good question of how we judge quality, although I am a communications. little nervous because Mr Hoyle said it was a dodgy Alex Jackman: I think DfE have a role in the word. I will instead use “standards”. Recently, the employability skills of pupils at schools, and the best Government announced a range of measures aimed at way to get buy-in from DfE is to have some money improving the standards of apprenticeships. Where attached to it. does quality assurance of apprenticeships need improving in your opinion? Q32 Ann McKechin: To turn to NAS directly Denis Hird: If you are delivering apprenticeships in providing support to employers, I think I am right in the current regulatory framework, it is driven by saying that both Mr Hoyle and Mr Hird were critical quality. I think we have agreed that employed status of it in terms of established sectors of skill training. is the best route for apprenticeships. Within SASE To what extent have you had any practical experience frameworks, which are statutory frameworks under of the vacancy matching service offered by NAS? the Sector Skills Councils, are qualifications, to which Have good or bad experiences been reported by your Graham alluded earlier, that require awarding members, or are you just not really using it? organisation regulation. You have Ofsted inspection; Denis Hird: We have totally rejected it; it is not SFA contract reviews; financial reviews; financial necessary. We have our own system, which has audits; measurement both by overall success rates and worked well for 20 years and operates within a timely success rates; and we are measured on minute, not a month. I am not saying it might not be programme payments. Anybody can tap into our useful for some other areas, but we have our own system 24 hours a day and look at where all 6,500 arrangements. learners are at any one time. When they do the reviews electronically, they are docked at tea time, Q33 Ann McKechin: Mr Jackman, you mentioned and the employer can see where the apprentice is at that it may be useful to your membership. Has your seven o’clock at night. I do not know what other membership any practical experience of it? measures we can put in place to improve that. We are Alex Jackman: We did not get much coming in in always looking for technology to improve it, but we terms of case studies. Just under half tend to go down are driven by quality. We are focused on the learner the NAS route, but the nature of our members—we and driven by quality and value for money. That is are talking about those with nine or fewer what it is all about. employees—is such that taking on an apprentice is a Graham Hoyle: I will try not to repeat myself too huge thing. It is not just about ensuring that a much. “Quality” is a good word, but it means different candidate has the relevant skills to do the things to different people. We come back to apprenticeship, but that they are also a good cultural definitions. We have talked about the need for a fit and they are willing to take on more than perhaps definition of “apprenticeship”. In a sense you need the core focus of the apprenticeship and take part in that first, and we will not go over that ground again. different elements of the company. If you have At the present time, the key quality definition is not somebody on sick leave, you could well have the about the internal processes, which are critically apprentice coming across and covering a bit of that. important, but about whether the framework, with all Our view is that NAS provides a good basic level of its different and complex elements, is fully achieved. support, but there is a whole range of other routes out It is very hard fully to achieve off-the-job training there you could go down. certificates signed off by awarding bodies; to have the competencies signed off by independent awarding Q34 Ann McKechin: Do your members give any bodies; to put together all the experience, blah, blah, reason for not using NAS as opposed to other blah. potential routes? At the moment—you will have the figures—76.4% of Alex Jackman: I go back to the previous point about apprentices fully complete apprenticeships to an taking on an apprentice being such an important independently accredited standard, and it is against decision. That is one reason for trying to keep it in- that that we measure it. I think it is staggering. When house. You could have existing relationships. I know I came into this job nine years ago, the completion that Leicester College, for instance, has a particular level was below 25%. It has gone from less than 25%, relationship with a care home in the area. It has a which is not acceptable, to 76.4%. I remember saying rolling programme of apprentices for that care home. during that process that we would not get to 75%. I am delighted to have been proved wrong. You have Q35 Ann McKechin: Do you think that provides some non-completions for reasons that are outside more flexibility than this particular Government certainly training providers. Some young ladies central service? become pregnant and do not complete. That is hardly Alex Jackman: I do not think I would be in a position a quality issue. People at that age still move away to say whether or not it offers more flexibility. with their parents, and so on. As for others, employers Because our members cross all different sectors, we say, “Hang on. You’ve got the technical certificate and tend to try to look at the overarching issues of the skill level I want, but you don’t have the basic apprenticeships rather than necessarily drilling down skills stuff, which is a bit hard. I don’t need that cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:46] Job: 021099 Unit: PG01 Source: /MILES/PKU/INPUT/021099/021099_o001_th_BISC 01 03 12 CORRECTED.xml
Ev 10 Business, Innovation and Skills Committee: Evidence
1 March 2012 Denis Hird, Alex Jackman and Graham Hoyle OBE anymore; I’ll put you on. Don’t bother to complete,” Q38 Margot James: We have heard about the and there is employer pressure. That is a great shame, completion of frameworks. Could you quickly but at the end of the day, the end product is reached. summarise what you think the Government should be With all those barriers, we still have 76.4%, and using to measure the quality and standards of these? rising. I am very satisfied with that. They have What are the key components? Do you think that the completed all the requirements of the framework. That measures the Government have brought in recently was why I said earlier that we seem to be talking have got it right? This is a big flagship scheme and under the heading of quality of time spent or served, we need to keep up the quality, not just for UK plc and so on. They are legitimate issues, but I do not but to ensure that the brand is protected and not think they are quality issues. You set what the end undermined by nasty stories we occasionally hear product should be and the outcome everyone about short courses and abuses. Can you summarise demands, and at the present time we are now starting how you think that we, as politicians and the to push 80% in quite tricky situations with an Government, need to measure these standards? incredibly complex arrangement. The framework is Graham Hoyle: I think it is completion of the far different from the qualification; it is a combination framework. Therefore, the critical issue is who devises often of three or four qualifications, some off the job, it. Currently, they are devised by SSCs, which are the some on the job and some in the classroom. It all proxy for employers. You can always argue about that, sits together in a coherent way, and that is what an but basically the employer bodies at the time have apprenticeship is. to design an apprenticeship framework that is fit for At the moment, I am not complacent, but I think we purpose in their sector, with all the elements. That is have a very good quality standard, and it is still going what we have. They can always be changed, and we up. We get there, as Denis said, because of the expect the SSCs constantly to review and modify attention of the process quality that must be there, but them, but, having got the employers to tell everybody we do not want to be distracted into the other issues what they need then, surely, the quality standard is we have discussed this morning about time serving. that and you measure the extent to which it is reached, That is an issue, but I do not think it is a critical and currently it is 76.4%. quality issue. Denis Hird: I would concur. Our measure is satisfaction by employers. We have to provide a fully Q37 Mr Ward: The labour market is different from skilled competent person. If we do not, they will tell us and will not re-engage, so that focuses our mind a year ago. Is it possible—I am not saying it is— clearly. I think that the current measures of the that people who started apprenticeships basically got Government are good, and they should use them to a better job and moved on and did not complete, drive out poor providers. whereas now if you get an apprenticeship and are Chair: Brian Binley is jumping up and down. doing a job, you want to stay there? Graham Hoyle: Absolutely. There has always been a Q39 Mr Binley: I am delighted by what I am level of turnover within apprenticeships, because they hearing. I shall say nothing about apprenticeships. Of are jobs. What do people in jobs often do? They go course, Mr Jackman would not dream of going there. and get a better one. There has always been that May I raise a point about involving business in setting element. It is incredible that we have squeezed a lot the parameters of the apprenticeship NVQ or, indeed, of that out. The vast majority of apprentices do not degree? There is a whole range of possibilities here, give in to temptations that are there. At the moment, and it is the flexibility within that range about which you are absolutely right that, with the economy as it Mr Jackman has talked. Can I ask you whether the is, those temptations are a little more difficult to find; practical elements are incapable of being properly jobs are hard to find. One would reasonably expect carried out now by our FE colleges and universities, people, having got their job, to stick with it anyway, simply because in many cases the equipment needed because the external temptations of a better job are is beyond their capability to purchase and set up and not there. We may see that move slightly, if and when is too diverse for them to do so? Are we talking about the economy picks up, but I am not particularly employers not only helping to set the course but also pessimistic. I think the high level of completion will helping with the training in the workplace during the be retained, but I accept your point that at the moment day or in the evenings? premature withdrawal from apprenticeships is not as Graham Hoyle: Absolutely. You also point to a high because there are few jobs to go to outside. It is difficult area of tension on the cost of up-to-date a factor, but I suspect not a big one. equipment. It has always been an issue in the college, Alex Jackman: I agree with most of what has been which is mainly the off-the-job element, but in some said. One issue I would throw in is the level of respects your question goes to the heart of work-based adaptability of courses. We have heard of examples— learning and apprenticeships. My chairman prefers the for instance, within construction—where an title “work-located training”. I think that is a rather apprentice will complete and get a qualification but nice and possibly even clearer expression of what is that qualification is no longer recognised across the going on here. What it actually says is that, at the end board. So it is a matter of making sure that, even of the day, it is the vast majority of the learning—I within an apprenticeship, the qualifications keep up to will use that word, which incorporates training and date with what is happening. I guess that the rate at assessment—that counts. How much did I learn from which the IT sector has expanded would be a perfect this? That is a product of training, assessment and so example. on. But the vast majority of learning in an cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:46] Job: 021099 Unit: PG01 Source: /MILES/PKU/INPUT/021099/021099_o001_th_BISC 01 03 12 CORRECTED.xml
Business, Innovation and Skills Committee: Evidence Ev 11
1 March 2012 Denis Hird, Alex Jackman and Graham Hoyle OBE apprenticeship is done at work on the up-to-date shortage. I am trying to think of an example. We had equipment that my company is using. So, in some a fire alarm business based in Staffordshire that was respects, your question does not worry me too much, looking to recruit someone. They could not find an because it is done on the employer’s premises under apprenticeship course that was particularly local to the supervision of skilled people. That is what an them, so they went to a college in Coventry. That led apprenticeship is, and it always used to be that. to the problem that the apprentice had to spend blocks However, as I mentioned earlier, there has always of time with the business, rather than having the kind been day release, as we used to call it. I do not know of flexibility that could be enjoyed had the provision why we do not call it that anymore. It became “block been a little more local. You can find one-off case release” and was confusing. We now call it “off-the- studies, which are probably replicated quite frequently job training”, which does not have quite the same ring throughout the country, where, because of a lack of to it. That is supplemented by the theoretical local provision, you lose the flexibility that a business knowledge that underpins the practical element. An might want. apprenticeship is the combination and mixing of those two in the right proportions. In that situation, it is Q42 Mr Ward: Denis, you have made comments on important that whoever does the off-the-job the need for higher level apprenticeships. Can you theoretical training—colleges or independent give us some of your thoughts on the need for more providers is not the issue—has the right kind of higher level apprenticeships? equipment, or whatever. That can be difficult in a fast- Denis Hird: It is well known in the engineering and moving technological economy. It is quite interesting building services sector that for many years it had the that the pressure, therefore, is to do more and more of status of technician. In terms of electrical work, it the job, including the theory, in the employer’s might well mean that when you go beyond 3.3 kV or establishment where the equipment is. I think that is 11 kV you need a technician-type level with a wider an ongoing tension within the further education technical knowledge base on electrical theory, and system. also supervisory experience in terms of a permit to Denis Hird: That is not really a big issue. What work, safety and protecting the consumer. It is well happens in reality is that off the job, day release or known in our sector that that is done with an approved block training—we do both—is knowledge based. electrician in that trade, but it has never been There is wide agreement. It has to be up to the formalised. There is a great need to bring back what standards laid out in the framework, but 80% of the we had, because employers value that and recognise time they are on the job. Openly, we move around that technician. I think that would be best served by a 3,000 apprentices a year into other employers to give higher apprenticeship. At the moment, it is done ad young people a breadth and depth of exposure to hoc. They do additional technical training, generally different types of processes and machinery. They are in the form of an HNC or a degree, and then there is then assessed on the competency element of the NVQ. informal training within the company, but there is no At the end of the apprenticeship, we have a two-day structure. The industry, particularly the unions and assessment off the job on up-to-date equipment. They employers, want to agree an industrial relations are given a time, a task and fault-finding to do, and framework and recognise that as part of the that closes off everything. framework. We are interested because it provides structured career opportunities to young people on Q40 Mr Ward: What you are describing is a really progression. We are quite happy to put some of our good state of affairs. You mentioned the figure of resources into that to develop that with the industry. 3,000. If it were Germany, how big would the figure Graham Hoyle: It has to be the right way to go. We be? know that in our economy we are quite good at the Denis Hird: Germany is an apprenticeship economy. university end; we are weakest, and need to do more, I was over there in the 1970s, as part of my training at Levels 3 and 4, and apprenticeships have to be, and and development. It would be huge in Germany are being, expanded into that. That follows the needs because it is driven by apprenticeships; it is integral of the economy. At the end of the day, we have said to the German system. In Germany, you would be that apprenticeships are training programmes for talking of tens if not hundreds of thousands of employers to make them fit for use. That has to be apprentices. right. I believe that higher apprenticeships should incorporate foundation degrees, which some years ago Q41 Mr Ward: Inevitably, by this stage we have were thought to be this theoretically, but they never covered some of these areas. Just to affirm some of got close enough to the workplace. I think there is a them, in your submission, Alex, you talk about the tremendous opportunity to link Levels 2 and 3 need for more flexibility tailored to an individual apprenticeships through to Levels 4 and 5. firm’s needs. On the issue of quality, is there a conflict To talk about branding—speaking off the wall for a between freedoms and flexibilities in locally based minute—if you want to sort that out for employer schemes and trying to get national apprenticeships and make sure people really consistency in these things? understand the breadth of them, the kind of courses I Alex Jackman: It is hard, because a business cannot would love to see called apprenticeships are those that have access to every type of apprenticeship in every we offer for accountants, doctors, teachers and locality. Where that happens, it is a question of the lawyers. Of course, we call them university higher route down which the business chooses to go to education qualifications, which they are, but they are employ someone, because obviously there is a work-based learning for the most part; it is work cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:46] Job: 021099 Unit: PG01 Source: /MILES/PKU/INPUT/021099/021099_o001_th_BISC 01 03 12 CORRECTED.xml
Ev 12 Business, Innovation and Skills Committee: Evidence
1 March 2012 Denis Hird, Alex Jackman and Graham Hoyle OBE practice supported by off-the-job theoretical training. had lots of bits and pieces all over the place of real I think you will find that in my definition. Call them value, basically we converted all of those and did apprenticeships and suddenly we are really starting them within the discipline of employer-designed to move. frameworks. It seems to me that is the development Mr Binley: That is an exercise in elitism, is it? of something that was pretty good, and arguably is Chair: It certainly affects the branding. better now. I am sorry but we come back again to branding and definitions. If we can get that right, Q43 Mr Ward: As an accountant, I did day release many of these things can be very easily and, obviously, work-based learning and also, for part accommodated. of it, distance learning through a correspondence course. It all added up to the final qualification. There Q46 Margot James: Where do you think the returns was also a very detailed CPD scheme for me once I on investment in apprenticeships are greatest? The had reached that point. I am a little worried that some Government obviously want to prioritise investment of the criticism of the older apprentices is simply where the returns and impact are greatest. In your about ongoing professional development, or, if not, view, where would that be? I am aware that there will personal development. It should just be happening not be one answer to that. anyway, and why badge that with this apprenticeship Graham Hoyle: I mentioned earlier the return on title? That is the thing about which I am not quite sure. investment. I do believe that, however we badge them Graham Hoyle: We keep coming back to definition, and describe them, apprenticeships have always been don’t we? That is why I think these debates need a employer-owned, driven and designed, and where definition. Even though some of us will not like it, we they are successful it is because they have been have a base point on which we can discuss, and I think investment and returns have come back to the that is missing at the moment. employer. There is a massive return to the employer community. At the same time, the breadth which was Q44 Mr Ward: Something else that is niggling at me introduced by Government intervention in 1994—it is the accusation that this great success story and huge was not there before—brought in at least basic skills expansion is just Train to Gain by another name. Are and transferability, and recognised that there was also there any comments on that? a return to the individuals in making them more Denis Hird: It is unfortunate that there have been marketable, to put it crudely, and more fit for use in large volumes in a supermarket chain. They have the world of work. The combination of those two badged up some of their induction programmes as things—developing the individual, from which they apprenticeships to rack up the statistics. I think that get benefit, and the effectiveness and, hopefully, the has damaged the brand. While I think that is good, the profitability of the company—means that the economy chap from Asda, who is a former work colleague of is well served. There are returns in three major boxes mine, said that, although they had put 25,000 through, here, and that describes how the frameworks have they had not created one extra job. That is very sad, been developed over the last 15 years. They develop isn’t it? They would normally have provided that as a the individual beyond perhaps what the employer major employer anyhow, but people are looking for would do themselves; they give the employer the numbers. I think we got caught out by that a bit, and skills they need to run a profitable business; and the it has damaged the brand. combination of that lot is a massive input into the Do not get me wrong; we can recover from all of that. economic welfare of the country. Those are three big There is nothing wrong with it; it is just that we need boxes with three big ticks. to understand what apprenticeships, in-company Alex Jackman: I think the Government have to be training, in-company induction and training honest about where they are directing some of the programmes are; what should and should not be money and who it is aimed at. If you look at the funded; and what employers contribute to. There is announcement by the Deputy Prime Minister during nothing wrong with it; we just need to be careful. apprenticeships week, which was funding up to £2,200 for certain apprentices, nothing in the PR that Q45 Chair: You have partly anticipated a number of accompanied that scheme said it was directed at large further questions. businesses; it was there for the business community Graham Hoyle: Train to Gain, despite much that was as a whole, but, if you drill down into it a little, you written about it, was a very successful scheme in up- are looking at individuals who have no GCSEs and skilling the adult work force. I think that in many have been out of employment for X number of weeks. places it was rubbished too easily and superficially. It is a laudable aim, and for a small business—we That is my view, and the view of my members and spoke to a number ahead of this inquiry—it is a lot of the employers who worked with it. money and a big incentive, but not enough for them I am quite prepared to say that we have moved it to support high risk individuals who might make forward. Train to Gain was changed. I put a quote in mistakes (for instance, on data entry). I do not think our submission from a Conservative paper in 2009 to that it is necessarily a scheme that small businesses the effect that they would take the money out and should be taking part in. turn it into all-age apprenticeships. What my members One of the positive things that came out of it, have had to do is convert the work they were doing however, is that Barclays in particular are taking on with employers on Train to Gain and do very similar 1,000 apprentices who are all NEETs; they are bits of bite-size training, but the focus was the training them up and putting them in branches and apprenticeship framework completion. Whereas you call centres. What they are looking at in phase two of cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:46] Job: 021099 Unit: PG01 Source: /MILES/PKU/INPUT/021099/021099_o001_th_BISC 01 03 12 CORRECTED.xml
Business, Innovation and Skills Committee: Evidence Ev 13
1 March 2012 Denis Hird, Alex Jackman and Graham Hoyle OBE that scheme is how some of those apprentices could Graham Hoyle: Just now I alluded to the fact—the benefit their small business customers. Currently, they Chairman said we would come back to it—that not are developing ideas about how they can bring in only do we need a definition of apprenticeships but those small businesses that might have a need for an far more clarity about the beneficiaries. I have given apprenticeship, and then you have these individuals three beneficiaries. If they are indeed beneficiaries, who are already conditioned and ready to go out into presumably each should be contributing in some way the marketplace. There are benefits, but you have to to the investment being made. It is a really tricky one, be a little more honest about the individuals at whom and I understand why it is a nettle yet to be fully those schemes are targeted in the first place. grasped, but, if I am correct and businesses really are Denis Hird: In terms of value, bearing in mind we understanding the return on investment to much pay industry union-agreed rates, our model is that, two higher levels than I have experienced before, we need years after the apprenticeship, it has paid for itself in to revisit who is paying for what within an taxes. Throughout the duration of the apprenticeships, apprenticeship. The prime contributors and payers at some of our third and fourth year apprentices earn in the present are employers—we do not put it in that excess of £500 a week. Because over eight out of 10 way—with a contribution from the Government. The complete, ours is self-financing. It is just like a loan Government are not the main contributors to upfront, and we are paying back the Government. It apprenticeships, and there is a lot of hard data over is an easy sell for us, and I would like to think that many years, especially from the traditional sectors, protects what we want to do. where the costs are very high indeed. We need to In terms of incentives, we are constantly scanning come clean on this to deal with the potential issue with our radar small employers, many of whom raised in your question, whether it is retail or anything operate their business from a kitchen table. I have else. I do not think it is necessarily a retail issue. been out to see them. What they particularly like, Who are the beneficiaries? Who should get what? I which was an idea we put through the LSC, is the believe—this is my own view—that the Government employer expansion project. That was £30 a week for should be making sure that individuals continue to be a year, paid three months in arrears, which tied the funded to get them up to a basic level of English, youngster in. They thought that was really good, so maths, literacy, numeracy and functional skills so they much so that we supported another 1,000 places out can play a full part in the labour market and have of the charity the following year to get another 1,000 the transferable skills they need to move to the next or 1,200 starts. That works well. It does not sound a employer. I believe the state has a reasonable lot, but a sole trader who is prepared to take the risk responsibility to complete the education of those has an order book that is generally no more than two people, many of whom do not get there at the age of or three weeks in front. They make a four-year 16 or 18, even at 21, I hear. I think we need to be commitment to a young person. They never know quite clear that the Government will pay for that, from day to day; they have orders two weeks in front irrespective of age. The Government stopped paying and operate from the kitchen table, but, to get that their full sponsorship at 19; they cut it in half. Hang cheque after three months, switches them on and on. Some people at 19 have the same problems and engages them. need for remedial or extra work as an 18-year-old. That seems to be wrong. For individuals, we are starting to move into potential Q47 Margot James: That is very good. Mr Hird, did loans at the higher levels. That is yet to be put in. you refer to Asda? That is well worth checking through. I was talking to Denis Hird: Asda was one. I am only repeating what the Minister last night. We do not have the details I saw on TV. right, which is important, but the concept is to start to get individuals to contribute at the higher levels. We Q48 Margot James: We also heard last week about have always had that with sandwich courses and day Morrisons. To what extent do you feel that investment release, which people have paid for themselves. It is in apprenticeships is supporting large companies’ not new. But the one we have not yet tackled is: what training budgets? are the employers paying if they are getting a return? Denis Hird: It is not for me to have a judgment. My view is that they should be paying for the basic Having spent the first 24 years of my life in one of skill competencies. That is a very crude division and the biggest organisations in the country, we never took it would be very hard to do, but, if you had something anything from the Crown because we had our own split that way, in some respects the formulation of schemes and were driven by statute. Therefore, we your question, which I have not quite answered, might could afford it. That allowed us to have our own be slightly different. If we really knew that the schemes; we were not covered in bureaucracy. Why Government paid for that, employers paid for that and take the Crown’s pound when you know as a business in some cases individuals paid for that, life goes on; you can afford it? we know exactly where we are.
Q49 Margot James: What do the other witnesses Q50 Margot James: Last week, we heard from Nick think? When times are tough, it is quite attractive Linford about a company called Elmfield, which when you want to keep your training going. You did provides training and has been in the press, making say earlier, Mr Hoyle, that this was one of the first extortionate profits out of participating in all this recessions where companies have not rushed to cut Government-funded work. I am very concerned about the training budget. Could this be the reason why? that. There is huge scope for profiteering across cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:46] Job: 021099 Unit: PG01 Source: /MILES/PKU/INPUT/021099/021099_o001_th_BISC 01 03 12 CORRECTED.xml
Ev 14 Business, Innovation and Skills Committee: Evidence
1 March 2012 Denis Hird, Alex Jackman and Graham Hoyle OBE government, whichever party is in power, from brand, that is not to say the term should not evolve. well-meaning schemes. Where do you think the red Could we not look at those kinds of jobs just being flag should be flying? What would you advise us to rebranded perhaps as entry level, or basic level look out for? apprenticeships? We have to recognise that businesses Chair: I never thought I would hear Margot require all types of skills, and the types of skills learnt advocating the flying of the red flag. on some of the shorter courses out there are perfectly Mr Binley: May I suggest that we sing the anthem to transferable and useful to some more niche close the meeting? businesses, and an apprenticeship might be able to Nadhim Zahawi: Margot meant the red light. continue from that point. Graham Hoyle: If I may be as light-hearted in attacking private enterprise, how mischievous can I Q53 Mr Binley: I want to probe the point about be? Perhaps I may move away from the specifics Government funding. I welcomed Mr Hoyle’s remark because I do not have the data, so that is dangerous, that the Government are not the major contributor to but I am aware of some of these things. You say there training in this country, and never have been. is huge potential for abuse. I would question that. Consistently, Government think they are the only There is undoubtedly potential for it. people who train and that companies do not train at all. The very obverse is true, and we need to get that Q51 Margot James: I do not mean just here but on record. You have already made the point about across Government. apprentices aged 16 to 18 getting 100% funding, while Graham Hoyle: Of course there is potential for abuse. apprentices aged 19 to 24 get only 50%. That seems There is a difficult balance here. If I may say so, the incredibly illogical to me, too. In terms of where the traditional view about the protection of Government focus of the money is, how do you think the money, which is absolutely right and proper, is to have Government should act to change that rather foolish an auditing bureaucratic machine that is so situation in a more practical way? all-encompassing that it certainly knocks out Graham Hoyle: You referred to our paper. I do not innovation. You can forget that. You have a rulebook have the detailed answer yet. I believe there ought to as thick as whatever, and a team of auditors that costs be a debate to come up with a sensible set of a fortune. That is also not what we want. It is the proposals. We have some outline thoughts, and I balance between risk and freedom to be cost-effective, referred to some of them. I think the 50% 19 cut-off and that pendulum continues to swing. I would work was arbitrary. By pure chance, I was in the room when with quality-assured preferred suppliers with a track a group of civil servants made that decision. record and a reasonably trusting relationship, but with the capacity not only for self-assessment and self- Q54 Mr Binley: It is the bureaucrats again. regulation but also for external checks. You hit the Graham Hoyle: I am afraid it was. I was only an people who have abused the system very hard with a observer at the time, not one of them, but recall the rifle shot, not a blunderbuss, please. very short non-evidence-supported decision that cut it As to my 600 members, there are a few issues. You at 50%, mainly because it was budget-related, which had an example; maybe there are others. We do not is perfectly legitimate. Interestingly, it was done on suggest there is no abuse round the edges—we suspect the basis that a lot more 19-plus bring more to the and believe there will be, and, for goodness’ sake, sort party than 16-year-olds. Therefore, there is less to do. them out—but we are really worried that the mass of That is probably correct, but it is not true in every innovation, development and quality across the sector case. If we can get a rough division, as I suggested is held back and played down by an overreaction of just now, as to who pays for what and let that apply, detailed micro-management and auditing. That would age does not come into it. If you have people with be the wrong approach. Sort out the problems. basic skills who do not have their English and maths or their transferable skills at 19, or even 23, the Q52 Chair: Perhaps I may say at this point that we Government might well say they will carry on funding are getting Morrisons in; we are also trying to get the elements that do that. However, when you get to Elmfield in as well, so they will have an opportunity the stage where some of the fundamental skill to respond to some of the points that have been made. competencies are there, which are what the company Alex, do you wish to come in? wants, then they take them over and you shift it. An Alex Jackman: If I may make a couple of brief arbitrary guillotine at 50% seems to be taking the comments on the last point and the previous one, you average that I mentioned earlier and simplicity much can argue that we have spent years, maybe decades, too far. I think it comes back to the point I made just devaluing GCSEs and A-levels. We cannot do the now about getting an answer as to who pays for what. same thing with apprenticeships; they are vital for rebalancing the economy, and they are strategically Q55 Mr Binley: Are you suggesting to me that the important in terms of our international standing. We scheme was created in that way to fit the needs of the have to keep the reputation high. If there is a view civil servant and not the needs of sectors of industry? that shorter term apprenticeships, like the ones that Graham Hoyle: I am prepared to go along with that. might be rebadged on-the-job training, are devaluing I was sitting in a room in a building not very far from the brand, that is an issue. Equally, if we feel that here when the decision to cut apprenticeship training those types of apprenticeships are sucking money by 50% at 19 was made by a group of civil servants away from SMEs, that is also an issue. Although based on how they could apply the budget available apprenticeships are in danger of becoming a catch-all at the time. I have a total understanding of that. That cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:46] Job: 021099 Unit: PG01 Source: /MILES/PKU/INPUT/021099/021099_o001_th_BISC 01 03 12 CORRECTED.xml
Business, Innovation and Skills Committee: Evidence Ev 15
1 March 2012 Denis Hird, Alex Jackman and Graham Hoyle OBE was the answer they came to. It was arbitrary, and is to ensure that the great majority are usable over a they are rarely correct. It has not been reviewed, and 40-year period. now the myth that has arisen is that it was cut to 50% Denis Hird: Absolutely. because employers should contribute the rest. That may be true—I do not think it is—but that was not Q61 Mr Binley: How do we bridge that gap? the basis on which it was set up. It needs a proper Denis Hird: As a nation, we have a huge problem investigation, and it may well be something you are with a million young people looking for a job. The looking at here. way to address that is to encourage and engage employers, and we have to find meaningful ways to Q56 Mr Binley: Does anybody else want to add to do that. Some employers tell me, “Denis, if you gave that? I am perfectly happy if you do not; it does not me fully funded apprentices whose wages were paid matter. for, I would have no work for them.” This is of no Denis Hird: For 19-plus, we make a contribution and use to anybody. take a risk. I can tell you now off the top of my head that our liability over the next four years is £6 million Q62 Mr Binley: So we need growth, do we? of our own money. If an employer comes to us and Denis Hird: Yes. We have all sorts of problems. A lot says, “I’m minded to take on six people but want three of them are saying, “If the bank would let me have in the guaranteed group and three in the 19-plus,” I £20,000, I could take on two apprentices because I am unlikely to want to turn them away, but I have to have a bigger contract.” I cannot do anything about take the risk. They might make a contribution but to that. Mr Cable can help me; he is being very good in us. Are you with me? We have some investments, but doing that. who knows where they are going? I have committed, because I live, breath and eat what I do, to taking a Q63 Mr Binley: I have been slightly flippant in £6 million hit over the next four years of our own saying, “So, we need growth, do we?” but it is money. absolutely essential to ensure that our young people— all of our people—perform successfully in their lives, Q57 Mr Binley: I understand that, and that is and this is a vital part of that process, isn’t it? repeated in other companies in different ways. Denis Hird: Yes. Denis Hird: But it is for a good cause. Q64 Mr Binley: We need to be making that point Q58 Mr Binley: Do companies have a preference in again, particularly at this time just before the Budget, terms of the age of the apprentices that they recruit, don’t we? or does it depend upon sector? Denis Hird: Yes. If I may quickly explain something Denis Hird: There is a variant, but it depends on who else that is really hitting us, now people do not have comes forward. If you are an employer and, like us, to retire at 65 and are staying on. Because of that there you get 25,000 applications, you do not discriminate is no natural progression in terms of demographics. on the basis of age. We put them through an initial Therefore, people are working beyond 65, but that is assessment. If they pass, they go on to an approved at the sacrifice of young people coming in five list, and if an employer wants to see some youngsters decades down the line. That is starting to have an in that postcode area, we present them. At my age, I impact. People cannot afford to retire because their do not know whether people are 18 or 22, but after industrial pensions are not sufficient to sustain a the selection process you might pick the 22-year-old reasonable income, so they stay on at work. People because you think that is the right decision. You get are not retiring, and that is not helping us to bring in back in touch with us and say, “We want to start that young people. youngster tomorrow,” and you do, but we then have to discuss how we are going to work it out and who Q65 Chair: I want to pick up a point Brian made is going to fund it. In terms of employers, they are earlier about growth, because it is a problem. Unless looking at the best young person irrespective of age. you have a growing economy, there may not be the capacity for apprenticeship. On the other hand, when Q59 Mr Binley: So the preference is not based an economy is not growing but will grow in future, necessarily on affordability but success. that growth could be constrained unless you train Denis Hird: A business is looking to succeed in life sufficient people during the low period of growth to and growth through a skill base, and therefore it wants meet the demand when it occurs. How do you think the very best people. If it can, it wants to attract some that can be coped with? financial assistance from the Government. In our case, Denis Hird: I have a plan, which I will share with that is paid back over a period of time. It works pretty you, on which I am in discussion with the funding well, but from an employer’s point of view he wants bodies. We have run it before. What we can do is look a range of opportunities to bring in different people at at the guaranteed group, the young people, and we can different ages. have a scheme that is more affordable. So we can bring in more people and work with employers to Q60 Mr Binley: What I am trying to get at is whether offer paid work experience at a lower rate than that preference has an impact upon the gap between industry agreed rates, and we can take funding, which the recruiting preference of employers and the supply is not as much as full apprenticeships, to get in higher of potential apprentices. You say that you are all in volumes of which the majority will flow in at a later the market for the very best, when the nation’s need stage to advanced apprenticeships and full cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:46] Job: 021099 Unit: PG01 Source: /MILES/PKU/INPUT/021099/021099_o001_th_BISC 01 03 12 CORRECTED.xml
Ev 16 Business, Innovation and Skills Committee: Evidence
1 March 2012 Denis Hird, Alex Jackman and Graham Hoyle OBE employment, like deferred apprenticeships. That does work. He asks the employer, referring to Mary or John two things. First, it enthuses young people and stops over there, whether he has considered taking them off them getting involved in things and wasting time, and what used to be called dead-end or low-skill jobs and it gives them a meaningful purpose and lifts their into a full framework. You can understand that that is morale. Secondly, it also helps employers to take a exactly the answer for older workers. It just needs to longer look at good people. Whenever I have done it be understood that a lot of people think that in the past, as I have in many sectors, generally when apprenticeships are new jobs for which people apply they like these young people and have seen and and start as apprentices. When that happens it is measured them over a period of time, with a longer fantastic, but it is only in a very small minority of assessment, they create jobs for them because they are cases. so good. Alex Jackman: One small thing you could do is introduce the £1,500 incentive to businesses to take Q66 Chair: How do you get over the problem of on their first apprentice. young people effectively being trained and then Chair: I am coming to that in a moment. having no job at the end of it and thinking it is a waste Alex Jackman: I will return to it later. of time? Denis Hird: We have had 50,000 programme-led Q67 Mr Binley: You are talking about people who apprenticeships a year in the plumbing and electrical want to be in the world of work. One of the problems sector funded by the Government. What happens is is that in relation to work experience, which is a that they do a programme that is badged up as forerunner in many cases of where you come in, apprenticeships. They have never seen employment or particularly with regard to electricians, people are not the work face; it is all simulated. It is a bit like able to claim for six months and have to be out of training to be a nurse but only on a dummy, never a work for six months. Does that not also help those patient. Then they go out into the wide world people are who are prone to thinking that a career can believing they have these skills. They knock on be made out of not working? Should we not be employers’ doors and say, “I’ve done this course,” and offering that and encouraging young people to take they are told there are no vacancies for labourers. work experience almost from the beginning? This is a They say, “I’m not a labourer; I’m an electrician.” hot political potato at the moment, so I want you to They are told they are not electricians. Then they get answer it. a van and start to practise on the cash market, which Chair: This is tangential to apprenticeships. is very tax efficient, and take work away from bona Mr Binley: It is supportive of them. fide employers who work from the kitchen table and Alex Jackman: One thing you could do is reverse the who then cannot take on apprentices. They are current proposals to remove work experience for 14 pinching their business because they have no to 16-year-olds, and get them into the world of work overheads. Mrs Wilkinson’s plug is a £40 cash job, at an early stage. rather than a £60 certified job. That is the reality, and we keep funding 50,000 of them every year. Tell me, Q68 Mr Binley: So do more with schools. is it a big sell to try to say to the funding bodies that Alex Jackman: Yes. they should put that in employed status Graham Hoyle: I was very interested in Denis’s apprenticeships? It is not a hard sell, is it? reference to work experience, which fits in with my Graham Hoyle: Growth is critical, and we all accept conversion reality and, as I understand it, maybe and know it. The fundamental of the whole thing is getting people in a pre-apprenticeship way to start at apprenticeships for jobs, so need to keep reminding a lower level, say, than the full 2 level. Let’s start ourselves of that. Therefore, for growth in the them off in a job that is not where they need to stay, economy, it is important to grow jobs, so it has to be but they get work experience. You can link it to the as important to grow apprenticeships. apprenticeship framework and start ticking off some To underpin your understanding of who would be of the elements. An employer may be prepared to take taken on—young people, older people and so on—of on a lower paid and lower skilled worker to start with, which members may be aware, over many years the but as long as they are channelled and pointed towards vast majority of apprentices do not start as apprentices apprenticeship frameworks and they start ticking off on day one; they do not apply for an apprenticeship some of the elements and prove themselves to the job at any age. The vast majority of apprentices are employer, where will the employer look for his next converted on to an apprenticeship programme having apprentice? They are going to say that they have seen started work. There is nothing wrong with that. It this young man or woman for six months, and they becomes an up-skilling thing, and it is also one of the will promote that individual—it sounds funny, doesn’t reasons you have the age stretch. I am not making a it?—into an apprenticeship. point about whether it is good or bad, or whether or Denis Hird: We have run several projects, but we not we agree with it; it is just an understanding that have one with Laisterdyke school in Bradford. We got that is the reality of it. It comes back to the question money from the funding bodies and built a skill of the matching system of NAS, which is bringing in centre; we put in some of our own money. It cost a people to start a job. It is at that end of the market. couple of million pounds. That centre, on the school Most people, including young people, are employed, curtilage, is for vocational training to give people a and a training provider, who has a good relationship taste of building services. We got an awarding body with the employer, suddenly notices a new young to do the qualification. We got 28 schools interested person in the corner and does a bit of investigation in it. Rather than have similar arrangements, they cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:46] Job: 021099 Unit: PG01 Source: /MILES/PKU/INPUT/021099/021099_o001_th_BISC 01 03 12 CORRECTED.xml
Business, Innovation and Skills Committee: Evidence Ev 17
1 March 2012 Denis Hird, Alex Jackman and Graham Hoyle OBE come to ours. We have minibuses; we have the Government should do to those businesses that do not employers involved; and we have found our way wish to go through the NAS? round all the health and safety issues and other things Alex Jackman: This recommendation comes from a people get frightened about. It works extremely well. poll of our members and the feeling that some of the They then flow into apprenticeships. Obviously, we courses out there are not flexible enough to meet their are limited in what we can do with our resources. I needs. A whole range of suggestions were put to us. would like to have at least one of those in every region Interestingly, when we held a focus group with BIS of the country. and some of our members, there was no agreement on how the funding should be made; there was really no Q69 Mr Ward: There is also a construction centre at agreement on when the funding should come, and that Carlton Bolling. was in a very employer-focused environment. There Denis Hird: That is absolutely right. I work closely was a feeling that a sum in the region of £1,500 to with them. £1,600 would be enough to incentivise a business to take one on. If we could look at value that could be Q70 Chair: We have had a long session, and I want applied in a way that best suited the business—it to conclude with a couple of questions on the might be in the form of reduced national insurance apprenticeship bonus and SMEs. We have recently contributions for a number of apprentices, which I had the announcement of the roll-out of £1,500 for up know is an ongoing campaign for all job creation, or to 40,000 eligible SME employers. What are the it could be in the form of vouchers, for instance— barriers to SMEs taking on apprenticeships, and will there is a case, which the BIS and employer-led SME this address it? group is looking at, for having flexible arrangements Alex Jackman: We touched on the announcement by for funding, or additional incentives, for SMEs to take the Deputy Prime Minister during apprenticeship on apprentices. week, which is slightly different. The £1,500 for 40,000 places is limited to those businesses that have Q74 Chair: How would you evaluate the success of not taken on an apprentice before. Our view is that, if this scheme? Obviously, it is too early at this point to you want to ensure that an apprenticeship leads to a do it. How do you think you would measure its job at the end of it, why not open that out to success? businesses that have previously run apprenticeship Alex Jackman: I would like to pass on that and say it schemes and know what it is all about? They are more is more a question for an awarding body to consider. likely to take one on because they have a role at the I would like to say, if pushed, it comes down to end. I do not think that limiting it to businesses that outcomes—people having jobs at the end of it. We have not been there before and have a lot of fears feel that an apprenticeship is taken on by a business about the whole process is the right way to go, but we partly because it offers additional skills and for other will see what take-up is like. If it is quite low, I would reasons. In part, it offers something that the business recommend expanding it. does not have necessarily at the moment and, as a result, might create more routes for growth. Q71 Chair: How would you avoid in effect Graham Hoyle: I will be brief. I think the current substitution—businesses taking the grant to take on proposals to offer direct cash incentives to small apprentices who would have been taken on anyway? employers have some merit, but the longer term Alex Jackman: It is a very difficult question. The approach should be an educational one to employers same question could be asked of the short-term to persuade them of the returns to them of investing placements in somewhere like Morrisons. That in training. We come back again to NAS. While training would have happened anyway; they have no Government may have a responsibility for putting need for qualifications. over this message, I increasingly think it has to be Chair: We will be asking them. pushed via the employer bodies and employers Alex Jackman: I think you just have to work on the themselves. In some respects, I would much rather see assumption that, over the next few years in taking on us going in that direction than giving out very short- an apprentice, there is a huge hope on the part of all term bonuses. of us that the economy will begin to pick up and there will be growth, and that the additional skills the Q75 Chair: What you have said is very valuable, but apprentice brings to an organisation will allow it to it does not address the question of how you measure find new routes to expand if the growth is not there, the success or otherwise of this particular scheme. or expand their existing work if the growth is there. Denis Hird: I can only go on the employer expansion project. We filled every place. We said we would fill Q72 Chair: Mr Hoyle, I thought you indicated that 7001, and we did so very quickly. They were all new you wanted to respond to this. people, but between 2004 and 2008 we had a fairly Graham Hoyle: No; I will pass on this one. Time is aggressive campaign to move into the SME market, going on. and were putting some resource into it. In those four years, we grew the average earning of our employed Q73 Chair: Mr Jackman, in your written submission, status apprenticeships from 7,200 to 11,200. There you say there should be alternative incentives for were 1,000 additional apprenticeships year on year. businesses that wish to provide their own 1 Note by witness: The number 700 corrected to “400 with a apprenticeship schemes. What do you think the budget allocation of £700,000”. cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:46] Job: 021099 Unit: PG01 Source: /MILES/PKU/INPUT/021099/021099_o001_th_BISC 01 03 12 CORRECTED.xml
Ev 18 Business, Innovation and Skills Committee: Evidence
1 March 2012 Denis Hird, Alex Jackman and Graham Hoyle OBE
Q76 Chair: You are saying that, basically, it is an Chair: It is unusual for the panel to be asking increase in numbers. questions. Denis Hird: Basically, you have to go out to Denis Hird: I will give you a hint. That is why it is employers. We engaged by telephone; there were growing quicker. 28,000 telephone calls. We went out to see employers. Chair: As it is part of a dialogue, then I will agree. It is about convincing them of the merits of being engaged in apprenticeships, because major employers Q79 Mr Binley: It is growing less than the British are no longer taking responsibility for training economy. apprentices. Denis Hird: Not in manufacturing, where apprenticeships are; that is a bit different. Q77 Chair: To take the 1,500 for this particular Chair: Have we any further comments? Unless any scheme, how do you measure it? member of the panel wishes to add anything, I want Denis Hird: We measure it on engagement. to draw this session to a close. What I say to you, as I do to other panels, is that in retrospect we may feel Q78 Mr Binley: The number of one-man businesses that we did not ask one or two questions we should in this country has grown by 13% over the past four have, and we might write to you for a response. years. That is a massive increase, except when you Similarly, you may feel that you did not get the look at what is happening in Germany, where the opportunity to give us an answer because we did not figure is now 80%. There is a massive opportunity pose a question that perhaps we should have, so feel there if only we would recognise it, but I am not sure free off your own bat to write to us with any further we are doing so to anything like the extent we should. points and it will then inform our deliberations. This The latent entrepreneurialism in the sort of area we are has been a valuable and long session, and what came talking about is considerable. Is that a fair statement? over loud and clear to all of us is your passion for an Denis Hird: Yes. Can I ask a question? How much advance in training and apprenticeships, which more has Germany’s economy grown than ours? obviously is very welcome and valued by the members. Thank you very much. cobber Pack: U PL: COE1 [SO] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG02 Source: /MILES/PKU/INPUT/021099/021099_o002_th_BISC 06 03 12 CORRECTED.xml
Business, Innovation and Skills Committee: Evidence Ev 19
Tuesday 6 March 2012
Members present: Mr Adrian Bailey (Chair)
Mr Brian Binley Ann McKechin Paul Blomfield Mr David Ward Julie Elliot ______
Examination of Witnesses
Witnesses: Professor Keith Ridgway CBE, Research Director, Advanced Manufacturing Research Centre, John Baragwanath OBE, Projects Director, AMRC, and Rt Hon Richard Caborn, Adviser, AMRC, gave evidence.
Q80 Chair: Good morning and thank you for go through the programme and become technicians agreeing to be our witnesses this morning. You are the and programmers, and eventually maybe go on to do first panel, and I will not start the questioning until engineering degrees. We want people to drop in at all all our public are duly seated. For voice transcription levels through the scheme. purposes, could you introduce yourselves? John Baragwanath: Hello. I am John Baragwanath Q83 Paul Blomfield: You don’t use Government and I am the Projects Director for the Advanced apprenticeships? Manufacturing Research Centre (AMRC). Professor Ridgway: No. Richard Caborn: I am Richard Caborn. I am the Strategic Adviser to the AMRC. Q84 Paul Blomfield: Why? Professor Ridgway: Keith Ridgway, Executive Dean Richard Caborn: They have not been as relevant to of the Advanced Manufacturing Institute. what we require here.
Q81 Chair: Thanks very much. I will just wait until Q85 Paul Blomfield: In what way, Richard? everybody is seated. Perhaps we should have charged. Richard Caborn: In the way that there are not, we Mr Binley: Perhaps nobody would have paid. believe, the nationally agreed standards for Chair: There are some seats down here. Perhaps we apprenticeships. It is an interesting question that you should have used the Government’s approach to ask, because we are now moving from a relatively regulation: one in, one out. We have 50 minutes for small training area to a much bigger area. We are our first session, and quite a few questions. I remind looking at building, just across the way there, a our witnesses that, while we welcome contributions training centre for 250 apprentices to go through that from everyone, we don’t necessarily need a apprentice training per year. Uniquely, it is one where contribution from everyone on every question. If you a university, I believe for the first time, has got feel you have nothing to add to what a previous involved and motivated such a development, because, speaker has said, do not feel the need to. Otherwise if you have something to add or subtract, your comment as you know, the AMI and the AMRC are part of the will be welcome. Can I just start with a very general university, so effectively the training will be part of question: what role does the AMRC play in terms of that as well. apprenticeships? Who would like to lead on this? That has been driven because Rolls-Royce are going Professor Ridgway: We do work with local to build a couple of factories here, and the local companies on improving manufacturing. It would be employers—who you are going to interview a little very difficult if we took their best operators to be our later—put skilled labour right at the top of their risk operators, so to poach from the local community is register. not a good thing. Five years ago we made the decision to start a training scheme for our own apprentices. We Q86 Chair: Could I stop you there for a totally have now had 22 on that scheme; six have been different reason? I have had a note that we are getting through and 15 are still within the scheme. Many of massive feedback off the mics. Can I ask everyone to our operators are now self-trained apprentices that we switch off mobile phones? I am told that it does affect have brought through. this system; I have already told the Committee to. Just putting them on silent is not enough. I am sorry to Q82 Paul Blomfield: We are looking at the effective interrupt you, Richard. routes into apprenticeships, Keith, and we have been Richard Caborn: It’s alright. That is what we are told by previous witnesses that fewer than half of going to be developing over the next period. If I could businesses use Government apprenticeships. Does the quickly put it into context: not only are we going to ARMC use Government apprenticeships? How do you give the opportunity for young people to be able to recruit your apprentices? come in here at 16 years plus to start an Professor Ridgway: We recruit using the local press apprenticeship, but within that context we will be able and schools; we get a lot of applicants. We have to be to give those young people exposure to further very careful about the aspirations of people we recruit: education, higher education, probably in a seamless we want machine operators; we want people that will way that has not been the case before. It has been one cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG02 Source: /MILES/PKU/INPUT/021099/021099_o002_th_BISC 06 03 12 CORRECTED.xml
Ev 20 Business, Innovation and Skills Committee: Evidence
6 March 2012 Professor Keith Ridgway CBE, John Baragwanath OBE and Rt Hon Richard Caborn of the fault lines, I believe, in the development of after that. That can be done by statutory instrument, young people. because the primary legislation is still on the statute To complete that picture, we are also looking at how book, as we know. We think there is a case now, if we we can get down the education supply chain in a much are serious about moving the GDP per capita of our more effective way. One of the propositions that we manufacturing base from 11Ð12% to the 25% of the have put in our paper, which we have circulated to you Germans, for that type of intervention to make that this morning, is to have an engineering and science happen. Government and industry have got to take experience centre, not dissimilar to what they do in responsibility for that. I think we argue that very the Science Museum in London—and in fact they are forcefully. coming up here next week to work in partnership with Professor Ridgway: There is an objection to the EITB us—so that every infant and junior school pupil will training programme, particularly about the levy; there have access at least once a year, if not twice a year, was a levy on the industry, and people did not like over the seven-year period, to come in and have that that. People did like the continuous standard, where hands-on experience of what the world of science and everybody was coming out the same from every engineering is really about. college. We have a lot of evidence from local To some extent, our education system has been devoid companies who are saying to us, “We have a lot of of that type of exposure. We are also looking at some variability in the product that we are getting from the of the teachers coming in, who probably have not had colleges, and the EITB was a better way of that experience either. We are looking at the whole of controlling that.” that supply chain, as it were, from the infants, the juniors, right through, and developing a skilled Q90 Mr Ward: The alternative, if you are concerned apprentice training here, with access into further and about the devaluing of the term “apprenticeship”, is to higher education. I suppose a young person coming call the young people you are working with something here at 16 years of age could, in eight or nine years, else. It is a familiar refrain, this one that we are go out as a chartered engineer. picking up, but when a Government is proclaiming What we suspect, which is fundamental to our paper, and boasting about nearly half a million new starts on is that we don’t believe we have those national apprenticeships, and some of those we know are a standards in this country. We are highly critical of the relatively short timescale, I am wondering whether way the word “apprenticeships” has been used. We this thing can be recovered? say in our paper very clearly that there needs to be a John Baragwanath: I think the national standard can distinction between trainee and apprentice. The be recovered. If you compare us with Germany, where devaluing of apprenticeships has made many parents the bar is set very, very high, people are not allowed up and down this country give wrong advice to young to call themselves apprentices unless they are going people, who don’t go into apprenticeships. You through formalised training that is agreed at a national cannot, cannot get an apprenticeship in six weeks. level. An apprentice in this country might receive relatively poor training or excellent training; there is Q87 Chair: Have you evidence of this? no distinction between the two. Richard Caborn: The Science Museum, who I spoke to last week about this very issue—and you would Q91 Paul Blomfield: Specifically on this point, we probably be interested to get a paper from them as have had discussions with previous witnesses about well, Mr Bailey—say that it is very difficult to get the what is meant by the term “apprenticeship”. It is the parents of young people to acknowledge that starting point, in a sense, for our inquiry, isn’t it? If engineering is a profession to go into, rather than we are to look at how the brand has been confused, going to higher education first. or tarnished, but we have got to rebuild it, we have got to be clear: what do you mean by an Q88 Chair: I understand that is one problem. The apprenticeship? What would your core components of other problem that you touched upon is the, if you an apprenticeship be, as opposed to some of the stuff like, devaluation of the brand “apprenticeship”—the that is in-house training and is happening under that perception of it. Have you any evidence that parents brand at the moment? no longer regard apprenticeships in quite the same Richard Caborn: There are two ex-apprentices here; light as historically they used to? we are a bit on the old side now, but John and I will Richard Caborn: Anecdotally, yes. Factually, I have tell you what we think an apprentice is. not got evidence, but I am sure there will be the John Baragwanath: An apprenticeship is an evidence out there. If one is looking historically, since agreement between the employer and the apprentice. the EITB ceased to function in 1992, we have seen The employer agrees to train that apprentice to a the falling off of standards, specifically in engineering. certain level, and in return the apprentice agrees to deliver for the employer to achieve that certain Q89 Chair: Sorry, excuse my ignorance—EITB? standard. Then, in days gone by, we would hope that Richard Caborn: The Engineering Industrial Training apprentice would be capable of going to the highest Board, which was part of the Industrial Training level within the company. Indeed, if you look at some Board structure, which came in in 1964. Again, in our of our most successful companies, for example Rolls- paper we argue the case that this Committee ought Royce, a very high percentage of their senior to consider whether we bring back the Engineering managers are ex-apprentices. Industrial Training Board national standards, both for Richard Caborn: If you go back and look at the the first year of training and then the module training modelling of the Engineering Industrial Training cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG02 Source: /MILES/PKU/INPUT/021099/021099_o002_th_BISC 06 03 12 CORRECTED.xml
Business, Innovation and Skills Committee: Evidence Ev 21
6 March 2012 Professor Keith Ridgway CBE, John Baragwanath OBE and Rt Hon Richard Caborn
Board, you had the one year experience training, John Baragwanath: And different. which was generic, but then you went on to the Richard Caborn: And different too. modular base of the EITB, which allowed each person to take the required modules to build up the full Q94 Mr Binley: Carrying on on that theme, our apprenticeship over that period of three to four years. information tells us that advanced-level That also meant having access to further and higher apprenticeships have increased from 57,000 in education as well. You need the national standard, 2006Ð07 to 154,000 2010Ð11, and higher have gone because after 1992 it was really left to the employers up from 100,000 in 2006Ð07, to 200,200 in 2010Ð11. what standard they trained to. That is where Is there any devaluation of those qualifications in the Government have a responsibility, with industry and increase in those figures? Does that worry you? with the sector, to make sure. Professor Ridgway: It would not necessarily be the That is where my view is. I think others on this side numbers that would devalue it; the danger is the can probably speak for themselves. The Technology difference in standards in the different places that are Strategy Board, with what they are developing in the offering apprenticeships. That is the concern. Technology Innovation Centres—two of the TICs are here, one nuclear, one aerospace—could take some Q95 Mr Binley: We are talking about advanced-level responsibility to start looking at where we need to apprenticeships and higher apprenticeships; we are modernise the structures of the Engineering Industrial talking about the top end of the almost 500,000 starts Training Board, and that would very quickly bring last year. I come back to my point: does it bother you you the national standards that most people could that there is a devaluation in that top end? coalesce around. Richard Caborn: I don’t think there is a devaluation at the top end. What we have seen, and you Q92 Mr Binley: Gentlemen, I am not sure the experienced that yesterday at Forgemasters and branding is that important. It sounds to me that you companies of that nature—look at Rolls-Royce, BAE engineers are being a bit elitist, quite frankly. I come Systems, and look around this area—is that the from the boot and shoe industry, where we have very investment into apprenticeships has become more and little qualification and hardly any level of qualification more real over the recent past. The demand on the that has any meaning. What we are trying to do is skilled sector is growing, and with the investments widen the thing. Does it matter that employees know that are taking place in this area—just across there exactly what a qualification means, or are we doing, there are going to be two new factories built by to your mind, what we have done with degrees and Rolls-Royce, 600 jobs over the next few years—that devaluing the term to a certain extent? needs to be supplied, and that will be 600 in the John Baragwanath: That is exactly what we are supply train. saying. I think the term “apprentice” has been It is interesting when you see the editorial in The probably applied too widely, but I agree that we could Observer yesterday: “Britain needs to shape an change the name of the apprentices we are looking at industrial strategy”. It goes on and says that “82,000 in manufacturing and call them something different, if engineers, scientists, and technicians are required over that is what we want. Apprentices in Germany go the next four years”. The penny has dropped. If we right across the board and cover most skills, but there are going to start moving towards a greater GDP per is a distinction between them; they call themselves capita in terms of manufacturing, then one of the main different names and that is a solution. elements of that is skilled labour, and people know Richard Caborn: I understand the boot and shoe the impediment to growth is going to be skilled industry—we had a good discussion last night about labour. That is true, and that is why those figures are that—and it is highly skilled; there is no doubt about moving. that. When you are looking at high-value manufacturing, and you are looking at sectors that are Q96 Mr Binley: Therein lies my concern, because in globalised or internationalised, you are in a different Northampton we have got the largest precision sector altogether. The aerospace industry, and the engineering enterprise zone in the county. I talk to green energy industry, the nuclear industry in people like Lotus, GE Precision Engineering; they are particular, is internationalised, and therefore the not getting the skills out of our educational system quality you are looking for, and the standards you are now, let alone when we are going to have 14,000 extra looking for, are international. Therefore, to draw a jobs in the sector. I want to ask you about the other comparison down between the boot and shoe as side of the coin: what advice would you give us to put against high-value manufacturing, both have different in our report about how we increase the numbers characteristics, but one has that international and while ensuring the quality? globalisation to contend with. Richard Caborn: If I wanted to see something come Professor Ridgway: You still need standards in either out of your report, you have got to define what an industry: if somebody changed jobs and went to a apprenticeship is: it has got to be valued; it has got different company, they would like to know they had to be properly policed; it has got to have a national got that basic training. programme of achievement; and it has got to be funded in a way that is a partnership between Q93 Mr Binley: But it is manageable within the Government and the private sector. That ownership of brand; that is the point I was trying to get at. those national standards is very important indeed, but Richard Caborn: Engineers are not elitist; we are I believe the valuing of apprenticeship has got to be just good. brought back. The engagement of education is crucial: cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG02 Source: /MILES/PKU/INPUT/021099/021099_o002_th_BISC 06 03 12 CORRECTED.xml
Ev 22 Business, Innovation and Skills Committee: Evidence
6 March 2012 Professor Keith Ridgway CBE, John Baragwanath OBE and Rt Hon Richard Caborn in our very small way, in our new apprentice training come up and say, “I want to stay as a tool maker, centre here, we are going to challenge that. We have as a skilled man,” and not necessarily progress. The challenged that in the supply chain of education, from difficulty is keeping that balance of apprenticeships the infants right through to a master’s degree as an and where they go through the whole company. engineer. That needs to be rolled out across the Technology Q102 Julie Elliott: Is there the flexibility in your Strategy Board, the TICs, and should be taken up by programmes to do that—to stop at a certain level or Government if you are going to address the problem. carry on? Again, I go back to this point: if you want to increase Professor Ridgway: The flexibility is there to stop the wealth-creating part of our economy from 12% wherever or go all the way through. Because we can to 20% or 25%, near the Germans, then you have to be almost too selective, the danger is we pick the intervene in that, and skills are crucial to it. academic stars and they all want to go through. We do want— Q97 Mr Binley: I think we are on the same side. Richard Caborn: Turners. You submitted a paper this morning; does it give that Professor Ridgway:—Turners, yes; we want people information here? who are skilled hands as well. Richard Caborn: Yes. That gives our view. Richard Caborn: It is a real problem, and it is interesting as we have gone round to Rolls-Royce and Q98 Mr Binley: That is excellent; we have got it. to BAE Systems that the recruitment has got to be My final question is about what level of age are screened in a way that some of the young people apprentices generally recruited in your sector: there is coming in are stopping as the artisans; they are going this business of 16 to 18, and 18 to 24, and so forth. to be the turners, the fitters, and the machinists. It is What is the relevant age in your sector? no good everybody becoming an engineer. It is a Professor Ridgway: Our experience is it is 16 to 18 balance of how you screen for your input into those we are recruiting. We are recruiting five good GCSEs, apprenticeships—whether some are going to stop at and also some people who have got maybe one or two the artisan level. A-Levels, or are on that A-Level route and decide to step off it. That is the basic level. Q103 Julie Elliott: If you are saying that people with Mr Binley: That is certainly the information we got five GCSEs and so on should come in, is that perhaps from Forgemasters yesterday. not the right measure to bring people into apprenticeships? Q99 Julie Elliott: As a follow-up to that, is there any Professor Ridgway: We have talked about this long leeway to bring in somebody who is perhaps older and hard. Some base level skills in the industry are than 18 and has got some work experience in the area important, but we are coming to the conclusion that but has not been formally trained? Is it a flexible we have got to recruit on character, personality, admission or is it very hard and fast—if you have attitude—they want to be apprentices. That is just as reached a certain age you cannot get on these important really. programmes? Professor Ridgway: Our oldest is 24—they could be Q104 Chair: Could I piggyback on your question, in their 30s or 40s. It is just generally they are 16 Julie? One of the complaints I constantly get from to 18. small businesses in the Black Country is that the people they are getting are not work ready, and that Q100 Julie Elliott: How long does it take to train an there has to be some sort of pre-apprenticeship apprentice to the required level before companies see training with the so-called soft skills. Have you found a return on their investment? that a problem? Professor Ridgway: Probably into your second year Professor Ridgway: It is a very common complaint. we are starting to see a return. We use our apprentices In the programme we are putting forward, those as almost our tool room now; they are making the test additional skills—project management, presentation rigs for the jigs and fixtures. For the first year it is skills—are being put into that as an added part of the intensive training, the second year they are with us, course. It is a very common complaint. and in that second year we are starting to see value from them. Q105 Mr Binley: Can I press a little bit further, because you know we visited Forgemasters, which Q101 Julie Elliott: Thank you. We have heard that was immensely impressive—the way they handled there may not be a demand in some sectors for Level those massive chunks of metal was quite startling. 3 and 4 apprentices. Is that the case in your sector, or When we talked to the apprentices and I specifically is there demand in your sector for the higher level asked them whether they felt that in their normal apprentices? education up to 16 to 18 they got any information Professor Ridgway: There is demand right through. whatsoever that was helpful about the workplace— One problem that was brought up before is that we whether they thought the connection in any way had are in a very good position: we have a lot of potential importance—not one of them said yes. Not one of apprentices applying for every job, and we see the them. They all said there was no connection at all. opportunity for people to go up to a part-time degree Isn’t there a real problem there? and into an MSc, although we do not want everybody Professor Ridgway: Absolutely. to take that route. All employers want some people to John Baragwanath: That is a definite problem. cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG02 Source: /MILES/PKU/INPUT/021099/021099_o002_th_BISC 06 03 12 CORRECTED.xml
Business, Innovation and Skills Committee: Evidence Ev 23
6 March 2012 Professor Keith Ridgway CBE, John Baragwanath OBE and Rt Hon Richard Caborn
Richard Caborn: That is the fault line. That is a fault statutory power to do that, then you have got to go line, there is no doubt, and that is why we would want back to the primary legislation; you have got to go to try to address that by what we are doing here, as I from an executive to a non-departmental public body. said, with the infant and junior schools, and the teachers as well, coming and looking at the world of Q108 Ann McKechin: That would suggest a much science and engineering as a wealth-creating tool and stricter basis of accreditation and enforcement against gaining an understanding of what they are likely to be those that are not meeting the standard? employed in. Even if they don’t come into the Richard Caborn: Absolutely. That is exactly what we engineering side they will have an appreciation of are saying. If this country is serious about shifting and what engineering, science and wealth-creation is all rebalancing the economy, and you want to drive about. It is that lack of understanding, and it is across wealth creation through manufacturing, then they are the whole education system. the decisions that Parliament has got to take. The Let’s be absolutely honest: we are going to give an implementation of that is industrial; the discipline is opportunity for young people to come in at 16 and go by the basis of law. to a master’s, but that has not been universally accepted within academia. There are those who Q109 Ann McKechin: How do you think that would believe that entrance into the world of higher work? Keith, you have mentioned that there was education ought to be by academic qualifications, not opposition, which was the reason that Industrial by going through an apprenticeship. Does that devalue Training Boards hit the buffers, because many the degree or the chartered engineer? I do not think it companies did not like this levy on their profits. Is does. If you are talking about engineers being elitist, there a change in culture within the engineering sector you ought to talk to some of them in higher education. currently, where people realise that there is a problem, You will find there is a lot more elitism there than there is a need to upskill, and there has got to be a down here on the shop floor. new mechanism to try to achieve that? Professor Ridgway: There is a huge recognition; over Q106 Chair: I noted your earlier remarks about the the last two or three years it has really struck home, work that you were doing in schools. Forgive me for and I would say it was nationally as well, that the not knowing the local situation here: have you got any skills base is getting older. We are all getting older, UTCs here and would you anticipate working with and there is nobody coming through that younger age them? group. We see that all the time. Companies are willing Richard Caborn: We are launching one tomorrow. to support, train, pay for that training, and pay the Lord Baker will be here at nine-thirty in the morning salaries. With the levy, it got to the point where people to launch the Sheffield UTC. still paid in if they did not have an apprentice, as I John Baragwanath: We are working with them. understand it. Richard Caborn: We are working with them— absolutely. Q110 Ann McKechin: But did it encourage them to make use of apprentices? Q107 Ann McKechin: Richard, I was interested to Professor Ridgway: Yes, but in a way it is better to note the comments that you and Keith made about have people who really want to do it. We find also national guidelines through a training board there is a big difference amongst the colleges of FE. framework. The Government has what is called We have our apprentices in Barnsley, Sheffield or Government Apprenticeship Frameworks; we have Doncaster and the relationship is different between the got 118 of them. How would you distinguish between colleges: the quality and standards are different the Government schemes and frameworks as they between the colleges. That needs to be a standard. currently exist, and what you are talking about in terms of national guidelines and a training board: what Q111 Ann McKechin: You have mentioned that you is the difference? use your own framework; you don’t use a Government Richard Caborn: I think you have got to come up framework. How do you try to calibrate the with the legal base, first of all. The training board, the framework of your apprenticeship system: do you ITB, is a legal entity and has powers vested in it by look at international competitors? How have you tried Parliament. The Sector Skills Councils are executive to set a standard on your own? bodies, and there is a fundamental difference there. Professor Ridgway: It is mainly looking at local That is where you start saying: how serious are you companies, what they want, and what we are trying going to be? How serious is Government going to be get to. We have found it very difficult in this region about training? If you are going to a non-departmental to get apprentices who can get training in machining. public body and you are looking at the legal base on We are a machine shop; we specialise in machining, which that is set, and it can set those national but it just was not there. We made an arrangement standards, by law it sets those national standards. with the local colleges that a group of companies That is why you go back and revisit the 1964 Act, doing machining would take at least 10 a year because that is where the primary legislation is. What between us, and they would alter the course to meet you can do through statutory instruments, as you that requirement. know, is bring in any sector. In 1992 the EITB was Richard Caborn: The other thing that is a very decoupled from the Industrial Training Board interesting development is if you look at Tata Steel structure. If you want to go back to the standards and here. At Stocksbridge they have just opened up a you want to give it a legal base, and therefore the development, an extension to their training facility, cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG02 Source: /MILES/PKU/INPUT/021099/021099_o002_th_BISC 06 03 12 CORRECTED.xml
Ev 24 Business, Innovation and Skills Committee: Evidence
6 March 2012 Professor Keith Ridgway CBE, John Baragwanath OBE and Rt Hon Richard Caborn which is very good. They use the EITB modules— past about whether the nuclear part of it has been basic training and then modules. Because there are a cleared by the Construction Industrial Training Board. lot of specialists in this area with the small companies, The CITB have gone in and won the case, because who cannot give the breadth of training—Newburgh they have got a legal base on which they are operating Engineering, for example—they are using Tata to give their training programme. They are nationally agreed, some first-year training and some broader experience. and the Sector Skills Council is just an executive This is an area that we have to look at: how can body; they are doing a good job within the limited smaller companies get access to that experience for powers they have got. their apprentices? You have to look at what powers these boards have to You had that with the EITB. One of the great insist that the national standards are adhered to. If you successes of the EITB and the other training schemes do not, that is where you are dealing with the was that you got that partnering, but it was not beggar symptoms and not the cause. The cause is the need to my neighbour; it was not that you were pinching be able to move those national standards positively somebody. If you talk to Tata, they have an agreement forward. that they are not going to poach these youngsters that have come in from other supplier companies that are Q114 Mr Ward: Finally from me, on the issue of around. There is a general consensus of responsibility funding: does the AMRC benefit from any kind of across the sectors that training is important and that it funding as a result of the apprenticeship programme? is a collective, not just an individual company, issue. Professor Ridgway: We get some funding as part of Chair: I am conscious of the fact we have only six the normal apprenticeship scheme from the minutes left. Government, but nothing additional to that. John Baragwanath: 16-to-18. Q112 Mr Ward: Just quickly on the name, again— Richard Caborn: I do not know whether some of the this brand. My father was an apprentice plumber until employers will say that some of the hoops they have he was a plumber; I was a trainee accountant until I to jump through, or boxes they have to tick, militate became an accountant; and so on. It seems to me the against what they are trying to do in terms of training. word is being used without something. For an How some of these funding schemes are designed apprentice fitter, it stops when they become one. This mean they do not always have the desired effect of is the issue with a lot of the shelf-stacking jobs that lifting the skills base of the sector. There are bits about have been called apprenticeships; it is not leading to bureaucracy and ticking boxes rather than quality anything. Maybe the answer to this is to insist that training. someone sticks something on the end—“apprentice John Baragwanath: Some of the go-ahead companies what?”—and then to have that defined. have questioned whether it is more worth their while John Baragwanath: And they are to be trained to a accessing the Government funding or just doing it national standard, because currently a lot of employers themselves. Obviously, they would not get as many are training above the national standard. apprentices through it doing it themselves, but there is a lot of bureaucracy surrounding it. Q113 Mr Ward: Back to my question, which was to Chair: We are more or less on time. We will finish do with the Sector Skills Councils and the off with a little sneaky question from Brian Binley. frameworks: what work has been undertaken with them to arrive at the frameworks for advanced Q115 Mr Binley: Richard, I wonder if you like being manufacturing? Are you involved in that at all? on the other side of the table? Professor Ridgway: We just started working with Richard Caborn: I used to do that job—I used to be Semta for ours, and also with nuclear. We found the in that chair where he is now. It is far better to be on nuclear is a much better planned organisation to work this side of the table. Especially when my party is in with, to be honest. It was quite clear what was opposition, I would rather be here doing something required in passports, nuclear, and so forth. We found creative than bothering you guys in the House of that a little bit different in the manufacturing area. Commons. I would rather be on this side of the table. Richard Caborn: On the Sector Skills Council—I am Chair: Can I thank you all? If you feel there is a not being critical of the Sector Skills Council; it would question that should have been asked and was not and be wrong to misread what I am saying here—I believe you would like to reply to, then please feel free to you have got to get a legal bit. If you look at the submit some written evidence. Similarly, if we feel in Sector Skills Council and you look at the CITB at the retrospect that we should have asked you a question moment and how they are run, look at that dispute that we did not, we will do so in writing. Thanks that has been taking place at Sellafield over this recent very much. cobber Pack: U PL: CWE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG02
Business, Innovation and Skills Committee: Evidence Ev 25
Examination of Witnesses
Witnesses: Sharon Ward, Group HR Manager, Sheffield Forgemasters International Ltd, Alison Bettac, Group HR Director, Firth Rixson Ltd, and Richard Cook, Production and Personnel Director, AESSEAL plc, gave evidence.
Q116 Chair: I will repeat the welcome and, again, from either the schools that we work with or the thank you for agreeing to speak to us. Again, could provider that we work with. you introduce yourselves with your position in the Richard Cook: Ditto for us. companies that you represent? We will start with Sharon Ward: I think Metskill also use the NAS to you, Alison. recruit, advertise and promote. Alison Bettac: I am Alison Bettac. I am Group HR Director for Firth Rixson in Sheffield. Q120 Chair: Right, if I can just move on: one of the Richard Cook: I am Richard Cook. I look after main measures of the NAS is the number of manufacturing and personnel for AESSEAL based in apprenticeship starts. We have received mixed Rotherham. evidence on this. Do you think it is appropriate to Sharon Ward: I am Sharon Ward, Group HR Manager measure the success of the NAS by the quantity of at Sheffield Forgemasters. apprenticeships that it sells? Alison Bettac: It would be more important to see Q117 Chair: Thank you very much. Again, you don’t completed apprenticeship numbers, because you could all need to answer every question. I suppose this is get an amount of drop-offs during that time. I would one you can all answer, but please make it brief: how like to see numbers of successful apprentices do you recruit apprentices into your workforce? Can completing the various schemes. we start with you, Alison? Alison Bettac: We start very early. We start promoting Q121 Chair: They also advertise that; I think we are apprenticeships at Year 8 in schools and then we go up to 75%, which is a big improvement. What we through a work placement scheme local to this region, are finding is that there has been a huge growth in called Workwise. We find that enhances the promotion apprenticeships in those aged over 25. of apprenticeships in this region, because it talks about Percentage-wise, the fastest growth is in the over-60s: employability skills, it gives the kids a real, live work whatever the merits of that, it is fair to say it does not experience of engineering, and then we recruit from conform to the traditional perception of both the Workwise programme and the work that we apprenticeship. Have you had experience of this? Do do with our local schools in the community. So we you recruit older people via the NAS? start very early. Richard Cook: Personally from an AS perspective, Richard Cook: We take a very similar approach to we don’t have an age limit on apprenticeships—a Firth Rixson in terms of engaging with schools early, lower or an upper end. What is more important than increasingly so in the last three to five years. In any quantity measure is the quality. The first panel addition, we work in partnership with a local training spoke a lot about the relative quality of body; they do a bit of filtering for us for young people apprenticeships, and the dilution of the brand if, who are looking for apprenticeships. We also use all indeed, there is such a thing as the brand. Frankly, for the normal levels, through the press and so on, to someone to try to persuade me that after 14 weeks recruit. they can send a young person to me and describe them Sharon Ward: Again, it is similar to the other as having passed an NVQ Level 2 is laughable at best, companies. We work closely with the schools and and at 42 weeks to have NVQ Level 3 and be ready colleges in the area. We take an awful lot of work to start in the world of work is in a similar vein to experience pupils through to give them a good insight me: it is just not realistic. to the company and to the apprenticeship scheme. We mostly use Metskill for our recruitment. We advertise Q122 Chair: Certainly. Do you think that is true of on our own website to encourage a wider net for just engineering or in general? recruitment, but we usually go through Metskill, and Richard Cook: I suspect it is the same generally, but we do an assessment through them as well. that would be anecdotal. Certainly in my experience of engineering that is the case. We have 101 providers Q118 Chair: Have any of you used the National in this region that put plenty of bums on seats, but the Apprenticeship Service website? quality of provision is appalling, frankly. Alison Bettac: Yes. All our vacancies for apprentices go on the NAS website, and that is via our current Q123 Chair: Do you think the fact that this happens apprenticeship provider. damages the perception of apprenticeships and potentially the willingness of people to be recruited to Q119 Chair: So you put your vacancies on. Do you your sort of apprenticeship? know if those that you recruit come via that Richard Cook: It is a twofold problem: firstly, there communication? is a complete lack of understanding of what an Alison Bettac: Some of the recruits do, but because apprenticeship is; secondly, for those who do we have got such a local relationship with certain understand, it devalues it in their mind. We have the providers, we find that mostly they are taken direct worst of both worlds at the moment. cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG02 Source: /MILES/PKU/INPUT/021099/021099_o002_th_BISC 06 03 12 CORRECTED.xml
Ev 26 Business, Innovation and Skills Committee: Evidence
6 March 2012 Sharon Ward, Alison Bettac and Richard Cook
Q124 Ann McKechin: We have heard some talk selection process last year. However, I am always earlier this morning about soft-skills and pre- mindful, in terms of the level of the GCSEs, not to be apprenticeships to try to prepare people for the world too exclusive. As Richard was saying earlier, we need of work. To what extent do you think that there is artisans that will come in and be machinists; we do a role for the Government’s National Apprenticeship not want them all to be high fliers. They do have to Service in that type of feature? Would that assist you have academic ability, but you need to have a good as employers? mix. With that in mind, to give that opportunity we Sharon Ward: I would agree that a lot of the young went down to a D level last year. people that come through are not ready; they do not understand the standards that we expect as an Q127 Ann McKechin: But still overall you had a employer. We have a lot of teething problems with better result and outcome. them in terms of simple things like turning up for Sharon Ward: The calibre was certainly much better, work on time, reliability and that kind of thing. There yes. is a role to play somewhere in setting the standards before they come into the workplace. Q128 Mr Binley: Can I quickly ask about literacy and numeracy, because we do get quite a lot of people Q125 Ann McKechin: Richard and Alison: do you telling us that literacy and numeracy is not anywhere have any views on that? You have been critical about near as good as you need it to be? some of the standards. Sharon Ward: I would agree with that, yes. Richard Cook: Very similar. The problem is we have Richard Cook: Generally true. a school system that is set up to teach our children to pass exams of varying relevance, when what we are Q129 Mr Binley: Can I go on, Mr Cook, specifically trying to do is prepare them to earn themselves a to ask whether it is correct that your company does living and have a stimulating and challenging career. not use the Government frameworks? It is difficult; we are finding with some of our latest Richard Cook: No, it does not. intake that somebody is doing something right, because we have got some fantastic young people Q130 Mr Binley: If so, could you tell us why not? joining us with some of those life skills. Keith mentioned in the previous panel that increasingly we Richard Cook: For the reasons that have already been are dropping our barriers of five GCSEs and other discussed in the first panel: we found them to be arbitrary measures, and saying, “What are their lacking in what we required. We are a machinist-based characters like? What is their work ethic like? What organisation. It is important to say that, for the first are they likely to be like? Are they going to fit into time this year, we have two apprentices starting with our team?” That is the important thing for us. us in the workshops whose long-term aim is to join Alison Bettac: Employability skills are critical for another part of our organisation: one the sales side and employers, certainly with the apprenticeship the other the internal commercial part. We find it programmes that we run. We have talked about this much easier to tailor apprenticeships to suit the for a long time now as a group of employers in this immediate needs of our business. We are a very particular region, and the fact that we are ensuring growth-orientated, agile business. Frameworks need that our UTC has employability skills on the agenda to be just that: they need to be flexible, and they need and on the curriculum. The NAS could do a lot of to allow us to grow and develop our business. We do partnership working with schools to ensure that not find that in the frameworks that are available. employability skills are on the curriculum. We are talking about even an employability qualification Q131 Mr Binley: Does that extend to FE colleges? within the Workwise programme for kids in schools. Richard Cook: Primarily, yes. Hopefully this region will be one of the first to deal with that. Q132 Mr Binley: What work does your firm get involved in regionally to support the skills level of Q126 Ann McKechin: Sharon, we had the pleasure the local workforce? Or do you not get involved with of meeting some of your apprentices yesterday. We that either? were all impressed by their commitment to the Richard Cook: Sorry, could you rephrase that? company. What is your experience of the quality of Mr Binley: Do you get involved in the regional apprentices? Clearly you attract a lot of people from efforts to improve the skills level of the local the local area who are keen to work in your company, workforce at all, or do you stay away from anything and one or two of them mentioned that they had come to do with what might loosely be called Government in through work experience. bodies? Sharon Ward: Yes. Richard Cook: We have a very strong local employer Ann McKechin: What has been your experience over base, including my colleagues here today. We have the last five years in terms of the quality of apprentices got ourselves together, we have looked at what we and issues that they bring? have needed and the shortfall in provision, and we Sharon Ward: We had some very good feedback on have plugged most of those gaps ourselves. I have sat last year’s intake from our college provider, who said on various committees in terms of skills; for me, it is the calibre of the apprentices was the best that we a national and, increasingly, international issue. If you had recruited over recent years. That was good and are passionate about engineering, as an ex- rewarding to hear. We did go through a stricter apprentice—elitist although that may sound—I am cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG02 Source: /MILES/PKU/INPUT/021099/021099_o002_th_BISC 06 03 12 CORRECTED.xml
Business, Innovation and Skills Committee: Evidence Ev 27
6 March 2012 Sharon Ward, Alison Bettac and Richard Cook keen to see it much higher on the agenda regionally, placement is now not mandatory in schools for some nationally and internationally. strange reason, it just needs a little bit more promotion to get out there. Certainly there is an appetite for it Q133 Mr Binley: So your local experience has not out there from an employer’s perspective, because we put you off from being enthusiastic about ensuring know that it helps build character, skills, and gives things happen? the kids a good experience of what engineering and Richard Cook: Not at all, quite the contrary. manufacturing is like.
Q134 Mr Binley: I am pleased about that. Can I ask Q138 Chair: How is it funded? a final very quick question: at what level do you Alison Bettac: It is funded by a trust at the moment, recruit your apprentices at, and what level do you I believe. I am not involved in the workings of it, but normally train them to? Let me get an understanding I believe it is funded by a trust. It was originally paid of that. for by the local authority, but I do not believe that is Richard Cook: “All and any” is the honest answer to the case any more. that. We have already had quite a lot of discussion Chair: It seems as if we might look on it as a model. around this, but for us we need people who want to be good programmer setter operators, or just good in Q139 Julie Elliott: On entry levels again, some of any other department in the business. One of the you were saying you take GCSEs and others do not. things we work hard with schools on is to make If you are not taking GCSE as the requirement, how people understand the differing opportunities, for do you test people’s literacy and numeracy skills when instance we speak nine languages in our commercial they come in? department. Language is a key part of our business, Sharon Ward: Through the Metskill assessment; that as is IT, finance and various support functions. is what they include as part and parcel of the If you look at the manufacturing part of our business, assessment. we need people who want to come in and do what I would classify as the old City & Guilds route: be a Q140 Julie Elliott: Is that the same for you? craft apprentice, and be damn good at what you do, Alison Bettac: We have our own assessment and have all of the great credentials we have spoken methodologies that we use in-house. about—the soft issues. If you want to go through at Richard Cook: Our training provider does some your own leisure over five, 10, 15, or 20 years and screening for us, to ensure there is the necessary end up with a PhD, that is good too. We will sponsor base level. that person throughout—let us forget student the debt aspect, just for the moment, against a traditional Q141 Julie Elliott: Alison, you said you used the route—they will have years of invaluable industrial NAS. Do the other two companies use it? experience. Sharon Ward: Via our provider—through Metskill, yes. Q135 Mr Binley: I understand that is a similar case Richard Cook: Similarly. with you, because we saw that. Sharon Ward: Absolutely, yes. Alison Bettac: Absolutely, yes. Q142 Julie Elliott: What support, if any, do you get from the Government for upskilling your workforce? Q136 Mr Ward: What is Workwise, and who runs Alison Bettac: As in financial? that? Julie Elliott: Anything. Alison Bettac: That is a work placement scheme that Alison Bettac: We get the 16-to-18 apprenticeships was set up a couple of years ago by a consortium of funded, but beyond that nothing. employers who were fed up with having unstructured Sharon Ward: It is the same for us. work placements in the workplace. We wanted to see, Richard Cook: Ditto. certainly in the engineering and manufacturing side, some more structure to that. We set up a programme, Q143 Paul Blomfield: We have explored the NAS and Business & Education South Yorkshire ran it at from different angles, because I guess it is at the heart the time, and we put a lot more emphasis on things of what the Government is trying to do in terms of like: employability—we put them through an enhancing apprenticeships. A number of comments induction, which includes an introduction to the world have been made, but if you were in the Government’s of work; communication self-respect; looking at the position or in our position, how would you judge what different values and everything. Then we put them the NAS is doing and what would you be expecting it through a structured work placement, which gives to do more effectively to promote apprenticeships and them a taste of every part of engineering within a support you as employers? company. A number of employers signed up to that, Alison Bettac: They could certainly do more on the and it is still there today. promotion within schools and the education system: that is where the challenge lies at the moment. The Q137 Mr Ward: How many schools are in education system is so overrun with targets to get partnership with that? people into higher education and achieving that they Alison Bettac: I am not sure how many schools signed forget about apprenticeship routes, and that is where up to it. I think at the moment there is probably about the downgrading comes with regard to the half a dozen in this region now, but since work apprenticeship brand. The NAS could do a lot more cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG02 Source: /MILES/PKU/INPUT/021099/021099_o002_th_BISC 06 03 12 CORRECTED.xml
Ev 28 Business, Innovation and Skills Committee: Evidence
6 March 2012 Sharon Ward, Alison Bettac and Richard Cook partnership working with schools in that respect, and be ideal for SMEs to be able to take on apprentices? certainly help more with SMEs. We have talked about providing a support package to This region is certainly a big SME supply chain SMEs that includes what competencies you train on, region, and the constant comments that I hear from how you train them, how you observe that training my supply chain as a large employer is, “We do not taking place, and how you monitor that. The other one get any support with our apprentices that we take on. is, because there is a time constraint with SMEs in We do not know where to access them. We do not how much time they can provide training for their know what to do with them when we get them.” I find apprentices, is there a possibility to share apprentices myself as an employer helping some of my smaller between SMEs, so do two days at one, two days at companies, providing them with competencies to another, etc. Is that a solution to it? develop their training frameworks in-house. The support framework has to be there, and it has to We, as an employer, have gone back to the old EITB be different for SMEs, because they are not like large competencies, because we do not feel that the national companies, they don’t have that time, and they don’t framework and the technical certificates that they do have the skills and knowledge half the time. The other currently on apprenticeships are enough. That is why thing we have talked about in this region is maybe an we have reverted back to EITB in addition to the SME forum for apprenticeships, so they can swap best frameworks that we are using now. That is what we practice with each other or larger employers can come are providing to the SMEs that work with us. in and share best practice with the SMEs. We are looking at putting together a project for that course Q144 Paul Blomfield: Any other thoughts? If not, I through Semta, under the employer ownership fund. would be quite interested to pursue your point, Alison, We are meeting this afternoon to discuss the project. about SMEs, because you are all of a scale as employers, with an experience in developing Q146 Mr Binley: Can I interject, just to give you a apprenticeships that kind of fit the old industrial feel? BAE employ 30,000 people directly and 140,000 terrain but not necessarily the new one. Across South in their supply chain, almost all of them in SMEs. You Yorkshire, for example, there is something like 40,000 are right; they are struggling to stay alive. Survival is SMEs; if just one in four of them took on an the name of the game with SMEs. Can companies like apprentice, we would be transforming the youth yours give SMEs more help in that respect? employment landscape. The Federation of Small Alison Bettac: Absolutely. We can look at the old Businesses and the British Chambers of Commerce ATA model, which is the over-recruiting on have identified a whole series of barriers for small to apprentices, but large companies are not going to do medium-sized enterprise in taking on apprentices. that without support from the Government, and I am How do you think, from your experience, we could talking financial support. Certainly in manufacturing break those barriers down? and engineering we are on a tight budget all the time, Richard Cook: Isn’t it going back to the fundamental so we have to be careful about the decisions that we issue of what is an apprenticeship and what value does make on this. We would certainly be interested in it represent? The problem is that you are to some over-recruiting and ensuring that apprentices have that degree preaching to the converted here; we cannot proper structured framework of training, but we would survive unless we are building the resources we need like to see help on a financial scale. for the future, because nobody is going to do it on our Richard Cook: To contextualise our side: we are not behalf. The SMEs have a different view of the world. taking on 75 to 80 apprentices a year; we are just They are perhaps on more of a day-to-day survival looking to increase from 4 or 5 to maybe 12 expedition then they are thinking about then next 10, apprentices per year for the next two or three years. 20, 30 years of growth. It is about making people We do not have a lot of latitude for failure either in understand the value that an apprentice can bring to our business. What we are struggling with, even at our your business, both now and in the future, and what size, is the diluting effect that young people have. You an apprenticeship is. At the moment, as we have can imagine that, for an SME with 15 to 20 staff demonstrated this morning, nobody really knows what bringing in one or two apprentices, somebody has got that is, do they? to come off their job to work with them and mentor those apprentices, otherwise there is no value in the Q145 Paul Blomfield: When I talk to SMEs in my apprenticeship. consistency in Sheffield, there is a real appetite for We are having that same difficulty now. We know we passing on skills and for taking on apprentices, but in have to grow our own talent base, and we enjoy that— a small workplace it becomes much more high risk. it is stimulating and it challenges our business—but You guys can take on 70 apprentices, half a dozen can even we are finding we are at the limit at the moment. fail, and that is not a problem; it becomes much more With our training provider we are looking at a two- critical in an SME. Because your relationship with a year scheme, starting maybe a cohort of 12 each year lot of the small enterprises is quite important, do you for the next three years, so that we can bring them in have any thoughts on how we could point the at a slightly more advanced level where they dilute Government in a direction that would help SMEs to our existing workforce less, but also to have a pool to take on apprentices and take the risk out of the select from. When I came through my apprenticeship, process? it was pre-the YTS scheme. I was sponsored by the Alison Bettac: The support structure has to be there local County Council, and I worked with another 140 for SMEs to be able to take on apprentices. We have apprentices in an apprentice school, some of whom talked about this as a group of employers: what would were sponsored by an employer with a guaranteed cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG02 Source: /MILES/PKU/INPUT/021099/021099_o002_th_BISC 06 03 12 CORRECTED.xml
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6 March 2012 Sharon Ward, Alison Bettac and Richard Cook position at the end, and some of whom, like myself, Q150 Julie Elliott: Can I come in on the back of were just sponsored on a speculative basis. that? Do you think the term “higher apprentice” is the That is what is important to SMEs: to be able to go right term, or do you think that we should just classify and pick somebody that is not completely school- apprentices as reaching a certain level and then call it fresh, has some broad-based experience. My something else? apprenticeship was very broad-based, so I was not a Sharon Ward: It used to be “craft apprentice” and specialist in any particular area. Unfortunately the “technical apprentice”, and I quite like that. I think funding was not available for me to continue my third the “higher apprentice” is a bit elitist in a way. year, but by the time I joined an employer I had done two years and I was of some use from day one—I hit Q151 Chair: Can I just talk about funding? The the ground jogging at least, rather than running. If you Government has said it will prioritise investment in ask most SMEs, they do not want the “what do I do apprenticeships where the impact and returns are with this 16-year-old on the first day who yesterday greatest. From a manufacturing perspective, do you was at school?” That is a daunting thought for any agree with your approach and would you say maybe employer. that the returns are greatest with manufacturing? Richard Cook: Yes. Q147 Mr Ward: I think you have covered many Chair: I suppose that is a bit of a no-brainer. points by telling us the work that you are doing, but Sharon Ward: We work in manufacturing, don’t we? if you could summarise: the Government did Richard Cook: Just talking to the MD of Firth Rixson recognise the need for improving the quality through last night, with growth of 30%, and we grew 20% last various measures, looking at training providers, year—I don’t know about Forgemasters—that is monitoring, and so on. To summarise and bring it all pretty impressive considering manufacturing is a together: what needs to happen to improve the quality dying industry in the UK apparently. Yes, we can quite of apprenticeships? easily justify the return on investment. Richard Cook: Rewind to 1964. We have got the Alison Bettac: The only thing that is holding my model; why reinvent the wheel? The EITB model was business back is the lack of skills in this region. We astounding. I am speaking purely from a will certainly be investing in apprenticeships in the manufacturing perspective now: it is the framework future. The UK itself is looking to manufacturing for I followed, it was broad-based, it was a really good wealth-creation, and so it is certainly justified as far foundation, and I was of relative use, having as I am concerned. completed two years of an apprenticeship, to my first employer—much more so than I would be under the Q152 Chair: I can see a statistical problem, but existing scheme. possibly it is not just a statistical problem. The huge increase in apprenticeships has come in the service sector; manufacturing is relatively low down the list Q148 Mr Ward: All agree? of the increase in apprenticeships. The National Audit Sharon Ward: Absolutely, yes. Office said that the value added currently is about £18 for every £1 invested. In theory, and on the base of Q149 Mr Ward: On the higher level apprenticeships, those figures, you could make a hypothetical argument are you an advocate of the Government encouraging that the current investment, most of it in service higher level apprenticeships? We have seen the industries, is bringing a very good return for the increase in the numbers, which Brian referred to: a Government, and therefore they should be justified in good thing? doing it. I appreciate you will not have all the Richard Cook: I still come back to the question of statistical evidence, but in your experience do you whether we know what an apprenticeship is, so I do think that is a valid argument? not know what the definition of a higher level Sharon Ward: I don’t think any one sector should be apprenticeship is. Our guys come in and they are excluded from offering apprenticeships, but it depends streamed almost naturally over a period of time, and on where the country wants to go in terms of those that want to go on to the ultimate aim of perhaps manufacturing or service. There has been a lot of a higher degree, that is great, but I do not think there discussion about Germany, and they are so successful should be a distinction necessarily. because they have a lot of manufacturing in their Sharon Ward: We are the same as Richard in country. That is a bigger question. Forgemasters: they can come through as a craft apprentice. We have got two apprentices that have Q153 Mr Ward: You cannot prioritise everything, by ended up in senior management positions; one is a definition. It is not enough to say something is director, one is an MD now of the company, so there important, but that is not prioritising. This is part of a is a lot of scope. They can go as far as they want. If proclaimed national agenda to rebalance the economy, they want to do a degree and they are able to, then we and it is you lot that are supposed to be a priority. Do would support that. It has to be more flexible. you feel as if you are a priority? Alison Bettac: We have a number of higher Richard Cook: Not remotely; not in real terms. There apprenticeships in Firth Rixson, and we tend to use it is a lot said about it, but that is fairly typical in my to develop those that have aspirations for leadership experience. or those that are going down a specialist pathway, but Sharon Ward: I cannot see why the funding only goes we found it extremely useful. We will continue using to age 19. We have the 24-years limit, and I feel that that framework. a lot of young people are very unsure about what they cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG02 Source: /MILES/PKU/INPUT/021099/021099_o002_th_BISC 06 03 12 CORRECTED.xml
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6 March 2012 Sharon Ward, Alison Bettac and Richard Cook want to do. There is a level of maturity, and over 20 wonder how the relative return from the service they are much better placed to understand perhaps industry is sustainable for the next 20 or 30 years where they want to go. That 24-years limit needs to without any continued wealth creation. go. Frankly, what worries me about the whole skills agenda that we are discussing is that we are seeing a Q154 Paul Blomfield: Can I just come in on that, renaissance in this area of manufacturing, and I hope Chair? I think that is really interesting Sharon, that continues and spreads throughout the UK, but because you largely recruit at Forgemasters, very there is only one place that high value-added successfully, your apprentices below 24. manufacturing work is going to go if we don’t sort Sharon Ward: Yes. It is very successful and we are out our skills agenda. It will be the other areas in very proud of what we do, and it works very well in Europe that are capable of taking on that niche, high our business. But why are people over 24 not given value-added engineering, because it is not China or the opportunity to do that? There is the lack of funding, and, as Alison said, in manufacturing we are India—that might not be a popular statement; it will under a lot of tight constraints in terms of our money be Germany, Italy, France, and we will be left behind. and our costs. Q159 Mr Binley: Can I make two comments? Q155 Paul Blomfield: If that did change, would you Chair: Can you make them quickly? We are almost change your recruitment model? at the end. Sharon Ward: Yes, I believe we would. Mr Binley: Very quickly. I went into the House of Commons at 63, so I am going to talk to you later. Q156 Chair: You partly anticipated my question, However, let’s not be too derisory about the service which was that apprentices 16 to 18 get 100% funded sector, recognising that retail is a massive earner by the Government, and 19 to 24, 50%. Do you feel internationally; law is a massive earner internationally. that is correct? From what you have said, I gather not. I don’t think we want to compartmentalise too much. Sharon Ward: No. Richard Cook: It certainly was not meant in any sort Richard Cook: On the contrary, I believe there is of derogatory sense. I am simply drawing a legislation against ageism in the UK. comparison between a return on investment today and the sustainability of that performance. Manufacturing, Q157 Chair: That is a very interesting subject, but we have not got time to have that debate today. If you despite setbacks of decades now, has still come out were compiling a model of funding that you would strongly and will continue to do so for the next 50 think would be most effective in terms of targeting years. either age groups or whatever for funding, what would you do? Q160 Chair: To conclude on the point—and I am Sharon Ward: I think the 24 barrier—or perceived pretty certain I know the answer here; it is not difficult barrier—should go, and maybe you could put an age to anticipate—some organisations like the Royal in of, say, 30. Aeronautical Society have told us that it does not Alison Bettac: They should remove the age: an matter what age an apprentice is; it costs business the apprenticeship is an apprenticeship, whether you are same to get them to a standard. Would you agree with 16 or 45. Everybody should have equal opportunity, that approach? whatever age they are, to be able to go through that Richard Cook: I would not personally, simply experience. because, by default, younger people are traditionally Q158 Paul Blomfield: Just very quickly on that cheaper to employ in those early years. The wage point: most people raise their eyebrows when they see expectations of a 16-year-old versus somebody in that there has been an eightfold increase in the number their 40s are going to be somewhat different. I don’t of apprentices over the age of 60. Now, going back to think it is a showstopper for us, but it would be more the point about the brand, how do you draw a line expensive to put a more senior person through an between an apprenticeship, which I understand as a apprenticeship. route into a skillset and a career, and upskilling— continued professional development—in terms of in- Q161 Chair: One of the counterpoints is that, house training, which, however valuable, is not what particularly if you are trying to recruit people without I would understand as an apprenticeship? Would you? a history of working that are over 24, the fact that Richard Cook: If I can refer to a colleague of mine they may have gone for so many years without that who has just gone off as a long-term engineer to do a sort of work experience means they may be more law degree, I don’t feel that is in any way inappropriate or unusual. I can understand why people expensive. Do you think that is a fair comment? Do have a perception of apprenticeships generally you ever find yourself in this situation? revolving around young people, but that is only a Alison Bettac: I don’t know, because we have been perception that has developed over the years. I agree; using the Get Britain Working scheme recently with there should be no age limits, and the more we can the eight-week work placements, and we have turned promote apprenticeships for people who change those into permanent jobs on the placements that we careers the better. Frankly, if we talk about return on have had. We have found there is a stigma around the investment, which we did a few moments ago, I long-term unemployed. We have found, with the work cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG02 Source: /MILES/PKU/INPUT/021099/021099_o002_th_BISC 06 03 12 CORRECTED.xml
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6 March 2012 Sharon Ward, Alison Bettac and Richard Cook placements that we have had, that stigma is not true, Q163 Chair: The Government is very anxious to do and they are simply people who have fallen on it, quite rightly, I may say. That probably concludes unfortunate times and not had the opportunity to get our questions to you. Can I thank you very much? No back into work. We have not had to spend any more doubt you heard what I said to the previous panel: if money on these people to get them up to a standard… you feel there are any additional points you would like to make to questions that we either asked or should Q162 Chair: What about NEETs who may never have asked, please feel free to do so and we may, of have worked? Have you ever had that experience? course, write to you to follow up one or two things. Alison Bettac: We have not had experience of NEETs. Thank you very much.
Examination of Witness
Witness: Peter Flinn, Specialist in high value manufacturing, Technology Strategy Board, gave evidence.
Q164 Chair: Thank you, can I welcome you here? ground of applied development, the benefit is as much Would you like to introduce yourself? in the skills and knowledge of the people who are Peter Flinn: Good morning. My name is Peter Flinn. participating as it is in the results themselves. You find I work for the Technology Strategy Board, where I am centres like this, which is part of the manufacturing involved in the programme management for the Catapult, where there is a lot of interchange of people: setting up of the new technology innovation centres, people coming in on secondment or going out on so-called Catapult centres. secondment from here. It is not training perhaps in the structured, formal sense that we have been talking Q165 Chair: Thanks. I was going to start with that about this morning, but development of people’s one: the website says that the TSB is involved in know-how and skills is a vital and essential part of Catapult centres. these centres. Peter Flinn: Correct. Q170 Julie Elliott: What age-range of people are Q166 Chair: These, I am told, bridge the gap involved in the centres? between universities and businesses. Could you Peter Flinn: I set up one operating near Coventry. expand on that? The youngest person who got into the activity was Peter Flinn: Yes. The universities have the capability around the 20 mark, and the oldest was 70, to my to take technology to a certain level. For example, if knowledge. The centre of gravity tends to be people that piece of ironmongery in the corner was a new who have done a first degree and are involved in process, then typically a university could produce that further research and maybe working towards a in quantities of one or two at the most over quite a master’s or a PhD. long period of time, with a high level of skill, and quite expensively. For a company like Rolls-Royce, Q171 Ann McKechin: Peter, I wonder if you could who would want to make several hundred if not tell me what role the TSB plays in terms of thousands of those per year, quite a lot of effort has apprenticeships, in terms of perhaps trying to set the to go into productionising a putative process. The aim standards, or the modules, or criteria? of the Catapult centres is to take technology that has Peter Flinn: Virtually none. We see these Catapult developed to a certain level, and therefore has a centres being a good venue for developing a modest degree of certainty about it, and develop it beyond number of apprentices, so a facility like this has the that point to one where industry can pick it up quite capacity—as Keith was saying earlier—to do half a quickly and efficiently. dozen people a year, that sort of order. We would expect all centres to work in this field of training young people, but the quantities will be quite modest. Q167 Chair: You did not bring that along as a The Technology Strategy Board would look externally teaching aid? for the standards that are applied. Firstly, I think it is Peter Flinn: I did not, no. It happened to be sitting important that standards are rigorous, are known, and there in the corner. are national, as opposed to local, standards. At the present moment, the Technology Strategy Board Q168 Julie Elliott: Who are these centres designed would look outside for those standards. to benefit? Peter Flinn: Industry, basically. They are designed to Q172 Paul Blomfield: Following on from what you benefit the UK economy, but through industry. The said a moment ago, Peter, and evidence from earlier whole premise of them is that they are designed for witnesses, I am interested in how we square national industry and are industry led. standards. Do you have any thoughts on the point that was made earlier, and has been made to us by the Q169 Julie Elliott: What level of training do Forum of Private Business, that we need more participants get at the centres? flexibility in apprenticeship frameworks? Peter Flinn: The work is developing technology. Peter Flinn: There is a genuine dilemma there, but it Technology is as much about people as it is about is extremely important that apprenticeships represent numbers, graphs, and so on. In this particular middle a known and national standard. It is how you create cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG02 Source: /MILES/PKU/INPUT/021099/021099_o002_th_BISC 06 03 12 CORRECTED.xml
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6 March 2012 Peter Flinn frameworks; I was interested to hear that there seems relatively light touch accrediting and monitoring to be a reversion back to the EITB standard, which I process is essential, but that does not necessarily mean remember quite well from 30-odd years ago. It sounds you need to have vast armies of people doing it. For as though we have already addressed this issue at the professional association ones, a lot of it is done some point in the past, and if we dig it out we still by volunteers. In principle there are ways in which have the material to do it. these things can be done efficiently. There is a genuinely good point that different companies need people that suit their needs. You will Q177 Mr Binley: Two quick questions, Peter. First, find a company like Rolls-Royce makes something does the Technology Strategy Board benefit from any like 1,500 air engines in a year, whereas Nissan—who Government funding for its role with apprenticeships? are in the news at the moment—make thousands, if Peter Flinn: Not directly. The funding we receive not millions, of cars. The nature of engineering and primarily goes into research projects. Elements of manufacturing varies from one business to another, those projects are to do with training. Some of the but nonetheless, the principles of quality management, money goes into buying materials, and some of it goes for example, or manufacturing process control, and so into paying people’s salaries and wages. There is an on, have to be understood by everyone who wants to indirect effect, and on a large proportion of projects be a professional in the field. there is probably some element of training involved. Therefore, I am sure that some TSB money will find Q173 Paul Blomfield: It is interesting hearing the its way into apprentice activities. For example, this case being made to return to the EITB approach. What centre here is part of the manufacturing Catapult; we are your thoughts on that case? are likely to be awarding somewhere in the order of Peter Flinn: I had lost touch in some ways with £30 million to £35 million a year to that network of apprenticeships. I was very aware of the fact that, seven centres. I am sure that some of that money will within UK manufacturing, we had a very good flow find its way into either facilities or activities in which of apprentices, up to a point some 20 or 30 years ago. apprentices would be involved. We have genuinely lost our way, and the modern apprenticeships that came in 10 or 15 years ago are to Q178 Mr Binley: Should we be incentivising a very high standard, but there are not enough of them. organisations like the TSB to take on apprentices? Manufacturing employs 2.6 million people in this Peter Flinn: We as an organisation would not. country; if you said that the average working life is 40 years, that is 60,000-odd people a year coming in and going out, putting aside any other factors. Some Q179 Mr Binley: I know that, but I am talking about of the numbers we have talked about today are quite your ability to place and oversee: is there a role there? modest in that context. I am not sure I have quite Peter Flinn: There is definitely a role in creating an answered your question. environment that is useful for apprentices. These sorts of centres, whether in manufacturing or in some of the Q174 Paul Blomfield: That is helpful. It is what we other topics, are looking at leading-edge technology, can learn from the old EITB model that we can apply the equipment itself is very good, they are very to the demands that we have now. vibrant environments, so they are very good ones for Peter Flinn: That model and that structure in developing young people. I think if part of the remit principle is one we could well look at. I would suspect was to do so—well, it is already. I am hesitating, that, if we looked at the detailed content, there would because I am not quite sure how the mechanism be rather more emphasis on manual skills than we might work. would like today, and not enough emphasis on manufacturing systems, the management of Q180 Mr Binley: Nor am I. That is why I wanted manufacturing and broader issues of that sort, but that your advice. is a question of balance, rather than detail. Peter Flinn: You have to think fairly deeply about these mechanisms, because quite often they come Q175 Paul Blomfield: And the approach is right? back to bite you in a way that you did not expect. It Peter Flinn: Yes. is worth looking at.
Q176 Chair: Before I move on, there is this talk Q181 Mr Binley: Would you think and come back about quality, flexibility and so on; from the previous to us? panels that we have had, there is an emerging Peter Flinn: Yes, I will, certainly. consensus that it is the quality of the course that is absolutely essential. That throws up the problem of Q182 Mr Ward: In terms of the TSB, from that monitoring and supervising to ensure that any course perspective—the businesses that you are familiar that is funded is of high quality. What is your with—how should the Government be engaging with perspective on how we can do that while minimising employers about training and apprenticeships? the bureaucracy of that monitoring and supervision? Peter Flinn: The natural way of doing it would be Peter Flinn: There are several ways of doing that. through the various employer associations and trade The professional institutions, the engineering associations, and organisations like the CBI, but I institutions, do work of this nature, accrediting degree guess apprenticeships are handled very much on a courses in engineering. One approach would be to do local basis. So if the Government can find its way into something similar to that for apprenticeships. Some local organisations, that would also be quite helpful. cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG02 Source: /MILES/PKU/INPUT/021099/021099_o002_th_BISC 06 03 12 CORRECTED.xml
Business, Innovation and Skills Committee: Evidence Ev 33
6 March 2012 Peter Flinn
Q183 Mr Ward: Can I ask you the same question as when you look at countries like Germany and Japan, earlier: do you feel as if you are being treated as if who have bucked the trend by being successful in you are special? manufacturing despite being high-wage economies, Peter Flinn: In engineering or manufacturing? investment in skills and people is something they do quite naturally. The Government would do well to Q184 Mr Ward: In manufacturing. understand what drives successful manufacturing and Peter Flinn: I have only worked for the TSB for a make sure that its activities support that. relatively short period of time. I worked for the best I support the work you are doing on apprenticeships, part of 40 years in manufacturing, and I would say it which is concurrent with the skills activity. Through was never particularly well understood or treated very the Technology Strategy Board we are involved in specially at all by Government. The drivers and the promoting technology in companies, which is another important factors of manufacturing are not particularly of the components that I think is important, but I well understood, and therefore it is quite difficult for would gladly put this point in writing to you. any particular industry to be treated specially or favourably if it is not particularly well understood. Q187 Chair: All the mood music is: “Yes, we believe Mr Ward: That is sad. in manufacturing; we have to rebalance the economy,” and so on. I don’t want to put you on the spot—well, Q185 Chair: I was going to say; it is very interesting. not too much—but do you feel it is being delivered on Did you want to follow it up, David? the ground? You have highlighted a number of policy Peter Flinn: I am happy to talk further about it. strands that need to be developed; do you think that currently they are likely to deliver on this agenda? Q186 Mr Ward: Maybe you could put that in some Peter Flinn: You can see movement in all of them. sort of written answer to us, because this is what we The question is whether the movement is fast enough. desperately need to know. As I keep saying, you are Ultimately businesses drive the success of allegedly the special people that are going to reform manufacturing, but the more they can be assisted in and rebalance the economy: the manufacturing and the terms of developing people, skills, capital investment engineering sector. It is now getting on for two years and the technology and so on, the better. I would since the general election, in which the cry was, “We suggest that the Government look at the quantum of need to do this.” It is quite sad if you don’t feel the support they are giving, and ask itself the question: special. “In the context of an industry that turns over £150 Peter Flinn: Yes. Manufacturing is a long-term game, billion to £160 billion a year, is there sufficient and the countries that are successful in it invest long activity going on?” term. In my view, they invest in four areas: capital Chair: Thank you. That is a very interesting and facilities, people and skills, technology, and business thoughtful response. It was short, but very helpful systems and processes. Today’s discussion is very indeed. Thank you very much. As I say, if you wish much about the investment in people, and particularly to develop any of the points that you made, we would be very grateful to have that in writing. Thank you.
Examination of Witnesses
Witnesses: Kyle Johnson, Chris Parkin, Lewis Nicholson, Luke Shaw and Chloe Jones, apprentices, gave evidence.
Q188 Chair: Good afternoon, everybody, and thank So to start off, what factors did you consider when you very much for agreeing to come to answer our you were thinking about becoming an apprentice? questions. I was at Forgemasters yesterday and I made Who would like to answer that first? Lewis, your body the mistake of asking the apprentices there if they was twitching in such a way that you looked as if you wanted to ask any questions of us, and I quite were about to answer, so we will start off with you. regretted it. You may have seen James Murdoch and Lewis Nicholson: I didn’t to start with. I went to do one or two others getting the treatment from the Select my A-Levels, and that is when I realised it wasn’t for Committee. Can I reassure you that our approach me and I wanted to look into something different. The today will be rather gentler than that? We do only other thing I knew about were apprenticeships, appreciate you making the effort to attend here, and and that is when I started to look into what apprenticeships were, what they were about, and what we really want, if you like, the apprentices’ insight areas they go into. The main reason I went into the into our deliberations. manufacturing one was, because, when the job opened I will repeat what I said to the other panels. We will for this, there were a lot of big names like throw up a question. Don’t feel that you all have to Rolls-Royce and Boeing—I work for AMRC—and answer every question, otherwise we could be here that stood out for me. I looked into those companies; until teatime. Some of the questions may be specific I looked into what might be more secure job-wise, to one of you, but I am going to start with a fairly building trade apprenticeships and stuff like that. I general one that you can answer fairly briefly. I will don’t know. I was lucky, I think—I just went into it; then throw it open to the panel to ask a range of I didn’t really know what I was getting myself into, questions. to be honest. cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG02 Source: /MILES/PKU/INPUT/021099/021099_o002_th_BISC 06 03 12 CORRECTED.xml
Ev 34 Business, Innovation and Skills Committee: Evidence
6 March 2012 Kyle Johnson, Chris Parkin, Lewis Nicholson, Luke Shaw and Chloe Jones
Q189 Chair: Where did you look to get information? the apprenticeship at Newburgh, because I liked the Lewis Nicholson: Through my college, doing my practical aspect and learning skills at the same time. A-Levels at Hillsborough, there were connections and there were places you could go to to get information. Q194 Julie Elliott: So engineering at your schools I saw it in a local newspaper at the start; that is when was something that was talked about and an option. I saw it. For the other three, were apprenticeships or engineering mentioned before you got to 16 at school? Q190 Chair: You did get some advice from your Was it an option? Was it explained? tutors? Luke Shaw: I did design technology at A-Level, and Lewis Nicholson: Yes. I was the only person on my course. There were plenty doing English and Media Studies, but there was Q191 Mr Ward: Luke, you had three offers at no real interest in the engineering subjects. university, I understand, and obviously decided to go another route. What was the thinking behind that? Q195 Julie Elliott: Were single sciences offered at Luke Shaw: Well, I got my places at university, but I your schools? realised then that I could have done my four years at Kyle Johnson: Yes. Single and triple science were university but still be back in the same position four offered at my school. Also, because it was specialist years later without a job and no experience, so I engineering, we had multiple options for engineering, decided I wanted to do an apprenticeship. I went to a like the product design diploma and the applied sixth form to do my A-Levels, and the minute I said, engineering, which I took, but not an apprenticeship “I want to do an apprenticeship,” they turned their option. nose up. I didn’t even get invited to the awards ceremony. It looked bad that they had got 180 going Q196 Ann McKechin: How many of you took to university and an odd few that were doing other physics? things, and to me that is wrong. Luke Shaw: I took physics. Chair: That is very interesting indeed. Lewis Nicholson: At GCSE? Ann McKechin: Any? Lewis Nicholson: Yes. Q192 Paul Blomfield: Chris, you were nodding your Kyle Johnson: Yes. head when Luke made that point. Was that your experience too? Q197 Mr Binley: I want to put three statements Chris Parkin: I found that when I approached my together, and see if you can make sense of them. First college when I did my A-Levels and said, “I want to of all you are aspiring to a degree by working your do something else other than university,” the amount way through it in a different way, and you hope to of literature and help available was limited. graduate in 18 months. You are clearly all aspiring Everybody is pushing towards university, so people, but you heard from the employers when we everybody completes a UCAS form, and everybody talked about those NEETs, people not in education, thinks that university is this great thing, and employment or in training, and there are about a everybody should go there, which just isn’t the case. million of them—it is a really big problem—that they My personal experience is very similar to Luke’s; I did not seemingly have any contact or anything to say got a place at university and knew I wanted to get a about that. What would you say about them? What is degree, but I didn’t understand what would make me the bit that you have that is missing with them? Is it different from the 20 other candidates that completed just opportunity or is there something more in your exactly the same degree as me with the same grade. experience? Jobs are not available for all of us, so I wanted to Chris Parkin: I would say it is very much make myself something better than them, so I wanted opportunity. I think I am quite fortunate that I gained to do a degree part-time, while in full-time work. the job that I did. If I was to go back and try to get another job, I would not particularly know where to Q193 Ann McKechin: Chloe, I think you and Kyle look or where to go to get a specific engineering did apprenticeship-type training at your school, so you apprenticeship. I don’t think the information is had quite a different experience to the others. Could available, especially in schools and colleges. you let us know what was different and how that really helped? Q198 Mr Binley: Are you saying it is just lucky that Chloe Jones: When I was at school, when it came to you are where you are then, and you could be one of doing your options, I had the choice of doing a young those million? apprenticeship programme. At the start of Year 10 I Chris Parkin: Definitely. I have friends who are in was at work one day, college one day, and then school that position. the rest of the week. By the time I had finished school I had got my first qualification in engineering. Q199 Mr Binley: Who are just as inspired and just Kyle Johnson: Whereas I took applied engineering at as aspiring as you? school, because we didn’t have the apprenticeship Chris Parkin: Possibly not, no. It is quite scary; it is option at our school, which involved a whole day of quite daunting at the age of 18 or 16 to turn round engineering. Straight after that I did my work and say, “I’m going to work and I’m going to experience with the company that I am at now, at approach these companies myself and try to get a Newburgh. As soon as I finished school, I applied for job.” cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG02 Source: /MILES/PKU/INPUT/021099/021099_o002_th_BISC 06 03 12 CORRECTED.xml
Business, Innovation and Skills Committee: Evidence Ev 35
6 March 2012 Kyle Johnson, Chris Parkin, Lewis Nicholson, Luke Shaw and Chloe Jones
Q200 Mr Binley: What about the other four? What Mr Ward: Just one. would you say to the question? Chair: That is quite surprising in a way, but it is good Luke Shaw: Mine was purely through sending in a way. Do any other Members of the Committee bucketloads of CVs to companies all over, and there want to ask anything on this area? I want to talk about were not many that replied. I would say it was pot the National Apprenticeship Service in a moment. luck that I got an interview at Firth Rixson and they took me on. Q207 Julie Elliott: It is sort of in this area. If you look at the group of friends that you were close to Q201 Mr Binley: Isn’t it funny how hard work, when you were 16, when you were starting to make sending all of those applications, equates to luck? Is choices, have any of them gone into this line of work there a connection there? or have they done other things? What kind of things Luke Shaw: There could be. have people done? Mr Binley: I think there could be too. Lewis Nicholson: There’s only a few. I had never even seen a lathe until I started the course. I knew Q202 Chair: Could I follow this up, because this is about apprenticeships, but not about manufacturing very interesting? You have obviously been quite ones. I only knew the building trade ones; those are resourceful in obtaining an apprenticeship, and there may be a lot of young people who would like an the only ones I really knew about. apprenticeship, but perhaps lack the self-confidence, Luke Shaw: A lot of my friends either went on to the drive and so on, to go that extra mile, which you study college courses or A-levels. The people that obviously have done. Do you think there is a role for weren’t expected to achieve were pushed into jobs at people like yourself to go back into school and give 16 from school, but of the people that went on to do people like that the sort of advice, mentoring, and A-levels, 99% of them went on to university, and they maybe that little extra bit of confidence to do the sort are trying to get jobs now, and struggling. of thing that you did? Do you think that would work? Chris Parkin: Majority university. They are either Chloe Jones: At Newburgh we have had several still there or a few have got decent jobs. A lot did opportunities to go back to our old schools and other degrees, found they could not get jobs and then did schools to talk about it: what path we took and things master’s, and they are currently at that stage. like that. Kyle Johnson: The same as the others—a lot of my friends have gone to college or sixth form, but four of Q203 Chair: There was an interesting point; was it my closest friends that I spent time with knew I had you, Luke, who said that if you wanted to do an an apprenticeship, and I said how good it was, and apprenticeship, in effect the school didn’t want to they have gone into an apprenticeship themselves. know? Chloe Jones: I am the same. All of my friends have Luke Shaw: Yes. gone on to college. I don’t think any of them have got proper jobs or a career ahead of them, or anything Q204 Chair: Do you think you might not be definite. welcome if you did that? You were not, shall we say, promoting the school agenda? Luke Shaw: It wasn’t the fact that I was doing an Q208 Paul Blomfield: Coming back to Luke, you apprenticeship; it was it looked bad on their end-of- said you did design technology at A-level. year results, because they had four or five people who Luke Shaw: Yes. were not going to university. They did not put “apprenticeship”; they just said “other”, and that is Q209 Paul Blomfield: And the course was not what they are putting down. available in the school. Mr Binley: It is elitism. Luke Shaw: The course was available, but it was only Chair: This is very important to us, because we have me that took the course. got to make recommendations, and it is not just about apprenticeship provision; it is about changing, if you Q210 Paul Blomfield: How did they make it like, the culture and the way that schools are measured available for one person? in terms of their success. Teachers will deliver to what Luke Shaw: The year after, it was scrapped. is a Government agenda.
Q205 Mr Binley: Would you name and shame the Q211 Paul Blomfield: I wondered whether they had school? gone into partnership with Barnsley College or Luke Shaw: Penistone Grammar School. something in order to provide the course. The point is, the year after, it was scrapped. How far is that Q206 Mr Ward: In terms of judging schools there is driven by school expectations, how far it is driven by also an informal process in place, because the sixth student demand, and how far is the problem partly the form tutors will compete with other sixth form tutors image of engineering as a career? in other schools on the percentage that they have got Luke Shaw: Engineering as a career is still not pushed to go on to university, in my experience. Out of by career advisers at schools. It is still seen as second interest, have any of you got parents who were in rate: you get your hands mucky and it’s a second-class either manufacturing or engineering? job, but that is not the case. That is the problem—it Chris Parkin: Yes. needs altering. cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG02 Source: /MILES/PKU/INPUT/021099/021099_o002_th_BISC 06 03 12 CORRECTED.xml
Ev 36 Business, Innovation and Skills Committee: Evidence
6 March 2012 Kyle Johnson, Chris Parkin, Lewis Nicholson, Luke Shaw and Chloe Jones
Q212 Paul Blomfield: There is a job to do in terms it is quicker or if you take a bit longer or whatever. of making people understand what is involved in They are really helpful. modern engineering. Luke Shaw: Yes Q219 Ann McKechin: Can I just ask a general question, not only to Chloe but to everyone on the Q213 Paul Blomfield: Do you agree with that, panel: how many of your female friends are taking Lewis? any type of apprenticeships? Lewis Nicholson: Yes. I was involved in taking Chloe Jones: Well, there is another girl at our place. apprentices on this year. When they all came in for the interviews and we asked them what they thought Q220 Ann McKechin: How many apprentices have they would be doing, they didn’t know; they didn’t you got? really understand themselves what they were getting Chloe Jones: There are four in our year, and there are themselves into. Even the people who were applying about seven in the year above. Out of all my friends, for the apprenticeships didn’t know what it entailed. I do not think half of them even know what They hadn’t been informed. engineering is. Luke Shaw: Last year our company had around 20 Q214 Mr Binley: Would it be helpful if we made all apprentices and two of them were female. One of teachers work for two years in what I might loosely them works with me as an electrician. She has done call “the real world”. Might that be helpful? really well with it. Witnesses: Yes. Q221 Ann McKechin: There is still the perception Q215 Chair: Can I just ask you about, if you like, that it is very much for boys? Government provision of information? Have you Chloe Jones: Yes, definitely. heard of the National Apprenticeship Service? Luke Shaw: I am aware that it is a framework of Q222 Paul Blomfield: Is that the case at AMRC, NVQs and technical certificates, but that is as far as Lewis? it goes. Lewis Nicholson: We have got two girls at the AMRC: one has just come out of her apprenticeship Q216 Chair: Would it be fair to say you have got and is in the drawing and design side; and we have very limited awareness? got one who is in her first year. Other than that, I don’t Luke Shaw: Yes. know of any girls.
Q217 Chair: That is interesting. My next question Q223 Julie Elliott: How many is that out of? was: what is your impression of it? I don’t know if Lewis Nicholson: I was the first apprentice, which you want to have a go at that, Luke? was six years ago, and we have taken on every year; Luke Shaw: It is good as far as an advanced one has just finished her apprenticeship—she might apprenticeship, but they need to not just focus on be 18, 19—and one is 16, 17—she has just started. Level 2s and 3s but progressing through to degrees, maybe with funding from the Government to help Q224 Mr Binley: Where do you see yourself in 10 employers out. Once you get past Level 3, it is down years? Running the company? You have thought to the employer to decide if they can afford to carry through the apprenticeship situation. I wonder whether on your education; it is a big emphasis on them. you are going to think about where you go when you finish with that, whether that is enough to deal with at Q218 Chair: Yes. Kyle and Chloe, you are doing the moment, or whether you are thinking about where what they call bespoke apprenticeships, as opposed to you might want to be in 10 years’ time? something that has a framework determined by the Chloe Jones: Well, after I have done my NVQ Level Government. Can you tell us what made you decide 3 I am going into inspection, getting trained up in on your particular apprenticeship? there, and then hopefully I will be able to move on to Kyle Johnson: I applied for the work experience bigger and better things eventually. while at school, and while I was there they gave me an insight into what we would do if I was to take the apprenticeship. They broke it down and I liked what Q225 Mr Binley: Anyone else? Or do you just want I saw, because we were doing the practical skills in to deal with what you have got at the moment? the workshop and also getting the NVQ Level 2 and Luke Shaw: I finished the Level 3 apprenticeship and 3, and the VRQ, which we have just passed, at I have now moved on to a Level 4, which is an NVQ Brinsworth Training. in Business Management, and a foundation degree and Chloe Jones: I am very similar really, because when hopefully a degree after that. I am sure everybody else I was at school doing work I worked at Forgemasters, wants to move on similarly. Newburgh and Torres Pumps—all totally different industries, as opposed to precision and things like that. Q226 Chair: Do you see yourself as, if you like, I liked the way Newburgh worked; as Kyle said, it reaching degree standard in whichever particular was in the workshop doing your work and getting a subject area you are concentrating on? lot of portfolio things done. There is not really a Kyle Johnson: I am hopefully going to university, timeframe on it. They just set you what you have got either business studies or an engineering degree, after to do, and you get it done in your own time, whether I have passed my NVQ, but we shall see. cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG02 Source: /MILES/PKU/INPUT/021099/021099_o002_th_BISC 06 03 12 CORRECTED.xml
Business, Innovation and Skills Committee: Evidence Ev 37
6 March 2012 Kyle Johnson, Chris Parkin, Lewis Nicholson, Luke Shaw and Chloe Jones
Chris Parkin: I am probably 18 months away from talking about schools not being overly a BEng, and possibly a master’s after, but I am not workplace-friendly in terms of helping you, but if the too sure. universities and the colleges are—I guess it is universities rather than colleges—being a bit Q227 Julie Elliott: On a day-to-day basis, what do obstructive, we have got a real problem. If any of you you do as apprentices? Is it all hands on? Is it in a equally have experiences of that kind, please do the classroom? same. It will remain confidential; I don’t want to cause Chloe Jones: At Newburgh we have got our own you any personal problems, but it is important apprentice cell, and we have got a series of phase tests information. that we have to complete. We will do a phase test, and then do a write-up on it, cross-reference it to all our Q231 Chair: Do you have any idea why the colleges portfolio work, but at the same time we might be were obstructive? doing jobs from the shop floor—one-off things that Chris Parkin: The reason they gave to me was that I need doing quickly. It is a mix of everything day to didn’t do maths and physics at A-level. They wanted day. It is not like one day you do this, one day you do me to complete an ONC before an HNC. Equally, the the next. It is just whatever you need to do; you just university wanted me to do two more years of a get on with it. foundation degree, because I did not have an HND. It Lewis Nicholson: I have been here six years now. I was frustrating. am still learning; I do not think I will ever stop until I get to maybe a particular thing that I am going to Q232 Julie Elliott: So they are not taking into stay and keep doing. In the first few years we were in account your practical skills and experience as the manual workshops, we were getting the general opposed to an academic qualification? basic idea of things and moving on to the CSE Chris Parkin: Not at all, but I understand that, machines, having a go at drawing things, designing because an HND and a degree are not practical things, making things. It has never really stopped. I qualifications; it is all theory. It has been hard, because am now on the big machines, machinists’ centres, I haven’t got maths and science A-levels, but I am involved with projects, and things like that. You can more than able to do it. I have come out with good take it as far as you want to go as long as the company grades, and I would not say I am any less well off is behind you, which they have been. I have finished than people who have taken the traditional route. my HNC. I think the degree would take me two years full-time, or four or five part-time. I am comfortable Q233 Chair: Would it be fair to say—I don’t want currently, but I could always think about going back to put words into your mouth—that the range of into education. courses they had available were not sufficiently flexible to meet your personal needs? Q228 Chair: Are you all confident that you are going Chris Parkin: Definitely, yes. to have a job after you have finished your qualification? Q234 Ann McKechin: When you were at school, to Kyle Johnson: Yes. what extent did people talk about the importance of Lewis Nicholson: Hopefully. trying to do maths and physics? These are Luke Shaw: Yes. fundamentals to engineering, so I wondered to what Chair: That is reassuring. extent people said that taking those particular subjects was important to try to widen the range of jobs, even Q229 Paul Blomfield: I just wanted to ask a general if you had not decided what you might do. question. You have all talked glowingly about the Chloe Jones: At my school they used to nag quite a experience of apprenticeships, and I am sure that is lot, saying how important it was for us to get good absolutely right, but in every kind of experience there grades. Obviously every single job you would ever is a downside too. Is there anything that you would get involves maths, and so my school did drill it into identify from your experience that could have made our heads that we needed to get good grades on it. it better? Kyle Johnson: It was the same as Chloe. They were Chris Parkin: In the route that I took to a degree, I more pushy towards the maths. They were pushing us have had to fight every time that I have gone to a towards the physics and science aspects in different college or university to get on to the course. engineering, but not as much as the maths. They have wanted me to do lengthy three- to four- year courses when, realistically, the syllabus can be Q235 Ann McKechin: Right, okay. Lewis and Luke, taught in two. I found it a real struggle to get on the any advice at school about this at all? courses, because they are not interested in the teaching Lewis Nicholson: Obviously maths, science and aspect and trying to get students through as quick as English are the main subjects, aren’t they? They possible; they are interested in lengthening it out for always push you towards them. But for A-Levels, as many years as possible. It has been a real struggle there was no advice whether to go on to anything like for me to try to get a degree in five years after that and take it any further. completing A-levels. Q236 Chair: You are all obviously very successful Q230 Mr Binley: Chris, could you write down your apprentices. Have you had any apprentice colleagues experience in that respect and let us have that, because who have dropped out at all? Have you come across that seems to me to be a vital point. We have been this? cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG02 Source: /MILES/PKU/INPUT/021099/021099_o002_th_BISC 06 03 12 CORRECTED.xml
Ev 38 Business, Innovation and Skills Committee: Evidence
6 March 2012 Kyle Johnson, Chris Parkin, Lewis Nicholson, Luke Shaw and Chloe Jones
Chloe Jones: Not personally, but somebody I know: Chloe Jones: It was not long after at all. there was a girl working in quite a big engineering firm, and she had to stop because she could not Q241 Mr Ward: Kyle, you went to an engineering physically handle it—the weights, and tightening and specialist school. What did it do? What was different loosening things, etc. She had to drop out because about it? of that. Kyle Johnson: Well we had lathes and CNC millers Chair: You would have thought that they could actually fitted inside the school, and programmes, like design a course that removed that particular problem; the CAD/CAM, installed on the computers. From my that is interesting. experience I had the skills and experience I needed to go into the job I am in now, so it helped me a lot. Q237 Mr Binley: If you were to tell us one thing that each of you thought was important in improving the Q242 Mr Ward: Did it have links with employers— situation and making it easier, and perhaps giving with engineering companies? more kudos to the sort of track you followed, what Kyle Johnson: Yes, because we did a yearly trip to would that one thing be? the company I am in now, and we went to Luke Shaw: You need to show people the outcome, Forgemasters and Firth Rixson, so they have got a because when you start an apprenticeship, the money wide link of connections. I don’t know whether they is not attractive. A lot of people think, “I can earn that need to emphasise that you can do apprenticeships on an apprenticeship, but I can earn twice as much there; it is just the trips that they were emphasising. getting a normal job.” They cannot see what they will gain from the apprenticeship that will benefit them in Q243 Paul Blomfield: Lewis, you said you were the future. They seem to be short sighted. The aware of construction apprenticeships but not apprenticeship is not pushed enough to say, “Look, engineering apprenticeships. How was that? Why you will not earn much for a few years, but this is were you aware of construction apprenticeships? what you will have achieved and what you will have Lewis Nicholson: From what I can remember, that is afterwards.” That is not pushed enough. just it. People either did their A-Levels or they went into construction. I never remember talking about Q238 Chair: That is interesting; are your peers who manufacturing. But it is so wide as well; it is not just are not taking apprenticeships going out and getting machining, is it? There is more to it than just better paid jobs? machining: there is the design and the drawing side of Chloe Jones: No. Most people I know are at college, things. There is all sorts, and that is why I cannot see probably not even getting paid or just in a part-time why women, or anybody, cannot go into it. You might job on nothing compared with what we are on. not be on the shop floor doing that; you might be in Mr Binley: It is a fair point. an office. I don’t think people fully understand what is available; I don’t think they do at all. Q239 Julie Elliott: Did you in your companies get Chair: I think probably that is almost the perfect line paid the £95 a week, or did you get paid a proper rate to end the session on: “I don’t think people know what for the job? is available in terms of the work that we are doing.” Luke Shaw: At my company it was a proper rate for Can I thank you on behalf of the Committee? It has the job. been really illuminating to get your perspective of it. Lewis Nicholson: Mine were. I am sure not only are we very grateful for your Chloe Jones: We got £95 while we were at contribution but we would like to wish you the very Brinsworth Training, and when we came in-house we best of luck, and would welcome you perhaps got paid a weekly rate of £189. influencing other people in the same line. Thank you very much indeed for your contribution today, and if Q240 Julie Elliott: How long afterwards was that? there is anything that you would like to write to us Kyle Johnson: About three weeks. afterwards, we would be very grateful to receive it. cobber Pack: U PL: COE1 [SO] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG03 Source: /MILES/PKU/INPUT/021099/021099_o003_th_BISC 13 03 12 CORRECTED.xml
Business, Innovation and Skills Committee: Evidence Ev 39
Tuesday 13 March 2012
Members present: Mr Adrian Bailey (Chair)
Mr Brian Binley Margot James Julie Elliott Simon Kirby Rebecca Harris 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 elements of functional skills in mathematics, English agreeing to come before us today. It is, as far as I and information technology and a number of soft know, the first ever BIS Select Committee meeting in skills as well, in line with the Specification of Northampton, and I should like to take the opportunity Apprenticeship Standards. That package is delivered to thank everybody who has made it successful so far; within a framework, all of whose elements are I’m sure that will continue this afternoon. I just have necessary for the apprenticeship to be awarded at the a couple of announcements to start with. First of all, end of an assessment period. The apprenticeship for those who may not be familiar with the system contains mandatory on-the-job and off-the-job here, you will need to press your button to speak into elements. the microphone; it won’t pick up your voice automatically. Q246 Chair: Thank you. Does anybody wish to add The second thing is that we have a lot of questions to or subtract from that? I will go on to my next and not much time to get them all answered, so if you question. There has been some criticism that some of could make your replies as short as possible, I am sure the courses that are labelled as apprenticeships are not, they will be just as informative. I do not need every in fact, that. How important do you think it is that member of the panel to answer every question. Don’t there is both an understood definition of it and that feel under any obligation to do so. Obviously, if the brand of apprenticeship is kept strong? somebody says something you feel you can either add Professor Petford: I’ll respond to that, if I may. I substantially to or need to subtract from, then fair think it is very important that we, as a society, have a enough, please do chip in, but don’t feel the need for shared and very well-rehearsed understanding of what everyone to speak. we mean by apprenticeship. From our perspective at Before we start the questioning, could I ask you to the university, I am not sure we have such clarity at introduce yourselves, starting with Nick Petford on the moment. I think that is causing issues, because we my left here, just to check the voice transcription pick up—on the grapevine, anecdotally—that there levels? are some work-based courses calling themselves Professor Petford: Hello, my name is Professor Nick apprenticeships when perhaps they don’t deserve to Petford, Vice Chancellor, University of Northampton. have that particular title. Len Closs: Good afternoon, I’m Len Closs. I’m the My understanding of apprenticeships is based on my Principal of Northampton College. thoughts when I left school at 16, when an Mike Griffiths: I’m Mike Griffiths. Headmaster of apprenticeship was four years’ hard graft with one day Northampton School for Boys. a week at a local FE college paid for by the employer. Dr Limb: Good afternoon, I’m Ann Limb. I am Chair I do not think apprenticeships are like that today; I of the South East Midlands Local Enterprise wish they were. Perhaps my colleagues from FE Partnership. would like to say more on that. Cllr Mackintosh: Councillor David Mackintosh, I am the Leader of Northampton Borough Council. Q247 Chair: Would anybody like to add to that? Cllr Harker: Good afternoon. I am Councillor Jim Len Closs: Yes, Chair. Certainly, I would support the Harker, Leader of Northamptonshire County Council. view that clarity about what an apprenticeship is— and, as it were, the currency of the term—is very Q245 Chair: Thank you very much. I will start with important, because from the points of view of further a definitional issue: from a training provider’s education, and training and skills, I do believe that perspective, what is an apprenticeship? Who would these frameworks still are the major route into like to lead on that? What do you think are the main employment for significant numbers of both young elements that constitute an apprenticeship? people and retraining adults in particular skills areas. Len Closs: Chair, I will take that, as a college that is I do, however, agree that there is enormous variability also a training provider. From our point of view as a in the apprenticeship frameworks that exist at the training provider, an apprenticeship is a package of moment. There have been some key issues, I think, learning and skills development, combined with that have challenged that validity, particularly in cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG03 Source: /MILES/PKU/INPUT/021099/021099_o003_th_BISC 13 03 12 CORRECTED.xml
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13 March 2012 Professor Nick Petford, Len Closs, Mike Griffiths, Dr Ann Limb OBE DL, Councillor David Mackintosh and Councillor Jim Harker respect of the length of qualification, which Nick has so that young people—when they are opting for it— alluded to. I think we have moved on from the old are opting for something that is known to be valued days of four-year apprenticeships. I think there are as a future direction, and that is going to be a genuine many excellent apprenticeship frameworks in progression route for them. existence already and, indeed, some of them provide full licence to practise, so they are current and valid Q250 Chair: If I could just introduce another qualifications in many respects. However, attention element into the discussion, a fellow Select always needs to be given to quality, and I fully Committee, the Public Accounts Committee, recently concede that the apprenticeship route may not be the spoke with top officials from the National best route into employment in some areas of the Apprenticeship Service and the Skills Funding economy. Agency, and neither could really be very specific about exactly how much of the money they were Q248 Mr Ward: It has been suggested that part of given was actually being used to deliver training on the very large explosion in the number of the ground. apprenticeships can be attributed simply to a This echoes a previous inquiry carried out by this rebadging of Train to Gain. I notice you have had Committee, which talked about the sheer complexity involvement in Train to Gain. Is that a fair criticism? of provision and, if you like, the layers of Len Closs: That would be an unfair criticism of my administration. What proportion of Government college in terms of how we treat apprenticeships as funding that you receive goes directly into training as a training provider, but I think it is fair to say that, opposed to administration? anecdotally, within the system—and amongst college Professor Petford: Well, I cannot comment on that as colleagues and other training providers, too—there a university, because, of course, as you know, we do has been a fear that the drive to meet certain numerical not do apprenticeships at universities, although as a targets as regards the rolling out of apprenticeships big employer in the town we would be very keen to has meant sometimes that the term “apprenticeship” take apprentices on, which is a different set of has been ascribed to training programmes that might questions, really. be better described as employer-based training. I have Just to recap, I think the previous question is a very no particular proof of that. I can only repeat the hard one to answer. What I would like to say is that concerns that, I guess, are fairly alive among training we are keen as a university—and as a sector—to make providers in the sector: that sometimes—perhaps to sure there is absolute rigour in the apprenticeship get numbers through, rather than because of the system as it runs presently, because apprenticeships quality of the frameworks themselves—there has been feed through to foundation degrees, which is where a drive just to sign people up to these things. There is universities do get involved in the vocational skills a need to look more closely at what those people’s agenda. skills and training needs are and, indeed, what the economy needs in paying for that training. 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 Q249 Chair: What steps are you taking to ensure that board is pretty tight. Obviously, the funding is more apprenticeships are seen as high quality? I appreciate favourably disposed towards 16 to 18-year-olds, this question is not relevant to everybody on the panel. Len, have you got a comment? because we get complete funding there, whereas there Len Closs: Well, we take quality very seriously at are expectations with regard to fees and employers’ the college. Colleges, generally, have fairly rigorous contributions coming into play for 19-plus quality assurance processes to try to ensure that all apprentices. our learning programmes—including I think it is worth the Committee knowing that, of apprenticeships—are of the highest quality. We have the target numbers that we have got for the year—the very rigorous processes: we work closely with the maximum contract value numbers—we are currently learners who are engaged in the programmes and the ahead of schedule for 16 to 18-year-olds for this time employers who are, ultimately, the customers of those of year, so we are more than meeting the expected training programmes to keep up standards and to try schedule of placements for 16 to 18-year-olds. We are to ensure that the frameworks—as they are being only about halfway towards our 19-plus and adult delivered—are meeting the needs of both those client targets in respect of the number of placements, and groups. that is significantly, we think, to do with small and Mike Griffiths: Clearly, in terms of quality, if one is medium enterprises in Northamptonshire finding it going to sell these to young people—for a start, for difficult to stump up for their bit, even though we are credibility—the term “apprenticeship” has to actually already subsidising fees. mean something. My understanding—from the To bring it back to the question specifically, it is research I’ve done, admittedly at a fairly small scale therefore pretty much a marginal business case to run recently, since I knew I was going to appear—is that apprenticeships as an element of college provision on there is a lot of concern about quality. There needs to the funding that we get. Probably, if we were merely be some sort of mechanism in place to ensure that, if charged with delivering adult apprenticeships, we this provision is going to have the badge of would not do it because unquestionably we are apprenticeship attached to it, it has to mean subsidising that provision quite significantly from something. There should be some sort of guarantee, 16Ð18 apprenticeships on the one hand, and the cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG03 Source: /MILES/PKU/INPUT/021099/021099_o003_th_BISC 13 03 12 CORRECTED.xml
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13 March 2012 Professor Nick Petford, Len Closs, Mike Griffiths, Dr Ann Limb OBE DL, Councillor David Mackintosh and Councillor Jim Harker broader college funding that we get for mainstream this as a way of soaking up cash. If the money goes provision of further education on the other. straight to them, then it might not end back where it should really be, which is in the FE sector. There’s Q251 Chair: Sorry, can I just probe you a little also a concern that some of the shorter-term further on this? Is it fair for me to summarise by apprenticeships, so-called, are purely focusing on the saying that, first of all, apprenticeships are pretty needs of the employer and not the apprentice. I think marginal to, if you like, your core provision? that is an important question that needs to be looked Secondly, the amount of funding you get—in into, because if employers are provided cash to train comparison to the amount that employers are going to apprentices and not actually skill them in a deep provide for post-19 provision—renders it almost way—just in a very narrow way—that is not looking irrelevant, and the real problem is getting employers after the individual. It is purely looking after the to come forward to basically contribute their interests of the employer, and that is not right. proportion of the funding. Is that a reasonable Chair: I can assure you that we will be questioning summary? representatives of certain sectors on that issue at a Len Closs: I think that is reasonable, Chairman. When subsequent hearing. I think it is time I brought my I used the term “marginal”, I guess I was saying that, colleague Brian Binley in now. He will have questions largely speaking, for apprenticeship provision, overall for some of the other members of the panel as well. funding-in probably equals cost-out, and therefore it just about balances, but it does that by placing that Q254 Mr Binley: Yes, and I am going to be a bit part of the business within the broader college’s robust, because it’s well known that I believe the financial position as well. educational establishment has let down a number of Taking the adults on their own, I know it does not generations of this country’s students and now balance, so the funding that we get directly from workers. First of all, before I go on to that, to explore central Government does not meet the direct cost of it a little further, I wonder if I can ask Mr Griffiths providing the adult apprenticeships. And whereas we what proportion of your 16-year-olds decide to take would like to be in a situation where employers are vocational training, such as apprenticeships, as paying 50% of that cost, more often than not that does opposed to the more academic route to so-called not happen. Indeed, some providers will be offering higher education? Therein lies my prejudice, Mike. that provision at nil charge to the employer just to Mike Griffiths: At my particular school, over 70% of make sure they get the placements. It is a challenge, students stay on into our sixth form, where it is an A- really, to build up and make viable adult level route. The great majority of them then go off apprenticeship provision on its own. into higher education, whether it is in a form that you approve of or not, Brian. Q252 Chair: Do you think there is a case for the I think in the last three years there has been one Government increasing the proportion of the total cost student who has been a NEET. They all either go on that it will subsidise for a post-19 apprenticeship? to college or employment-based training, so it is quite Len Closs: I think there is a case particularly for 19 successful. My personal view is that—broadening it to 24-year-old adults—the lower-age range, as it were. out into vocational education generally—as a country Broadly speaking, the 50% charge is reasonable. The where we fall down is that there is not parity of difficulty is that, in an area where there are large esteem. As long as we think of these things as layers numbers of smaller employers, it is challenging, rather than as parallel routes through, we are always sometimes, to make the financial case to those going to have this problem. I get really annoyed when employers for buying in that apprenticeship. I would the basic underlying assumption is that you do certainly argue that there are cases—particularly, vocational training or a vocational course if you are perhaps, where people in the 19Ð24 age range have incapable of doing an academic one. There is almost suffered some disadvantage in the past—where, if a belief that, if you are not up to it, there is a layer some way could be established, there would be a case that is accessible to you. We need parity of esteem for extending the subsidy for that age range. for the different routes and the acceptance that some youngsters will prefer a different route through from Q253 Chair: And do you think there is a case for other people. Do not ask me how on earth we crack making that subsidy to the employer? that, because I think it is something which has been Len Closs: I understand that a pilot is under way to riven in our system certainly for the 40 years that I put some of this funding in the employers’ hands to have been involved in it. buy the training. Insofar as we try and work closely with employers to meet their specific needs, broadly Q255 Mr Binley: You hit exactly the point I wanted speaking I support that, with very strong to; I knew you would and I am grateful. I am going conditionality around that funding, I suppose, in terms to go to Jim Harker now, who is the chairman of the of exactly how that employer is allowed to dispose county council responsible for educating the young those funds. We come back to an earlier question people in this county. about suspicions that it has not always been best used When we went to Sheffield, we were told by a young in the past. apprentice that, when he went to the sixth form to do Professor Petford: Can I just echo that? I think there A-levels, the minute he said, “I want to do an is anecdotal evidence, again, that some employers— apprenticeship,” they turned their noses up—“I didn’t certainly, the big volume house builders—would see even get invited to the awards ceremony.” These are cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG03 Source: /MILES/PKU/INPUT/021099/021099_o003_th_BISC 13 03 12 CORRECTED.xml
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13 March 2012 Professor Nick Petford, Len Closs, Mike Griffiths, Dr Ann Limb OBE DL, Councillor David Mackintosh and Councillor Jim Harker pretty frightening words, to my mind. Jim, what are probably do an apprenticeship as part of that you doing to change our education system? training—perhaps through pupillage, or internship if Cllr Harker: Well, with your Government’s help, they do a medical degree. I wanted to make the point we’re doing a lot. We have got two out of the 13 about the perception of what apprenticeship means, University Technical Colleges being established in and this whole issue of jamming people down one Northamptonshire, which are just for that particular route or another, academic or vocational, and then purpose. There are 13 in the country and two in trying—falsely, in my view—to get a parity of esteem Northamptonshire—and thanks very much for that. between the two. It just doesn’t happen. Kids know Mr Binley: It’s not us; we’re Back Benchers. that, if you are doing an apprenticeship, you are doing Cllr Harker: We are very pleased and grateful to the something very different from if you are doing A- Government. We don’t want that to stop, levels. Part of what we have to try and crack is a way unfortunately, because the UTCs were established at through for young people, so that they don’t perceive Silverstone and Daventry—in the south of the that one route is a lesser route than another, when county—and that is fine. However, we want to make precisely the people we think of as academic do sure there is a network of these technology apprenticeships in their training. opportunities for young people at 14 years of age going through, to prepare them for apprenticeships or Q257 Mr Binley: The law makes the local council a skilled work in the higher performance technology pressuriser in this respect: you have the responsibility industries that are important to 21st-century for the whole of your area; although not directly Northamptonshire’s economy. As you know, we are responsible for education, you nonetheless can bring historically 19th-century industries, such as boots and pressure to bear. How are you doing that? shoes, and steel at Corby and that sort of thing. The Cllr Mackintosh: I think it is important to tie all of intention of the county council and our partners is to these things together. We heard earlier, when we make a big change in that direction, and to emphasise visited some local companies, that effectively they and concentrate on 21st-century electronics, feel on their own. We have come here to listen to what performance engineering, computer sciences and all the county council and the further education sector are of those sorts of thing. To do that, we need a cascade doing: some fantastic work to bring things together. I of educational opportunities, I suppose. We have the think there has to be some form of brokerage to work university; we have the colleges; we now have the out what skills are required, how they are facilitated UTCs being established, all of which give young and how we make sure they are put in place through people the opportunity to take technical qualifications. the further education sector and the county council, The county council is going to launch—in two weeks’ but, also, that there is that facility to bring those skills time, actually—a scheme of its own to promote together with the employers to meet their needs. I’m apprenticeships in the county, and it is a scheme which very pleased that this week we have been awarded I believe most public sector areas could emulate. We £100,000 through the Enterprise Zone Skills Fund, are going to require any capital works going out to which—through a scheme led by Northampton tender after 1 April to provide one apprenticeship per College, in partnership with Moulton College and £2 million of capital cost, on the basis that now 50% Tresham College—will allow the development of a of a structural project is labour. So, every £1 million skills plan, through assessing the needs and that the county council spends on labour will require requirements of companies located within the one apprentice. That can be quite extensive when you Enterprise Zone. Here in Northampton, we do have talk about things like the Corby Link Road, which we the largest in the country, so it is a really important started work on in May, which is £29 million. It really area, both for the Government’s policy and for us in is a positive step for the County of Northamptonshire delivering improvements to the local economy that to provide the requirement for tendering contractors to have a major impact not just on Northampton, not just actually keep those apprentices. More importantly— on our wider county, but on the whole of the South Chair: I have to hurry you up. East Midlands region. It is very important that we get Cllr Harker: Very quickly on that, they are going to this right, and I think this brokerage is very important; be for the duration of the apprenticeship, as well. Even that is at the forefront of what we are doing at though the contract might only last 12 or 15 months, Northampton Borough Council. the contractor has got to guarantee the provision of that apprenticeship for the whole term of the Q258 Mr Ward: I go back to the 70%, again. If this apprenticeship. There are a few other things but we was an inquiry into how to support young people to can talk about those later. get into university, I am sure you could give a really good story about how you provide support to young Q256 Mr Binley: That is good news. Can I come to people: visits to universities, talks about subject areas Dr Limb, who has a massive responsibility for and so on. Where is that level of support for those who Bedfordshire, Buckinghamshire and don’t want to go to university to do something else? Northamptonshire? The flow of skills is absolutely Mike Griffiths: In my particular school, we employed vital to you. Do you want to comment on this point? somebody who used to be employed by Connexions. Dr Limb: I wanted to pick up the point about the 70% She has developed a work-related learning programme of pupils at Northampton School for Boys that go and for right the way through from year 7 to year 13. She do an academic route. It is a fair bet that a number is at every parents’ evening for years 7, 8, 9 and 10. of those will become lawyers or doctors, and they’ll She gives talks; she sees the pupils. Every year 10 cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG03 Source: /MILES/PKU/INPUT/021099/021099_o003_th_BISC 13 03 12 CORRECTED.xml
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13 March 2012 Professor Nick Petford, Len Closs, Mike Griffiths, Dr Ann Limb OBE DL, Councillor David Mackintosh and Councillor Jim Harker pupil has an individual one-to-one interview with her, referring as many, if not more, young people to our and again in year 11, where she will explore with them college for appropriate vocational skills training, what the different options are post-16. including apprenticeships, as has been the case We have a scheme whereby youngsters who go to historically when they were obliged to do it and when college, for instance, are still able to access our Connexions existed in a more proactive way. So I see awards schemes as well. However, we accept that we that a very positive sign, at least in terms of the local cannot—as an individual school—provide the whole collaboration that takes place and makes sure that range of opportunities in one particular place. We young people get what they need. have chosen to focus on one particular aspect, but we are not very good at other things. And we think, for Q260 Mr Binley: This is my final question, actually. some youngsters who want to go down a particular Can I congratulate, you, Mike, on being president- route, a far better option is to go to somewhere like elect of one of the leading educational professional Northampton College or Moulton College, or, indeed, bodies in the country? I am not saying what it is another sixth form that is providing a different because I’ve forgotten, quite frankly, but you will be opportunity. in a very important position to influence the But we spend a lot of money in addition to what we experience of work and work placement in a can get from our Connexions link, which I know is pre-leaving school scenario. I wonder whether you disappearing. We have employed our own careers have thoughts on how you might spread that particular advisor, who we make sure is fully trained so that activity, and Jim, you may have thoughts about how our students, I think, are well aware of the different you would do that in the many hundreds of schools opportunities. But she would say—she did say to me you have got under your control too. This is about before I came here—that she finds the biggest work placement as a method of introducing young problem is youngsters who want trade qualifications; people to the world of work, and hopefully getting rid it is very difficult to get apprenticeships in trade of the idea that not working can be a career. qualifications. Mike Griffiths: In terms of work placement, are you It was interesting, particularly in view of what Brian meaning during their time within the school? said earlier and the implications about universities and whatever else, that her perception was that, for those Q261 Mr Binley: I am looking for that connect wanting trade qualifications, not only was it harder, between school and the workplace, and I am looking but in particular it is who you know, not what you can to find out how you might think about enhancing that offer. She finds it is very difficult for youngsters who in the job you are going to have, which is a national want a trade to actually find an apprenticeship, role. because the ones that are available go to friends of Mike Griffiths: It is the Association of School and friends of friends. Although we hear it in other areas College Leaders, by the way—ASCL. of English life and social links and whatever else, it Mr Binley: Thank you for that, Mike. actually works throughout, that, again, if you don’t know somebody who can get you in, then it is very Mike Griffiths: I haven’t got a magic wand; I am not difficult. 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 Q259 Chair: Len Closs indicated that he wished to speak. Could I just remind witnesses to be as brief as is that in, for instance, the days of work experience, possible? This Committee has got a train to catch. all schools tend to want it at the same time. There are Len Closs: Just in support of Mike, I would want to restrictions on what ages it can be, so the number of say two things about the situation here in decent work placements is not always there. My Northampton. Firstly—I am not sure he will welcome experience with my own school, which is possibly me saying this—I think we are two of the older unusual, is that we were disappointed with the quality members, now, of what is called the Northampton of what was going on: it was actually not helping our Heads’ and Principals’ Group. There is good students to have a good attitude towards places of collaboration between schools, colleges and FE work, and so we stopped doing them at that stage. providers here in the town, which means that we liaise What we do is arrange work placements for students constantly on shared provision and, indeed, to a who volunteer to do that in their holiday time, if they certain extent we see our responsibilities as together, want to. towards the whole of the town, rather than to our It is a bit like with apprenticeships; getting good individual institutions. quality is the issue. Nearly everything that I have read Secondly—and I think this is quite important—the about in the last few weeks has said that this has been panel will have probably been made aware of some the key. A lot of people have emphasised that, rather concerns from the FE and skills sector about the new than necessarily simply getting more and more and freedoms schools have to provide independent more, that actually it is the quality that is important, information, advice and guidance: maybe those and whether they actually lead to something later on. freedoms will result in fewer youngsters coming We have to work incredibly hard with employers to forward for skills training and apprenticeships in the ensure that they have a positive attitude towards work future. That is a fear. We have done some analysis in placements, because there is not a lot of point in Northampton that shows that exactly the opposite is twisting arms and them reluctantly taking on young happening, and that schools in Northampton are people. cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG03 Source: /MILES/PKU/INPUT/021099/021099_o003_th_BISC 13 03 12 CORRECTED.xml
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13 March 2012 Professor Nick Petford, Len Closs, Mike Griffiths, Dr Ann Limb OBE DL, Councillor David Mackintosh and Councillor Jim Harker
Q262 Mr Binley: What are you doing, Jim, about National Apprenticeship Service sells in effect, is the the employers? right measure of success. Cllr Harker: As you know, Brian, the county council Mike Griffiths: No. doesn’t have a lot of direct input into schools anymore. One area we do place importance on is Q264 Julie Elliott: Has anybody else had any inspiring young people to think that the opportunity dealings with the National Apprenticeship Service? to work in these high-performance, 21st-century, Dr Limb: My answer to that question is no, too. In engineering-type businesses is a good thing. We need preparation for today, I got some statistics off the to do that to satisfy our employers in the town. You website and had to do all the analysis of it myself. I have probably heard from Cosworth, for instance. I couldn’t really see quite what the NAS itself was was told the other day they need to interview 80 doing, nor—to go back to a point made earlier—what people to get one young engineer out of that. So, we the Skills Funding Agency is doing either. need to do something to satisfy our employers. They From an employer’s point of view, those national way we do that is to inspire young people to train into agencies mean absolutely nothing. What does mean those sorts of industries, and we are doing so in a few something is the local provider fixing up the right kind innovative ways. For instance, we have linked up with of apprenticeship training, to the right kind of quality, Richard Noble, the world land speed record holder, so I have a big question mark in my mind about what and his Bloodhound project—he is going to design a those two national bodies are doing. 1,000 mph car. We have got a contract with him to take his team, and his car in fact, around to the schools Q265 Julie Elliott: Some other figures are telling us in Northamptonshire, give them a pep talk, and link that the number of higher level apprenticeships—the them with the whole of his development programme; ones that are equivalent to foundation degrees—is so he will feed in all of his data and information as it growing. Is it your experience that you are finding the is generated— numbers of people doing those things are growing, Chair: Sorry to interrupt. We actually were briefed and are you encouraged by that? Do you think that is on that. It is very relevant, I agree. the way forward? Cllr Harker: That is a county council project. Brian Professor Petford: At the university, as I say, we don’t asked what we were doing, and that is the sort of do apprenticeships so it is hard to comment directly thing. We have to inspire young people. on that, but we are seeing an increase in students We do it as well through things like the Young wishing to do foundation degrees, which are Leaders scheme. We link very directly with the progression routes on from the advanced Northamptonshire school young leaders—elected by apprenticeship schemes. So, we would welcome that their own communities—and we put a lot of continued trend to get people into foundation degrees. investment into developing leadership skills, That may well be the end of the line; that is a good particularly of young people, again using enough thing. If you come away with the skills of a Northamptonshire organisations such as NAYC to do foundation degree, that could set you up for a very it. productive working life without carrying on, there and Dr Limb: May I make just a brief point? I think there then, to university. Of course, this is in the bank, so if is a role for the LEPs, here, to encourage employers. you wish to go back 10, 20 or 30 years in the future, Obviously, LEPs are quite a new body, but they are you still have a whole suite of credits behind you that local authorities—whether they are county councils or you can, if you like, cash in and get a final degree at unitary authorities—working with employers in the some stage down the line. private sector, and they are private sector-led. I think Can I just make one quick point about something we cannot expect just the training providers—schools, earlier? I am aware of the time. It is about this really colleges and universities—to be the ones that beat the crude way of assessing how successful the scheme is drum and say, “Come and do apprenticeships.” We by the number of starts. That is crazy, obviously. No have got to play our part in getting employers on side. one with any sense would want to think about it like The South East Midlands LEP, next week, is having that. The problem is—and universities also work like an annual conference at which it will be asking all this as well—that there is this number of completions; the employers present—some 350—to pledge to either that is a really crude stick as well. I think it is more adopt a NEET, become a business mentor to someone along the lines of the qualification gained: what did or, indeed, to take on an apprentice. So, just flying the you get out of it; also, where was your destination; flag and getting the LEPs to do more is possibly one where did you end up? There are more nuanced ways way forward in the future. of measuring how successful the apprenticeship Chair: We are getting very short of time. If you can scheme is than the ones that we have at present. keep your answers as brief and to the point as possible Len Closs: May I also add something on the question I would be grateful. of higher level apprenticeships, very quickly? At the moment—certainly locally, from our position as a Q263 Julie Elliott: One of the main measures that training provider—the jury is very much out on higher the National Apprenticeship Service is judged by is level apprenticeships, and we are finding it difficult the quantity of apprenticeship starts. We have received to identify those frameworks that seem appropriate to mixed evidence about this so far. I wonder what your develop beyond level 3. Many of the apprenticeships opinions on that are, and whether you think that the that we offer are naturally in occupations that lend number of starts, or the number of apprenticeships the themselves to levels 2 and 3. We only offer one at cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG03 Source: /MILES/PKU/INPUT/021099/021099_o003_th_BISC 13 03 12 CORRECTED.xml
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13 March 2012 Professor Nick Petford, Len Closs, Mike Griffiths, Dr Ann Limb OBE DL, Councillor David Mackintosh and Councillor Jim Harker level 4 at the moment, which is AAT, which is Q269 Margot James: And have you come across accounting technicians. Quite often, if you are, say, in any models that work in that regard? If firms are not an area like care, when you get on to level 4, you using Government frameworks or the NAS, what are are really talking about leadership and management they using? qualifications, rather than furthering the care standards Dr Limb: I think they used to call it “Sitting by that form the backbone of the level 2 and level 3 Nellie,” didn’t they? I nearly gave that as an example qualifications. of the definition of an apprenticeship. It is learning the Julie Elliott: I think that is a very clear answer from job on the job, and I daresay we cannot capture this you on the way things are measured. information because we will not know how many— just to choose an example—plumbers in Northampton Q266 Margot James: A previous witness told us that may well be training up a young woman or man to do fewer than half of businesses use Government that job with it not being registered anywhere. apprenticeships, and the main reason seems to be the Len Closs: It is perhaps worth mentioning that, in need to tailor training more to the needs of the fact, there are some contradictions from our business. Is that your experience? perception in this. Quite often, when you talk to employers, they will say that many times the skills Len Closs: If I may say this, nearly all the frameworks they find lacking in potential employees are functional that we are using with learners in the workplace are and soft skills, i.e. those outside their immediate standard frameworks, essentially. It seems to me that expertise. When we talk, sometimes, to employers at the moment we have very limited capacity to work about the whole apprentice framework, it is actually directly with the Sector Skills Councils on what you those bits they do not want; they place more emphasis might call bespoke training. We have explored this to and value on the National Vocational Qualification, a certain extent with City & Guilds in trying to which is the competency specific to that occupation, develop bespoke training around business and are more concerned about the time spent doing improvements techniques etc, but we find that our the skills that sit around that within the SASE capacity to deal directly on this basis is limited. While specification. it is not a direct answer to your question, the fact that we are not able to persuade employers—we are selling Q270 Margot James: A last question to Dr Limb: I an off-the-shelf product—may be the reason why we think you mentioned in your submission that your aim are not always getting as many apprenticeships out is “to create the right environment for businesses to there as we would like. grow.” What does that look and feel like in Northampton, that right environment, and how would Q267 Margot James: Before other panellists come you connect your growth agenda to upskilling the in, if they want to, I was also going to ask how local workforce? training providers ensure that employers have the Dr Limb: I think the key to it is ensuring that flexibility they need while ensuring consistency of businesses feel that they are shaping the agenda, rather quality. Are you saying it is difficult to get that than being done unto. I don’t have a magic wand to employer engagement to start with? sprinkle this over the heads of every employer in Len Closs: There is an element of selling an Northampton and say, “Get engaged.” However, I do apprenticeship to an employer, and I think it either think we can build up a culture of wanting to be stands or falls at that basic interaction where the involved in something, which is actually why employer will make a judgment as to whether the Northampton Alive as a movement is so important, framework that is sold at that particular point is because people will get behind it and see what is sufficiently suitable and meets the employer’s need as involved in it. well as the apprentice’s needs or not. By creating the right environment, I think it is really What I am saying is that many of those frameworks about making sure, if somebody wants to succeed, all are inflexible in the sense that the SASE defines that of the elements are in place so that they can succeed. fairly well, so an employer is going to be making a You can’t make a seed grow, basically. You just have judgment of a fairly black or white nature. 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 Q268 Margot James: Does anyone else wish to point, over the last few months we have been building comment on that? this programme of trying to articulate what is Dr Limb: Can I just make one point about employers? happening in our town, and that is a programme of I think it is really important to distinguish between the regeneration, right through to delivering the sizes of employer as well. Clearly a bigger employer Enterprise Zone. The Government announced our with a Director of HR and with schemes and processes Enterprise Zone last August to great fanfare, but we all set up will be able to find their way through this have found that a lot of people do not understand what much more easily—and we know this is the case— that means. There is a lot of misunderstanding about than the vast majority of small, medium and even the process, when it starts and the impact it will have midsized companies which comprise, largely, most of for local businesses. We, as a council, but working our economies. So I think one of the difficulties that together with our partners—that is the whole spectrum we have is making it easier for SMEs, really, to take of people involved, in both the public and private on apprenticeships. sectors—have been out there, talking about what it cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG03 Source: /MILES/PKU/INPUT/021099/021099_o003_th_BISC 13 03 12 CORRECTED.xml
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13 March 2012 Professor Nick Petford, Len Closs, Mike Griffiths, Dr Ann Limb OBE DL, Councillor David Mackintosh and Councillor Jim Harker means and the benefits it can bring for our town. particularly the grant aiding that is proposed to Certainly, the feedback we have had from our launch provide, I think it is, £1,500 grants to small employers of Northampton Alive on Friday has been absolutely in particular because, as I alluded to earlier, small fantastic, with people asking us, “How do we get employers find the fees problematic. If the money is involved? What can we do?” Certainly, I hope that going to employers for those kinds of purposes—to that network of bringing people together will help us ease the burden of apprenticeships for employers—I to grow and develop as a town, but also provide the think it would be a good thing. I am less familiar skillsets we need to make the Enterprise Zone work. with and therefore a little bit more dubious about the It is all very well to encourage companies to come Employer Ownership of Skills initiative, which is and locate here and to give them every incentive in whole deal more money; it was that I was referring the world, but if they have not got a workforce here, to when I said I would want to see the criteria for and if they cannot provide places for these people to constraining their expenditure before I could live and go to school, then we are failing. As a comment. collection of local authorities and the private sector Mike Griffiths: Sorry, can I also make the point that all working together, we need to make sure this is a you would expect me to, coming from the schools success. I think some of the initiatives we have started sector? If all this extra money is going to are the seeds of making that happen, but that is really apprenticeships and everywhere else, it is at the same fundamental to it. time as there are significant cuts happening to budgets for post-16 in schools and colleges. Q271 Simon Kirby: We have heard mention of the Government’s pilot scheme to inject, I think, some Q272 Simon Kirby: I didn’t quite expect to get so £250 million directly into the employers; is this a many answers, but thank you for that. I have one final good idea? Will it help businesses shape the agenda? question, really wrapping it up. We mentioned earlier And will it change how training providers operate? that certainly small and medium-sized businesses saw Cllr Harker: Can I make a point alongside that? I the financial burden as a problem—the actual money think it perhaps ought to be categorised in terms of was off-putting in some ways. sector targeting. In Northamptonshire, for instance, Do you think that—talking specifically about 19 to there are currently, I’m told, 97 apprenticeship 24-year-old provision—there is also a perceptual vacancies at the moment, but they are in the service problem, in that apprenticeships are seen traditionally sector and the business support sector. There are lots for younger people only? Is it only the money that is of young people that want the more traditional the problem when it comes to these small and apprenticeship opportunities, which are not so much medium-sized businesses coming forward? there. So perhaps it would be worth just thinking Len Closs: From our point of view, I do not have any about sector targeting when you start giving the evidence to suggest that. For the 19 to 24-year-olds, money out. that may be more of a concern for the potential Professor Petford: I think it is important to hold in apprentice at that age than it is for the employer, but mind at all times that the workplace in the UK is not I honestly don’t have feedback from employers to homogenous; it is heterogeneous and it is all scales. suggest that they consider age—particularly at the Ann has pointed out rightly that most people don’t younger age range you have mentioned—as a barrier. work in big companies; they work for sole traders or Chair: Any further comments? Well, would you they are one, two or five person bands. How do you believe it, we have finished on time. Can I commend reach that group? That is the question you need to ask you all for your brevity and thank you very much for yourself. They are the key constituents, simply your contribution? It will be incorporated into our because that is where most people work. It is not the recommendations that will be coming out in a few BPs and the Tescos; it is the small traders. And they weeks’ time. Thank you once again. I also give a are probably not that interested; if it is overly special thank you to David Mackintosh for allowing bureaucratic, forget it. The challenge, really, for us to use the facilities here, which are absolutely politicians is to address that particular market. superb, and to enjoy the hospitality of the Council, Len Closs: I said earlier that, generally speaking, the which, again, I think everyone would agree was money to employers was a good idea. I favour 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 John Harley: My name does not appear on that list, Mawson, Paul Southworth, David Rolton, Milan although I was asked to come and attend the meeting Shah, and it is now Alan Ainsworth, which is five. in writing. cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG03 Source: /MILES/PKU/INPUT/021099/021099_o003_th_BISC 13 03 12 CORRECTED.xml
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13 March 2012 Peter Mawson, Paul Southworth, David Rolton, Milan Shah, Alan Ainsworth and John Harley
Q274 Mr Binley: Who did that? between 2005Ð06 and 2010Ð11. You are from John Harley: Well, I got a letter from you, Brian. different walks of life but all have an East Midlands focus. What is the contribution that any of you have Q275 Mr Binley: Did I do it? made to that large increase in apprenticeships within John Harley: Yes. It came together with a list of this area? managers, and I am on that. David Rolton: I will go. In my case, the answer is Mr Binley: Then it is my fault and I apologise, but “nil”. We have a real problem in terms of the lower- he is a bloody good chap and he ought to be there. skilled grades within our organisation that were the Chair: I am sure you are very welcome. bedrock for taking on young people and letting them Mr Binley: Can I tell you that John runs a company go—formerly—to night school or then on to day with 15 apprentices? It is only a small company but release and university and eventually chartered he really concentrates on apprentices and, I think, can engineer. Those skills now are pretty much instantly give us a lot of information of value. accessible over the internet and into the third world, Chair: I do apologise for the obvious breakdown in whereby you can pick up and put down the service at communication, and I have no hesitation in blaming much cheaper cost, and it is a real barrier to taking my colleague, Brian Binley. anybody on. Mr Binley: Absolutely. Q280 Mr Ward: Presumably, you do recruit. Q276 Chair: Could we just have your name and David Rolton: We recruit at a higher level. title? John Harley: My name is John Harley. I am a Q281 Mr Ward: For your business, working up from Director of a local company called ACS Office the metaphorical shop floor is not a route. You would Solutions, and I also sit on the board of the Brackmills come in at a higher level. Business Improvement District. David Rolton: No, it has pretty much disappeared. You have to combine it with the construction industry Q277 Chair: Good. Thank you. I will invite the other to which we are related, which, of course, is the members just to introduce themselves for voice economic regulator, and every recession results in transcription purposes. We might as well go across probably a 50% staff loss. You do all the investment, there. It is Milan next. and the risk you run is the employment risk. Also, Milan Shah: Hi, I am Milan Shah. I am Chair of the in training, you run the risk of them being poached, Governing Council of the University of Northampton effectively, as well. Whilst you do try to do it—and, and a retired board member of the local chamber of historically, for 32 years, we have done our best—in commerce. the last probably seven or eight, the internet has made David Rolton: I am David Rolton. I am a founder of quite an exceptional difference. You need the skills, a number of engineering companies. I am an SME; in and you still need high-level skills, and the skill level my case, it’s a self-made engineer. I am also a member probably rises in our business because of it. You tend of the board of Northamptonshire Enterprise to do more clever things. Partnership. Paul Southworth: Paul Southworth and I am the Q282 Mr Ward: Presumably there was a serving of Chairman of the Northamptonshire Enterprise articles or whatever it may be called in your Partnership. professional field. Peter Mawson: Peter Mawson, Chief Executive of the David Rolton: Most of the recruits probably go to West Northamptonshire Development Corporation. university directly, and what we have lost are probably Alan Ainsworth: Alan Ainsworth, Head of Public the sandwich students, who were really good. You Affairs for Barclaycard. could take them for a year out, and they would come and work for us for a year and then go back to Q278 Chair: Thanks very much. You were possibly university. That was a really great ground for finding in when I introduced the previous panel. If I could people. Now, we tend to take only people with just repeat my comments then: we have quite a few exceptional skills at a higher level. questions. Please do not feel that every one of you has to answer every question. I am mindful that we have Q283 Mr Ward: There are still 7,600 there. Has a train to catch, although I am sure we would love to anybody else contributed to those? stay and hear every word that you may have. Just try Milan Shah: I am a spice trader by profession, so, to be disciplined and only contribute if you feel you really, the only way to learn my trade or my craft is have something to add to or subtract from what work-based learning. It took me seven years to do that somebody else has said. On that, I will invite David in the traditional apprenticeship manner. My own firm Ward to open the questioning. has experienced double-digit sales growth for the last five years. It has created jobs. It has been investing in Q279 Mr Ward: Thank you very much. On the machinery through the recession and through the quantity-versus-quality argument, which we were credit crunch. We have been doing all the right things, discussing earlier in terms of the number of but whether or not we have created apprenticeships is apprenticeships, we have some figures before us a separate question. In fact, we took on an apprentice. which show the growth in apprenticeship framework I talked to my management team and they trawled achievements within the East Midlands: the number through their records, and we did take on an rose from just over 10,000 to just under 18,000 apprentice for engineering/maintenance. It didn’t last. cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG03 Source: /MILES/PKU/INPUT/021099/021099_o003_th_BISC 13 03 12 CORRECTED.xml
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13 March 2012 Peter Mawson, Paul Southworth, David Rolton, Milan Shah, Alan Ainsworth and John Harley
I think the person didn’t turn up after about three or Alan Ainsworth: Yes, I think so. We heard from four months. The management team took a view that previous witnesses that, when you are a big it is easier just to train people up who have come from organisation, you have the resources to create a the job market. So we are creating jobs, we are scheme, which is a very bespoke Barclays scheme, so creating work, and we are creating value-added work perhaps we do not need the support of various other and up-skilling the economy, but the particular label services. What we have found, though, is that we have of apprenticeships is one it seems that my team has had to stamp our own label on it, if you like, to ensure floated in and out of. that we do deliver the quality, so that, when people come out of that 12-month period, they have a really Q284 Mr Ward: David explained, understandably, useful qualification. Our aim is, clearly, to keep those why it is unlikely to be an appropriate route for people in Barclays, but what is also important is that recruitment. By contrast in yours, with this need for a this apprenticeship—level 2—will give them strong work experience and learning on the job, it something that is portable into the world of work would seem to be a very appropriate route. going forward. Milan Shah: Think of us as being in the food John Harley: I have a somewhat different experience industry. We are manufacturers of food ingredients, from my colleagues here in that we operate in the once we have imported them into the UK. Only 2% service industry. Our company supplies computer of the food industry workforce is below 18. For systems and office-furniture systems, 17 years trading example, if you look at the skewing of the funding, it from the town and a growing business. We have is not conducive to drawing people from the food invested in the same way as Milan’s business, as he industry into apprenticeships. Also, we import explained. We had a headcount of 72 when the credit materials from all around the world, so we are fully crunch was at its worst point, and we now have a exposed, as a business, to the forces of globalisation. headcount of 114. During that time, I have employed What that means is that supply chains are unbundled. 15 apprentices, 14 of whom have now been given It means that there is trade not in goods but in tasks. permanent posts within our business. None of the If we really are going to compete, we need to have a local educational organisations—and this sounds like very flexible labour force at our end. I think Mr a criticism—ever engaged with us. We came across Rolton would agree with that from his perspective. To a local commercial outfit who were delivering NVQ that extent, we need a workforce that can be re-skilled training but went out of their way to try to get these from time to time, retraining mid-career. The young people placed. We partnered with them and it perception of an apprentice being somebody straight has been a huge success—very talented young people, out of school is only one perception; we need to make none of whom went on to college but are now training sure that people understand that, if the British in accountancy, in IT and in warehousing. economy is going to re-skill itself from generation to We have heard a lot about the efforts of the local generation and mid-career, then apprenticeships— partners here, but here in this county the biggest entry routes into a new career—have to be available employer is logistics and there is no logistics training to people further into their lives as well. in any of our colleges in this county. There is plenty of hairdressing, but there is no logistics training, and Q285 Mr Ward: Can I just come to Alan, because it is the biggest employer in the county. We have to you have had 1,000, I think? That is a national figure change our mode of thinking, I think. for Barclays’ commitment to the apprenticeship scheme. Q287 Mr Ward: Was that a training provider or was Alan Ainsworth: Yes. That has not kicked off yet it an agency? although we have announced that we are going to take John Harley: It is an agency that actually delivers the on 1,000 over the next 18 months as a pilot training as well and has trainers qualified to deliver programme. That will be a 12-month apprenticeship NVQ. for those 1,000 people, and we are really looking forward to it. Historically, our minimum recruitment Q288 Mr Ward: But none of those through the criteria have been five GCSEs at grades A to C, which National Apprenticeship Service. is probably not atypical, but we have realised that we John Harley: No, I am not sure where they get the are not attracting certain groups of society into our funding. To expand that, sitting on the board of the workforce and, therefore, potentially the workforce as Business Improvement District in Brackmills, I am a result of that policy. We think there is something to quite passionate about getting these young people into be gained from increasing the diversity of our work. We have 150 businesses on Brackmills Estate workforce and not being so specific around academic and there are 12,500 young people working there. We qualifications, so we have used apprenticeships as a felt it would be a good idea about six months ago to way of seeing if we can find a way to provide financial make a commitment to employ 150 apprentices on the services training and a financial services career to a estate, which, after all, is only one for each business. far broader pool of people. They run from very small businesses through to global companies. We thought we would start with the Skills Q286 Mr Ward: What is your experience of the Funding Agency. We asked them how many National Apprenticeship Service itself? Limited, I apprentices were employed in our postal district, and have no doubt, in your case, David, but what about the answer we got back was appalling. They said there the others? Has it been supportive in your quest for were 1,500; 97 of them were employed by my 1,000 apprenticeships, Alan? company. So, as a base, how many apprentices are cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG03 Source: /MILES/PKU/INPUT/021099/021099_o003_th_BISC 13 03 12 CORRECTED.xml
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13 March 2012 Peter Mawson, Paul Southworth, David Rolton, Milan Shah, Alan Ainsworth and John Harley there employed in any given area and what is your remit but somebody has to do it, because, looking action plan around it? I think the whole thought back at things two years on, those same problems are process has to change. still there. If I go back and talk to employers, as I have been over Q289 Chair: Just before we go on, did you write the last couple of years, in terms of what they have back to them and tell them that that was a concern? picked up on apprenticeships, the National John Harley: I did not engage with them, Mr Bailey, Apprenticeship Service has done a sterling job in at all. I sit on the board of the BID; one of the board terms of promoting awareness. As a market campaign, members was given the task to engage, and that was it has been superb. Whether it is value for money is a the feedback we got: that it was a hopeless situation. separate issue; I do not know what it costs, but I We employed the local university and college to would be interested, as a taxpayer. In terms of undertake an engagement with the employees, and the marketing and raising awareness, excellent; in terms feedback they got was patchy. As a group of of actually brokering apprenticeships, I do not know. businesses, we have decided to do it ourselves. After You would have to go a lot further and you would six months, we are now employing 38 apprentices in have to look at your performance metrics. 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 Q291 Mr Ward: I think I ought to move on now, instance. which is a shame, because that is really interesting, but this is also interesting. I am really interested in Q290 Mr Ward: I think it was Paul next. this one, which is, I think, Peter’s, to do with Paul Southworth: Just to add to what John has said, construction. I have this document, which I am going the reality we have here is an enormous mismatch, to nick and take back to Bradford, which is to do with because, as the local LEP, we are very heavily this wonderful scheme called Construction Futures. I engaged with the private sector. For instance, we have am really interested in this and how you do it, and most of the major companies represented on our particularly how you can make it contractually board; and, of course, through our Ambassador binding, as someone who has tried to get local jobs Programme, we link with the majority of the SMEs for local people from development schemes. Is this through the county. What we are hearing from the legal? Is there not some European law that is stopping employers is the jobs are there. On the other side of us doing this? the coin, we have 4,500 unemployed people between Peter Mawson: I am sure it is legal, and let the record the ages of 18 and 24, so something is wrong. The show that I said that it is entirely legal! For those who reality is exactly as John has just outlined: the are not as familiar as perhaps you are, Construction employers tell us over and over again that those Futures is about using the planning system and coming out of the schools—not necessarily further Section 106-contracted relationships between education, but those who do not want to go into developer and planning authority to establish the skills further education—are applying for jobs for which for people, and the training, placement and they do not have the skills. There is a tremendous apprenticeships, as a direct result of approving the mismatch between what is being taught and there is planning for a particular development with a national no linkage between secondary level, let alone further house builder or logistics or whatever. This is about education and the employers. Until we get that linkage apprenticeships into the construction industry. It uses together, we are not going to solve this problem. a very small contribution from the Section 106 monies Milan Shah: Following on from Paul’s comments, if that would come from the approval of a development you take Northamptonshire as a microcosm of the to set a system up. It requires developers to commit to country and the issues facing the country, it is quite a certain level of either apprenticeships or placements instructive. In anticipation of its setting-up, we invited within a scheme. I think perhaps the Committee in a representative of the National Apprenticeship knows that the construction industry is a particularly Service in March 2010 to present to the precursor to difficult area to get apprenticeships established. 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 Q292 Mr Ward: I understand that. to bring all the partners around the table to ensure that Peter Mawson: First into recession, last out of we could deliver the goods on the ground. recession; skills drain away from that particular What came out of that discussion was that, essentially, sector; and it is populated by many small sub- it was there to promote apprenticeships. There were contracted arrangements and, therefore, it is very four senior board members of Northamptonshire difficult to embed apprenticeships within that Enterprise sitting at that table and we pointed out, environment. What, with partners, we have designed “What about the schools? Will the schools instil the is a modelling system that allows us to work with employability into the individuals coming out so that major developers to establish what the training, we can take them on, as employers? What about the placement and apprenticeship opportunities might be schools in terms of directing people towards this type in a long-term development, and have them contract of training rather than A-levels and other routes that and commit to deliver apprenticeships over time. If might or might not be appropriate?” The they then choose to pass that on into the sub-contract Apprenticeship Service was quite clear and said, market, they can do that, so long as the “That is not our remit”. I appreciate that it is not their apprenticeships are monitored and maintained. cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG03 Source: /MILES/PKU/INPUT/021099/021099_o003_th_BISC 13 03 12 CORRECTED.xml
Ev 50 Business, Innovation and Skills Committee: Evidence
13 March 2012 Peter Mawson, Paul Southworth, David Rolton, Milan Shah, Alan Ainsworth and John Harley
Q293 Mr Ward: What if the applicant is not a it is the key to getting them engaged. A lot of young developer? people can only see what is in front of them rather Peter Mawson: If it were a contractor direct, or if it than some academic goal. Engineering itself in the UK were a local authority, public-sector body or whatever, is grossly undervalued, generally, and is increasingly the same would apply. That contractual obligation having to raise its skill set, because that is what we then, effectively, runs with the land with the planning are good at. We are good at the clever stuff and, when permission, so it is enshrined within the approval. it comes to making it, we seem to drift away. The issue I have is with the word “apprenticeship”, Q294 Mr Ward: Is it legal? actually, because the definition of it is to learn a trade Peter Mawson: Absolutely. Also, just to add to the from a skilled employer for a low wage for a fixed earlier question, we will have brokered the placement period. That is really inspiring to a young person. We of 20 apprentices over the last 18 months. That is a need to do something about that, and what the relatively small number compared to that we have engineering industry really needs—the Cosworths of been hearing about, but it is a very difficult sector. the world etc—is to give people a really fantastic idea of what is in front of them: an open goal way beyond Q295 Mr Ward: In fact, I think it was Jim in the anything that an apprenticeship, in that definition, previous session, from the county council, who was might produce. And the opportunity to— talking about being able to incorporate this also into procurement, which, again, is a fascinating area in Q297 Chair: Can I just interrupt you there? We have terms of providing incentives for creating had this debate about apprenticeships being a good apprenticeships on the back of council contracts. brand, and what you are actually saying— Peter Mawson: If I may add to that, the example that David Rolton: It is rubbish. Cllr Harker used was another construction procurement programme, but of course it does not Q298 Chair:—is that this may be the received have to be construction-related. It could be the wisdom but, actually, from a young person’s procurement of an ICT contract or social care or perspective, it is not. whatever it may be. Wherever the public sector is David Rolton: It is 19th century in a 21st-century procuring, there could be an embedded policy to world to me, but that is one opinion. I am just one require the provision of apprenticeships within that opinion. particular programme. I think the critical point is to work in partnership, be it with the developer or the Q299 Chair: It is a very interesting opinion. service provider, to establish what, truly, is the right David Rolton: I think, if you are a young person, you level of apprenticeships within a particular want get in the open goal on engineering. You could programme of delivery. This can become very be the MD of a Cosworth, not somebody just aspirational very quickly. operating a turning machine or something like that. I think what we have established in Construction Your skills level will change as an engineer probably Futures is that we can work very closely with, in our four or five times in your career—it has already case, major developers to establish precisely what the changed four times for me—and the skills that right level of apprenticeship and placement might be. probably you came out of university with 40 years We will have brokered the delivery, with partners, of ago, as I did, are not the skills you now need. They some 2,000 training weeks over the course of that need to be much higher to get employment, because, period and, as I say, the 20 apprenticeships or as I said earlier, in terms of the mundane ones, we whatever. It is about establishing, with the developer have taught the rest of the world and they do it more or the provider—whatever it is—truly what can be cheaply. We need to be right up there, and the word borne by that particular market. “apprenticeship”, to me, is just not cutting it. It does Chair: Can we move on? We are falling a little not cut it for me and I would not use it with young behind time. people.
Q296 Rebecca Harris: This might be going slightly Q300 Chair: Could I just ask: do any others on the back to the interesting conversation we had earlier on panel agree with that? here, but the success of the apprenticeships scheme Paul Southworth: To a degree, I agree with it. The really is probably that it is up-skilling our workforce, reason for that is that what we are seeing, in talking, giving employees the skills they need to get on in life, again, to employers, is that there is, whether we like and matching, therefore, of course, with the needs of it or not, a perceived negativity between youngsters business better. The Forum of Private Business has and, more importantly, their parents to the whole told us that apprenticeship frameworks should be aspect of apprenticeships. We hear it all the time. The more flexible for firms’ needs and, therefore, there is perception is that apprenticeships are lower skilled, a difficulty there to make sure we get the balance for cheap labour. I am not saying that is the fact—we the Government between the flexibility that the firms know that is not the fact—but that is how they are want and the quality we need. It was really just what perceived. What we have started to do through the you thought about how we ensure we get that LEP is, would you believe, parent counselling on balance right. apprenticeships. We have started to have forum David Rolton: Good afternoon. I would like to start groups, where we are talking to parents to get their by echoing Jim and the word “inspiration” earlier on opinions and find out what they would like to see. with young people. Particularly in engineering, I think In fact, what we have now produced is a guide to cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG03 Source: /MILES/PKU/INPUT/021099/021099_o003_th_BISC 13 03 12 CORRECTED.xml
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13 March 2012 Peter Mawson, Paul Southworth, David Rolton, Milan Shah, Alan Ainsworth and John Harley apprenticeships that we have started to put out around David Rolton: Sorry, there is a definite requirement the county to try to change that perception, but we do for higher-level skills, and the higher the better. have to change it. Q304 Rebecca Harris: There was a suggestion Q301 Julie Elliott: I am quite interested in your view slightly earlier on, I think from Professor Petford, on apprenticeships: that you say you have to sell it to perhaps, which was that, sometimes, employers are parents. Is this perception that you are talking about, not actually helping with apprenticeships in terms of which I think is different to my experience, around the giving them skills that the employee will need to take good-quality four-to-five-year apprenticeship schemes them forward in life, but just make sure they have the that can lead to higher qualifications, or is it around skills that are useful just for that job alone, and are some of the things that are termed “apprenticeships” holding people back. Do you think that happens? and can be as little as a 14-week training programme? David Rolton: I think it is almost back to front. You Paul Southworth: I think it is probably the latter, if I have academia looking down at the employer. You am honest. have to start with the job, actually. Start there—start Milan Shah: There is a market for skills—employers with somebody who is employed. The employer wants demand skills. Whether or not we badge it with the to improve the lot for himself and for his employee, term “apprenticeships”, the training will go on to the like we did 20 years ago, with, as I said, night school, extent that there is a demand for it and to the extent day release and so on. It goes on. If you can inspire the employer can recoup value from it. those young people and make them interested in your I would like to introduce two points: firstly, it seems business, they do tend to stay. You do run the risk of there is a risk that the word “apprenticeship”—and the employment laws of the UK and of poaching. nobody has a monopoly, Lord Sugar included, over And, somewhere down the track, they will probably the word “apprenticeship”—is a contaminated brand leave you. All you can do is try to be in front of them both to the individual employee, or potential in terms of how you are pulling them into the next employee or apprentice, and to the employer. The only bracket. It is a delicate balance for an SME. It is okay people who understand it clearly, in my estimation, for a company that has 50 or 60 people, but for people are the providers of the training. I think the learning with only five, it is very difficult. providers are very clear on what apprenticeships are. The further point I would like to make is that, again, Q305 Mr Binley: I am very supportive of very high- in a very straightforward market, the employer would level skills, but I am equally concerned about the poor train the employee. Within our firm, I asked my quality of very low-level skills, quite frankly. We have management team what their experience of not talked about that at all today, yet so many of the apprenticeships was, and they said, “Normally, people jobs out there that our own people are not taking lie come to us and say, ‘Can you pay for this training?’” within that bracket. If I may say, in my own company, and there is a form they fill out and it is part of their we gather information to make databases for business- training needs analysis. If the training is for something to-business publishing companies. It simply needs that is above and beyond what they need to do their somebody to gather information on the telephone and job—somebody recently came and wanted to qualify record it sensibly onto a computer. We do a simple as an accountant—that moves them into the realm of spelling test of 10 words—middle-range words like transferable skills and of poachability discussions that “business”, “supervisor” and “asset”—and the number some employers often have. That is absolutely fine: of people who do not get two of them is amazing. we will still pay for it, we might split the cost with This is still a real problem. Do you come across that them or we might pay for it and they take some day problem and are you specifically doing anything to release. These are old-fashioned terms but this is how help change that situation? Does anybody want to it works. have a go? The point is: if there is some economic value in that Paul Southworth: Again, from the LEP point of view, transaction, it is split between the people who will what we have now set up, in fact, is a skills strategic benefit: employer and employee. Does the board, where we are particularly focusing on a cross- Government have a role within that? That is a section of SMEs as well as training providers to link question that has to be asked. the two together and create a strategy that will help that particular situation. Q302 Rebecca Harris: Interestingly, when I was in business, I found that giving my staff transferable Q306 Mr Binley: Is there a real problem here among skills helped with retention, because they felt they those people who make up the majority of that group should stay, rather than— called NEETs, or am I wrong—am I missing the Milan Shah: I would fully agree. point? Paul Southworth: No, it is a big problem. Q303 Rebecca Harris: That might be something that some businesses may need persuading a little bit on. Q307 Mr Binley: Can I ask Alan to come in on this? You have probably answered, to some extent, my You are widening your spectrum. second question, which is how we should balance the Alan Ainsworth: We are widening our spectrum. To Government’s desire to up-skill the whole UK build on the previous conversation, what is the workforce on occasions when, actually, there is no problem we are trying to fix here? The problem that demand for higher skills from employers, particularly we would like to contribute towards fixing is the at the moment, given the economic crisis— million people who are young and not in education, cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG03 Source: /MILES/PKU/INPUT/021099/021099_o003_th_BISC 13 03 12 CORRECTED.xml
Ev 52 Business, Innovation and Skills Committee: Evidence
13 March 2012 Peter Mawson, Paul Southworth, David Rolton, Milan Shah, Alan Ainsworth and John Harley employment or training. How we can get them that I was talking about earlier, say there was a prospects and make them employable? We think that national presumption within planning policy that this the apprenticeship programme that we are developing model that we have described does work—and clearly will do a lot of that. We anticipate—we have not it does. Having that central acceptance supported by started it—that many of those people will need a lot local policy acceptance and adoption, looking at the of pre-employment training. Our programme will local markets that we operate within—and most of provide, following some assessments, around four the narrow construction sector is very much locally weeks of pre-employment training to get people up to oriented—and identifying the local needs and tuning a level. We also anticipate that a lot of training will the requirements of the marketplace to the provision be required on the job and, of course, in the City & in academia is a fundamental issue in terms of getting Guilds and the BTEC that we will provide as part of that alignment correct. I think we heard earlier that the 12 months of training. That is a much greater level there is some disconnect. Certainly we identify, of training than we would anticipate with someone outside of the providers that we work with, when we coming in with five GCSEs or above. Our hope and have tried to take the model into other areas, that there our expectation is that we will provide aspiration and is a serious disconnect between the academic hope for a lot of people, and not only will we providers and that which is required in their necessarily recruit the thousand people who we are marketplace. The KPIs, that they operate to, seem also hoping to recruit to Barclays, but perhaps by adding not to deliver the right outcomes, generally, for the our brand to this there will be other people attracted young people. to this who may not get to Barclays but may go elsewhere. Q310 Chair: Does anybody else wish to add to that? Paul Southworth: Just a very brief one, and that is to Q308 Chair: Can we just pick up the discussion that say that you mentioned the word “quality” and we we had earlier on the quality of apprenticeships? The heard before the word “flexibility”. I think the quality Government is obviously aware of, if you like, the of apprenticeships is going to relate to the sectors potential contamination of the brand. In November themselves and, therefore, what we saw as an example last year, it announced a range of measures designed in Church’s this morning is that they have had to go to improve the quality of apprenticeships. From your it alone because they have developed their own perspective, what do you think are the things the apprenticeships. That is a quality apprenticeship. Government should be doing to improve the quality? Again, coming back to the earlier discussion from the Can I rephrase that, since it has obviously caused a earlier panel, if the funding goes to the employers to degree of consternation? If you can take a leap in develop their own specific apprentice scheme related imagination to think of yourselves as knowing this to their sector, I think the quality will automatically problem and being in the Government, what would be rise. the essential elements that you would put to ensure Milan Shah: Just very briefly, there are two concepts that apprenticeships were quality and delivered what of quality: one is minimum standards, and that is they were intended to do? something I am very familiar with from chairing the John Harley: Could I offer an opinion? council at the university. We have minimum standards Chair: We have a competition now—yes. in HE. That is a form of quality. The other is fitness John Harley: I have no idea as to how the places of for purpose. My particular view is you have to have learning are funded. I have a perception, but not based some system of safeguarding minimum standards but, on your information. However, it is about determining beyond that, much as Mr Southworth is saying, I think what is required in the workplace. For instance, we the funding should flow in the right direction. If the are living in an age of technology, and I think the funding were to flow, as it is about to do in HE, local places of learning should offer more technical through the student—in this case, the apprentice—or training courses. We have heard about engineers and from the employer, which is the Employer Ownership what have you, which is important. If I look at my of Skills pilot you alluded to earlier, normally it is the business, at the number of young people who are case that fitness for purpose is more likely to occur in taught usable skills around IT compared with the a market where the funding is flowing from the people number of hairdressers, or, as I alluded to earlier, at who are buying the service or the good. the fact that we employ in this county thousands and thousands of people in the logistics industry, I wonder Q311 Chair: The interesting thing about the where are the young people coming in with those Church’s example was that we have Sector Skills skills when the local places of learning are not running Councils, in effect, designing frameworks for courses for them? I think the Government are apprenticeships, and we have bodies to monitor that responsible for ensuring that the training—vocational those frameworks are of the appropriate quality. Yet, or otherwise—fits the requirement of the community. you have a company like Church’s, which is delivering what, by any normal interpretation, would Q309 Chair: I saw somebody else indicate earlier— be a very in-depth apprenticeship over a long period was it Peter? of time, but very specific in its skill set, which does Peter Mawson: If I may come back to the not seem to have any accreditation or qualify for any construction example, I think there is a danger of Government funding. On the other hand, we seem to centrally imposed policy and position on this because, have a whole lot of short-term apprenticeships in to reiterate what has been said, it is about local certain areas that seem to attract large amounts of circumstances in local markets. Following the trend Government funding. That brings me on to my next cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG03 Source: /MILES/PKU/INPUT/021099/021099_o003_th_BISC 13 03 12 CORRECTED.xml
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13 March 2012 Peter Mawson, Paul Southworth, David Rolton, Milan Shah, Alan Ainsworth and John Harley question, which was, if you like, the short courses really featured. The reason we are doing this is issue and the potential damage to the brand that it because we think it is a good thing to do and the does. Have you, as panellists, any experience of this? right thing to do to try to find ways to get people who David Rolton: Excuse me, Mr Bailey, could I just go currently have no realistic job opportunities in the back to the funding? Would you permit me, just for financial services sector to have those. a second? Chair: Yes. Q316 Julie Elliott: I would like to ask a question, David Rolton: For the SMEs, if you are a small Alan, about your scheme because I think it is quite an company you perhaps have one or two young people interesting scheme. It has caught the attention of the who you are taking on to train. Could that funding be media because it is quite a big thing that you are directed at some sort of relief from the risk of offering. There are a couple of things I would like to employment? If you are taking these people on—and know about it. You are, obviously, targeting it at a you are taking only a couple on—the chances of group of people who are not particularly engaged with perhaps not landing the right person or the right any of the employment processes in place at the attitude can be quite high. With the laws of moment, so how will you recruit the people to come employment in the UK, that is quite a deterrent to an on to your scheme? What criteria are you going to SME. That is a severe risk, where he has perhaps two use? At the end of it, if they successfully complete people out of six in his organisation. Rather than whatever your scheme is going to offer, will they have direct funding—money just given to him—is there any qualifications? Will they have an offer of a some way the funding could be directed to some form permanent job? Are you paying them a rate for the of relief? job while they are doing the scheme? Alan Ainsworth: I guess there are three questions Q312 Chair: Sorry, I am not quite clear what you there. I will try to deconstruct them. In terms of how mean by “relief”. we are going to find those individuals, that has always David Rolton: I mean relief from employment been the tricky thing for companies such as us, legislation. because, at the moment, or prior to developing this scheme, we do not have the capability of attracting Q313 Chair: Yes. I think that is an area that is people who are difficult to reach. It stands to reason. certainly worth developing. I am not quite sure that it We are working with a third-party company called is totally within the compass of this Committee, but Elmfield, which has the tentacles out there to speak to yes, I am sure your comments have been noted. Jobcentre Plus and various other agencies. Part of this David Rolton: Thank you. is about finding constructive ways to tap into the broader market that is out there. Clearly, that is Q314 Chair: Did somebody else wish to come in? difficult and it is why we are calling this a pilot. We Peter Mawson: Only to add that I think, within do not yet know how we are going to do it but we Construction Futures, we draw a very clear distinction have come up with quite a number of different routes, regarding work-based placement and experience that including the partner that we are working with. run alongside academic courses, which could be for In terms of the second question around qualifications, 14, 18, 25, or 40 weeks—whatever they may be. We the qualification will be a BTEC in Providing see those as entirely distinct from apprenticeships that Financial Services. We will also provide City & tend, within the construction industry, to still adopt a Guilds around literacy and numeracy. Clearly, through traditional line. I think the devaluation of the brand, the year of working with Barclays, whether in a if it were to occur in the construction industry, would branch, a contact centre or a processing centre, we be because we had moved away from that assumption hope those people will develop other skills as well. that apprenticeships are lengthy blends of academic We anticipate about 30% of the time the person is and on-the-job training that, ultimately, do take a long there to be spent on development, whether on a course time to secure the qualification. or doing something in-house in terms of learning. We hope and believe that the frame that we have Q315 Simon Kirby: I think the question has already developed alongside the apprenticeship scheme will been answered but I will just summarise what I think give people something that will enable them to your position is, and you can disagree with me: develop a career within Barclays—and that is what we apprenticeships should be more employer-led rather would love to happen—but, if they cannot, they have than training-provider-led and you broadly welcome something transferable and portable into the world of Government money being made available so that work more broadly. businesses can be in the driving seat. Have I got it In terms of pay, while they are on the scheme they right? will earn the same amount as somebody who is not Paul Southworth: I think some pump-priming of the on the scheme, so they will be recruited into entry- initiative would get the private sector more involved level positions on that pay for the grade. At the end than they currently are. of the year, provided those individuals pass the Alan Ainsworth: From the Barclays perspective, I performance assessment criteria that everyone else has think we are probably in a different position to SMEs, to pass, and they pass the qualifications, they will be in that the reason we have done this is not anything offered full-time employment within Barclays. really to do with Government funding. This will cost us significantly more as an enterprise than anything Q317 Julie Elliott: The Department has told us that we would get back from Government, but that has not they are going to prioritise investment around cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG03 Source: /MILES/PKU/INPUT/021099/021099_o003_th_BISC 13 03 12 CORRECTED.xml
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13 March 2012 Peter Mawson, Paul Southworth, David Rolton, Milan Shah, Alan Ainsworth and John Harley apprenticeships to where it is going to get the best so I fully agree with the priorities at the moment but results—where the returns are going to be greatest, in I would like to see a sunset clause in that. effect. Where do you think that is going to be? Is it going to be around age groups or sectors? What is Q319 Margot James: Does anyone else have a your general view on where you think that is going view? to be? David Rolton: To me, you could almost define it by Milan Shah: I think it depends, quite critically, on saying, “Don’t finance the training of jobs that will be what the primary purpose of this apprenticeship displaced by technology in the future”. programme is. It is a flagship scheme for the coalition. In the short run, we have a million in terms of youth Q320 Mr Binley: How do you know which jobs they unemployment. That is a serious issue that needs to will be? be tackled. I can see that a lot of the headline-grabbing David Rolton: That would be wonderful. initiatives are focusing on that. Some of them, Mr Binley: Where are you going to get your actually, run counter to what might be a long-run dustmen from? sustainable solution to our real issue as the UK, which Chair: Could I just say we could probably have a is supply-side constraints on skills. It hampers our much wider debate than specifically we require today, long-term growth capacity. Those are two totally notwithstanding that it is a very interesting subject. different issues and I think we are mixing up the two in apprenticeships. Q321 Margot James: I think Mr Mawson wants to I will give you a concrete example: if I wanted to come in. push more people through apprenticeships, I would Peter Mawson: Only a very brief comment, just to not be targeting SMEs at this particular time, and I say that I do not think funding is the entirety of the would not be going for diversity of sector, because solution. I would not want us to leave here with that they are hard to reach. As Dr Adam Marshall of the presumption that, if one pours more money into the British Chambers of Commerce said, go for the problem, the problem will go away. I think it is much 100Ð249 employers; they are the most likely to give more deeply seated than that and more broadly based you the short-term boost in apprenticeships, if that is than that. what we are after. There obviously has to be some growth in aggregate demand in the economy to pull Q322 Margot James: Can I direct your attention to them through, but that is where you are more likely the 25-year-old-plus group? A large proportion of the to get it. Equally, if a business has already put in place apprenticeship growth has come from people over the the infrastructure and has had the experience of age of 25. What is your experience of the over-25s? running an apprenticeship scheme, you are more Milan Shah: Not my experience, but my observation likely to get them to take a second, third or fourth is that some form of continuing professional person than going to a fresh business and trying to set development—or lifelong learning, as we used to call up the infrastructure from scratch. it—is going to occur; whether or not it should be In the short run, if what we are trying to do is to tackle badged as an apprenticeship, I do not know. I was the issue of youth unemployment, which is a serious quite astounded by the eight-fold growth in the over- 60s applying for apprenticeships. I thought that was issue for us to tackle not only as a society but as an absolutely astounding. I do not know what it tells us. I economy, those are the sorts of tactics that we need to would not close the door on older members of society deploy. The long-term strategy, in my opinion, in retraining through apprenticeships. I think it is going terms of apprenticeships has to be geared to what the to be critical to the flexibility of the UK labour market Germans and others around the world are doing, in the long run. which is to tackle our supply-side constraints as an economy. Q323 Margot James: Does everybody agree with that? Can I just ask you: should we be concerned Q318 Margot James: The current funding about some companies? We had the example of framework provides for apprentices aged 16 to 18 to Morrisons given us by another witness, telling us that get 100% funding and older apprentices—19 to 24— 85% of apprenticeships at that company are performed just 50%. Do you think that is about right, or do you by members of the existing workforce. Do you have have a different view? any issues with that? Milan Shah: If I just briefly repeat what I said earlier, David Rolton: It is back to who you know. in my sector—the food industry—we rarely are going to be tapping into the market at under-18. It is less Q324 Margot James: Or who you work for, I than 2% of our workforce in the food industry—and suppose. remember that we, the food and drink sector, are the David Rolton: I think, from the perspective of an largest employer in the manufacturing sector. The SME, you have the employment risk—I keep talking second argument I would again repeat briefly is that about it. If you know somebody, you have a better people are going to retrain within their careers, so we degree of security, so it is inevitable, I guess. really should not be ageist about this. That is the long- Milan Shah: If I could use the word “substitution”, term issue and, if I were designing a scheme for the whenever public funding flows it is very difficult to long term, I would not design it as we have now. The disaggregate or look at causality issues. We have had short-term issue is that we need to tackle the lost lots of experience of it; for example, the generation of youngsters that we face at the moment, Northamptonshire Enterprise Partnership deploys cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG03 Source: /MILES/PKU/INPUT/021099/021099_o003_th_BISC 13 03 12 CORRECTED.xml
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13 March 2012 Peter Mawson, Paul Southworth, David Rolton, Milan Shah, Alan Ainsworth and John Harley public funds. We are very careful to make sure there unemployed, and a skills and employability is some additionality and not some substitution. requirement for them. We have the up-skilling of the Alan Ainsworth: This scheme that we are developing existing labour force, and then we have the issue that, is not available to existing Barclays employees so, for I think, historically we would have called us, it will not happen. “apprenticeships”. That is the issue of fairly long- Margot James: Thank you. That is interesting. term, high-quality training, specifically or especially in the manufacturing sector to broaden our Q325 Mr Ward: Alan, would you employ those manufacturing capacity. people if they were not apprentices? At the moment, we have an all-embracing Alan Ainsworth: That is a great question. I would apprenticeship scheme of delivery that seems to be doubt it. The point of this is to try to access a market delivering huge numbers in the one area of post-24 that we currently do not tap into. up-skilling, some progress in the lower area and, again, some progress but with great difficulty in terms Q326 Mr Binley: If I may, Mr Chairman, is it also of improving apprenticeships for manufacturing and about ensuring that they stay the course on the basis broadening our skills base in that area. Would that be that, in order to succeed, they need to stay the course? a reasonable summary? Is there anything that you, as I am thinking about the remedial bit again and representatives of providers and so on, would say is providing the level of skills that you would normally incorrect or would like to add to? expect to exist within the people you are taking on at John Harley: May I just say that there is a part that the moment. Do you need a longer period of time and Government has to play in it and there is a part that do you need to keep them there? the media has to play in it, as well as companies and Alan Ainsworth: We do not know all the answers yet. society as a whole? There are an awful lot of talented This is a pilot programme that we have not begun. young people in the United Kingdom but all we seem One of the reasons for doing this is, as I said, we want to talk about is a lack of skills. They are talented, they to tap into a group of people who we think have the need to be given the opportunity and they will rise to right attitude and aptitude but not necessarily the the challenge. Our nation has fabulous, young, academic qualifications. We always have challenges talented people who need to be given an opportunity to keep good-quality people in every role that we rather than keep talking about the lack of skills, the have, and it may be that, by investing a lot in this lack of desire from employers and where the funding group of people, we might get better levels of has to go to. It is about time that we started talking retention. We do not know that yet. about this talent and how we are going to get it mobilised. Q327 Mr Ward: Just to try to sum up all this, I am Milan Shah: Very briefly, our university here within not so bothered about Barclays because I think this county—the University of Northampton—was Barclays will be all right. If we begin with the end in number one last year for value added. It is not really mind, the end we want is growth in manufacturing, where you start from; it is where you end up in life. engineering and construction. We want growth in that That is something that we used to tell our students— part of the economy. How much are apprenticeships in fact, at graduation last year. I think the same applies the answer to that problem? if you are not at university. Paul Southworth: I think, from our point of view, Chair: Can I thank the panel and finish on that more being very parochial now, that challenge is upon us. upbeat note than perhaps we have had through all the We now have the Enterprise Zone. We are targeting deliberations? Just to make the general point, yes, I ourselves to try to attract about 400 companies into agree entirely. I am often amazed at the sheer drive, that zone. The emphasis of the zone will be on high- enthusiasm and potential aspiration of our young performance technologies, which automatically means people. The issue really is how we, as a Government, that our need for apprenticeships over the next five to through the agencies that we create to deliver the 10 years is going to be absolutely huge, so we have funding for them, can maximise their potential. Part to be focused on it. of the object of this particular exercise is to try to David Rolton: I think it is one of a number of hurdles make recommendations so that the enormous to manufacturing. resources that are put into this are used to maximum effect on behalf of young people. I thank you very Q328 Chair: Can I thank you? I am just trying to, if much for all your contributions today, and they will you like, summarise the issues which I think have of course be incorporated in our final Committee arisen from the comments that we have had. We recommendations. I might also add that, if, in undoubtedly have an overall skills shortage and we retrospect, you think there is an answer that you have, if you like, an employment profile that is going would like to have given to a question that we to require a higher level of skills across the board and neglected to pose to you, do feel free to write to us in proportion to the total skills base that we have at and we will be very happy to incorporate that as well. the moment. We have several areas that stand out: first Thanks very much. of all, there are the 1 million NEETs and young people cobber Pack: U PL: COE1 [SE] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG04 Source: /MILES/PKU/INPUT/021099/021099_o004_th_BISC 27 03 12 CORRECTED.xml
Ev 56 Business, Innovation and Skills Committee: Evidence
Tuesday 27 March 2012
Members present: Mr Adrian Bailey (Chair)
Mr Brian Binley Rebecca Harris Paul Blomfield Margot James Katy Clark Simon Kirby Julie Elliott Ann McKechin ______
Examination of Witnesses
Witnesses: Stephen Uden, Head of Skills and Economic Affairs, Microsoft UK, Ray Wilson, Director and General Manager, Carillion Training Services, Justin Owens, Human Resources Manager, Robinson Brothers Ltd, and Alex Khan, Managing Director, Education and Training, Babcock International Group, gave evidence.
Q329 Chair: Good morning and welcome to our equivalent; otherwise we find it hard to recruit people Select Committee hearing. Thank you for agreeing to on to our programmes because we have to spend a lot be our witnesses. Obviously we have a number of of time explaining to young people and their parents questions; do not all feel obliged to answer every what the difference is between them. question. If somebody says something and you do not wish to either disagree or add to it, do not feel obliged Q331 Chair: That is interesting. Does anyone else to contribute. Some questions will be specific to a wish to add to or subtract from that particular point? particular person, so obviously we will need a Alex Khan: I agree with virtually all the comments response then. made. I think the brand of apprenticeships is Just for voice transcription purposes, could you absolutely critically important. Apprenticeships are a introduce yourselves? work-based, competency-based programme. The bit Alex Khan: I am Alex Khan. I am the Managing that I keep coming back to when I look at Director of Babcock’s Education and Training apprenticeships is around the framework and the business. content of what they are made up from, which is Justin Owens: Good morning, I am Justin Owens. I driven by employers and industry. I think that is, am the HR Manager of Robinson Brothers Ltd in the critically, the important part of the apprenticeship West Midlands, chemical manufacturer. programme. The brand is obviously very important, Stephen Uden: Good morning, I am Stephen Uden but getting the skills and the qualifications that make and I am Head of Skills for Microsoft UK. up an apprenticeship is probably as important because Ray Wilson: Good morning, my name is Ray Wilson that is where the credibility comes. and I am Director and General Manager for Carillion Training Services. Q332 Chair: If I could just summarise Mr Uden’s point as I understand it, you are saying it needs to be Q330 Chair: Thanks. I am not sure if I need to strong in order to ensure that it becomes an effective declare it, but Robinson Brothers is in my alternative educational route to, if you like, academic constituency and I have made a number of visits to degree attainment, and that types of apprenticeships the company, so a special welcome. Can I start with a ought to be slightly rebranded to distinguish between fairly general question? There has been a lot of debate them. Is that a fair summary of what you were saying? about the Government proposals and the different Stephen Uden: It is. It is not so much rebranding, variety of apprenticeship schemes actually potentially because they are already branded as that. It is just the weakening the apprenticeship brand. How important emphasis on that. Absolutely—that is quite correct. do you think it is that the apprenticeship brand remains strong? Who would like to lead on that? Justin Owens: I would agree with Stephen there. The Stephen Uden: I am happy to. For us, it is very level 2 should be called a foundation apprenticeship, important. We are taking on apprenticeships that are and then above level 3 should be an advanced; level 3, level 4—higher apprenticeships—and we are otherwise, as you say, it does devalue the trying to persuade people who would otherwise maybe apprenticeship. go to university that an apprenticeship is a good option for them, and I think that is really important. Q333 Chair: My next question is specifically to Ray We have absolutely no issue with the fact that Wilson from Carillion. No relative of the former apprenticeships cover a broad range of programmes; footballer? in fact, that is their strength. But there is a challenge Ray Wilson: No, unfortunately not, but a great servant that you are putting under the same brand everything to his country. from a short-term level 2 apprenticeship for an existing worker up to very high level Q334 Chair: Yes. Interestingly, you place a number apprenticeships—say, level 6. We would certainly like of your apprentices in smaller firms in your supply to see more focus given to the word that goes before chain. Given that a lot of firms use the fact they will apprenticeship—advanced apprenticeship, higher be poached by other companies as an excuse for not apprenticeship—so it is clear that these are not all having apprentices, yours seems a very altruistic cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG04 Source: /MILES/PKU/INPUT/021099/021099_o004_th_BISC 27 03 12 CORRECTED.xml
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27 March 2012 Stephen Uden, Ray Wilson, Justin Owens and Alex Khan approach. What are the benefits to your company of examples where we have developed into further from this? collaborative models. For example, in Glasgow we Ray Wilson: There are absolutely huge benefits. have partnered with a company called Tigers and we Primarily this is about us as an organisation have shared that, so we do the employment and they supporting young people into training with the do the training. Working together we are able to relevant skills for the industry. That then supports the provide the same service. supply chain in that industry, which then goes on to support us within Carillion itself. These young Q337 Chair: I was particularly interested in your people—young people on an apprenticeship basis; comment that you place. Do you actually determine those are the majority of people that we employ—are which part of your supply chain a qualified apprentice often leaving school looking to forge a career, goes to subsequently, or is it basically left up to their sometimes perhaps not quite understanding where individual preference and the demands of the supply they want to be and it can be a “light on” moment chain? for them. For me, it is vital for them to be given the Ray Wilson: In the main, we will place them with a opportunity to develop the skills that are relevant for relevant work experience provider that will provide our industry in a framework and a brand of for them at that time the training that they need or apprenticeship that they and employers can trust. So the experience they need on that particular element of it is very important for those young people. work-based learning; 90% of the time it is done on In Carillion, we have a huge sustainability policy. We where we place them. In some instances, if a young are very committed to working with our communities. person says, “I am not getting on working with that I feel that working with young people who perhaps particular supply chain company,” we will look to otherwise would be unemployed if we did not give move them somewhere else. But, as our employees, them the opportunity to commence an apprenticeship we will place them where we feel it is most relevant, with us is a very strong message for us to give to our and as long as they agree and are happy with that, it communities about the work we want to do with them, is fine. so that we can become sustainable in employment, offering real opportunities and real jobs for them. Yes, Q338 Chair: What happens once they have there is huge benefit there also. Finally, as an completed their apprenticeship? Do you keep them or organisation, of course, we will benefit through do some of them stay in the supply chain? procurement programmes and others that give benefit Ray Wilson: to Carillion for potentially work-winning. So for a A number of things can happen. First of number of reasons apprenticeships are extremely all, the apprentice may then progress to the next level important to us and we have to have a very strong of apprenticeship with us. Others will then move into brand to support them. work with Carillion and its supply chain or, indeed, the partners we have in addition to that supply chain in the external market, and they will work for those. Q335 Mr Binley: Can I ask a quick supplementary? Approximately 70% of our apprentices who complete Are most of those apprentices put with allied direct will go on and find employment with those labour organisations? You do a lot of resource work organisations. with local government. Are those apprenticeships placed with your allied direct labour operation? Ray Wilson: Absolutely. For example, what we will Q339 Chair: Thanks. Have you come across any do is work with Carillion and its full supply chain to obstacles in doing this? Have there been any place apprentices to give them opportunities. We will problems? rotate them; so they may get a bit of experience, for Ray Wilson: I think I have outlined to you that there example if they are a carpenter, in hanging some doors are a certain number of risks associated with this, in with one organisation, and then they may need some that we take the risks associated with placement roofing experience, which that organisation may not opportunity and employment. The obstacles for us be doing. So we will rotate them through our supply particularly are around the funding. Our starts are chain and other organisations with which we work to predominantly at level 2, and we find the funding for give them a fully rounded experience. Not only does those young people is then separated at level 3. That it give them the technical skills, but experience and creates some issues for not only us but the industry, exposure to other organisations, and I think, therefore, in that the funding is then reduced by half but the their apprenticeship is fully rounded. costs of employment almost double. It is a bit of a double whammy, so for us that becomes a bit of an Q336 Chair: Tangential to this, do you actually obstacle in retaining someone at a very high cost and employ a training provider for some of the skills sometimes being unable, for example, to find them the provision or is it all done with either you or your relevant experience externally in the volumes we supply chain? might need. So it becomes a difficult situation. It is Ray Wilson: No, it is done directly by us, so in fact something I think we manage particularly well, but it we are the training provider and we are the employer. reduces the volume somewhat. For the vast majority of what we do, we recruit, we employ, we train and we place. We take the risk on Q340 Chair: You obviously have a model of training the employment, we take the risk on the training, we that works for you. What have you learnt that you take the risk on the funding and we take the risk on the would pass on to other large companies who might results, so we take all of that risk. We have a couple want to replicate it, or would you prefer not to pass cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG04 Source: /MILES/PKU/INPUT/021099/021099_o004_th_BISC 27 03 12 CORRECTED.xml
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27 March 2012 Stephen Uden, Ray Wilson, Justin Owens and Alex Khan it on because of the competitive advantage you feel coming up to the point where they make the decision you have? on what they are going to do next. Ray Wilson: No, I think it is an absolutely fantastic Ray Wilson: I would echo that point. My experience model. As an employer, we have taken the lead where of the NAS has been pretty reasonable to good. I think a lot of organisations have not. Small and medium- they are a good organisation. However, while their sized enterprises who would dearly love to take an engagement, for example, with employers and large apprentice—those I speak to would love to get training providers is all well and good, I guess we involved in apprenticeships, but find that the funding know what we are doing, and therefore should the drop I have just described is very difficult for them— focus really be for schools and others to promote have found the administration of an apprentice very apprenticeships at that level and also a bit of a deeper difficult in terms of the uncertainty of their workloads dive into the SMEs? and moving from place to place. They desperately Stephen Uden: I certainly agree with that. Given that want to get involved in apprenticeships as SMEs, but they are facilitating the investment of quite a lot of cannot commit to the time and the employment. So, public money in training, the level of administration in effect, we de-risk that on their behalf, and that is and bureaucracy around it is reasonable and why the model is very attractive to them. commensurate. It does present a challenge to smaller If you are going to go into something like this, there organisations, which do not have the specialist people are huge benefits, but you have to manage the to do so, so they need some kind of intermediary programmes particularly well as you are the employer. organisation to sit between them. Whether it is an area Key for you if you are going to look at this is to make training association like Sandwell or, indeed, sure that your model is very clearly understood. That organisations like Microsoft and Carillion who are has been probably the predominant issue for me over doing it on behalf of their supply chains, you need to the past two to three years: getting the Skills Funding have something that stands in the middle. But it would Agency and the National Apprenticeship Service to be dangerous to reduce the amount of paperwork from fully understand the model we operate as both them to too much of a degree. employer in the industry and training provider in the industry. Q343 Paul Blomfield: I wanted to follow up on Mr Wilson’s point about the NAS taking a deeper dive Q341 Margot James: The NAS is responsible for into SMEs, because it is a critical area of our running a dedicated responsive service for both investigation about how we, as you said in your earlier employers and learners. What is your experience of comments, can de-risk the opportunity for SMEs to the NAS? Is it delivering? take on apprentices. Clearly you have developed a model in relation to your sector. Have you any further Justin Owens: Certainly Robinson Brothers have no thoughts about what that deeper dive from the NAS direct experience of the NAS. Very early on when we might look like and how they might de-risk were designing our apprenticeship scheme we decided apprenticeships for SMEs across sectors? to partner with a local training organisation that was Ray Wilson: There is an ideology that employers in close proximity to the site and that had lots of should take apprentices and particularly, if we are advantages for us. going to grow the UK’s economy and grow our skills, that has to start with SMEs. It has to start with Q342 Chair: Can you say which training employers; it has to start with SMEs. That is the organisation that is? foundation of our infrastructure, if you like. It is those Justin Owens: Sandwell Training Association. We organisations that are, of course, most probably risk partnered with them for a variety of reasons: averse in these circumstances because of fluctuations proximity, supply of good-quality apprentices. They of work across the country, and the like. also understood our needs as a company. They took One thing they could clearly do is promote models the time to come into the company, understand our such as ours and support us in doing so, because that processing, the functions required of an apprentice, takes away a lot of the mechanics of managing the and they are able to alter their apprentice training, still interface, but targeting certain areas of that sector will within the framework, to deliver a very relevant be very important for them as well. In terms of apprenticeship with us. de-risking, it is perhaps providing a layer of insurance Alex Khan: Regarding my experience with the NAS, or protection against that, and allowing organisations I am here with two hats on, because we are an such as ours to continue to do this on their behalf, but employer that employs a whole bunch of apprentices, ensuring that they reward us for taking the additional but we are also a training provider, so we train risk. Doing that then enables more organisations, such apprentices for other organisations. As a training as us, as employers within the sector to take a lead provider, I guess I have quite a few interactions with and train on behalf of the sector. the NAS, especially through their vacancy matching service, which they launched a couple of years back. Q344 Paul Blomfield: Did Mr Uden want to come As an employer, I have very little. They have a field in on that point? force team, they are engaged with employers and they Stephen Uden: Yes, only to add to the point. We work are selling the benefit of apprentices to employers. I with 300 of our SMEs and train 1,200 people through have always felt that they could probably do more them. It would be difficult for a Government work with schools and parents in selling the benefit organisation like the NAS, to be frank, to develop the of apprenticeships to young people leaving school or skills and expertise to engage SMEs when, whether it cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG04 Source: /MILES/PKU/INPUT/021099/021099_o004_th_BISC 27 03 12 CORRECTED.xml
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27 March 2012 Stephen Uden, Ray Wilson, Justin Owens and Alex Khan is chambers or training associations or larger take on into Babcock. I have not got the actual companies, there are other organisations that can do it statistics, but I can certainly supply them to you after on their behalf. I see their role as facilitating it. this. When we set up our scheme, we found that initially, Mr Binley: Could you? That would be very helpful. because it was a big company involved, we had to do Justin Owens: Certainly from the SME point of view, a lot of explaining to say, “This is a small company six years ago we struggled to recruit apprentices. We scheme, because they are the people being benefited.” asked for a minimum of grade C in maths and English, But to be honest, I do find them willing to listen and and preferablyaCinscience. We asked for those to get round things, and as a public body, and we deal because obviously, once they have done their level 2, with a number, they have very much a can-do attitude. we want them to progress to level 3 and the Encouraging them to identify and engage technical certificate, and they need to be fairly capable organisations that can act as intermediaries would be academically to do that. We struggled six years ago, a very effective way of reaching SMEs. but now in the last couple of years we have seen more We find that when you listen to SMEs and you deliver apprentices with those qualifications and higher something to them that is valuable and helps them coming out, so it is seen now as a more viable route grow their business, the criticisms I have heard of than previously. SMEs—that they do not want to take on apprentices Alex Khan: The point I would make on that, which I and will not take the risk—are unfounded. The system struggle with a little bit, is that I am noticing that has just not made it easy enough for them to step demand massively outweighs supply. We advertised through the door. 400 vacancies for VW Audi Group and 20,000-odd young people applied. I am sure you have heard Q345 Simon Kirby: You made mention of schools; similar statistics from other organisations around the do you think schools should be doing more to push country. What we are noticing, not necessarily within apprenticeships as clearly an alternative to going to the example I used, is that more and more employers university, certainly at higher levels? Is there a are now starting to state, “We want five GCSEs A to particular problem with the information that schools C,” or whatever it may be. My concern is that if you give about apprenticeships, say, in SMEs? Is there an do not make the grade in school and you want to go image problem from both ends? into an apprenticeship, I am not quite sure where you Ray Wilson: I am not sure I would define it as a would end up. problem. What I would say is I think they can do more. Young people will be influenced very much, Q347 Chair: So, in effect, the threshold for entry is clearly, by schools, but also by their peers and their being raised? parents. Advice and guidance given to young people Alex Khan: If we are not careful, it will be mandated may well, for example, be, “You want to go into by employers that you have to have a particular something more traditional rather than, perhaps, academic attainment level in order to go on an something more modern.” It is the role of schools to apprenticeship programme. Whilst I made the point help give a fuller breadth of available opportunities. that lots of people come on to our programmes that Vocational training routes and advanced do not necessarily have the grades in literacy and apprenticeships are absolutely fantastic and there is numeracy and we have the people in place to train great value in them, but I would like to see the NAS them, and it is difficult and it adds another dynamic and schools in particular really push that hard for to it, I still think it is important that the apprenticeship young people. What I fear is that, particularly in the programmes are open to all. Where employers try to construction sector, perhaps the advice they are mandate such levels, we try to get them not to. getting is not as strong as it could be. Chair: I am conscious of the fact we need to move on. Margot has been waiting, and a model of restraint, Q346 Mr Binley: I was going to raise this a little so I will bring her back in. later, but on this point the evidence we have had so far suggests, first, that there is concern amongst Q348 Margot James: I have only one more question. employers with regard to basic literacy and numeracy For the record, our local FE colleges are having to put skills emanating from our primary and secondary on more and more remedial coaching in English and education structures. Secondly, there is a distorted maths for students who have not just C grades in those view of the world of work that suggests degrees are GCSEs but also B grades, which is quite shocking. the be all and end all if you do not want to work in a How do you measure the success of your dirty factory. How would you see those two apprenticeship programmes? I mean, even if it is gut particular concerns? feel, what to you looks like success with the Alex Khan: When we sign apprentices on to a apprenticeship schemes you run? programme, whether in Babcock itself or with our Ray Wilson: The success of an apprenticeship is, first respective employer partners, we do an initial of all, the attainment of a full framework and, assessment, and invariably the levels of literacy and secondly, moving into employment. If we can achieve numeracy are low and require a lot of support. We had that, it is fantastic. to make the move—we have about 500 field-based On the point about the academic skills requirements, trainers and assessors—to up-skill all those people to I am very concerned by the introduction of Functional be able to deliver literacy and numeracy, because it Skills, particularly in the construction sector, where was a problem that we faced across our learner base. we have seen a commensurate fall in those able to It is a big problem, as it is with the learners that we achieve those levels on leaving school. That will lead cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG04 Source: /MILES/PKU/INPUT/021099/021099_o004_th_BISC 27 03 12 CORRECTED.xml
Ev 60 Business, Innovation and Skills Committee: Evidence
27 March 2012 Stephen Uden, Ray Wilson, Justin Owens and Alex Khan to a decline, I think, in success rate, which makes experience as not one of engagement, success and that very difficult contractually. I would call for the achievement, yet they are clearly quite bright and Government to re-look at Functional Skills very capable. Part of what we have to do as part of the carefully in terms of its demanding requirements but training element of the apprenticeship is get them also its very much classroom-based nature, which back up to the standard that, theoretically, they were many young people entering this sector—the perfectly capable of meeting previous to the construction sector—will find extremely difficult. apprenticeship but did not have the motivation to do Many will, therefore, leave perhaps having passed so. their NVQs but not their Functional Skills, and Ray Wilson: Yes, I probably would call upon schools therefore not achieve a full framework, and training to ensure that for 11 years of effort, they come out providers will then suffer as a result of that. So we with a much greater level of capability. If we do not need to re-look at that. do that and then we have a short duration for them to Stephen Uden: Can I answer from our perspective? attain that level, we are at great risk of excluding a Certainly, completion rate is quite important. We get whole cohort of school leavers who are unable to get about an 85% completion rate. The young people are into a level 2 or level 3 apprenticeship. What do we employed from day one by IT employers, so it is not do with them? That is the question we have to ask a question of whether they have a job, but some of ourselves. them do not stay the course. I could increase that rate, Chair: We have partly pre-empted Rebecca’s but that would mean, going back to the previous questions, I am sorry. question, taking fewer risks with young people. If you drove it to 100%, that would mean being much surer Q351 Rebecca Harris: We have covered my about the people we took on. For us, it is quite an questions quite well, but I might move back to the important social mobility driver. Our industry has a discussion we were having slightly earlier about diversity issue, and one of the other things that we experience of the NAS. In particular, we have had track around success is diversity, so we are looking mixed evidence about the vacancy website, and I for young women, ethnic minorities and people from wonder if you could tell me whether you found that diverse social backgrounds to broaden out our sector. useful. Outcomes from that point of view are something that Ray Wilson: We find it very useful; it is a good tool. we track as well. We probably get about 60% of our vacancies filled Margot James: That is very refreshing, thank you through it. However, you can only advertise if you are very much. an employer. We are missing a huge trick. As an industry, there are many people who want to offer an Q349 Mr Binley: I noticed that both of you were apprenticeship opportunity who do not have access, or dying to comment on my previous question, so I am the knowledge and understanding of how that process going to try to give you the chance to do that. Was works, which goes back to the point about the NAS there anything you wanted to add to what has been engaging with SMEs to give them that opportunity. said in terms of the raw material you get from our That is where large training providers and large schools and in terms of the attitude to the workplace? employers are able to access their supply chains to Ray Wilson: I slipped most of it into my answer to raise the profile and awareness of vacancies. the next question. Alex Khan: Could I make another point on the Mr Binley: I thought you did. system? It is a step in the right direction. If you go Ray Wilson: But I have to say that the attitudes I see back three or four years to when it was not in place, coming from schools are fantastic. Many of the young there was absolutely nothing. On that basis it has to people that come to us today perhaps do not quite be a good thing, and thousands of vacancies are put know where they want to be, but over that period of on there. We work with all our employer partners and 16Ð18 they mature into some fantastic young people we encourage them to advertise their vacancies. If you with energy and ideas. To have the people I work with look at the utilisation I have seen published—I cannot say, “It is a pleasure to have such refreshing people,” remember the statistics—it seems to be a site that is makes it worth waking up in the morning and going used a lot. We probably could improve the to work. It is fantastic as an outcome. So I do not functionality and the efficiency of it, but it has to be necessarily see a change in attitude of young people. a good thing coming from where we were before, which was absolutely nothing. Q350 Mr Binley: No, I did not mean in young Stephen Uden: It is certainly the right initiative. We people; I meant in what the schools were doing to do not get nearly as many vacancies filled through that help young people in that respect. route for our partners as we would like, so we would Stephen Uden: Part of the case for public investment like to see momentum being built because, frankly, it in apprenticeships is that we are taking people who is more convenient to be able to just put things on have not achieved the level of qualifications from there. We have to do a lot of local advertising, partly school that they maybe have the potential to do. By because even though Microsoft stands behind it, the providing a work environment we see them come to jobs we are connecting people with are with smaller life and, because they now know why they are IT companies that do not have household names. So I learning, work incredibly hard. Our programme is a would love it to work better. It has certainly developed very tough programme to take people up from five some momentum and we get some candidates through GCSEs into entry-level IT jobs. It is a shame that it, but a lot more work is needed to make it the one many of the people on it talk about their school place that everybody goes to and looks at. cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG04 Source: /MILES/PKU/INPUT/021099/021099_o004_th_BISC 27 03 12 CORRECTED.xml
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27 March 2012 Stephen Uden, Ray Wilson, Justin Owens and Alex Khan
Alex Khan: There have been a couple of questions I know there are schemes, and I think the next about schools and what advice they give, and evidence session will include one employer that does obviously we are now talking about employers accredit a lot of existing employees. I have no advertising vacancies. I guess that is the issue that fundamental issue with that. It is where you are using needs to be bridged, because even if you have the the apprenticeship scheme and the apprenticeship best careers advice service in schools talking about framework and the apprenticeship funding to fund apprenticeships and the benefit that they can bring to schemes that do not have the fundamental creation of individuals, you ultimately need an employer prepared skills and opportunity that apprenticeships are to take people on. When young people get to the point designed for. That was what I was intending to get where they are deciding what they want to do in the across in that written submission. future, the apprenticeship might be hypothetically a great idea, but unless there is a vacancy for them to Q354 Rebecca Harris: On the wider philosophical be employed to do that, it will not really work. We point, do you feel apprenticeships should be about probably do need to refine on a geographical basis the simply job creation or up-skilling? Which do you matching, filling and marketing of vacancies, so think is the most important thing that we should be people can not only decide to go down that route but focusing on generally there? get a job and sign on to an apprenticeship programme. Stephen Uden: There are different degrees of public benefit. Certainly in the scheme that we run, because Q352 Rebecca Harris: So in fact you are feeling we are helping small businesses to expand, 80% of quite positive about this, but do you think the NAS the jobs that the apprentices go into are newly created or, frankly, even the Government is the right body to jobs. That is generating jobs and growth, and I can be doing the matching between apprentices and make a case that there is a very high public benefit businesses’ vacancies? and need to invest in that kind of scheme, because it Alex Khan: Their role is relatively limited in terms of is turning people who have been receiving benefits doing the matching. What they tend to do is to have into taxpayers in a sustainable way as well. a field force team that goes out and sells the value of That is not to say, though, that there are other schemes an apprenticeship. With my training provider hat on, that may have different degrees of public benefit, I would see that as the space that we would occupy, because retaining a worker and developing their skills so we would go in and work with employers to find level, for example getting their first level 2 apprentices, and in some instances we completely qualification, has a public benefit as well. It is not fulfil that role. In the example I used earlier, necessarily the same degree of public benefit though. VW Audi Group will say they want to take on When you look at the frameworks and the way in 400 apprentices, and we will market them, interview which the funding is allocated, there is not necessarily candidates and put them in front of the relevant a complete match-up between public benefit and dealers. Their role stops at saying, “Apprenticeships public investment. The focus on more employer-led are good and valuable and can bring benefit to your schemes and an open approach to funding that looks business.” In terms of finding young people and at the outcomes of the scheme has been a welcome matching them, they do not do any of that as far as I change, but there is still work to do in taking that can see. forward and aligning those two things effectively. Ray Wilson: I would put it quite simply. Q353 Rebecca Harris: I have a specific question for Apprenticeships, to me, are about having the right Mr Uden. In your written submission to us you said, skills in the right place at the right time, and if we do “Apprenticeship funding should not be invested in not get that right, we cannot grow as an economy and schemes that involve the accreditation of existing we do not have the right skills base to compete in employees.” I wanted to explore that a bit. What do international markets. Organisations like Carillion you think the objective of Government funding should want the best people and we want the right skills, and be for apprenticeships? Is it about job creation and we deliver that through apprenticeships or graduate reducing unemployment, or is it about re-skilling the schemes, but we need the right people at the right time British work force? if we are going to continue to grow as a business. Stephen Uden: Thank you for that. I did not think I Rebecca Harris: You put that very well. Anyone else was that hard on accrediting existing employees. want to add to that? Thank you. There is a scheme in IT, in particular, where the Chair: We will take that as assent. training provider takes people on and they are technically employed by the training provider in a Q355 Ann McKechin: The current funding very different way from, for example, the way the framework means that if you are an apprentice Carillion scheme works. At the end of the scheme, aged16Ð18 the Government funds 100%, whereas if they then try to place them with people. Since making you are 19Ð24 it funds 50% only. I am wondering the submission, I think that scheme is no longer in what the panel’s opinion is of whether the funding place anyway. What we feel we really need are structure is skewing preferences in terms of the age of schemes where there are genuine employment recruits or is it no longer having as much impact as it prospects, because there is a problem with some of previously did? those schemes: I was meeting people at job fairs who Justin Owens: It does have an effect, for sure. It has were saying, “I have done an apprenticeship and I two effects. Yes, the funding is one side of it, but you cannot get a job.” You start an apprenticeship because are potentially missing out on people who might have it is on-the-job training. A-levels going into an apprenticeship, which gives cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG04 Source: /MILES/PKU/INPUT/021099/021099_o004_th_BISC 27 03 12 CORRECTED.xml
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27 March 2012 Stephen Uden, Ray Wilson, Justin Owens and Alex Khan you those advanced skills to go forward in an thing that I put in our submission was that if we did advanced apprenticeship. Certainly for an SME it not make it so much of a cliff edge, or changed the becomes less attractive. Certainly I know the training threshold to 19, we would be able to help those young association we use has a lot of 19Ð24 people on its people much more effectively. We are certainly books they cannot get an apprenticeship for because coming across a lot who are getting caught by that they cannot find somewhere to place them. So in my particular sudden change on their 19th birthday. experience, yes, I would say it has a negative effect. Alex Khan: My view is there is an assumed level of Q357 Ann McKechin: Is that a similar experience skills or abilities based on age, and what we find is for you, Mr Wilson, about the cliff edge, or is it not that regardless of people’s age and what they have quite such an issue in construction? been doing in work, there is often quite a long journey Ray Wilson: It is actually, and not only for ourselves for them to travel in order to meet the requirement of but for many SMEs. Whilst I can understand the an apprenticeship programme. There is a 50% funding argument that once you are over 19 you can become reduction for 19-plus, which makes it difficult, in a lot more productive and therefore you are obtaining more of cases, to deliver the programme when we talk about value from that as an employer than you otherwise the issues in terms of literacy and numeracy. People would, that segregation of 16Ð18 and then 19-plus can might have experience, but they might have worked lead to some problems simply because the funding has in different sectors. Sixty per cent of the 25-plus starts been reduced. A better solution for me would be to who were signed up last year did not have a first link them together. So if you are starting on, for level 2 qualification, so quite often there is a big example, a level 2, you should be able to progress to learner journey for people to have within the sector a level 3 at the same funding level. Once you that they are in, but quite often they move around. segregate them what happens is organisations, for example, will then be penalised if that person then Q356 Ann McKechin: So you might have a leaves at level 3, because it is seen as a failure rather youngster leaving school at 16 or 17 who might go than a success at level 2. So my view would probably into a casual job, but then from there tries to seek be let’s change it and start to reduce funding perhaps an apprenticeship? at age 22-plus. Alex Khan: Sure. We did a piece of work with an awarding body looking at what motivates or drives Q358 Ann McKechin: Mr Owens, do you make young people and helps them make their decisions in contributions to your training providers for your terms of going into the world of employment and apprentices who are only partially funded? Are you in apprenticeships. What we found was that employment that situation at all? came first in a lot of cases and apprenticeship came Justin Owens: We do not for level 2, as they are fully second. If they made the decision that they wanted to funded. At level 3, yes, we have to contribute. We are leave school and go into the world of employment, obviously employing them at the same time as well. they would find a job and then, hopefully, be able to For us, the way the apprenticeship works is that they sign on to an apprenticeship programme. They would go into the training centre for three months and learn not necessarily go out and look for an apprenticeship basic skills, and then they start to be released to us programme. maybe one day a week. As their training progresses What we found most interesting was that the sector through the centre, they are released more days a week was almost secondary. We do a huge amount of until they become full-time. We then enrol them at the training in the engineering sector and the automotive local FE college for their level 3 City & Guilds. So sector. We envisaged that little Johnny would decide we pay them day release to go to college one day a he wants to be an apprentice technician in the week and employ them ourselves and pay a wage to automotive industry and would apply to those jobs. them through that period. He would do that, but also he or she would just see what local jobs are available and end up in one of Q359 Ann McKechin: Mr Khan, as a training those, and if they are with apprenticeship training, provider as well as an employer of apprentices, how great, and if they are not, they have to go out and find do your employers generally make contributions for a training provider. apprentices who are only partially funded? Stephen Uden: There is a specific problem that we Alex Khan: It is a mix, and it is a mix by different encounter around the age breakdown, because we get sectors as well. There is a huge amount of what is people on our programme who finish their A-levels termed in a lot of the reports as “in-kind and then are looking to make a decision. They then contribution”—a lot of the stuff that Mr Owens investigate apprenticeships, maybe in the summer and mentioned, where they employ apprentices, they allow early autumn, and get into a programme that is going them time off to study, they buy them tools, to start the following January, by which time they equipment, provide academies and workshops and buy have just turned 19, and suddenly it is much, much training materials for them to practise on. Some of the harder to persuade an employer to take somebody who programmes make a cash contribution. To take one of has just turned 19 than somebody who is 24, so they our programmes, I have been doing a bit of work with effectively lose out. While more young people are EDF Energy; it is a huge programme involving considering apprenticeships as an alternative to overseas trips, etc, so they make a considerable cash university, which is positive—it is good that people contribution. One of the sectors that we struggle in is make the decision that is best for them—that time the service sector, where typically it is more transient. period is often when they hit their 19th birthday. One People move around and SMEs in the service sector cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG04 Source: /MILES/PKU/INPUT/021099/021099_o004_th_BISC 27 03 12 CORRECTED.xml
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27 March 2012 Stephen Uden, Ray Wilson, Justin Owens and Alex Khan struggle to find the money to make contributions to they have or in their sector and how those can be 19-plus apprenticeships. filled—and the funding is driven around the outcomes of that. Training providers will often need to be Q360 Ann McKechin: The National Audit Office involved to do it. Some employers may do it directly, says that many training providers did not charge fees some may not, but the fact that it is employer-led to employers for adult apprentices. Do any of you makes sure the investment is going to deliver skills have any experience of this? and jobs that directly fill an economic need in a way Alex Khan: From Babcock’s experience, we do that just leaving it to training providers would not everything we can to take a cash contribution for adult necessarily do in all cases, so I welcome that. apprentices, but quite often we will work with the employer in a tri-party way to look at what we can do Q363 Ann McKechin: If it is focused in that way, in and what they can do, and how they can play a role terms of greater employer participation in framing the in the apprenticeship programme and actually pick up apprentice programme, that to you would be a and deliver some of the programme themselves. success. Stephen Uden: Yes, I think so. Q361 Ann McKechin: The next question is on the Ray Wilson: Ownership has to sit with employers. I Government’s initiative about an employer ownership agree with Alex; it is probably a little bit too early to pilot scheme. Would you describe the current say at this stage, but I am looking forward to that and, apprenticeship programme structure as being hopefully, that is something that we can support fully. employer-led or training provider-led? What are your thoughts about this pilot programme of giving money Q364 Simon Kirby: Mr Khan, you mentioned directly to employers? Ofsted. As far as I understand, Babcock was graded Alex Khan: From my personal experience, it is outstanding. What does that mean? probably a little bit early for me to comment. If you Alex Khan: That was for our most recent inspection, go back a couple of years, there was a big initiative which was on our engineering programme. The Ofsted to grow the number of apprentices on programmes in process looks at a number of different things, ranging the country, and there were three ways of doing that. from leadership and management to how well learners The first was to allow more training providers into the achieve capacity to improve and the quality of the way industry and simplify the process for them to set up we engage with employers. There is a whole raft of and to talk to larger training providers—like us, I different measures that they come and look at, and for guess—to try to get them to deliver more. The second that particular inspection a team of inspectors was was to set up the NES, or the National Employer with us for just over a week. They talk to learners, Service, which was the NCS, I think, in a previous they talk to employers, they look at our statistical life, to work with employers, to have contracts. From my experience, it started off really well; loads of reports, and they graded us as outstanding. employers saw it as a really good opportunity, but it just got complicated. It was weighed down with Q365 Paul Blomfield: I want to explore some issues bureaucracy, and we have seen a reduction in the in relation to quality, but first I want to ask a question number of employers with direct contracts to train about work readiness. We hear a lot from employers their staff. We went through a period of time when that schools do not prepare people for the world of employers were coming to us asking us to pick up the work sufficiently for the start of apprenticeships, yet contract and deliver it for them to their staff, because when I talk to men in steel and engineering—in this all of a sudden you have an Ofsted inspection, you context it is largely men—who went into an have PFA audits, you need to have a system to claim apprenticeship 40 years ago, it is pretty clear that in the funding; it is a complicated process. Sheffield they were not work-ready in terms of the discipline of attendance and of the workplace and so Q362 Ann McKechin: So it is really going to be a on. It was the apprenticeship that made them work- process that people such as you, who have already got ready. It was peer support and peer pressure that made training divisions set up, can handle, but if you do not, them work-ready. Where do you think the balance you are going to find it difficult. falls between the responsibility of schools and Alex Khan: My understanding of the employer employers through the apprenticeship? I am asking ownership fund is that you bid for an allocation of because I am concerned that a lot of employers are money depending on the size of your organisation, suggesting that schools should sort all this out: “We and SMEs can cluster together and bid for, I think, a should have pristine, ready, enthusiastic, disciplined minimum of a quarter of a million pounds, but it is to young people who we can take on straight away.” deliver training that you would not already have done. Ray Wilson: There has to be a balance. I do not think Justin Owens: We will be using our sector skills body, it is one or the other. It has to be something where the Cogent, to make the bid for us, because of the school will take a responsibility in terms of the tools bureaucracy, etc, and also to get a package together and techniques for work readiness. As a training where other companies can join in. We will be taking provider, I think employers have a responsibility for that approach. shaping those young people into what is relevant for Stephen Uden: We do not train our apprentices their industry and the world of work within their ourselves. We use training providers to do so and we industry. Therefore, between the two you will strike work with a number of excellent ones. It is a balance that will ensure they are fully work-ready, employer-led—employers identifying skills gaps that simply put. cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG04 Source: /MILES/PKU/INPUT/021099/021099_o004_th_BISC 27 03 12 CORRECTED.xml
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27 March 2012 Stephen Uden, Ray Wilson, Justin Owens and Alex Khan
Q366 Paul Blomfield: Any other views? want to learn in an academic environment. This Stephen Uden: It is not in the nature of employers to country has been plagued for many years with the be 100% satisfied with any recruits and never has artificial dichotomy between academic and vocational, been, in my experience. But I have not seen anything with the view that if you are capable, you go down change, and I would agree that there is a shared the academic route, and if you are not, you do not. So responsibility. There are certain things it is reasonable it is incredibly encouraging we are getting young for employers to be able to expect from young people, people who are saying, “I am not sure whether I for example basic literacy and numeracy. Regarding should go to university or do an apprenticeship,” and some of the things to do with the working almost at any cost we should make sure that we environment and how young people know about the encourage that, because young people will then world of work, there is, firstly, a responsibility, which choose the option that is best for them, which will be I am sure many here will step up to, to go into schools good for everybody. and help young people when they are at school get a sense of the world of work. But also, when Q368 Paul Blomfield: Mr Wilson, you were nodding apprentices first come along they do not always at that point and, indeed, earlier you made the understand fully the fact that when you are meant to comment that we needed to compete internationally. turn up on time, you turn up on time. But they learn Ray Wilson: Yes. those things and we have a high success rate, so we are able to educate people. It necessarily has to be a Q369 Paul Blomfield: But in terms of levels of balance. Would I say that there is a major issue and apprenticeships, we do not. We are lagging behind our that our young people are wholly unprepared? No, I competitors in settling for level 2 in too many cases— do not think so. well, that would be my view. But in your evidence Alex Khan: To make a final point on that, let’s not you said that in some sectors level 2 apprenticeships forget that the number of potential places for would- are the right level for a skilled, competent worker. be apprentices is quite low, so if they are successful Where do you stand on that? in getting an apprenticeship place they have probably Ray Wilson: I agree on the fact that if we want to worked quite hard to get there and gone through a become competitive we have to raise skill levels. We fairly lengthy process. That might influence their work have to have aspirations to grow our economy and readiness. You would expect that the calibre and the have the right skill base to support it. That will work enthusiasm would probably be higher. very well in saying that a level 3 apprenticeship is appropriate only as a starting point within IT, for Q367 Paul Blomfield: As I said, I wanted to probe example, but within construction I would beg to differ, around issues of quality. Mr Uden, in your written and there it would have to be at level 2; 60% of the evidence you said that an apprenticeship should be at labour within the construction industry is young least level 3, and that level 2 apprenticeships should people entering with very few GCSEs and, if they be rebranded almost as pre-apprenticeship training. I have them, Ds to Es. We have to be careful, as I realise we explored some of these issues in the mentioned earlier, about excluding those young opening questioning from the Chair, but I wondered people, so it does have to have a broad range. if you could develop that point a little. Where we then fall into some issues is that Stephen Uden: We certainly have to get the branding apprenticeships have their foundations in trade and right and there is—we covered this a little bit earlier— professional skills, and if we broaden that and extend an incredibly diverse range of programmes that go it up into other areas, I feel you do have a degree of from level 2 all the way up to level 6, and we have to branding dilution. Therefore I cannot fully agree with do a better job of making sure that the young people what Stephen was saying, but I agree that we have to in particular, but also the employers we work with, ensure that we appropriately level those through and understand the difference between them. So there are identify them in a way that people understand and various ways you can approach that rebranding and, give strength to the brand. not being a marketing expert, I do not plan to tackle that. Q370 Paul Blomfield: Do you not think that I do think we should fund programmes of all lengths, sometimes we might be too ready to be satisfied with that go all the way up, because they do valuable level 2? I mean, in terms of construction—you know economic things, but it is very difficult to contain in the sector much better than I do—it is an incredibly one brand something that varies from a short retail changeable sector in terms of the demands being experience through to some of the level 6 engineering placed on all sorts of trades, with new products, new and professional services programmes. I do not think technologies and so on. Take retail, for example. We the word “apprenticeship” can do the job around that, settle for level 2 in retail. In Germany they push for so we have to find a better way of doing that branding. level 3, and what you have when you go into a shop We are getting a great explosion of numbers that tend is a level of expertise and product knowledge that to be towards the lower end of the spectrum, and it is quite often we find lacking in this country. getting much harder to persuade people who would Ray Wilson: Yes. I agree we absolutely have to push otherwise be considering university to come on some for higher levels. However, there is no escaping the of the level 4 or level 5 programmes. fact that those people entering the construction sector, Yet for the credibility of the whole apprenticeship where the predominance is around labouring-type system, it is really important that people look at activity, are not going to be able to attain those levels, whether they want to learn on the job or whether they so we have to push on both fronts. To remove it, and cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG04 Source: /MILES/PKU/INPUT/021099/021099_o004_th_BISC 27 03 12 CORRECTED.xml
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27 March 2012 Stephen Uden, Ray Wilson, Justin Owens and Alex Khan therefore provide no entry level into construction, great route through to providing us with great people would be damaging. in our work force. Stephen Uden: Just to be clear, I would not Justin Owens: All our level 2 apprentices, 100%, go discontinue funding what is an excellent programme on to level 3 and beyond. The chemical industry is that helps entry-level people with very low levels of one of the most highly regulated industries in the qualification take up apprenticeships. Firstly, we country. We have to have a measure of competence should offer good progression, which is your point, for people working in these areas, and level 2, for us, which I would completely endorse. It is more to do will not cut it—it has to be level 3—but I can see the with how we describe that. So absolutely we should benefit in other sectors of having level 2. fund and support it, because it does very good work, Alex Khan: As my chairman keeps reminding me, he but giving it the same label—“apprenticeships”—as was an apprentice at one point. other programmes makes it difficult potentially to recruit people on to those. So we do not agree about Q372 Paul Blomfield: Can I ask one last question? I how to brand and describe it, but we do both agree am conscious of the time. At the end of last year the that they are valuable things to do. Government announced a range of measures aimed at Alex Khan: I have two points. Firstly, to respond to improving the quality of apprenticeships. If you were your question about whether I think a level 2 should in their position or, indeed, our position making be an apprenticeship, I absolutely do. The second recommendations, what measures would you point is that if you just look over the last few years, recommend that the Government prioritise to we have had modern apprenticeships, national improve quality? traineeships, intermediate apprenticeships, advanced Ray Wilson: They have already made the apprenticeships, apprenticeships at level 2—there is announcements in terms of time frame. An no wonder that parents and young people are confused apprenticeship, in terms of protecting the brand again, by what the hell these things are. We absolutely need is about having effective knowledge transfer and a to lock into the apprenticeship as a brand. If we want competency base. If you have those and the successful to differentiate the levels below that, that is fine, but outcomes, that is a great measure. The introduction of we need to lock into it, and that is where the very short-term apprenticeships has done huge marketing campaign needs to be to schools, to young damage to the brand of apprenticeships. Quality, to people and to parents, because people are just me, does not appear to be those things. confused by what these things are. Q373 Paul Blomfield: Would anyone else like to Q371 Mr Binley: Just on Paul’s theme, because this answer? is really rather important, how many of the people Alex Khan: Again, with a training provider hat on, that go into a level 2 scenario become aspirational we have Ofsted visit us on a relatively regular basis, thereafter to go further? How much is this whole whether for full inspection or follow-ups. We have the process an escalator, and do you actually see that in Framework for Excellence. We have had the training action in your workplace? quality standard. There are a number of people that Ray Wilson: Yes. stand outside the bubble and look in and test the Alex Khan: My view is that, yes, we absolutely do, quality. The SFA look at our success rates. The and one of the problems that we have, coming back awarding bodies come and look at how we are to the previous point, is that one thing we probably delivering the programmes against the standards. do need to challenge is the sector skills councils and the awarding bodies a little bit to come up with Q374 Paul Blomfield: But what more might we be qualifications at level 3. In the service sector, in a lot pushing Government to do? of cases you can get to level 2, but in order to progress Alex Khan: There are probably adequate measures to level 3 you need to be a manager—you need to within the system to review the quality of the training manage people—which I know is different from the that is delivered. IT sector and the engineering sector, where you can Justin Owens: On a related point, I believe from my go along a high-level technical route. contacts in the Training Association that all Unless you manage people or take on responsibility apprentices shortly are going to have to last a for supervision or management, it is very difficult to minimum of 12 months for level 2. I am not sure that progress, but actually—I think this is the model you is necessarily the right approach. As long as they meet used—you can become an absolute expert in your or exceed the framework within, say, a minimum field. There is probably some work to do to challenge period of six months, they should be allowed to what level 3 is and what progression on to level 4 is. progress, because it holds them back from progressing The last time I looked—it has probably changed—the to a level 3 thereafter. I know we are trying to look at number of level 4s was relatively small; it was eight some of the NVQs or apprenticeships that are perhaps or 10 occupational routes. So there is a piece of work delivered in 12 weeks, which is far too short a period, to do there. but this 12-month period is too long. Ray Wilson: It is extremely important to provide clear Stephen Uden: I know there is a need for Government progression routes for people coming into the to set rules, but when you have something that is so industry, so they can have visibility of those flexible, it is hard to be too prescriptive about the opportunities. Certainly we have taken on some rules. Our generic programme is a 12-month fantastic people into graduate programmes following programme, but we have some accelerated ones that their apprenticeships, so that is a prime example of a are very successful and very popular with employers, cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG04 Source: /MILES/PKU/INPUT/021099/021099_o004_th_BISC 27 03 12 CORRECTED.xml
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27 March 2012 Stephen Uden, Ray Wilson, Justin Owens and Alex Khan where in seven months they achieve the results, and to questions as to whether some of those are really sometimes it is somewhere in between. more up-skilling and re-skilling rather than what you It would be a perverse result to say, “We want to could classify as an apprenticeship. increase quality,” which is absolutely the right goal to Chair: Thank you. I have allowed the session to run have, “but we are going to have these rules and you on slightly because you had an awful lot to offer in have to tick this box; it has to be this way.” It needs terms of insight into how it works on the ground. I more to look at the programme and what it is trying thank you for your contribution today. If there is an to achieve and whether it does achieve the results and answer to a question that we have not asked that you outcomes, and judge it on the basis of that. It is harder would like to give, please feel free to submit further to have a set of easy-to-tick rules around that, but the evidence to us; that would be very useful. Similarly, test for me is whether small employers find it valuable of course, if in retrospect we feel that there is a and it creates people who are well paid and have question that we should have asked but did not, we sustainable jobs. That should be the test of quality may do the same to you and would be grateful for any ultimately. further information you could give us. But this has Ray Wilson: I would agree with that, but I feel that in been enormously helpful. Thank you very much for terms of short-duration apprenticeships, it does lead your contribution today.
Examination of Witnesses
Witnesses: Norman Pickavance, Group HR Director, Wm Morrison Supermarkets plc, and Ged Syddall, Founder and Chief Executive Officer, Elmfield Training Ltd, gave evidence.
Q375 Chair: Good morning and welcome to the Salford just before Christmas. We started working Committee hearing. Thank you for agreeing to with the Ordsall community nine months prior to contribute to it. Could you introduce yourselves for opening the store. The Ordsall community is one of voice transcription purposes? the most deprived areas in the UK, third generation Ged Syddall: My name is Ged Syddall. I am the CEO unemployed, and they asked us if we could work with of Elmfield. them to see if we could reach their target of giving Norman Pickavance: Norman Pickavance. I am the 50% of the jobs to local people. So one of the things Group HR Director, Morrisons. we try to do is work in partnership to create Chair: Thanks very much. I will repeat what I say to employment opportunities for people from the all panels, which is that there is no need for you both immediate area, so that we are very much part of the to answer every question if you feel that you have not community. got anything to add to or subtract from the response As a consequence of doing that, it is not therefore that we have already heard. Some questions, of about advertising the jobs. We tend to be absolutely course, will be person-specific. in partnership with people, helping them progress to a stage where they stand a really good chance of getting Q376 Rebecca Harris: I know Morrisons have one of those jobs with us and then we take them on become very active in the apprenticeship field; I have the next leg of the journey. Often people in those been introduced to a few in my own area. I wonder if pre-employment stages are really not work-ready. We you could talk us through what a Morrisons get them, hopefully, through some great apprenticeship looks like. pre-employment training. Then we pick them up, give Norman Pickavance: Thank you. We have two types them a basic qualification, QCF level 2, and then of apprenticeship in operation at the moment, and we people go on from there. Last year, we put will be introducing a third later this year. Our 28,000 people through that basic-level apprenticeship apprenticeships provide a general introduction to programme, and 10% of those went on to develop retailing, a generalist apprenticeship, which is broadly their careers in the business. targeted at individuals who come into our business A question that was raised earlier on was whether it with no qualifications; 65% of the people who come is an escalator. Absolutely. It is a really good start for on to our entry-level programme come to us with no people, because many of them would not think that qualifications, and 85% of those people come to us they had the chance of a career and many of them with very limited numerical and verbal skills. We have would not think that they could go on to develop an entry-level apprenticeship scheme that gets within the organisation, and the chance of a everybody on the first rung of the ladder, and then qualification with us provides that start. So 10% of the we have a craft scheme, which takes people to the people who come through the programme then go on traditional craft skill areas—butchery, bakery, and so into junior management positions within the on. Two levels: one is a general mass apprenticeship, organisation, and we have a great track record of and the second one is a craft apprenticeship. taking them from there to build really successful careers in the business. Q377 Rebecca Harris: Where do you recruit your apprentices? Q378 Rebecca Harris: Where does that Norman Pickavance: We try to work in partnership pre-employment training take place? with our communities. Perhaps it is best illustrated if Norman Pickavance: In the local community. We I talk about a recent example. We opened a store in work very closely with the voluntary third sector and cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG04 Source: /MILES/PKU/INPUT/021099/021099_o004_th_BISC 27 03 12 CORRECTED.xml
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27 March 2012 Norman Pickavance and Ged Syddall further education colleges to provide interventions exclusion issues. There are a plethora of initiatives in that help people who are perhaps the furthest away the UK at this point in time for dealing with all kinds from employment to get to a place where they can of issues, from chronic exclusion, lack of basic skills access employment with us. It is interesting to note and skills progression, to social mobility. We are the recently published ACEVO report; many talking about 16 to 24-year-olds and trying to parcel apprenticeships are actually out of reach for a number them up into discrete boxes. My view is that there is of the young people that we work with. They are out a lack of confidence in the system because we do not of reach for two reasons: first, because people do not articulate a journey for young people—that they can have the basic qualification standard to get on to an progress from 16 to 24, build skills, build confidence apprenticeship programme; and secondly, because lots and build careers. We do not do that any longer, and of apprenticeship schemes do not pay a basic wage. consequently the role of apprenticeships in up-skilling The apprenticeship rate, at £2.60 an hour, is not people is a critical phase of that journey, because it enough to live on, and we pay everybody who comes does not just stop when you finish an apprenticeship. to work with us a full rate from day one, not a training That is just a leg of the journey. For many people it rate, and that is a key element of them taking has to start before apprenticeships. It has to start with employment with us. So we have pulled together the other work I have mentioned: pre-employment collections of voluntary third sector social enterprises interventions. and the further education sector to help to provide Apprenticeships, I feel, are part of a much longer that pre-employment work that is so critical to getting pathway, which goes on beyond apprenticeships in our people involved. organisation through investment in junior and senior management training. We have a huge success rate in Q379 Rebecca Harris: Typically, when an taking people all the way through our organisation. apprentice is working with you, how much time would Apprenticeships spanning those early years in our they spend on off-site training, say, with your business are a great way of describing the training provider? development of vocational skills, of getting vocational Norman Pickavance: One of the things about the qualifications, of getting a great start in a career. It is large-scale apprenticeships is that the young people in a great way of articulating all that activity, but it is them do not want to go back to college. They have only one part of a pathway. The more the Government had 12 years in school, where they have been failed try to parcel these things up and say, “Apprenticeships by the education system and come out with no do this, another thing does that and there is a youth qualifications, and the last thing those people want to contract over here that does something else,” the more do is go back to college. It is really important for this the British public are confused about what is going Committee to understand that the last thing those on, because they cannot see what the pathways are or young people want to do is go and spend more time how the schemes join up. I would strongly in a classroom. recommend that more work be done to connect these We are trying to re-engage with those young people different reviews of the challenges that we face about and say that getting a qualification is something that employment in the UK. they can aspire to and is something for a person like them. Persuading them that there is nothing to fear in Q381 Chair: What percentage of your total number the programme that we put together is one of the most of apprentices is in the 16 to 18-year-old age group? important things that we do. We have invested a huge Ged Syddall: Sixteen to 18? About 8%. I will clarify amount of money in coaching people. Last year we that information, but it is round about 8%. put 5,500 managers through coaching skills Chair: If necessary, could you send us the figures? development so that they could work with young Ged Syddall: I will do, yes. people much more effectively and encourage and nurture them, and to say, “Yes you can.” Getting them to a stage where they have a qualification and we are Q382 Chair: How many of those would you say go saying, “This is a nationally recognised certificate, and on to full-time employment within Morrisons? a passport to a career with us but also to a career Ged Syddall: They are all full-time. elsewhere if that is what you want,” gives them a huge Norman Pickavance: Yes. One of the things that has boost of confidence and a sense that things they may not been much publicised is that all the have thought were out of reach are things they can apprenticeships at Morrisons are full-time, aspire to, and that is hugely important. We think the full-waged individuals. entry-level programme that we run is hugely important in getting people engaged. Q383 Chair: Yes, but a high percentage are already employees, aren’t they? Q380 Rebecca Harris: In your written submission Norman Pickavance: Well, from day one, when we to the Committee you recommended something of a recruit a person, we recruit them on a full wage, and rebrand for the apprenticeship scheme. How do you we guarantee them the job and the training and that think the definition of apprenticeships ought to be they will have access to getting a qualification. So we changed? provide those guarantees up front rather than going on Norman Pickavance: I would like to take one step a scheme that may or may not be a passport to a job. back from that question, if that is okay. There is a We guarantee the job and commit to deliver the terrible problem that we have in salami slicing the training. That is a huge commitment from us as an way we look at solutions to skills development organisation. cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG04 Source: /MILES/PKU/INPUT/021099/021099_o004_th_BISC 27 03 12 CORRECTED.xml
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Q384 Chair: It is. In fact, if you are taking some and above—started on the shop floor. Our ability to hard-to-reach 16 to 18-year-olds and making these provide that career ladder is something that is sadly guarantees, have you had to ever get rid of any, lacking in many parts of British industry. So we are because you would reasonably expect, given the very proud of our ability to take people from all cohort that you are taking on, that some just would backgrounds and build realistic careers for them, and not come up to scratch? it is something that we are keen to get across. Putting Norman Pickavance: It is a very small number. We people into jobs but not giving them qualifications or do a very good job, as I mentioned earlier, of coaching access is an absolutely sure-fire way of ensuring that individuals through the programme. they continue to be excluded or poorly paid. Ged Syddall: I have some data around that that might be useful for the Committee. There is a misconception Q387 Mr Binley: I am grateful for that, because I am that a lot of what we have been doing within the a secondary modern schoolboy who left school at 15, programme has been purely based around the so maybe I would have been one of your store incumbent work force. Since we started the managers. programme in 2009, approximately 50,000 people Norman Pickavance: Well, given that two of our have joined Morrisons, and every single one of those current board members started at 17, having not been individuals has been offered the opportunity either to to university, and were promoted to the board in the do a QCF level 2 qualification, and for many of these last two years, that is absolutely what we are about. people it would be their first level 2 qualification, or to go on and do a full apprenticeship. Q388 Mr Binley: I am delighted to hear it. Can I go The other thing we need to bear in mind with the on? Your Chief Executive, Mr Philips, recently said people who opt to take on the apprenticeship is that about the apprenticeship scheme that “it is a big for a lot of them it is about tackling issues that are real investment that we believe that we will get a great road blocks to their development, particularly around return on from growing our own people”, which is, in numeracy and literacy. So out of the 100,000 people essence, what you have said. How much of the that have signed up over the last three years to training your apprentices receive would have been undertake the qualification, 40,000 have made the conscious decision to tackle those issues, because given to your staff anyway without public grant? How 84% of those people have numeracy and literacy much, in other words, have you done it because there issues. It is about addressing system failure as much is public grant and was that a motivator? Secondly, if as anything else. it had not been there, would you have done it anyway? The other key fact is that, of the 50,000-odd people Norman Pickavance: We would have done it anyway. that have joined Morrisons, 53% of those people were What we would not have been able to do is to ensure unemployed and 58% of those people were 16Ð24. that people got nationally accredited qualifications as a result of the training that we provided. We do not receive any money from the Government purse for the Q385 Chair: Sorry, how many were 16Ð24? training that we provide. All the training that we Ged Syddall: Fifty-eight per cent of the people who deliver is at Morrisons’ cost, and so it should be. We joined Morrisons were 16Ð24, and the success rate for use the Government money through a third-party the programme for apprentices is 83%. Our success provider, because we are not experts in accrediting rate in taking on people who have issues to overcome in terms of reaching full competence within the people and we are not experts in national standards. framework has been very high, and that is because of the way we have structured the partnership with Q389 Chair: So what you are saying is Elmfield gets Morrisons. the Government money. Norman Pickavance: Elmfield gets the Government Q386 Mr Binley: Some of your contractors have money, but we do our training in job skills, and we rather derisively dismissed what you are doing as a have always done that. We have always operated to a way of getting cheap labour and badging them without very high level in that regard. We have focused the really doing anything. In other words, giving funding on getting people to a nationally recognised qualifications to shelf stackers. Is that an unfair view qualification, something that, as I said earlier, most of of what you do? them do not have when they come to us. It is that Norman Pickavance: It is a very disappointing view. qualification piece, I believe, that lights a fire in First of all, it is not cheap labour. We pay very people that says, “Actually, I can. I am cut out for a competitively in the UK retail sector; we are one of career. This is something I can do.” That qualification the best payers, in fact, in UK retail, so it is not cheap means a huge amount to people, and it should not labour. Secondly, we have a chronic issue in the UK be underestimated. of people who come from excluded backgrounds Bear in mind we do not receive, or Elmfield do not ending up with jobs that have limited opportunities. receive, the full amount of Government funding for The thing that retail at Morrisons provides is an providing that. It is a much smaller amount, which I opportunity to build a career from wherever you start, am sure Ged can comment on. It is a small amount and 2,500 people were promoted off the back of this because it is only for the last leg of the journey—the scheme just last year alone into junior management accreditation piece. The other piece that it also helps positions. with, I should add, is numeracy and literacy skills That is not where it stops: 95% of the people in our development, which again you would not describe as business who are senior managers—store managers being something of a core activity for a retailer, and cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG04 Source: /MILES/PKU/INPUT/021099/021099_o004_th_BISC 27 03 12 CORRECTED.xml
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27 March 2012 Norman Pickavance and Ged Syddall that has helped with work in remedial skills Interestingly, one of the questions that was asked in development areas. one of the previous sessions was about the amount of Mr Binley: You can throw a few jokes in, because money that a training organisation would put into we have just lost half of our audience. front-line delivery, and I do not think anybody seemed Norman Pickavance: I know, I know. Was it to know the answer at the time, but I will tell you. It something I said? is roughly 50%—50% goes into front-line delivery. Ged Syddall: One of the things there is a lot of Chair: Okay. I am conscious of time. confusion about is what the public purse is actually paying for in this: what is the contribution that is Q390 Mr Binley: Mr Pickavance, how many of your coming from the public purse in these kind of apprentices were on a Train to Gain scheme? programmes? There are two things that you need to Norman Pickavance: I am not sure I could answer look at. When an employer makes a conscious that immediately. decision that it is going to train and develop its staff to a nationally accredited standard, there are certain Q391 Mr Binley: Could you come back to us with things that have to wrap around that to ensure that the the information? standard is met. For instance, within the training that Norman Pickavance: Yes. was delivered in Morrisons, there were gaps. There Mr Binley: Thank you. were gaps in the knowledge that needed to be delivered. There were gaps in that Morrisons did not Q392 Ann McKechin: I wonder if you could just do numeracy and literacy training. clarify a question that you answered about the number You then have the situation where the people who are of 16 to 18-year-olds employed in the company. I take going through the programme are actually working to it that is not the same as the number of people who a nationally recognised standard, and their work have then gone on to the apprenticeship system. Could towards achieving that nationally recognised standard you tell me how many 16Ð18s of that number have is achieved through coaching and mentoring them to actually gone on to the apprenticeship system? operate against the standard. Finally, you get to the Ged Syddall: Can I come back to you with that point where you can start to make assessments against number? people’s competence, which builds their confidence Ann McKechin: Could you give us written and ultimately ends up with those individuals clarification? receiving a qualification. The other thing you need to Ged Syddall: Yes. put around it is that the whole process needs to be quality assured. So there is a significant infrastructure Q393 Ann McKechin: Thank you very much. Mr of quality assurance that needs to go around the Pickavance, I note in the submission that you made to programme to ensure that the standard is being met. the Committee that you said in 2012 you are going to train 15,000 new apprentices, which I calculate, from The other thing then is that if you are using the basis of 132,000 employees, is about 11% of your Government support to underpin, in effect, either total employees. Just for comparison purposes for the entitlement or system failure, there is a whole raft, Committee—it would be very helpful for us to unfortunately, of bureaucracy that goes with that in contrast—what percentage of employees in your order to demonstrate that the use of public funds is Scottish shops are going through an apprenticeship appropriate. On the train on the way down I was system that has been approved by the looking at a tender spec from another employer that Scottish Qualification Authority? has looked at us to tender. I will submit what I have Norman Pickavance: We apply this system across the scribbled down, but to give you an idea of what a board, so it will be very similar. provider does and the services that it provides, and Ged Syddall: So it is Scotland, Wales and England. some sort of contextualised— Chair: Could you do so very briefly? I am conscious Q394 Ann McKechin: I take it that Elmfield is of the time. registered with the Scottish Qualification Authority. Ged Syddall: Okay. Initially we need to design the Ged Syddall: Yes. programme. We need to pilot it and test it to see if it would work. We would then need to go and deliver Q395 Ann McKechin: Right, okay. Do you then pre-employment for a lot of our customers—go out provide what would be called an apprenticeship as there and find people and prepare them from a certified by the SQA, which is generally to a higher pre-employment perspective. We then need to recruit standard? Is that right? them. We need to give advice and guidance. We need Ged Syddall: Yesitis. to do initial assessment. We need to develop materials online and offline. We need to be coaching to Q396 Ann McKechin: Do you receive Government standard. We need to assess. We need to support funding from the Scottish Government for that numeracy and literacy. We need to do numeracy and scheme? literacy testing. We need to quality assure from an Ged Syddall: We do, from SDS, yes. Ofsted perspective. We need to quality assure from a curriculum perspective. We need to accredit. We need Q397 Ann McKechin: Can you provide us with to certificate. We need to do SFA administration, SFA figures of how much money you are provided, so that controls, management information and contract we can see the number of people that go through and management. I could go on and on. which qualifications they receive? cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG04 Source: /MILES/PKU/INPUT/021099/021099_o004_th_BISC 27 03 12 CORRECTED.xml
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Ged Syddall: Yes, no problem at all. as a subcontracting partner or directly with the Ann McKechin: That would be very helpful to the organisations for a long time. We knew that they were Committee. looking at what was a fair and appropriate rate to Ged Syddall: We only receive funding for people, I underpin this kind of delivery, so we are working very think, up to the age of 19, but there are a significant closely, very transparently and, as a result of that, in number of other people either doing QCF 2010Ð11 rates were reduced for large employers by qualifications— 25%. In effect, I suppose that is 25% off our top line, which translated down to a reduction in our operating Q398 Ann McKechin: It would be helpful if you surplus that year. So for 2010Ð11 our numbers were could break that down by age categories, 16Ð18, 13.8% operating margin, and it will be something very 19Ð24 and 25-plus, in the same way as we have, and similar this year. From our point of view, ultimately how much money you receive from the Scottish that reduction in large employer rates multiplied Government for each of those. across the entire provision that the SFA underpins Ged Syddall: Yes, that is fine. over the next few years will save several hundred Ann McKechin: That would be very helpful. Thank million pounds. It is organisations like us developing you very much. models and working effectively with our partners that has demonstrated that. Q399 Julie Elliott: Mr Syddall, what proportion of the Government funding that you receive goes directly Q403 Chair: I am trying to work out the thrust of into training as opposed to your overheads, costs, etc? your argument. What you are saying is that you have Ged Syddall: About 50%. It depends really on the made large profits because of your high level of contract and it depends on your definition of what efficiency and productivity and so forth. “front line” is. Ged Syddall: In 2009Ð10. Julie Elliott: I did not mention “front line”; I said “into training”. Q404 Chair: Now you are claiming that you are Ged Syddall: Yes, about 50%. effectively passing on the benefits of that in either reduced profits or reduced charges. Is that correct? Q400 Julie Elliott: Last year, Elmfield made pre-tax Ged Syddall: The rates have been reduced across— profits of £12 million. How much of your income is from the Government as opposed to from your Q405 Chair: The rates of what? employers? Ged Syddall: The SFA and the NAS have reduced Ged Syddall: It was all Government money. by 25% the rates for large employer apprenticeship delivery in 2010Ð11 as a result—or partially, I think— Q401 Chair: I believe it amounted to 36%, your of the efficiencies we were able to demonstrate. So profit level. we get paid 25% less now than we did in 2009Ð10. Ged Syddall: Yes, in 2009Ð10. Could I expand on that? Q406 Chair: But you are still making 13%? Ged Syddall: It is 13.8%. Q402 Chair: Have you any indication of what subsequent years are going to be? Q407 Chair: How does that compare with other Ged Syddall: This year’s operating margin is 13.8%. companies in the same area? Can I explain why? Ged Syddall: It is normalised. So I think it is roughly Chair: Yes, that was the reason for asking. similar for Alex, who was sitting here before. Ged Syddall: Right, okay. Elmfield exclusively deals with large employers. That is our business model. We Q408 Katy Clark: You will appreciate that as a support a number of the UK’s largest employers, Committee we are very concerned about executive delivering apprenticeship programmes, work-based pay, particularly when there might be public money learning programmes and pre-employment involved. We have been told that you have received programmes. There are natural efficiencies in dealing £3 million in dividends from Elmfield. Is that true? with large employers. The easiest example probably Ged Syddall: Over the last four years we have to illustrate this is that if you looked at a similar size declared one dividend, which was £3 million, which of provider to ourselves, they normally would have an equated to about 15% of the distributable profits, if estate of around about 50, 60, 70 offices where their you like, that we could have done. There are three staff would be accommodated and where they would things that I do when we look at the business. One of deliver the training. Because of the way that our the problems I have is that I own the business. If this model operates, our front-line staff are accommodated was a business like Babcock that was a PLC or that within the organisations that we work with and we use had hundreds of shareholders— their premises to deliver the training. So we have six Chair: I have to say, it sounds a very happy problem offices from which we operate, which is mainly our to have. back office and management staff. If you look at the Ged Syddall: I set the business up from nothing; we efficiencies just within our estate model, that would now employ 750 people. The other thing that we have amount to several million pounds a year just in the done is over the last three years put 40% of our lack of need for offices. post-tax profits into what we call our social impact We have an incredibly close relationship with both the programmes, which have helped thousands of young NAS and the SFA, and we have been working either people back into employment. So, yes, we are cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG04 Source: /MILES/PKU/INPUT/021099/021099_o004_th_BISC 27 03 12 CORRECTED.xml
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27 March 2012 Norman Pickavance and Ged Syddall entrepreneurial. Yes, I set the business up. From my of reasons. First of all, we started to look at this in point of view, from a conscience perspective, for 2007; we started to look at the ease to business of every £1 I have taken out over the last three or four getting qualifications for young people in 2007. Under years I have put £2 back into helping other people the then Labour administration, following the who have not been as lucky as me. Leitch report, which identified that the UK was a third division country in world league tables as far as skills Q409 Katy Clark: For example, do you get a salary? were concerned, the vast majority of people coming Is that in the public domain? Are those figures in the into the work force had no qualifications. public domain? Mr Binley: I understand that. Ged Syddall: My salary is £75,000—I think. Yes, Norman Pickavance: This is really important, £75,000 is my basic salary. because the then Prime Minister, Gordon Brown, came to Morrisons and applauded the work that we Q410 Mr Binley: Mr Syddall, I have set up two were doing in our attempt to get 100,000 people to a companies. They now employ collectively 260 people. basic qualification, which they had left school without. I have never got anywhere near the profit levels that So we set that goal. We then went to the further you are talking about and, if I am perfectly honest, I education sector in the UK and said, “Can you help would be very concerned if I did get that much profit. us to deliver this objective?” I did not go to the private It sounds to me like you became concerned about that sector first; I went to the FE sector, and not one single too. Is that the case? Because, quite frankly, that much organisation in the FE sector was able to deliver money made out of a business of your kind is a rip- against the scale and the national standard that we off. How do you answer that? were looking for. It was only in extremis, in those Ged Syddall: Are we talking about the profits— adverse conditions, that we then went to the private sector and said, “Can you help us?” We went through Q411 Mr Binley: I am talking about the amount of a bidding process, and Elmfield won that bid, so as an money made for the service you provide. It is a very organisation, we have not touched the contracting simple question. I employ, as I say, 260 people—not process. quite the number you do but quite a few—and I do not see, when you are a large employer of people, how Q416 Mr Binley: I have no concerns, Mr you can make that sort of money. I understand how Pickavance, with Morrisons and what you are doing— the City does, because it deals in massive sums of none whatsoever. But you would be pretty surprised money, but you do not. I want to know how you make if you saw that sort of percentage bottom line with that sort of money. your business, wouldn’t you? Ged Syddall: With all due respect, at the end of the Norman Pickavance: A wider observation I would day, the year we are talking about, where that profit make to the Committee is that yesterday I was level was made, was 2009Ð10. We did not set the speaking to the Inclusion Forum across the UK, with rates. 250 people in the audience, addressed by the Minister— Q412 Mr Binley: So you overcharged? Chair: Could you focus your remarks, please? Ged Syddall: No. We did not set the rates. The rates Norman Pickavance: The point is that there is a were standardised. whole industry out there, Chairman, directed at the garnering of Government funds for the provision of Q413 Chair: You were overpaid. training for people who are excluded from the work Ged Syddall: Or the state was paying too much force. There is a huge market because of the lack of money— capability in the further education sector for delivering Chair: That is what I meant. this work. If it was capable of delivering this work, Ged Syddall:—because it did not recognise that there we would use them, but there is a huge market, led were efficiencies in this kind of delivery model. From by the G4Ss and Sercos of this world, doing this work. our point of view, I do not think there are many The reason we have worked with Elmfield is that they businesses out there that have put £6.5 million of their have done this work better than other people, purely own money over the last three years into supporting and simply. programmes that have helped thousands of young Chair: We quite understand the position Morrisons people. are in. This is not a criticism of Morrisons. Indeed, we applaud your motive. Q414 Mr Binley: That is great, but I do not think there are many businesses out there making the Q417 Katy Clark: It may be that you have already bottom line that you are making. dealt with this, but as a Committee we are concerned Ged Syddall: Well, moving forward now at 13.8%, about how Government money is spent and about that is normalised for the sector. executive pay. If you could provide as much information as possible about that to the Committee Q415 Mr Binley: You can understand why people in writing afterwards, that would be appreciated as are suspicious though, can’t you? part of our wider look at this issue. We need to ensure Norman Pickavance: Can I make an observation? that taxpayers’ money is wisely spent. It is not about Mr Binley: Yes, please do—help him out. whether Morrisons feel they are getting a good service Norman Pickavance: I am not going to help him out or not. That is a different issue. We are concerned too much, because he is working with us for a couple about the wider issues. cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG04 Source: /MILES/PKU/INPUT/021099/021099_o004_th_BISC 27 03 12 CORRECTED.xml
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Norman Pickavance: There are two other points if I Q422 Julie Elliott: I would say that was quite early may just add to this. The Minister is trying to set up on. a competitive market, and he reiterated that point Ged Syddall: Not when you’ve been running it for yesterday. That is the way the Government apparently 10 years, it’s not. wants this market to operate. That is the first point. The second point is about results, isn’t it? It is about Q423 Julie Elliott: Right. Well, why did you feel it results—payment for results. Last year, we took was really important? Was it just that there weren’t 1,000 NEETs, as so defined, and gave them permanent companies doing what you needed or was there a gap? employment and training. That number, I understand, Ged Syddall: As an entrepreneur, I thought there was would equate to £56 million-worth of taxpayers’ a niche in the market to create a business. benefit, because they are not being paid benefits through the JSA system. Q424 Julie Elliott: You felt you could make money Chair: These were points that you made in your out of setting up this company. slides, so we will have seen them. Ged Syddall: Yes.
Q418 Julie Elliott: Moving on to a slightly different Q425 Julie Elliott: Does Elmfield work with any area, Mr Syddall, it has been reported that you have awarding body other than Skillsfirst Awards Limited? also founded your own awarding body, Skillsfirst Ged Syddall: We do work with Edexcel. Awards Limited. How do you respond to those who may say that there is a conflict of interest arising from Q426 Julie Elliott: What kind of percentage of your owning both a training provider and its awarding work is with Edexcel? body? Ged Syddall: I will not quote exactly, but it is quite a Ged Syddall: It is no different, for instance, from lot of work with Edexcel at the moment. I will let you City & Guilds and City & Guilds for Business, who know exactly, but it is a reasonably significant deliver Asda. It is no different from Edexcel and percentage. Pearson in Practice. It is no different from Walsall Julie Elliott: Could you forward us that information College, who I believe have an awarding body, and in writing? Norwich College, who have an awarding body, and Ged Syddall: Yes, no problem. there are other organisations. We were encouraged, Julie Elliott: Okay. Thank you very much. and certainly there was a movement to encouragement, to broaden the awarding body market Q427 Chair: As Elmfield, you own Elmfield. a few years ago. Presumably you contract with Skillsfirst to do the accreditation. What is the size of the contract? Q419 Julie Elliott: By whom? Ged Syddall: We will probably spend about—again I Ged Syddall: By the Government, to bring more will get you the exact figure if you want—£2 million competition into the market. I set Skillsfirst up a year. because I thought there was a gap in the market for a good, customer-centric, employee-focused awarding Q428 Chair: So one company pays £2 million to the body. As a result, that is now a very successful other company and you own both. awarding body. It deals with 30 organisations, Ged Syddall: But it is no different than City & Guilds including us, so it is a competitive, out-in-the-market or Edexcel. business. There are no rules from Ofqual to say you Chair: I agree that there are other parallels within the cannot do it. There are very robust and rigorous industry, yes. conflict of interest policies that we adhere to. If the rule is “Well, you cannot,” then we cannot. The other Q429 Ann McKechin: I have a point to clarify with thing is that from a competition perspective, I have to you, Mr Syddall. I understand that your initial compete in the open market against City & Guilds and allocation from the Skills Funding Agency was some Pearson, etc. The breadth of service that organisations £20 million and this was increased to £40 million under common ownership can offer to our customers halfway through the financial year. Can I ask why the gives us at least a competitive level playing field SFA doubled its allocation to your company? against those other organisations. That is why we have Ged Syddall: Because of the volume of learners that done it. we were putting through.
Q420 Julie Elliott: You have answered part of my Q430 Ann McKechin: So it was based on the next question. Yes, you are quite right: there are other volume rather than the actual time period in which providers doing this in the marketplace, but you set you were passing them through? this up very early on after your company set up. Ged Syddall: No, it was volume. It was because of Ged Syddall: No, no, I did not, I am sorry. the volume.
Q421 Julie Elliott: It was quite early. Q431 Ann McKechin: The volume? Ged Syddall: No, the company has been going for the Ged Syddall: Yes. best part of 10 years and Skillsfirst was set up about Ann McKechin: Okay. That is fine, thank you very three years ago, so it was seven years in. much. cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG04 Source: /MILES/PKU/INPUT/021099/021099_o004_th_BISC 27 03 12 CORRECTED.xml
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Q432 Chair: Mr Pickavance, to get some points of all together, we have had four satisfactory grades, clarity, it has been agreed that the vast majority of 20-odd good grades and four outstanding grades. your apprenticeships are in the 25-plus age group. This is only partially funded by the Government, or Q435 Chair: Yes, that again was in the slides you did you say that you provided all the funding and that presented. What proportion of your total contractual you did not take anything from the Government? base is the contract with Morrisons? Norman Pickavance: Yes. The way it operates is we Ged Syddall: Probably this year I would say it will deliver the training, and the cost of the accreditation end up being about 50%. and coaching through to the receiving of a certificate is provided by the Government to Elmfield. That is Q436 Chair: About 50%. So, if you like, the more how it works. satisfactory grades of the others is for the other 50%, Can I just add to the point on the cost? We fund all of by and large. our craft apprenticeships directly. We have no funding Ged Syddall: The good grades for the others, yes. from the Government for that activity. We fund Norman Pickavance: Can I just chip in with one debt-free degrees, which we get no funding from the small point on that? Government for. We fund many MBAs, which we get no funding from the Government for. We run the Q437 Chair: Yes, I was going to come to you in a largest coaching programme in the UK, which we get moment. I was going to ask you what factors you no funding from the Government for. consider when choosing a training provider and what your reaction was to this relatively low score from Q433 Chair: Tangentially, the National Audit Office Ofsted. You may well have been going to cover those has said that the Skills Funding Agency has been points, but I am just getting the questions in first. trying to assign a cash value to in-kind contributions Norman Pickavance: You have to look at the scale of by companies. Obviously yours goes far beyond that. what we are doing. We are providing How would you recommend that the Agency should Ofsted-accredited training to a satisfactory level quantify and audit these contributions, from your across 100,000 people over approximately 500 sites. experience? That is the biggest, most complex training provision Norman Pickavance: If you consider that we do not in the UK. We have been at that for 18 months. We pay a training rate, that would be a factor, so what have reached a satisfactory standard; we will get contribution we are making in terms of full salaries better. If other people were to provide what we do on versus training salaries; the cost of the people who do this scale, we would not have the skills crisis in the the training in departments in the workplace; the cost UK that we are suffering. of the coaches that we have. It is difficult to put a cost on all that, but we estimate that for our basic Q438 Chair: What will you do if in future apprenticeships it is about £1,000 a person. inspections Ofsted does not rate them higher? You said that it will get better. Q434 Chair: Mr Syddall, Ofsted recently graded Norman Pickavance: We have noted all the points Elmfield with an overall score of three out of four, that were made in the first Ofsted report and, again, where four is the worst score possible. Given that you for a large company to be involved and open itself up are now in receipt of more than £40 million of public to Ofsted accreditation is a great step; it demonstrates money, are you satisfied with Ofsted’s assessment of the openness of what we are doing and our recognition your training? of the value of scrutiny. We are working to improve Ged Syddall: What you have to do there is put that in that and I think we will. the context of where we were in our relationship and the programmes that we were delivering directly with Q439 Mr Binley: I really do want to make sure that the SFA. At the point of inspection we were the taxpayer, which is you as well, is getting real value 18 months into the programmes we were delivering for money. When I look at your P&L for the year through the SFA funding provision, and there is a ending 30 September, I notice you have pre-tax profit cycle to reach maturity and the point where your of 33%, £12.3 million, and I notice that £6.5 million provision becomes good or outstanding. At the point went in taxation and dividends. What was the when we were inspected, we expected ourselves to percentage split between taxation and dividends? be at the satisfactory standard, with a view that the Ged Syddall: It will be the standard rates. contributory grade around capacity to improve would be good, and that is, in effect, what the inspection Q440 Mr Binley: Well then, tell me what the came out at. So it was fit-for-purpose provision and percentage split was. with good capacity to improve that provision. Ged Syddall: There will be corporation tax. It was I would like to point out as well, though, that we have £3 million. The dividend was £3 million. Is that what also been involved in a further five Oftsed inspections you mean? over the last four years where we have been the lead provider. So it is exactly the same type of provision, Q441 Mr Binley: So about £3.5 million went in in effect, as we do in this, apart from that we have dividends. been holding the contract. Because those contracts Ged Syddall: No, £3 million went in dividends. were mature and had had longer to develop, they were all graded good. Of the grades that we have received Q442 Mr Binley: Three million went in dividends. from an Ofsted perspective, if you amalgamate them How many shareholders do you have? cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG04 Source: /MILES/PKU/INPUT/021099/021099_o004_th_BISC 27 03 12 CORRECTED.xml
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27 March 2012 Norman Pickavance and Ged Syddall
Ged Syddall: Four. to do is look at developing programmes and solutions that provide people with a framework to transition Q443 Mr Binley: Four. Can I just ask your them to employable individuals. My opinion is that shareholding? the best way to do that for a lot of these unemployed Ged Syddall: It is 95%. individuals is to prepare them for employment by Mr Binley: Thank you. employing them. The models that we delivered were Chair: Brian, you were going to ask some further fairly similar to the Future Jobs models for 16 to questions on Elmfield and Barclaycard. 18-year-olds. There is a significant problem for a lot of these kids. Q444 Mr Binley: Thank you very much. Just to finish up, Mr Chairman, I think it is right and proper Q446 Mr Binley: I understand that. Did you say that to get that as evidence, because it does give us an idea you were training them in contact centres? What does about whether the taxpayer is getting value for money. that mean—telephone marketing contact centres? Whilst I understand your side of it, I want to explain Ged Syddall: Yes. that there is a doubt in terms of the amount of money you made in that year. Right, let me go on to talk about Elmfield. I think I Q447 Mr Binley: Okay, fine. It is part of my am on question 17, am I, Chairman? Oh, question 20. business; I am perfectly happy with that. Specifically We are further on. We recently spoke to one of your in that regard, because it is vital that the information clients, Barclaycard, and they told us that their they receive is relayed on to a computer very apprenticeship scheme was not open to existing accurately—with reasonable spelling, for instance— employees. Is it better for apprenticeship schemes to can I ask what you have found in terms of numeracy create jobs or to up-skill existing staff? and literacy skills? Ged Syddall: They have equal merit. Particularly Ged Syddall: They are typical. About 80% of people where there has been system failure, and somebody is who come to us have deficiencies in either numeracy in a job but the education system has let them down, or literacy at level 1, and a significant percentile have they have numeracy and literacy problems, and they very significant numeracy and literacy issues. A lot of might not have any formal recognised qualifications, what we do, for instance about a quarter of the work it is equally important those people get the chance to that we have done in Morrisons, is underpinning get that qualification, which is a passport for social support in numeracy and literacy. A lot of the work mobility. Obviously, in these times, when there are that we did and are doing in our academies is around pushing 1.5 million young kids on the unemployment supporting numeracy and literacy. It is a problem and register, it is great that we are creating opportunities it is probably one of the biggest road blocks. with Barclays. What we have found is that you can transition these Mr Binley: I agree with you. young people very effectively and fairly quickly. It is Ged Syddall: We are incredibly proud and pleased to all about confidence; it is about re-socialising and it is be supporting that programme: 1,000 unemployed kids are going to get the chance of a good job, a good about turning up on time. Somebody was talking wage with Barclays, so we are over the moon with earlier about school leavers in the old days, when they that, and it is fairly similar to a lot of other had become un-socialised. It is having that arm round programmes that we have supported out of our them. The kids used to go to factories and down a pit surpluses. I believe we have done one with Sandwell or into a mill or whatever, and the person next to them Community Caring Trust in the Chairman’s would put their arm around them and they would be constituency. We have similarly taken young the mentor, they would be the buddy—the person who unemployed people, given them a job and helped them knocked the rough edges off them. The kind of to progress into permanent employment. The business environment that we have created in our contact is massively committed, both in terms of the funding centre academies facilitates that. that we receive, in terms of the prioritisation of that funding, and also its surpluses; as I said, £6.5 million Q448 Mr Binley: So social skills are equally as of our surpluses over the last three years has gone into important. underpinning this kind of activity. Ged Syddall: Yes, attitude, behaviour. Skills are only one bit, and that needs to be factored in. Q445 Mr Binley: We have had some evidence that The other point I would like to make is that it is tells us today’s school leavers may not be as equally pertinent, certainly for kids up to the early employable as many employers would like them to 20s, where there is not a huge difference. Some of be. Can you tell us your experience in that respect? those kids, particularly in the conurbations that we are Ged Syddall: Yes. We opened nine contact centre operating in, are fairly tough and a lot of them have a academies, where we took young people on and gave lot of problems at home, etc. You create an them a job for six months to prepare them, in a environment where you can nurture them, support sympathetic working environment, for the world of work. We have interviewed tens of thousands of kids them, and make them feel valued. over the last couple of years, and the distance that some of these kids have to travel to change from Q449 Mr Binley: What is your average age scenario being, unfortunately, unemployable young people to in terms of the people you employ in the contact employable adults is fairly significant. What we need centres? cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG04 Source: /MILES/PKU/INPUT/021099/021099_o004_th_BISC 27 03 12 CORRECTED.xml
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Ged Syddall: Fundamentally, the Future Jobs ones are these things are not sustainable. It is very expensive obviously Future Jobs posts, but they are 16Ð18. to do this work.
Q450 Chair: I want to conclude with a couple of Q456 Chair: Yes, I understand that. So, in effect, groups of questions. Earlier, you outlined the levels of there is £2 million of funding from the SFA. How profitability from Elmfield and the relative distribution much from the Council? in terms of tax and dividends. Could you do the same Ged Syddall: There is £200,000 from the Council. for your Skillsfirst company? Ged Syddall: Yes, with pleasure. Q457 Chair: How much from you? Ged Syddall: We underpinned it. I will get the exact Q451 Chair: Have you got the information to hand? number, but it was several hundred thousand pounds. Ged Syddall: No. I know that in the last set of audited accounts we have, Skillsfirst made a loss. Q458 Chair: How many young people do you think you have helped here? Q452 Chair: Have you any idea what the projections Ged Syddall: About 550. are now? Ged Syddall: About a couple of million turnover. Q459 Chair: Have they all got jobs in caring, do you know? Q453 Chair: What about profit? Ged Syddall: The vast majority are going into Ged Syddall: I am not sure of the profit. About a full-time employment. million profit. Q460 Chair: Would you be able to give us the Q454 Chair: About a million profit. Who are the exact figures? shareholders? Ged Syddall: Yes, I can get you the figures. Yes, that Ged Syddall: It is me. is fine. Chair: Okay. That concludes my questions. Thank Q455 Chair: You, thank you. Secondly, I would just you very much. That was very helpful. Obviously like to ask you about your contractual relationship there are some questions for which you with the Sandwell Community Caring Trust. What understandably could not give a full answer. If you level of public funding do you get for that? could send us the written information, we would be Ged Syddall: Basically, it was a partnership where very grateful. If we feel that there are some questions Sandwell Community Caring Trust was the lead that we did not ask that we need to ask, then we will bidder in a Future Jobs Fund-related programme that be sending them to you. Similarly if you feel that there was co-supported by Sandwell Council. The is any additional information that was not covered by programmes basically draw down SFA support, which the scope of our questions that you want to give us, was about £2 million, but we underpinned it to the we would be grateful to receive it. Thanks very much. tune of several hundred thousand pounds, because cobber Pack: U PL: COE1 [SE] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG05 Source: /MILES/PKU/INPUT/021099/021099_o005_th_BISC 17 04 12 CORRECTED.xml
Ev 76 Business, Innovation and Skills Committee: Evidence
Tuesday 17 April 2012
Members present: Mr Adrian Bailey (Chair)
Mr David Ward Margot James Nadhim Zahawi Simon Kirby Paul Blomfield Julie Elliott Ann McKechin ______
Examination of Witnesses
Witnesses: Martin Doel, Chief Executive, Association of Colleges, and Tom Wilson, Director, Unionlearn, TUC, gave evidence.
Q461 Chair: Good morning and thanks for agreeing Tom Wilson: In recent times—the last year or two— to appear before us this morning. Could you introduce there has been much more attention paid by NAS to yourself for voice transcription purposes? quality, and that is why they have been more Martin Doel: Martin Doel, Chief Executive for the successful. That is very welcome. Association of Colleges. Chair: Do you wish to disagree with that point, Tom Wilson: Tom Wilson, Director of Unionlearn, Martin? which is the learning and skills arm of the TUC. Martin Doel: No. There has always been a wish to preserve quality, but if you have an offer where Q462 Chair: I will repeat what I always say to effectively you are saying, “The answer is an panels. Do not both feel obliged to answer every apprenticeship, now what is the question?” there is question as a matter of duty. If you feel that the other always the potential for undermining quality in that person has adequately covered the points you would growth process. The NAS have been alive to that, but wish to make, feel free to opt out, but obviously there have perhaps given more attention to it, will be some questions that are specific to your area understandably, in the last year rather than the of expertise. I will start with a fairly general question. preceding years. I do not think that they were avoiding The National Apprenticeship Service has sent us a the quality issue throughout, but greater attention has long list of its achievements. According to the NAS been paid to it in the last year. everything in the garden is rosy. What is your view of that? Q464 Chair: One of the accusations I have heard Martin Doel: I do not think that anybody’s garden is levelled is that it goes for soft options, if you like, always entirely rosy. There will be some achievements the major employers, but does not deal with the more that are properly ascribed to the NAS, but there will difficult areas, the small employers, issues around be more that needs to be done. I particularly salute ethnic minority apprenticeships, and so on. Have you their efforts at promoting and marketing any views on that? apprenticeships, perhaps most effectively to large Martin Doel: There is always a tendency to go for the employers and at the national level. The growth is not eponymous low-hanging fruit, and as a national to be sneered in terms of the increase in the number agency it is an easier match for them to work with of apprenticeships, but continuing to have growth with large employers. That is not a bad thing to have done; quality is an abiding concern for all of us. The NAS it is a right thing to have done. I would question their needs to think in those regards. I think that the internal ability as a national agency to effectively work with relationships between the Skills Funding Agency and SMEs in the locality. Colleges tell me they have very accountability trees and chains need to be thought good links with small and medium enterprises at the through a good deal more into the future. local level; they know better the local markets than a Tom Wilson: NAS perhaps has suffered a bit in the national agency. sense that quality and quantity have been slightly I would not want the NAS cutting across unduly what opposed to each other, and the one is perceived at the colleges do with their links with their local expense of the other, and that is the opposite of the communities and employers within those local truth. NAS’s greatest success in more recent times has communities. I would not hold that up as something been because they have pursued quality as much as with which to beat the NAS over the head; it needs to quantity, and have thereby assured employers that this work in concert with colleges and local providers in is not some kind of cheap second-rate qualification order to reach out to SMEs effectively. They have that is not worth pursuing; it is something that is concentrated on national-level employers, but I do not valuable. That is why they have been more successful know that that is a bad thing for them to have done in over the last couple of years. raising national consciousness of the apprenticeship offer. Q463 Chair: One of the accusations levelled at it is Chair: I was going to develop that issue; you have that it has gone for quantity rather than quality. You partly pre-empted it. Do you wish to add anything, are saying that from your perspective, Tom, that they Tom? have managed to sustain quality, and are in fact are Tom Wilson: To be fair to NAS, they have actually using it as marketing? worked hard at recruiting and engaging both large cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG05 Source: /MILES/PKU/INPUT/021099/021099_o005_th_BISC 17 04 12 CORRECTED.xml
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17 April 2012 Martin Doel and Tom Wilson employers and SMEs. Interestingly, still today in the potential conflict does not manifest itself and affect UK only 30% of employers with over 500 employees quality. employ apprentices. Far more than half, almost Tom Wilson: Often when our members have raised two-thirds of all large employers in the UK still have concerns with us about quality, and very often they no apprenticeships, unlike, say, Germany where it is have, we convene meetings of apprentices themselves literally 100%. I do not think you can blame NAS for and talk to them about their experience, and they will that necessarily. Part of the issue, exactly as Martin tell us when they have poor quality off the job says, is that there needs to be a much stronger training, supervision, or mentoring—whatever it partnership between colleges, large employers and might be. We have then taken that up with NAS SMEs, using supply chains, for example, which large privately, and very often we have found that NAS employers often have with their SME suppliers, to does act on that, and has acted quite effectively. create a network in which the large and the small can I agree entirely with Martin that there are two clear, all work together through the colleges, with distinct roles, and there perhaps needs to be clearer or everybody working in some kind of partnership. That more public articulation of the way those two roles has not always worked, but it is now better than it are organised within NAS and the way in which they was. work. I agree also about Ofsted perhaps having a clearer and more public role in monitoring quality. Q465 Chair: The AoC said in your evidence that, “Colleges report that they recruit most apprentices for Q467 Mr Ward: What is emerging is confusion employers directly and locally.” That is backed up by about who does what. While, by definition, everybody evidence submitted by other bodies like the Forum of NAS works with are apprentices, not all apprentices Private Business. If that is the case, what is the virtue are involved with NAS. Therefore it becomes very of the NAS as a national matching service? Does it confusing in terms of who is in charge of this. Tom add value to that process? Wilson has mentioned the restriction on the Martin Doel: At the level of general awareness, yes, involvement of unions and SMEs in feeding into this. NAS has a substantial role to play. While the colleges Should unions have a greater role in the promotion will say they recruit locally through working with of apprenticeships? employers, it is very hard to establish how much of Tom Wilson: Yes, absolutely. Our experience is that that awareness had generally been raised by NAS at where unions are involved, employers report twice as the national level, and how much that plays through much take-up, interest, satisfaction, quality and to the success colleges have then had working at the progression among their apprentices. Similarly the local level. A combination of the two becomes very apprentices themselves, who are union members, effective and contributes to the overall outcome. report to us that they are much more likely to get Clearly NAS has further roles, rather than just high quality training then where they are working in marketing and the matching service, and the roles in a company that is not union-recognised, or where they relation to quality in terms of overseeing the flows, are not members of unions, and frankly the quality and so forth. and the training may not be as good. We are strongly of the view that where there is union Q466 Chair: Do you think there is a conflict in the involvement, engagement and presence it is a role of the NAS acting as the promoter and evangelist powerful force for good, and that has been recognised for apprenticeships and at the same time as the from top to bottom throughout the entire system. regulatory body? Do you think there is a conflict and Interestingly, this social partnership approach to do you think it has caused problems? apprenticeships, the working together of unions, Martin Doel: There is a potential conflict, and there employers, and Government in a tripartite way, is needs to be very clear accountabilities within the what underpins the enormous success of agency as well as externally about which people are apprenticeship systems in Europe. responsible for quality, for auditing the quality of It is not an accident that we are taking the Skills provision, and which are responsible for marketing Minister, John Hayes, to Berlin next week to meet and generating that demand in the first place. I do not some counterparts in the German apprenticeship know how the NAS works internally in detail, but if I system to talk about how their system works, and were involved in running the NAS I would want to particularly to talk about the way the social see clear accountabilities, who was responsible for partnership strengthens, underpins and embeds the quality and audit, and who was responsible for whole success of the German model. The Government generating the business in the first place. have been very supportive of that, and we are grateful That needs to be clarified. I would feel happier in to them for that support. some respects if, as the latest report has said, an The reason why that works is precisely because, in a external body like Ofsted—we might come back to sense, you have then got a critical friend in the union Ofsted’s effectiveness or otherwise in its role of agent—the shop steward, the union learning rep—who looking at apprenticeships—came in to judge the can be a voice for the apprentice, who can articulate quality of outcomes for individual learners and also their needs to the employer, and who is often quite for employers, rather than those who market it. You sympathetic and understanding—but not always; can have a combination of checks and balances here, sometimes we have to engage in some fairly robust but I would have some internal checks and balances, exchanges. Where it works well, it is the best way to and clarity about roles within the NAS to ensure that ensure a high quality of apprenticeship. cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG05 Source: /MILES/PKU/INPUT/021099/021099_o005_th_BISC 17 04 12 CORRECTED.xml
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17 April 2012 Martin Doel and Tom Wilson
Q468 Mr Ward: Where has this gone wrong though, Once they are recruited the role of the ULR is then to Tom? That comment could have been made any time support, literally sometimes by putting an arm around in the last 40-odd years, and probably has been made the shoulder of the new apprentice, helping them to every year for 40 years. Why do we consistently get come to terms with the world of work. it wrong? For a lot of young apprentices, this may be their first Tom Wilson: I would not say we consistently get it ever real encounter with the world of work. They may wrong. Certainly over the last few years we have well need a friendly arm around their shoulder to begun to consistently get it much more right. Things explain to them, “Look, this is how things work here.” have improved enormously, and there should be great Things like dress sense, meal breaks, language credit given to both this Government, and the previous codes—simple things like that, which some young Government, to be fair. The real decline in people do not know about. That is where ULRs can apprenticeships throughout the ’70s and ’80s was a play an important and effective role in reassuring combination of factors: changes in industry, changes people, helping them, supporting them, and working in qualification regime, different Government policies, with the employer to ensure that apprenticeship and so on. All of that then changed in the mid to late scheme is right for their industry and is going to ’90s, and there has been steady progress that has genuinely help those young people to progress and helped to rebuild and re-found a new kind of complete. apprenticeship, which is much more around the The evidence suggests that where we have good, modern employment needs of the UK economy, which active ULR networks, which is widespread across the is different from what it used to be. union-recognised work force, the completion rates, It is that different kind of apprenticeship that is now progression rates, and enrolment rates of apprentices being promoted, and that is what we are a big part of are far higher than where those do not exist. helping to promote and to publicise. Key to this is persuading employers, who may still be unaware of Q470 Mr Ward: Do you know how many the different kinds of apprenticeships that are organisations would not be able to benefit from that available now, about the value, the quality, and the by being non-unionised? What are the percentages? business benefits of those apprenticeships. Many Tom Wilson: Roughly, collective bargaining extends employers, even big employers, are still unaware of to about a third of the economy, so it is the other that. two-thirds where people do not have the benefit of A big part of what we do as a union movement is to that. Having said that, we are working in non-union talk to those large employers, many of whom workplaces to try and help them to learn from the recognise unions and we work very closely with them, benefits of union learning in union workplaces, in about the benefits to them of the apprenticeship ways that are appropriate to them. We are trying to service. Perhaps the biggest way in which we can play extend the model beyond the unionised sector. our part is by robustly engaging those employers that do not take on apprenticeships to begin to take them Q471 Mr Ward: What support does the AoC provide on, or if they do, to improve the quality of their as an organisation to your members, the colleges, in schemes—for example, by having a longer duration, terms of developing the apprenticeships? or better progression, or improved quality./p>The final Martin Doel: The prime role of a representative body point I would make is that one thing we have not in this regard is providing good information to cracked yet properly in this country is equality and the colleges on emerging Government policy, fact that far too many young women are still excluded, consequences of funding decisions and changes, frankly, from decent apprenticeships in engineering, sharing best practice between colleges, and holding and far too many men are excluded effectively from events in order that they can meet with one another to apprenticeships in social care, retail or hairdressing, understand that. In no sense could I be a guarantor of which can be just as valuable. That is a real problem quality within it, but clearly there are messages that that we need to address with some urgency. the AoC would push to their members, the key one is delivering apprenticeships with integrity—the term Q469 Mr Ward: Could you tell us a bit more about we have come up with. the union learning representatives and the role that Colleges are in their communities for the long term. they have in that very issue? They have no interest, wish or benefit in providing Tom Wilson: We have trained about 28,000 union low-quality apprenticeships, either to individuals or to learning reps across the entire country, which is employers, because their reputations depend on something we are very, very proud of. ULRs are a long-term relationships. They are not for profit and kind of shop steward in the workplace, but their role therefore they are not in it to make a buck; they are is limited to training, to learning, to skills. As far as in it to serve their communities through what is a very apprenticeships go, they will firstly go and talk to the strong and impressive way of learning while you are employer about why it is so important for the working. It is a very persuasive and strong model. employer to have a decent apprenticeship scheme, to Perhaps I could just take up a couple of Tom’s points. set up a kind of training committee, to work with the Colleges value the involvement of unions in the union, to organise it in a way that really suits the provision of apprenticeships and all training, and work needs of that industry and that work force. very closely with the unions in the Unionlearn Hopefully the employer will respond and say, “Fine, movement, and in other respects. I have to question okay, let’s get an apprenticeship scheme up and the point that if 33% of the work force is not running”, and start to recruit apprentices, and so on. unionised, and Unionlearn is not involved in 66% of cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG05 Source: /MILES/PKU/INPUT/021099/021099_o005_th_BISC 17 04 12 CORRECTED.xml
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17 April 2012 Martin Doel and Tom Wilson apprenticeships, to imply that all the 33% are much you think your support adds value to the perception better than the remaining 66% in all cases is perhaps that they are a good thing? fallacious. There can be some good provision that is Tom Wilson: Yes, I think so. Broadly speaking people not delivering in conjunction with unions. do trust union views. This is, frankly, quite a complicated area, and the whole value of having union Q472 Chair: Tom, you made this assertion that in learning reps is because these are people who are effect completion rates were better where there were trained to understand the issues. If your ULR says, trade union representatives. Can you provide any “Yes, this is a good scheme”, with caveats—they are statistical support for that particular assertion? Not not always perfect, and often there are things that need necessarily here today, but if you could that would be to be improved—but broadly speaking, union very helpful. endorsement does carry quite a lot of weight, not just Tom Wilson: Yes, we certainly will provide that in union workplaces, but in the non-union ones too, evidence. To clarify, I certainly was not claiming that interestingly. in every case this is a necessary condition, or a sufficient condition, but I think there is overwhelming Q474 Ann McKechin: As we all are aware, there has evidence that where unions are present, there tends to been a very rapid increase in Government funding on be a much higher level of quality of progression and apprenticeship systems over the last three or four completion and other indicators. That is not to say that years. Last year the Government spent nearly £1.2 where unions are not present it cannot also be high billion. Martin, you commented that at some point the quality, but is not quite so often the case. Government will need to pay less in the future, on the Martin Doel: Can I add one further thing in relation to assumption that employers are going to be paying Tom’s evidence? We also need to beware of simplistic more. Do you think that the current level of international comparisons. The comparison with investment is sustainable? Do you think that the Germany is interesting. There is much to recognise Government has a strategic idea of how it is going to and commend in the German system, not least that in change that balance? A year-on-year increase at the 1946 we left it a dual system directly after the Second levels we have seen in the last few years is unlikely World War, and introduced the apprenticeship system given where we are in terms of public finances. to Germany. None the less it is part of a complicated Martin Doel: This is a really important time to pause social compact, or a series of social conditions, not for thought about how best we use the funds available least a very active chamber of commerce role, which for apprenticeships. I hope the amount of investment is not easily reproduced in our economy. in apprenticeships continues, but how best we use that Moreover, while the stability within the German is an important question to ask at this particular point. I have a particular concern about funding and its rates. apprenticeship system is to be admired in many I note the earlier conversations that the Committee respects, the speed of change in our economy leads has had about value for money. The NAO report was me to believe that some of our employers would not persuasive in that respect, but not in the detail that we want to be sitting with a model that has been might want to get to. If I have a particular concern substantially the same since 1967. We have perhaps around funding it is around 18 to 24 apprenticeship changed too much, but arguably the German system funding rates, with the presumed 50% contribution changes very slowly, and whether or not it will from employers, which is not a cash contribution, but continue to be fit for purpose in a rapidly evolving can be in kind. modern economy is an open question. There is a tendency for providers to be led into a Taking one system and trying to transplant it here, or process of undercutting each other below that taking the bits you like would be interesting; for presumed 50% contribution from employers, and I am instance, 16 to 18-year-old apprentices in Germany aware that a number of providers—some colleges have two days off-the-job training, whereas it is only included, I expect—are providing it at no contribution one day here. Whether or not employers here have the from the employer, i.e. a 0% investment from the appetite for apprentices to be away from the employer. That must be an incipient threat to quality. workplace for two days’ structured learning each It will be cheaper, one would suppose, to deliver an week is an open question, but we need to ask whether apprenticeship to a 19 to 24-year-old than to a 16 to we are going to provide more maths and English to 18-year-old, but it is not 50% cheaper. 16 to 18-year-old apprentices and whether or not that We need to get to grips with the employer can be attained in one day’s time off the job. contribution. I can also see it is not as simple as saying International comparisons are interesting, but they there must be a mandatory 50% contribution matched need to be approached with a health warning about funding from an employer, because if a college is how they translate into our circumstances. delivering large numbers of apprentices to a local employer—an example might be my president’s Q473 Simon Kirby: Mr Wilson, I am interested college in Bridgwater delivering to EDF— today to hear about the value of the involvement of volumetrically you may be able to do it at less than the unions, and clearly that is a good thing. Would the full 50% contribution from that employer, but you you say that your broad support of the Government cannot do it for 0% at the same quality. scheme adds to the perception of the quality of apprenticeships? Perception in many ways is more Q475 Ann McKechin: You would recommend then important than the reality. I am very pleased that you there would be a minimal contribution in a range? A seem to be working closely with the Minister, but do range, say, from 25% to 50%? cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG05 Source: /MILES/PKU/INPUT/021099/021099_o005_th_BISC 17 04 12 CORRECTED.xml
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17 April 2012 Martin Doel and Tom Wilson
Martin Doel: We need to pause and think about the groups to pursue apprenticeships, or be encouraged most effective way to see that funding rates are into the apprenticeship arena. That might be one area effective, 18 to 24, to preserve quality. The Committee at the margins where you could experiment. is perhaps aware of the review of fees within further Frameworks are different sizes and have different education that was completed on the changeover of rates for the job within it, so that is quite complicated. the two Governments, called the Banks Review; it had I would be slightly chary of minimum rates, but they some sane and sensible things to say in this area, but are worth considering. Also worth considering is it seems to have been put on the shelf somewhat. greater transparency about portraying what the It would be good to return to some of that thinking in employer contribution is to NAS, and/or others, to be this particular area, otherwise I think a couple of a cue for looking at the quality. things could happen: either quality will be affected, or If you are delivering and reporting no employer some providers would begin to say, “I can’t deliver at contribution, or the employer contribution is some the rates employers are prepared to pay for this, so I complicated form of in-kind support, then that would just won’t do it; I can only do it for a certain period be a sensible cue for looking at the quality. How can of time, cross-subsidise it from my other work”. Then you be delivering at this rate and at the required you would have a flattening off of opportunities for quality? We need to go and look at it. If it is explained 18 to 24 apprenticeships, because providers cannot by volumetric economies then that might be a deliver at the quality and the rate. worthwhile reason, but again, how far does that allow Rates in this area of apprenticeship provision, as it is in all skills provision, is a very complicated matter, you to offset the presumed contribution? but it is a very sensitive market, and you need Selected groups and tapering, yes; adjusting the rate constantly to be considering what the incentives are from a 50% presumed down to 40% presumed; and around funding. While it makes it complicated to also greater transparency to say what the employer come in front of Committees like this to explain the contribution is as a cue to investigating quality. very many different rates applying, if you buy into the voguish term “nudge politics”, nudging in this market Q477 Ann McKechin: Last month, you may be is important. Nudging through pricing points and aware, we spoke to the owner of the training provider behaviours, and understanding those behaviours and Elmfield, who provide training to Morrisons among impacts upon quality, is a very subtle business that others. It made very, very large profits in the last few needs to be continuously reviewed and understood, years and the owner was paying himself millions of otherwise you get threats to quality, or to sufficiency pounds out of the apprenticeship grants system. All of supply. the funding for his company was purely from the Tom Wilson: There is a kind of catch-22 here because public sector. There has also been a recent Panorama if a college is perceived by an employer to be programme, which shows that this is not necessarily a delivering at only 50% of what the funding should be one-off experience. This is clearly what concerns us because other employers are not effectively paying about the reputation of what apprenticeship systems their 50%, that puts off those employers. They can see are, and problems like these will cause people alarm. that the quality is not, frankly, as much as it could be Do you think these are just a small minority, which because it should be done at a higher level of funding, the Government is now tackling effectively, or do you exactly as Martin said. It becomes a cycle, or rather a think that there are further measures the Government spiral of decline, where fewer and fewer employers needs to put in place to measure its own success in then want to be involved because they perceive that terms of its impact on public funding? the quality is not as it should be, which in turn leads Martin Doel: We need to keep things in perspective. to less and less funding from employers. My sense is this is at the margins of the provision. The issue, exactly as Martin said, is how to turn that The great majority of provision is high quality, good spiral of decline into a more virtuous circle, which value for money and benefits both the employer and encourages more employers to become involved, and, the individual. It would be good to have some better above all, to start paying their 50%. statistics to demonstrate how much of the total percentage short apprenticeships are so we can Q476 Ann McKechin: What do you think would be establish a sense of perspective. the key components? Is it that there has to be a I can only say, in terms of colleges, that I do not see minimum cash contribution by the employers? Do you many college principals making £3.5 million either to think that this sudden drop-off between the 16 to 18- year-olds on the one hand, and the 19 to 24-year-olds put into their own pocket or as a surplus to put into on the other, needs to be a much more tapered their wider work. I cannot see colleges extracting that solution? Or does it have to vary according to the type much profit from the system. I go back to the same of apprenticeship, whether it is a Level 2 guarantee on what colleges do. They have no interest apprenticeship or a Level 3 apprenticeship? in providing poor quality for individuals, for Martin Doel: There is some room for sensible employers, or for their communities, because they will tapering, particularly as Tom was talking about the be there for the next 50 years working with those equality point. If you want to encourage certain groups. There is no integral interest. disadvantaged groups, or groups that are There are some different imperatives working with the underrepresented in particular sectors, then you private sector in this area, and NAS and others need might—I do not use the term in a trivial way—‘play’ to be aligned to the other imperatives that might work with the funding envelopes to encourage particular with private training providers. cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG05 Source: /MILES/PKU/INPUT/021099/021099_o005_th_BISC 17 04 12 CORRECTED.xml
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17 April 2012 Martin Doel and Tom Wilson
Q478 Chair: Some of the evidence for this has come Chair: When we had Elmfield and Morrisons here, from colleges. What would be the best way of arriving that was a point that we tried to bring out. at some sort of figure for the number of short-term courses? Could colleges do this, or have you any other Q482 Ann McKechin: Martin, it is generally agreed advice on how these statistics could be compiled? that proper pre-apprenticeship training is an important Martin Doel: Colleges could not do it, because factor for success, because many of the youngest colleges would only be able to report from their own apprentices have never been in a work situation provision or that of their subcontractors. NAS must before. In your survey you found that only 7% of be in a position here. They are concluding funding pupils are able to name apprenticeships as a post- agreements and they are maintaining the individual GCSE option. What recommendations would you learner record on all the students within the system. I make to the Government to try to improve that cannot see that it would be beyond the wit of man— situation and really show the viewer, or the public as a whole, that apprenticeships are a credible alternative Q479 Chair: NAS should be able to get a picture? to higher education? Martin Doel: I probably got to about Level 2.5 on my Martin Doel: Both our survey and the recent Ofsted understanding of the data and funding systems within report in this area are instructive. First, we need to further education, but I am working very hard towards think clearly about advice and guidance as young as my Level 3. It seems to me that, from all I know, this 14, not just at 16, not just at 18: an effective careers is not a data-free sector; it is a question of interpreting advice and guidance service being presented to young that data, and putting the data sets in ways that can be people. We are concerned about the approach of the presented most effectively. Department for Education towards careers advice and guidance, and our survey bears that out, about the knowledge within schools of apprenticeships as an Q480 Mr Ward: While we are talking about the alternative. employer’s contribution, does the issue of additionality, or not additionality, give you any concern? Q483 Ann McKechin: This is a step, as I understand Tom Wilson: Sorry, what do you mean by it, where the careers service has been downgraded and additionality? schools themselves have been made responsible for this? Martin Doel: Exactly so. Although statutory guidance Q481 Mr Ward: Well, basically, that they would has just been issued, we are not sure about the means have done it anyway. by which compliance with that statutory guidance will Tom Wilson: Sorry—deadweight and all that. Yes, be observed. More broadly, I talked about having a absolutely, enormously. I would agree entirely with pause before we open the next chapter on everything Martin has said about the kind of practice apprenticeships, and actually celebrate the chapter that that was revealed by Panorama being broadly at the is just closing as a success, notwithstanding that at the margins. But it can very quickly become a major margins there are some issues to be dealt with. problem, because even if it is at the margins, if that There is a further chapter we now have to open up, to becomes something that your competitor is getting see this as a comprehensive offer from pre- away with then you have got to do the same, apprenticeship through to post-apprenticeship. At the otherwise you are going to get driven out of business. back end of this, there are a larger number of Level 3 You have to deal with it very quickly and effectively apprentices now completing their course of studies. to stop it spreading quickly from the margins and What next for them? Higher apprenticeship has a role becoming a much bigger threat. in this, universities recognising the value of what the On the deadweight point; yes, the issues around Train Level 3 apprentice has completed, and what might be to Gain, and the 50% that the NAO found, were real. open to them as a traditional higher academic route, Those are big issues for us. Again, I come back to the and also as a higher apprenticeship. union point, because where unions are engaged and What is the Level 4 or Level 5 progression here? A active with employers, we are able to persuade the couple of years ago, 50% of Level 3 apprentices said employer to do more than they would otherwise have they wanted to carry on for further study. Only 6% of done anyway. That is by far the best way, in our them did. The University of Greenwich has said it experience, of making sure that there is at least has got better, towards 15%, but there is a substantial minimal deadweight. If you do not have an number that do not. That is one end of it. We also organisation like a union working with the employer need to think comprehensively about how we get in that way it becomes much harder. It is not people ready to undertake an apprenticeship more impossible, but it becomes much harder to avoid that effectively, particularly if you see apprenticeship as a amount of deadweight. way to reach out to those who are most likely to To be fair to Morrisons, it was interesting that the become unemployed or are unemployed, to get them Panorama programme was about Elmfield much more to the stepping-off point to be attractive to an than about Morrisons. Morrisons have a good employer. Integral to an apprenticeship is that you relationship with USDAW, the retail trade union, and have to be attractive to an employer to become an USDAW is working hard with Morrisons to try and apprentice. avoid the deadweight problem and make sure they The pre-apprenticeship offer and the post- were doing better than they would otherwise have apprenticeship offer need to be thought about, done. followed by the provision of good advice and cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG05 Source: /MILES/PKU/INPUT/021099/021099_o005_th_BISC 17 04 12 CORRECTED.xml
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17 April 2012 Martin Doel and Tom Wilson guidance. Then we would have a very persuasive we are seeing that time and time again as being a offer, which would be a parallel vocational route, of huge shortfall. equal stature, standing and value to a higher education Tom Wilson: We have worked closely with the teacher traditional academic route. At this stage, we need to unions. All three major teacher unions are very keen think about how we get people into an apprenticeship, that their members deliver good quality careers and what we do with them after Level 3. Where do guidance to all of their pupils, including about we go next? apprenticeships. What they tell us time and time again is that they are actively discouraged from doing so by Q484 Mr Ward: Do you see the work experience the senior management in the schools, who will tell element of the Youth Contract as making a positive them that if they start having lots of their best and contribution? brightest pupils going off to do apprenticeships, rather Martin Doel: I do. I have to say the Youth Contract than going to sixth form, they will suffer in the league seems to me to be a collection and collation of a series tables. That is the big issue. of initiatives. There needs to be much more work done Martin is right, many schoolteachers do not in stitching together these various initiatives into an necessarily have a background that makes them offer that is easy to portray to young people, and comfortable and understanding about apprenticeships, easily understood by employers. It is almost a flurry but the big issue is that structurally schools are of activity, which you would expect to be the case in discouraged from doing this. the face of disturbing unemployment figures, Chair: We have had evidence of that on the ground. particularly youth unemployment figures. Joining up the offer is pretty much what I am saying about the Q487 Simon Kirby: Improving the information apprenticeship offer. It needs to be joined up, clear, available to our young people is clearly a live issue in and as clear almost as the academic offer. That is schools. How do you think the Government should ingrained. Most parents understand it, most young improve a thing that is clearly missing at the moment? people understand it. We want to be flexible about the Martin Doel: The all-age careers service has potential offer to young people, but we also need to have one to be transformative, but it is going to have to be given that is joined up and progressive. access to schools, or access to those services has to be extended to schools. There is competition for the Q485 Mr Ward: Can I ask you about the 7% figure, student between colleges and schools. If you had a which is dire, really, in terms of where we want to be. schools representative here he would say that colleges What does that mean? There is also the figure of were marketing machines that were voracious in trying to attract the student. I think that would be nearly 37% who do not know about A-levels. Surely wrong, but I do think colleges sitting at the centre of that is not true? their communities could have a strong potential role Martin Doel: If you asked any group of 14-year- to act as career hubs in order to find a route of study olds—my own 14-year-old—I think you would get for young people, giving them the opportunity to some interesting answers to your questions and interact with a college. It goes to the work experience challenges to your assumptions. What it does say to prior to apprenticeship issue that Ofsted identified. me is, yes, the A-levels tells you something about the Colleges have a live and large amount of contacts with amount of information in front of 14-year-olds, and SMEs and employers in their local areas. how much they are thinking about it. It particularly I am keen to develop the idea of colleges as says to me that the people that are advising, or have community hubs generally, but also as community been advising, 14-year-olds have little personal careers hubs where people can find a range of options knowledge of what an apprenticeship is, how it will to go forward. Pretty much all careers staff in colleges be completed, and what those alternative routes are. are Matrix standard in impartial advice and guidance, They predominantly, without being too dismissive, and correspond with external standards. There is a will have progressed through an academic route very strong role there. While I am very conscious of themselves, or recognise and understand that route, not broadening the Ofsted remit unduly, I think Ofsted and are able to explain it to young people more also has a role to play in terms of vouchsafing. They effectively than a route that they have not followed are looking at the outcomes for young people if they themselves. are looking at advice and guidance. Sir Michael How you increase the knowledge of schools, and Wilshaw has said that is a critical thing for Ofsted to those that are advising within schools is a live issue. look at, and I would encourage them to look at it as The move towards colleges recruiting at 14 is a very they are going around schools in order to continuously interesting development—to integrally give young improve what is on offer. people the opportunity to follow a vocational route— but it only displaces it one step further. Understanding Q488 Julie Elliott: Both of you have mentioned what a college has to offer at 14 becomes an issue of inequalities in apprenticeships in your written explaining to the 12-year-old that this might be a route evidence and this morning. Would you outline how for them. One way or the other we have got to have a you see that as a problem, and why do you think that better sense of information for young people to make inequality has manifested itself in the publicly funded choices. part of apprenticeships? Tom Wilson: This is a big and important problem, and Q486 Mr Ward: Everything that we are doing is it does not get anything like the attention it deserves. about the information made available to young people; NAS is now beginning to do much more on it. In a cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG05 Source: /MILES/PKU/INPUT/021099/021099_o005_th_BISC 17 04 12 CORRECTED.xml
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17 April 2012 Martin Doel and Tom Wilson way that is very, very welcome, but it could have been apprentices with learning difficulties or disabilities is done many years ago. If you look at the employment declining. The data on that are very weak, it is not pattern generally, occupational segregation—the clear necessarily whether that is the case, but we need concentration in apprenticeships—stands out to do something about that, not least to start collecting astonishingly. better data. For example, if you take engineering, where Martin Doel: Tom implies that there are deeply something like 8% of all engineering apprenticeships embedded gender stereotypes and other stereotypes, are women, and you translate that into thinking that and apprenticeship provision suffers in the same way this is the cohort of people who are being trained for as many others do, but perhaps more starkly in many the next 10, 15, 20 years, it bears no relationship sectors. There is the general sense of modernising the whatsoever to the employment profile that this country perception of young people and their parents, about needs to have to succeed as a productive economy in what an apprenticeship is in the 21st century, and what 20 years’ time. We have got to do something about is involved in an engineering apprenticeship in the it now. 21st century. It is almost no exaggeration to describe these as I think sometimes people have this warm and fuzzy islands of apartheid where segregation stands out in perception of an apprentice being somebody in an these pockets of apprenticeships in a way that it does overall, probably with a welding torch, in a great big not anywhere else in the whole employment field foundry in the 1950s, going home with a flat cap on quite so starkly. I am not suggesting that their head. It is immensely comforting, and we apprenticeships would bear the entire weight of remember it when we were children; some people restructuring the employment work force—that is far went off to do those things, and I went off to too much to expect—but they could do a lot more. If university. It is a bit different from that and we have you think about the next 20 or 30 years and the profile to begin to tell people that an apprenticeship in the of employment we ought to be aiming for in that 21st century is different generally. It is different in period, what we need to train now is closer to 50:50. gender relationships and gender assignment to That is not just in engineering; it is retail, social care, particular apprenticeships, and we need to work and so on. If you take hairdressing, it is a well-known concentratedly towards that. stat that only 7% of all hairdressing apprenticeships I do think also, at the margins, there may be some are boys, and so on. room for pricing incentives around apprenticeships for So what do you do about it? Our view is that you need particular disadvantaged groups and those who have to tackle this on many fronts. Firstly, do some good been disadvantaged in the past. It is not about social research to find out what the key problems are. A lot engineering, but rather about encouraging behaviours of that is about identifying the pockets of unawareness around particular groups if you want to change that. among many employers about the potential remedies. Secondly, tackle some of the practical issues. It is Q489 Julie Elliott: In what way would you have surprising, but still true, that we come across cases pricing incentives? where employers say, “We are delighted to take on Martin Doel: If you were working with a young young women”, but they do not have separate person aged 18 to 24, who has had a history of changing facilities, separate toilets or separate disengagement, it might be more expensive to get that uniforms. Basic stuff like that still happens. young person to the starting point, and also to succeed As Martin was saying earlier on, you need to talk on their apprenticeship framework, than working with much earlier, when people are 12, 13, 14, about the a high-achieving young person who has been aiming advantages to young women of thinking about to be an apprentice for many years. That could engineering as a potential career route, because of the sensibly be reflected in the rates for the job. There are pay, the conditions, the career prospects, and so on. some disadvantaged groups, a bit more troubling and Far too many young women simply do not know difficult territory to be in, but there could be some about that. When they do know they are very funding enhancement rate in those areas. interested, in our experience. Conversely with You approach something close to social engineering employers, we need to do much more to get them to here, which is difficult ground to get into. However, advertise apprenticeship vacancies much more widely. as I was saying before, in this market, although people Many SMEs may use the traditional route of word of work with integrity, their behaviour is to some extent mouth, or spreading news among family and friends shaped by funding incentives. As well as the about an apprenticeship vacancy. That is not likely to proselytising that Tom was talking about, which I be reaching different sorts of people than have come fully support, there needs to be some through in the past. acknowledgement of, and perhaps some attention If you take the fire brigade service, where many years given to, funding rates for particular groups. It would ago they took active positive steps to advertise much be worth particularly looking at disadvantaged groups. more widely in a wider range of potential markets, it transformed the nature of the fire service. There are Q490 Julie Elliott: In terms of getting young people far more women and BME members working in the interested in apprenticeships at an early age, obviously fire service than there used to be, and that is the way for engineering, for instance, the subjects you excel at they did it. By tackling it on all those fronts that is and the subjects you choose when you are 13 or 14 the way in which we can begin to make some serious are very important. Have you any ideas about how inroads. It is not just about gender or race; it is also you encourage the importance of taking certain about disability. The evidence is that the proportion of subjects with an apprenticeship route as a goal? cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG05 Source: /MILES/PKU/INPUT/021099/021099_o005_th_BISC 17 04 12 CORRECTED.xml
Ev 84 Business, Innovation and Skills Committee: Evidence
17 April 2012 Martin Doel and Tom Wilson
Tom Wilson: Being trade unionists, we are fairly and demand for employers, which is the key point pragmatic and hard-nosed about this, and pay is a big here. incentive. When you tell schoolchildren, “You are Quality, as Martin was saying earlier on, is something going to get paid twice as much by pursuing this that is not measured well enough. The evidence on subject or career route than by going into it—the data—is still rather poor. We have proxies in hairdressing”, it can have a pretty salutary effect on the form of duration, or completion rates, or possibly their career choice. It also has a big impact on the progression. When we talk to our apprentice members parents, because once parents realise there is a about the quality of what their learning experience is, genuine potential open route for young women to do they talk about things like the quality of mentoring something which perhaps they had never thought of— and supervision, what goes on in the workplace, often and, by the way, it pays much better and is going to much more than what goes on in the classroom at the give you a much better job at the end of it—they can college, or in the college provision, which can often be a very powerful influence on their children’s career be at the workplace. It is as much about their choices. But you have to do that really early; 12 is employment education experience as their classroom almost too late sometimes. You have to get people education experience. Measuring all of that, and thinking about their choices from first year secondary. improving understanding and transparency around That is one thing you can do. that, is very important to raising quality in a much The other thing would be to encourage much more deeper sense. employment and education interaction. At the moment, work experience and employer engagement Q492 Margot James: You said that only one third of in schools is, frankly, patchy and a bit rudimentary. It apprentices who complete Level 2 go on to do Level often happens too late when people are 15, 16, and 17 3. I think you mentioned that regulation might be a and have made their career choices. way of solving this. Could you expand on that or any If there was more and earlier employer engagement in other suggestions that you have for getting more schools—even at the most limited level of somebody people up from Level 2 to Level 3? coming in and talking to a bunch of children in the Tom Wilson: Regulation is something that nobody is first year of secondary about what it is like working terribly keen on, because it sounds like bureaucracy in engineering or something—that can have a positive and red tape. I go back to the problem that if your effect, because it makes it more real somehow. There competitor is doing something much more cheaply are a variety of things that you can do, but it has to than you, then you are going to be driven out of happen early. That is the key point. business unless you follow suit. There has to be some Martin Doel: We need to think about a lagging effect sort of level playing field and some sort of regulation here around STEM and the promotion of STEM of some kind, which establishes a framework of generally within schools and colleges. As a result of expectation, as there is in Germany. As Martin said, the action of the previous Government and this you cannot just import different models wholesale, but we can learn from other countries. One thing that Government in prioritising STEM, you are going to Germany has achieved is that sense of cultural see a group of young people coming through with expectation: this is what employers should do. They improved STEM awareness, STEM abilities, or do it over decades, and I am not saying we would STEM-related achievements. Your point is very achieve the same overnight. apposite. Hitherto, that has been with a view to a route The way in which you do that is by encouraging to higher education and academic study. I do not think employers through a mix of light-touch regulation and we have done as well about translating that greater procurement. One thing that could have an enormous awareness and achievement toward apprenticeship effect would be using tax relief. At the moment, provision around STEM, which is an obvious thing to something like £5 billion-worth of tax relief is given do. It is something that bears greater thought and to employers to subsidise and encourage their training, attention. on which we have almost no data. If we used that much more effectively to target it to those employers Q491 Margot James: Mr Wilson, you said a lot in who are providing high-quality apprenticeships, then your written evidence about the quality of you could get much more value for the existing apprenticeships, and we have discussed that this money. This would not involve any extra expenditure morning. Do you think that the quality of at all, but would be more value from the existing apprenticeships has been undermined by the focus on money then we currently have. It could be a mix of increasing their numbers? all those things: procurement, tax relief, some sort of Tom Wilson: There was certainly a perception of that levy framework. some years ago. I think that perception is less than it One final thing that might make a big difference is was. Certainly in the last year or two, things have simply encouraging employers, large and small, to improved markedly, and credit to NAS for doing that. include in their annual reports some kind of statement They have now focused much more on quality. As I about what they did on training, including was saying at the beginning, they have also tried to apprenticeships, and the proportion of apprentices overcome the perceived conflict between quality on who went on to progress to Level 3 and beyond. the one hand, and quantity on the other. All the Martin Doel: The way we are looking at quality and evidence that we have from employers is that the two expansion is very British. You could say that it has go together: if you improve the quality you will been remarkable that we have achieved this degree of improve the quantity; you will improve the appetite expansion in the time, with the quality that we have cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG05 Source: /MILES/PKU/INPUT/021099/021099_o005_th_BISC 17 04 12 CORRECTED.xml
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17 April 2012 Martin Doel and Tom Wilson maintained. The threat to quality over these last two was talking to the Association of Accounting years, in that degree of rapid expansion, is very Technicians recently, and they have introduced a 14- significant. Historically, we will look back it and say month minimum, but multi-level, framework. You that to have maintained the degree of quality that has said special exceptions, but could you elaborate on been maintained represents an achievement. You need that? to beat yourself up to make it even better going Martin Doel: Up to 18 it is absolute. From 19 to 24, forward, but we always look at this on the deficit side it could be either by exception for the individual, or by in the nature of making things better. exception by the sector. A colleague in the audience is The other thing about Level 2 to Level 3 is that our from my former background, the armed forces. The evidence says not all sectors value or need a Level 3 Royal Marines have a very concentrated training qualified work force. Therefore, getting a student to regime, which is almost 24 hours a day. Therefore, the end of Level 2 and implying that they must go on completion within 12 months might be possible in to Level 3 when there are no jobs requiring those up- some circumstances. Having a presumption of 12 rated skills is an open question. You would hope in a months is the right thing to do, and if the Association value-added economy that you want to add value of Accounting Technicians wants to have a through a more skilled work force, but there is an conversation about a particular qualification, they issue of under-employment against qualifications as need to make that case for an exceptional treatment. well, which is present in some sectors. It is not a Any sensible rule has got to have room for some simple thing to say that everybody must progress from exceptions, but it has to be the exception rather than Level 2 to Level 3 in all sectors. the norm.
Q493 Margot James: You have answered my next Q496 Margot James: I want to conclude by asking question, which was going to be whether you thought about apprenticeships over the age of 24, and paying it was appropriate to encourage every apprenticeship full fees, often having to take out a loan. Do you think in every sector to have Level 3 as a benchmark. this will affect demand? Martin Doel: I think we need to be a lot more subtle Martin Doel: I honestly do not know. Anybody that than that. The thing I would add to Tom’s piece about tells you they do know can’t know. Level 3 progression in some sectors—the Government Margot James: Do you have a view Mr Wilson? have spoken about this—is about having licence to Martin Doel: I have seen some market research practise. An area I might look at is perhaps the caring recently, which challenged my preconceptions about industries, particularly caring for the elderly. You this. My preconceptions would have been that, no, it would want the most professionalised work force that would have put many people off, and it would you could achieve, but it is traditionally a low-paid significantly drive down demand. I think it will have work force. an effect on demand. From that market research The wage gain for moving from Level 2 to Level 3 is recently completed I am not now nearly so sure perhaps not great. The imperative for employers is about this. perhaps weak in this area, so some form of licence to practise in some sectors might be a way in which you Q497 Margot James: Right. What was that market could generate extra training. Regulation is research? unwelcome, but the Government has a role sometimes Martin Doel: The market research was recently to promote aspiration and improve the completed by BIS and is about to be published. It competitiveness of the nation overall. was not conducted predominantly on apprenticeship candidates, but on over 25-year-olds generally and Q494 Margot James: Do you think the Government their willingness to take a loan to complete a Level 3 are right to stipulate that all apprenticeships should be qualification. There is obviously a dimension with an of a 12-month minimum duration, apart from 19-plus apprentice being employed. You could almost present where they have got prior attainment. I think you have this as the apprentice paying for the employer’s touched on this before. training, benefiting the employer by taking a loan out. Martin Doel: The Association of Colleges is If we have a Minister for Further Education and Skills comfortable with 16 to 18 being a 12-month minimum who likes going back to his history, there could be an in all cases. That is absolutely right with a young indentured labour perception here. It is not as stark as person to embed their learning as well as demonstrate I thought it would be, and we need to think it through. things like getting into good work habits and good working relationships, and there is an amount of Q498 Chair: Could you provide us with evidence, or embedding the skills in the workplace. Absolutely, for the evidence you have? 16 to 18. We are also comfortable with a presumed Martin Doel: I hope I have not put BIS unduly on the 12-month period for all other apprenticeships, and spot, but they shared with a sector group yesterday only by special exceptions that it will not be the case. the outcome of some market research they have been Twelve months seems to me to be a reasonable period completing, and I am expecting that to be open source to alight upon, but it should not, as Tom says, be an to me. I clearly would think the Committee would absolute proxy for quality, because it is more subtle have access to that market research. than that. Tom Wilson: Our evidence is that there will be universal horror at the idea that apprentices who Q495 Paul Blomfield: Twelve months is the currently are doing an apprenticeship paid for by the minimum contract, but at every level? For example, I employer will start having to pay for that themselves. cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG05 Source: /MILES/PKU/INPUT/021099/021099_o005_th_BISC 17 04 12 CORRECTED.xml
Ev 86 Business, Innovation and Skills Committee: Evidence
17 April 2012 Martin Doel and Tom Wilson
There is a real distinction to be drawn between that the employment relationship, you are damaging what group, for whom the idea of taking out loans and is at the heart of the notion of an apprenticeship. It is paying for something that previously was routinely no longer an apprenticeship if it is effectively paid for by the employer, if you like, versus another something that is just an agency. group where there may well be some interesting demand, which is the unemployed. Q500 Paul Blomfield: My instinct is to agree with People who are 24-plus, who fancy their chances of you, and to embrace the arguments that you are training as a plumber, currently have to pay out of advancing, but the discussions I have been having their own pocket to do a Level 3. The idea that they with small employers in my area suggest that the GTA can now take out a loan and repay it over time might model is not sufficiently flexible to accommodate all well be attractive to people like that, but that is their needs. When you look at the reports that the FSB different from the traditional apprenticeship. We have and the BCC have been producing, about what are the not done detailed polling on this, but the impression barriers to apprenticeships with small SMEs, they say we get talking through the union movement, talking that they cannot offer sufficient time. I accept that the to people who themselves talk to apprentices and talk GTA model covers issues and worries about training. to employers, is that nobody wants this. Employers do It is about the whole risk of taking on one person not want it and apprentices do not want it. It really in a very small employment environment. It is also will not work. sometimes about looking at it from the apprentice’s point of view. One very small employment Q499 Paul Blomfield: I want to look at how we environment is not able to provide the diversity of effectively address the development of experience that would consolidate training in the apprenticeships in the SME sector. It is something we trade. Do you not think those are real issues? touched on earlier and we have come back to it time Tom Wilson: I do, absolutely. I am not claiming this and again throughout this inquiry. I note that you both is simple or clear cut, and there is an overlap between have different views on the models that might enable the best ATAs and GTAs. There are also issues about us to address this. Tom, on what basis have you sectoral spread, where ATAs can work on a much criticised the ATA model, which is sponsored by many broader basis than some GTAs, because GTAs are colleges, and seems to be growing quite significantly? more sectoral than ATAs, and so on. Tom Wilson: Why do we not like it? However, I would argue on the other side that for Paul Blomfield: Yes. every small employer, with perhaps a handful of Tom Wilson: Fundamentally because it is not a employees, that says, “I cannot afford the risk and genuine employment relationship. It is a device that is therefore I am going to have to go down the ATA being used to create the impression of an employment route”, there will be many other such small relationship. That is, frankly, in our view, something employers, exactly the same, who do take the risk, that is antithetical to the fundamental idea of what an and are prepared to take on an apprentice in the time- apprenticeship is all about, which is that you work for honoured fashion, and work very well. What do you an employer, not a group of employers or people then say to them? Why are you allowing some dilution getting together, and that that employer, when you of what the apprenticeship brand stands for in one have completed the apprenticeship ideally takes you group, who are not prepared to take the risk, rather on, and gives you a full-time job. than championing what should be the gold standard, The ATA model is much more like an agency, frankly. and making sure that everybody does take that risk. It may be perfectly valid in its own terms. It may well This is not to minimise the risks that small employers be helping people who otherwise perhaps would not feel, I do understand that; but there are many other gain an apprenticeship, or it may more likely be ways in which you can help SMEs to put a toe in the encouraging some employers who might otherwise water, and explore what it means to take on feel reluctant to take the risk, but in our view the price apprenticeships, perhaps take away some of the of doing that is that you damage the brand. administrative back-office difficulties and bureaucracy We have so many examples that we have come across that they are often most concerned about. That is what through our networks with unions, of ATAs that have ATAs do very well at their best—take away all that, provided, frankly, not very good quality—not all, and do that for the SMEs. Fundamentally, our view is some are better than others, but where the ATA model that you have to have that employment relationship has not served apprentices that well. They may have with the employer. achieved their apprenticeships, but they have not got a job afterwards, or the quality of their training has Q501 Mr Ward: On the ATAs, is it not a question of not been that great; or in effect, what they have been one or t’other? Within the labour market there is a doing is working for an employer, not rotated around very large pool of agency workers who are going from a group of employers, in the same way as if that one job to another on a short-term basis with no employer could have taken them on properly as we personal development, let alone career development, would have argued they should anyway. and the ATA model does seem to offer an opportunity That is why we much prefer the GTA model, where for development while going from position to the employment relationship is with that particular position. employer, and you effectively pool the training, but Tom Wilson: In our experience it simply does not you do not pool the employment. That is something work that way. It is true that there are many agency of fundamental importance, because once you start workers in the economy; we would argue, far too pooling the employment relationships and damaging many. As you say, very many of them receive very cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG05 Source: /MILES/PKU/INPUT/021099/021099_o005_th_BISC 17 04 12 CORRECTED.xml
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17 April 2012 Martin Doel and Tom Wilson little training. The ATA model does not really meet apprenticeship framework. You had a number of their needs. The ATA model is for a different group people that would be interested in taking on of employees, often young people, who are just apprentices, but not wanting to take that risk, so there embarking on any kind of employment relationship was an element of de-risking the process. of any kind, whether it is short-term agency work or There was also, as Tom alludes to, the issue about the anything else. bureaucracy attending an apprenticeship, necessary There is a genuine conundrum here. If, on the one reporting, and all the back-office functions that a hand, you took away all ATAs, and that meant that college or another provider could meet. It grew from group of people had nothing, it would clearly be a the London area, and there have been a number of very bad thing. We would have to find some way of other examples now set up. ensuring that other models were put in place that did When I talk about the London area, I see a provide a decent genuine employment relationship. I complementary role for GTAs and ATAs. GTAs am not claiming this is simple. predominantly serve a sector of industry—a group of Currently you have the danger of ATAs that are pretty employers working in a similar sector. I see an ATA variable: some are not bad, some are much worse than serving a place, an area, working with a range of others, but there does not seem to be enough real SMEs in order to support them to make an inspection and rigour about how well they work, and apprenticeship offer. Done well, as Tom says, it is a certainly not enough transparency to the young people very powerful model. It was set up as a concept about themselves. We have found that a lot of people on two years ago. Clearly we are in the process of apprenticeship schemes do not even know they are learning what makes it work in the best way. In terms being employed by an ATA; they do not even realise of regulation, they are perhaps not there in regard to that an ATA is effectively, in law, an employment sharing best practice and oversight in order to agency, not an employer. It is not all ATAs—I do not continue to improve the model. That is something want to claim that they are all as bad as this—but worth looking at, but I do think there is a role for both many ATAs do not properly tell their own apprentices GTAs and ATAs, and particularly for small employers what their employment status genuinely is. There a lot it is a very persuasive model and a very useful model of fog around all this, and not enough transparency, to use. clarity, or standards, which would help to distinguish good practice from what is, frankly, undermining good Q504 Paul Blomfield: When we talked to one large practice elsewhere. employer of apprentices, Carillion, we were impressed by how successfully they had engaged SMEs in their Q502 Paul Blomfield: Would your concerns be supply chain in taking on apprentices. Do you think, addressed by a mixed-economy model in which there Tom, there are lessons that the Government can learn was more regulation and oversight of ATAs? from that experience when looking at future public Tom Wilson: To some extent, perhaps. But I think that procurement? more regulation and oversight would begin to Tom Wilson: Yes, very much so. We have argued undermine what ATAs were all about. What would strongly that what the sector as a whole should do is the regulation do? There would have to be regulations what the construction industry has done, and have a about, for example, the proportion of time an ATA rule of thumb, which is for every £1 million of spent with an employer, the genuineness of that contract you have one apprentice. The construction employment relationship. You would have to capture industry is a special case with contractors, that in some sort of regulation, and as soon as you subcontractors, and sub-subcontractors. All the way start doing that then they begin to look much more down that chain that rule generally applies with good like GTAs. employers. If you talk to Kier, Willmott Dixon, Laing O’Rourke or people like that, they will apply that rule. Q503 Paul Blomfield: Martin, you are an advocate That is something that applies in the private sector of ATAs. just as much as in the public sector. When Nissan Martin Doel: It is interesting; Tom has shifted a bit. established their plant in the north-east, in Sunderland, We have had lots of conversations about that, because they were horrified to find that many of the small our evidence indicates that we have different views employers were not providing adequate training. They around it. He might say that some are not as bad as could provide good quality at that time, but Nissan others; I say some are good and some are not quite was concerned about the longer-term relationship. as good as others. It is a different approach to the Where would they be in 20 or 40 years time? Were same thing. they training people to continue that? Nissan, of On the points you note, I think ATAs have a strong course, is famous for having long-term relationships role to play with SMEs. When the first ATAs were set with its SMEs. up, they were substantially taken—notwithstanding Our view is that a very important route to encouraging my problem about international comparators—from SMEs to provide good quality apprenticeships is to an Australian model. They were particularly set up for use a supply chain model, engage the mother a London market where there are a number of micro- companies at the top of the supply chain, get clear businesses working on short contracts, where the agreements with them—either through the public employer did not feel sufficiently sure about the future sector and its £200 billion-worth of expenditure each of their contracts and their ability to be able to take year, or through private sector models in the way I on an apprentice, in order to both employ that have described—and ensure that that is followed apprentice long term, but also to complete their down through the supply chain. Where that works it cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG05 Source: /MILES/PKU/INPUT/021099/021099_o005_th_BISC 17 04 12 CORRECTED.xml
Ev 88 Business, Innovation and Skills Committee: Evidence
17 April 2012 Martin Doel and Tom Wilson works very well indeed. Nissan have found that would help to encourage that sense of a framework of people then compete in the quality of their expectations, which we were talking about earlier on, apprenticeships to become part of the Nissan supply so that the norm becomes that everyone then plays chain. It has become a driving force for improving their part in the future success of that industry and it apprenticeships more generally in that part of the becomes established that that is what good employers economy. do—if you want to succeed in this sector then that is The previous Government made some limited moves the route to success. in this direction to try and encourage public Chair: Thanks very much. That concludes our procurement to have these kinds of conditions questions. I would add, as I always add, if you feel attached. The current Government has looked at this, that there is a response that you did not give, but but has not yet come to any conclusions on it. Our would like to give subsequently, please submit it in view is that this is something that should be strongly writing. Equally if we feel there is a question that we encouraged, both for the public sector and for the should have asked, but did not, we may do the same to private sector, and where some of the larger trade you and would welcome your constructive response. associations, like the Engineering Employers Thank you very much. That is incredibly helpful. We Federation, or some big trade associations in will be reporting in due course and that will pharmaceuticals, would themselves strongly incorporate some of the comments and observations encourage it. This is what SSCs do in a sense. It that you have made. Thank you.
Examination of Witness
Witness: Nick Linford, Author and Managing Editor of FE Week, gave evidence.
Q505 Chair: Thank you very much, and thank you some of the issues associated with this extremely Nick for agreeing to address us. If you would just like rapid growth, far beyond the Government’s intention to introduce yourself for voice transcription purposes? with the extra investment, my particular interest is to Nick Linford: Yes. Hello. My name is Nick Linford, have a look beneath the big number of last year, the and I am Managing Director of Lsect and Managing 177,000 extra. Editor of FE Week. Q507 Chair: Could I interrupt you at that point, Q506 Chair: Thanks very much. Nick, I know you because you are anticipating my next question, and I are a person of very strong opinions. We are running would like to get it in. You made the point on the slightly over time, so without wishing in any way to Panorama programme that big headline numbers look curb the points you might wish to make, if you could great on paper, but scratch under the surface and just make them as briefly as possible I am sure the maybe we should not be calling them all Committee and everybody else would be grateful. apprenticeships. This highlights the issue of quality, Apprenticeships have been with us for an awfully long which I think you are about to move on to. How time. There has been a huge increase in the last few would you define an apprenticeship? years, and, of course, commensurate with that is the Nick Linford: Let us look under the surface. What level of funding. In general, are you encouraged by have we seen? More than 75% of the growth was for this or not? those aged 25 and over. In fact, for those aged 35 and Nick Linford: Absolutely, in general, I am very over the increase we have seen is 355%. That is more encouraged by it, and I note that one of the key than 84,000 additional apprentices aged 25 and over. elements within the Committee is to look at whether When I met the Committee in a private session not so the extra investment in apprenticeships is being spent long ago, I used particular case studies: one very large wisely. The key investment here, as quoted from the employer in the case of Morrisons, which I know got grant letter to the Skills Funding Agency back in June a fairly good outing on Panorama as well, and has 2010, was the £150 million additional investment to been in front of you with the training provider deliver, “50,000 additional Apprenticeship places Elmfield. It is about looking at that and saying what focused on SMEs”. That was the very clear steer in are these apprenticeships that are being funded as the letter from the Minister, John Hayes, to Geoff apprentices and are being counted as apprentices and, Russell, the Chief Executive of the SFA. if they are big numbers of adults that are already in Looking back now, a couple of years on, they have work—in one of their most recent documents the SFA been incredibly successful. In fact, it has not been has coined the term “converters” for them—if they are 50,000 additional that we have had last year; we had existing employees. What is particularly the case with 177,500 additional. That is fantastic. If you take NAS the larger employer is that the duration for the existing as a sales force—Simon Waugh, who was at the time employee is fairly short, which makes sense if you the Chief Executive, spoke to the Public Accounts consider that the funding is less, and the colleges and Committee and was very clear that they are a sales training providers still need to be efficient, especially force, marketing—that is a fantastic achievement in where they are not charging. You may want to come terms of those headline numbers. on to that. My view is that a number of these learning As an adviser on funding for a good 10 years, having and development programmes funded as published quite a successful book about funding, and apprenticeships should not be called apprenticeships now producing a newspaper that was first to report on and should not be funded by the public purse. cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG05 Source: /MILES/PKU/INPUT/021099/021099_o005_th_BISC 17 04 12 CORRECTED.xml
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17 April 2012 Nick Linford
Q508 Chair: What essential element should be When you move on and talk about quality, it is right included in a definition of an apprenticeship? to say that a certain duration does not necessarily Nick Linford: I have written about that in FE Week mean there will be good quality or not. My concern just this week. My personal view is that an has been that Ofsted have been pretty absent; they apprenticeship is an experience; that is what it is have produced a report in the last week looking at beyond the mandatory frameworks. There are very some case studies, but they have been pretty absent in clear definitions that are mandated by what we now the last two years around the monitoring of quality. call Issuing Authorities, or by Sector Skills Councils. Until July, people were very unclear who was There must be functional skills or English and maths responsible for the monitoring and measurement of at Level 1 if you are doing a Level 2 apprenticeship, quality in the workplace. Not very many people know and at Level 2 if you are doing Level 3. There must that on 18 July, Vince Cable gave the National be a knowledge element. There must be a competency Apprenticeship Service official responsibility for both element through the qualification regime. quality and value for money. That was given to the It is very easy to tick boxes to say, “All of the boxes Chief Executive of NAS. have been ticked. I would like to claim the funding, They have been identified as the bearer of quality. You and I would like to give the learner the certificate.” quite rightly raised earlier as a Committee that there My view is that for an apprenticeship, it should be is a tension between being the marketing department more about the experience of having a real job. I and the quality assurance department. I have yet to would like to talk a bit about how perhaps the funding see any evidence from NAS themselves that they are agencies should incentivise, not conversion of existing well placed to take on that role. The Minister has been employees, but apprentices that are entering the pushing incredibly hard, and is introducing certain workplace. I am very disappointed that among all of compliance aspects—quite rightly with minimum the things the Government are now tackling, such as durations. That means that it can form part of the durations, they are not paying much more attention to contract with the college or training provider and if those under the age of 25, in the context of record they did not meet those conditions they would not youth unemployment, and those where it is about be funded. getting into the workplace, not about having Compliance has been met, but the softer issue is pre-existing skills accredited. whether quality is being met. We should look back at things like the Adult Learning Inspectorate, who Q509 Chair: Perhaps I can just tease out a point it is understood quality assurance in the workplace, and very difficult to work through. You have said that, in learn some lessons there. Maybe Ofsted should focus effect, it must be a job. Secondly, you have said that on classrooms. I know that it is very good at focusing it should not be people in pre-existing employment. on schools, but maybe we need a professional quality To a certain extent, there is an overlap on those issues. assurance body that is not about compliance, but is How can you draw a distinction? about the learning experience, and ensuring that Nick Linford: The important thing to remember is public money is best spent for the benefit of, I would that the apprenticeship is not the only training route say, ideally young people. when you are in the workplace. For me, that is one of the big problems that the Government have made. Q511 Chair: Your response was work-focused, but They have proliferated a myth that the only routes do you not think there is a role for apprenticeships in to public funding in the workplace for training is an raising the general level of skills within a work force? apprenticeship, which is not true; there are other Nick Linford: The point about apprenticeships is that workplace qualifications that can be done and publicly they are funded by the taxpayer, by the public purse, funded that are not apprenticeships. as a framework of qualifications. It should be a Secondly, coming on to some points you were raising substantial learning experience including numeracy, earlier about who should be paying, this Government literacy and transferrable skills, and then the and the last Government have done very little to tackle knowledge and the other aspects. If an adult needs situations where training for adults in the workplace some numeracy skills, they can be funded by the should be paid for by the employer. Where we create Government for numeracy training in the workplace. situations of extreme rapid growth for existing If they need literacy skills, they can be funded for a employees, we let large employers off the hook. literacy qualification in the workplace. Under certain circumstances, where they need vocational skills, they Q510 Chair: Regarding the quantity versus quality can get those as well. issue, what do you think the objective of the My point around apprenticeships is that they should apprenticeship programme should be? not be classed as the catch-all only option, because Nick Linford: I think that apprenticeships are there to you end up with the situation we have now, where offer real work with training. That is the strap line large bodies and individuals representing colleges and for me. That is something that should be ensured and training providers are questioning the definition of an monitored, and where it is not happening it should not apprenticeship. The lay person would be fairly be funded. If you are talking specifically about quality, bemused about why, after so much time, we are many people would have different definitions, and revisiting that definition. there is sometimes a blurring between the lines of If I were privileged enough to be able to make some compliance. For me, compliance is about saying it is of the decisions, one of them would be to better a real job with training, not just assessment of articulate that employers have a range of publicly existing skills. funded training opportunities. Apprenticeships are not cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG05 Source: /MILES/PKU/INPUT/021099/021099_o005_th_BISC 17 04 12 CORRECTED.xml
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17 April 2012 Nick Linford the only option, and they are not appropriate in all Q513 Mr Ward: I am quite happy to join a lone cases. I would go further than that. I would introduce voice in theory. Am I right in saying, Nick, that what minimum fees, particularly for large employers, and I you are talking about is really your concerns about the would probably incentivise college and training confusion over what this thing is, and the fact that providers much more to take unemployed people on what has been branded as an apprenticeship in old to apprenticeship programmes, and perhaps fully fund terms may have been in-service training, continuous those aged 19 to 24, rather than, as you heard earlier, professional development, updating of statutory only paying half. But where you are converting awareness or obligations on staff. It is the confusion existing employees, that should be a much lesser over what this thing is that is being branded as the priority. success. Nick Linford: Yes, absolutely. One of the biggest mistakes that the new Government made, in being Q512 Simon Kirby: Nick, there is some danger of very critical of an alternative training programme, you being a lone voice in this debate. Perhaps the called Train to Gain, was that they essentially created Labour Party might join you. What do you say when this impression that it was being scrapped, and that the Minister has recently received a letter from a large everything should become an apprenticeship. You number of employers and importantly the TUC, have probably heard language like “rebadging” Train saying they warmly welcome the Government’s focus to Gain, and so on. on apprenticeships, and its guarantee on It is difficult to get more than anecdotal evidence, but apprenticeship quality? Is that not totally at odds with there are some big examples to draw on, and I have what you are saying, and if that is the case, do you done some of that. The reality on the ground is that not represent a minority view? where we have seen significant falls, for example in Nick Linford: No. Had I been given the option to sign the retail sector on Train to Gain—the numbers are that letter, I would have signed it. I warmly welcome there and I can quote them to you, because I have the focus on apprenticeships. I think it is a fantastic them with me—we have seen significant increases in programme. I think that it should be encouraged. I apprenticeships. Those apprenticeships are being warmly encourage the focus on quality. As an expert delivered in a fairly short period of time, as Train to on funding, having published FE Week for the last six Gain is. months, and being first to report on the issues, I was I have no qualms about saying that a lot of the growth quite heartened to hear Tom from Unionlearn say that that we have seen in the last year is actually Train the issues may be at the margins but if they are not to Gain provision funded as an apprenticeship. My dealt with, they can quickly get out of control. That is argument is that Train to Gain is still there, although very much my view. the Government do not like to call it that, and you can My point is that you cannot invest in the programme still fund discrete qualifications—you might want to to the point where you are only interested in the call them NVQs—through that scheme. Where it is numbers. When NAS saw a target of 50,000 to not fundable the employer should be paying for it. achieve, from what I understand, they were quite You might want to have a conversation about concerned, because it is difficult to create employer contributions and minimum fees; I know apprenticeship places if what you are trying to do is that was something that a Committee Member picked take on new employees, particularly in a market where up on earlier. the economy is struggling. They took some soft Yes, it is too broad—it has become much too broad. options; it was referred to earlier as low-hanging fruit. They went to large employers like Morrisons, who Q514 Chair: You touched earlier on NAS and its went from doing no apprenticeships for those aged 25 approach. How would you measure its success? and over, to, in little more than a year, 40,000—I think Again, you have partly pre-empted that question. Panorama said. Elmfield were advertising one of their Nick Linford: The measurement of the success or roles where they said they were hoping to achieve otherwise of NAS depends on the metric—the 100,000—100,000 with one employer. performance indicator. If the performance indicator is on sales, or starts, as we technically refer to them, you I warmly welcome all the positive statements. I have have to say they have been incredibly successful. To openly and warmly welcomed the minimum quote some numbers for you: last year, an increase of durations, and the Minister is doing the right thing to 63%, we had 457,200 starts. Interestingly the SFA, set down some compliance rules. What is missing is the body that actually pays for these courses—these softer things around how we are actually measuring experiences, as I call them—is getting quite nervous quality. Who is doing that? Is it the Sector Skills about the significant growth on 25-plus. Council? Is it the awarding body? Is it the college The numbers that we have seen this year show, in my training provider? Is it Ofsted? Is it now NAS? And view, that the Government have lost control of the with a limited work force that has been reduced under significant growth on 25-plus. The numbers this year the cuts, how have NAS suddenly got these quality show more than 100,000, just in the first half of this assurance skills? Where have they come from? I am year, for 25-plus. That is a 45% increase on the same not convinced. They have published their Quality period last year. You have the SFA saying things Action Plan this week. It contains not a single date or like—this is from a document dated 12 March—“We deadline. It is the first time I have seen a plan without expect to see a greater focus on the recruitment of one of those. I warmly welcome all of those things, young people aged 19 to 24, rather than a maintenance but I want to see real action. of current recruitment levels for those aged over 25… cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG05 Source: /MILES/PKU/INPUT/021099/021099_o005_th_BISC 17 04 12 CORRECTED.xml
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17 April 2012 Nick Linford
We will monitor the pattern and volume of 25 simple question, and I should have just said, as I Apprenticeship delivery in-year and will not award started by saying, that I do not know about any growth for 25+ Apprenticeship provision”. The international comparisons. funding body was saying that in March. I refer you back to what they said in June last year. Q516 Nadhim Zahawi: You have already expressed In a document in June last year they were describing the next part of my question in your concerns around moneys that were going unspent; they recovered £37 what the NAO has already highlighted, that the million from underperforming providers and they said expansions have been in the 25-plus age group. Let that they would not be offering growth. They “have me put it to you in a different way. Rather than being not been able to agree at this time any additional worried about it, should we not celebrate that that funding for new 25+ Apprenticeship starts”. The group is getting further training and the ability to funding body said in June last year that they were not become a stronger work force by being much more funding growth. They had to repeat it quite strongly flexible? Rather than denigrating it and conspiracy in March of this year, but what we are actually seeing theorising about it—that it is money that has been is continued significant growth—over 100,000 of 25- shifted from one place to another—should we not plus starts, up 45% on a record year last year. celebrate it, but at the same time focus on the younger In my view it is out of control, and that is age group? disadvantaging 16 to 24-year-olds. I think the funding Nick Linford: My personal view is that we should body knows that, and that is why they are repeating celebrate it; we just should not call it an in March of this year that they will be looking closely apprenticeship. Simple. I have never said that an adult at the numbers. I respect the Minister, John Hayes, for of any age, even 110, should not have training, should creating freedoms and flexibilities—the sector asked not potentially be in a position where they are for them—but when you have public money and responding to a redundancy scenario and need record youth unemployment, it should be much better retraining. I have never said that that should not be focused. I certainly will be suggesting, and I said this Government funded, although clearly in certain when I visited Number 10 back in June 2011, that we circumstances public money needs to be prioritised, need revisit whether the 25-plus should be the domain and it might not always be appropriate. of the employer to pay for, certainly for existing Of course it should be celebrated. My concern comes employees. That would allow the training providers when you have vast numbers of existing employees and colleges on the ground to focus their marketing being given certificates that they have achieved an efforts on the 16 to 24-year-olds. apprenticeship. You heard earlier, particularly from Tom— Q515 Nadhim Zahawi: The National Audit Office highlighted that most apprenticeships in England are Q517 Nadhim Zahawi: But if they have learned a at a lower level than those in other countries. This has new skill set, would that not be an apprenticeship? been reiterated to us though evidence. In your Nick Linford: My point is that I celebrate the new experience, how does the UK’s apprenticeship skill set. What I am saying is that if you are in a programme compare with those in other countries? school and you are worried about the way that the Can we have a bit of an international comparison? schools are promoting apprenticeships, if that is a Nick Linford: I would have to defer to somebody with problem, what better way than saying apprenticeships more experience of what happens internationally. I are not all that: “Look, you can do it in 28 weeks as have not done any work of my own to look at an existing employee and have most of the skills that international models. I was quite taken by what Martin you already had assessed and certificated.” Surely if Doel said about being careful about drawing the Minister is talking about a gold standard of immediate comparisons. I have seen examples where apprenticeship, our young people should be aspiring individuals are put on Level 2 apprenticeships, but to get on that programme and receive significant really should be moving straight on to Level 3. A training, significant experience of being in the work colleague on the Committee brought up the force, and we should be protecting that from other accountancy technician; that is a 14-month types of training, which we should just call other types apprenticeship for three levels—Level 2, Level 3, and of training. Level 4—being delivered by both training providers and colleges, in fact. That will not be possible from 1 Q518 Nadhim Zahawi: Do you agree with August, and they are already having to redefine that. Apprenticeship England’s calls for a root and branch The minimum requirements for these bright young re-evaluation for the way apprenticeships are kids is that they have got five A* star A to C, yet they regulated and administered? start a 14-month course at Level 2, which by proxy Nick Linford: We have the two founders of the group would assume they would only need a Level 1 in in the room, as it happens. Yes and no, in terms of a English and maths, which clearly they already have re-evaluation. We have the answers— because they have actually got Level 2. Both colleges and training providers should be more mindful of the Q519 Nadhim Zahawi: Is it yes or no? right starting point, and if we now have minimum Nick Linford: I think it is no. durations we should not be disadvantaging young people from progressing fast enough when they are Q520 Nadhim Zahawi: Good, keep going. already putting in minimum durations. The starting Nick Linford: I have told them this. The reason why point is very important. That is a long answer to a I think it is no is there is no room for delay. It is cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG05 Source: /MILES/PKU/INPUT/021099/021099_o005_th_BISC 17 04 12 CORRECTED.xml
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17 April 2012 Nick Linford unfortunate, but I understand the issue, that the Morrisons, I question what percentage of those are Committee started a while ago and it is going to take progressing in their career with Morrisons. I cannot a long time—I am sure it will publish before recess— imagine it is a huge percentage. Where are they but we know the answers. I am very clear on what going? They will need those staff at those levels. should happen as far as the structures are concerned, The Government could be doing a lot more to gather and the Minster is in a position to take some serious informative information at the start and at the end to action decisions. Some of those are happening, but be able to answer that question of level appropriately. I am not convinced, for example, that the National Apprenticeship Service have the armoury to see Q522 Mr Ward: When NVQs were first introduced through the role they have been given around quality. there were a lot of people who achieved NVQs by That needs much more attention. It was referred to, accrediting what they could already do at a level of not unsurprisingly, by other people who came before competency. But it was a qualification. The me, who said that there is more transparency about apprenticeship seems to be badged as a qualification their role as the promoter than their role as the quality when it is a route to, and as soon as you get to assurer. I do not think there is a need for review, but something you stop becoming an apprentice. It seems there is a significant need for further reform. as if there is confusion about badging something at completely different levels and different sectors as Q521 Paul Blomfield: In terms of quality and your being a thing, which then cannot be compared because earlier comment about Level 2 and Level 3, you every single one would be different. modestly said you could not comment on international Nick Linford: Yes. It is interesting what Martin said comparisons, but do you not think we are setting, as about colleges being for the local community and not a country, our sights a bit low by the acceptance of seeking immediate profit. The risk, without proper Level 2, when many competitor countries are looking oversight of quality, is that you look at the compliance at Level 3 standards? elements and ask what it will require to be able to Nick Linford: I spent seven years at Lewisham get the apprentice the certificate, and then the college College as their Director of Planning and training provider the income. Then you do as little as Performance. My job there, among many others, was possible—that is not how it should be—to meet those to plan the courses that we were going to run. The requirements; you tick those boxes. Train to Gain way you decide on a level is on the basis of learner suffered from that with the NVQ. NVQs are very need. You assess that need. For any college or training much about demonstrating skill as opposed to learning provider to design a programme around a level before skill; they are an assessment-based model, as opposed they have met the individual is ridiculous—you are to a training technical certificate based model. The going to start at Level 2 because that is the course and risk is that the apprenticeships have become about it starts at Level 2, or you have got to start the AAT certification, rather than about the learning and the at Level 2 because that is where we start. experience. Clearly the public money, time and experience for the I am mindful that in the last three or four months the young person or the adult, should be at the level that Minister and NAS have been speaking in unison about is appropriate for them. If we have vast numbers of quality over quantity. I do not think we should take Level 2s that should only be, in my view, because that that at face value; we should be able to see the is what individuals need. You can only know whether evidence of that on the ground. Minimum durations or not the very large numbers at Level 2 are lower are a part of that. I feel strongly that if you want to than they should be by looking at the experience of see real quality you need to have an Ofsted equivalent, the people that are coming on them. and/or Ofsted, which is able to look beyond the boxes I wanted to raise this point and maybe now is the time that have been ticked in the right place. The learner’s to do it: there are a certain number of key questions experience is a valuable one and is well served by the that the Government do not ask at the point of both public purse. enrolment and at the exit, with regard to The NVQ model in a sense has been exploited; it is apprenticeship and other programmes. One obvious still being exploited. It will inevitably be less key question at the point of enrolment is: is this exploited with minimum durations, but there is still creating a job or not? Why is that not an important further to go on prioritising young people. thing to ask for an apprenticeship, if you are spending public money? Q523 Nadhim Zahawi: The NAO report identified At the point of leaving, do they get to keep the job? over a dozen key organisations that are involved in You talked about ATAs earlier; it should surely be a the funding flow. Do you think that the structure of significant performance metric for them that you get the apprenticeship programme is efficient? to keep the job at the end. I recruited an apprentice Nick Linford: No, it is not. through an ATA; she is now a full-time employee of mine, so that is a success story. I would not rubbish Q524 Nadhim Zahawi: How would you restructure all ATAs, but it comes back to compliance and being the funding of those apprenticeships? clear about what you expect for the public money. Nick Linford: Let us start by appreciating that the More generally, at the point of progression, what is National Apprenticeship Service say that they have the learner’s experience at that point—listening to the end-to-end responsibility for apprenticeships, and yet learner—and are they progressing to a level where they have no responsibility for the funding and they are not only doing Level 3, but they now have compliance. It is the only body I am aware of that more responsibility? Of the 40,000 to 50,000 starts at claims to have end-to-end responsibility, but does not cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG05 Source: /MILES/PKU/INPUT/021099/021099_o005_th_BISC 17 04 12 CORRECTED.xml
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17 April 2012 Nick Linford control the money, the compliance or use of that example, with regard to very short apprenticeships or funding. even allegations of fraud, or individuals not knowing My view very clearly, and there is a lot of evidence that they are on a programme. They come from of this, is that there has been a blurring of the lines beyond those that the funding agency is responsible of responsibility between the National Apprenticeship directly for; they come through from the Service and the Skills Funding Agency, which has led subcontractor. to slowness to respond and a definite lack of clarity I would like to quote to you from a letter from Geoff about who is responsible. Watching the chief Russell, the Chief Executive of the Skills Funding executives of both of those agencies at the Public Agency, to John Hayes, on 24 May—about a year ago Accounts Committee—if you did not see it do watch now; it was a letter about the potential misuse of it—it is quite interesting to watch the body language; funds. “Risk is likely to increase in the context of one described himself as the banker, and the other the economy, funding challenges and greater levels of described himself as the marketer. The structures are subcontracting”. It goes on, “Subcontracting is the inappropriate to be separated and to have two chief area most prone to mismanagement and abuse, and is executives. You have to have one person who is responsible for about 70% of our current responsible to the Minister. I am aware that the investigations”. We have moved forward now beyond Committee before this Government were critical of Panorama, and even the Association of Employment having two separate structures. We are partly in the and Learning Providers are calling for “an urgent situation of questioning the value of some review of subcontracting.” If you are looking for programmes and whether they have been dealt with, inefficiencies in the structures, I would look to how because we have retained the two structures. I would easy it is currently for new providers to enter the have single responsibility, absolute clarity about who market under the radar, as it is sometimes referred to, is responsible, but not leave the independent role to though prime contractors, who currently, where some monitor quality with the body that deals with of the money is going unspent, are perhaps not paying compliance and funding. That has to be more enough attention to due diligence when they are independent. How can the funding body be taking on people to help them deliver the numbers. responsible for saying whether they spent the money well or not? That has to be done independently. Q527 Ann McKechin: This is the issue, as you said, about how they are accredited; if they are accredited Q525 Chair: My recollection was that the previous through the prime contractor rather than themselves, report expressed concern about potential problems and the actual level of supervision. with it, but would await evidence; they are in the Nick Linford: Absolutely. process of gathering that evidence. Nick Linford: Sorry, this was in the previous Q528 Ann McKechin: This is the issue in a number Committee, before this Government. of the examples shown on the Panorama programme; Chair: Yes. I think only myself and Brian Binley, who there appeared to be no degree of independent is not here today, are survivors of that particular assessment of the quality of the work and the contact report. between the training provider and the employee. Is this an issue that the Government need to pay more Q526 Ann McKechin: The Committee has received attention to or need to set down further regulations? evidence from Professors Fuller and Unwin We have heard there is an increasing number of suggesting that the funding for apprenticeships is private providers entering into this sector; in some diluted through multiple steps in the funding areas that will be appropriate, but it did seem that allocation train, because it is a very complex number the major problem was that there was no degree of of bodies that are engaged with this process. The independent scrutiny of what they were providing, and Government spent £1.2 billion on apprenticeships last quality assessment seemed to be pretty superficial. year. Is the public getting value for money for its Nick Linford: Yes. The Government have introduced investment under the current delivery model of this a number of policies that have led to significantly very complex structure, or do you think there is an more subcontracting. They have introduced minimum argument for it being substantially streamlined? levels of contracts, which mean that prime contractors Nick Linford: The main inefficiencies in terms of the have to become subcontractors. They also removed a £1.2 billion do not necessarily come from having rule that said you were not able to subcontract two—a NAS and an SFA. They come from a very anything more than 51%; you can now essentially just extended supply chain in terms of delivery. We have be a managing agent, you do not even have to deliver not much covered subcontracting; that was a topic of any provisions as a prime contractor yourself. They particular focus in the latter half of the Panorama have recognised that there are problems, and they are programme. The two big inefficiencies are primarily putting in place a number of steps to try and better in subcontracting, and both of these can be an issue regulate the system, including publishing some of the with the primary contractors as well, but it is well information around who is and who is not a recognised that subcontracting is a particular focus. subcontractor. One is in the management fees that the prime I would, however, point to some other actions that contractor holds on to as the money flows down the undermine their attempts, which I think they need to chain. The other is just in poor use of public funds. A revisit. The SFA has a department at called the lot of poor practice ultimately gets picked up, but Provider Financial Assurance Department, and one of often not early enough because it is subcontracted; for its roles is to assure that the finances are being cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG05 Source: /MILES/PKU/INPUT/021099/021099_o005_th_BISC 17 04 12 CORRECTED.xml
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17 April 2012 Nick Linford appropriately spent. That team has gone from about of your answers, but there are still some areas that 100 to about 60, so they have fewer people looking at need to be addressed. Would you say that effectively more providers in terms of subcontractors. Secondly, in its contract the Government is paying £40 million they published information in February that showed to a training provider to merely sign certificates, given that under the former Learning and Skills Council the fact that Morrisons said they would be providing they undertook 1,175 workplace funding audits. The the training anyway? SFA in 2010Ð11 undertook 185—that is 84% fewer Nick Linford: There are two issues. It was very telling audits that took place under that regime. That is by that when you asked Morrisons, “Would you have design. In a statement in July 2011 it said, “The done it anyway?” they said yes. That is the definition Agency will operate a radically simpler and a more of deadweight. That is a technical term that Tom market-driven funding and regulatory system…The mentioned earlier: the Government, the Treasury and Agency will be less interventionist and operate a less we are paying for something that would have labour-intensive, more simplified system.” happened anyway—displacement, deadweight. That is one issue. Quite clearly, in my view, why should we? Q529 Ann McKechin: Does it have a risk Resources are scarce. We have cut Education assessment strategy for how it would decide which Maintenance Allowance. That money could have been institutions it would decide to visit? spent on supporting young people through EMA and Nick Linford: A very good question. I am sure that is other things, rather than paying for something that the a question that you would want to ask them when they employer—Morrisons turned about a £1 billion profit come before the Committee. last year, and would have used some of that, according to what they said. Q530 Ann McKechin: In your experience, how The second issue, which you need to treat separately, competitive is the training provider market, or has it is whether it was paying for training or not, or if it simply been allowed to gain, in some cases, pretty was just assessment. Again, Morrisons said that the excessive profits for no real return in value? reason they used a training provider was to get access Nick Linford: There are particular case studies that to the certification. I would say that anyone can gain warrant an independent review to learn the lessons access to that certification without public subsidy. from what went wrong, in terms of the use of public They could quite easily have paid Elmfield for the funds and the profits, to ensure it does not happen training, and Elmfield’s awarding body could equally again. There are others, but the best example that have paid for the certification. We should certainly not requires further investigation has to be why the have been paying for national rates of apprenticeships training provider Elmfield’s first contract with the SFA when it seems implausible that a full-time employee was £20 million, which was doubled during the year in the workplace would have got much more than an because they were delivering Morrisons provision in assessment of their existing skills in those 28 weeks. half the time that they had planned, even though they were advertising assessors on six month short-term Q532 Chair: What would you expect the training contracts. You know the numbers. One of the things provider to actually do? that the Committee did not ask about, but is in the Nick Linford: The regulation is very clear in this public domain and was published by The Times regard. I do not know how much you have been Educational Supplement, was the £6.5 million spent covering a technical area known as the SASE, or the on properties by the owner of Elmfield out of that Specification Apprenticeship Standards for England. money, in addition to the dividend that you are It is very clear in there that there are not minimum familiar with. duration expectations, but minimum hour durations My big question to the Government, and there should that are both on and off the job, or away from the be a review to look at this, is why did the contract go work pressures. I do not want to bore you too much to the training provider? At the time there was a with that, but there is a rule of 280 hours in total, of National Employer Service that gives contracts to the which 100, or 30%, whichever is greater, is off the employers themselves—employer ownership is a big job. I would be very interested to see whether in 28 thing at the moment anyway. Had they done that they weeks this statutory requirement was being met. could have negotiated—which is what they do—a I am a very big fan of the day-release model, which is much more efficient, cost-effective rate. You heard the still being delivered in some circumstances. Typically, owner of Elmfield here saying, “It is not my fault if I when the National Apprenticeship Service put forward get overpaid”. That could have been done; why was it apprentices to hear from, they would be in areas where not done? they would be a day a week at the college, learning Secondly, as far as some of those profits are skills in workshops, and then four days a week in the concerned, I feel, as an individual, outraged that the workplace. That is not to say you cannot do first time they were visited by Ofsted they were everything in the workplace, but where employers do already on a £40 million contract that had been not have the facilities, I find it hard to believe they doubled, and Ofsted said it was satisfactory. How could be doing very much more than assessing skills much of the £3 million after tax in dividend could as opposed to delivering substantial training. have been spent on a better service to those employees? I think a lot of it; probably all of it. Q533 Chair: You have mentioned the profit levels of Elmfield before, and quite rightly Elmfield said the Q531 Chair: I had a series of questions covering state was paying too much money because they did much of that and you have pre-empted them in some not recognise that there were efficiencies in this cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG05 Source: /MILES/PKU/INPUT/021099/021099_o005_th_BISC 17 04 12 CORRECTED.xml
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17 April 2012 Nick Linford model. Do you think the Government do recognise employers putting hands in their pockets. I put a this now? survey out to my 5,000 members yesterday lunch-time Nick Linford: Yes, if for no other reason because they and got nearly 200 responses; 60% of those that had have stated that where prior attainment exists that a view—yes or no on fees—said you have to do should be used to reduce the funding that is achieved. minimum fees. There has to be something in the There are rules—I am surprised they were not used, contract, particularly with large employers, and and I would even revisit whether or not they should certainly for those with existing employees, maybe be retrospectively—known as the Principles of not as a barrier for new ones; the employer should be Funding. It is public funding after all. If you have a paying their fair share to get high quality training. delivery model that ticks all the boxes, but you are making upwards of 40% profit margin, that is Q535 Chair: You will be publishing the results of inappropriate with public money. That should have this survey? been dealt with. Nick Linford: It will be in the next edition of FE I find it astonishing on a £40 million contract that Week. there was not an account manager from the Skills Funding Agency all over this. Who signed off? How Q536 Chair: You get the plug in. did that conversation work, which said, “You have Nick Linford: The second thing I would say is that— delivered twice as many apprentices in six months I mentioned it earlier in terms of my with Morrisons, upwards of 20,000, nearly all 25-plus recommendation—it is bonkers to me that we are not and we are only half way through the year”. How recognising the difference between an apprentice, did that conversation go that led to them doubling the where we create a job, and an apprentice where we contract to £40 million in the year for that single convert, as the SFA call it, an employer. I would be employer? Who signed that off? Up to what level? I looking carefully at using the 25-plus Apprenticeship think that will not happen again. The view of most funding to fully fund 19 to 24-year-olds that were new individuals I have spoken to is that Morrisons should to employment. pay for their own learning and development. Q537 Chair: How typical do you think the Q534 Chair: What recommendations would you Morrisons-Elmfield situation is to the industry as a make to ensure that this does not happen again? whole? Nick Linford: I have a number. I was talking about Nick Linford: It is a very good question, and there who is paying. You have to go back and look at has been a lot of debate about whether Panorama employer contributions. That was brought up earlier. represents a big or a small issue. It is important to I have a quote here from July 2010, from the Banks mention with the Morrisons case that it is not just one Review of fees. The last Government had an case out of 5,000 arrangements or engagements with independent review of fees, and it was unfortunate employers. It is a very important case. It is the largest that it was published right at the end of their tenure, deliverer of apprenticeships with the fastest-growing and I am disappointed that nothing has happened provider. They are fastest growing off the back, since. I quote: “The current system for ensuring primarily, of the Morrisons contract. employers co-invest alongside Government in this If you look at the numbers, over 10% of all range of Further Education provision is failing. It is apprentices are with a single employer. You then look not securing the level of investment expected and elsewhere in the same sector—Asda, for example. In required from those who should contribute, and action May, the Government awarded an £8 million contract is essential to change what is widely regarded as to an awarding body who have a subsidiary known as unfair and untenable.” City & Guilds for Business to deliver 25,000 At our newspaper, Further Education Week, we hear apprentices with Asda. You look at some of the very regularly both from colleges and training providers large employers and you can see some very large about how they are being undercut. They are well numbers of apprentices. Therefore, to describe that as intended with their employers at charging them for marginal within the context of training existing the contribution of the high quality training that costs employees, statistically I would claim is not the case. money. That is the point: high quality training costs When you look at individual cases, obviously one out money. Where the Government are paying reduced of how ever many thousand employer engagements is rates on the basis that the employer is contributing it marginal. There are semantics around whether it is a seems implausible that high quality can be delivered big issue or not. I would bring us straight back—I will without charging the employer. If the Government conclude on this point—and agree wholeheartedly expect and will get high quality, the only way is for with what Tom said earlier: if you do not nip some of the employer to contribute. The Government play a these things in the bud early and quickly—FE Week huge role in changing the culture of employers to put has led the way in highlighting some of these things their hand in their pocket and pay for it. Employers so that they can be dealt with, and people are aware will expect a lot more when they pay for it, and you of them—other colleges, other training providers, look know they will want it and use it well when they are to the left, look to the right, and say, “If that is the paying for it. way to find efficiencies then we will be out of the The only way to go is down the route of minimum game soon enough if we do not follow suit”. Even if fees. While it may be imperfect and you may want it were a marginal, you have to deal with it. tariff arrangements, I am getting feedback from Chair: Thank you. That is very helpful, very colleges and training providers who are conscious of provocative, and no doubt will be incorporated into cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG05 Source: /MILES/PKU/INPUT/021099/021099_o005_th_BISC 17 04 12 CORRECTED.xml
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17 April 2012 Nick Linford our recommendations. As I always say, if you feel that us. Again, we may ask you further questions when on there is anything else that you would like to submit reflection we look at the areas that we have covered. on any of the questions that we asked you, or should Thank you very much. have asked you, but did not, then feel free to write to cobber Pack: U PL: COE1 [SO] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG06 Source: /MILES/PKU/INPUT/021099/021099_o006_th_BISC 26 04 12 CORRECTED.xml
Business, Innovation and Skills Committee: Evidence Ev 97
Thursday 26 April 2012
Members present: Mr Adrian Bailey (Chair)
Paul Blomfield Margot James Julie Elliott Ann McKechin Rebecca Harris Nadhim Zahawi ______
Examination of Witnesses
Witnesses: David Way, Interim Chief Executive, National Apprenticeship Service, and Geoff Russell, Chief Executive, Skills Funding Agency, gave evidence.
Q538 Chair: Good morning. Thank you for coming are now implementing those minimum durations, so before us today. For voice transcription purposes, quality and ensuring that everybody can have perhaps you would introduce yourselves. confidence in apprenticeships is the top priority for us David Way: I am David Way, interim chief executive at the moment. of the National Apprenticeship Service. Geoff Russell: I am Geoff Russell, chief executive of Q541 Chair: Perhaps I may direct the next question the Skills Funding Agency. to Mr Russell. In your annual report, one of the key measures of performance was the number of Q539 Chair: Some of the questions will be person- apprenticeships. How do you measure the success of specific; on others you may wish to complement each the programme? other, but please do not feel both of you are obliged Geoff Russell: I am happy to answer that question, to answer every question if you do not feel there is although David may have comments as well because realistically anything you can add to it. My first that is really a question for which NAS is responsible. question is person-specific. Mr Way, NAS was In my view, it would be around employer uptake launched in 2009. Could you summarise what you think the main achievements have been so far? because that is one of the key issues and barriers, and, David Way: When the National Apprenticeship to the extent you can persuade employers to make Service was created it had the specific task to support positions available for apprenticeships, that suggests the then Government’s ambitions to expand quite strongly it is a product they want to buy. Other apprenticeships, which were then being taken over by measures of quality are: Ofsted inspections of the current Government. It was very clear that the providers; value for money that is generated for an blockages to the growth of apprenticeships were apprentice from the point of view of the public purse, employer opportunities, so the biggest achievement because value for money is not just about cost but we have been able to bring to apprenticeships has what you are getting for it; and also the satisfaction been to expand the number of work places now of employers and apprenticeships themselves in terms offering apprenticeships compared with a few years of the experience they get. The mechanistic measure ago. About 700 new work places a week are coming we use to try to drive quality improvements—but it is on stream, so the main achievement of the National only one dimension of it—is around success rates, i.e. Apprenticeship Service, working with colleges, of those who started, how many completed. I think providers and employers up and down the country, that by all of those measures quality has continued to has been to create more high-quality opportunities for improve since NAS was created. young people and adults. The growth in apprenticeships through having more employers is, I Q542 Chair: I suppose there are inevitable tensions think, the greatest achievement over recent years, and between the role of job creation, upskilling if you like, I am pleased that the National Apprenticeship Service and the NEETs programme, because value for money has played a part in leading that. is not just measured in positive contributions but the avoidance of a negative contribution. What do you Q540 Chair: You have recently taken the position as regard as the most important priorities? interim chief executive. Will you be making change? Where do you think the services need to be improved? David Way: The issue is an important one. In the work David Way: As my submission to the Committee said, we did in the NAO, the early discussions were about while we are very pleased with the progress that has whether there was a danger that apprenticeships could been made and can point to quite a long list of be the solution to every problem, and therefore end achievements over the last few years, there are some up not being the solution to one. We have always seen important issues still to address. Those change over the heart of apprenticeships as being an effective time, but clearly quality is the most urgent and bridge between school, college and the world of work, pressing issue with which we have been dealing in the to give people that foundation on which they can last year. We have been getting to the bottom of succeed in work and go on to further learning and quality issues and addressing them; we have made development. With changing demographics and the recommendations to Ministers, particularly about fact that people will be working much longer these duration, which the Minister has announced, and we days, enabling people who are a bit older than 16, cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG06 Source: /MILES/PKU/INPUT/021099/021099_o006_th_BISC 26 04 12 CORRECTED.xml
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26 April 2012 David Way and Geoff Russell indeed 24 and into their 30s and 40s, to get broad- in reality that it is individuals who feel employers based training which will develop them for the future have made it pretty clear that they want them to be becomes much more relevant. upskilling themselves to ensure they have a big part When we look at the benefits of apprenticeships we to play in the future employment of that company, do so particularly from the perspective of the learner and the individuals are translating that as being not and the employer. We know that from a taxpayer completely voluntary. I think that is the point they perspective the NAO report was very positive about are making. the return on public investment, and that was great. Our learner surveys show—and there is consistency Q547 Chair: Basically, these are people in across a number of surveys—that the vast majority of employment who, presumably, are likely to be post- learners feel they get a great experience out of 24. Any particular sectors? apprenticeships, but about 10% believe they are not David Way: Not particularly. To put it in perspective, getting the learning journey they are looking for. That we are looking at a range. We are saying that of the is where from a quality perspective we need to focus 10% who are saying they do not have a very good more and more, not trying to raise the minimum experience there are characteristics of those who say standards that have been described but to understand they have a poor experience; some are to do with pay; why it is some people do not get the experience they some are to do with their perception of off-the-job want. training; some say it is because when they do their one day a week at a college they get lost in the Q543 Chair: To interrupt, to what cohort does that college. They feel there is not an individual there who 10% apply? Are these people in existing employment is picking them up, so they feel a bit lost. There is a who are being upskilled, young people being trained whole host of reasons. You follow through on one for a job, or what? aspect of that. I think that demonstrates why we need David Way: It goes across the whole piece. One of a pretty forensic approach to all of the issues that the things the Committee will be able to see before it come out, but my main point is that in terms of quality sees the Minister is a learner survey that is about to not only do we want to concentrate on the things be published. I think you will find that interesting. Geoff has outlined about success rates but really You can delve into that. A lot of the analysis that we understand why it is people are not completing their get shows there are variations from sector to sector. apprenticeships and what more we can do to take There are lots of sectors, such as engineering, where away their concerns about their experiences. the experience of young people and adults is a very good one; there are other sectors where the experience Q548 Julie Elliott: Have you come across any is not as good. evidence of employers who are telling people to do apprenticeships and it is not entirely voluntary using Q544 Chair: Could you name them? it as a way to pay those individuals less money? David Way: If you take the hairdressing sector as an David Way: I have not come across examples of that. example, over the years there have been issues about I suppose this is a little bit of the downside of talking pay and the treatment of tips. There are other sectors. about surveys that are just on the point of being published. It enables us to follow through on those on Q545 Chair: That is interesting, because pay as an what it is telling us, so we do not have any evidence issue is not quite the same as the training provision. of employers doing that at the moment. The David Way: No, but they interrelate. When we have researchers are telling us there is a perception by the survey, people are judging from their whole individuals that they are being encouraged to take it experience. You asked whether these were young on. If you take the vast majority of apprenticeships, people or people who were employed. What is very what happens is that people are given the opportunity. clear is that the people who are least satisfied are those I know you went to see Morrisons and you spoke to who are undertaking short duration apprenticeships, Morrisons. They pride themselves very much on which is why removing those, as we and the saying that when they look at the individuals in front Government are doing, is so important, but where of them, they give them a choice between doing an employers effectively tell a young adult, typically, that apprenticeship or a narrower form of training. That is they are going to do an apprenticeship, as opposed to the way the vast majority of employers would be the individual opting to do it, there is not ownership working, but this is a finding that we need to look of that journey by the individual, and that is reflected into further. in their satisfaction. Therefore, satisfaction rates are highest among those who feel they get the best Q549 Chair: We will be discussing the Morrisons/ experience, not surprisingly, and that usually equates Elmfield issue later. In 2010Ð11 there were 457,200 with a longer duration of training. apprenticeship starts. Can you give some sort of breakdown? How many of those were NEET, in Q546 Chair: I am intrigued by employers telling education prior to that, or existing employees? people that they will have apprenticeships. That seems David Way: As far as concerns existing employees, to me to be a contradiction to the whole principle. In our survey information tell us that about one third of what particular areas does this happen? those were recruited and two thirds were employed. David Way: Thankfully, it is a minority. Remember, that this is what learners are telling us. It has been Q550 Chair: Of those recruited, do you have any categorised by the researchers as “telling”. I suspect idea how many were NEETs? cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG06 Source: /MILES/PKU/INPUT/021099/021099_o006_th_BISC 26 04 12 CORRECTED.xml
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26 April 2012 David Way and Geoff Russell
David Way: Not by the strict definition. Of course, you help us?” In most cases, we give them basic they were all non-employed before by definition. information about an apprenticeship, and as quickly as possible put them in touch with a local training Q551 Chair: We talked about the role of NAS in provider or college because we think that is the most selling apprenticeships, which you have highlighted in efficient, effective and right thing to do. There is no the evidence you have given, yet a lot of employers doubt that employers often need that little bit of extra do not seem either to know about or use NAS in help. We point them towards the website quite a bit. recruitment. This was the evidence submitted to us Since you have asked that question directly, one of the by the Forum of Private Business. Why do you think issues we are discussing at the moment is that we have that is? not promoted the National Apprenticeship Service David Way: Is the question about why they do not anywhere near as much as we have promoted take on apprentices, or why they do not use the apprenticeships, because we think it is the product— National Apprenticeship Service? the training service—which is more important than us as an organisation. What some small employers are Q552 Chair: First, I think there is an issue of saying now is that they get a lot of information about awareness. In effect, what are you doing to get to the apprenticeships by Googling it and going on to the hard-to-reach companies? Even those that do know of website. If you go on to the website, you see a lot of your existence and role are not using you. Why do people if you put in “apprenticeships”. We may well you think that is? There are two areas. be trying to raise the profile of the National David Way: I start by saying that if employers are Apprenticeship Service with employers, because they adopting apprenticeships without coming through the want to go to somebody they feel they can trust. National Apprenticeship Service, that is not It is also relevant that, if you are a local employer, particularly an issue for me. Our main concern is that you might not know where to go. The vast majority employers are investing in training, and if they find of apprenticeships are delivered by training providers apprenticeship training solutions by going directly to rather than the local college. The local college is a colleges and training providers, with whom they have good place to go—I would always recommend that— well-established relationships, that is a very good but in the context of apprenticeships, you might not outcome. know the training providers available in your locality. Within the National Apprenticeship Service, the We can help put you in touch with those. biggest proportion of our staff are working on sales; The principal obstacle from employers who come they are approaching employers all the time. through our website and phone lines is that a high Typically, they are approaching those employers who proportion expect apprenticeships to be free. They have no history of apprenticeships in the past. The want to take on an apprentice and expect the public number of expansions in the work places—the figures purse to pay wages as well as the training costs. When I quoted earlier—are indications of success, but there we explain to them that that is not the case, though at are lots of other things we do as well. For example, the moment there is an incentive scheme to cover we have been leading the so-called “100 in 100” wages for the first few months, often that deters campaigns. One of the biggest successes we had in the people. Pricing and costing all these things is often a past year was in the north-east—it is being repeated— determinant of whether or not people proceed with where we had over 1,000 apprentices responding to apprenticeships. campaigns, typically run by local newspapers. We try to recruit 100 new apprenticeships in 100 days. That Q553 Chair: I understand there has to be a marketing has been an enormously successful marketing role, but with marketing, the criteria for success often campaign. depend on the number who buy the product. Do you You have also heard from the ALP and others about not think there is a danger, given the pressure you are the value they place on the marketing we have been under, to sell this product sometimes to companies doing. Why are we doing that? In part, we are trying that do not need it, or they really cannot utilise the to create a positive environment in which to sell training to its full potential? apprenticeships, whether it be the National David Way: Selling products to people who do not Apprenticeship Service or training providers up and need it is a hard sell. As there are so many employers down the country. There is no doubt we have raised out there who currently do not use apprenticeships, awareness of apprenticeships. we assess the employer market according to whether The other critical point is that, since we now have or not we think they would be interested in about 700,000 apprenticeships, those are 700,000 apprenticeships. In order to get the best return on the apprentices with family, friends, and employers who investment we make in sales, we do market research are talking about apprenticeships and spreading the initially to work out whether or not there is any word about them. There is something about the critical prospect of selling. If they are not interested in taking mass of the number of apprenticeships there are now, apprenticeships we go to other employers. so all these things reinforce messages. When it comes to employer engagement, the truth is Q554 Chair: Do you make any assessment of future that employers come to the National Apprenticeship skill needs in the areas you are looking at? Service, because they do not entirely understand the David Way: At an individual level, the discussion we way to engage with apprenticeships. Most of the have with employers is not to go through the door and queries that come to us are, “We are interested in an try to sell them an apprenticeship; it would be very apprenticeship. We’re not quite sure what to do. Can much to talk to them initially about their own cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG06 Source: /MILES/PKU/INPUT/021099/021099_o006_th_BISC 26 04 12 CORRECTED.xml
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26 April 2012 David Way and Geoff Russell assessment of their skills needs to see whether David Way: I am sure Geoff will want to come in on apprenticeship is the right answer. I sit down with lots part of this. What you have described is the life of of employers and have a discussion and at the end of running the National Apprenticeship Service; i.e. you it they conclude that the answer is something other are trying to get across to employers the great than apprenticeships. That is entirely their decision; experience they can have through having an they are making an informed choice. apprenticeship and the benefits they get. At the same time, you are trying to deal with issues of quality. Q555 Chair: In their evidence to us, City & Guilds During the period we have been talking about we have cited bureaucracy as the main barrier to hiring grown the total quantum. As Geoff indicated earlier, apprentices. Do you agree that there are still barriers all the quality indicators have been moving in the right to overcome in terms of the private sector working direction as well. with Government agencies on their training needs? Where we have had quality issues—we come straight David Way: Absolutely. Geoff and I are both to the issue of short duration—what did we do? We committed to reducing bureaucracy wherever we find worked with the Skills Funding Agency. The Skills it, and we are running pilots to try to do that at the Funding Agency has picked up the 87 providers with moment. The direct answer to your first question whom there were sets of issues; we have worked our about whether I agree with City & Guilds that way through it together to solutions for nearly all of bureaucracy is the main barrier to taking on those. We have been able to push the numbers and apprentices is that I do not, because we record all the address quality at the same time. I do not see that barriers people bring to us as the reasons why they there is any tension in practice. What we are trying may or may not take on apprenticeships. Although to do is promote high-quality apprenticeships, yet the bureaucracy is in the first five, it is not the first barrier. volume of apprenticeships we now have, which is almost 500,000, is broadly the level we are expected Q556 Chair: What bureaucratic barriers have been to achieve over the next few years. cited? To me, it is not about any sales. My sales teams are David Way: I think bureaucracy becomes a bit of a focused on 16-to-24 apprenticeships and on the catch-all for a whole range of things. employers who are hardest to reach—the new employers and new sectors—and on higher-level apprenticeships. All of those are qualitative issues as Q557 Chair: I understand that. That is why I am far as I am concerned, but Geoff might want to trying to find out exactly what it means. comment on the way we dovetail on quality. He is David Way: Usually, it comes back to the point I was responsible for ensuring that the quality delivered making. When people say they are interested in through our provider base is strong. apprenticeships, there is a journey from the first contact they make when, say, they phone us, or Q559 Paul Blomfield: I would welcome that further somebody at one of the helplines. There are a lot of observation from Mr Russell, but I wonder whether I steps to go through. The first thing we do is explain may press you a little further? At our last session, we to them how an apprenticeship works; the fact they had witnesses from the Association of Colleges and need a training provider; that it is about a job, not the TUC. On this specific issue, they expressed some training, so there are lots of things we need to explain. concerns. On this issue they both agreed—they did What we try to do is cut out the bureaucracy by not agree on everything—that they wanted to see clear getting them very quickly to a training provider. The accountabilities. Who is responsible for quality and training provider will help them through this particular audit? Who is responsible for generating business in process, take the bureaucracy away from them and the first place? How do you manage that internally? simply focus on their needs. How can we put in front David Way: I have a different team for sales and for of them, if they are recruiting, some people who we quality. As chief executive, I manage those particular think will make great apprentices? How can we set tensions in the way any other business would. I did out for them what a training programme would look read the story. We saw Martin yesterday and I was like in as simple a way as we can? One of the key intrigued by that and thought it a very interesting set reasons employers do not take on apprentices is that of questions on which I reflected. Maybe it is they cannot provide a suitable training provider. That something we want to pursue further with Martin. feeds into bureaucracy. If they can find an excellent Having reflected on it, my answer to you is that I training provider and college, of which there are recognise there can be tensions. I probably saw that many, who can explain to them very simply what the best when the apprenticeship system first came under process is, bureaucracy disappears for them. some scrutiny in respect of the short-duration apprenticeships. It would be very tempting to become Q558 Paul Blomfield: I want to come to a specific very defensive about that, or sweep it under the carpet. issue related to accountability. One of the merits or What we have tried to do is the exact opposite. Only founding principles of NAS was providing an end-to- last month, we held an AoC/ALP quality conference, end service. That means you have a lot of different at which the Minister spoke, in which we tried to roles, one of which is generating sales, if you like, expose all the quality issues and explain what we were and a lot of your success is measured by the numbers doing about it. I think that helped. you generate. At the same time, you have There has been a bit of a learning journey on this, but responsibility for quality and audit of provision. Do my conclusion was that reconciling growth and sales you think there is a potential conflict of interest there? with quality issues was no different for me as the chief cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG06 Source: /MILES/PKU/INPUT/021099/021099_o006_th_BISC 26 04 12 CORRECTED.xml
Business, Innovation and Skills Committee: Evidence Ev 101
26 April 2012 David Way and Geoff Russell executive of NAS from what it would be for the chief about apprenticeships as being only for young people executive of many other organisations, because rather than young people and adults. They probably ultimately my sales, or the growth of apprenticeships, think of them as primarily for people who are being depends on people having confidence in the quality of recruited, as opposed to those who are in the work the product. They do go together. I thought it was an force, mainly in the industrial rather than service interesting question, but I do not think they are sectors. There is a series of subtle but important incapable of being handled within a single differences that we need to reconcile. organisation. Brand is important, and I have not had any issues from Geoff Russell: I will just add that it would scare me those people in the work force who are being called if NAS was responsible only for sales and somebody apprentices, but I often ask them because I think that else was responsible for production because of the particularly older workers might have a problem with necessary tension in that relationship. that. What I have found with branding in recent weeks and months is that people, realising that an Q560 Paul Blomfield: But that is a relationship we apprenticeship in engineering is different from, say, have in other areas of our education system, is it not? an apprenticeship in retail, have been suggesting to us Geoff Russell: Indeed, which in my view often does that we might rebrand the apprenticeships a bit to have not work that well. more emphasis on occupations, so you could be an apprentice in retail as opposed to an apprentice in Q561 Paul Blomfield: And often do. engineering. They think that the subtle differences Geoff Russell: I look at some of the stuff the would help make the relevance to particular sets of Education Committee is looking at. I think there are occupations more secure. We are always looking at as many issues, if not more, there. As David says, branding, not least to keep it modern and relevant to he has to balance quantity with quality; the two are those mostly young people who come into inextricably bound, but he does it and he is apprenticeships. accountable for both. What would be dangerous is if all he had to worry about was pushing the numbers Q563 Julie Elliott: We have had some conflicting and somebody else had to say, “Wait a second. That’s written evidence on this. For example, CITB- not of adequate quality”, because then you get into all ConstructionSkills said, “NAS had promoted sorts of interesting questions about what levers one apprenticeship volumes, irrespective of age and has over the other, conflict and what the measures are. length, but this could potentially damage the Those are discussions that David has to have with apprenticeship brand in the long term”. We have also himself, but the whole world gets to see the outcome. had evidence from the Shropshire Training Provider It is no different from Apple selling iPhones. Network that “NAS has provided a national profile of David Way: I thought the NAO report was quite the apprenticeship brand which has been successful”. interesting. It said that when there is an expansion of How do you think the recent rapid increase in quality there is a danger that there will be quality apprenticeship numbers has affected the brand value? issues, and the key concern is to ensure those quality David Way: I think the brand value remains strong. If issues are exposed and the risks managed. The NAO 90% of people say they have a very positive concluded that we were managing those risks. Indeed, experience of apprenticeships and there is a growing certainly through the governance arrangements under number of apprenticeships, that only helps reinforce both BIS and DfE I can assure you those risks are the brand. I do not accept that we have been on the being managed effectively. Only yesterday I had to go front foot by promoting the brand through numbers, through all the primary risks concerned with though there has been some brand messaging on that. apprenticeships with both Departments to ensure they What we have tended to focus on—certainly the new were being managed effectively. I think the marketing campaign—is the experiences of young governance arrangements we have in place are an people, or real apprentices. All the branding material important safeguard. at the moment features people who are three- dimensional, in the sense that you have pictures Q562 Julie Elliott: How important is the showing the pride and value they get out of those, and apprenticeship brand when you are promoting the there are case stories by people who were apprentices. programme to both employers and employees? You can get behind them, talk to them and feel their David Way: I will come to that directly. I think the experiences and stories. brand of apprenticeships is hugely important in this If it was about numbers—I can see that there was area, because we have a rich heritage on which we some numbering used in the branding—today it is rely heavily. We have many chief executives of absolutely about the benefits young people get out of businesses who used to be apprentices and can be apprenticeships, the fact they are about real people ambassadors to promote apprenticeships up and down and the range of occupations. We have talked about the country. With so many people prepared to be the growth of apprenticeships; the reality is that that advocates of apprenticeships it is very important that is partly because we have opened up brand new they remain and have full confidence in the brand. sectors. One of the big brand challenges for me is not The issue—your question goes to the heart of it—is particularly to take the whole range of occupations but that people’s perception of apprenticeships and those areas like IT, accountancy, child care and the new being delivered today are different. I worry if people’s areas of big employment with which people do not perception of a brand is different from what is actually naturally associate apprenticeships. That is one of the delivered. I say that because mostly people think challenges for us. cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG06 Source: /MILES/PKU/INPUT/021099/021099_o006_th_BISC 26 04 12 CORRECTED.xml
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26 April 2012 David Way and Geoff Russell
Q564 Julie Elliott: You have talked about the to get across to the public at large, and employers in research you have done on people who have particular, is that these days, apprenticeships are not apprenticeships and companies that are working with just about construction and engineering. For the vast apprentices. Have you done any research on the brand majority of the employer work force, that is a positive, with the people you have not reached? but I can well see that if you are in construction, for David Way: We do not talk only to apprentices; we example, you might see that they could do with some talk to the population at large about their perception additional help in promoting this as absolutely being of apprenticeships, whether that is positive or in construction, but our view is that most people who negative, and how detailed that knowledge can be. would want to go into construction know that the Over years, the knowledge and recognition of apprenticeship route is the route to go into, which is apprenticeships has increased, but it has not increased why we have widened our branding. I will certainly to the levels we would want where everybody in the talk to Mark and ConstructionSkills about that, if that population understands what an apprenticeship is and is an issue for them. It is a vital sector for us, and if that it is a high-class vocational route. We still have we can do more to support construction we progress to make in that area. absolutely will.
Q565 Chair: Julie quoted CITB as an example of a Q567 Margot James: Mr Way, in your written slightly negative concern about NAS. Given the fact evidence, you talk about now being the right time for it is a highly reputable body, what have you done to “a new era for apprenticeships”. I just wonder whether address these concerns? Have you had any you could expand on that. conversations with them? David Way: If I was to try to describe the new era, it David Way: We have regular discussions. Within the is very much about some of the things we have National Apprenticeship Service I have a lead person already talked about. It is about ensuring that all who is, if you like, the relationship manager for each apprenticeships are of high quality. I think that within of the sector skills councils, including construction. that it is about new ways of working. Last time, we We have been having a lot of discussions with talked a bit about ATAs, and that is an important part construction recently, though interestingly not about of the future. It is absolutely about holding on to some that particular issue as far as I am aware. What we of the traditional heartland of apprenticeships, have been having particular issues with about particularly 16 to 24. I am not suggesting that we construction, as we have over recent years, is that it move away from that. It is about the new sectors. It is part of the economy that is particularly subject to is also about encouraging higher levels of fluctuations in the labour market. apprenticeships. That is probably one of the most Two years ago, we spent a lot of time and money— exciting areas for me, because the way to get more from memory, we put in about £100 million, but I will people to take apprenticeships at level 2 or level 3 is have to check the figure1—on ensuring that to offer them an opportunity at level 4 and at apprentices in construction, who were not finishing university, so that is important. Similarly, because we their apprenticeships, were able to finish them. We are concerned with the whole area of worked together with Construction Skills on that. At pre-apprenticeships, we are very interested in working the moment, we are working with them to try to get a with the UTCs to ensure that in all the great work better understanding of what is happening to they are doing, concentrating on boosting technical construction apprentices and what we can do to skills, there is within that a section about ensuring that encourage growth. In the discussions we have been apprenticeships are part of that offer. having I notice that they have introduced their own What we are saying is that having got half a million version of what we would otherwise call ATAs—the apprentices is not where this Government and the apprenticeship training associations—so they are National Apprenticeship Service want to rest. We giving apprentices in construction a greater want to make sure they are high quality and provide opportunity to complete their training by going to lots of opportunities and that the vocational route is different construction companies. I think they have seen by parents and young people as being as great a about seven of those. The sort of thing we talk to route as going to university. Although we are making them about mostly is how we can ensure that in the strides, we are not there yet. It is really a future construction sector, which is subject to fluctuations in ambition. We are very pleased with the progress we demand for labour, we can keep high-skilled have made, but there is more to do. It is a matter of apprenticeship training coming through. I have not trying to capture the essence of that, but the higher- spoken to them about branding; I cannot be certain level skills are a key part of it. one of my colleagues has not done so, but I certainly would do. Q568 Margot James: On the question of quality, when you were responding to Panorama on BBC you Q566 Chair: You seem to be speaking to them, but stated that you were concerned for those apprentices on other issues. I would accept up to a point that if who appeared to have been misled by training they had an issue on that they should raise it. providers. What have you done to ensure that all David Way: I can understand why they might be a bit training providers are of good quality? concerned about the brand. I had not really thought Geoff Russell: Not all training providers are of good about it in quite this way, because what we are trying quality, and they never will be, but the vast majority 1 Note by Witness: The figure was checked and it was £1 of them are. We put them through a due diligence million process before they can be eligible for funding that cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG06 Source: /MILES/PKU/INPUT/021099/021099_o006_th_BISC 26 04 12 CORRECTED.xml
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26 April 2012 David Way and Geoff Russell looks at their financial health and whatever track apprenticeship. That is not our view of an record they have. There is a series of other factors, apprenticeship and it is not what Geoff and I define but primarily it goes to the question asked by the as an apprenticeship. We are applying, through the Chair earlier to do with the forces that maintain new descriptions of apprenticeships, new funding quality. We can say that this training provider has the rules and so on. capability and track record to deliver an At the heart of it were people who were doing things apprenticeship. Whether or not they actually do is which were beneficial to those young people, but it going to be determined properly and impacted by was not an apprenticeship. What we have done is take Ofsted inspections and, ultimately, whether employers them through what an apprenticeship would mean, are happy with the training their employees get. It will crucially having an employer for the apprenticeship be impacted by the funding audits my people do to occupation in which that young person thinks they are ensure that the money they get from us is being used getting an apprenticeship. If you start from the basis properly. We audit the providers they (employers) use of having an employer and a framework in the to deliver the training. occupation of your own choice, you have a very solid There are various forces, but at the end of the day, we foundation. We have been revamping and reorienting have to balance the bureaucracy issue. I can double these training providers to do bona fide the number of people I have and the amount of effort apprenticeships instead of training courses. That was I make to peer over the shoulders of the several probably the fundamental thing we found. thousand providers we have in the country. That would cost money and generate much more Q570 Margot James: What checks do you carry out bureaucracy, and I am not sure it would be a good with new training providers before you approve them return on investment given that the number of for funding? providers who are bad apples is, happily, relatively Geoff Russell: Some of the things I mentioned before: low, although the Panorama experience illustrates one their track record in terms of delivering training, if not of them. necessarily for us then possibly for other organisations like the DWP, for example. We check the directors; Q569 Margot James: Do you have a feel for how we do basic checks through Companies House; we many poor-quality providers there are? Do you have check their financial health, i.e. whether they have the a measure of how long they can remain in business financial capacity and capability to be able to deliver before they are rooted out? I accept there will always against the funding levels they are seeking. The be a variation in quality, but I was a little disturbed important point is that, just because they have come when you said there would always be poor quality through our due diligence gateway, does not mean providers. they automatically get money. They have to go and Geoff Russell: What I meant by that is that there will persuade an employer that they are fit to deliver the always be people who take advantage of the system. apprenticeship training for their employees. I view These are effectively fraudulent people. There are also that as a very important part of the quality control providers who are not fraudulent and are trying to do process. a good job, but they do not do a good enough job. Employers are pretty demanding, in that they will The main way we capture that is through measuring want the best-quality training for their employees the number of people they take on who complete the because they have to pay their wages; they have to programme. There are minimum levels and if you do invest quite a bit of their own time and money to not meet them your funding disappears immediately; deliver apprentices. In a sense, it is the market that is you just will not get any more the following year. It the main quality control, although there is a lot of is that simple. other paraphernalia, like Ofsted, our minimum levels David Way: It might be worth saying, since you of performance, my funding auditors, etc. But the picked up on the Panorama programme, that a lot of thing that ultimately drives a provider out of business that focused on short-duration apprenticeships. Our is if employers just do not want to use them. analysis of that showed there were 87 out of over David Way: Can I just add an anecdote that I think 1,000 apprenticeship providers who were delivering may be helpful? I was recently with an employer, the short- duration apprenticeships. Geoff and colleagues Southern Co-operative. I may as well name them of mine have been working our way through that. By because it is a good story. These days it is quite typical and large, what we found in those training providers for employers to want to three or four training was not fraudulent training, though at least one of providers and talk to them about what they are going those featured in the Panorama programme is now in to offer them as an employer. This particular employer administration, so that has followed its course. was telling me that one of the training providers came We found there were people who did not always along and basically said, “You could have this training understand what an apprenticeship was. I know this for free.” This employer sent them packing and said, Committee has spent quite a lot of time looking at “I can’t possibly conceive of a useful training what an apprenticeship is. At the heart of that for us is apprenticeship programme in which I do not have to employment and skills development in the workplace. invest my time, money and effort. I want value for Some of these short duration apprenticeships and the money, but I don’t buy the idea that you will come reviews we have done show that some training along and give me something for free.” providers saw apprenticeships as largely a training That underlines Geoff’s point about quality and course. As soon as you were capable of passing the ensuring value for money. We have thousands of various tests, you were assessed and got your pretty savvy employers out there working with cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG06 Source: /MILES/PKU/INPUT/021099/021099_o006_th_BISC 26 04 12 CORRECTED.xml
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26 April 2012 David Way and Geoff Russell training providers. Nobody is forcing their arm up Q574 Chair: Earlier, Mr Way remarked that there their backs to say, “We need some more for was evidence of employers basically interviewing Government targets.” This is about trying to ensure training providers and one had been rejected because that that employer gets a high-quality service. We they said they were doing it for free, so it could not cannot look over their shoulder, but it is encouraging have been of the right quality. Have you followed it to hear stories like that. People see that they have to up to investigate exactly what is on offer from that invest in apprenticeships if they want the quality we provider? are all looking for. David Way: I have not personally. I must say I was very happy that the message would get round the Q571 Julie Elliott: Mr Russell, you said that one of system that the way to secure business with employers the things you check is how many people start on a is not to pitch up and say, “I can do it the cheapest.” programme and how many do not end up finishing it. Presumably, that provider will have learned their lesson and when they next try to get business—it was Can you expand a little on that? What account do you a pretty major contract—they would be taking a very take of the skills base of people who are coming in at different approach. I have used the anecdote the beginning, for instance, compared with somebody effectively, I hope. These messages do go round the coming into a high-level apprenticeship or a NEET? sector pretty quickly. I have not followed it up with How do you adjust that calculation, because not all that specific provider. I do not think I was told who people are coming in with the same level of ability, it was. skills and commitment to get through the programme? Or do you not? Q575 Chair: It might not be a bad idea to find out. Geoff Russell: It is an interesting question. Broadly, It seems to me to be a somewhat passive approach, the answer is that we do not, other than by setting the given the fact there might be employers who would minimum level of performance, as it is called—the respond positively to that message. It could be success rate of starts versus finishes—at something possible to waste money on what might well be—I less than 100%. We set a minimum, but on average am not in a position to make a judgment from here— the sector is providing above that minimum. At the poor-quality training provision. moment, I think it is about 75%. In effect, if one David Way: One of the things we want to do in the quarter of learners do not pass, we will still give them coming year is more messaging to employers about funding for 100% of the learners they take on. That quite what an apprenticeship is all about and what allows, to some degree, for people who just drop out. they can expect from providers, so I would wrap it It gives them room to take on higher-risk learners. into that. There is another mechanism for recognising the costs Geoff Russell: It is important to recognise that, even of higher-risk learners, in that we provide learner though the provider said it was free, it is not free; we support and learning support for people who have pay for it. It was free to the employer, although the special needs, or need assistance in travelling to employer was meant to make a contribution. That was learning. There is a range of things we do to try to really what the provider was saying, “You don’t need recognise that there are some customers who will be to make a contribution.” more difficult. Q576 Chair: I quite understand that. It would appear Q572 Julie Elliott: Do you check what package of from the reaction of that employer that they were very support is there before you allocate funding? suspicious of the package offered. I thought that Geoff Russell: We set the rules for the support would be quite a reasonable basis for any sort of packages; the providers draw it down based on their regulatory organisation to identify and carry out some investigation. assessment of the potential learner. David Way: You make a good point. Although the NAO report was very complimentary about the fact Q573 Julie Elliott: But do you check that that is we had learned lessons from Train to Gain in the happening and it is adequate? apprenticeship programme, one of the lessons from it Geoff Russell: In a sense we do. Are you asking me was that nobody gains an advantage from going whether it is a sufficient package? I think I understand around promoting free training. We will look to see your question. If the provider did not create a suitable whether there is more that can be done with that package of support for that learner it would negatively particular messaging. impact their minimum level of performance statistics Chair: I certainly think any examples like that should and they would lose funding. They have a pretty be followed up pretty rigorously. powerful incentive to take on people they think will complete. There is always a risk that they may say, Q577 Julie Elliott: Do you think the apprenticeship “That person’s too difficult and might harm my brand has been put at risk because employers are statistics.” So we do specific procurements directed at losing confidence in the system? very hard-to-reach people to try to mitigate some of David Way: I think it is easy to generalise. I do not that. We throw quite a bit of money at providers to think that generally employers are losing confidence allow them almost, in some cases, one-on-one support in the system. To give an example, some of the for people who are very far from the labour market. criticism of apprenticeships has focused on retail. You That is quite expensive, but I still think it is a good have already signalled that you want to talk about that. return on the Government’s money. I was talking to a big employer in retail, but not cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG06 Source: /MILES/PKU/INPUT/021099/021099_o006_th_BISC 26 04 12 CORRECTED.xml
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26 April 2012 David Way and Geoff Russell grocery retail, for whom those issues made not a jot you illustrations of why that is the case if you want of difference. They were committed to me to. We need to make sure that the 90% or so of apprenticeships; they knew about the history of it; and apprentices who are having great experiences don’t go they knew what they wanted out of high-quality home to their families and friends at the end of the apprenticeships. week and say they are proud of their achievements as We are always monitoring anything that would apprentices while the general public turn round and damage the brand, so if people are talking about the say, “Well, they’re not what they used to be.” I am sort of issues they have been talking about we need to sure we are all trying to grapple with that particular ensure that that does not become so toxic that it problem. We are trying to deal with the root causes of spreads across the whole brand. That is why I am these problems, but keep it in perspective. always very anxious to try to deal with the issues of poor quality where they arise, but try to avoid people Q579 Margot James: Mr Way, you mentioned always generalising about them, which is why the earlier that the National Audit Office had reported employer and learner surveys are so positive. There favourably on the apprenticeship scheme, in terms of are some experiences of which the short-duration value for money and return on investment. It also apprenticeships are a good example. According to our reported that the standard of skill and breadth of learner survey, less than 8% of all learners think they apprenticeships in this country was lower than in other have a short duration apprenticeship. We have to countries. Do you believe that is a failure of our remember that 92% of learners think they get a much programme in comparison with other countries? longer duration apprenticeship. We have to deal with David Way: It is clearly a fact that apprenticeships in the issues and make sure they do not filter out and this country are typically at lower levels. We have the contaminate the whole ground. Part of that is dealing fifth largest apprenticeship programme in the world with the issue itself but also by putting it in its proper but lower levels than many countries in Europe. Most context the scale of any problems that have been European countries are at level 3 rather than level 2, identified. which is why one of our quality measures and Geoff Russell: Some of the media attention on aspirations is to increase the number of apprentices at apprenticeships has lost perspective entirely. The vast level 3. majority of apprenticeships are of high quality and It is not quite as simple as that, because often people well delivered. Both the employer and employee are have to go through level 2 to get to level 3. There are very satisfied, and they go directly to a need this also some important sectors in this country where country has. There are some instances where it needs level 2 is, if you like, the unit of currency of to be better, but, as ever, the media will focus on employment. Retail would be a good example. When those. The risk is that people will say, “Oh, there’s you get to level 3, typically you are talking about something wrong with apprenticeships in this either some specialism in trade or supervision. The country.” As David said, in the vast majority of cases ratio of people who need to have product and that is not true. customer knowledge and so on and who work the floor in retail to the number of supervisors is quite Q578 Chair: We have to be careful not to put this high. Therefore, the retail industry, as an example— down just to some media conspiracy. We have had to some extent the construction industry is the same— plenty of evidence from the training providers that says it needs lot of people at level 2. I do not think there is a concern. we should criticise ourselves too much for level 2s, Geoff Russell: I have said to the various individuals but it is absolutely our intention to get more level 3s involved that it is important that the media do and level 4s and move people through. challenge things, because they do uncover some stuff For example, when we talk to providers, and providers we need to deal with. As David said, we do deal with talk to employers, about when somebody has it. I am not suggesting that the media should stop completed a level 2, we are very keen to make sure doing that. What I said was that I think they need to they do not see that as the end of their journey. If you keep it in perspective, in the sense that there are some stand back from this, we are talking about instances of bad behaviour. We are happy to have international competitiveness. We will not achieve them brought to our attention and we will deal with international competitiveness at level 2; we know that them, but everyone—businesses and mothers—have will be level 3 and level 4, and more people going to understand that apprenticeships in the greatest through. You are right to say that, compared with majority of cases are very, very good and well other countries, we have more level 2s and they have delivered. more level 3s, and that is why we are trying to tackle David Way: I thought what was happening here was that issue. You mentioned the new era for that quality issues had been exposed. We are dealing apprenticeships. Part of my answer was to try to move with them. I thought the evidence you had suggests us in that direction. I think we learn a lot from other that people think we are dealing with them. That is countries, and we might come on to that. good. What I am therefore anxious to do is make sure that people deal with the reality of where we are now Q580 Margot James: You might already have and do not let the sort of “image” issues you are answered this. Who is responsible for the quality of talking about, which we are dealing with, contaminate the programme? the brand as a whole. There have been problems of David Way: The overall programme rests with the short duration that we have been dealing with. They National Apprenticeship Service, but it is part of this are not as bad as has been portrayed, and I can give end-to-end responsibility. The real drivers of quality cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG06 Source: /MILES/PKU/INPUT/021099/021099_o006_th_BISC 26 04 12 CORRECTED.xml
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26 April 2012 David Way and Geoff Russell will be the providers and employers at the local level early age. You might do volunteering; you might do who are ensuring they get the best possible experience work experience; you might do a whole range of they can. There are lots of other people involved in things. You tackle your English and maths because the process of apprenticeship, starting with the sector you know that to become an apprentice you need skills councils who set the standards, the awarding those sorts of skills. That is one of the other things we bodies who ensure that some of the issues raised in learn from overseas: that lots of young people know Panorama are adequately addressed, down to training they will be apprentices at 16 and start preparing for providers, Ofsted and so on. There are a number of it much younger. We learn things from overseas, and, people working on this to ensure that quality is thankfully, they come to us and learn some things. We achieved, but overall I have to report to the Minister. also import things. The ATAs are an example of where we have imported something from Australia. Q581 Margot James: Is there anything to add to what you are doing to try to raise the quality of UK Q582 Rebecca Harris: I want to ask about the issue apprenticeships versus international comparisons? Is of perception. The Committee has had written there anything more than getting more people up to evidence that apprenticeships are still seen by level 3? You did say that you were focused more on employers and some students as of low-quality or a the higher-end quality apprenticeships. I gather that poor relation to the traditional academic route. How 33% of apprenticeships are at advanced level in much do you think apprenticeships are seen as a England compared with 66% in France. Do you have credible alternative to A-levels, and what work are a target in mind? Will just getting people up to level you doing on that? 3 make the difference, or is there something more you David Way: I think the answer is: increasingly. The are doing? more we can tackle the sort of issues that Margot was David Way: Our internal target is that we would like talking about in relation to higher-level to ensure that as many advanced apprenticeships as apprenticeships the better. As a generalisation, we see intermediate apprenticeships are successful. At the a lot of very capable people wanting to take an moment, it is roughly 40/60 and we want to move that apprenticeship. That is why we need to offer them to about 50/50, but it is always a difficult measure. more level 3s and level 4s. You want to have more people come in at level 2 in I often say to people who doubt the quality of those order to stoke level 3 and then level 4. What we will who go through the apprenticeship route compared see, I think, is a big improvement in the number of with the university route—it is important both are people going to level 3, because we are expanding the there and are of high quality—that they should meet number of higher apprenticeships and working with some of the apprentices who go through those routes. universities so people can progress. The calibre of most of the apprentices I meet is really Why is that important? When I talk to parents about good. With 500,000 apprentices—admittedly, the whether their children would want to become biggest growth is adults—we have got more and more apprentices, one of the questions they always ask is, people who can attest to that. Even in our own “Is this a cul-de-sac?” It is often going to work for organisation and Geoff’s, taking on apprentices is somebody locally on an apprenticeship. They can be almost the best way of becoming an advocate for the seen as, not a job for life, but a job. What you need quality of apprenticeships and the vocational route, to say is, “No. If you succeed in that you can go on because they bring so much. If we have, say, 700 extra to higher levels, and, if you want to, you can go on to work places a week taking on apprentices, those are university later.” That is a very powerful signal to 700 extra work places that can attest to the quality and parents and potential apprentices to raise the quality. contribution of people who come through the That is one thing we need to do. apprenticeship route. We have a way to go before I think the international comparisons are useful in a people see the vocational route and apprenticeships as number of respects. We hold an international being right for their children, but I think we are conference each year. We had the third one this year, heading in the right direction. and it was over-subscribed. People are interested in the UK system as well. They come to us because they Q583 Rebecca Harris: I was very interested when like our flexibility; they are interested in the fact that you talked about how in some other countries people we work with adults as well as young people. are preparing from the age of 14. That means they are Typically, they work with young people. What do we thinking about this when they are still in school. How learn from them? I think we learn about the high level much work do you do to promote apprenticeships in of skills. schools with teachers? We have had some suggestion There is also almost a different culture. Perhaps I may that the funding system incentivises schools to describe it in two ways. In Austria, if you complete promote courses which traditionally are delivered in an apprenticeship you can choose any university to go the sixth form rather than vocational education. It is to. I thought that was quite an interesting challenge to there we need to be getting the message through. the way we think about our education system. What is your view on that, and what work are you Crucially, when you look at the international doing on it? experience, a lot of young people know that they are David Way: The statutory responsibility rests with going to be apprentices at 16. In this country, a lot of school heads, and we are working with them to give people at 14 and 15 do not know that they are going them the facilities and resources they need to to be apprentices. That matters because you start to understand apprenticeships, and to be able to steer collect evidence towards your apprenticeship at an people towards apprenticeship information, including cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG06 Source: /MILES/PKU/INPUT/021099/021099_o006_th_BISC 26 04 12 CORRECTED.xml
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26 April 2012 David Way and Geoff Russell our own website. We have a resource pack that is invited, as we did last year for the WorldSkills available to all schools. The single thing we try to do competition, to come and see it. I do not know about is to make available to heads employers who go into you, but watching a craftsperson, whether it is those schools to talk about apprenticeships and, building a garden or a robot, fascinates me. I think it critically, apprentices who go into those schools. My is true for young people as well. I saw so many kids own observation is that the single most powerful at that event whose eyes were opened. In a sense I motivator for young people to be interested in schools, think that is even more powerful than the pamphlets other than knowing somebody in their own family, to head teachers which say, “Tell your kids.” is to meet an apprentice. Through our ambassadors David Way: We have 100,000 people expecting to network and a range of initiatives out there at the come to the skills show in Birmingham. I know that moment we try to ensure that speakers go into very many of you supported National Apprenticeship schools, and we are supporting those. If you can get Week. If you could get to see the skills show I think employers and their apprentices into the schools to it would leave an indelible impression. We are inviting meet young people then, my goodness me, their eyes all the schools to come. One of the features of open. I did explain previously the impact of going WorldSkills in London was the coach after coach of with Jaguar Land Rover with one of their apprentices school children who came for that experience. That into a school in Birmingham. Every single person in will be part of our armoury as well. that class wrote down the details of that Geoff Russell: We also launched the National Careers apprenticeship when they saw a role model for the Service this very month. That is open to young people future. Giving people role models is a key as well through the website and telephone service. Of consideration here. course, they have to go to it, but the website is already getting a huge number of hits and is designed to Q584 Rebecca Harris: Can you say what proportion appeal to young people as well as adults. of your promotional work is with schools? David Way: I did not cover that and should have done David Way: It is relatively small in relation to, say, so. We have an online system of apprenticeship the work we do with employers. The primary vacancies and recruitment. If you visited it today you responsibility for this rests with the schools would see 9,000 or 10,000 apprenticeship themselves, so we try to be responsive to schools opportunities. One of the things we try to do is drive rather than go into schools. If we were to go out into interest in business to our website and to those lists of schools and take that responsibility, it would be a huge vacancies. That is very popular with 16 to 18 year- resource commitment. I think we have taken the view olds and younger people. There are all sorts of types that, rather than fall between two stools, we would of data to suit them. That is something we do to give try to use our website and enabling measures to get them the information but, importantly, they can see on employers and people out there and make resources there that they can apply for this apprenticeship with available, and that that is really the limit of what we this employer in this location and at this wage, so it would be able to do. just gives them a clear line of sight to apprenticeship opportunities. Q585 Rebecca Harris: You do not think it should be Geoff Russell: It is one of the most used Government a clearer part of your remit to work with the websites; it got 5 million hits last year, pushing at Department for Education on that. about 100,000 a week. David Way: I think it is a clear part of our remit, but the challenge we face is that it almost feels like an Q586 Nadhim Zahawi: Mr Way, both your all-or-nothing responsibility. There are so many predecessor Simon Waugh and Mr Russell appeared schools we feel that, rather than invest, say, another before the Public Accounts Committee last month. 50 people in doing that, what we need to do is make During that session Mr Russell said, “Simon is the sure we can get the materials out to the schools who salesman and I am the accountant.” Do you agree with can facilitate the provision of IAG, rather than try to that summary of the respective roles of both your substitute ourselves to do that role. It is a support organisations? rather than lead role, but it is very important. David Way: I think the roles and accountabilities of Geoff Russell: One of the more effective ways we our respective organisations are well documented in have of getting to school kids is through competitions. the letter of direction from the Secretary of State. It We had the WorldSkills competition here last autumn makes it clear that I am responsible for performance, when 80,000 school kids went to see the competitors. the development of programmes and the money, and They were able to try it themselves. Just around the Geoff is responsible for a much wider skills budget. corner there was an information, advice and guidance Geoff does the work in contract management with the booth. That competition occurs somewhere in the providers, so it is a simpler system for providers. You world every two years, but, as a result of the success asked me to comment on that specific quote. What I of London hosting it last year, between us, we have would say is that that is the distribution of agreed to put in quite a bit of money to mount an accountabilities. I report to Ministers on performance annual skills competition in this country. It has already and development of the programme and the money, kicked off; it will be held in Birmingham in and Geoff manages a much wider budget and the November. contracts with the training providers. We will replicate that model where, as with the Olympics, there will be a build-up of competitions to Q587 Nadhim Zahawi: Do you agree with the get to the national team. School children will be quote—yes or no? cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG06 Source: /MILES/PKU/INPUT/021099/021099_o006_th_BISC 26 04 12 CORRECTED.xml
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26 April 2012 David Way and Geoff Russell
David Way: Geoff is an accountant by background. to resolve it so we can make frameworks fit for From my answer, I guess we are interested in getting purpose for all retail apprenticeships. That is what it to the truth of accountability. I have explained the is trying to capture. I do not have total responsibility truth of the accountability. I am not quite sure what for every aspect. In a sense, it is trying to hold the was in Simon’s mind or whether I would agree with whole thing together. him, but the position is as I have described. Q591 Nadhim Zahawi: One of the previous Q588 Nadhim Zahawi: I hear what you say, but I witnesses, Nick Linford, expressed a real concern that really wanted a straightforward answer as to whether NAS is the only body that “claims to have end-to-end or not you agreed with that statement. responsibility, but does not control the money, David Way: Geoff is by background an accountant compliance or use of that funding”. and Simon is by background in sales. Geoff Russell: That is absolutely untrue. I spend the Geoff Russell: I do not think that statement was ever money, but it is David’s budget and I spend it to his meant to be a description of the accountabilities; it specification. I have a service level agreement with was more about our respective skills background. him where he effectively buys services from me, but I do not make the decisions about what an Q589 Nadhim Zahawi: Mr Russell, we have already apprenticeship is, what the quality should be, and heard that the National Apprenticeship Service claims what is paid for it. I just do the execution. Therefore, to have an end-to-end responsibility for the delivery David is the accounting officer with statutory of apprenticeships. If that is the case, why do we need responsibility under the legislation. If I screw up, it is two organisations? his fault. If I fail to deliver, he has to take Geoff Russell: As David said, the Skills Funding responsibility, so in that sense I am a provider to him. Agency is responsible for a wide range of adult FE David Way: I think the accountabilities are very clear. in this country. It has a budget bigger than that for You are right though to expose the fact that the term apprenticeships. We have all the facilities in place to “end-to-end responsibility” needs to be interpreted in procure training and check to make sure that the the right way. Even correcting Nick’s comments in the money we have spent on procurement is spent way Geoff has, the reality is that I am not responsible properly. It would not make sense, given that NAS is for every aspect of delivery. primarily an organisation to deal with sales and marketing of a product, for it to replicate the wiring Q592 Nadhim Zahawi: But you are accountable. in the background—procurers, contract managers and David Way: I am accountable. The reason the quality controls—because from my point of view, the National Apprenticeship Service was created in the difference between a provider delivering an first place and taken out of the Learning and Skills apprenticeship and delivering some other form of Council as part of a single organisation was that vocational learning is nil. We do it all, but to NAS previous, as well as current, Ministers were very specifications: they define the product, the quality they ambitious for apprenticeships. They wanted a service want, how they want the contracts to be managed; as part of government that could have a dedicated they define what is paid to providers; and they tell us focus on working with employers, not on everything what they want us to do with the money—broadly, but on apprenticeships, to drive up the quality and where they want it directed. quantity of apprenticeships. That is what we have been doing, and the statistics suggest we have been Q590 Nadhim Zahawi: Maybe it should not be reasonably successful in that. I am very pleased with called “end-to-end”. that. David Way: “End-to-end accountability” or “end-to- Of course, you are right to say that the downside is end responsibility” is a phrase which captures an idea that we need to work very carefully with Geoff. but does not stand up to the most robust scrutiny, by Frankly, I do not think there have been issues between which I mean that what it is trying to capture is the the National Apprenticeship Service and the Skills notion that when the National Apprenticeship Service Funding Agency. The issues on short duration was created lots of people had responsibilities for apprenticeships are a good illustration of why there is apprenticeships: sector skills councils, awarding a problem with the whole system. We analysed it, bodies, all the way through to the point at which there Geoff investigated and we fixed it. That is a good was delivery. The worry was that no single illustration of two parts of the organisation working organisation took an interest in all those things. together, sorting out a problem and Ministers agreeing Therefore, if something went wrong between the a way forward which will solve it, so we make it work various players in the organisation there was lack of in that way. clarity about whose responsibility it was. What this is trying to capture is that, if something goes wrong or Q593 Nadhim Zahawi: Would it be better to have employers say they cannot get a certain framework, just a single organisation? somebody picks that up—NAS, if nobody else—and Geoff Russell: The distinction between NAS and the talks to the sector skills councils; it talks about retail agency is almost one without a difference. It is an and new frameworks. For example, I went to see a external distinction; it is about brand. The reality of it well-known employer who said they were not entirely is that my people and David’s work together happy with the structure of some of the retail inextricably, but it is important, as in any company apprenticeships. I have picked that up. I am talking that sells different products, to have one division next week with the relevant sector skills council to try focused on that product and to have the ability to say, cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG06 Source: /MILES/PKU/INPUT/021099/021099_o006_th_BISC 26 04 12 CORRECTED.xml
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26 April 2012 David Way and Geoff Russell
“This is the product we want; this is how it should absolutely to hold their hand through the first stage look; this is what we are going to price it at”, without and explain the apprenticeship, what it means, how to having somebody else from some other part of the find a training provider and then get out of the way. I organisation saying, “We don’t like that.” The focus have about 25 people working for me, running a small is the thing that has made NAS so successful. The business service team. What they do is take the details reality is that when we become an actual executive and within two days they respond to that employer agency next year NAS will be a division in it, but and find them a training provider. Within the month legally those accountabilities will be taken over by my they have to move to the position of trying to find an successor. The practical uniqueness, separateness and apprentice. We do get out of the way. focus of NAS will be maintained as a division. It is As I explained to Nadhim last time we spoke, we formalistic. David is absolutely accountable at the segment the markets so that the NAS involvement is moment; next year, legally he will not be, but it will where there has traditionally been market failure; that not change anything in terms of the NAS focus and is, those mid-size employers who just do not have a the agency’s partnering with NAS to deliver the history of employing apprentices, or large employers service. who have lots of employees but do not typically employ them across very many occupations. I spend Q594 Nadhim Zahawi: If you were to change the most of my time with my staff approaching large and phrase “end-to-end responsibility”, what would you medium-sized employers, but even there, as I said in use instead? answer to questions before, having got the employer David Way: I wish you had not asked me that. I was to the point at which they say they want going to ask you the same question, in the sense that apprenticeships, we encourage them to talk to a range I have not found a better one. of providers and see which is best for them. They choose their different providers. Q595 Chair: But you are here to answer. We get out of the way most of the time. We want David Way: I do understand that, and I apologise. The employers to establish a long-term relationship where truth is that I have not thought of a better descriptor, there will be a number of apprenticeships in the first hence the reason we are continuing to use it. It has year which will grow over many years. That is what never really been a problem in the sense that the large employers do. Typically, they grow their people who work in the system understand it, but if it apprenticeship programme. We check in with those has started to become a problem then I agree that I employers from time to time to see how the need to find a better way of describing it. I am afraid relationship is going, or they know to come to us if I cannot pluck an expression from the air. If I had got they want to make a change. There is a huge market one I think I have already been using it, but it is a there for us both to go at. I was pleased with fair challenge. comments about our marketing approach, which were very positive, but we do try to get out of the way. If Q596 Paul Blomfield: I wanted to explore the area we go to an employer and they say, “We’re already of employer engagement, on which you have put great working with the local college”, we say, “Fine. Is that emphasis as a priority for NAS. When we met the working well?” and then just go. Association of Employment and Learning Providers, who clearly have their own angle, they said you Q597 Paul Blomfield: As you describe it, you are should not be dealing directly with employers at all; almost pre-empting my next question: how do you it was already effectively undertaken by training avoid duplication? You talk about a complementary providers. I can see why they would say that, but what relationship where you are focusing on large would your observation be? employers. The problem with that, and it is in some David Way: My observation is twofold. First, the of the evidence we had, is that NAS is seen as not reason the National Apprenticeship Service was set up providing support to SMEs because of that focus on in the first place was that there was a fundamental large employers. Is that true? barrier to progress with expanding apprenticeships, David Way: No, it is not true. and that was the lack of employer opportunities. My answer to Graham and the AELP over the years has Q598 Paul Blomfield: You have just described a been, “I don’t know why you have an issue with this. process by which you followed a journey where you 90% of employers in this country do not employ were concentrating on large employers and, after an apprentices. I would have thought there was enough initial relationship, getting out of the way for SMEs. room for both of us to be working in that market to David Way: Let me try to explain again. We have secure extra employment opportunities.” That was my a segmented market approach. We divide employers first response. It was not working; it needed basically into SMEs; 250 and below; mid-size; and acceleration; and NAS was created. large employers. As far as the SMEs are concerned, Secondly, it makes a huge amount of sense to work we have a web-based and telephone-based system that in harmony with the Association of Employment and enables us to give them enough confidence to know Learning Providers and their members. That is what where to go to with their inquiry and to find a local we seek to do. What the AELP was saying was that training provider. We use our resources to deal with their bread-and-butter business tended to be local those employers in that way. My internal feedback is employers and local SMEs. We agree. That was the that that is now working well, but there has been a impression I got, so when I answered the question period of transition, and perhaps that is what you are about our involvement with smaller employers, it is picking up. As part of our efficiency savings, I have cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG06 Source: /MILES/PKU/INPUT/021099/021099_o006_th_BISC 26 04 12 CORRECTED.xml
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26 April 2012 David Way and Geoff Russell changed the small business service from being nine people and develop the long-term relationships that systems operating across the country to one consistent they need? standard operating in a central team. Perhaps you are Geoff Russell: It is worth mentioning that 80% of all picking up a little of that. However, only 25 of my the apprentices out there are in SMEs; it is an SME staff basically run that service, whereas there are 125 programme. I think we need to be careful to people working with large employers. distinguish between medium-sized companies and To some extent, we prioritise large employers because micros, because the latter do not get much attention that is where the market failure has been historically. from the provider base, because it is too expensive to Providers have been very good at working with SMEs, try to sell one apprentice to someone who is very busy and we are continuing to develop that, but the thought running their business and probably is not going to I would just plant in this is that quite often employers buy. I think there is much more success at medium- get lots of inquiries from people all the time. They sized companies closer to 250. The smaller ones, fend off those inquiries. I think the AELP would be micros, are the big issue. the first to agree that there are many occasions where we can get a foot in the door with large employers Q600 Paul Blomfield: How do we address that big by being the National Apprenticeship Service. As a issue? Micros are, in a sense, the future, are they not? Government body they will come and talk to us, I look at how the industrial terrain has changed in my because they know we are not trying to sell them our area. Micro businesses are a big feature. Not enough training company but to promote apprenticeships and is being done. What should we do? the right skills solution. We can often get to talk to Geoff Russell: It is difficult, though, isn’t it? them and to some large employers and then introduce them to providers. Q601 Paul Blomfield: Yes, it is difficult, but it is important. Q599 Paul Blomfield: If I may pursue the point Geoff Russell: It is inherently difficult, because if you about market failure, while what you might be are a two- or three-person business the time you have describing is identifying a historic market failure for to take to try to deliver a proper apprenticeship to large employers, and you have addressed that, would someone, working with them on the job, is going to you not say there is now a market failure for SMEs? be a real challenge. Most of those micro businesses If I look at my region of South Yorkshire, for some are up to their eyeballs and desperately trying to stay time a lot of the large employers have been afloat. developing and running extremely effective apprenticeships. We have 40,000 SMEs who want to Q602 Paul Blomfield: But many of the ones I talk to but are not effectively engaging apprentices. The FSB are interested in getting engaged, with all the and British Chambers of Commerce have both problems associated with it. How do we make that possible for them? produced reports saying that is a problem area. Should David Way: you not be doing more in that area? What I am trying to describe, obviously not successfully, is the fact that the best way of David Way: We are doing more in this area. Apart supporting micro businesses and small business is to from having this small business team, we have just ensure they are aware of apprenticeships, where to go launched the Government’s incentive scheme for for information and feel supported by somebody SMEs who can get a grant of £1,500 if they have not locally on the ground. If I was trying to put a fence taken on employees before. That is something which round this and say that only NAS people will deal AELP members now have in their armoury. They with SMEs—I know you are not suggesting that—it approach employers and say they have that. would be the wrong thing to do. What we are trying However, there is also something that I know is dear to say to people is, “There are thousands of providers to your heart. We have been looking at the out there local to you. Talk to them; develop a long- introduction of more ATAs. We are working in some term relationship”, because there are various of the core cities to ensure that ATAs are a popular dimensions to how you get high-quality people, not part of that particular approach. We have been least establishing a relationship with local colleges, working with the TUC and others to set out what good local training providers and schools to ensure a flow ATA arrangements look like, because, although we of people. You also ensure those are the people who have about 30 ATAs at the moment, from memory can put forward proposals for ATAs and all the other there are about 70 in the pipeline. This is becoming things we are talking about. very popular with SMEs. I mentioned it in respect of The service we are providing to SMEs is very strong. the construction sector. We need to keep working at information, but I We are still doing lots of things with small employers: honestly believe that the best way of supporting SMEs incentivisation; new delivery models; and ATAs. In is through people locally on the ground in training terms of my own sales team, what we are not trying companies and colleges, not through some sort of to do is use a high proportion of my staff to sell to centre. We can support it through marketing and SMEs. We are trying to provide them with the information, but they need delivery people on the information so they can then work with trainers. ground. Unless NAS had thousands of people, we use Remember, there are over 1,000 training providers out the resources that are there, and in the main they are there. Why would I intervene in a process where there very capable resources. are 1,000 training providers out there and many more Geoff Russell: It is interesting that David and I had a people who could work at a local level with those meeting with the AELP board yesterday. This issue cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG06 Source: /MILES/PKU/INPUT/021099/021099_o006_th_BISC 26 04 12 CORRECTED.xml
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26 April 2012 David Way and Geoff Russell was raised and they said, “It’s very expensive to get employees. What they would not have done is give at those people.” I think David took away an action them sufficient training and the certification that gave to think about whether we might want to incentivise their employees the kitemark that said, “I have this or defray some of that additional cost, because broadly qualification.” Therefore, the bit we paid for—we pay that is what it would take. far less for that sort of service than we do for the full training of a young apprentice coming in for the first Q603 Paul Blomfield: You have followed our time—represents an important part of upskilling the proceedings quite closely. You will probably know existing work force, which is the single biggest that we had a difference of opinion last week on ATAs strategic skills weakness the UK has. versus GTAs. What is your view? David Way: I think they are very different animals. Q610 Ann McKechin: You are a retail assistant in a An employer needs to understand which of those supermarket. That is the majority of the models is the right one for their solution. apprenticeships Morrisons were taking on. You are serving at the counter, stacking shelves and dealing Q604 Paul Blomfield: But you would take the view with customers’ inquiries. You gain a certificate. Have that they both have a place. you made any assessment of the additional income a David Way: Yes, a very strong place. To go back to person would have in that type of job by having a your previous question, Jason Holt has been brought certificate rather than not, and what value it adds to in to do a review of apprenticeships, particularly the the British economy? support to SMEs. I am not quite sure when he is due Geoff Russell: I am not sure an assessment has been to publish his report, but he has been sharing some of made of retail apprentices. the emerging thinking with people, so that is something the Committee would be very interested in. Q611 Ann McKechin: That is the majority of the As Geoff has indicated, the discussions we have been apprenticeships Morrisons are offering. having throw interesting light on the costs and the Geoff Russell: Indeed. I am trying to answer your amount of money we pay to SMEs. We discount quite question. a lot for large employers; we cut down the rates. The sort of questions that are now being thrown around Q612 Ann McKechin: Are you saying to me you would include whether or not you almost have to have have carried out no assessment of what additional a reverse premium for those who are in very difficult income a person in that position would have with a circumstances: the very micro business. It will be very certificate at the end of that period of training, interesting to see what Jason Holt, who as a compared with two years previously when they did businessman is very knowledgeable about the sector, not have a certificate? comes up with. I think you will be interested to see Geoff Russell: I do not believe—David may wish to those recommendations, which should be out fairly add something to this—that we do studies for each soon. type of apprenticeship framework on additionality or value for money. Q605 Ann McKechin: Mr Russell, can you tell the Committee how your agency assesses conditionality Q613 Ann McKechin: If you are giving out £40 in the procurement of contracts? million of public money you would be expected to, Geoff Russell: We do not. would you not? Geoff Russell: No, not necessarily. We do it at a high Q606 Ann McKechin: Why do you not? level across all frameworks, and the evidence shows Geoff Russell: As I mentioned before, it is the that the value for money is probably higher than in responsibility of NAS to decide what an most Government programmes. The NAO confirmed apprenticeship is, what should be paid for it and the that. BIS believes that the NAO’s figures are quality of it. underestimates. I do not think that level of study is done for every single type of framework in every Q607 Ann McKechin: Surely one of the key criteria single type of provider, because there are cost is value for money for the taxpayer. implications to that as well. Geoff Russell: Indeed. Q614 Ann McKechin: I accept that, but there are a Q608 Ann McKechin: We have taken evidence, as lot of people in this country who work in the retail you will be aware, from Morrisons, which is one of industry. Are you saying there has been no assessment the major providers of apprenticeships in this country. carried out in the retail sector for people in this type They stated on the record that they would have carried of job about the value of having this qualification? out this training anyway. The only issue was This is a structure in a retail industry that is very flat- certification of their employees, for which the UK lined. There are very few promoted posts, so what is taxpayer spent £40 million in the last tax year. Do you the additional value to a person having a certificate at consider that to be value for money? the end of a six-month course to them or to the UK Geoff Russell: Yes. economy, because the British taxpayer has just paid out £40 million on just one contract alone? Q609 Ann McKechin: How? Geoff Russell: I think the benefit to the economy is Geoff Russell: Because what Morrisons were saying significant. I am sure the studies that were done across was that they would carry out training for their the country by definition had to include retail because, cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG06 Source: /MILES/PKU/INPUT/021099/021099_o006_th_BISC 26 04 12 CORRECTED.xml
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26 April 2012 David Way and Geoff Russell as you observe, it is the largest single sector of the framework, but if as part of our funding audit economy. procedures we believed that providers were not David Way: I think that is right. The NAO report and ensuring that employers made their contribution, the PAC concluded we needed to do more work on whether in kind or cash— additionality, and that work is being done. The point about Morrisons was not just to do with gaining the Q618 Ann McKechin: Do you work to a standard certificate; it is also the literacy and numeracy issues template contract in that regard to describe what a that they addressed. The general conclusion on the contribution in kind would be, and how it could be gain to the public purse in investing in apprenticeships interpreted? is £18. Work has been done across not all but a Geoff Russell: Contracts are standard. It requires the number of sectors. I know that retail is below £18; it employer to make a contribution in cash or in kind. is less than the general figure, but I cannot tell you The nature of the contribution is probably David’s the exact figure. You get a range of benefits from territory, but in practice it is the provider who will investing in retail. Retail is an important sector. We negotiate. There are only so many possibilities, are talked earlier about NEETs. We have talked about there not? It is the time company employees give up Morrisons. There are a number of large retail chains in training apprentices; provision of equipment, and it is an expanding industry. They are looking to possibly purchasing it; and paid time off. recruit significantly from the NEET group, so there is real value in this. Q619 Ann McKechin: If equipment is a component of the contract, is an approximate value placed on it Q615 Ann McKechin: That takes me to my other so you can audit that? point about the fact the NAO reported that the David Way: I do not think you can look at it in that majority of providers did not charge fees to employers way. for adult apprenticeships. You mentioned that Morrisons were carrying out some additional work in- Q620 Ann McKechin: How can you audit it if you house as part of the certification process. Perhaps later do not have a value attached to it? the Chair will go on to talk about the Elmfield contract David Way: I think we are interested primarily in the in particular. In connection with Morrisons, to take success of the outcome. one example, have you made an evaluation of the value of the additional training Morrisons has been Q621 Ann McKechin: I am concerned about value providing? We concede that Morrisons is getting no for money for the taxpayer. The UK is somewhat additional money for this particular scheme. Have you unique because other countries have very specific made an assessment of that additional in-house work, regulations about how the contribution is made by the and what the contribution is? employer, and almost all of that is in cash. That is not David Way: The contribution from the employer? the case in the UK. Obviously, in the case of engineers Ann McKechin: Yes—from Morrisons. and construction there will be an issue about David Way: We know what the contribution that providing kit. Are you saying that 10% of the 50% Morrisons make. I have a list of all the activities that contribution made by the employers is represented by are undertaken by Morrisons and those undertaken by kit, and therefore you can audit whether that has been Elmfield. I have not put a quantification on that in provided? If not, quality is impacted, or the taxpayer terms of price, but I have a breakdown of what each is not receiving the appropriate value for money in party did to help those people complete their terms of what they can expect. apprenticeships. Geoff Russell: You might interpret it that way, but it is the outcome that matters, so I do not think it is an Q616 Ann McKechin: Could you provide that to the issue of quality. We do manage and monitor the Committee, because I think it would be help to see quality. the additional value that has been contributed? David Way: I am sure I could. Out of courtesy, I Q622 Ann McKechin: How do you manage the should probably just clear it with Elmfield and quality if you do not know the components of the Morrisons, but I do not think there is anything in it contract, Mr Russell? that would present any difficulty for them. Geoff Russell: I do not think it is an issue of the components of the contract. Q617 Ann McKechin: That would be helpful to the Committee’s analysis. Following that, in general how Q623 Ann McKechin: But how do you audit it when do you monitor and police employers’ contributions you do not have a value attached to it? for those apprenticeships that are only partially Geoff Russell: We do not audit it. funded? Geoff Russell: All employers are required to Q624 Ann McKechin: You do not have a value, so contribute half the cost, but it can be in kind, not you do not do any spot checks; you do not go and necessarily in cash. Providers understand that that is a check. condition of their contract. All providers—I think you Geoff Russell: We audit providers. It is the provider’s took testimony from several earlier—will have a responsibility to ensure that in their negotiations with discussion with the employer about the contribution the employer they make an appropriate contribution; they are going to make. It varies depending on the otherwise, the apprentice will not be successful. If I nature of the employer and the nature of the were to employ an auditor to go and check whether cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG06 Source: /MILES/PKU/INPUT/021099/021099_o006_th_BISC 26 04 12 CORRECTED.xml
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26 April 2012 David Way and Geoff Russell an employer’s 50% added up to exactly the number it David Way: It depends on whether we are talking should, that might cost more than the contribution about the same problem. being made by the employer. Q631 Nadhim Zahawi: Picking up Ann’s point Q625 Ann McKechin: I am not talking about about retail, I am sure you will agree there has been “exact” but having a clear idea of what the share some controversy about it and the additionality actually is and people have worked out what the 50% numbers. contribution is, with a value, because if you are saying David Way: Yes. to the employer, “You are providing a 50% contribution”, and they are saying 30% of that will be Q632 Nadhim Zahawi: What would it cost to focus in kind, there has to be a value attached to it, does on that particular sector and do some work to evaluate there not? it? You are saying the timeline is two months. Geoff Russell: Implicitly, yes. David Way: The timeline for understanding the issues and trying to develop some solutions depends on Q626 Ann McKechin: Surely you should give the whether at that point we needed to do some evaluative training providers a guideline about how they assess research. That would cost a few thousand pounds to whether the employer’s contribution is an accurate get somebody to do that. I have people who work in reflection of the value contributed. this area quite regularly, but I do not really have a Geoff Russell: I think that is in fact the case. call-off contract where I can just turn round and say, Providers know very well what the range of employer- “Could you do that?” It may be that that is something provided contribution is, but we do not regulate this we should have, but at the moment, I have people I system; we run a market and we sell a product. can go to but there would be a procurement timeline on it. I think it would take a few months to get all the Q627 Ann McKechin: You rely for the greater part evidence. In most cases, it is a matter of getting on trusting the employers. That is what you are together the employers, some of whom employ saying. There is a huge element of trust here. apprentices and some of whom do not, because they Geoff Russell: No. We rely on market forces see issues with it, and tend to work through the sector primarily. If the employer does not make the skills council, and working out some sensible contribution they need to make to the apprenticeship’s recommendations. That would be our normal development, they will not be successful; it is in the approach. provider’s interest to make sure that their apprentice trainees are successful, because if they are not we will Q633 Nadhim Zahawi: But you see where I am not pay them. There are quite powerful forces in play going with this. here to ensure quality—including the employer’s Geoff Russell: Yes. I think you would agree with me contribution to training the apprentice, giving them that there is definitely value in it. There may not be equipment and giving time off to go to college, if that as much value as an engineering apprenticeship. is what is happening—because if the employer is not willing to do that the provider will not want to Q634 Nadhim Zahawi: If you are going to carry contaminate their track record. public confidence—and you know there is an issue on this—should you not be thinking about conducting Q628 Ann McKechin: Mr Way said earlier that that research and making sure it is available, not just when employers contact you a large number say they to this Committee but publicly? want to do it for nothing, so that is quite a strong David Way: Yes. What you have done is probably incentive, too. describe what we are doing at the moment in retail, Geoff Russell: But that is when David says, “Sorry; which is to take a number of these issues where a you don’t get it for nothing.” small number of employers are standing back from apprenticeships in the area of food retail and are Q629 Nadhim Zahawi: Picking up Ann’s point, saying, “We are doing some apprenticeships, but we what is the cost of evaluating a particular sector, for think there are lessons to be learned from all of this, example retail, and what would be the time scale? before we go big time into apprenticeships we want David Way: It depends on what you mean by to ensure that the content is right and that the payment “assessment”. What we would be doing is having a regime is right.” That is what we are doing and that series of meetings. It depends on how you go about is why I am meeting the sector skills council for retail it. The way in which we would normally assess the next week and other people the following week. effectiveness of the sector is that I would find an employer in a particular sector who has employed Q635 Nadhim Zahawi: I am glad you said that; apprentices and has hands-on experience to work with otherwise, you open yourselves up to the criticism that the sector skills council and National Apprenticeship it is a few thousand pounds and eight weeks’ work for Service to do an analysis of the problem, and then tens of millions of pounds of taxpayer money being bring that together. It is largely a displacement cost of spent on apprenticeships, which is causing the activities of other people, and you would expect controversy. to do that in a couple of months. David Way: Yes. Geoff Russell: It is probably worth making it clear Q630 Nadhim Zahawi: Are you saying there is not that we run a market, and it is a very complicated a big cost to it? market. 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26 April 2012 David Way and Geoff Russell when issues arise, whether they are quality or value- place is a process by which we tackle those issues for-money issues. We have talked about the tension thoroughly and forensically in the way you indicate. between quantity and quality, but I do not think we should ever underestimate the complexity of the thing Q638 Nadhim Zahawi: I do not want to labour the we are trying to do, which is broadly run a market but point, but I used to run a research company, and did tweak it where we have to, using money or rules. I so for 10 years. 90% of people saying they are pleased also do not think we should lose sight of the fact that requires further analysis. I would be pleased if I had there is a price to be paid in getting the number of a certificate; I would tick the box saying I was really apprentices we have today and get that critical mass; pleased, without it meaning very much. to persuade mothers that this is a good route for their David Way: We do ask some other questions, but I children; and to be in a position where today, in the take the point. middle of the worst recession we have had in a century, there are 500,000 apprentices working. As Q639 Chair: I want to finish off with questions about hard as we try, we cannot plug every leak in the ship, the NAO report. Before I do so, I want to pick up but when we see a leak, we do try to plug it pretty some outstanding issues on the Elmfield/Morrisons quickly. link-up. David Way: I think that is the value of the surveys. You talked about certification and so on. My We try to cut out everybody else and say to the understanding is that Elmfield has a separate company learners, “Where are the issues for you?” and, to that does the accreditation, so potentially the provider employers, “Where are the issues for you?” You have provides a course and the same company, or at least a rightly highlighted the fact that there are issues with sub-division of the same company, does the some employers in retail. We need to sort that out. accreditation. Is that what goes on with Morrisons? Similarly, on the learner side, I referred to some of David Way: Yes, in the sense that Elmfield’s the issues that arise from that. We need to be forensic arrangements with Morrisons are that the awarding and follow through on those things in the way you body they use, unless I am corrected, is First4Skills. describe. Of course, that is not a practice only with Elmfield; Geoff Russell: I am not coming out with excuses. You there are others that do that. The information I have should challenge us. is that Elmfield do that for about 30 other companies.
Q636 Nadhim Zahawi: I hear what you say and Q640 Chair: However, I think there is an issue about completely get the point of complexity and the profile the size of the contract and the numbers involved. It of the market in which you operate, but your last is strategically significant. comment slightly worried me. You said there is a price David Way: The whole issue of providers and to be paid in order to get mothers and fathers to be awarding bodies is one that Geoff and I discuss on a happy that we have half a million apprenticeships in number of occasions. It is a relatively recent place. I hope you are not saying that doing things that development. are not delivering value for money and quality of Geoff Russell: The legislation changed in 2009 to take apprenticeships is a price that is acceptable, and that away the barrier that prevented that from occurring. it is okay to turn a blind eye to this problem. Some companies have taken advantage of it. Ofqual, Geoff Russell: I do not think there is anything we which regulates the awarding organisations, is in the have done intentionally to try to say, “Oh, let’s pile midst of a market health review. One of the things it them high and sell them cheap.” I think it was more is focusing on is that very question. As David says, a case of setting a definition and quality standard, but there is definitely potential for a conflict of interest. it is not possible to enforce that perfectly every second He and I ponder this quite often. My view is that there when you are also trying to grow the market. It is not have to be some very strong firewalls to prevent that we ever set out to do something of poor quality. conflict of interest.. Ofqual already has a rule which says there should be a firewall, but I am not sure how Q637 Nadhim Zahawi: Of course not; I get that. You strong it is. It needs to be very strong; otherwise, the grow the market, review it and deal with issues that risks are obvious. are found. Geoff Russell: And we respond to the challenge of Q641 Chair: What I think a lot of people will find people like yourselves and the Nick Linfords of this astonishing is that in 2010Ð11, you awarded this world. company a £23.8 million contract before it had even David Way: When we say we are being responsive, to been assessed by Ofsted. By what sort of judgment or return to a point that I think I made before you arrived, criteria did you make this decision? in the surveys we conducted there is a consistent Geoff Russell: At the outset of this hearing, we picture that 90% of people under apprenticeships are discussed the sort of process we go through before we having a really good experience. Increasingly, our allow providers to get on our registration list, but we focus needs to be on the other 10%, whether they are award moneys to companies that have demonstrated learners or employers, to make sure that we sort out they can deliver successfully; that is how the system those issues. At the moment, you have described some works. of those issues; in six months’ time there will probably be another set of issues, but—I entirely agree Q642 Chair: If it is delivered successfully by their with what you have drawn out—what we have in own accreditation system. cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG06 Source: /MILES/PKU/INPUT/021099/021099_o006_th_BISC 26 04 12 CORRECTED.xml
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26 April 2012 David Way and Geoff Russell
Geoff Russell: By a regulated awarding organisation. awarded this contract before it was assessed by Ofsted Please do not forget that the key quality control from and then you doubled the allocation halfway through my point of view is the employer, because if the year. Why was that? Morrisons did not think Elmfield was doing a good Geoff Russell: One of our jobs is to move money job there is no particular reason for them to stay from training organisations that are not using it to with Elmfield. training organisations that can deliver training, because our objective is to try to use our budget to Q643 Chair: That comes back to the broader issue. meet the demands for training that exist in the country, Have you done any research on, if you like, the value so every quarter we sit down with every training added in terms of performance within Morrisons of organisation with whom we contract and agree with the money invested in them, and the accreditation them whether or not they are going to use the they receive? allocation we have given them. If they are not, we Geoff Russell: I guess that goes to the question Ms take it off them and examine applications from other McKechin addressed. companies who have the demand, and we make a decision about where to redeploy that money. Elmfield Q644 Chair: Yes, it is the same thing. clearly had the demand because it had a contract Geoff Russell: I think David has recognised that we with Morrisons. probably should do more specific research, primarily to try to put to rest the idea that people think there is Q649 Chair: I find that quite astonishing. There was no value attached to that. I think there is value. I am money unspent in other programmes. pretty sure it is not nearly as much as it is in other Geoff Russell: Other providers. areas, but I do not think there is any potential that it is a waste of public money. We might be able to find Q650 Chair: And then you sat down with Elmfield ways to use public moneys on, say, engineering that to award them extra money without any assessment would provide greater value, but, at the end of the or evidence to demonstrate that this was value for day, this is an employer-led programme. money. Geoff Russell: We do not do a value-for-money Q645 Chair: I think it is very honest of you to say assessment as part of our day-to-day business of so, because one of our jobs is to assess where best awarding money. We make an assumption about the this money may be spent. It would seem that a lot of product we are funding. money is being spent in an area where, at best, the overall economic benefits are, shall we say, not Q651 Chair: And it is being accredited by Elmfield. obvious, whereas there are other areas where they are Geoff Russell: Elmfield is not the accreditor. They much clearer. have a company owned by the same man, which is Geoff Russell: That is a legitimate challenge regulated by Ofqual as an awarding organisation, and undoubtedly, but we are clear that there is value. that organisation is obliged to check.
Q646 Chair: I am sure there is some value in it. Q652 Chair: But ultimately they are owned by the Geoff Russell: But it is important to recognise that same person. this is a programme that is led by employers; it is a Geoff Russell: As I have just said, that is true. We sit market, and we could, if we wished, say, “We will not down with every provider who says, “We have fund retail apprentices.” demand for training from employers.” We decide where that is best used. With regard to apprentices, we Q647 Chair: It is led by employers but funded by make that decision with the National Apprenticeship the taxpayer. Therefore, it is perfectly reasonable to Service. Ofsted does not inspect every training ask these questions. provider every year; that is just not their regime. We, Geoff Russell: Of course. however, do funding audits of every provider every David Way: Even within sectors you will find from year, or a statistical sample of them, to ensure that we the research we have done that a clear influence on know the money we have spent has been properly the return for the investment of public money depends used, so it is not that Elmfield will have been not on the nature of the individual employer and the way subject to external scrutiny, just not Ofsted—yet. in which that apprentice is either stretched and supported, or otherwise the attitude is, “You’ve done Q653 Chair: I think the decision is even more your apprenticeship; it’s business as usual.” With an mystifying in the context of the fact that NAS claims employer like Morrisons, which takes its training the majority of providers are “good or outstanding”, development seriously, you would expect to get a but that Elmfield got an overall score of only three out better return than you would in some employers who of four, four being the worst possible. Are you going put people through a retail apprenticeship but do not to go on awarding money to an organisation that is extract the full value by giving that apprentice, post- not performing at the level most others are? training, the opportunity to develop, grow and get Geoff Russell: We set a standard and they met it, so further training. it is rather difficult for us to change the rules for one particular provider. They are satisfactory. Would we Q648 Chair: You may be right, but I think it is like them to be better than satisfactory? Of course, but reasonable for the public to expect some degree of that is the standard we set. We are in the process of research and assessment to feel confident about it. You tweaking the funding system in future so that cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG06 Source: /MILES/PKU/INPUT/021099/021099_o006_th_BISC 26 04 12 CORRECTED.xml
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26 April 2012 David Way and Geoff Russell organisations that exceed the minimum standard will Q660 Ann McKechin: Was a report provided to have a greater likelihood of attracting our funding Ministers about how the surplus was used? than those that do not, as a way to try to drive quality Geoff Russell: No, because it is our job. Ministers are improvement, but at the end of the day they were statutorily barred from being involved in funding awarded a satisfactory grading and that was the decisions. standard. Q661 Ann McKechin: But were they not informed Q654 Chair: I find this quite astonishing, given the or provided with information on how the surplus was fact that in other sectors of education—in schools— used? the Secretary of State is saying that a “satisfactory” Geoff Russell: They know that the surplus gets used Ofsted rating is not good enough. by being redeployed to other providers who can use Geoff Russell: I think he said that a persistent it, and there are hundreds of them. “satisfactory” was not good enough, and I agree with that. Q662 Ann McKechin: I think it would be very helpful if you could confirm to the Committee what Q655 Chair: So, they will not get any more money percentage of the total surplus in that year Elmfield if they do not improve. obtained. Geoff Russell: What we will do is put in a system Geoff Russell: Okay. that says, “When we do our procurement, if your standards are higher that will increase the likelihood Q663 Chair: Perhaps I may conclude with the NAO of our giving you the money.” If we sat down each February report. There were three recommendations quarter to do the business case I talked about earlier that refer to NAS. I would like to know what you have and had five providers each asking for money and this done in response to them. If I may read them out, one was of the highest quality it would increase the recommendation b) was about “explicitly [targeting] likelihood that we would give the money to them those frameworks, levels of qualification and age rather than someone who is just consistently ranges likely to have most impact on the economy”; satisfactory. recommendation c) was about gathering information Chair: It is a bit vague. on the cost of delivering different apprenticeships; and recommendation d) was a review of whether Q656 Ann McKechin: Mr Russell, you said that the employers’ needs are matched to potential apprentices additional tranche given to Elmfield in the financial in the provider network. Perhaps you could deal with year 2010Ð11 came from a surplus from other training them one by one. I am quite happy to read them again, providers. Can you confirm what percentage that was although I suspect I will not need to. of your total surplus? How much of the total surplus David Way: If I may take the first one, which is did they get? targeting sectors likely to have the most impact, that Geoff Russell: I am sorry; I have no idea. I could is not just sectors, as you read out, but also ages. We probably provide that for you, but it would have been have targeted NAS resources, in particular sales a small fraction of the total available. resources, on the 16 to 24 age group. We are also targeting new employers who are likely to employ Q657 Ann McKechin: What is the procurement apprentices rather than convert their existing work process for dealing with surpluses? force. We have also been working with BIS on their Geoff Russell: It is not a procurement process per se. growth sectors to try to ensure we have got strategies The formal procurement process is that they have to to develop apprenticeships in each of those sectors. get on our registered list first. Q664 Chair: Could I reasonably conclude from what Q658 Ann McKechin: But were all the other you have just said that a future budget profile will providers told, “I now have a surplus of £100 demonstrate a higher investment in that area than in million”, and then asked to re-tender with alternative others? or additional proposals? David Way: Certainly, that is the intention. If I may Geoff Russell: What happens is that we sit down with illustrate, in the 16-to-24 group we have just been every provider every quarter. We take money off those talking about the reallocation of surpluses in-year. we do not think are going to spend it. Any provider One of the areas we give least priority to are growth in the country who has, in their view, the ability to requests for 25-plus apprenticeships, so if anybody deliver more than their existing contract can make a comes forward with requests for apprenticeships at 19 business case to us through our local people. Those to 24 we would fund those routinely; for 25-plus we get aggregated and moderated across the country, and would not, because we are looking to grow 19-to-24 we try to make a decision as to where best to deploy apprenticeships rather than 25-plus apprenticeships in that money. line with our trajectories.
Q659 Ann McKechin: As to moderation, would it Q665 Chair: What do you say about the second one: not be unusual for someone to get literally an extra gathering information on the cost of delivering 100% of the allocation already provided to them in apprenticeships? any financial year? That seems a huge additional Geoff Russell: We do that. Sector skills councils are capacity without any rigorous form of reassessment. primarily responsible for deciding what it costs to Geoff Russell: It is not unusual. deliver the frameworks, because they develop the cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG06 Source: /MILES/PKU/INPUT/021099/021099_o006_th_BISC 26 04 12 CORRECTED.xml
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26 April 2012 David Way and Geoff Russell frameworks with employers. We take that information additional demand from individuals in those sectors, and assess it, and it is used to determine what we whether we need to ensure our sales people get more should pay. We have not updated those costs for some employer opportunities, or vice versa; and whether time, and the PAC at the time suggested we should. there are any obstacles to expanding apprenticeships We could have done it but it would have meant we in those particular sectors. Sometimes that is about the would have been paying more rather than less, so we provider base. The report indicated that sometimes it were rather content at the time. is about the lack of frameworks; in some cases it is As a result of the fact there are now SASE-compliant about the lack of level 3 opportunities, so we have frameworks, to try to get consistency between been asked to look at apprenticeship business and to apprentices and non-apprentice vocational learning we report much more on a sector-by-sector basis. That is are in the process of trying to pay for identifiable something we are keen to do, because all the analysis components of apprenticeships that are the same as suggests that in many ways it is the sectoral dimension other vocational qualifications, in exactly the same that has a big impact on overall performance; and that way and at exactly the same price, and then make a the generic issues to do with the difficulties and very explicit payment in relation to an apprenticeship successes with apprenticeships are often associated to recognise there is a greater requirement to get an with some sectors rather than others and need to be apprentice successfully through a framework than to approached on that basis. do just individual qualifications. We are going to be Chair: That concludes my questions. I finish off by far more explicit about that, and I think it will bring saying that if, on reflection, we feel there are one or much greater clarity and accuracy to what an two others that we need to ask you to follow up from apprenticeship should cost. the responses you have given, we will put that in written form and would welcome your written Q666 Chair: Recommendation d) is: reviewing response. Indeed, if you feel there is any point you whether employers’ needs are matched to potential wish to make that you have not made during the apprentices and the provider network. course of this session, please feel free to send David Way: I think we touched on that a little in our supplementary evidence to us. Thank you very much earlier discussions, but we have been asked and are for your contribution. That will be very helpful in very keen to look at apprenticeship supply and providing a basis for our recommendations in the demand on a sectoral basis, in essence to analyse near future. every sector to ensure we look at whether there is cobber Pack: U PL: COE1 [SE] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG07 Source: /MILES/PKU/INPUT/021099/021099_o007_th_BISC 16 May 12 Uncorrected.xml
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Wednesday 16 May 2012
Members present: Mr Adrian Bailey (Chair)
Mr Brian Binley Simon Kirby Paul Blomfield Ann McKechin Rebecca Harris Mr David Ward Margot James Nadhim Zahawi ______
Examination of Witnesses
Witnesses: Paul Coxhead, Chief Executive, Logistics Apprenticeship Training Academy and Neil Bates, Group Chief Executive, Prospects Learning Foundation, gave evidence.
Q667 Chair: Can I welcome you and thank you for people without specific skills, which they then can agreeing to speak to us this morning? Just for voice pick up from SMEs; basically, will SMEs take that transcription purposes, if you would like to introduce offer? yourselves. Paul Coxhead: Yes. Paul Coxhead: I am Paul Coxhead, the chief executive of the Logistics Apprenticeship Training Q670 Chair: If what I have said is not a fair Agency in the West Midlands. summary of what you are trying to get across, please Neil Bates: Morning, I am Neil Bates, chief executive correct me. of Prospects Learning Foundation. Paul Coxhead: You are trying to change hearts and minds. At the moment, we have a massive pool of Q668 Chair: Thanks. Some questions will be available work force and if they are looking to pay person-specific, others will be general. Do not feel someone the rate for the job they will go and take that you have to supplement what another speaker has someone that is already qualified and able to do it. said just for the sake of it, only if you have anything What we try and look at are ways of giving a risk-free to add or contradict to what he says. I will just start. strategy for them to grow their business, or as On SMEs, there is a lot said about the difficulty in risk-free as it can be. We will take away as many engaging with the apprenticeship programme. What barriers as we can. We will find the people, we will would you single out as the main difficulties? train them, we will make them so that they understand Paul Coxhead: We work a lot with SMEs, probably good work ethics and good work practices and they predominantly SMEs. The hardest thing for an SME are willing and able to go to work. We cannot give is giving them the right people for the jobs they want. them everything they need for that particular I talk to a number of them and there is a lot said about employer. What we train them in is more of a Level 3s, Level 4s, etc. For a lot of SMEs they do not transferable skill that goes from one workplace to necessarily want the higher level skills. They want another, that is going to be useful to any workplace operatives. They want people who can come in, be and pretty much that is where we try and focus our efficient, be effective and contribute to their workforce attention as what we do. and make a meaningful contribution over and above the level of skills, because they feel that they can give Q671 Chair: So, the so-called softer skills. So that, them the skills they want. in effect, they are more, if you like, apprentice-ready. We deal with a number of engineering firms even Is that a reasonable— though we are in the logistics sector and they take our Paul Coxhead: No. You see, we have gone through apprentices who have not been trained in engineering, this argument. We have had NAS come down and we but they are well prepared for work and that seems to went through a day of discussing this issue of whether be their key priority. They are worried that if they are they are just being made apprentice-ready. It goes way going to a higher level they have to start making a beyond just getting someone ready. We are a true blue contribution towards the training they are getting. In work force. We are a very different model to most a lot of cases they want 18-plus, but we try and ATAs, never mind any other model, because we convince them that 16 to 18 are as good, albeit they employ them ourselves in our business. might not have the flexibility of 18-plus, but again it is the funding thing: how much can we prepare Q672 Chair: What I am trying to tease out is, if it is someone who is 18-plus with the funding that is not just the soft skills but it is not the specialist skills, available to them? I know it should not all be about what exactly are you offering that employers will funding, but unfortunately when you are talking to buy into? SMEs, in the majority of cases it really is largely to Paul Coxhead: It is giving them the ability to work. do with funding. In most cases it is not soft skills, necessarily, because they are getting used to working for a living and I Q669 Chair: Can I just try and single out what the cannot dress it up—it is difficult to take it beyond that issue is? Essentially, you are saying that a lot of SMEs point. When we take them in, we are predominantly need well prepared 18-pluses but cannot afford them. taking them from the NEET group; I think it is about You can provide well prepared but obviously young 83% of ours come from the NEET group. We then cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG07 Source: /MILES/PKU/INPUT/021099/021099_o007_th_BISC 16 May 12 Uncorrected.xml
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16 May 2012 Paul Coxhead and Neil Bates have to give them a thorough induction, tell them some time with that one. I do not think we have ever what is expected and it is about setting boundaries. done that. The first probably 12 to 15 weeks are about setting boundaries and getting them used to working within a Q674 Chair: What sort of percentage do get taken defined boundary, and in most cases these young on? people have not had those boundaries set. They go Paul Coxhead: I think it is 59%. Our last survey on through school and they disappear off the school our completers, which was of 320—that was spectrum. They do appreciate boundaries. They do November last year—we had 59% that went into appreciate the fact that you are setting this for them sustainable full-time employment; 29% either went on and they start to work within it. Then it is about, to another framework, which may have been in a “Okay, now let us get you doing a useful contribution different sector, or went into full-time education, and to the production”, and what we are about is getting only 12% fell back into NEET. production going. So when they get to five or six months, we perceive at that point they are ready to go out to other Q675 Chair: It does seem to me that, in effect, as employers to then get specific skills that might lead you say, you are de-risking the process. What sort of them to a job. But at our ATA, we put them out for proactive approaches do you get from SMEs, if any, periods of three months, so they can go to an to get apprentices? employer for three months and we say to employers, Paul Coxhead: It is starting to move now. I believe “Look, do not look at your agency take, or have a the majority of it comes from word of mouth. We have look at that and see what your core agency take is and companies—Blackburns Metals is one of them; they you could use these people to replace that and get have just had their 14th apprentice off us. They have good qualified people doing jobs that they can get real grown their work force by over 10% by using our good experience.” It is about building their experience apprentices as that route. They had identified the of working for different employers and, hopefully, average age of their work force was 52 and they could they will find something that actually is something see a time bomb waiting to go off and they wanted to they want to continue down a path of. just dramatically drop the age, which is why they did it. But they obviously talk around manufacturing Q673 Brian Binley: There are lots of very small groups. Albeit, like I keep saying, we are not an companies in Darlaston and Gornal and Netherton, engineering-specific company, we are getting other Brierley Hill, those sorts of places, and I just wonder, companies that we know have worked with them after that initial work that you are doing to get them coming to us to get people to grow their work force. to understand the parameters of the workplace, to So we are starting to have companies come to us, but make them mentally attuned to the requirements of it has taken us two and a half years, so we should start the workplace, how you proceed from there. We have seeing something happening. heard a lot of fashionable talk about sharing apprentices at that level. Does it really work? Is it Q676 Margot James: The former chief executive of really an option? the National Apprenticeship Service said that we need Paul Coxhead: In most cases with us, we do not share to adopt innovative approaches to employer apprentices in that way. Like we do not have engagement. What sort of support have you had from companies who will group together and say, “Well, I the National Apprenticeship Service in trying to will have them from January to April and then we will achieve that goal? have them from this and this is the skills we will Paul Coxhead: Obviously, we were one of the cover”. Maybe that is because we are more of an original 12 pilots of the ATA and I have to say they operative level. Predominantly with what we are have been with us every step of the way, albeit doing it is operatives; it is warehouse workers, drivers, sometimes perhaps not as positively as we would like, forklift operatives, etc. But what does come from it, being SMEs, they like the fact that they have a flexible because they are obviously risk-averse. They are approach to their peak labour requirements, because looking at it and obviously want to challenge the prior to this, they either took agency workers, who are model at every step and when we first put in for it, obviously going to cost them more than their we said that we need to have them programme-led to traditional staff, or they struggled by with what they start with. That was throughout our tender, because were doing, which perhaps impacted on their ability we knew we would have to have a period to get to perform. So what we have offered them is a people work-ready because of the group we were risk-free strategy. expecting to work with, and they challenged that from In a lot of cases the companies we have, once they day one, which has pushed us down the route to the take them into their second three-month period, after model. But what they do is challenge us at every step, that they seem to take them on in the majority of which you can only see as a positive thing. They are cases, because they have actually found their place not being negative; they are just ensuring that what within that work force and they are gelling with the we are doing is meeting the requirements of what they rest of the group and becoming an efficient part of would expect to see from what we do. They have been their machine. I know there are cases of ATAs, from very positive. They have never deliberately done the Confederation of ATAs, where they actually do anything to put a barrier against us. If anything, they match jobs between different people from a sector, have tried to help us over them, but in a constructive that perhaps they will do some time with this one and way. cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG07 Source: /MILES/PKU/INPUT/021099/021099_o007_th_BISC 16 May 12 Uncorrected.xml
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16 May 2012 Paul Coxhead and Neil Bates
Q677 Chair Before I bring in Ann McKechin, have than it is in others. I just wondered what you think the you anything to add to that, Neil? ATA model offers in assisting employer engagement Neil Bates: We operate a fundamentally different and in trying to develop a longer term relationship model, because we are rooted in the Group Training between them and their employees. Association movement, so we work with SMEs in a Paul Coxhead: I can only talk from probably the very different way. It tends to be a process where we logistics sector really, but in the logistics sector, we are looking at the skills needs of a particular sector. have different parts of the sector that need people at We have Group Training Associations in engineering, different times because of the peak labour in construction and in aerospace and our model is requirements for that particular sector. But the sector about employers working together to pool their skills itself has always taken—they may take quite a high requirements, usually around a technical training agency number; they might need 20 or 30 people a centre. We have six technical training centres in the week to take them through their peak labour Thames Gateway and we provide essentially a training requirement, but what they will generally do is keep management service for SMEs. One of the difficulties them for a period of two or three months, because that SMEs have is, frankly, that they are confused and is what their peak period goes through. But they will baffled by the myriad of Government initiatives, generally, from that group, take the ones who excel in schemes, programmes, frameworks, and qualification what they are doing and look to recruit them into their requirements, and what we try to do is to demystify main work force anyway. What we are trying to do is that and manage it for them so that they can actually get them to replace that with the apprentices. It is concentrate on doing what they need to do in business changing hearts and minds. It is difficult to convince terms and in terms of supporting an apprentice companies that a 16 to 18, or a 16 to 24 year old, through the provision of the on-the-job training. We can be as effective in the workplace as someone who help them with recruitment of an apprentice, we help supposedly comes in older with the skills. them with the management and the planning of the delivery of the apprenticeship, right the way through Q684 Ann McKechin: Are you saying that really to accreditation and so on. So it is a different model of your model offers an alternative in sectors where working with SMEs and it is a way of SMEs working apprenticeships have not really been as common? together to actually get the skills that a particular Paul Coxhead: In logistics, historically, we have sector needs. massively underperformed on apprenticeships, because I think historically the sector did not really Q678 Brian Binley: Can I just ask if that means a want you until you were 25 and they wanted two- form of job sharing as you proceed? years-plus experience. That is what the logistics sector Neil Bates: All of our apprentices are employed from has always been after and trying to shift that mindset day one, but there are circumstances, particularly in is difficult. the construction sector— Q685 Ann McKechin: ATAs essentially remove the Q679 Brian Binley: Can I just stop you? Employed employment risk for these companies. How do you by you, employed by— respond to the criticism that has come from the TUC Neil Bates: By the employers. and others who argue that the relationship between an agency and an apprentice is not genuine employment Q680 Brian Binley: So a single employer? in the way in which it has been certainly traditionally Neil Bates: Yes. understood, in terms of that core relationship? Paul Coxhead: To be honest, I cannot see how it can Q681 Brian Binley: So the sharing of apprentices is be seen as not genuine employment. All of our young not— people we employ are employed from day one and if Neil Bates: It does happen, particularly in the you ask any of them—we obviously have people construction sector, because the framework coming in all the time and looking at our model— requirements of the qualifications for the they all perceive that they are employed. They all apprenticeships require a range of experience and perceive they are in real jobs. The fact that they are expertise in the workplace, and for some SMEs it is going out and they may go out to another employer— not possible for them to provide that level of I think the worst we have ever had is someone who expertise. If you are training a site carpenter and they has gone to three different employers—and in the need to do a particular type of shuttering or roofing, majority of cases one of them picks them up, because then we will move apprentices to another employer they are well prepared and they do contribute well to for a period in order to gain that experience for that the work force. You are going to have cases where qualification. this model potentially could be abused, because it could just become a cheap agency and that is the Q682 Brian Binley: Do you organise that? threat to it, but I think if it is properly screened and Neil Bates: Yes. guarded against, and if people are following the framework that has been set by NAS and the Q683 Ann McKechin: Paul, I was interested to Confederation of ATAs, I cannot see that there is a big know about your engagement with employers who problem with that. have a history of relying on agency workers and probably short-term temporary contract workers, Q686 Ann McKechin: I think you mentioned to the which is obviously more common in certain sectors Chair that approximately 12% of apprentices go back cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG07 Source: /MILES/PKU/INPUT/021099/021099_o007_th_BISC 16 May 12 Uncorrected.xml
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16 May 2012 Paul Coxhead and Neil Bates to the NEET status without going on to further them first prior to them coming out, so we had to set education or other jobs. Have you carried out any up a real work force. analysis of the reasons behind those failures? We also do jobs for other employers. For example, Paul Coxhead: I could probably tell you most of there might be returns that are coming back to them them. that they need to rework. We do little manufacturing jobs for some of the companies who are host Q687 Ann McKechin: Is it the relationship between employers. They use us to do some of their smaller their employer, or just people find it— manufacturing jobs and they pay us for that. So we Paul Coxhead: Largely, we get about 10% that we have different income streams coming into our ATA know we struggle to place with host employers. They and that is how we are sustainable. are very hard to reach, but I think if you talk to the people who know of this group that we are talking Q689 Margot James: Right, so you are not typical? about—they tend to be the people who did not attend Paul Coxhead: Not typical, no. school at all and we give them a chance. We try and work with them. I think the experience they will have Q690 Margot James: Do you think that is a realistic with us will be invaluable to them, but it is so expectation of typical ATAs—that they should be ingrained in them to not conform and to be different— sustainable from their own commercial operations? they will have a day off just randomly. It does not Paul Coxhead: Yes, and I think if you talk to the matter how much you try and stop that or encourage confederation and the members within that, every one them not to or try and coach them, it is ingrained into of them would consider themselves to be. I mean, they them. We know we get a certain number of our group have to be. They have not got any other funding that we are not going to be able to place, but we try coming in to make them sustainable. They have to right until the end. We work with them and it takes us fund themselves from their operation. longer to work with that person and they tend to stay with us as opposed to go out to host employers. We Q691 Margot James: So they do not receive any send them out to interviews and in some cases they support from the Government? do not even bother attending. It is a difficult group, so Paul Coxhead: Not as far as I am aware. We with whom we are working we will find that, but that obviously had the pump-prime money to start with, is our particular ATA. I have to say from other ATAs which was helping us set up and get things moving, who are working in other sectors, they do not have but we have not had support other than that. the same issues we have. Q692 Margot James: What do you charge Q688 Margot James: The evaluation of the ATA companies for your services? pilot found that ATAs should be sustainable in the Paul Coxhead: We pay the apprentices £2.60 an hour, longer run, based on commercial operations rather so if that company has them for 37 hours a week we than funding from the Skills Funding Agency. Do you charge the company £155 for the week. There are think that is a realistic prospect? Have you attained cases where they can do overtime or whatever. Some that yet with your business? of the companies insist on paying more and we leave Paul Coxhead: Ours is. I have to say we are different that down to the individual company. We have just to most ATAs. The majority of ATAs charge a labour gone into Honda and they are paying them £6.75 an hire fee, so they are earning a percentage more than hour, but that is because of their union agreements they are paying out, which is the agency part of it. and things like that. So it varies from workplace to But they also charge, because they work with other workplace, but basically we pay £2.60 an hour when providers and they charge the other providers a they are with us, which gives them a chance for percentage of the funding they are drawing down, progression, which encourages them to go out. which is about them helping to place the ATAs. So they earn from two sides of it really: one from the Q693 David Ward: On the 88% success rate that you provider side to find the placement and one from the have, presumably that is after your own recruitment placement side, which is their ATA fee. processes have removed those who are not acceptable From our side, we have a different angle, because our to come onto your books. Have you any indication of company is the provider anyway, but we actually work the size of the rejection rate of those who apply? I with a number of companies. We do jobs for other am trying to get a feel for the scale of those seeking companies. We do plastic recycling, which we are these places. doing through Dudley Council and we get plastics Paul Coxhead: On our particular ATA, I have to say from other places and so our apprentices are recycling we are as inclusive as we can possibly be. If people plastics, which we then we sell the plastics into the get through the skills scan and they actually turn up recycling. We are working with a company called for the interview and then agree a start date, we will Europlastics, and they buy all of the plastic off us take them. We are not selective—only on if we believe when it has been recycled, cleaned and whatever, and they have the ability to go through the programme if they are setting that up now into a full blown line. So we work with them. So we do not have a big burn that is our model, and ours is different to every other rate at the start, but what we have started doing now, ATA, but that was the route we had to take, because because predominantly ours are NEET, there is a otherwise we were worried that with ours it perhaps number of NEET initiatives that you can have them would not be that sustainable. We knew that with the from four to six weeks and we have found a pocket group we were working with we needed to work with of that now; that works very well, because they cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG07 Source: /MILES/PKU/INPUT/021099/021099_o007_th_BISC 16 May 12 Uncorrected.xml
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16 May 2012 Paul Coxhead and Neil Bates generally go in the first four weeks. We take them on the GTA providing that provision to meet the skills to the programme. The ones who are going to leave, needs. I would make a bigger point in relation to that, leave in the first four to six weeks anyway, so we are which is that I know that the Committee has been finding a big difference now with the NEET referring to Leitch and the report that he produced and programme, because that is happening before they it is rather saddening to learn that since Leitch, in actually come on to the full-blown apprenticeship. terms of the OECD league tables in terms of skilled workers, we have fallen from 17th to 19th in terms of Q694 David Ward: Just for both of you really, while workers with no skills or low skills. We have fallen I have the floor, particularly because of some of the from 20th to 21st for intermediate skills and 11th to sectors and the skills areas that you are looking at, is 12th for high skills; we have this fundamental inverted there any introduction at all to the world of bell shape problem in this country that we have lots self-employment for any of these apprentices? of people with no skills and lots of people with very Neil Bates: Certainly in our sector around high-level skills, but in the intermediate level, Level 3, construction there is, although actually it is declining there is a huge gap. My question and challenge would slightly because of the Revenue rules around direct be does the way in which the apprenticeship system employment, but there are a number of our currently operates fill that gap at Level 3 Advanced apprentices who will go on to be either self-employed Apprenticeship in key sectors where those skills are and run their own businesses or will set up their own needed? Or are we actually just chasing volumes of business on a larger scale. In fact, we have companies apprenticeships in order to meet a target that is not who have worked with us for the last 43 years who attached to the skills requirements of local businesses are former apprentices, who are now the employers or the national economy? of apprentices, so there is a significant focus around Chair: You have put your finger on the very question self-employment, yes, particularly in the construction we are trying to answer. sector. Q696 Paul Blomfield: That was a very helpful Q695 Paul Blomfield: Neil, we are obviously trying answer in distinguishing between supply and to explore the respective contributions that GTAs and demand-led, but also in the second point that you ATAs can make in cracking the challenge of made. It has been, as the Chair says, one of the issues apprenticeships in the SME sector. I wonder if you that we have been looking at as well and I take from could explain a little bit more the distinguishing what you are saying that you think we are features between the two models. Obviously the insufficiently ambitious in contrast with some of our critical feature is the employment relationship. From competitors in terms of the way we settle for Level 2 the two organisations that you have outlined this apprenticeships instead of pushing for Level 3. morning there are sectoral or perhaps skill level Neil Bates: They are very different systems. The differences, but Paul has outlined that his ATA is not German system, the Dutch system and even the necessarily typical, so I am not sure whether that is a French system are very different systems of general distinguishing feature; what other apprenticeship. There is a much greater commitment distinguishing features are there? and obligation on the employer. There is much more Neil Bates: In fact, it might be helpful to refer to the regulation around the length of the apprenticeship and GTA Commission of Inquiry that has just been chaired the content of an apprenticeship, and so my question by Professor Lorna Unwin that, in fact, I was a is really: should we be calling lots of the provision commissioner on, which exactly sought to identify that we are offering—particularly at Level 2, that distinction regarding what makes a GTA a GTA. particularly around short, work-based, The criteria that the Commission have concluded are employer-based programmes—apprenticeships? In that the Group Training Associations should be not Australia, they have a difference between for profit organisations; their governance is led by traineeships— employers, so employers form the boards of the GTA and determine the strategic direction and the services Q697 Chair: Could you give us your opinion? that are provided by the GTA; that it should have a Neil Bates: My opinion is that apprenticeships should membership base drawn from local businesses that be at Level 3, they should be a prescribed length of want to use the GTA services; and that it is time, they should be with an employer, and they demand-led and, if I may, at some point this morning should result in, essentially, a license to practise where I would like to say something more about the you can confirm the skill and the competence of the apprenticeship system, what we consider to call individual. apprenticeships and what seems to me to be— Chair: Could I just say I would take the opportunity Q698 Brian Binley: I think you have put your finger now, because we are very constrained with time? on the whole nub of the problem facing this country Neil Bates: I am conscious I want to answer Paul’s and I want to put it to you—and I am going to give question as well, but, from our perspective, we have you my view now—that the concentration on a skills system in the UK which is very supply-driven. university degrees in our educational system has been It is about training organisations identifying provision actually very debilitating in this respect. We just did and then going out and generating demand for that not put enough emphasis on those intermediate skills provision. The GTA model is a demand-led model, that might be FE colleges, night school stuff and all because it is about employers determining what the of that stuff that we—and you are nowhere near as skills requirements are for their businesses, and then old as I, but you know what I mean about generational cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG07 Source: /MILES/PKU/INPUT/021099/021099_o007_th_BISC 16 May 12 Uncorrected.xml
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16 May 2012 Paul Coxhead and Neil Bates gap—grew up with. Am I right in thinking that, and historically had, would be to support capital am I right in thinking that we really have to try to lift investment in the establishment of new GTAs to serve the appreciation for, and the concept of, doing a good specific sectors in specific geographical locations, job, and of being valuable to the community, in that because if you look at the map of GTAs there are huge middle sector that we have failed to do? gaps, particularly in the south, where GTAs have not Neil Bates: Yes. My interpretation of history is that survived and have disappeared. as a result of the 1964 Industrial Training Act there were 150 Group Training Associations set up across Q701 Paul Blomfield: Can I just ask specifically in the UK, specifically aimed at engineering, with relation to your organisation—Paul has shared his training centres and clusters of local employers who stats—what proportion of your apprentices stay with trained their apprentices over a four-year period. The their employer and go into full-time work? Industrial Training Boards prescribed the content of Neil Bates: Because we are in a traditional model of the apprenticeship and so on. All of that provision was construction and engineering it tends to be the funded by employers, because the levy system drove majority, the vast majority. There are apprentices it. It was not funded by government initiatives. clearly who lose their employment, but if they What happened during the 1990s was we went to a complete their apprenticeship, because of the length supply-based approach to the delivery of skills and of the investment we are talking of an apprenticeship learning, where providers chased funding that had that is between two and four years— conditions that needed to be satisfied. So the focus was on the driving of demand from individuals, rather Q702 Paul Blomfield: Do you have any sense of the than the demand from employers. level of fallout? I know that in my area in Sheffield Chair: I think we understand the basic point you are some employers take on apprentices with the view of making. We are running out of time, but I do want to 100% completion, others build in a level of wastage bring Paul Blomfield back in. and take on more than they know they need in the end. Neil Bates: There have been some examples where Q699 Paul Blomfield: Thanks, Chair, and thanks for employers have, I think it was described as “training that point, Neil; that is very helpful. If I could pull us for stock”, where they will actually sponsor more back to the respective contribution of GTAs and apprentices than they have employment opportunities ATAs: the FSB and BCC surveys before Christmas at the end of the period. I do not actually have a identified a whole series of barriers for SMEs taking problem with that because provided it is a full and on apprentices. Whilst GTAs would address some of robust apprenticeship, the fact that the young person those barriers, they would not necessarily de-risk the comes out at the end fully qualified but not working process of taking on an apprentice in a way that for that particular employer often it is down the supply maybe the ATAs would. Would you agree with that? chain. So the likes of Rolls-Royce will be training Neil Bates: I do and that is actually why some GTAs, numbers of young people that will not necessarily my own included, have an ATA within our structure. work for Rolls-Royce, but they will work for the GTAs do some of the features of an ATA model, and supply chain. I am not critical of an ATA model. I think it has a place, provided it does not fall into becoming a labour Q703 Paul Blomfield: The NAS evaluation of GTAs supply agency. I think they are an important part of and ATAs said that whilst some training providers the framework. So, yes, in circumstances where, for welcomed the relationship, some felt threatened. Do example, in the construction sector there are breaks in you do all your own training or do you engage with employment, because apprentices are with a company training providers and how do you build that that loses a contract or has not got work, we will take relationship effectively? the apprentice back and employ them for a period of Neil Bates: We provide the entire service, so we time until we can re-place them into another deliver the technical certificates, the off-the-job employment, which is a feature of an ATA model. training, all the on-the-job training, and all the accreditation. Q700 Paul Blomfield: Can I just ask whether you faced barriers in setting up your GTA, which you Q704 Paul Blomfield: A final question from me. As think we can learn from and Government can learn I say, one of the key parts of our inquiry is seeking to from in making it easier to address the issue of SME really break into the SME sector and probably looking apprenticeships? more at the micro end of SME. What do you think we Neil Bates: Yes. One of the key barriers for can learn from ATAs and GTAs? How far can we use Group Training Associations is that because they are that model to actually address that end of the predominantly characterised by having technical off- problem? the-job training centres—we have six in the Neil Bates: I think actually, in relation to micro Thames Gateway—our inability to access capital businesses, the ATA model works really well. Very funding in the same way as FE colleges can access anecdotally—I know we are short of time—I recently capital funding is a major barrier, because the costs had a chap in to fit a kitchen with us. He is associated with opening and developing a centre, like self-employed, owns his own business and I wanted the ones that we have, are very substantial. So one of to persuade him while he was in my home to recruit the things that the Government could do in order to an apprentice and his problem was, “Well, I am on encourage the growth in GTAs, because actually we my own. I do not have employer’s liability insurance. should be getting back to the numbers that we have I would not know how to go about doing that.” So we cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG07 Source: /MILES/PKU/INPUT/021099/021099_o007_th_BISC 16 May 12 Uncorrected.xml
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16 May 2012 Paul Coxhead and Neil Bates have a model where we will employ the apprentice Paul Blomfield: I think that has become clear this for a period, typically six months, and help the morning, so thanks very much. employer then to get the appropriate insurances and Chair: We are going to have to move on, I am afraid. processes in place, and I think the ATA model in that I am conscious that there is more that we perhaps respect works really well. could have got at, and I would welcome any further Just one final point: I think it has been really unhelpful written evidence that you would like to submit to of the LSC to conflate the ATA and the GTA model supplement what you have said today. Can I thank and to somehow interchange the terminology, because you very much? That has been very helpful. I am sure the GTA model they are referring to is actually the we have not had as much time as I would have liked, Australian model of ATAs. GTAs are a fundamentally but we now want to have the Minister in to question different structure, and that is not to distance ourselves him as well, so thanks very much. from the ATA; it is just that we are different.
Examination of Witnesses
Witnesses: John Hayes MP, Minister of State for Further Education, Skills and Lifelong Learning, and Gila Sacks, Deputy Director of the Apprenticeships Unit (BIS/DfE), gave evidence.
Q705 Chair: Welcome, Minister, and thank you for competitors and we will, I am confident, by the end agreeing to come today. I know full well of your of this year have 500,000 apprenticeship starts a year. passion for this particular subject and I know you did But it is absolutely essential that we focus on quality ask if you could make a short opening statement. I am too, which is why I have insisted on a minimum time happy for you to do so, but will confine it to two length for apprenticeships, why we put in place minutes because we have an awful lot of questions statutory standards in terms of what apprenticeships and very little time to ask them in, so if you would comprise, why we insisted that all apprentices should like to make a statement then— lean towards Maths and English at GCSE level and, Mr Hayes: Yes, by those constraints, Chair, it would indeed, why we have focused on poor provision and be inappropriate and impolite for me not to mention tightened the framework to an unprecedented degree. your passion for Cheltenham Town and they have, I understand, reached this season’s League Two Q706 Chair: Your two minutes is up; I think you playoffs and I think congratulations need to be put on have summarised it very effectively. I was rather the record. expecting you to talk about that survey. Can I just Chair: They have to play another game tomorrow. open? Students, when they are at school and when Mr Hayes: T S Eliot said we know too much and are they are about to leave school, have a range of convinced of too little. What I am convinced of is that options. I think some of our evidence has indicated apprenticeships offer the best way of providing the that there is a level of ignorance about the skills our country needs to be more productive to apprenticeship option. Basically, what are you doing compete with those who have already invested in to strengthen the awareness of the brand as a credible skills amongst our counterparts in Europe and route for students at school? elsewhere. So, in Opposition and now in Government, Mr Hayes: Well, Chair, I wondered if you might ask I decided to make apprenticeships the pivot of our that, and so I have brought with me, because I thought skills strategy. I did so because the brand is well the Committee might not have a copy to hand, a copy established. We know employers like apprenticeships, of the Education Act 2011, which, as you will know, we know people want to do them, they have strong on the face of it says that the responsible authorities, brand recognition, but also because we know that the by which we mean schools and colleges, must secure apprenticeship framework reflects the real economy. careers guidance in an impartial manner, which We know how much they cost, we know how long includes—and I quote—“information and options they take and we know that the skills they confer are available in respect of 16Ð18 education or training, in line with real commercial and economic need. including apprenticeships”. We have put in law that That would be an opening statement with passion, I those who provide careers advice and guidance must think you will agree, but it needs to be backed up with include apprenticeships in the options which they some facts and yesterday we received the news of the offer to people. This has not always been the case in latest survey, a remarkable survey, which the the past, as you know, Chair, and it has meant that Committee may be aware of, with 5,000 apprentices some with technical tastes and talents have not known surveyed and 4,000 companies, showing an about the steps they could take to turn their ambitions unparalleled, unprecedented level of satisfaction with into reality. 92% of apprentices that completed their apprenticeship satisfied with the training they Q707 Chair: I understand the point you are making, received, and 88% of businesses saying they got and I think it is a welcome one, but we know that it benefit. These kinds of figures have never been is one thing putting it in statute and another getting a found before. culture developed within schools that will realise that. This shows the progress we are making in quality as I think it was the Association of Colleges survey that well as quantity. My absolute desire was to grow the found only 7% of pupils were able to name system to the point where we could match our apprenticeships as a post-GCSE option, and from our cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG07 Source: /MILES/PKU/INPUT/021099/021099_o007_th_BISC 16 May 12 Uncorrected.xml
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16 May 2012 John Hayes MP and Gila Sacks own experience in Sheffield, an apprentice told us that Q710 Brian Binley: John, the question was: what are the amount of literature and help available was you going to do to change the culture in our limited. Everybody is pushing towards university. educational establishment? That means with teachers, Basically, how are you going to change that? in schools, all the way through. What are you doing Mr Hayes: There is a cultural assumption and I blame with your colleagues in that respect? the bourgeois liberal class—and I do not mean Liberal Mr Hayes: I think five years ago, Brian, a survey was Democrat when I say that of course; I mean liberal done for Edge, carried out by YouGov, which showed with a small “l”. that teachers knew less about apprenticeships than any The idea that only through academic accomplishment other qualification apart from the Welsh can people gain prowess is entirely specious. It is Baccalaureate. That is why in that Act I changed the absolutely the case that the economy needs practical, law from one which said they had to provide careers vocational, technical skills, and that many people’s advice and guidance to one which said they had to attitudes lie in that direction and they can achieve secure independent advice and guidance, and why I fulfilment through the acquisition of those skills, but set up the National Careers Service, the first all-age we are challenging a prevailing cultural assumption careers service England has ever seen, to provide that that I think has been around for most of the post-war kind of advice and guidance. It is a big ask, but we years. I am determined to do so through the training are on the case and we are going to do it. duty on schools, but—may I say one other thing, Chair?—also through the work of the National Q711 Chair: Can I just come back? In terms of the Apprenticeship Service. I said to them when I became supply of apprenticeships, previously in your opening the Minister, “You are a sales and marketing statement you outlined measures that you have taken organisation. You have to go out and sell this to to ensure that the brand is preserved, but there has businesses. You have to sell this to providers.” The been a lot of concern about the increase in brand “apprenticeships” is bigger than ever. We are apprenticeship numbers and the potential damage to filling a bigger space than we ever have, but you are the brand. Indeed, a previous speaker today talked quite right: there is much more to do. about it having, over the years, become a supply rather than demand-led provision, and I think that emphasis Q708 Brian Binley: Good morning, Mr Hayes; it is has become even greater over the last two years. How good to see you. You are known for your outspoken are you trying to ensure that modern apprenticeships comments and can I push you a little further in respect actually reflect the needs of the employers rather than of this particular subject? I believe that the just boost statistics? educational establishment has been one of the most Mr Hayes: I think by making the system be more destructive establishments in this country for a very demand-driven. You will know, Chair, because you long time, specifically in the area of skills training. are a great student of these things, that the last There is a view that unless people go to university and Government commissioned a report by Lord Leitch. I have a copy of it here, where Lord Leitch called—and get a degree, they almost are seen to have been I quote—for a “demand-driven system”, a system failures and I wonder what you are doing in that more responsive to employer need. How can we do particular respect with regard to the culture in our that? The first way is by ensuring that the educational establishment. apprenticeship frameworks match real commercial Mr Hayes: I agree, Brian. Your own example, not need by making sure the frameworks are constructed only as a person who has started two or three in a way that reflects employer interest. businesses to my knowledge in Northampton, which The second way is through our employer ownership have employed many people— pilot. We have launched a £250 million employer ownership pilot. We have said to employers, “We Q709 Brian Binley: You are not going to talk about want you to get more involved in shaping the skills Northampton Town later, are you? You are very system”. We have just had the responses to the flattering. invitation of that prospectus yesterday—employers Mr Hayes: But also, Brian, as someone of rich working with education providers to look at how they learning who did not go to university. It is part of the can shape apprenticeships in new and fresh ways to cultural misassumption that I described earlier, that match need. only by going to university can people gain a sense of The third way, and finally, Chair, is we need to prowess; we need to challenge it. Apprenticeships are recognise that in an advanced economy, two things a critical way of doing that. occur. The first is that skills needs become greater, but Might I just draw attention to one thing? I can see you the second is they become more dynamic and they want to come back, but just let me finish the point, change more rapidly; it is a point that is not so often Brian. The development of higher apprenticeships— made. We need to review those frameworks, look bear in mind it was 180 when I became the Minister; again at what is taught and tested with much more there will be 25,000 higher apprenticeship starts at the regularity. By creating more freedom for FE colleges, end of this Parliament in my estimation. That will not because I have been deregulating FE at a pace of only create new opportunities parallel to the university knots, we can get the providers more sensitive to real route for a different cohort of people; it will also need, and more responsive to that dynamism. change perceptions of the brand of apprenticeships, because people will see them as a highway, not a cul- Q712 Chair: We did receive some written evidence de-sac. that employers’ perceptions of apprenticeships is that cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG07 Source: /MILES/PKU/INPUT/021099/021099_o007_th_BISC 16 May 12 Uncorrected.xml
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16 May 2012 John Hayes MP and Gila Sacks they are “for school dropouts”. Is this reflected in your But I do think there will be an issue if that displaced experience of working with employers and, if it is, younger apprentices. You will be familiar with the what are you doing to change the perception? figures. The growth in numbers that you refer to has Mr Hayes: Employers like BAE, BT, Rolls-Royce, been across the age range, so there has been a 12.8% Bentley, McDonalds, and Barclays Bank do not growth in under-19 apprenticeships. There has been a believe that. There are many employers— 69.3% growth in 19-to-24 apprenticeships. So whilst it is true that 25-plus apprenticeships have grown Q713 Chair: I would guess—and I would not wish most, they have done so from a low base and not at to second guess the evidence—that this refers more to the expense of growth in other areas. If that were to SMEs rather than the large companies, who of course happen, I would have concerns. have well established apprenticeship programmes. Mr Hayes: I think you are right to return to the issue Q715 David Ward: You mentioned the word of brand identity and the importance of marketing to “deadweight”, and that is used as an argument against the brand very strongly and I held a series of meetings many other things that the coalition Government has with employers that are not currently engaged in done in terms of looking at funding of particular apprenticeships and what did I do? What any schemes, but the evidence that we have seen is that— businessman would do: I got those who were and and, in fact, quite openly and, frankly, large employers those that are, pitching to those that are not. I think have told us that they would have actually carried out through apprenticeship fairs, through spreading good the training associated with apprenticeships with or practice, through getting employers to lead this without the apprenticeship funding. They have been process and help us to promote apprenticeships, we open about that, which suggests there is a very large can bring more of those that are yet to be converted amount of deadweight, particularly with some large into the net. This is an evangelical business and I am employers. Does that worry you at all? the chief evangelist. Mr Hayes: The most recent evidence we have is a The other point though, in fairness, Mr Bailey, study undertaken by London Economics, and initial because the diligence of your members is such that estimates suggest a very high level of additionality they will raise it, is we also need to make the system associated with Government investment in more navigable for employers, less burdensome, less apprenticeships and a very low level of deadweight, bureaucratic, and less irksome, particularly for the but you are right: if I felt that apprenticeships were SMEs. I have set about that by simplifying the system merely being used to accredit existing competencies and by producing a toolkit for employers to guide then I would be concerned. I think it is absolutely them through the system. We are piloting, for large right that apprenticeships, whoever does them, add to employers, a much simpler funding regime so they do skills and that is partly about the rigour of the system. That is one of the reasons why I extended the time for not have to deal with weekly or monthly funding; big adult apprentices. A lot of people said I should not. A employers do not want to have to do that. So we are lot of people think I have been too tough on this. The setting about making the system more navigable, less learning providers, some of them, said, “There will be burdensome, and less bureaucratic at the same time as so much prior attainment amongst older people, there we are engaged in this passionate evangelism. will be so much greater employability skills than there might be for a 16 year old that these apprenticeships Q714 David Ward: The apprenticeship programme can be completed in a shorter time”. But I was is seen as being a flagship policy for the coalition actually insistent. I resisted that argument and, in Government and much has been made of the order to ensure that what was taught and tested was expansion in the number of apprenticeships, but the meaningful and additional, I extended the time limit. statistics have shown that there is a very large So the evidence that we have from independent proportion of that expanded programme that is research suggests the deadweight is not as high as 25-plus. Does that concern you at all? perhaps some claim, but you are right; it is something Mr Hayes: You would expect me to be very we must be mindful of. straightforward, so let me start by saying what I think is good about that and then say what I do not think is. Q716 David Ward: There are two separate elements I think it is very important we provide a vehicle by to this. One, which you referred to, is the general which we up-skill and re-skill the work force. failure, some would argue, of industry and employers Sandy Leitch, in the report that I referred to a few to up-skill their work force, and the second area is moments ago, made clear that the vast bulk of the young people in particular getting into trades and 2020 work force are already at work. They are not professions through apprenticeship schemes. It was people coming through the school system and unless referred to earlier in the first session that there has we up-skill and re-skill the existing work force—the been a systemic change in the system of funding of people over 25—we simply will not catch up with our training and development in the work force, which competitors. So I chose to make apprenticeships the was moved very much from an employer-funded vehicle to do that because I wanted a coherent, system to what now appears to be very much a consistent offer in skills terms that will allow us to do Government-funded system. Have you any comments that with much lower deadweight. You know that the on that? deadweight on apprenticeships is massively lower Mr Hayes: Apprenticeship systems across the world than the deadweight of the previous Government’s are government-funded. If you look at the German flagship policy Train to Gain. system, which is often held up as a model, this is a cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG07 Source: /MILES/PKU/INPUT/021099/021099_o007_th_BISC 16 May 12 Uncorrected.xml
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16 May 2012 John Hayes MP and Gila Sacks relationship that combines government, individuals grateful for that. I think what is certainly true is that and business. If you look at the cost of an we have, as I said, expanded the role of apprenticeship for an over-25 year old compared to apprenticeships and the risk would have been that, in the cost of an apprenticeship for a 16 to 18 year old, the drive for quantity, we compromised quality. There of course we pay much less. We pay half the training is always a tension, when you grow anything rapidly, cost, but in practice sometimes the contribution is between quantity and quality, so that is why I said to much lower than that because the employer my Department right at the beginning, and to the contributes more. So you are right: if we wanted to National Apprenticeship Service, that we have to move to a system where the Government did not get focus on quality too and it is why I have put in place involved in skills funding for people over 19 then we several of the measures I have described. It was the could adopt an extreme view about this. That is not last Government, you will remember, that actually what the last Government thought when they provided the relationship vehicle for statutory introduced adult apprenticeships, mindful of the standards, to their credit, but it was this Government Leitch analysis, and it is not what I think either. that put them in place. For the first time statutory standards define an apprenticeship. Q717 Chair: Could I ask you whether you have any That is a significant step forward in terms of quality figures for the number of 25-plus apprentices that and protection of the brand identity, but I wanted to were already in employment? What sort of percentage go further, which is why I did the work on length. of that total of 25-plus apprentices were previously Paul, you mentioned length; I do not say—and I know in employment? you would not either—that there is an absolute Mr Hayes: The overwhelming majority of 25-plus correlation between length and quality, but there is apprentices were already employed, but I simply certainly a proxy relationship and you, Chair, used the strike this warning note on that: the real issue is how word “perception”. Certainly in terms of perception of many were employed for how long. So, if people were the quality of the brand, the length matters, does it employed for perhaps up to a year or two years—they not? So I took the steps on length first for younger were new employees and the training was part of their apprentices and now for older apprenticeships induction, part of them being inculcated, if you like, precisely to deal with that issue of brand identity and with the skills necessary to do their job—then that perception. You are right, Paul, there is always a risk would be rather different to those who have been with when you expand a system, but I am absolutely a company for a very long time who were looking to determined that we should retain quality and, in some use an apprenticeship to up-skill. Both are legitimate, cases, that will mean sacrificing quantity. I do not but they are rather different. So when we talk about want to go for quantity at any cost. That would be whether they are employed, we need to differentiate quite wrong. between new employees and people who have been with the company or organisation for a considerably Q719 Brian Binley: I am fearful that there is the longer time. But this does really bring us back to the same sort of elitism growing into this debate that there issue about whether we think apprenticeships should was with university degree and non-university degree, be the vehicle by which we up-skill and re-skill the quite frankly, and I think we have to be very careful. existing work force. I took the view that they should, I think you are right to choose one overall brand, so I and that does mean that apprenticeships are filling a do not quite share the view that I think Paul is much bigger footprint than they were previously, and expressing that we have heard from people on this if you do not think they should then you will take a inquiry. For instance, the boot and shoe industry have contrary view to my own. rarely had a qualification base and yet a three-month Chair: I quite understand the benefit of this training NVQ in lasting room technology, which could easily or retraining, or whatever you want to call it. I think be managed in that time, would provide a degree of the issue is whether it conforms to the perception of esteem that that particular industry has never had, and an apprenticeship and whether potentially it could I see nothing wrong with classing that within the damage the brand. Paul, I think you wanted to come apprenticeships, because you can do the job in that in on this. time. As long as you can do it with quality and do it effectively then it seems not to matter. Am I right or Q718 Paul Blomfield: It is precisely that point, am I wrong, Minister? because I think we all recognise your passion for Mr Hayes: I think there is a case for other work-based apprenticeships, and it is one that we share in this training apart from apprenticeships; you are quite inquiry. But one of the problems surely, Minister, is right, Brian. Of course, as long as that training is the way in which the brand has been confused—some meaningful and rigorous, it deserves its place in the would say tarnished—by some of the activities that sun too, and of course much of what FE colleges do, have taken place in its name and perhaps that would and much of what businesses do, exists outside of the include some activities of up-skilling. Perhaps some apprenticeship framework. There is a lot of training of the things that you describe as up-skilling are just going on, as you well know, in businesses up and consolidation of existing skills on very short-term down the country that is not called an apprenticeship. courses and that has led to some lack of confidence in We should not assume apprenticeships are all training the brand, would you not agree? and certainly they are not all the work of the FE Mr Hayes: That is the second time you have paid sector. But if I might provide an Hegelian synthesis tribute to my passion and you have it here on the between you and Paul— record as having done so before, so I am extremely Brian Binley: But we are the best of friends. cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG07 Source: /MILES/PKU/INPUT/021099/021099_o007_th_BISC 16 May 12 Uncorrected.xml
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16 May 2012 John Hayes MP and Gila Sacks
Mr Hayes: I know, I know. What I think I would say There are fewer steps in the process, but I want to go about that is the factor that unites all quality training further, which is why I launched this employer is: does it add to competence? Does it deliver ownership pilot. I want to say to employers, “What do something extra? I think the risk is actually in you want it to look like?” We have put a lot of money accrediting existing skill. People were highly critical, into that because we felt that it was right to hear the including the NAO, as you know, of the Train to Gain employers’ voice about how they think the system scheme, because they said that is what it did and I should look. So I am determined to make this more think we have to be careful that all schemes add employer-friendly and less bureaucratic. additionality. The evidence that we have suggests they May I just say, finally, Chair, colleagues have played do, but I am very mindful of the need to be vigilant a big part in this? Because there is another issue about about that and I think that is where Paul is coming employers and that is getting the message out, and I from and where I think we have some sympathy. think every colleague around this table, and many others, through apprenticeship fairs, through the Q720 Chair: Could I ask you, not necessarily now, 100 in 100 campaigns they have been involved in, but to provide some written evidence, first of all, on through their promotion, and through their knowledge the number of post-25 apprentices that are previously of apprenticeships with local business, particularly in employment and, secondly, the nature of the small business, have helped, and that has paid real training that they get, which, if you like, distinguishes dividends. the course that they do as an apprenticeship as opposed to more, if you like, conventional work-based Q722 Margot James: Thank you. Geoff Russell told training? Would you be able to provide that? us that the distinction between the National Mr Hayes: Of course, we would be delighted to do Apprenticeship Service and the Skills Funding that.1 Agency is almost one without a difference. It is an external distinction for marketing purposes, I Q721 Margot James: You mentioned that you were presume. Would it not be better and would it not save making progress making the system less bureaucratic. money to have just a single organisation? We have had written evidence that stated that the Mr Hayes: I think there is an argument for changing funding for apprenticeships is diluted through multiple the way the SFA is structured. No government gets all steps in the funding allocation. How can the delivery these things right and I remember in Opposition system be made more efficient in that respect, in terms looking at the SFA and the NAS and talking about of making more use of the funding, getting the whether that was the right structure and whether the funding to reach the training more directly? existing arrangement with the SFA, where it is an Mr Hayes: I think the challenge, Margot, is in external body—it is not a Departmental body, as you ensuring quality, to make sure this is properly audited, know—was right. I have increasingly come to the whilst at the same time making it less bureaucratic. view we need to bring that more in-house in order to One is trying to balance those two priorities. In terms deal with what you have described. We are looking of the funding particularly, we have done work with very closely at that now. It would require a legislative the very large employers—we have run a pilot with vehicle to do that because it has status in legislation. about 20 very large, significant apprenticeship I am looking at that closely. But returning to a point I providers, employers—and what we have worked with made earlier, the first thing I tried to do was to say to them on is payment at the end of the process. What the NAS, “You are out there as a sales organisation. they said to us is, ‘Look, we do not want to be You are not there as some great bureaucracy to make involved in monthly and weekly audit and payment the process more difficult. You are out there to make related to audit”. It just does not work for a very large the process more attractive and to mission them.” organisation, so we have worked on a change regime Chair, forgive me for sharing; we are speaking there, where we are looking to pay them in one go. privately, are we not? I did say to them, “Why do you We will expand that. It seems to be successful and we not pay your people on commission?” That is what will expand that for the large employers. you do in business. They giggled when I said it at For the small employers, of course, that is more first, but then they realised I meant it. We are really troublesome because they need the money. You cannot quite determined to ensure that they perceive their role expect them necessarily to put the money up front. rather differently, Margot, to perhaps how it has been You know, as a businesswoman, that cash flow is a perceived historically. key factor in any business. In fact, it can be the make- or-break of a small business, so you cannot do that. Q723 Margot James: Thank you. Your Department What I think you can do is make the process a more has asked the NAS to target funding where straightforward one for them by making the steps in apprenticeships deliver the greatest benefits. How do the process fewer and making the system more you expect them to do that in practice? In particular, transparent. What I looked at when I first came to this, how do you expect them to ensure that the funding is rather in the same spirit as you are asking the targeted at a local level in the most effective way? question, was: how would you navigate this? How Mr Hayes: In terms of the most difference to the many steps do you have to go through? How many individual, apprenticeships targeted at young people interfaces do you have to have? I have tried to are of greatest value in the sense that you are shaping systematically reduce those and we have, indeed, someone’s future career in a pretty definitive way if reduced them. you train them between 16 and 24. In terms of sectors, 1 Ev 216 this is a much more difficult thing to determine. 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16 May 2012 John Hayes MP and Gila Sacks true that some apprenticeships—the ones that I pilot? What are the criteria for success? What does suppose many people would archetypally identify as success look like? How will you regulate this pilot to apprenticeships: engineering, construction—have a ensure that there is no fraud or misuse of public very clearly defined set of competencies which really, funds? unless you absorb you cannot do the job. You cannot Mr Hayes: I will tell you how I judge it. I judge it be a bricklayer if you cannot lay bricks, can you? In around the capacity and potential for growth. If we do some other sectors, like hospitality, care, business not look at ways in which we can tie our skills administration and retail, it is more difficult to discern strategy to our growth policy we will be failing, so the competencies, but it does not mean they do not I am anticipating looking at those responses to the exist. Apprenticeships have to reflect the real prospectus by that measure. Will these proposals help economy. That is where people are being employed. these organisations to grow, to prosper, to become Whilst we have grown engineering and construction more sustainable and to fuel the economy? That is apprenticeships very substantially, I do not see how I think we need to judge it. But I think also anything wrong with growing apprenticeships in those around the partnerships, the collaborations between other areas, which reflect the real economy. businesses, and, if I might say so, between large Just to explain the point: in Germany, the retail sector companies and their supply and distribution chains. is the second largest employer of apprenticeships. This This is something, again, other countries do rather is not particular to Britain. I have opened up the banks better. The automotive sector is a perfect example. to the idea of apprenticeships really for the first time. Jaguar Land Rover—I visited Halewood—has a Barclays, HSBC and Lloyds are now seeing wonderful apprenticeship programme. The company apprenticeships as a key recruitment vehicle and as a is doing very, very well, as you know, a big exporter, route into the professions. So I take a pretty more engagement— broad-minded view, I think reflecting economic Nadhim Zahawi: On the border of my own reality, of the role that skills can play across a range constituency. of sectors. For too long we have thought that if you Mr Hayes: Indeed, and, like all automotive worked in hospitality or care you did not need skill. I companies, with a very complex supply chain. One of think you do. the things they want to do is to look at how they can seed skills in their supply chain and increase resilience Q724 Nadhim Zahawi: Good morning, Minister. amongst those suppliers on whom they are absolutely Mr Way at the NAS told us that we prioritise large dependent. I think we can do much more of that and employers because that is where the market failure has I am looking for the pilot to do that through been historically. What are the barriers that you need partnerships and collaboration, and collaborations to address for large businesses to engage with the with the FE sector too. Let us be more open minded. programme? My understanding was the challenge was Let us be more lateral in our thinking about how we in the middle camp, not the very large employers. can combine to best effect in the terms you describe. Mr Hayes: Yes, that is an extremely insightful For the record, Chair, we will be happy to provide evidence on that employer ownership pilot to the analysis. It is true that the majority of apprenticeship 2 providers are SMEs—over 60% are SMEs—and then Committee to add to your considerations. you have the very well-known apprenticeship Nadhim Zahawi: You took the words out of my providers. We can all name them; there are 25 names mouth. we could reel off. They have got very long-established Chair: Thank you. apprenticeship programmes. They are amongst our leading companies. There is an issue and a challenge Q726 Paul Blomfield: In your submission, Minister, around that medium-sized business, the business you cite a number of reasons why small businesses employing perhaps 500-plus people. I think we need find it hard to engage with the apprenticeships to look—I would be interested in this Committee’s programme. Several witnesses that we have seen thoughts and recommendations on this, actually—at during the inquiry have suggested that a way of how we can incentivise those employers to be more overcoming these and providing business with a engaged in the system. Certainly we can market to greater focus on apprenticeships might be to use them. We can try to make the system more attractive public procurement to incentivise apprenticeships. for them. But getting those kinds of employers to Have you any thoughts on this? Have you any plans invest in skills is going to be critically important to to introduce incentives for Government suppliers to the performance of our economy. I think you are right. take on apprentices? There is a challenge there, partly about bureaucracy, Mr Hayes: Forgive me for not quoting the partly about brand identification and partly about constituency because I cannot recall it, but as your perceived value. I think we might be able to do more colleague, Catherine McKinnell, a great friend of on that. mine, knows, I am a great enthusiast for using public procurement. There are issues around competition law, including law from the European Union, but I Q725 Nadhim Zahawi: One initiative that you think we can, within those constraints, be more introduced to increase employer engagement was the creative about the use of procurement. For example, employer ownership pilot. I understand the first round around benchmarking good practice, around of applications for funding have now closed. Would kitemarking employers who are committed to you give the Committee an update on the progress of apprenticeships, around identifying training and skills this pilot? In answering that, can you just address how you will judge the success of the employer ownership 2 Ev 216 cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG07 Source: /MILES/PKU/INPUT/021099/021099_o007_th_BISC 16 May 12 Uncorrected.xml
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16 May 2012 John Hayes MP and Gila Sacks as one of the factors that is indicative of quality, of Gila Sacks: I expect the first numbers will probably the kind of organisation you want to buy from. This come out in late June. There is a time lag: because the is common practice in the private sector. When I was employer does not get paid until the apprentice has in the IT industry, when we bid for big contracts it been there for a little while, we do not get the numbers was often the case that the tender would demand a until the payments go out. That is why there is a bit certain level of competence, evidenced by of a time lag. But as soon as we get that data we will accreditations—Microsoft, Oracle and, in those days, be very happy to share it. Novell accreditations. This is not uncommon in the private sector so—using private sector examples—we Q730 Chair: Before you move on to your next can do more on procurement, and I think we should. question, can I supplement it? As you said, you have laid certain conditions to ensure that these will be Q727 Paul Blomfield: We could go beyond what you additional apprentices and apprenticeships, as it were. describe, couldn’t we, to actually make requirements What sort of measures are you looking at to see that of Government suppliers? That is achievable within the apprentices that are taken on are, if you like, EU competition law, isn’t it? related to the real skills needs of the country? Mr Hayes: Well, that is the debate. I am determined Otherwise you could just get companies taking on an to push this as far as we can go within the constraints apprentice that could even displace people that they within which we are working. I have made that clear would have recruited normally. in meetings with your colleague who brought the Mr Hayes: Well, in a demand-led system you really Private Member’s Bill and others. In fact, strangely— have to leave that to the employer. My experience of perhaps coincidentally, perhaps by means of an act of being a businessman and employing people is you do God—I was speaking about this, not knowing that you not train people in stuff that does not have a purpose. would ask the question, just yesterday to my officials: I did not use to train people in things that did not what progress we have made on the steps we can take relate to my business and did not add value to them on procurement that are within those confines but and to their productivity. So this is about trusting nonetheless are more than we are doing now. businesses to say, “We know best the skills we need. We are at the coal face. We are doing the job”. I do not Q728 Paul Blomfield: We look forward to hearing think a demand-led system can predict and provide in more. How well have your £1,500 incentive payments that way. Indeed, one of the advantages of our to encourage small businesses been going? apprenticeship system over some of the others—I do Mr Hayes: I am glad you have raised them. We took admire the German system, but I do not admire it in the view that in addition to making the system simpler an unqualified way—is our system is more flexible. we should incentivise small businesses with a We do have to be careful of rigidity here in a system £1,500 bonus. It is early days, as you know; it is just that we want to make more sensitive to the dynamic at the beginning of the process. But yes, we are skills needs that I referred to earlier. I am immensely making progress. I have asked for an update on that, pro-business. because now that it is bedded in—we only launched it, as you know, just this spring—I want to look at Q731 Chair: I understand the difficulties here. I the kind of companies that are taking advantage and think the problem is that, in effect, by offering a whether some sectors are seizing the opportunity and £1,500 incentive, you are diluting the demand-led others are not. approach. I think how it is being promoted is terribly important, Mr Hayes: Not if what you are adding is incremental. not just by the NAS but by other agencies. But I am I find it inconceivable that a very small business confident that we will reach our target and that the would take someone on and train them just because £1,500 will help more employers to come into the they were getting 1,500 quid. If we said this was an system. It is something I have long believed in, the immense amount of money and we would create a apprenticeship bonus concept, for those SMEs that are profit opportunity for a company, then I suppose that currently not apprenticeship providers. But I have is true, but my goodness, there are not many small targeted it at young people, further to a point that was businesses that will say, “Well I will take someone on, made earlier. I have said it has got to be a young I will train them, I will do all this audit so I get the apprentice and an employer that has not had an 1,500 quid”. I just do not think that will happen. I am apprentice previously. We are cutting new ground. much more confident that that is not the risk that you This is not about existing people or existing are suggesting, Chair. businesses. This is about new businesses and new Chair: I say displacement; it may be in place of apprenticeships. somebody that they would have recruited more conventionally. Shall we say we will await the Q729 Paul Blomfield: Understandably, perhaps, evidence of this with interest? given the timelines, you have not got those numbers at the moment, but you could share your update with us. Q732 Paul Blomfield: On a different issue, still in Mr Hayes: Yes, as soon as we get those numbers we relation to SMEs, when we met David Way, he told us would be happy to do so, but it is very early in the that NAS operates what he described as a “segmented system, I think it is fair to say. I had better let Gila market approach”. What that meant was that large speak, because she is here and it does not seem fair. employers got lots of attention and lots of support and Could she say something, Chair? SMEs had to rely on what he described as a Chair: Please feel free to. “web-based and telephone-based system”. Given the cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG07 Source: /MILES/PKU/INPUT/021099/021099_o007_th_BISC 16 May 12 Uncorrected.xml
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16 May 2012 John Hayes MP and Gila Sacks importance of encouraging apprenticeships in SMEs, Mr Hayes: I was referring to the growth overall in the do you think that is good enough? apprenticeship numbers and Level 3 is growing faster Mr Hayes: It is probably true to say that the than Level 2. But you are right. It is a sector-by-sector providers—and by that I mean colleges, private demand issue, so in some sectors most of the skills training providers, organisations that are embedded in requirements are at a very high level and in other their local community—are often the first port of call sectors most of the skills requirements are pitched at for those smaller businesses. I have, as I said earlier, a different point. I would not want to create a deregulated FE, but I have also missioned FE to go vanilla-flavoured system where we have the same still further in terms of those relationships with their view about every sector in terms of the skills levels SME community. So I do not think it would be fair to required. say that the only point of contact or even the principal point of contact with the SMEs in the locality comes Q735 Brian Binley: Could I quickly jump in there, through the National Apprenticeship Service. I think Minister? We must see this skills expertise as a ladder it is more likely to come through the local network hierarchy, that we move up from one to two to three of providers. and onwards. It is that sort of package that we have There is something else I have done on that, because to create at local level to meet local needs. Is that not again, I share your interest in this, as you know. I have so? Those local needs have got to have serious input established apprenticeship hubs in cities. I want to use from local businesses. That has not really happened to local government here. I took the view with my the extent we needed it to extend in the past. colleague the Minister for Cities, Greg Clark, that we Mr Hayes: It is part of what you said at the outset, could use the beacon status of a city, the power and Brian, that too often we have assumed that it was influence, if you like, of a city authority and the necessary to have an academic pathway, which was neighbouring local authorities, to network highly progressive in the way you describe it, but apprenticeships amongst SMEs in their locality. We there was not an equivalent vocational pathway. The are in discussion with the eight big cities to form vocational pathway has never been as navigable, as apprenticeship hubs where the city will coordinate, progressive or as seductive. We need to make it all of will bring the SMEs into the hub, as it were, and will those things. You are absolutely right; we would match supply to demand—match what the SMEs need expect people to start at the bottom of that ladder and to people who want to train, particularly young go right through. One of the reasons I think this people. This is an important way in which we can go Level 4 work is so important is the cohort of people still further along the lines of creating a local that engage at Level 4 and get skilled at that level and relationship, a local community of interest of the kind then get the employment that results from that will be you describe, which is additional to anything the very different to the cohort that typically goes through National Apprenticeship Service might do. the HE system. I think this is an absolutely critical means by which you widen access to higher level Q733 Paul Blomfield: Referring back to an earlier learning. It will oblige us to recalibrate our thinking comment that you made about Germany valuing retail about what higher learning comprises. You are apprenticeships, is it not true that most of their retail absolutely right that this needs to be highly apprenticeships are at Level 3? Are we sufficiently progressive. ambitious in settling too often for Level 2? Mr Hayes: Level 3 is growing faster than Level 2. Q736 Brian Binley: Let me take you right to the Both are growing, but here, on my figures, Level 3 is other end of the educational scale. We have heard in growing faster than Level 2. It is true that in some this inquiry many employers telling us that too many other countries intermediate skills levels have been young people are coming out of our primary and higher than they have in Britain. So you are right; we secondary school structure without the required skills should focus on intermediate and higher level skills. or attitude and knowledge of the workplace and many Coming back to Brian’s point, that does not mean that of them have to do a lot of remedial work before they there is not a place for Level 2 training. There is a become able to start on the sorts of ladders that you place for Level 2 training, as Brian said, and I would are talking about. Can I ask what you are doing with not want in any sense to disregard the significance of regard to your colleagues in the Level 2 training. But I think you are right and Department for Education to answer this particular certainly our intention is to drive up the level of criticism? training and to focus heavily on Level 3. We have said Mr Hayes: “Northamptonshire has set itself the target that from the outset. We have had some success on of getting 2,016 of its 18 to 24 year olds in that. Of course, the advent of Level 4 is a further employment by 2016. Apprenticeships are at the heart illustration of that. There were 180 Level 4 of the scheme.” Brian Binley’s website, apprenticeships when I became Minister—180. We 20 April 2012. You are right. will have 25,000 starts a year. Q737 Brian Binley: Thank you for paying tribute to Q734 Paul Blomfield: I have to say, Minister, on the my scheme; now answer my question. figures that we have shared—and perhaps you could Mr Hayes: You are right; the journey starts before the clarify with a supplementary note—on retail and age of 18, as you imply on your website. It starts when commercial enterprise your own figures suggest there people first begin to think about the world of work, is much more substantial growth at Level 2 than there the kind of job they might do and the choices they is at Level 3. might make to get to that destination. I think we do cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG07 Source: /MILES/PKU/INPUT/021099/021099_o007_th_BISC 16 May 12 Uncorrected.xml
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16 May 2012 John Hayes MP and Gila Sacks need a very close relationship between schools— future date and let us know what progress you might between pre-apprenticeship training, if I might put it have made in that regard? that way, and the apprenticeship system. This is not a Mr Hayes: I am glad, Brian, that you think I am on journey that begins for everyone at 16. It is a journey the upward ladder. that actually needs to start much earlier than that in terms of how we perceive practical learning and how Q740 Brian Binley: I always have done, Minister. we see the world of work. I cannot solve all these Can I then go on to the National Careers Service, problems personally, but let me tell you the one thing which you recently launched and said would I am doing. I am determined we get a more systematic transform careers advice for those outside school? relationship between businesses and schools, that we What role will this body have in terms of promoting get more businesses into schools, and that we build your apprenticeship programme? on the very good work that is done by people like Mr Hayes: You know that the National Careers BAE, for example—but it is also true of Rolls-Royce Service that I have launched is going to be critical to and others—where they have a programme where they this. It is important perhaps just to say a word about visit thousands of schools across the country. But that that, Chair, because we have launched the National is not systematic. It is not universally effective; it is Careers Service; it is the first all-age careers service patchy. The work that is done by our big companies in England. It is going to have 3,250 points of contact, is good, but I want to make that more routine. co-located in colleges, in job centres, in community The second thing is I was at No. 10 yesterday talking organisations, in a whole range of community-based to the Cabinet Secretary about pre-apprenticeship organisations, and I expect that to spread. I was training, about traineeships, about the idea that we talking to local authorities yesterday in a meeting could bring people at an earlier stage than Level 2 about how they can become more involved in into learning and training as a stepping stone. We co-locating National Careers Service offices. We know there is a very substantial number of young expect the website to get 20 million hits a year. The people without the prior attainment to get on an telephone helpline we expect to get at least a million apprenticeship. Their level of skill, particularly the calls a year. We expect something of the order of disengaged, does not allow them to get on to a Level 2 700,000 one-to-one interviews in the National Careers qualification and we need better stepping stones for Service a year. We recently launched and we are those people so they can subsequently do an looking to roll out in the summer a social network interface with this as a separate piece of work that we apprenticeship. I do not think we have yet got those are funding too. I think that will be very important in in place. That is a next piece of work, I think, that getting to young people when they are making their needs to be done. decisions about what routes they might take. I think it is the best we have ever done in terms of careers. Q738 Brian Binley: We look forward to hearing how that work might progress, because I think it is Q741 Brian Binley: There is only one danger. NAS absolutely vital to the whole process you are trying to and the National Careers Service could well be put in at a later stage of the process itself. fighting for the same space and the same resource in Can I ask you two very quick questions? What role the same area, couldn’t they? Are you going to make do you think there is for NAS to work more with sure that they see their roles as achieving two different schools in terms of pre-apprenticeship? objectives rather than the same and therefore fighting Mr Hayes: I have not missioned NAS to do that; I to achieve those objectives? have led it from the two Departments, BIS and DfE. Mr Hayes: No, I would expect them to work I am a Minister in both Departments. As you know, extremely closely together collaboratively, and as they NAS are involved in apprenticeship week, both report to me they better not have a fight. apprenticeship awards, apprenticeship fairs, all kinds of events, many of which will touch the experiences Q742 Brian Binley: Good. As long as you are aware of younger people by their nature; you have all of the problem. You do see it as a problem, or you experienced it yourselves. It is also true that NAS do would not have answered in the way you did. work with schools. They do have a conversation and Mr Hayes: I do not see it as a problem, but if it were a relationship with schools. But maybe we could do to become one I would stop it being one. more. I always think you cannot do too much in those terms because of the prevailing prejudice that a Q743 Brian Binley: Well, you might also come back number of people, including me, have referred to that to us and report how that particular connection is we are trying to counter. I think we have got to go the proceeding. Finally, does it bother you that only 10% extra mile to make the case for apprenticeships and of apprentices are from minority ethnic groups? What practical learning. I will talk further as a result of your work are you doing? I do not need to tell you in some overtures, if I might say so, Chair, to the National of our northern cities particularly there is a real Apprenticeship Service about how they can go further concern about NEETs and the relationship to ethnic with their work in schools. They do do it, but we minorities. I wondered if you were paying special could do more, I think. attention to this particular problem. Mr Hayes: When we have got something on the order Q739 Brian Binley: We recognise that you are on a of half of young black British males out of work, that ladder yourself in terms of the growth of your is of profound concern to this Committee, I have no projects. Will you come back on those two issues at a doubt, and certainly to me. It is absolutely right that cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG07 Source: /MILES/PKU/INPUT/021099/021099_o007_th_BISC 16 May 12 Uncorrected.xml
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16 May 2012 John Hayes MP and Gila Sacks we should extend the reach of apprenticeships in those confidence you describe has real effect and real terms. If you look at the figures over a long time, results. Once you get the apprenticeship, it is not just they are not encouraging. I am not speaking about my that you can do the job you are doing more stewardship alone; this goes back a long way. We need effectively; it is clear that it provides a platform for to do much more in terms of creating opportunities progress, for further development, and the confidence for minorities. We need to do much more, by the way, you describe in terms of the individuals is undoubted. in terms of ensuring that women get their chance in The second thing is that the nature of apprenticeships those areas where they are under-represented— is training with employment. I was insistent, by the engineering is a good example. We need to do much way, that apprentices should be employed. You more in respect of people with learning difficulties probably remember that in the previous regime we and disability. To that end, I have established a series had what were called “programme-led of pieces of work by the NAS—pilots—in those areas apprenticeships”. There has been quite a lot of to look particularly at how we can do that. I criticism of them, clearly, on television. I really do commissioned a piece of work and we have had a share the view that they were not the right way to go report back already on what further steps we need to and that apprentices should be employed. I introduced take and we are now going to take them. I think this this absolute requirement that apprentices should be is a real test and a real challenge, Brian. You are right employed. We do have a few exceptions in areas to identify it. It is something I identified at the outset where it is very hard to define employment, like deep- and I will not be satisfied until we impact on those sea fishermen and other people, but in essence all numbers. Of course, in a demand-led system we need apprentices are employed. Of course, that means to work with employers on this too, because in the people gain the employability skills, the things that end, I said earlier you cannot predict and provide and Brian was talking about earlier, which are also I am not going to then change my tune and say you characteristics of confidence and progress. So in can. But having said that, there are steps we can take confidence terms, I think the fact that these people are to make this more accessible, to make it more in real workplaces matters. straightforward and to look at any barriers that exist In terms of companies’ confidence, you know from in the terms you are describing, and I think it is your background, Simon, that in an organisation, absolutely right that we do so. when you have high levels of competence, you have high levels of confidence. I think there is a contagious Q744 Brian Binley: Thank you, Minister. Your work effect of investment in skills which has an effect well in this area is of great importance. In fact, I think it is beyond the individuals concerned. If we want to build one of the most important pieces of work that this companies that are world-beaters, we need to ensure Government is doing and it is one of the reasons we those contagion effects on productivity and that that have spent so much time on this inquiry. I therefore productivity has a knock-on to competitiveness. So I would hope that our report will meet with your think there is a macroeconomic effect of this as well approval and you will see it as a very serious piece of as an effect on individuals and the spreading of work. We see your work as work in progress and I opportunities. It is good for communities, good for would hope that you would keep in touch with us on individuals, good for businesses and good for Britain. this issue, because it is one there is no doubt we will revisit on a number of occasions over the next two or Q746 Simon Kirby: If I can come back on that point, three years. there is a perception perhaps that UK apprenticeships Mr Hayes: The fact you are doing this is incredibly are of a lower quality compared with other countries. valuable. I know everybody sitting around this table Do you think that perception will be dispelled as the and I think we have had discussions either across the scheme is rolled out and becomes more established House or more informally about this, so I know there and people’s perception of what an apprenticeship is is a real commitment to skills around this table. Of changes? course it is work in progress and we absolutely want Mr Hayes: I think it will if we are clear about quality to be guided and advised by your considerations. and rigour. As I said at the outset, I think the brand Chair: Good, we welcome that. has always had pretty strong recognition. As we build that still further and people recognise to an even Q745 Simon Kirby: Minister, what a great pleasure greater extent than they have historically that it is to see you today. I think it is fair to say that apprenticeships are a high quality qualification, people apprenticeships have been a great success to date. One who might otherwise previously have taken different of the areas of success is that of raising standards and routes will choose the apprenticeship route, maintaining confidence in a high quality product. How particularly, as I said earlier, as it becomes a highway. do you build on that success moving forward to raise If you know you can end up at a Level 4—and by the standards even further and continue to maintain that way, Chair, I expect Level 5 and 6 to develop within confidence? this Parliament. The information we are getting from Mr Hayes: Do you mean for individuals, Simon? Sector Skills Councils, from employers and others Simon Kirby: In any way you like. I could ask the suggests to us that in a number of growth sectors question in a number of different ways. following the development of Level 4 there will be a Mr Hayes: The survey yesterday shows that people demand for Level 5 and 6 frameworks too. When who do apprenticeships progress in their jobs. people know they can get to graduate and Interestingly, 75% of the people who completed an post-graduate level through the apprenticeship route I apprenticeship progressed in their job, so the think the status, which is really what you are cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG07 Source: /MILES/PKU/INPUT/021099/021099_o007_th_BISC 16 May 12 Uncorrected.xml
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16 May 2012 John Hayes MP and Gila Sacks describing, of apprenticeships will change and that Q749 Ann McKechin: Was this more or less than will mean a number of people who would not have before they introduced this apprenticeship previously considered doing one will begin to do so. programme? Mr Hayes: These are people who specifically Q747 Simon Kirby: On that basis, when you progressed as a result of apprenticeships, so none of compare the UK, say, with France with its higher level them would have done that before. apprenticeships, that gap will close, won’t it? Mr Hayes: Yes, I expect us to overtake France. When Q750 Ann McKechin: I think the key point, I was in Germany recently I told them I eventually Minister, is that Morrisons is one of our major expected to overtake Germany too. I will make our retailers, with a turnover of over £1 billion a year, system the best in the world. France is in my sights probably much in excess of that. I think the taxpayer is probably going to ask why Morrisons shouldn’t be already. paying for this. Mr Hayes: That comes back to a question that was Q748 Ann McKechin: Minister, you will be aware raised earlier about whether governments should of the evidence that this Committee has taken from invest in apprenticeships, whether the partnership Morrisons and from Elmfield Training, which has between Government, private business and individuals been the subject of comment and an additional piece around the apprenticeship programme is right or not. of evidence has been produced by the NAS I think it is right. Let me just deal with your Elmfield subsequent to that to our Committee. I would just like Training point as well. to ask you a number of questions regarding the procurement process. I think the Committee certainly Q751 Ann McKechin: Just on this Morrisons issue, commend Morrisons for their commitment to training because you have raised this issue of the valuation of of their staff and it would certainly appear clear that the benefit in kind. As I said, I certainly commend Elmfield recognised a business opportunity, but I think Morrisons for their commitment to their staff; that has the questions that have been raised are about the been a longstanding commitment. NAS has produced issues about the way in which these contracts were to us further information about what the input from procured. Elmfield Training was awarded a Morrisons was and, as you can understand, these are £40 million contract before they had even been things like coaching and mentoring, although assessed by Ofsted. Are you comfortable with that apparently one of the inputs was a positive place to process? Do you believe that it represents value for learn. Can I perhaps ask of the different criteria—and money for the taxpayer? Or do you believe that we I think there are five criteria issued in the input—what need to learn lessons from it? valuation would your Department assess that these Mr Hayes: Let me deal with the two points, because different elements represent? there is the Morrisons point and there is the Mr Hayes: You mean elements of the framework? Elmfield Training point. Of course they are related, but I want to separate them out. I said earlier that Q752 Ann McKechin: As in actual monetary value. retail is one of the biggest employment sectors in the Mr Hayes: We pay far less for older apprentices, as UK and the apprenticeship programme clearly would you know. We contribute less to the training of those be a very odd programme if it did not reflect apprentices and, indeed, because the charge is that a employment per se, because these are jobs with lot of these were older apprentices, about 11% of the apprenticeship budget goes on post-25. Let us be training. I also mentioned that large numbers of clear, the vast bulk goes on those 16 to 24. apprentices in other countries are in retail too. But it is right that what is taught and tested should be Q753 Ann McKechin: I am just talking about additional to what people do now; apprenticeships Morrisons, Minister, and I am talking about the should not simply accredit existing skills. Morrisons valuation of their input of their benefit in kind. My has employed 49,500 new people since 2009, and concern was that when we took evidence from NAS 50% of them were previously unemployed; 50% had and the Skills Funding Agency they said they had no no Level 2 qualification; 25% had no qualification at criteria for assessing benefit in kind. They had no all; and many of those are now doing apprenticeships. guidance that they issued about how to value benefit Some 84% of the Morrisons apprentices had in kind, but yet employers are, if the employee is over numeracy and literacy problems, all of which are 19 or over, supposed to contribute a significant share being tackled by the apprenticeship programme, given either in cash or benefit in kind. So can I come back that I have said that every apprentice must head to: do you think it is acceptable that there is no towards a GCSE equivalent in maths and English. So valuation placed on it, no assessment, no criteria and I think Morrisons’ defence of their programme has a no guidelines? number of things to recommend it and I certainly Mr Hayes: Well the new research, which we will be would not want to be associated with the view that happy to make available to the Committee and Gila Morrisons’ apprenticeships are not adding value. I will say a word about in a moment, suggests that gather that about 2,500 Morrisons staff progress from employers make a very substantial contribution in entry-level jobs to junior management positions after respect of benefit in kind. first gaining an apprenticeship, so 2,500 people move into junior management at Morrisons as a direct result Q754 Ann McKechin: Indeed they may, but the of doing an apprenticeship. Let’s be clear about that. problem is how do we assess it? Can Ms Sacks tell cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG07 Source: /MILES/PKU/INPUT/021099/021099_o007_th_BISC 16 May 12 Uncorrected.xml
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16 May 2012 John Hayes MP and Gila Sacks me how her Department assesses it? Does she have unreasonable to say we should do more work on any criteria? measuring that. Mr Hayes: We will be more than happy to make that Chair: This is a major contract and you would expect information available to you. It actually suggests— it to be given high priority.
Q755 Ann McKechin: It is just a little surprising that Q758 Ann McKechin: One other issue that was you do not have it this morning. raised in that evidence the Chair referred to was how Mr Hayes: It actually suggests that employers the NAS dealt with underspends in the budget. At one contribute a minimum of £3,000 and, in some cases, point Elmfield had a £20 million initial contract and according to the framework and employer, up to more we asked why it was then doubled to £40 million in than £30,000 in kind for each apprenticeship. Gila will the space of one financial year. They simply said, “We say a word or two more about that. had an underspend and we asked people who are Gila Sacks: There were some new research studies approved by us to provide us with other bids.” You that came out with yesterday’s set. They were spoke earlier to Mr Binley about your concerns about sector-by-sector case studies, acknowledging that dealing, for example, with the NEET community, the apprenticeships play different roles in different BME community, various people—obviously there sectors. One of the sectors they looked at was retail, are other issues, people with disabilities, issues about particularly looking at training of existing employees gender disparity. Surely if you have underspends they in some of the large retailers. They found that, on should be focused on the priority areas rather than just average, the employer invested between £3,000 and £4,000 per apprentice. The report details how those trying to find someone who manages to meet a target. figures are derived. Of course often that is not cash, Mr Hayes: Yes, I agree. The underspends are going that is a range of costs. first to 16 to 18 for exactly that reason. It is probably worth also saying that I have asked that we should Q756 Ann McKechin: That is very interesting; I am look closely at the rate setting process, which was the sure the Committee would be very interested to see it. end of your previous question. I think there is an issue But my point is that if you have that as a baseline, around being clearer about the rate setting process, so there will be a monetary element attached to the we are doing further work on that to tighten it. We are various components and from that you should be able directing underspends to priorities in exactly the way to produce guidelines in terms of the way in which you describe. NAS and SFA provide procurement and audit and find out whether or not the taxpayer is getting value for Q759 Ann McKechin: I am grateful for that. I money. It is a simple audit process, is it not? welcome that. You mentioned Elmfield Training. Mr Hayes: As you know, the audit process that the There are a couple of things. The issue was that they NAO themselves did said that there was an £18 return had not been assessed by Ofsted before they were for every £1 Government spent. I do not know any awarded the contract. Of the 10 largest contract other Government programme that could claim that. providers, they were the only one that was ranked But you make a fair point that, given the research errs “satisfactory”, whereas all the others were ranked on, if I can put it this way, my side of the argument, either “good” or “outstanding”. Again, would you why would we not want to make that research agree that the funding structure should reflect and available to the Committee and why would we not reward only proven good quality providers? I would want to be more clear about the sort of guidelines be grateful for your views. you describe? No doubt, an 18:1 return is an absolute Mr Hayes: They were found to be satisfactory and we endorsement of the money Government spends on would rather they were good or excellent; you are apprenticeships, but you are right; let’s break that right. But I do have to say that despite the almost down a bit more. relentless focus on Morrisons that we have had from some quarters, at the end, as the HR Director of Q757 Chair: Could I just intervene at that point, Morrisons said to you when he gave evidence, that Ann? Yes, we will be probing the NAO on its figures, company has focused funding on getting people some I have to say, but can I just quote to you Geoff Russell nationally recognised qualifications, many of whom of the SFA, when before Committee? “We do not do a did not have them before and would not have had value for money assessment as part of our day-to-day them otherwise. The fact that it is in retail and the fact business for awarding money. We make an assumption that a private training provider is involved does not about the product we are funding.” Do you think that is an acceptable approach? alter that fact. It is absolutely right we should look at Mr Hayes: The point really is, Chair, that I think what rate setting; it is absolutely right we should look at Geoff Russell was saying is that because of the range quality; and it is absolutely right we should look at of apprenticeship frameworks, the range of types of additionality, but I would not want to stand and say business involved and the range of apprentices, it is that either retail generally or Morrisons specifically very difficult to come up with a very simple set of were not adding value. criteria to make an assessment about value. That does not mean to say we should not try to do so. We are Q760 Ann McKechin: Have any lessons been talking here about 450,000 apprentices across learned from the Elmfield contract? 200 potential frameworks across 1000,000 businesses, Mr Hayes: We are learning lessons every day. My but even given that variety and complexity, it is not whole life is a process of learning, as are all our lives. cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:47] Job: 021099 Unit: PG07 Source: /MILES/PKU/INPUT/021099/021099_o007_th_BISC 16 May 12 Uncorrected.xml
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16 May 2012 John Hayes MP and Gila Sacks
Q761 Ann McKechin: Yes, I am sure it is. Elmfield provide better value for the taxpayer rather than 36% made 36% profit levels when it was awarded the profit going into Elmfield? contract in 2009Ð10 when its only income was public Mr Hayes: We are looking at how rates are set for money. Are you concerned about any elements of the exactly the reason that we want to maximise value training provider model that would allow such a large for money. profit margin? Mr Hayes: I will tell you what I think about that. I Q766 Ann McKechin: Mr Syddall has told us he is think that if Government took the view that none of expecting about just under 14% this year. Would you the organisations with which it deals or collaborates say that would be a fairer return? to deliver public programmes should make profits, my Mr Hayes: Sorry, I did not hear what you said. goodness, we would have to close down a great deal of what Government—any Government—has ever Q767 Ann McKechin: He is expecting just under done. Of course people who supply goods and 14% return this year compared with 36%. services to Government make profits. That is the Mr Hayes: I think it is absolutely right we maximise nature of the relationship between the public and the value for money where Government is spending it and private sector. If this was an FE college who we we will use all mechanisms to ensure we do so. mission to be highly cost effective and they were making a loss, we would complain bitterly. If this was Q768 Ann McKechin: Okay. In February, the NAO a health provider that was losing money heavily and wrote that the Department had not provided sufficient therefore jeopardising— clarity on what success will look like in the medium to longer term. Have you responded to that report, or Q762 Ann McKechin: Are you comfortable with a are you intending to? You also mentioned your 36% profit level? ambitions today, which I am sure the Committee were Mr Hayes: Across Government we work with very interested in and supportive of, but given that we organisations that make profits, don’t we? Every have also had evidence this morning that the UK is Government always has, has it not? still slipping down the way in the OECD rankings on Chair: That begs the question—it is the level of skill levels, do you not believe that there is a need for profit. a further effort and drive about how we get to skilled levels in this country? Q763 Ann McKechin: The proprietor of Mr Hayes: I said earlier there is always a tension Elmfield Training told us the state was paying too between quantity and quality, which is why I am so much money, because it did not recognise there were determined to place this unprecedented emphasis on efficiencies in this kind of delivery model. I have to quality in the apprenticeship programme. The say I commended him for his honesty. What I am mountain we had to climb, made very clear by the concerned about is that you do not seem to be Leitch report, was a very great one. We have neglected reflecting the issue about the taxpayers’ value for investment in practical skills over a very long time in money and the fact that you are so comfortable with this country, so you are right, we are looking first to such an excessive profit level. catch up and then to overtake our competitors. But it Mr Hayes: The SFA, for which I am responsible is a substantial mountain, as Leitch identifies. although of course it is an independent body, claws Returning to your issue of value, I think it is back money from people who do not live up to the absolutely right that we focus on value, which is why standards we expect. Where provision either does not I ended the Train to Gain programme with its massive happen at the level we want or where it does not deadweight cost and focused on apprenticeships, happen at all, we claw back money. A great deal of which have a lower deadweight cost and represent money has been clawed back from private providers much greater value for money. of apprenticeships where they have not delivered. Chair: We will be probing the NAO on this very issue. Thank you, Minister, for your contribution. Q764 Ann McKechin: Does that not suggest the Again, as I say to everybody, if you feel that there is procurement process could have actually got a lot further evidence you would like to submit to us then more money for the taxpayer? we will be pleased to receive it. Indeed, of course, Mr Hayes: Elmfield Training? there were a number of issues that you have undertaken to provide evidence on. Q765 Ann McKechin: Do you not think the Mr Hayes: Thank you so much for having me. procurement process should have been designed to Chair: Thank you very much, Minister. cobber Pack: U PL: COE1 [SO] Processed: [05-11-2012 13:48] Job: 021099 Unit: PG08 Source: /MILES/PKU/INPUT/021099/021099_w020_michelle_NAS supplementary (Schools).xml
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Written evidence
Written evidence submitted by the Department for Business, Innovation and Skills and the Department for Education DATA IN THIS MEMORANDUM IS CORRECT AT TIME OF SUBMISSION TO THE COMMITTEE 1. Introduction 1.1 Apprenticeships have been key to our society and economy for centuries and though much has changed, it remains the case that people learn best whilst doing. An Apprenticeship is first and foremost a job—a job with significant new learning, the practice of new skills and achievement of nationally-recognised qualifications. Apprenticeships involve a rigorous period of learning with sufficiently stretching standards and high expectations of competence. For young people, they can be a first step on the ladder that leads to fulfilling careers and further learning; for employees of all ages they can provide a route to career progression, reskilling and upskilling; and for employers they offer a sustainable way of building a workforce with the skills needed to succeed. 1.2 The Apprenticeship programme has expanded rapidly since its revival in 1994 and is now the cornerstone of our skills system, as the government has made big strides in expanding this essential mode of training to better support the up-skilling and re-skilling of the existing workforce. The status of Apprenticeships has also been revived: this is clear from recent growth, where final figures show that there were 457,200 Apprenticeship starts in the full 2010Ð11 academic year—up by 63.5% on the previous year and with increases across all age ranges and levels, despite a challenging economic climate. Almost 250 Apprenticeship frameworks are now in place, offering 1,200 job roles, ranging from accountancy to textiles, engineering to veterinary nursing, business administration to construction: naturally, the take up of frameworks in a range of job roles continues to reflect the nature of employment in the economy. In the last academic year around 50,000 workplaces took part for the first time, bringing the total involved to around 160,000 across England. Government investment has also grown to over £1.4 billion now, and rising. 1.3 There is a strong rationale for the Government’s vision and for this expansion: evidence shows that Apprenticeships deliver economic and social benefits to individuals in terms of higher wages and improved employment prospects, to businesses in the form of higher profits and increased competitiveness, and to the wider economy and society as a whole. For example, individuals with an Intermediate Level Apprenticeship earn 12% more on average than similar individuals with lower-level qualifications and those with an Advanced Level Apprenticeship earn on average 22% more. Satisfaction rates for Apprenticeships are high, with individuals recognising that the impact of Apprenticeship training is significant and helps with career prospects and ability to do a job. 1.4 The recent National Audit Office assessment recognised the strengths of the Apprenticeship programme, highlighting how it continues to be valued by learners and businesses, with 91% of apprentices satisfied with their training. The NAO concluded that public spending on Apprenticeships offers a good return, estimated at £18 for each £ of investment. The Department’s own evidence suggests that returns may be higher, at £28 for every £ of government investment. Finally, the NAO also concluded that the programme is well coordinated by its two sponsor Departments, BIS and DfE, which oversee the National Apprenticeship Service and the Skills Funding Agency. 1.5 As set out in the Autumn Statement 2011 and in New Challenges, New Chances1 the Government is committed to building on the success of programme to date and to ensuring its long term contribution to growth. This will be achieved by maximising its effectiveness, driving up quality and targeting the programme to ensure it continues to meet the current needs of the economy and the labour market. In Building Engagement, Building Futures2 published jointly by BIS, DfE and DWP in December 2011, the Government set out its strategy to support full participation by young people in learning and work, highlighting the contribution of the Apprenticeship programme and its potential to do more, for example through the new recruitment incentives for small employers, and through action to support progression into Apprenticeships for disadvantaged young people. 1.6 The key challenge ahead is to safeguard the sustainability of the programme, with a focus on matching quality with quantity and ensuring ongoing value for money. The recent announcements of reform to the programme concentrated on three areas key to the programme’s continued impact and success: — encouraging more employers, particularly SMEs, to offer Apprenticeships by enabling greater employer ownership, reducing bureaucracy and offering incentives; — ensuring that all Apprenticeships deliver high value for employers and apprentices by relentlessly driving up standards and quality; and — prioritising the investment in Apprenticeships where the impact and returns are greatest. 1 http://www.bis.gov.uk/assets/biscore/further-education-skills/docs/f/11Ð1380-further-education-skills-system-reform-plan 2 http://www.bis.gov.uk/assets/biscore/further-education-skills/docs/b/11Ð1452-building-engagement-building-futures-maximise- participation-16Ð24 cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:48] Job: 021099 Unit: PG08 Source: /MILES/PKU/INPUT/021099/021099_w020_michelle_NAS supplementary (Schools).xml
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1.7 Subsequent sections of this written memorandum provide further detail about the Apprenticeship programme, covering employer engagement, quality, funding and delivery by the National Apprenticeship Service, and thus the specific questions set out by the Committee. This information applies to the all-age programme as a whole.
2. Engaging Employers 2.1 Apprenticeships are jobs, and so the programme’s success depends upon its ability to engage employers and deliver what employers value for their businesses. The Government’s priority, and that of the National Apprenticeship Service, is to encourage more employers to offer good quality Apprenticeships, and that means making it as simple as possible to recruit and employ an apprentice, and making sure that employers can get the tailored, high quality training that their business needs. 2.2 There are around 160,000 workplaces across England using Apprenticeships and evidence shows that employer satisfaction with the programme is high, with employers seeing increases in productivity due to training delivered through Apprenticeships. Looking forward, giving employers more ownership over the Apprenticeship system is the best way to ensure that Apprenticeships remain high quality, relevant and responsive. 2.3 The National Apprenticeship Service has been successful at increasing participation in the programme; in the last academic year around 50,000 workplaces took part for the first time. National Apprenticeships Week 2012 saw further major announcements by large employers recruiting new apprentices. 2.4 The National Apprenticeship Service has national and local employer engagement strategies in addition to the range of bespoke initiatives for large employers and SMEs. These strategies are underpinned by a high profile and high visibility marketing and communications strategy, directly linked to their Business Plan. Both national and local strategies focus on the following three areas: — growing the number of Apprenticeship places—by marketing to employers directly and through colleges and learning providers; — ensuring employers have a wide pool of suitable and qualified candidates to choose from—by ensuring potential apprentices and their parents have the information they need to consider if an Apprenticeship is for them—and to be able to apply for one; and — raising reputation and progression to ensure the type of Apprenticeship opportunities we secure and fill focus more on Advanced and Higher Apprenticeships, progression into Advanced Apprenticeships and beyond into higher level skills, and to ensure we highlight the successes of apprentices in England. 2.5 In addition, ministers and senior officials across Government, and John Hayes, Minister for Skills, in particular, have strategically targeted major employers, and those in particular sectors which could benefit from higher levels of engagement with Apprenticeships, to encourage greater involvement and address any obstacles they may face. For example, a recent set of cross-sector meetings with large employers and one-to-one meetings with major banks have led and continue to lead to new commitments by employers to begin or expand an Apprenticeship programme. 2.6 The Government has committed to help even more people to benefit from high quality Apprenticeships; as a demand led programme, this is dependent on employers coming forward to make places available. So making it easier for employers to take on an apprentice is a top priority and there is a range of new activities in train to achieve this.
Reducing bureaucracy 2.7 We are reducing bureaucracy, and streamlining and speeding up processes, with significant progress made already. For large employers (5,000+ employees) that directly contract with the Skills Funding Agency; the latter is currently running an Employer Outcome Payment Pilot. This will test a new approach to making payments based on Apprenticeship framework completions enabling a significant reduction in the paperwork and reporting requirements. We are also introducing more proportionate audit, inspection and monitoring arrangements and a single certification service. 2.8 To address the concerns of small employers, we are working to streamline processes so that it takes just a month for an employer to advertise for an apprentice, through from first enquiry to agreeing a training package. The Skills Funding Agency has removed health and safety requirements on providers and, where relevant, employers, that go beyond regulatory requirements. We are working with training providers to develop new service standards for supporting SMEs to be included in all new contracts for Apprenticeships delivery.
Increasing employer ownership 2.9 Giving employers more ownership and control of the Apprenticeship system is central to the Government’s efforts to increase employer engagement so more employers offer Apprenticeships, and drive up Apprenticeship quality so that every Apprenticeship involves high-quality, relevant training that employers value. cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:48] Job: 021099 Unit: PG08 Source: /MILES/PKU/INPUT/021099/021099_w020_michelle_NAS supplementary (Schools).xml
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2.10 Alongside the mainstream programme, the Government is piloting a radical new approach to the way it works with business to invest in skills. Up to £250 million will be made available directly to businesses over a two year period from AY2012Ð13 to invest, alongside their own resources, in the development of skills and to support industry growth. Apprenticeships will be at the heart of the pilots, although employers will have the space to innovate in designing new ways to address skills needs in their sector, supply chain or local area. Funding will be awarded competitively to those projects that offer greatest benefits and value. 2.11 This is a fundamentally new approach to empowering employers more strongly as demanding purchasers of skills services, and to increasing the quality, impact and value for money of the Government’s investment in these. A prospectus for the pilots was launched on 7 February, and bidders have until 26 April to respond. The UK Commission for Employment and Skills is leading the management of the competition, and the National Apprenticeship Service and Skills Funding Agency are also closely involved and will support BIS and DfE with delivery.
Support for small businesses 2.12 There may be a number of reasons why small businesses find it harder to engage with the Apprenticeships programme: — they may not have a dedicated HR department to manage the process, or support learning and development; — it may be more difficult for staff to dedicate time to training and supporting an apprentice; — it can be harder to release someone for training off the job when there are fewer remaining staff to cover; or — small businesses may have more cash flow constraints and be less prepared to risk an initial investment to achieve long-term productivity gains. 2.13 Taking on an apprentice can appear more of a challenge to a small business, and evidence from the British Chambers of Commerce suggests that around 20% of businesses with fewer than 250 employees cite cost as a barrier, in comparison to 10% of businesses with 250+ staff. This suggests that incentive payments are an effective mechanism for initiating contact with employers not previously involved in the programme3. 2.14 In November 2011, we announced 40,000 incentive payments of £1,500 to encourage small businesses not currently engaged in the Apprenticeship programme to offer more opportunities for young people aged 16Ð24. Partly supported by additional funding through the Youth Contract, the incentives have been available to small organisations in all sectors, and for Apprenticeships at all levels, from 7 February 2012. Half of the payment will be provided around two months after the apprentice has started their framework; the second half will be paid later, to encourage completion and continued employment. 2.15 Targeting such employers with this new incentive will maximise the impact of the additional funding and further grow the Apprenticeship brand. In promoting the scheme, the National Apprenticeship Service will also seek the greatest value for the taxpayer by concentrating on the occupational sectors which generate the greatest levels of return. This is further enhanced by focusing the incentive on young people for whom the costs (both to the individual and the state) of a period not in work might otherwise have been significant. The National Apprenticeship Service’s experience also shows that a high-profile incentive scheme can have wider benefits in attracting attention to Apprenticeships as a whole. 2.16 The first £750 instalment of the incentive payment equates to two months wages at the Apprenticeship rate of the National Minimum Wage, helping small businesses to overcome the initial costs of supporting an apprentice while they settle in and start becoming productive. 2.17 Incentive payments outlined above are one way of addressing these barriers, but we are also adopting a number of other measures to make it as straightforward as possible for a small business to set up an Apprenticeship programme for the first time. 2.18 Recognising that working for a smaller firm often requires fulfilling a greater variety of roles, firms with fewer than 10 employees will be able to add up to two (co-funded) broader business skills units to any full framework. Small employers will be able to add to existing Apprenticeships training, tailoring frameworks to their specific needs. 2.19 Employer-led Group Training Agencies (GTAs) can play a pivotal role in meeting the particular training requirements of SME apprentices and supporting their employers’ participation in the programme. We strongly support this model and have encouraged the expansion of the GTA network via the National Apprenticeship Service funding of GTA England and its activity in this area. 2.20 The National Apprenticeship Service will streamline the support it provides to SMEs to ensure that it is tailored to the specific needs of these businesses, including a dedicated team, tailored online support and clearer messaging through a one page sales pitch for small businesses. 3 Apprenticeship Grant for Employers (AGE) Evaluation, BMG Research, 2011. cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:48] Job: 021099 Unit: PG08 Source: /MILES/PKU/INPUT/021099/021099_w020_michelle_NAS supplementary (Schools).xml
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2.21 Taken together, these measures will help to ensure that it is easy and straightforward for small employers to engage in the programme. In addition, we have asked Jason Holt, CEO of the Holts Group of Companies (including Holts Academy), to lead a short review to identify what further measures can be taken to give SME employers more control in the system and to make it more responsive to their needs. Mr Holt is due to report to Ministers in May 2012.
City Apprenticeship Hubs
2.22 Supporting employers and addressing business need has a strong spatial dimension. We are taking additional steps to support economic growth and tackle skills needs in our major cities by supporting the establishment of City Apprenticeship Hubs. These will help employers, in particular smaller firms, and local people to make the most of the opportunities offered by Apprenticeships. 2.23 It is up to cities themselves to convene whichever mix of organisations makes sense in their area, for the Hub and any wider network. Local Enterprise Partnerships and local training providers are likely to be prominent contributors, together with other employer bodies. Opportunities include working with the National Apprenticeship Service to target the new employer incentives most effectively in creating Apprenticeships and helping local businesses to benefit from the programme. We expect initial city plans to start during the spring.
3. Ensuring Apprenticeships Remain High Quality Learning Experiences 3.1 Apprenticeships are a tried and tested model with a proven track record of delivering benefits to apprentices and employers alike. 3.2 The numbers of Apprenticeship starts and achievements have been increasing over recent years; critically success rates—where someone who begins an Apprenticeship successfully completes their training and achieves the required levels of competence—have also been improving, increasing from 63.9% in 2007/08, to 76.4% in 2010/11. This is a key sign of improving quality. APPRENTICESHIP STARTS AND ACHIEVEMENTS, 2006–07—2010–11
500,000 Advanced Level Apprenticeships (Level 3)* 450,000 Intermediate Level Apprenticeships (Level 2)
400,000
350,000
300,000
250,000
200,000
150,000
100,000
50,000 Apprenticeship Framework Starts/Achievements
0 Starts Starts Starts Starts Starts Achievements Achievements Achievements Achievements Achievements 2006/07 2007/08 2008/09 2009/10 2010/11 Academic Year
* Advanced Level Apprenticeships figures include a small number of Higher Level Apprenticeships4
3.3 The most important indicators of quality are the benefits to employers and employers (more detail in Annex A). Evidence suggests that individuals who complete an Apprenticeship experience improved employment prospects and higher wages in employment. Those with an Intermediate Level Apprenticeship earn on average between £48,000 and £74,000 more over their lifetime than similar individuals with a Level 1 or (other) Level 2 qualification; and those with an Advanced Level Apprenticeship earn on average between £77,000 and £117,000 more, compared to similar individuals with a Level 2 qualification (see Annex A). 3.4 Employers also report substantial benefits—including increased competitiveness, higher overall productivity, reduced staff turnover and recruitment costs, as well as a more motivated and satisfied workforce. 4 Source: Individualised Learner Record, January 2012 Statistical First Release cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:48] Job: 021099 Unit: PG08 Source: /MILES/PKU/INPUT/021099/021099_w020_michelle_NAS supplementary (Schools).xml
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Research suggests that employers recoup the costs of their Apprenticeship within two to three years in most cases.5
High quality Apprenticeships 3.5 Apprenticeships must be real jobs and, as such, the nature of the training they include has to be tied to real opportunities and be led by employer demand. Quality is paramount—an Apprenticeship should represent a significant learning experience for an individual, with clear progression routes into higher learning and more rewarding work, and offering a genuine productivity gain for the employer. 3.6 Raising standards and maintaining confidence in a high quality product and a strong brand is the Government’s top priority. This means raising the bar in terms of the standards we want apprentices to achieve, and it means cracking down on poor provision, with any training provider that does not meet the high standards that employers and learners demand having their funding withdrawn if they do not improve. 3.7 The Government has taken steps to improve the quality of Apprenticeships. First, it sought to ensure that all apprentices are employed: ensuring Apprenticeships are real jobs is key to safeguarding the core qualities that set apprenticeships apart from other training. Apprenticeships offer young people and adults the opportunity to develop their confidence, skills and knowledge. Mentoring and feedback delivered through practical experience of doing the job is as important as formal training. 3.8 Second, the Apprenticeship programme is now underpinned by statutory standards. Published in January 2011, the Specification of Apprenticeship Standards for England (SASE) sets out the standards that all Apprenticeship frameworks in England must meet. SASE is designed to ensure the consistency of Apprenticeships and that all frameworks offer substantial on and off the job guided learning leading to the achievement of recognised high-quality qualifications and an Apprenticeship Completion Certificate. 3.9 Third, the Government took the decision to replace Key Skills in English and maths with Functional Skills, ensuring apprentices were supported to attain more stretching and transferable qualifications in these skills which are so vital for progression. We are now working to help training providers introduce the new qualifications. 3.10 The Government announced a further range of measures aimed at improving Apprenticeship quality in November and December 2011. In particular, it committed to: — more robust and timely action to crack down on poor provision that does not meet standards that learners and employers demand—withdrawing funding where quality does not improve quickly;6 — requiring every provider to support their apprentices in progressing towards the achievement of Level 2 in English and maths. From Academic Year 12Ð13 all Apprenticeship providers will be required to provide opportunities to support Apprentices in progressing towards achievement of Level 2 functional skills or GCSE qualifications and will be measured on their success in ensuring that Apprentices who have not already achieved this standard are able to complete it as part of their Apprenticeship programme; — driving quality through consumer empowerment and transparency by improving employer and apprentice access to objective and comparable information on providers. Giving employers and learners better information about provider performance and about the level of government investment in their training will better enable them to act as informed purchasers of training, and be a critical tool in driving up quality and rooting out poor provision; — supporting an independent employer-led review of Apprenticeship standards, to be launched shortly, that looks at how to ensure we are continuing to raise the quality of Apprenticeships to meet the evolving needs of employers and apprentices; — launching a new £250 million Employer Ownership Pilot, as described above, to improve the impact and value of training, as empowered employers demand high quality training better designed to meet their particular needs and those of their employees, rather than more off-the-shelf options. — ensuring that all Apprenticeships involve a rigorous period of learning and the practice of new skills that normally extends over at least 12 months, with that being a requirement for all 16 to 18-year old apprentices from August 2012, as new contracts to training providers are issued. The National Apprenticeship Service is assessing the implications of extending this minimum requirement to other age ranges, on the principle that all Apprenticeships should include significant new learning but taking account too of the fact that older apprentices typically start from a higher base of existing skills; and — asking the National Apprenticeship Service to work with the Alliance of Sector Skills Councils to tighten guidance for those who are developing Apprenticeship frameworks to ensure that expectations on national standards and rigour are met, and to take action where frameworks are insufficiently stretching. 5 Source: Hasluck et al (2008) The Net Benefits of Employer Investment in Apprenticeship Training Institute for Employment Research 6 The Implementation Strategy for tackling poor performance (set out in New Challenges, New Chances) was implemented on 1 December and is being applied to all new cases where underperformance is identified. cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:48] Job: 021099 Unit: PG08 Source: /MILES/PKU/INPUT/021099/021099_w020_michelle_NAS supplementary (Schools).xml
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Tackling poor providers 3.11 In New Challenges, New Chances we set out a strategy for tackling poor performance across the FE sector, that: — sets tougher standards that are less complex and more transparent and these will be used as the basis for measuring performance; — a proportionate approach to monitoring quality, with greatest scrutiny and inspection targeted at poorer providers; and — withdraws funding quickly where a provider falls below acceptable standards—and secures alternative quality provision. 3.12 As part of driving up Apprenticeships quality, the Government has asked the National Apprenticeship Service and the Skills Funding Agency to take steps to clamp down on poor performance. As the recent National Audit Office review of adult Apprenticeships recognises, the Department for Business, Innovation and Skills has learnt lessons from Train to Gain and applied these to improve the management of the programme—with particular emphasis on the effective management of contractors. 3.13 Investigations and improvement work is focussing particularly on short durations and subcontracting, identified as key issues in ensuring quality. A substantial review is currently under way within the Skills Funding Agency and the National Apprenticeship Service to analyse and address issues of short duration Apprenticeships. Overall, internal data show that the volume of short duration Apprenticeships is now declining and among providers under review, the issue of short duration is assessed as being of minimal or medium significance in the majority of cases. 3.14 The review is responding to the variable aspects of individual cases as they arise, to ensure that timely and effective action is identified for each case leading to appropriate outcomes, such as new delivery arrangements or cessation of delivery in specific sectors/areas. The current position is as follows7: — one third of all reviews are now closed; — of these, two thirds have been closed due to providers either ceasing certain existing sub-contracting arrangements or delivery in specific sectors; — over two thirds are considered of either medium or low significance; and — a minimum duration of 12 months for apprentices aged 16Ð18 will apply to all new starts from 1 August 2012 onwards. 3.15 At present, the most common reason for closure is that providers have changed their delivery models to meet the required quality standards. In other cases, providers have either ceased sub-contracting with organisations that used short lengths of stay or have ceased delivering Apprenticeships in sectors where there was an issue of short duration. In the remaining short duration cases assessed as significant or highly significant a number of contributory factors are often found to affect quality. Sub-contracting is a particularly important feature in two of these cases. In several instances, providers have suspended starting new apprentices whilst they revise their delivery models. Major reviews are also underway with a small number of significant subcontractors and, as a result of this, a number of prime contractors have now stopped working with them. 3.16 The Government, the National Apprenticeship Service and the Skills Funding Agency carefully monitor sub-contracting arrangements. Each year there is a requirement for colleges and training organisations that have a direct contractual relationship with the Skills Funding Agency (lead providers) to tell it who they have entered into a sub-contracting relationship with, together with the details of the amount the sub-contractor receives. This is termed a sub-contractor declaration. Lead providers are required to complete this declaration on at least an annual basis, but also to update it in year as and when it changes. For example, when the lead provider has ceased their contractual arrangement with a sub-contractor; when the lead provider has taken on a sub-contractor in year; or when the lead provider has increased an existing sub-contractors contract value. 3.17 The Skills Funding Agency collects this information from the sector, which assists direct contract holders by providing them with the national picture of the Skills Funding Agency’s wider supply chain, and assists them with their due diligence checks. This subcontractor information enables lead providers to build a better understanding of the capacity of subcontractors prior to them entering into a commercial and legally binding relationship. 3.18 The lead provider retains ultimate responsibility for all aspects of the provision that it has contracted with the Skills Funding Agency to deliver, including any elements that it chooses to sub-contract, and must have a legally binding contract with each and all of its sub-contractors. A second level or further sub-contracting is not permitted, unless specific named requirements have been fully met to the satisfaction of the Skills Funding Agency. Also, it is the responsibility of the lead provider to satisfy itself that the sub-contractor has been selected fairly and has sufficient capacity, capability, quality and business standing to deliver the provision that is being sub-contracted. If there is any evidence of current or historic irregular financial or delivery activity with any of the sub-contractors that a Lead Provider is engaged with, it is the responsibility of the Lead 7 As for all data in this memorandum, correct at 10 February 2012. cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:48] Job: 021099 Unit: PG08 Source: /MILES/PKU/INPUT/021099/021099_w020_michelle_NAS supplementary (Schools).xml
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Provider to undertake an investigation at their own cost and carry out any follow up actions, and this must be reported to the Skills Funding Agency. 3.19 In addition, as a further mechanism to manage and monitor the use of public funds, the Skills Funding Agency has determined that all sub-contractors in receipt of Agency funding with an aggregate value of £500,000 or more need to complete the Due Diligence Assurance Gateway of the Register of Training Organisations, and it is the responsibility of the lead provider to ensure that that this is undertaken. 3.20 For the 2012Ð13 contracting period the arrangements relating to sub-contracting will be further strengthened, this includes by: — requiring lead providers to update their sub-contractor declarations on at least a quarterly basis as part of their funding agreement requirements; — the Skills Funding Agency publishing a full list of sub-contractors holding an aggregate contract value of £100,000 on its website and, where appropriate, sharing this information with sector organisations such as Ofsted; and — the Skills Funding Agency continuing to manage the growth of sub-contracting arrangements through its formal performance management protocols.
4. Targeting Government Investment 4.1 The Government’s increased spend on the Apprenticeship programme reflects the programme’s high economic returns; evidence indicates that the total economic return (consisting of benefits to learners, their employers and the wider economy) amounts to around £28 for each pound of Government investment (see Annex A). Analysis by the NAO based on different assumptions suggests an economic return of £18 per £1 of Government investment. 4.2 Apprenticeships represent a three-way investment, with benefits accruing to learners, their employers and the wider economy: — Individuals benefit from higher wages in employment, seeing an average wage gain of around 12% at Intermediate Level and 22% at Advanced Level compared to similar individuals with lower level qualifications.8 They also benefit from an increased chance of being in employment. This means that over the course of their lifetime individuals with an Advanced Level Apprenticeship earn on average between £77,000 and £117,000 more than similar individuals with Level 2 qualifications. Those with Intermediate Level Apprenticeships earn, on average, between £48,000 and £74,000 more than similar individuals with Level 1 or (other) Level 2 qualifications (See Annex A) — Employers benefit from a competitive edge that manifests itself in many areas of their business. 80% of those who employ apprentices agree that they make the workplace more productive. In most cases this increased productivity leads to employers recouping their investment in the apprentice in two to three years. 81% of consumers favour companies that employ apprentices. 83% of employers who employ apprentices rely on their Apprenticeship programme to provide the skilled workers that they need for the future.9 — “Spillover” benefits accrue to other individuals and employers eg through the transfer of knowledge. Apprenticeships also create a pool of skilled labour from which other firms can recruit.10 4.3 The Government’s current and projected investment in Apprenticeships is set out in the table below. £K FY09Ð10 FY10Ð11 FY11Ð12 FY12Ð13 16Ð18 Apprenticeships 687,815* 744,870* 779,000** 833,000** 19Ð24 267,738* 314,722* 644,000*** 698,000*** 25+ 116,482* 136,158* see above see above TOTAL 1,072,035 1,230,880 1,423,000 1,531,000 * Skills Funding Agency Annual Report and Accounts 2010Ð11 ** YPLA 16Ð19 Funding Statement, December 2011 *** BIS Skills Investment Statement, New Challenges New Chances 2011. Projection figures are given on a 19+ basis only given the demand led nature of the programme, and represent a minimum expectation 4.4 The Government is committed to securing best value for every pound of public money invested, focusing public funding where returns are greatest. At the Apprenticeships Summit on 16 November 2011, Vince Cable announced a renewed focus on targeting the programme where the investment and efforts deliver greatest returns and wider benefits—including on younger people (16Ð24), new employees, and advanced and higher level qualifications and particular sectors where spend will make the greatest impact. 8 London Economics (2010) “BIS Research Paper Number 53, Returns to Intermediate and Low Level Vocational Qualifications, September 2011.” 9 Populus (2008), Findings summarised at http://www.apprenticeships.org.uk/Employers/The-benefits.aspx 10 See the following for examples of spillovers: Dearden, Reed, & Van Reenen (2005), “Estimated Effect of Training on Earnings and Productivity, 1983–99.” CEP Discussion Papers dp0674, Centre for Economic Performance, LSE; and Kirby & Riley (2007), “The External Returns to Education: UK Evidence Using Repeated Cross-Sections” NIESR Discussion Paper No. 291. cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:48] Job: 021099 Unit: PG08 Source: /MILES/PKU/INPUT/021099/021099_w020_michelle_NAS supplementary (Schools).xml
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4.5 The Department has asked the National Apprenticeship Service to target actively, through marketing and other operational levers, those learner groups, qualifications and sectors where Apprenticeships deliver greatest benefits, taking account of economic returns, skills needs and market failures. 4.6 However, Government is not best placed to determine provision at a local level. With the new freedom and flexibilities the Government has introduced, such decisions are now rightly made by training providers and employers working together on the ground, responsive to local needs.
Younger adults 4.7 Government focuses the highest levels of public investment in Apprenticeships on supporting younger learners. The 100% funding available for the training element of Apprenticeships for 16Ð18 year olds is founded on the principle that Government should fully support the education and training for those yet to reach adulthood. This is consistent too with the position that those under 19 cannot legally be charged fees for their learning in schools and colleges. In this respect, Apprenticeships offer a vocational alternative to the more academic route followed by many other young people eg through school sixth form departments and full time further education colleges. For employers, the policy reflects the relative labour market inexperience, greater learning needs and initially lower productivity of the youngest apprentices at the outset of their careers and entering the workplace for the first time. Apprenticeships will make an important contribution as we raise the participation age, in particular for those young people who learn best by doing. 4.8 Similar principles apply in funding Apprenticeships for young adults 19Ð24. However, as labour market experience and learning increases, likely to be reflected in greater initial workforce productivity, it is right that the balance of investment between employer and State adjusts. Further funding adjustments are made for those 25+, where prior skills levels and experience will typically be higher still. Funding for all 19+ Apprenticeships is reduced by an additional 25% for large employers, given the greater resources and infrastructure they are likely to have to support training. Additional investment in younger learners includes the new employer incentives, as discussed above, designed to encourage small employers to take on new apprentices aged 16Ð24. 4.9 Other arguments for targeting Government support for younger people link to the financial constraints they are more likely to face, which result from the inability to borrow against future increased earnings. These will generally be greater for young people and those with lower skills, who typically have lower incomes and less flexibility in financing. Information barriers also affect the low skilled more—they are less able to access information and less likely to be able to rely on personal networks. 4.10 In addition, returns are typically greater where qualifications are undertaken before the age of 25, including as younger individuals have longer left in the workforce, on average, over which the benefits can accrue.11 4.11 The Government remains committed to introducing FE loans for those 24+ at Level 3 from AY2013Ð14, which will affect those taking Apprenticeships at this level. The introduction of loans is expected to provide further stimulus to quality improvement across the FE sector, as learners become more demanding and make more informed decisions about their investments. The case for loans is supported by the evidence cited above of higher returns for Apprenticeships at the advanced level, with payback starting only after completion of the course and rising incrementally after an income of at least £21,000 has been achieved. 4.12 The Government has consulted extensively with employers in developing our approach to introducing FE loans, and will continue to work closely with employer bodies to ensure that the system is effective and continues to support high levels of participation.
Higher level Apprenticeships 4.13 In the strategy for skills, Skills for Sustainable Growth, and its parallel publication, Investing in Skills for Sustainable Growth (published November 2010), the Government set out their intention to not only increase numbers of people undertaking Apprenticeships, but also to improve the quality of the programme. As the economy rebalances, we will need more highly-skilled employees. The Government recognises the important role Apprenticeships can play in helping employers meet these needs. 4.14 Higher skills increase productivity, enabling businesses to become more efficient and more innovative. The challenge for the Apprenticeships programme is therefore to improve the transparency of the pathway from Intermediate Level and Advanced Level Apprenticeships into higher learning, including but not exclusively into Higher Apprenticeships. The take-up of Apprenticeships at Advanced Level and above grew substantially in 2010Ð11: and are continuing to grow this year:12 — Advanced Level Apprenticeships (Level 3 only) grew by 75.5% in 2010Ð11 — Higher Apprenticeship starts grew by 47.8% in 2010Ð11 — Combined—Level 3+ grew by 75.1% in 2010Ð11 11 Source: London Economics (2011), Returns to Intermediate and Low-Level Vocational Qualifications. 12 Source: Individualised Learner Record, January 2012 Statistical First Release cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:48] Job: 021099 Unit: PG08 Source: /MILES/PKU/INPUT/021099/021099_w020_michelle_NAS supplementary (Schools).xml
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In focusing resources on supporting employers who want to recruit 16Ð24 year olds, we will prioritise especially those who are offering opportunities at Advanced Level and above. The National Apprenticeship Service are promoting the opportunities and benefits of progression to this level and beyond to employers, young people and their parents and will support employers to offer progression opportunities to young people who achieve their Intermediate Level Apprenticeship. 4.15 Working with the Skills Funding Agency, the National Apprenticeship Service will also prioritise allocation of available budgets through the year to providers who focus on Advanced Level Apprenticeships and support new providers such as University Technical Colleges to enter the market where they focus on the delivery of Apprenticeships at Advanced Level or above. 4.16 The Higher Apprenticeship Fund is key to our plans to expand the range of Higher Apprenticeships. Currently there are only eight Higher Apprenticeships available.13 To accelerate the development of new Higher Apprenticeships and to build capacity of the system to support the expansion of Higher Apprenticeships a discrete £25 million fund was announced in May 2011. Following a competitive tendering, £18.7 million was allocated to support the development of 28 new Higher Apprenticeship frameworks at level 4 and above with pledges from employers to make 19,000 new Higher Apprenticeship places available in sectors including construction, advanced engineering, insurance and financial services. A second invitation to bid was announced on 7 February 2012, focusing on further areas needed to support economic growth, and is expected to bring investment in the 2012Ð13 financial year to around £25 million.
Sectors 4.17 In terms of sectors, high economic returns have been demonstrated in traditional industries for Apprenticeships such as engineering, construction and advanced manufacturing, (see McIntosh (2007) A Cost- Benefit Analysis of Apprenticeships and Other Vocational Qualifications) whilst newer industries and the service sectors also offer strong opportunities, such as in digital and creative media. It is not our intention to exclude certain sectors from the Apprenticeships programme, especially where there may be employer demand. Rather, we will seek both to maximise Apprenticeship opportunities in key growth sectors and to explore how quality and returns can be further strengthened across the programme; for example, the National Apprenticeship Service will take steps where there is evidence that current frameworks are insufficiently stretching. 4.18 The National Apprenticeship Service takes a balanced approach to sectors, developing new markets whilst ensuring that existing employer demand is met and sufficient opportunities are created to ensure sufficient learners and employers can access and gain value for money from the Apprenticeship budget. The National Apprenticeship Service maintains a sector “plan” for all major sectors which is developed and deployed jointly with the leading sector bodies and employers. The National Apprenticeships Service has run sectoral marketing campaigns, created and deployed jointly with sector skills bodies, and based on an analysis of labour market intelligence for the sector and targeted to respond to the specific skills needs in that sector. This has led to tailored, sector specific marketing campaigns in the Public Sector, Construction, Logistics, Engineering, Hospitality, Retail (in 2009Ð10) and Logistics, Financial Services, Creative and Cultural, IT, Retail, Manufacturing and Engineering (in 2010Ð11). They have also used their “sales force” to broker the introduction of Apprenticeships across all of the major public service sectors from 2009 to 2011. The National Apprenticeships Service is currently working with National Skills Academies and Sector bodies such as Construction Skills to ensure that the Government’s SME incentive payments create new opportunities in the sectors where they will deliver the greatest economic impact. 4.19 As well as stimulating demand in this way, the National Apprenticeship Service also takes an active role in ensuring that the supply side is able to respond. One means of doing this is to sponsor the development of new frameworks where there is proven employer demand and demonstrable return for the state. The National Apprenticeship Service is currently using the Higher Apprenticeship Fund to develop, with sector bodies and employers, 20 new Advanced and Higher Frameworks in the following sectors: Energy Engineering (renewables) Research and Development, the Creative Industries, Emergency Healthcare, Lifelong Learning, Logistics, Insurance and Banking, Professional Services. 4.20 The Government is supporting the development of a new degree-equivalent Advanced Manufacturing Higher-Level Apprenticeship by establishing the STEM Strategy Board led by UK Commissioner Nigel Whitehead. SEMTA, Proskills and Cogent are working together with the National Apprenticeship Service and the UK Commission for Employment and Skills to produce a broad framework that will aim to grant professional recognition from the appropriate bodies.
Supporting routes into Apprenticeships for disadvantaged young people 4.21 We want to make sure that young people with the potential to rise to the challenge of an Apprenticeship get the opportunity to do so, and enjoy the rewards that ensue. Targeting young people who are NEET, or at risk of being so, helps get them started on a positive career and can save the money that would otherwise be spent on dealing with the long-term effects of unemployment, ill-health, crime etc. It is right that employers 13 Higher Apprenticeships are currently available in Accounting; Business and Administration; Contact Centre Operations; Engineering Technology; Food and Drink; IT, Software, Web & Telecoms Professionals; Providing Financial Advice and Leadership and Management. cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:48] Job: 021099 Unit: PG08 Source: /MILES/PKU/INPUT/021099/021099_w020_michelle_NAS supplementary (Schools).xml
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choose the best person for their job, and that Apprenticeship places are prized and sought-after. However we are taking action on several fronts to help young people equip themselves to compete, and to support progression into Apprenticeships through better organisational arrangements. 4.22 In August 2011 the Government launched the Access to Apprenticeships pathway within the programme, for young disadvantaged people who need a little extra boost in moving into employment as an apprentice. An alternative way of beginning an Apprenticeship, rather than a separate programme, it offers short-term help to polish skills such as English and maths, and establish a workplace track record as a keen, reliable member of staff, with the clear objective of moving participants into a paid job as quickly as possible, where they can complete their Apprenticeship in the usual way. Access to Apprenticeships will provide up to 10,000 places in the first year with a similar amount likely in following years, subject to review. 4.23 The 2011 Budget announced a £105 million boost to funding for adult Apprenticeships, which enables us to support an additional 40,000 places over the spending review period and enhance our capacity to help 19Ð24 year olds who are NEET. Apprenticeship providers with proven expertise in recruiting and succeeding with this client group were targeted for the additional funding. With this as a catalyst, the National Apprenticeship Service and the Department for Work and Pensions have developed joint working arrangements to promote awareness of Apprenticeships throughout the JCP Adviser network and encourage and support progression into Apprenticeships as the preferred next step from measures like Work Trials and Work Experience—enlisting new employers to the programme as well as additional apprentices.
Equality and diversity 4.24 The National Apprenticeship Service has responsibility for delivering the Apprenticeships programme, and increasing the numbers and diversity of Apprenticeship applicants is a priority. The National Apprenticeship Service is currently exploring new ways to promote access and success for under-represented groups. Through the Apprenticeship “offer” in the Education Act 2011 we are making sure that young people in certain groups, including young disabled people up to age 24, will have their Apprenticeship training funded as a priority, when they have found a place. 4.25 For advice on disability issues, we consult a Reference Group of external experts, including disability organisations. We have also commissioned independent research to produce practical recommendations on other ways that we could help disabled people get into Apprenticeships and complete them successfully.
5. Delivering the Programme 5.1 Working together, the Secretaries of State for BIS and for Education determine the overall strategy and the policy context, funding levels and volumes for the Apprenticeship programme as part of their responsibilities for pre- and post-19 education and training. This is co-ordinated through the single joint BIS/ DfE Apprenticeships Unit. All significant decisions affecting the programme as a whole are shared between the two Departments. John Hayes is joint Minister for Apprenticeships, also working across the two departments. So responsibility for “joining up” the programme applies at policy level as well as delivery level through the National Apprenticeship Service. 5.2 A single apprenticeships agency, formally accountable to both departments, was considered the most appropriate model to deliver an all-age programme. The information below sets out in more detail how the National Apprenticeship Service works with the two departments, and the impact of these arrangements.
Role and Responsibilities 5.3 The National Apprenticeship Service was launched in April 2009 with a remit of end-to-end responsibility for the leadership and delivery of the Apprenticeship programme, within the policy context set by BIS and DfE, and accountability for delivery of the Government’s ambitions for Apprenticeships. This includes championing Apprenticeships; engaging with employers, training providers and other key stakeholders; and ensuring Apprenticeship quality. 5.4 An annual letter to the Chief Executive of the Skills Funding Agency sets out the key priorities and the National Apprenticeship Service is required to develop and implement an annual Business Plan with specific outcomes and deliverables in line with those priorities. 5.5 The National Apprenticeship Service operates as a discrete and separate national service with its own distinctive Apprenticeship brand, housed within the Skills Funding Agency. It has its own Chief Executive directly accountable to Ministers in BIS and DfE and 320 FTE staff, 150 of which operate as a sales force across four geographical areas in England. The National Apprenticeship Service has full operational authority in order to deliver the Apprenticeship programme and leads on planning and managing Apprenticeship growth, marketing and promotion, and determines unit costs and funding rates for Apprenticeships. The Chief Executive is also responsible and accountable for the National Apprenticeship Service’s administration and running costs budget. 5.6 Since April 2011, the National Apprenticeship Service has also had responsibility and accountability for Apprenticeship funding. To ensure that employers and training providers can access a single, co-ordinated cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:48] Job: 021099 Unit: PG08 Source: /MILES/PKU/INPUT/021099/021099_w020_michelle_NAS supplementary (Schools).xml
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service across the age ranges, the National Apprenticeship Service has a Service Level Agreement with the Skills Funding Agency. The Agreement covers the provision of allocations, contracting and performance management with providers and employers for the delivery of Apprenticeships. The Skills Funding Agency provides the National Apprenticeship Service with agreed performance data to enable the National Apprenticeship Service’s monitoring and management of delivery and funding. 5.7 The National Apprenticeship Service’s Chief Executive’s performance is subject to the usual SCS Performance Management arrangements. Performance is reviewed regularly by both Departments against objectives set in an annual Performance Agreement. 5.8 The National Apprenticeship Service’s operational performance is monitored formally through quarterly Ministerial Reviews and joint BIS/DfE official level reviews. These reviews are informed by reports provided by the National Apprenticeship Service’s on delivery, performance and risks. There are a number of additional regular mechanisms for monitoring and discussing the National Apprenticeship Service performance, including the BIS Joint Management Board which receives a detailed monthly report used to inform ongoing oversight of Apprenticeship delivery and associated issues and risks; and the DfE Senior Management Review Group focused on 16Ð18 Apprenticeship delivery performance, funding and risks. 5.9 The National Audit Office’s review of adult Apprenticeships published on 1 February commented positively on the oversight and management of the Apprenticeship programme. The National Audit Office concluded that there was improved management of the Apprenticeship programme and appropriate governance arrangements for the National Apprenticeship Service on behalf of both sponsor departments.
The National Apprenticeship Service delivery record 5.10 World Class Apprenticeships: Unblocking Talent, Building Skills for All, Chapter 4—A New Delivery System14 identified functions, set out below, for the National Apprenticeship Service within its role of end-to- end responsibility for Apprenticeships. There has been significant success in setting up and building the capability of the National Apprenticeship Service, as a discrete service within the Skills Funding Agency, and there has been good progress in discharging these functions, the detail of which is being reported separately by the National Apprenticeship Service in its written evidence. The following examples provide an indication of the significant success of the National Apprenticeship Service in fulfilling its remit since its launch in 2009.
Delivery of the Government’s policy on Apprenticeships 5.11 A key priority for the National Apprenticeship Service has been to grow the Apprenticeship programme regionally, sectorally and by age group in line with Government priorities and funding, and provide leadership on the Apprenticeship agenda, working with and influencing a wide set of stakeholders. 5.12 The National Apprenticeship Service has built a dedicated sales force operating nationally, across four divisions regionally to create and boost demand for Apprenticeships and ensure quality of delivery. Employer Account Managers provide a single interface for employers, with the National Apprenticeship Service providing a bespoke service for large employers and SMEs. The National Apprenticeship Service’s work on employer engagement has supported considerable growth in the number of employers which now exceeds 100,000 in 160,000 locations across the country. 5.13 The National Apprenticeship Service’s strategy has been instrumental in the significant growth of the Apprenticeship programme with latest figures reporting record levels of Apprenticeship starts and successful completions for 2010Ð1115. Annex B sets out more detail, but for example: — 457,200 starts (all ages), a 63.5% increase on 2009/10 which in itself was an increase of 16.6% over 2008Ð09; and — 200,300 achievements (all ages), a 16.8% increase on 2009Ð10. 5.14 In line with the role envisaged, the National Apprenticeship Service has developed and delivered specific initiatives supporting new delivery models such as Apprenticeship Training Agencies (ATAs); the Apprenticeship Grant for Employers (AGE), which offered an incentive for employers to create 5,000 places for 16Ð17 year olds; and the new Access to Apprenticeships pathway to widen access for 16Ð24 year olds who have been NEET for at least 13 weeks.
Co-ordination of Apprenticeship funding 5.15 Working with the Skills Funding Agency, the National Apprenticeship Service has been successful in ensuring that employers and training providers access funding through a single co-ordinated experience regardless of the age of the learner. Effective governance arrangements and simplified data collection and management ensure that the National Apprenticeship Service and the Skills Funding Agency are able to account to BIS and DfE for volumes and make-up of starts and completions. 14 2008: http://www.bis.gov.uk/assets/biscore/corporate/migratedD/publications/W/world_class_apprenticeships 15 Source: Individualised Learner Record, January 2012 Statistical First Release cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:48] Job: 021099 Unit: PG08 Source: /MILES/PKU/INPUT/021099/021099_w020_michelle_NAS supplementary (Schools).xml
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Assessing potential providers for quality and value-for-money 5.16 A number of measures aim to ensure that all Apprenticeship providers offer quality and value for money. The Skills Funding Agency, which manages contracts with providers, can withhold payments or terminate contracts if providers are not meeting quality or other standards. Ofsted inspects the delivery of Apprenticeship programmes using the common inspection framework. The inspection framework covers the overall effectiveness, outcomes for learners, quality of teaching, learning and assessment, and effectiveness of leadership and management.
National promotion and marketing of Apprenticeships 5.17 Through its national marketing strategy, agreed with Cabinet Office, the National Apprenticeship Service has worked in partnership with UKCES, SSC/Os, Jobcentre Plus and others to raise awareness and promote the value of Apprenticeships and the Apprenticeship brand amongst employers, careers advisers, potential learners and others as a high quality career option underpinned by paid employment and opportunities for career progression. The National Apprenticeship Service launched their new marketing campaign on 9 February 2012 promoting Apprenticeships to employers, young people and parents. Comprising of direct mail, public relations and advertising the campaign focuses on four themes that define what organisers have termed “a new era for Apprenticeships”—quality, growth, pride and value. Apprenticeships.gov.uk provides a single on-line portal where employers, training providers and others can access a wide range of information and support on Apprenticeships. 5.18 The national Apprenticeship Ambassador Network and the National Apprenticeship Service’s regional Apprenticeship Ambassador Networks are supported through the National Apprenticeship Service to champion Apprenticeships with employers. National Apprenticeship Week, held annually in February, provides opportunities to promote the brand and for partner and stakeholder organisations and training providers to showcase excellence across the full range of Apprenticeship provision and opportunities. There were over 500 events held during National Apprenticeship Week 2012. The Prime Minister joined in the celebrations by visiting Apprenticeship employer Crossrail, and announcing a £6 million Higher Apprenticeship Fund, the £250 million Employer Ownership Pilot giving businesses more control of the way skills training is delivered and confirming that the £1,500 apprenticeship incentive for small firms is now available.
A national matching service for employers and potential apprentices 5.19 Apprenticeship vacancies is the National Apprenticeship Service on-line system for employers, training providers and potential applicants. The service brings together in one place the capability to advertise Apprenticeship job vacancies, identify training providers, and for potential applicants to search those opportunities and submit an application. In 2010Ð11, the number of individuals registered on the system was 477,430 and the number of vacancies advertised was 70,930.
Ownership of the Apprenticeship Blueprint and development of a model Apprenticeship Agreement 5.20 The National Apprenticeship Service has worked hand in hand with BIS/DfE on implementing the Apprenticeships provisions of the Apprenticeships, Skills, Children and Learning Act 2009 which provides statutory underpinning for the Apprenticeship programme. The National Apprenticeship Service worked closely with UKCES, the Alliance of Sector Skills Councils and training providers to reform the Apprenticeship programme and ensure that provision meets the minimum requirements of the Specification of Apprenticeship Standards for England (SASE). This involved the review and upgrading of over 200 Apprenticeship Frameworks to ensure that they met the new statutory requirements. The National Apprenticeship Service has also taken steps to ensure that provision meets the new statutory completion conditions for the award of the national Apprenticeship Certificate launched by John Hayes on 25 January 2012.
6. Conclusion 6.1 As this memorandum shows, the Apprenticeship programme is delivering results for employers and individuals across the country, and achieving strong returns on public investment. As the Apprenticeship programme looks to play an even greater role in the country’s plan for growth, we must continue to build on the significant success of the last few years and protect a well respected and valuable brand. 6.2 Based on the new strategic priorities set out in late 2011, Government together with the National Apprenticeship Service will continue to ensure that Apprenticeships are of consistently high quality and effectively meet the needs of employers and learners alike. 6.3 The departments’ commitments, covering key activities and milestones that reflect the announcements in the Autumn Statement, will continue to be published via their Business and Structural Reform plans. The National Apprenticeship Service, under a new interim Chief Executive from April, will regularly refresh and update its own business plans to ensure it reflects policy developments and priorities, and keeps delivery on track. Plans for the coming year will recognise the findings and recommendations set out in the National Audit Office’s review, published on 1 February 2012. cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:48] Job: 021099 Unit: PG08 Source: /MILES/PKU/INPUT/021099/021099_w020_michelle_NAS supplementary (Schools).xml
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6.4 Governance of the programme will also be refreshed; with a new BIS/DFE-led programme board providing strategic governance and accountability, which will sit alongside the National Apprenticeship Service’ own stakeholder advisory group. Through other learner, provider and employer groups, we will continue to listen to key stakeholders’ views on the programme. Our comprehensive research and evaluation programme for the coming year will include surveys of apprentices and employers and ensure we continue to drive best value from the programme. 6.5 In 2012 and beyond, we will continue to focus on the areas key to Apprenticeships continued success: how to get more employers to offer more Apprenticeships; how to ensure that every Apprenticeship delivers new skills employers really value; how to ensure that Apprenticeships continue to offer people, especially young people, a firm first step on the ladder that leads to fulfilling careers and further learning; and how to ensure that the money that the government spend on Apprenticeships delivers the greatest returns for individuals, employers and the economy.
ANNEX A SUMMARY OF ECONOMIC RETURNS ON APPRENTICESHIPS AND SATISFACTION LEVELS This annex summarises the available evidence on the economic benefits of apprenticeships—to learners, employers, the wider economy and the Exchequer. It explains in more detail some of the evidence referred to in the main submission.
There are substantial wage and employment returns from apprenticeships, comparing favourably with other vocational qualifications Table 1 PERCENTAGE WAGE AND EMPLOYMENT GAIN ASSOCIATED WITH EACH QUALIFICATION TYPE AS HIGHEST QUALIFICATION16 Level Qualification Type Average wage premium Average employment compared to people with premium compared to lower-level qualifications people with lower-level qualifications Level 3 Advanced Level Apprenticeship 22% 14% BTEC 20% 8% City and Guilds 15% 14% RSA 16% 6% NVQ/SVQ 10% 15% Level 2 Intermediate Level Apprenticeship 12% 10% BTEC 12% 9% City and Guilds 7% 12% RSA 14% 9% NVQ/SVQ 1% 13%
Combining these wage and employment effects suggests that the lifetime earnings benefits associated with Apprenticeships are very significant—between £48,000 and £74,000 for Intermediate Level Apprenticeships, and between £77,000 and £117,000 for Advanced Level Apprenticeships. Similarly, there are substantial benefits to the Exchequer, in the form of enhanced income tax/National Insurance receipts and reduced benefit payments. These are estimated to be between £33,000 and £48,000 for Intermediate Level Apprenticeships, and £56,000 and £81,000 for Advanced Level Apprenticeships. Compared to previous work, this latest study suggests that there may have been a divergence in the wage returns to Apprenticeships at Intermediate and Advanced Levels.
16 Source: London Economics (2011)—“BIS Research Paper Number 53, Returns to Intermediate and Low Level Vocational Qualifications, September 2011.” cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:48] Job: 021099 Unit: PG08 Source: /MILES/PKU/INPUT/021099/021099_w020_michelle_NAS supplementary (Schools).xml
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Table 2 PERCENTAGE WAGE GAIN ASSOCIATED WITH APPRENTICESHIPS, COMPARED TO PREVIOUS LITERATURE 17 Qualification Type McIntosh (2007), based London Economics (2011)— on data for 2004Ð05 based on data for 2004Ð2009 Advanced Level Apprenticeship (L3) 18% 22% Intermediate Level Apprenticeship (L2) 16% 12%
Analysis of administrative data also suggests substantial earnings and employment benefits from apprenticeships BIS has also published analysis based on the Individualised Learner Record, which provides details of an individual’s Apprenticeship, matched to HMRC earnings data and DWP benefits data, and which tracks individuals for a period of seven years after their learning.18 This also suggests substantial economic benefits from Apprenticeships: — Apprenticeships have some of the largest long-term impacts on learners, compared to other vocational qualifications. — The earnings impact of completing an Intermediate Level Apprenticeship in the first year post- acquisition stands at approximately 24% compared to a non-completer. Relative earnings benefits remain in excess of 14% compared to non-completers throughout the seven-year period. — The earnings premium associated with gaining an Advanced Level Apprenticeship stands at 25% relative to non-completers. There is some erosion of this premium over time, with the aggregate premium to Advanced Level Apprenticeships after seven years standing at 15%. — Both Advanced and Intermediate Level Apprenticeships are associated with an increase in the proportion of the year employed of between 4% and 6%. This employment effect remains relatively intact over the seven-year period. — The analysis also indicates that the acquisition of qualifications reduces benefits dependency.
Taken together, the evidence implies a strong return on government investment Research published in March 2011 suggested that Apprenticeships deliver substantial economic returns (including wage and employment returns for individuals, as well as benefits to their employers and the wider economy) for each pound of government investment: Table 3 NET ECONOMIC BENEFITS (NPV), PER QUALIFICATION ACHIEVED, PER QUALIFICATION STARTED AND PER POUND OF GOVERNMENT FUNDING Provision Type NPV per completion NPV per start (£000s) NPV per government (£000s) pound (£) Intermediate Apprenticeship 112 82 35 Work-based NVQ L2 59 43 33 Provider-based NVQ L2 31 22 7 Advanced Apprenticeship 106 75 24 Work-based NVQ L3 72 52 31 Provider-based NVQ L3 87 61 15 Basic Skills 27 20 23 Developmental Learning 25 19 28 Average* 47 35 25 *Includes all learning streams weighted by the number of qualification aims in each learning stream Source: BIS Research Report No. 38 “Measuring the Economic Impact of Further Education” The average Apprenticeship completed delivers the highest benefits of any of the qualifications considered by this work—Intermediate and Advanced Level Apprenticeships deliver net economic benefits of £112,000 and £106,000 respectively over the course of the learner’s working life. Similarly, the average Apprenticeship start (ie taking into account the fact that some are unsuccessful) deliver the highest benefits—£82,000 and £75,000 for Intermediate and Advanced Level Apprenticeships respectively. 17 Source: London Economics (2010)—BIS Research Paper Number 53, Returns to Intermediate and Low Level Vocational Qualifications, September 2011. 18 Source: London Economics (2011) The Long-Term Effect of Vocational Qualifications on Labour Market Outcomes ) cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:48] Job: 021099 Unit: PG08 Source: /MILES/PKU/INPUT/021099/021099_w020_michelle_NAS supplementary (Schools).xml
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Because Apprenticeships are more expensive to deliver, they offer a return per pound of government investment which is closer to that of other qualifications. However, they still offer very strong returns— Intermediate and Advanced Level Apprenticeships deliver economic returns of around £35 and £24 per pound of government investment respectively over the course of the learner’s lifetime—implying a return of around £28 per pound to the programme overall.
But returns vary significantly by sector… The above study did not consider returns by sector, but previous studies suggest significant variations: Table 4 BENEFITS OF APPRENTICESHIPS, BY SECTOR Wage Returns NPV per achievement NPV per government £ (£000s)* Construction 32% 157 £27 Engineering 10% 78 £12 Hospitality 13% 58 £15 Business Administration 7% 57 £15 Retail/Customer Service 0% 32 £9 * Includes wage and employment returns to individuals only. Source: McIntosh (2007) “A Cost-Benefit of Analysis and Other Vocational Qualifications”
Annex B APPRENTICESHIP COMPARISON TABLES FOR STARTS, SUCCESS RATES, SECTOR AND GEOGRAPHY Table A APPRENTICESHIP STARTS, BY LEVEL AND AGE19 Apprenticeship 2008/09 2009/10 2010/11 1-year change 2-year change Starts Intermediate (Level 2) 158,500 190,500 301,100 58.1% 90.0% Advanced (Level 3) 81,300 87,700 153,900 75.5% 89.3% Higher (Level 4) 200 1,500 2,200 47.8% - Under 19 99,400 116,800 131,700 12.8% 32.6% 19Ð24 84,700 113,800 143,400 26.1% 69.3% 25+ 55,900 49,100 182,100 270.6% 225.9% Total 239,900 279,700 457,200 63.5% 90.5%
Table B APPRENTICESHIP ACHIEVEMENTS, BY LEVEL AND AGE Apprenticeship 2008/09 2009/10 2010/11 1-year change 2-year change Achievements Intermediate (Level 2) 98,100 111,900 131,700 17.8% 34.2% Advanced (Level 3) 45,200 59,400 67,500 13.6% 49.3% Higher (Level 4) - 200 1,000 -- Under 19 67,700 73,100 83,300 14.1% 23.1% 19Ð24 57,800 64,200 77,000 20.0% 33.1% 25+ 17,900 34,300 39,000 16.6% 123.7% Total 143,400 171,500 200,300 16.8% 39.7%
Table C APPRENTICESHIP SUCCESS RATES, BY LEVEL AND AGE Apprenticeship 2008/09 2009/10 2010/11 1-year change 2-year change Success Rates Intermediate (Level 2) 70.4% 73.4% 75.3% 1.9pp 4.9pp Advanced (Level 3) 72.1% 74.8% 78.6% 3.8pp 6.5pp Higher (Level 4) - - 84.6% - - Under 19 69.6% 72.4% 74.0% 1.7pp 4.4pp 19 Note that growth at 25+ reflects the upskilling and re-skilling of that cohort of the existing workforce, which is by defintion more numerous than those aged 16Ð24. cobber Pack: U PL: COE1 [E] Processed: [05-11-2012 13:48] Job: 021099 Unit: PG08 Source: /MILES/PKU/INPUT/021099/021099_w020_michelle_NAS supplementary (Schools).xml
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Apprenticeship 2008/09 2009/10 2010/11 1-year change 2-year change Success Rates 19+ 72.2% 75.0% 78.2% 3.2pp 6.0pp Total 70.9% 73.8% 76.4% 2.6pp 5.5pp
Table D
APPRENTICESHIP STARTS, BY SECTOR SUBJECT AREA Apprenticeship 2008/09 2009/10 2010/11 1-year 2-year Starts change change Business, Administration and 64,060 76,590 133,820 74.7% 108.9% Law Retail and Commercial 48,030 61,620 102,770 66.8% 114.0% Enterprise Health, Public Services and 34,890 44,150 89,970 103.8% 157.9% Care Engineering and 36,990 37,860 48,970 29.3% 32.4% Manufacturing Technologies Construction, Planning and the 29,220 25,210 28,090 11.4% -3.9% Built Environment Leisure, Travel and Tourism 11,330 14,690 21,590 47.0% 90.6% Information and 8,820 12,570 19,520 55.4% 121.3% Communication Technology
Table E
APPRENTICESHIP STARTS, BY REGION Apprenticeship 2008/09 2009/10 2010/11 1-year 2-year Starts change change North East 17,230 18,510 34,550 86.6% 100.5% North West 36,530 47,280 78,660 66.4% 115.3% Yorkshire and The Humber 32,170 36,530 55,800 52.7% 73.5% East Midlands 22,180 24,620 40,860 65.9% 84.2% West Midlands 27,860 31,720 54,290 71.2% 94.9% East of England 21,170 23,730 39,760 67.5% 87.8% London 17,180 20,350 41,400 103.5% 141.0% South East 35,040 39,120 58,340 49.1% 66.5% South West 27,790 35,020 49,330 40.9% 77.5%
Source: Individualised Learner Record, January 2012 Statistical First Release and Supplementary Tables http://www.thedataservice.org.uk/statistics/statisticalfirstrelease/sfr_current/ 10 February 2012
Supplementary written evidence submitted by the Department for Business, Innovation and Skills and the Department for Education
DATA IN THIS MEMORANDUM IS CORRECT AT TIME OF SUBMISSION TO THE COMMITTEE.
1. Introduction
This supplementary evidence is in response to the further questions raised by the Committee at the session with officials on 21 February 2012.
2. Evidence of Retention of Apprentices By Their Employer
A survey commissioned by the former Learning and Skills Council looked at the employment status of individuals at the time of the interview (December 2008/January 2009), by when they completed their apprenticeship. The results are shown in the table below. It suggests that 38% of those who completed their apprenticeship in 2004Ð05 were still working with the same employer, compared to 65% of those who had completed in 2007Ð08. cobber Pack: U PL: COE1 [O] Processed: [05-11-2012 13:48] Job: 021099 Unit: PG08 Source: /MILES/PKU/INPUT/021099/021099_w020_michelle_NAS supplementary (Schools).xml
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Table 11: Current employment status by year of completion; percentages
Year Apprenticeship completed
2004/05 2005/06 2006/07 2007/08 All
Working with employer where did 38 48 57 65 53 Apprenticeship
Working with another employer 38 33 25 19 28
Self-employed 3 4 3 2 3
At FE College 2 2 3 2 2
At University 2 2 1 1 1
Unemployed 11 9 8 7 9
Other 5 2 3 3 3
Total 100 100 100 100 100
Unweighted base: 3,215 Apprentices who completed their Apprenticeship Statistically significant differences (p<.05, 2-tailed test) between row values or paired comparisons shown in bold
Source: http://readingroom.lsc.gov.uk/lsc/National/294468_-_Benefits_of_completing_an_apprenticeship.pdf Our current research programme evaluates retention by employer in the following surveys. A recent survey of apprentice’s pay by sector, due to be published in March 2012, asked individuals what they plan to do after they have finished their Apprenticeship. The Apprenticeship learner survey, conducted by IFF Research and due to report at the end April 2012, will ask apprentices how likely they are to continue working with the same employer for the next 2Ð3 years. And the Apprenticeship employer survey, also conducted by IFF Research and due to report at the same time, asks employers about a number of benefits derived from Apprenticeships, including whether Apprenticeships help to improve staff retention. cobber Pack: U PL: CWE1 [E] Processed: [05-11-2012 13:48] Job: 021099 Unit: PG08
Ev 154 Business, Innovation and Skills Committee: Evidence 1,300 2,070 ------90 ------40-105080 ------20506014060 Full Year Full Year Full Year Full Year Full Year Full Year Full Year Full Year Full Year Level 4 Level 4 Level 3Level 4 70Level 4 50Level 3Level 4 280Level 4 - 200Level 4 10 150Level 4 80 60 150 60 260 40 760 200 900 460 3,100 Level 4 All Levels All Levels 3,450All Levels 4,000 120 4,020All Levels 60 4,050 20,160All Levels 410 3,930 26,680All Levels 4,500 25,450 - 320 26,220All Levels 21,670 5,210 230 10 33,060 18,640 27,520All Levels 5,690 33,730 110 23,090 27,830 90 4,820 7,380 30,870 23,450 29,220 230 110 5,750 34,660 22,480 25,210 440 43,100 5,940 23,590 90 28,090 36,990 1,030 7,500 31,070 330 37,860 34,890 6,430 1,160 48,970 44,150 8,010 860 89,970 8,820 4,070 12,570 19,520 All Levels 36,900 39,680 38,340 37,160 36,430 50,740 64,060 76,590 133,820 Culture Level 3 Arts, Media and PublishingBusiness, AdministrationLaw and Level 2 Level 2 60 27,380Education and Training 29,190 10EngineeringManufacturing Technologies 28,920 Level 3 Level 2 130Health, PublicCare 27,570 Services Level and 3 9,520 and 110Information - 26,210 12,820 Level 10,490Communication 2 Technology Level 2 36,520 16,060Languages, 70 13,400 9,430 12,460 Literature - Level and 3 and 44,530 16,900 17,000 15,680 9,590 40 Level 2 1,670 53,250 Level Level 2 13,700 10 3 16,830 15,920 10,220 88,170 3,150 1,810 17,060 80 17,170 6,190 14,680 14,220 50 20,750 3,940 1,530 17,570 15,170 19,450 7,410 180 14,770 60 22,360 4,410 3,210 17,440 22,040 7,530 270 15,180 22,210 20,440 43,580 4,290 2,120 130 7,790 16,770 22,620 27,390 4,290 2,770 270 8,420 32,120 47,650 5,190 3,770 13,630 390 14,450 5,000 6,710 960 16,760 10,830 5,720 42,320 8,640 Sector Subject AreaAgriculture, HorticultureAnimal and Care Level 2 Level 2,940 2002/03 Level 2003/04 3 3,260 2004/05 3,300 500 2005/06 3,170 2006/07 740 2007/08 3,040 720 2008/09 3,470 2009/10 880 3,980 2010/11 890 4,310 1,040 4,920 1,230 1,380 2,460 Construction, Planning and theBuilt Environment Level 2 13,710 Level 3 17,770 6,450 19,780 8,910 15,280 20,580 5,670 21,220 6,390 16,890 6,940 14,760 6,610 16,110 12,330 10,450 11,980 3. APPRENTICESHIP PROGRAMME STARTS BY SECTOR SUBJECT AREA AND LEVEL (2002Ð03 TO 2010Ð11) cobber Pack: U PL: CWE1 [O] Processed: [05-11-2012 13:48] Job: 021099 Unit: PG08
Business, Innovation and Skills Committee: Evidence Ev 155 1,500 2,200 ------10 -----10 ------3010------100100200 ------Full Year Full Year Full Year Full Year Full Year Full Year Full Year Full Year Full Year Level 3Level 4 -Level 3Level 4 - - 250 Level 3Level 4 - 48,400 57,000 30 53,900 52,100 56,900 72,900 81,300 87,700 153,900 Level 4 Level 3Level 4 200 80 2,120 2,130 1,100 1,220 - - - Level 3Level 4 3,500 2,350 2,800 1,700 1,900 2,480 4,490 4,640 6,370 All Levels 167,700 193,600 189,000 175,000 184,400 224,800 239,900 279,700 457,200 All LevelsAll Levels - 49,500All Levels 54,280 -All Levels - 44,370 250 710 39,990 - 10 43,020 210 49,290 40 6,210 48,030 4,980 61,620 2,940 102,770 3,510 - - - All Levels 7,170 6,750 6,750 5,860 5,590 6,270 11,330 14,690 21,590 Science and Mathematics Level 2Total - - Level 2 10 119,300 136,600 135,100 122,800 127,400 151,800 158,500 190,500 301,100 RetailEnterprise and Commercial Level 2Unknown 42,000 Level 3 45,230 7,500 37,780 Level 9,050 2 33,500 34,930 6,590 510 39,380 6,490 130 38,300 8,100 4,090 51,850 9,910 87,080 2,850 9,740 1,820 9,770 2,280 15,700 - - - Preparation for Life and Work Level 2 Sector Subject AreaLeisure, Travel and Tourism Level 2 Level 2002/03 3,670 2003/04 4,400 2004/05 3,940 2005/06 2006/07 4,160 2007/08 3,690 2008/09 3,790 2009/10 2010/11 6,830 10,050 15,220 Source: Individualised Learner Record Notes: 1. Figures are rounded to2. the “-” nearest ten Indicates except a Totals base which value5 are of March rounded less 2012 to than the five. nearest hundred. cobber Pack: U PL: CWE1 [E] Processed: [05-11-2012 13:48] Job: 021099 Unit: PG08
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Written evidence submitted by the Association of Employment and Learning Providers Executive Summary (a) Deciding a clear, universal definition of what an Apprenticeship is must be the starting point of any review of Apprenticeships. AELP suggests: An Apprenticeship is a competence based skill development programme, designed and endorsed by employers for their employees, which combines independently accredited work based learning, off the job training and relevant experience in the job. (Paragraphs 2—4) (b) The “Employer Ownership” proposals must not be allowed to devalue the Apprenticeship brand by providing government funding for employers’ own apprenticeships that do not meet, or exceed, the current requirements of Apprenticeships in England. (Paragraph 4) (c) The National Apprenticeship Service (NAS) should be focused on marketing Apprenticeships at the national level and explaining Apprenticeships in schools to young people, their parents and teachers. They should only be dealing directly with those large national employers not already involved with Apprenticeships. (Paragraphs 5—8) (d) Funding systems must allow Apprenticeships to continue as a demand-led programme, responsive to the real-time needs of employers in a fast changing economic environment. (Paragraph 9—10) (e) The decision to make all 16Ð18 Apprenticeships last 12 months when funding is being cut by 2% will create a tension between increasing volumes and maintaining quality for this group of learners. (Paragraph 11) (f) All Apprenticeship frameworks offer high quality training. In many occupations and sectors a Level 2 Apprenticeship is the most appropriate. (Paragraph 12) (g) The vast majority of Apprenticeships offer high quality training. Concerns about a very few “short duration” Apprenticeships should be investigated and appropriate action taken where a problem is identified. The system must continue to allow exceptional learners to progress more quickly than the norm and not hold them back unnecessarily. (Paragraphs 13—14) (h) Clear principles for “who pays” for the various elements of an Apprenticeship framework are vital. Only then can proper funding levels be decided. The true costs of successfully delivering this complex programme must also be taken into account when setting rates. (Paragraphs 16—20)
Introduction 1. The Association of Employment and Learning Providers (AELP) represents the interests of a range of organisations delivering state-funded vocational learning—our members deliver in excess of 70% of all Apprenticeships. The majority of our 600+ member organisations are independent providers (from both the private and the third sectors) holding contracts with the Skills Funding Agency, with many also delivering Department of Work and Pensions (DWP) provision. In addition to these we have a number of colleges in membership, as well as non-delivery organisations such as Sectors Skills Councils (SSCs) and awarding bodies as Associate Members, which means that AELP offers a well rounded and comprehensive perspective and insight on matters relating to its remit.
AELP’s View on the Issues Being Considered by This Inquiry 2. For a serious debate on the issues it is essential that everyone involved is talking about the same thing. We believe that at present too often different people and groups mean different things when they refer to an Apprenticeship, and that it is vital first to agree a common definition of what an Apprenticeship actually is before tackling the any of the other issues. In November 2011 AELP published its policy paper, “What are apprenticeships (for)?”20 (Appendix 1), which suggests the following definition of an Apprenticeship: 3. An Apprenticeship is a competence based skill development programme, designed and endorsed by employers for their employees, which combines independently accredited work based learning, off the job training and relevant experience in the job. 4. We believe that agreeing this definition—or something very similar—would be a good starting point in the debate—indeed an essential starting point. That being the case, we are concerned that, whilst in principle we support the objectives behind the “Employer Ownership of Skills” proposals, they would inevitably increase confusion as to what exactly an Apprenticeship is if they were to allow the introduction by employers of so- called “apprenticeships with a small a” that are not subject to the same audit scrutiny, Ofsted inspection regimes, SASE compliance, etc, as other government funded Apprenticeships. Such a move would not only raise questions of accountability of public funds, but would bring a real risk that, unless they are clearly at very least meeting or better still going beyond all these existing requirements of a government funded 20 What are apprenticeships (for)?, published by AELP in November 2011, was sent in separately to the Select Committee Chairman before the formal announcement of the inquiry, in the hope that it would inform the Committee’s thinking on Apprenticeships. The paper can be found on the AELP website—www.aelp.org.uk—or via this link: What are apprenticeships (for)? cobber Pack: U PL: CWE1 [O] Processed: [05-11-2012 13:48] Job: 021099 Unit: PG08
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Apprenticeship, they could seriously damage the Apprenticeship brand, which is currently widely recognised as the gold standard in work based learning.
National Apprenticeship Service 1. AELP believes that there is a role for the National Apprenticeship Service (NAS) in the marketing of Apprenticeships at the national level. This has never been more important and there is much work that they can undertake in this area, including gathering and publicising the value Apprenticeships bring to employers. 2. NAS can play a particularly valuable role in schools, explaining to young people, their teachers and parents that Apprenticeships offer a high quality vocational training that will suit many young people better than the traditional academic route after the age of 16. This is particularly important at a time when careers guidance is being dismantled and there is a real fear amongst providers that schools will not be able to fulfil their duty to make pupils aware of all the options available, including Apprenticeships, except in a very superficial way. Provider concerns about the failings of the information, advice and guidance services now being provided are exacerbated by the failure of the funding system to factor in the additional costs now being borne by providers as a result of the cutbacks elsewhere. 3. Apart from the “general” marketing of Apprenticeships to employers, however, we do not believe that NAS should be dealing directly with the employers themselves, as that role is already undertaken very effectively by training providers (who should be rewarded for this service, enabling them to reinvest in the process). The exception to this might be engaging with those large, mainly national, employers that are not already involved in the delivery of Apprenticeships, and are not easily accessed by providers, in order to persuade them of the benefits of recruiting Apprentices. 4. Finally, defining the framework and standards of Apprenticeships is a role for employers and the awarding Sector Skills Councils (SSCs) rather than NAS, as they know what is required in their industries.
Extra Funding for Apprenticeships 1. AELP strongly supports the need to continue to maximise the funding available to support and encourage the sustainable demand for Apprenticeships. They offer a high quality vocational route, on programmes designed by employers to meet business needs, whilst at the same time ensuring Apprentices develop a range of more generic skills that will allow them to progress within the workplace. Improved funding and significantly higher profile marketing undoubtedly bring benefits to the UK economy; Apprenticeships are highly successful programmes and we should build upon them. 2. It is difficult to suggest changes to how the funds should be spent as Apprenticeships must remain a demand-led programme, responsive to the real-time needs of employers in a fast changing economic environment. 3. We are concerned, however, that funding rates for Apprenticeships have reduced substantially over the last few years and we believe that additional financial support is required for the delivery of Functional Skills at levels 1 and 2 to meet the challenge set by the Government to improve English and maths. On top of this, the Government has announced that Apprenticeships for 16Ð18 year olds must last a full 12 months just as the funding rates for this age group have been cut by 2%. There is universal agreement that young people should be receiving quality training on an Apprenticeship and that quality provision comes at a cost. At a time when the government is trying to grow the number of young people starting Apprenticeships, this rate cut will surely create a tension between increasing volumes and maintaining quality, especially if any action taken by providers to improve their efficiency is likely to be seen as reducing the quality of their Apprenticeships.
Quality of Apprenticeships 1. We believe that all levels of Apprenticeships offer high quality training which brings extensive benefits to both the employer and the Apprentice. Whilst we would encourage progression to level 3 Apprenticeships wherever possible it must be recognised that in many occupations and sectors a level 2 Apprenticeship is the most appropriate level of qualification, offering the right quality, skills, knowledge and benefits to the Apprentices and their employers. 2. There has been much publicity recently about a comparatively small number of Apprentices that are completing their framework in surprisingly quick time—so called “short duration” Apprenticeships. These stories of course need to be properly checked out and AELP fully supports the need for a thorough evidence based investigation to ascertain what is really going on in those very few cases or there is a real danger of ill- informed prejudice devaluing the excellent Apprenticeship brand. 3. What is needed are employer designed frameworks that indicate a reasonable sector “norm” but at the same time give the capacity for employers, providers and funders to understand and explain why that norm does not on occasion need to be rigorously applied. Only where an appropriate explanation is not forthcoming action should (rightly) be taken. It should be fully accepted that Apprentices—especially older ones—will often bring a range of experience and competences with them which will enable the balance of the full framework to be completed within a reduced timeframe. As within the academic route of GCSEs, A levels and degrees cobber Pack: U PL: CWE1 [E] Processed: [05-11-2012 13:48] Job: 021099 Unit: PG08
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there will always be exceptional learners who for various reasons are able to develop and succeed exceptionally quickly and such early completions should not only be permitted, but the completer’s achievements celebrated.
Apprenticeship Bonuses 1. As these have only just been introduced it is really too early to comment on how they should function and whether they encourage greater sustainable involvement of more small and medium sized businesses. It will be important to monitor their take up and evaluate their success before taking any decisions on whether other forms of incentive are needed to encourage greater take up by SMEs. It might be shown that the money could be better spent on more effective marketing and funding for more Apprenticeships. Bonuses and incentives always lead to changes in behaviour amongst employers and these changes are not always as one might wish for or anticipate and may not represent best value for money.
Current Funding Arrangements For Training of Apprentices 2. In March 2011 AELP produced two linked policy documents, “Co-funding—the underpinning principles for government funded training” (Appendix 2) and “Co-funding—how the agreed principles should be applied in practice to Apprenticeships” (Appendix 3). Again, we recommend that these two documents be considered by the Select Committee during the current inquiry.21 3. The first document aims to set out the principles for deciding who should bear the cost of training, arguing that decisions on “who pays” need to be based on a clear, transparent assessment of who benefits from the various elements of any training programme. 4. The second document focuses specifically on how the principles set out in the first document might be applied to Apprenticeships in practice. It points out that not only does each Apprenticeship framework consist of a number of mandatory requirements—usually competence based qualifications/units, basic skills (key or functional skills), technical certificates and personal learning skills—but also a range of additional elements that incur costs during the programme. These include mandatory fees (from Awarding Organisations, etc), the “Apprenticeship element” (in recognition that delivery of an Apprenticeship programme adds up to far more than the sum of its parts—this is explained more fully in the paper) and, of course, miscellaneous administration costs. 5. In practice, therefore, Apprenticeship funding must recognise the true costs of successfully delivering such a complex programme, often uniquely tailored to meet the needs of both the employer and of the Apprentice and make available appropriate levels of funding based on those individual needs. Age and experience will, of course, be factors that would need to be taken into account. We do believe, however, that those learners who are 19Ð24 who do not have a level 2 qualification or who had been unemployed at the start of the programme should have full funding and not reduced, as currently happens, by 50%. 6. One final thing that we must point out is that, in reality, current funding may not be 100% for 16Ð18 year olds and 50% for 19Ð24 year olds. If the true costs of delivering many frameworks is evaluated it is clear that employers in many sectors are substantially subsidising the training—and by many thousands of pounds in some of the more traditional sectors; a financial input that is not always recognised or acknowledged—in addition to all the “in-kind” support provided as well by all employers.
Summary 1. Whilst it is quite right and proper to hold a serious review of Apprenticeships, we all ought to recognise that the vast majority of Apprenticeships are delivered appropriately, to a high quality standard, with continually rising completion rates and Ofsted grades. There may be some areas needing attention, but these are relatively few and we must not allow them to be taken out of context and blown up out of all proportion by either the media or academia. With success rates at 76.4% our Apprenticeships are something we should be proud of and celebrate. 3 February 2012
APPENDIX 1 WHAT ARE APPRENTICESHIPS (FOR)? Summary This paper describes and celebrates the recent history of the apprenticeship brand, which no longer simply embraces first jobs for 16 year olds, but has developed to allow tens of thousands of young people to be converted from dead end “jobs without training”, and upskill adult employees to enable them to progress to higher skilled jobs/higher education, often tackling low levels of literacy and numeracy on route. 21 Both Co-funding papers can be found on the AELP website—www.aelp.org.uk—or accessed via the following links: Co-funding-the underpinning principles for government funded training Co-funding-how the agreed principles should be applied in practice to Apprenticeships cobber Pack: U PL: CWE1 [O] Processed: [05-11-2012 13:48] Job: 021099 Unit: PG08
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These all contribute hugely to the government’s skill and growth strategies. The inbuilt flexibility has developed almost individually unique programmes of variable duration, taking into account individuals’ previous qualifications, skills and experience. All apprentices finish up with higher levels of usable skill, to be put immediately to use for the benefit of themselves, their employer and the economy as a whole. None of these economically value adding attributes should be threatened or lost. The apprenticeship brand successfully embraces all these variables, but must not be damagingly stretched by making it a programme for the non-employed/NEETs. These need flexible preparatory programmes to enable them to enter employed apprenticeships when both ready and employable. — AELP members deliver 70% plus of apprenticeships. — The apprenticeship brand successfully embraces the upskilling of many different age and ability groups. — Apprenticeships are employer designed and funded, independently assessed programmes for employees. — Apprenticeships include circa 60,000 variations! (Across 230 frameworks, three levels, three age bands, differing entry levels and variable durations.) — The aim is to ensure all apprentices reach an agreed, employer designed, fit for work outcome, irrespective of the individual’s previous age, experience or qualification. — Apprenticeships are as important for upskilling the adult workforce as they are for training up school leavers. — They currently do not result in dangerous “brand stretch”. — Damaging brand stretch would occur if they embraced programmes for the unemployed/NEETs. — Such “preparatory” training should precede entry into an apprenticeship.
What Are Apprenticeships (For)? Introduction This paper attempts to describe the various situations that can be found within the apprenticeship programme. These range from brand new jobs for 16 year olds with programmes typically lasting up to three years plus to adults (over 25) who need some additional training to complete a full employer designed framework. The individuals on apprenticeships range from those who have achieved A levels to those with continuing basic literacy and numeracy problems. The common factor is that the final achievement, from a wide range of start points, is the accredited completion of a full competence based, employer designed framework. While putting to bed some myths and misconceptions about the programme since it was relaunched in 1994, the paper also reconfirms that the aim of an apprenticeship is to develop and confirm skills fit for the workplace, together with an appropriate level of related experience at that workplace. The paper argues that all of the situations described have real value for the individual, the employer and the economy and represent appropriate success within the apprenticeship brand. Arguing for a limited number, or indeed single, outcome would severely limit the successful role apprenticeships currently play in upskilling employees of all ages—an objective broadly recognised as critically important for the future wellbeing and prosperity of the country. There is currently a serious debate under way about the nature, purpose and benefits of apprenticeships, including how best to fund them. As AELP members deliver, it is estimated, in excess of 70% of all apprenticeships this paper seeks to outline a picture of what apprenticeships are (for) from the sharp end. Our members work with committed employers on a daily basis, so they are better placed than most to know what really matters. What is clear is that the apprenticeship brand incorporates a wide variety of elements that operate alongside each other using this common brand name. What is also clear is that many individuals/organisations define apprenticeships in a very narrow way, usually related to perhaps just one of these elements linked to their (narrow) experience or their individual perspective. To fully answer the question posed by this paper—”What are apprenticeships (for)?”—it is necessary to view all the separate elements before coming to a final conclusion/answer. For apprenticeships to continue growing and developing with the full support of employers, government and individuals it will be important to agree on a common, comprehensive definition which can encompass, in a sophisticated way, the totality of the different elements. AELP suggests the following: An apprenticeship is a competence based skill development programme, designed and endorsed by employers for their employees, which combines independently accredited work based learning, off the job training and relevant experience in the job. This overarching definition accommodates a wide range of separate aspects/approaches variously considered to be “priority” elements by different interests and this paper now goes on to describe these various aspects. cobber Pack: U PL: CWE1 [E] Processed: [05-11-2012 13:48] Job: 021099 Unit: PG08
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What then does an apprentice look like? Apprentices are defined by a series of variables which can almost make every apprentice unique; a fact which concerns some people who would prefer to have a simple, clear picture easily understood and recognised by all. That is not, nor should be, the case. Every apprentice however should be covered by the broad description at the core of this document. This part of this paper outlines the main variables in common use which when combined produce potentially 55,890 descriptors.
The variables Sector/occupation (230). Programme level (3). Age band (3). Previous experience/qualifications (3). Programme duration (3+). Previous employment status (3).
Sector/occupation (230) The most obvious and important variable relates to the particular occupation/sector that apprenticeship is designed for. The apprenticeship is designed by employers and currently approved by their Sector Skills Council and is focused on a programme which is fit for purpose, ie related to the operating requirements of that job within that sector (eg bricklayer, shop assistant, care worker, chef, accounting technician). The key objective must be to prepare the apprentice for the needs of the specific sector occupation, not to embark on a course of academic/theoretical training which has some unrelated comparison to apprenticeships in entirely different sectors. The core criterion is to prepare someone to meet the requirements of a real job not to attempt to artificially achieve some theoretical qualification based equality with other totally unrelated jobs. That said, achieving the required levels of literacy, numeracy and the requirements of the underpinning knowledge technical certificate will afford some careful and helpful comparisons. The critical skills competences however are not designed in themselves to be comparators.
Programme level (3) There are now effectively three levels of apprenticeship. When introduced in 1994 Modern Apprenticeships were solely at level 3. Because of the accepted need to design frameworks that develop employees for the requirements of frontline delivery—especially in the “new” service sectors (hospitality, retail, care, etc)—level 2 frameworks were soon introduced. There are currently 105 level 2 frameworks, with 117 at level 3. Most recently the coalition government has decided to support higher level frameworks (level 4 and 5) and eight have already been approved. It is anticipated that the number of higher level frameworks will rise substantially over the next few years, strengthening further the progression route into higher education.
Age band (3) The three age bands applied to government apprenticeship funding rates (16Ð18, 19Ð24, 25+) represent proxies for the volume of training that normally needs to be carried out and the contribution government is prepared to make to the total cost of a full framework. Government contributions (available for 16Ð18 year olds) are reduced by 50% for apprentices over the age of 19, representing a perceived average of the experience/competences older apprentices bring with them. For some time now there has been an unhelpful misunderstanding that the reduction in government funding at 19 was based on the need for employers to contribute more. Having been present at the meeting where the decision was made, AELP chief executive Graham Hoyle knows that was not the basis on which the 50% level was introduced in 2001; the decision was based on a government decision on “affordability” and the assumed reduced level of training required by older, more experienced employees to enable them to fully complete their apprenticeship. It also recognised the employer’s contribution towards apprenticeship costs which include income support (wages) and much on the job training, with training providers supplying the assessors and trainers with the direct industry experience that are essential for effective delivery of the full apprenticeship framework requirements. The focus on 25+ is a comparatively recent development which was designed to encourage employers to upskill part-trained adult workers in response to the Leitch recommendations for a national upskilling strategy. This last approach was accelerated by the new coalition government of 2010 who immediately closed the Train to Gain programme, instead adopting the policy strongly articulated in the Conservative policy papers of 200922 which stated, “We will offer a major boost to the provision of real apprenticeships by injecting £775 million of government funds to support real apprentices of all ages”. 22 Quote from Conservative Policy Green Paper No7, “Building skills, transforming lives, a training and apprenticeships revolution”, repeated in their paper, “Labour’s failure on skills”. cobber Pack: U PL: CWE1 [O] Processed: [05-11-2012 13:48] Job: 021099 Unit: PG08
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It is wrongly assumed that the recent dramatic increase in 25+ apprenticeship starts and completions represents only some marginal upskilling of well experienced adults firmly established in the workforce. Official figures indicate that 60% of the 25+ growth has been of adults reaching their first ever level 2—a necessary springboard for the kind of further progression that everyone recognises is vital to our national economic wellbeing. These older apprentices also represent a substantial number that have for the first time achieved the required literacy and numeracy levels, positively impacting on the successive governments’ priority to tackle this issue.
Previous experience/qualifications (3) Whilst, as explained in the previous section, the age groupings are used as a rough proxy for the level of knowledge/competence/experience already achieved by the learner it must be recognised that there are many exceptions in both directions within each age grouping. Whilst government funding assumes that 16Ð18 year olds will require all, or at least the vast majority, of the framework requirements to be accessed during the apprenticeship programme there are of course exceptions to this. These include the levels of literacy and numeracy achieved or not whilst in statutory education and indeed the range of competences and experiences— often significant—during part time employment, or for those aged 17Ð18 during previous full time employment. Nevertheless the government’s funding contribution continues to be based substantially on meeting the total potential requirement for this group. As we move through the 19Ð24, and especially into the 25+ apprenticeship arena, the level of previous experience/achievement understandably tends to grow, where sometimes “topping up” is required to enable the employee to achieve full apprenticeship completion. There still remain a substantial number of low skilled adults who continue to operate at well below their potential. For these the achievement of the apprenticeship framework represents a considerable milestone, often starting with major literacy/numeracy deficits. The government is still prepared to fully fund this basic preparatory training.
Programme duration (3+) To keep the picture as simple as possible this section suggests that apprenticeship frameworks can be split into three groups to describe their actual duration. These are up to one year, between one and two years and over two years. In reality, of course, there is a much greater range of variables as each framework can potentially be of a different duration. Increasingly employers, through their employer bodies (SSCs) are suggesting a time for completion of a full framework by a young person starting at 16 from scratch. Whilst it is helpful and will enable employers to anticipate how long it might take to achieve the levels of competence and experience required of apprentices, the previous two sections of this paper make clear that age, and more importantly previously attained skills and experience, will allow many (especially older) apprentices to reach full framework completion in shorter, often far shorter, periods of time. Such situations do not represent a weak framework or a poor quality apprenticeship; they merely confirm that the apprentices from highly variable start points have now achieved an accredited skill level which not only fits them for the particular job in hand, it confirms a jumping off point for further progression to levels 3, 4 and indeed beyond. The suggested time for the full completion of a framework can only be related to the time needed for most to complete starting from scratch. It must be right to enable individuals and their employers, with an often unique set of previous experiences and abilities, to reach the completion stage as quickly as possible. Such events should be celebrated in the same way as we regularly celebrate early GCSE, A level and higher education achievers. As a society we do not treat young A level achievers as poor quality, nor do we minimise the achievement of those reaching such independently accredited levels post retirement. The accusation that early completion of common and properly accredited levels of achievement must inevitably be due to a poor quality programme must be robustly resisted, especially when the accusation comes from traditional (academic) educationalists naturally sceptical about the value of competence based vocational achievements.
Previous employment status (3) There is apparently a misconception by some that apprenticeships solely represent job creation—a newly created job (primarily available for school leavers). This for a very long time has not normally been the case. The driving argument for the last decade or so underpinning the growth in apprenticeships has been the broadly supported desire to upskill those in work whilst of course giving young people the opportunity to move from full time education to start an apprenticeship, representing a job creation opportunity for an unemployed young person. However for many years most apprentices—all those 25+, the vast majority of 19Ð24 and indeed the significant majority of 16Ð18 year olds have been rescued from low skill employment, “jobs without training”, and converted into apprentices following a fully authorised and accredited apprenticeship framework. Pre-apprenticeship experience therefore can be described in three ways: (1) Previously unemployed. (2) Employed with a different employer. (3) Employed by the same employer (a genuine conversion). cobber Pack: U PL: CWE1 [E] Processed: [05-11-2012 13:48] Job: 021099 Unit: PG08
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All three situations are totally acceptable and there should not be any concern about any of these starting points as the objective of an apprenticeship must be to get the apprentice to the end point of achieving a full framework, irrespective of where they start. The focus must firmly stay on the outcome. Current government policy towards apprenticeships is on the right tack and it should not be blown off course by misconceptions on what the programme is about.
One Last Issue—“Brand Stretch” There is increasing unease that the apprenticeship brand is being damagingly stretched, with the danger of diminishing the respect and credibility in which the brand is widely held, but as this paper points out this is not currently a problem. In reality very few people have a comprehensive understanding of the breadth of the current apprenticeship brand as described in this paper and AELP argues that all the elements described can be legitimately accommodated within the apprenticeship brand. A real danger, however, is that apprenticeships could be wrongly positioned (stretched) to accommodate support programmes for the unemployed. However well intentioned, some political statements loosely, but inappropriately, have proposed apprenticeships as a potential remedy following the recent riots. They are also increasingly cited as a major answer to the “NEET problem”. Others complain that apprenticeships do not properly deal with (young) people with a variety of disability or other disadvantage. For most of these situations apprenticeships are indeed not the immediate solution as many potential apprentices are still too far away from meeting the often demanding selection criteria quite properly laid down by the employers who will be employing them. Many, especially young people, who have the potential to become apprentices need considerable “preparatory” training before being suitable, and indeed capable of progressing onto a full apprenticeship as outlined in the earlier definition. The scope for appropriate preparatory training is still too limited and simply suggesting that apprenticeships are the immediate answer risks stretching the brand too far, probably by putting the employed condition under threat. This would indeed cause a damaging brand stretch that could fatally wound it. This must not be allowed to happen. Association of Employment and Learning Providers November 2011
Annex 1 HISTORY Apprenticeships have always developed in response to the changing economic face of the country. With a history traced back to the 16th century and beyond, apprenticeships could never have survived without such responsive developments. As recently as the immediate post-war period of the 1950s-1960s, apprenticeships still reflected an economy substantially based on manufacturing, engineering and construction; all sectors that employed a male dominated workforce in a society where huge proportions of working age women were not active in the labour market. The short term failure of the apprenticeship model to respond to the substantial growth of the service sector and the equally dramatic increase in the female participation rate resulted (alongside a questionable understanding of the need to invest in training on the part of employers) in the near disappearance of apprenticeships. This near demise was halted by the Conservative government’s adoption and promotion (and part-funding) of Modern Apprenticeships in 1994 in response to a submission from the Training and Enterprise Council movement. The immediate results were the expansion of apprenticeship frameworks into the service sector, the opening of apprenticeships to both sexes, the removal of the “time serving” expectation and the recognition of variable normal apprenticeship periods reflecting the differing workforce skill needs of the wider range of sectors now involved. The revolution also extended the range of ages at which apprentices could start their training period. One thing that did not change, however, was the responsibility for apprenticeship framework design which was left squarely with employers—at that stage via the national training organisation network. This 1994 revolution saw significant government contributions to delivery costs for the first time, with the government as part funder understandably exercising some control over aspects of design and delivery. A major unintentional mistake at this stage was to allow the inaccurate myth to develop, that apprenticeships were a government funded programme to which employers made a (modest) contribution; a complete reversal of reality. The next major development which impacted on apprenticeships was a strengthened political determination on the part of the 1997 Labour government which led to a quadrupling of apprenticeships during their thirteen year term of office. This substantial growth was in turn supported by two other significant developments. cobber Pack: U PL: CWE1 [O] Processed: [05-11-2012 13:48] Job: 021099 Unit: PG08
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Firstly, a government inspired determination to reduce/eradicate “jobs without training” led to many employers being persuaded to “convert” many of their young employees (aged 16—24) from so-called “dead end jobs” with little or no formal training/qualifications onto a comprehensive apprenticeship framework. The second development came following the Leitch review, which stressed the vital need for the country to significantly upskill its workforce, with a particular focus on unacceptably low levels of skill and qualification throughout the adult workforce. Complementary to this picture was the already accepted policy to tackle the totally unacceptable low levels of numeracy and literacy throughout the adult working population.
The Labour government responded to these linked needs by funding adult literacy/numeracy developments for those at work, launching a Train to Gain programme targeting individual skill requirements and tentatively exploring the scope to move adults (25+) onto a full apprenticeship framework. This last approach was accelerated by the new coalition government of 2010 who immediately closed the Train to Gain programme, instead preferring an all age apprenticeship programme.
It can be seen therefore that as apprenticeships have developed rapidly in the face of ever changing economic reality the range of apprenticeships and apprentices is massively greater than ever before in our history. What has however remained at the core of apprenticeships as shown in the definition used in this paper is that apprentices are always employed. The purpose is to develop the ever higher skills that are needed, on a sector by sector basis. Finally, those skills together with appropriate experience are properly accredited through the awarding of competence based qualifications.
APPENDIX 2
CO-FUNDING—THE UNDERPINNING PRINCIPLES FOR GOVERNMENT FUNDED TRAINING
1. The Funding Approach
ALP recognises a need to shift expectations and practice about who pays for what and understand the need for a greater recognition of the benefits to both the individual and the employer of any investment in training. Independent work based learning (WBL) providers have long pointed out that when providers offer training to employers at highly subsidised rates, or even free, those employers do not value as they should the training they are undertaking. This has led to a situation where learners and employers currently do not expect to pay a realistic contribution towards the cost of their learning. ALP has long accepted the need to develop a three- way co-funding model23—this need is now even more vital than ever given the current financial difficulties.
We believe, however, that the first task in establishing the principles for co-funding must be to look carefully at the various elements contained within each training programme and identify who properly ought to be paying for each element, ie who benefits from that particular part of the training (rather than simply identifying a percentage of the cost of the overall programme that would be paid by the employer/individual). A starting point would be to identify which parts of the programme are there because of the economic and social benefits they bring—these are the ones for which the government should be prepared to pick up the cost. Only once that has been clarified it will be possible to establish how much benefit the employer and the individual derived from the training and an assessment made of what a fair contribution towards the cost from each would be.
2. The Elements of a Training Programme
Each training programme will incur costs for one or more of the following elements: — Competence based qualifications/units. — Basic skills (key/functional skills). — Technical certificates. — Mandatory fees (Awarding Organisations, etc). — The “Apprenticeship element” (in Apprenticeship programmes). — Miscellaneous administration.
Every one of these elements is necessary for the programme to be considered an Apprenticeship.24
3. The Costs of the Various Elements of a Training Programme
Having decided the elements that comprise each training programme the actual cost of the individual elements will need to be identified. It will then be possible to draw up a matrix clearly identifying who is responsible for funding which elements. 23 ALP paper—“Investing in Skills: Taking forward the skills strategy” published in October 2004. 24 The linked ALP paper—“Co-funding—how the agreed principles should be applied in practice to Apprenticeships”, published in March 2011, sets out in detail how the co-funding principles should be applied in Apprenticeships. cobber Pack: U PL: CWE1 [E] Processed: [05-11-2012 13:48] Job: 021099 Unit: PG08
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Element Who pays Competence based qualifications/units Employer and/or individual Basic skills (key/functional skills) Government Technical certificates Government and/or employers/individuals Mandatory fees (Awarding Organisations, etc) Employers/individuals primarily Apprenticeship element Government Miscellaneous administration Government/employer
In the case of 16Ð18 year old learners it would be expected that the Government would pay for all the elements as part of the “guarantee” offered to that age group. Ideally, however, a new system for co-funding would do away with age-related break points. What must not be overlooked having established “who pays” and setting co-funding levels are the considerable “in kind” contributions being made by employers throughout the training period. This has consistently been under-estimated not only by Government funders, but often even by providers themselves. Another factor that also needs to be taken into account is that with an Apprenticeship the employer also provides significant “income support” for the learner (their employee) in the form of a wage, in addition to these “in kind” contributions. Although these principles can clearly and easily be applied to an Apprenticeship programme there is no reason why they could not be applied to government funded training being undertaken by any individual whether in employment or not.
4. Summary Providers must be able rely on realistic levels of funding to cover the costs they incur in delivering government funded programmes. There is considerable scope, however, for some of these costs to be passed on to either the employer or the learner themselves. Determining who ultimately bears the cost of training must, however, be based on a clear, transparent assessment of who benefits from each element of every government funded training programme and then setting fee levels (co-funding rates) based to those assessments. Judy Brandon National Policy Manager Association of Learning Providers March 2011
Appendix 3 CO-FUNDING—HOW THE AGREED PRINCIPLES SHOULD BE APPLIED IN PRACTICE TO APPRENTICESHIPS 1. Introduction The basic principles on which co-funding should be based have been set out in ALP’s policy paper, “Co- funding—the underpinning principles for government funded training”.25 This paper seeks to set out how these principles should be applied in practice, starting with the implications for Apprenticeships
2. Apprenticeships Although in most cases it is relatively simple to break the training down into the various elements and establish an appropriate cost for each, this is not possible in the case of Apprenticeships. Here there is another factor that needs to be taken into consideration—completion of an Apprenticeship framework brings greater benefit to the learner than simply achieving the individual qualifications within the framework would have done. In other words, for an Apprenticeship the whole adds up to far more than the sum of its parts—a fact that has been recognised by the funders in the past. When the LSC developed a system of funding for Apprenticeship frameworks it was based on the cost of delivery for the average 16Ð18 learner within each framework. This created an overall funding envelope within which the provider had to deliver all of the required qualifications, ie NVQ, technical certificate and key skills. In order to pay the providers that amount of money the LSC chose to “price” each individual element and then pay the remainder of the funding within the NVQ payment. In many instances this payment was greater than the funding for an NVQ and this difference became known as the “Apprenticeship element”.
Apprenticeship frameworks Within the Apprenticeship framework there are a number of mandatory requirements and these vary between sectors, however every framework requires the learner to have achieved: 25 ALP paper: “Co-funding—the underpinning principles for government funded training”, published March 2011. cobber Pack: U PL: CWE1 [O] Processed: [05-11-2012 13:48] Job: 021099 Unit: PG08
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— Competence based qualifications/units. — Basic skills (key/functional skills). — Technical certificates. — Personal learning skills. In the new standards all of these elements are mandatory and additional requirements are set out over and above any specific requirements for the individual qualifications set by the awarding bodies. There are also additional elements incurring cost during an Apprenticeship training programme: — Mandatory fees (Awarding Organisations, etc). — The “Apprenticeship element” (mentioned earlier). — Miscellaneous administration.
Integration of qualifications The requirement to deliver a range of qualifications within a single framework means that learners are expected to manage different curriculum and learning methodologies at the same time. Providers are rarely able to deliver nice neat packages of learning with say the key skills first, followed by the technical certificate and finally the NVQ. NVQs in particular take some time to deliver so most of the qualifications have to be completed in an integrated way. This does result in more support for the learner. Very often this is the first time the learners have experienced any competence-based assessment and they are also very often learners that have not been successful at academic studies and exams.
Qualification delivery Each of the different qualifications in the framework can have a different delivery mode (one to one, classroom based, distance learning) and they probably have a different assessment methodology, which may involve formative assessment, project based assessment, written exams, multiple choice and summative assessment. These different teaching methodologies together with the different assessment processes makes this a more complex mix than if each were delivered separately.
Integration of learning and work All Apprentices are employed therefore the learning, which is already complex, has to be integrated into the day-to-day demands of a job. The learning curriculum has to be linked to the work that the Apprentice is involved in and in particular the NVQ elements of the learning require the Apprentice to be experiencing a range of activities that cover the qualification. This requires constant adjustment to the learning programme in conjunction with the learner and employer. The important role that the employer plays is vital to the successful delivery of the Apprenticeship and this three-way relationship, ie provider, learner and employer, makes this a more complex relationship than classroom delivery. In areas requiring a lot of equipment use such as engineering this integration of learning and work becomes even more difficult to manage. It is difficult enough to manage access to equipment in college based workshops but access to specific machinery in the workplace to effect the learning can be very difficult and may add time to the process.
Introduction into work For many young Apprentices this is their first job. This means the provider has to deliver the learning whilst also supporting this introduction into work, with all of the new disciplines of start and finish times, long hours and strict disciplines. This often affects the young people who find this change very difficult and it will also affect the learning. Ongoing work related issues such as performance, changing shifts and changing locations also affect the programme and providers often have to adapt the programme to suit these changes. Changes do occur in other modes of delivery but not as frequently as in the world of work. This issue is compounded by the fact that a learner may be doing several qualifications at the time of change whereas doing a single NVQ might be easy to adapt.
Success rates and timing As the Apprentice programme has to be delivered as an integrated package this puts more pressure on success rates and therefore funding. It is much more difficult to drive success rates when all learners have to pass all elements of the programme. In other circumstances if someone has a particular weakness you may replace certain elements of a learning programme. Within Apprenticeships this is not possible. There are many examples of very competent young people, where their employer is very happy with their work, passing the NVQ and technical certificate not getting through the key skills. These young people are deemed failures in the Apprenticeship environment and the provider loses the funding that they needed to give the learner the additional support. cobber Pack: U PL: CWE1 [E] Processed: [05-11-2012 13:48] Job: 021099 Unit: PG08
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Similarly to achieve timely completions it is much more difficult to predict and manage a range of qualifications to a point where they are all finished to plan as opposed to delivering the qualifications one at a time. Judy Brandon National Policy Manager March 2011
Written evidence submitted by the Association of Colleges 1. The Association of Colleges (AoC) represents Further Education, Sixth Form and Tertiary Colleges and their three million students. Colleges provide a rich mix of academic and vocational education at all levels. As independent, autonomous institutions, established under the Further and Higher Education Act 1992, they have the freedom to innovate and respond flexibly to the needs of individuals, businesses and communities.
Executive Summary — The National Apprenticeship Service has achieved many positive outcomes since its inception but it is now time to pause and consider its future role. — Additional funding for apprenticeships is welcomed but the focus should be on quality, not quantity and there should be a clearly communicated expectation from Government that employer contributions to the cost of apprenticeships should grow. — We believe that the introduction of apprenticeship bonuses will result in a growth in apprenticeship numbers but, in order to sustain this growth, the bonuses will need to remain in place for a number of years. Alternative methods of encouraging employer engagement, particularly the Apprenticeship Training Agency model, should be encouraged. — We support 100% funding for apprentices aged up to 24 in certain cases.
Introduction 2. Apprenticeships have existed for many hundreds of years but whilst some basic principles have endured, they bear little resemblance in the 21st century to the image many have of their Victorian predecessors.26 Until the 1960s apprenticeships focused on creating skilled craftsmen, from electricians to shipbuilders, but now they more often prepare men and women for the service and care sectors which are essential to the UK today. 3. Industrial change and the growth of education resulted in many apprenticeship schemes disappearing, and reduced total numbers to 53,000 in 1990. The then Conservative Government responded by developing Modern Apprenticeships in the early 1990s and, over the last two decades, there has been increasing regulation, standardisation and, more recently, expansion. Although the Labour Government of 1997Ð2010 replaced several training schemes with apprenticeships, it proved difficult in the mid-2000s to meet a target for 175,000 annual apprenticeship starts. Only in the last two years have numbers increased significantly, with 442,700 apprentices in England in 2010Ð11. 4. Many features of the current system stem from the Labour Government’s “World-Class Apprenticeships” strategy, published in January 2008,27 which had several elements: — Proposed legislation to update the status and rights of apprentices. — Creation of a National Apprenticeship Service. — Development of a Specification of Apprenticeship Standards in England (SASE).28 — Creation of an online vacancy matching service to link individuals and employers. 5. The Coalition Government has built on these foundations by giving apprenticeships a higher profile, but has left the architecture in place.
Current Form of Apprenticeships 6. Publicly-funded apprenticeships have the following features: — Taken by anyone over the age of 16. — A mix of work-based and classroom learning, amounting to at least 280 guided learning hours per year.29 At least 100 hours or 30% (whichever is the greater) must be delivered off the job. 26 The apprentice is employed, mentored in the workplace, follows a course of structured learning and is subject to a competency assessment. 27 Available at http://www.bis.gov.uk/assets/biscore/corporate/migratedD/publications/W/world_class_apprenticeships 28 The SASE sets out the minimum requirements to be included in a recognised Apprenticeship framework. Compliance with the SASE is a statutory requirement of the Apprenticeships, Skills, Children and Learning Act 2009. 29 Guided Learning Hours are defined as all times when a member of staff is present to give specific guidance towards the learning aim being studied on a programme. cobber Pack: U PL: CWE1 [O] Processed: [05-11-2012 13:48] Job: 021099 Unit: PG08
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— A broad programme including a knowledge-based qualification, a competency-based qualification and Maths and English. — Offered at three levels—Intermediate, Advanced (equivalent to A-level standard) and Higher. — Only available to someone with 30 hours or more paid employment per week, apart from some specified exceptions which have a minimum of 16 hours work. — Covered by a lower Minimum Wage of £2.60 per hour for those aged 16 to 18, or aged over 19 in their first year.
The Role of Further Education Colleges 7. There are 345 Colleges in England, some of whom have been training apprentices continuously for more than a century. Colleges play a central role in the long-established Construction and Electrical Installation apprenticeship programmes but have also worked with employers to develop apprenticeships in newer sectors such as social care. Colleges took a leading role in the public sector apprenticeship drive of 2009 and now employ more than 1,000 apprentices themselves. Our analysis of the 2010Ð11 statistics shows that Colleges are directly responsible for 25% of apprentices overall. APPRENTICESHIP STARTS 2010Ð1130 Provider Type Age 16Ð18 Age 19Ð24 Age 25+ Total College 37,660 26,390 25,490 89,540 Other Publicly funded Funded ie schools, Local 8,370 9,870 4,910 23,150 Authorities and Higher Education Private Sector Public Funded 62,000 75,410 103,700 241,120 Total 108,030 111,670 134,100 353,800 College % 35% 24% 19% 25%
How successful has the National Apprenticeship Service been since it was created in April 2009? Has it helped bridge the gap between the two funding Departments? (BIS and Department for Education) 8. The National Apprenticeship Service (NAS) was created to oversee a series of reforms and to promote apprenticeships to the public and employers. The positive aspects of its record are: — Successful delivery of the new SASE standards which, although not perfect, provide a clear and balanced basis for the programme. — Raised awareness of the renewed Apprenticeship offer, including high profile events like National Apprenticeship Week and World Skills 2011 in London. — Clear messages for employers about the benefits of taking on an apprentice. These are helpfully summarised on the NAS website.31 — A contribution to the increase in the number of apprentices of all ages. There are, however, some areas for improvement: — Following the 2007 decision to split the Department for Education and Skills into two Departments, apprenticeships for 16Ð18 year olds are becoming increasingly different from apprenticeships for those aged over 19. — There is potential for conflict between the dual role of promoter and regulator of apprenticeships. — NAS focus only on apprenticeships but other training options must not be forgotten because of a political imperative to increase apprenticeships. — There has been too much emphasis on increasing numbers through large employers, rather than on assuring quality and on reaching out to small and medium-sized enterprises (SMEs). — The vacancy matching service was expensive to establish and lacks proper rules. Applicants can make many applications and many miss interviews. Colleges report that they recruit most apprentices for employers directly and locally. — Clear statistics are needed to assess how effective NAS has been in placing apprentices and the role Colleges and other providers have played. There is no data showing how many potential apprentices are unable to find a placement because there are too few employer places. — There has not been enough progress in tackling inequality in take-up, which manifests itself in lower numbers of people applying from black and minority ethnic backgrounds and gender segregation between different apprenticeship types. For example, 98% of Dental Nurse apprentices are female and 99% of Electrotechnical apprentices are male.32Only 10% of apprentices are from minority ethnic groups.33 30 Source: Skills Funding Agency Individualised Learner Records, 2010Ð11, Periods 1 to 9. Note figures may not add up as they are rounded. 31 www.apprenticeships.org.uk 32 Apprenticeship Programme Starts by Sector Framework Code and Gender 2009/10 33 The Data Service Statistical First Release—Apprenticeship Supplementary Tables, January 2012 cobber Pack: U PL: CWE1 [E] Processed: [05-11-2012 13:48] Job: 021099 Unit: PG08
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9. NAS does not have a distinct legal status which means that it was not reviewed as part of the 2010 Public Bodies review and was, instead, subject to a more limited rationalisation exercise in 2011. We believe it would be sensible for both the DfE and BIS to agree a future role for NAS.
Is the extra funding promised by the Coalition Government necessary for apprenticeships? How can this funding best be spent? 10. The Government has taken several decisions to increase spending on apprenticeships including a £150 million increase in funding announced in May 2010 and £180 million allocated in the 2011 Budget. In addition, spending on apprenticeships from the Skills Funding Agency (SFA) budget has been protected at a time when that budget is falling. This means that the Government now spends more than £1.4 billion on apprentices with the largest element of funding going to 16Ð18 year olds. Public spending at this level is necessary to sustain the programme while maintaining quality and relevance but there are several issues to consider: — Additional spending should focus on sustaining and building high-quality apprenticeships. — The recent expansion in apprenticeships has been achieved at a time when the economy is sluggish and unemployment is high. This has resulted in some apprenticeships being seen as “back-to-work” schemes for unemployed people. It has also reinforced the practice where Government fully funds training but employers pay nothing. Given the economic situation, it would be hard to encourage some employers to pay more but companies which make large profits could do so. Ministers need to set a medium-term expectation that Government will pay less in future on the assumption that employers contribute more. — Rising unemployment made it challenging for some Colleges and training providers to use the funds available in 2010Ð11 because it is has been difficult to persuade some employers to hire apprentices. Colleges have found a solution to this through Pre-apprenticeship courses and Apprenticeship Training Agencies (ATAs) and are laying the foundations for more employer participation in future.34 There was significant investment made by the College sector in the development of sustainable ATA models as part of the 2010/11 Pilot. The evaluation highlights that the pilots were successful in attracting employers who had previously not engaged. The evaluation further recognised that the reasons for non-participation can be complex.35 — Access to Apprenticeships are too narrow in that each potential apprentice has to be linked with a specific employer, whereas generic, employment-related skills, in preparation for a work placement, might also be successful, especially in support of smaller employers.
Are apprenticeships of a high enough quality to benefit apprentices and their employers? Should there be more Level 3 apprenticeships? 11. It is essential to maintain the quality of apprenticeships to: — Protect apprentices, particularly those aged 16Ð18, who accept lower pay and forego other career choices to participate. — Maintain their credibility with employers and encourage their continuing support. — Safeguard public investment. 12. Several processes contribute to maintaining quality including the willingness of most employers to act responsibly, the rules associated with Government funding, the publication of success rates and the involvement of Ofsted. 13. Colleges have decades of experience, a track record in tackling poor quality through a rigorous Self Assessment Process and a long-term commitment to their communities and employers. The whole apprenticeship model should not be threatened because of isolated mistakes or unscrupulous behaviour among some employers. No-one should be complacent about bad practice but the key is to find the best way to minimise it. There are several further issues which deserve attention: — The Government aim to create a million extra apprentices by 2015, and to make the programme increasingly employer-friendly, has resulted in expansion which could prove damaging. There are some negative aspects of the association with short-term jobs. Meanwhile the desire of Ministers and NAS to sign up high-profile national employers has involved thousands of employees being enrolled as apprentices. — The growth of short apprenticeships in 2010 has damaged confidence in the brand and was caused by a lack of clear rules in the SASE and the decisions of some sector bodies and employers to create very short programmes. The Further Education Minister, John Hayes MP, rightly set minimum lengths for under 19 year olds.36 34 Apprenticeship Training Associations are schemes through which apprentices are employed by the Training Association and “hired out” as a flexible workforce to other employers, known as “host companies” for the work-based element of their apprenticeship. 35 NAS, Evaluation of the ATA/GTA Pilots March 2011, York Consulting 36 House of Commons Hansard 19 Dec 2011 : Column 1112 cobber Pack: U PL: CWE1 [O] Processed: [05-11-2012 13:48] Job: 021099 Unit: PG08
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— Long-established apprenticeship frameworks have seen a decline in numbers. For example Construction Apprenticeships fell by 28% between 2006Ð07 and 2010Ð11. Much of the growth has happened in new areas, for example customer service which has seen a 248% increase in the same period37. Quality systems need to treat rapid expansion as a risk. — The recent plan to give employers more control of Government skills funds may result in money going to organisations without relevant experience in training.38 We recognise the importance of gaining greater employer ownership of skills, but we believe that the Employer Ownership Pilots should involve partnerships with approved providers, Ofsted must be able to inspect quality and relevant data must be collected to assess performance. This is needed to ensure that the training genuinely improves the skills of employees and that the pilot succeeds in increasing the level of investment in quality training by employers. — The English apprenticeship system involves several different parties (NAS, Sector Skills Councils (SSCs, awarding organisations, employers and Colleges). There may be scope for one fewer by allowing Colleges to work directly with SSCs on industry-specific packages of learning which meet appropriate standards (in a revised SASE). — A Royal Society of Apprentices to be established to help promote and enhance the esteem of apprenticeships and uphold the brand. 14. Consideration should be given to a pause in the expansion in apprenticeships during which we consolidate our shared understanding of what a quality apprenticeship should be. 15. Many commentators are rightly concerned about the level at which apprenticeships are offered because the majority are at an Intermediate level (ie Level 2). This Government, like the last, has an explicit objective to expand the number of Advanced (Level 3) apprenticeships because this will achieve several objectives, not least of which is an increase in status. There are a number of issues to consider: — Apprenticeships are a mirror to their occupational sector and employers. Sectors like Care have many jobs requiring Level 2 skills and it is preferable to have trained staff in these roles. A shift to a higher skilled operation may be desirable but the apprenticeship programme cannot be the only way for organisations to make this leap. Furthermore, enrolling more Level 3 apprenticeships without real job opportunities could lead to unfulfilled expectations. — Some of the people ready and willing to gain Level 3 skills may be older, already in work and more suited to a part-time course than to becoming an apprentice. As of 2013 those aged 24 and over will have to pay full fees or take out a loan for their Level 3 course and will therefore want to take the most affordable route to their goal. The drive for more Advanced apprentices should focus on younger adults, sectors with growing employment and clear progression ladders out of education and into higher education (on a part-time basis). — Level 3 Apprenticeships need to be a credible alternative to progression from school for young people with good GCSEs. 16. As a flagship Government policy, apprenticeships must be effectively promoted as a good route for young people. The general lack of awareness and understanding of apprenticeships is a serious issue. A recent AoC survey found that only 7% of pupils are able to name apprenticeships as a postÐGCSE option compared with 63% of young people who are able to name A-Levels.39 We fear that changes in school-level careers advice, included in the Education Act 2011, will do little to improve this situation.40
Apprenticeship bonuses—how should they function? Will they encourage the involvement of more small and medium sized businesses to take on apprentices? If not what will? 17. The Government announced a number of new “bonuses” in autumn 2011 to support the employment of apprentices, including a pay subsidy of up to £2,275 for SMEs and an under 19-year-old £1,500 incentive payment.41 Both are part of the Youth Contract with the former aimed at business growth and the latter focused on reducing the number of young people not in education, employment or training (NEET). These bonuses will not apply until April 2012 and some details are still unavailable. It would be helpful to have clear messages regarding the intent of each measure. 18. Similar bonus schemes in 2009 helped recruit new employers and apprentices. The momentum was lost when the schemes ended. 19. One idea behind the new bonuses is that they will allow employers an opportunity to try out apprenticeships at a minimal cost to see if there is a “fit”. Other ways to do this are to use the Apprenticeship Training Association (ATA) model which also reduces the employment “risk” as contracts are handled by the 37 The Data Service Statistical First Release—Apprenticeship Supplementary Tables, October 2011 38 BIS Press Release, 17 November 2011 39 AoC Survey, September 2011, available at www.aoc.co.uk 40 The Education Act 2011 places a duty on schools to secure independent careers advice for their pupils but AoC raised concerns that fulfilment of that duty will not be monitored nor will the quality of the advice. 41 BIS press release, 16 November 2011 cobber Pack: U PL: CWE1 [E] Processed: [05-11-2012 13:48] Job: 021099 Unit: PG08
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ATA. The apprentice is “loaned” to a different employer to ensure compliance with the rules. Employers benefit from this arrangement and some Colleges have developed strong ATAs.
Is the current funding arrangement for training of apprentices of 100% for 16Ð18 year olds and 50% for 19Ð24 year olds appropriate? 20. The lower state contribution of 50% is right for those over 19 but many employers do not pay their 50% contribution, leaving the College or training provider with little choice but to look for significant savings or drop the provision altogether. 21. The requirements for 19+ apprenticeships are almost as onerous as for under-19s so price competition is likely to affect quality. Rates should be reviewed for some apprenticeships. There are other funding issues worth noting: — DfE’s decision to make an annual 2% cut to the 16Ð18 apprenticeship rates, to keep them in line with 16Ð18 education rates, is wrong—especially as these programmes should include Maths and English and last for a minimum of one year. — As the National Audit Office has identified, the system for setting rates is historically-based and may produce arbitrary results.42 Some employers and providers have taken advantage of over-funding in running short programmes at a profit. Meanwhile Colleges report that some rates for 19Ð24 year olds with low levels of educational achievement are too low, particularly as the employer contribution is missing. — The SFA’s plan to overhaul its funding formula in 2013Ð14 could make it uneconomic to run certain apprenticeships. The impact needs modelling. — Given the concerns on costs, employer contributions and inequality of access, it would be sensible for SFA and NAS to provide 100% funding for apprentices in the 19Ð24 age group where there is evidence of past disadvantage, for example past receipt of a relevant benefit, women in an occupation of male dominance or a member of an under-represented minority group. 9 February 2012
Written evidence submitted by Carillion plc Background Carillion welcomes the opportunity to respond to the Business, Innovation and Skills Committee— Apprenticeships inquiry. In order to put our comments into context, it may be helpful to outline briefly our role in the employment and training of apprenticeships and other trainees across the UK and Ireland. Carillion is one of the UK’s leading support services companies with a substantial portfolio of Public Private Partnership projects and extensive construction capabilities. The Group has annual revenue of over £5 billion, employs around 46,000 people and operates across the UK, in the Middle East, Canada and the Caribbean. Carillion is the largest employer of apprentices in the construction sector, with over 2,000 apprentices being trained at any one time. With a UK network of 13 construction apprentice training centres, we are also one of the largest training providers, offering courses not only to our employees, but to the wider community.43 Our innovative work with apprentices has been well documented, particularly on projects such as Library of Birmingham and our Kings Cross Construction apprenticeship programme. We have been involved in training apprentices for the construction sector for over 40 years and have been consistently recognised as one of the country’s leading construction training providers.44 In addition to operating the largest construction training network in the country, our Energy Services team have also developed a Training Academy, which was recently opened by the Skills and Lifelong Learning Minister—John Hayes.45 All our training colleges are staffed by experienced craftspeople, who are also fully trained and qualified assessors and inspectors. Carillion works closely with sector skills councils and represents the industry on the Construction Skills Board and main Training Committee, collaborating with Construction Skills in delivering the largest construction employer-based apprentice training programme in the UK. For further information on our work with Apprentices, please visit: http://www.carillionapprenticeships.com/apprenticeships_mod/about/about.asp. 42 National Audit Office Report: Adult Apprenticeships, 1 February 2012 43 Carillion, “Making tomorrow a better place”, Sustainability Report 2010, issued April 2011, P48. Copies are available on request. 44 Carillion Construction Training, Case Study, http://www.excellencegateway.org.uk/pdf/Carillion_LIG_Funded_Projects_Case_Study.pdf 45 Skills Minister helps open new Training Academy, Training Journal, 26 October 2011. http://www.trainingjournal.com/news/articles-news-skills-minister-helps-open-new-training-academy/ cobber Pack: U PL: CWE1 [O] Processed: [05-11-2012 13:48] Job: 021099 Unit: PG08
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Questions From the Inquiry: How successful has the National Apprenticeship Service been since it was created in April 2009? Has it helped bridge the gap between the two funding Departments? (BIS and Department for Education). Carillion believe that the National Apprenticeship Service (NAS) has been reasonably successful in raising the profile of apprenticeships in England and to some extent in providing a matching service linking applicants to employers. However, we have concerns that the matching system only captures a proportion of the available apprentice opportunities—as only employers are allowed to list vacancies and we believe that many employers fail to register vacancies. We would suggest that in many sectors, apprentice managing agencies, independent providers and FE Colleges have successfully recruited applicants and engaged with employers, for many years and are therefore in a position to capture these opportunities. We believe that NAS has partially bridged the gap between BIS and DfE, in that there is a common funding methodology for 16Ð18 and 19+ apprenticeships. However, there are indications that the increased influence of DfE on learning programmes for 16Ð18 year old apprentices may result in an unrealistic expectation on employers through increasingly demanding academic education content in work based learning apprenticeships. We believe that as Government seeks to increase apprenticeship numbers and success rates it will become important that pre-apprenticeship and apprenticeship funding is joined up to ensure that funding is available to support provision which assists these aims and that funding is available to all providers in a fair and equitable way.
Is the extra funding promised by the Coalition Government necessary for apprenticeships? How can this funding best be spent? Carillion is the largest employer of apprentices in the construction sector, with over 2,000 apprentices being trained at any one time.46 We have been involved in Apprenticeship programmes for over 40 years and believe that these programmes offer a genuine opportunity to turn talent into a trade. Carillion’s commitment to sustainability underpins the success of our apprenticeship programme.47 This commitment has ensured a proactive approach in engaging with Employment Access Teams on several high profile construction programmes such as the Library of Birmingham project.48 Based upon this experience, we would suggest that the extra funding promised by the Coalition Government is necessary to maintain the high quality of delivery and to encourage more employers to take on apprentices. In particular funding to encourage more SME’s to get involved in training apprentices is important, either through direct financial incentives or by providing additional funding for large employers willing to employ and train apprentices on behalf of SME’s, as was recommended in a recent CBI report. The Coalition government’s plans to pilot direct funding for employers training apprentices is interesting and may help cut unnecessary bureaucracy and create a level playing field. However, funding employers directly may not be the complete solution as there is a risk of de-stabilising the vocational training infrastructure and damaging the currently good apprenticeship success rates. In some sectors training providers add significant value by recruiting learners, engaging with employers and managing the overall programme delivery effectively.
How can this funding best be spent? We would also suggest that one of the ways that the funding can be spent is on programmes for unemployed adults. Many of these adults are harder to motivate particularly if these have been unemployed for some length of time. We work with community organisations to provide training for unemployed and disadvantaged groups, including young people who are classified as being “NEET.” Working in partnership with community organisations including the Princes Trust and Local Authorities we have helped many of these people to gain meaningful employment and training. In 2010 we delivered 36 courses to 383 unemployed people.49
Are apprenticeships of a high enough quality to benefit apprentices and their employers? Should there be more Level 3 apprenticeships? In general the content of apprenticeship frameworks are adequate and will result in high quality apprenticeships if delivered successfully. We have some concerns as to how apprenticeships should be delivered to existing workers, with some existing skills and qualifications, whilst this practice may be desirable in some 46 Carillion, “Making tomorrow a better place”, Sustainability Report 2010, issued April 2011, P48. Copies are available on request. 47 Further details on our Commitment to Sustainability are outlined in our Report—Carillion, “Making tomorrow a better place”, Sustainability Report 2010, issued April 2011. Copies are available on request. In November 2011 we also appointed our Chief Sustainability officer, Tom Robinson. 48 http://www.birmingham.gov.uk/cs/Satellite?c=Page&childpagename=Lib-Library-of-Birmingham%2FPageLayout&cid= 1223276194736&pagename=BCC%2FCommon%2FWrapper%2FWrapper 49 Carillion, “Making tomorrow a better place”, Sustainability Report 2010, issued April 2011, P48. Copies are available on request. cobber Pack: U PL: CWE1 [E] Processed: [05-11-2012 13:48] Job: 021099 Unit: PG08
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sectors the quality and reputation of apprenticeships must not be compromised. In light of the current rates of unemployment among school leavers in particular, it could be argued that apprenticeships should be restricted to new entrants into an occupation and to workers seeking to up skill into a different job role. The occupational skill needs of different sectors must be taken into account when deciding the level of apprenticeships offered. In some sector level 2 apprenticeships are the right level for a skilled, competent worker with level 3 being for a highly skilled worker and levels 4/5 reserved for supervisory and management roles. In other sectors a level 3 or 4 may be the requirement for a skilled, competent worker.
Apprenticeship bonuses—how should they function? Will they encourage the involvement of more small and medium sized businesses to take on apprentices? If not what will? The best bonus for an apprentice should be the successful achievement of an apprenticeship framework, which should lead to a sustainable career in a sector. There is a case for an achievement bonus for employers and providers to ensure that both work together to achieve a high success rate in the apprenticeships they deliver. As stated earlier, some form of financial incentive may encourage some SME’s to take on an apprentice. However, in most cases it is their unwillingness to cope with the necessary administration and controls required to deliver government funded programmes that restricts the involvement of SME’s, together with the inevitable unpredictability of work levels. As well as direct financial incentive, additional funding should be made available to large employers willing to take on the risk of employing and training apprentices, on behalf of SME’s, especially where the involvement of SME’s is encouraged in the delivery of these programmes. This type of involvement by large employers was recommended in the Governments “World Class Apprenticeships” paper as few years ago but the financial incentives suggested were never implemented. In sectors dominated by SME’s self employment, agency and migrant workers it is essential the innovative apprentice training models, ideally involving large employers, are developed and financially supported.
Is the current funding arrangement for training of apprentices of 100% for 16Ð18 year olds and 50% for 19Ð24 year olds appropriate? With young people having to stay in education or training until they are 18 it may be more appropriate for 19—21 year old apprentices to be fully funded, with funding being reduced for 22+ learners. However, the current arrangement does reflect the State’s enhanced responsibility for funding the education and training of young people. Older apprentices should have additional social and life skills, together with some additional learning and work experience, which should improve their productivity to employers and enable them to complete their training more effectively. However, where older apprentice recruits do not possess these additional skills and experience, some additional funding may be required either through effective pre-apprenticeship courses or enhanced apprentice training. 24 January 2012
Written evidence submitted by Elmfield Training Ltd 1. Context and Strategic Drivers Three strategic drivers form the context for Morrisons Apprenticeship programme: — Social mobility powered by opportunities for progression at work. — A study by the Policy Research Institute at Leeds Metropolitan University, commissioned by Morrisons, provided the evidence base and starting point for the programme. — The study identified job mobility and career development pathways as the two key factors in social mobility though work. — Economic growth dependent on skills—the Leitch review. — Level 2 target—Morrisons is well ahead of the game by qualifying 75% of its workforce to this level. — Level 3 shift of balance—Morrisons has created a platform in the workforce to progress a significant proportion of the workforce to Level 3. — Level 4 target—Morrisons is already making a direct contribution to this target through its workplace degree programme, linked to Higher Apprenticeships. — Focus on employment opportunities for young and disadvantaged. — Morrisons will create 7,000 new jobs p.a. for unemployed 16Ð24 year olds. — 1,000 new jobs will be filled by chronically socially excluded people, including the ex- homeless, over a three year period. cobber Pack: U PL: CWE1 [O] Processed: [05-11-2012 13:48] Job: 021099 Unit: PG08
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1.1 Purpose of Morrisons involvement in Apprenticeships Morrisons’ involvement in Apprenticeships is designed to produce systemic outcomes: — Support social mobility by offering all retail employees the chance to: — Gain a nationally recognised qualification with real currency in the labour market. — Tackle issues such as numeracy and literacy which are a roadblock to careers. — Create clearly structured pathways: — For new entrants and existing staff. — To develop the skills and gain the qualifications that allow them to progress. — Enable Morrisons—alongside other large companies—to play their part in: — Putting right the failures of the education system. — Proactively supporting people who are unemployed and unqualified into jobs with training, qualifications and prospects.
1.2 Ambitions over the five-year cycle Morrisons Apprenticeship programme was designed from the beginning as a five-year cycle of development, starting with a platform at Level 2 with progression opportunities built in through access to Level 3 and Higher Level Aprenticeships thereafter. Morrisons ambition over the five-year cycle is to produce the following outputs: Total To date To come Unemployed people into jobs & qualifications 50,000 26,250 23, 750 Of which, 16Ð24 year olds 25,000 12,500 12,500 New entrants gaining L2 QCF/Apprenticeship 80,000 40,000 40,000 Staff who have improved numeracy/literacy 75,000 35,000 40,000 Staff progressing to L3 QCF/Advanced Apprenticeship 20,000 - 20,000 Staff progressing to Higher Apprenticeship/FD 3,000 - 3,000 These outputs will be delivered at a significant value for money discount and will produce a sizeable socio- economic impact.
2. Key Facts About the Morrisons Apprenticeship Programme 2.1 Achievements to date Morrisons Apprenticeship programme has already delivered substantial outputs: — 100,000 employees have completed either a QCF Level 2 Retail Diploma or an Apprenticeship since the programme started in October 2009. — Over 12,500 have completed an Apprenticeship. — Over 20,000 are currently on an Apprenticeship. — Thousands of additional employees are on the programme without any government funding, including 12,000 Apprentices. — Around 60% of everyone enrolled had no previous qualification at level 2, and half of these had no prior qualification at all — 84% of everyone enrolled on the Apprenticeship needed help in numeracy and/or literacy to reach the expected standard. — More than 50,000 people have started a new job in Morrisons retail stores since the programme started. — Over half (53%) were previously unemployed. — Almost three in five (58%) are 16Ð24 year olds.
2.2 Value for money Morrisons Apprenticeship programme represents unrivalled value for money: — Morrisons spends significant amounts every year on developing its workforce, through training, coaching, mentoring and other developmental activities. — The funds provided by government via Elmfield’s contract with the Skills Funding Agency have paid for the additional activities required for the Apprenticeship. — The unit cost of the Apprenticeship in Morrisons is significantly lower than the cost of an Apprenticeship obtained at normal rates. — A significant proportion of the programme budget has been spent on improving employees’ numeracy and literacy. cobber Pack: U PL: CWE1 [E] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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2.3 Quality — The success rate for the first 12,500 employees to complete the Morrisons Apprenticeship is 83%— six points higher than the national average of 76%. — The learner satisfaction rate is above the average at 8.8 (av. 8.4). — The Apprenticeship is of an appropriate duration. — Average duration for employees already completed is 32 weeks. — Average once all have completed is expected to be 54 weeks. — Ofsted judged the programme as satisfactory overall, but good (Grade 2) for “outcomes for learners” and “capacity to improve”. — Impact on learners (Ofsted): — “gain confidence and self-esteem which enhance their work”; — “develop good work-related skills and practices”; and — “access a training programme that is well structured”. — Morrisons has won retail employer of the year awards for the last two years running, for the quality of its training.
3. How the Morrisons Apprenticeship Programme Works The Apprenticeship is a fully integrated partnership between Morrisons and Elmfield:
Process — Employees acquire the knowledge to do the job. — They develop their skills through practice at work. — Coaching and assessment ensure good performance. — Guidance and mentoring build confidence and motivation. — Numeracy and literacy problems are identified and tackled. — Skills and knowledge are accredited to national standards.
Outcome — This creates competent, confident, career-minded people.
Underpinned by — Quality assurance, certification, administration.
3.1 Apprenticeships and career pathways Morrisons Apprenticeship programme is linked to the career pathways for employees. Morrisons also supports pre-Apprenticeship employability training, to ensure that people currently unemployed or new to work have the chance to gain the necessary employability skills for a job and a career in retailing. Pre Apprenticeship Apprenticeship Higher Apprenticeship Unemployed and excluded Frontline colleague Trainee Supervisor (Intermediate Apprenticeship) (Career Development) Pre-employment experience Frontline specialist Junior Manager (Advanced Apprenticeship) (Management Training) Pre-employment training Department Manager (Further opportunities)
The programme is designed to take people: — From excluded to included. — From unemployed to employed. — From unqualified to qualified. — From shop floor to top floor.
4. Future Developments Morrisons Apprenticeships is evolving, to include: — Intermediate Apprenticeship as the normal standard for everyone coming into a frontline job in Morrisons retail stores. — Advanced Apprenticeship for everyone who progresses to a role as customer champion or supervisor. cobber Pack: U PL: CWE1 [O] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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— Higher Apprenticeships/Foundation Degrees for 18Ð24 year olds with the ability and aspiration to succeed. — Numeracy and literacy training provided for everyone who wants it and can benefit. — At least 50% of new jobs in newly-opened stores to be filled by unemployed 16Ð24 year old NEETs. — Vacancies in existing stores to be prioritised towards 16Ð24 year olds and the disadvantaged.
4.1 The socio-economic impact
Morrisons Apprenticeship programme will have a powerful impact on individuals, the economy and wider society: — Apprenticeships produce material increases in earnings for people who complete them. — The lifetime wage premium to individuals ranges from £73,000 to £103,000. — Businesses benefit from improvements in productivity, employee retention and flexibility. — The economy benefits from the multiplier effect of increased spending and tax contributions. — Society benefits from savings in welfare, health and other areas of spending, when people are in sustainable employment. To give a single example, for every 1,000 young people in the NEET group employed by Morrisons through its Apprenticeship, the country saves £56 million* in welfare costs alone. * Based on data from a 2010 study by the University of York for the Audit Commission. 23 March 2012
Supplementary written evidence submitted by Elmfield Training Ltd
Follow-up points from oral evidence session—27 March 2012
Q381 Age breakdown of Morrisons Apprenticeships
The table below shows the percentage starts by age band (funded and unfunded): 16Ð18 8% 19Ð24 30% 25+ 62%
Q384 Age breakdown of Morrisons Apprenticeships “drop-outs”
The table below shows the percentage “drop-outs” by age band: 16Ð18 8% 19Ð24 8% 25+ 19%
Q389 Structure of accreditation
Training in job skills—delivered and funded by Morrisons Induction and initial training in the knowledge and Continuous training and updating of knowledge and skills required for the job skills Coaching and mentoring to improve performance
Additional training and other inputs required to provide a nationally-accredited qualification (Apprenticeship)—delivered by Elmfield and funded through Elmfield’s contract with the Skills Funding Agency Numeracy and literacy teaching and support Additional training to meet national standards Additional coaching to support the effective application of knowledge and skills Assessment against national standards Quality assurance to underpin national accreditation
Q398 Apprenticeship funding in Scotland The table below shows the funding from Skills Development Scotland for Morrisons Apprenticeships in Scotland: cobber Pack: U PL: CWE1 [E] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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2010/11 2011/12 (to date) 16Ð19 £251,148 £418,539 20+ £147,675 £7,823
Q417 Executive pay arrangements at Elmfield Training and Skills First Awards
The total remuneration of the CEO of Elmfield Training is £84,900.
The annual salary of the CEO of Skills First Awards is £81,600.
Q426 Percentage of work that Elmfield does with awarding bodies other than Skills First Awards
31% of Elmfield Training’s activity was with awarding organisations other than Skills First Awards in the 12 months April 2011- March 2012.
Q451 Profit and loss accounts and projections for Skills First Awards
In the latest published accounts Skills First Awards made a loss of £211,000. The forecast for the next set of accounts (awaiting sign-off by PWC) is for a pre-tax profit of £649,000.
Q460 Future Jobs Fund and number of young people going on to full-time employment
£2.8 million funding from the Future Jobs Fund went into programmes in Sandwell and Stoke on Trent. 261 young people have progressed directly from these programmes into full-time employment.
Funding for training in Scotland
See answer to Q398 above. Morrisons does not pay Elmfield fees for any of the training.
Written evidence submitted by the Forum of Private Business
Introduction
The Forum of Private Business is a proactive, not-for-profit organisation providing comprehensive support, protection and reassurance to over 18,000 small and micro businesses. We add value to businesses through the collective voice for members in local, central and European government, and the provision of tailored solutions that promote business success.
Small businesses value on-the-job training, meaning apprenticeships are an attractive training method for our members, as figure 1 shows. Therefore, this is an area of interest to the Forum, and the reason why we have been working with the Department for Business, Innovation and Skills and the Department for Education to make apprenticeships and work experience more small business friendly. This paper will start by focusing on the reasons why small businesses use apprentices and will then touch on the main themes and issues raised by our members, as well as specific questions raised by the committee. Any of the research or member views referred to in this submission are from our focus groups on apprenticeships (conducted summer 2011) and our training and skills panel research reports from September 2010 and August 2011.
The Forum would be more than happy to provide oral evidence to supplement this written response. cobber Pack: U PL: CWE1 [O] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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Training Methods Used by Small Businesses
Figure 1
USAGE OF CURRENT RECRUITMENT METHODS
Apprenticeship scheme (day release and college 46% training)
Traditional apprenticeship (training on the job) 31%
Work trials (taking long-term unemployed on 30 26% day trial)
12% Work experience (to cover for staff absences)
Internship 9%
We would only consider people from other firms 21%
Do not anticipate employing 11%
0% 10% 20% 30% 40% 50%
“I have tried all of the above with a high degree of success, I prefer to use some kind of trial/internship/ apprenticeship to just taking someone on and crossing my fingers as both the employer and employee need to know that there is a good fit.” Panel member response
Our training and skills member panel results reveal government-sponsored apprenticeship schemes are the most frequently used methods of training-based recruitment, with 46% stating that they would use this method. This is even more significant as 31% of businesses would only consider employment from other firms or cannot see themselves employing in the foreseeable future.
Most panel members felt that this was the best method of recruiting as it allowed recruits to get college training as well as practical on-the-job training and enables them to make mistakes on more skilled aspects of the job away from the workplace. The college element also allows businesses a break from “babysitting” apprentices.
General on-the-job training or a more traditional apprenticeship were more useful for some, particularly where no apprenticeship scheme was available locally or for less vocational subjects where businesses felt that the workplace was the best way to get the skills needed (eg customer service/product knowledge).
However, while apprenticeships are popular methods of recruitment, some of our members have encountered problems with the quality of the training provider or the applicant. The current skills system is not meeting all of small businesses needs, an issue which must be addressed. In addition, we feel more could be done to encourage small businesses to take on more apprentices, particularly businesses that do not currently use apprenticeships as a method of recruitment.
How successful has the National Apprenticeship Service been since it was created in April 2009? Has it helped bridge the gap between the two funding Departments?
Not all of our members use the NAS to recruit apprentices, as figure 1 shows, while government apprenticeships are popular with members, they are still used by fewer than half of respondents. Some businesses prefer local training schemes, while others run their own apprenticeships, which can be tailored more to the needs of the business. However, the recent announcements by Business Secretary Vince Cable to improve the service offered by the NAS are welcome and may encourage more businesses to use the service. In particular, the commitment to advertise a vacancy within a month and to remove any health and safety requirements that go beyond national standards are welcome steps and will help small businesses who often need vacancies filled quickly with minimal disruption to the business. cobber Pack: U PL: CWE1 [E] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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Quality of Apprenticeships Are apprenticeships of a high enough quality to benefit apprentices and their employers? The issue with apprenticeships is that the quality of courses varies across the UK. The evidence from our members suggests that training provision is patchy—some have had a great experience with apprenticeships, while others have struggled to find the framework to suit their business needs. The problem for our members is that the majority of courses are not flexible, an attribute which is essential for a small firm. Businesses want courses that they can tailored to their needs, as well as the needs of the recruit. A number of businesses at the focus group sessions said they would be more likely to use apprenticeship courses provided by local colleges, if they were able to pick and chose different modules, in order to help create a worthwhile course. There is also a lack of information available to small businesses and therefore they find it difficult to navigate the complex system, which is made up of numerous courses. “The whole provision area for better this and better that is such a maze with information so complex to understand that it turns people away from looking seriously as it becomes a chore. Everything—like all Government red tape—needs to be simplified and (made) more accessible”. Panel member response For instance, our members say there is not enough information on the courses on offer or their effectiveness. Information on training and skills is not available to access all in one place. The NAS provide a useful helpline to advise businesses, but this covers mostly government apprenticeship provision and not necessarily courses offered by colleges or other providers in the local area. Small business owners are time poor so are unable to source all the relevant information. Lack of information is one of the reasons small businesses struggle to access courses in the first place, with 50% of respondents to our 2011 panel reporting that access to training and grown worse in the past 12 months. Data on the effectiveness of courses is especially important because small firms need good quality courses that increase competency. As they have fewer resources to cover an employee that is absent due to training, they cannot afford to “waste” these resources on training that does not benefit the business. Some businesses felt that training providers had a role to play in addressing this issue by taking a more proactive role in terms of interaction with the local business community. “As a managing director, I have yet to have anyone even contact me about skills education.” Panel member response If colleges had a better relationship with local businesses in the community they could let them know about the courses on offer and could potentially help to tailor apprenticeship courses to business needs. This could also increase the number of small firms taking on apprentices as the colleges would be able to outline the benefits to the business. As well as the quality of the courses and the role of training providers, there is an issue with the quality of recruits. Our panel research revealed that a large number of respondents believe young people are not adequately prepared for the workplace. Business owners were critical about the attitudes of young people and the soft skills they possessed, rather than core skills such literacy and numeracy. “The college leavers we have for hotel work have generally been working unrealistic hours at college both in time during the day and hours during the week. They also appear to have all the basic cleaning work done for them by technicians and have the attitude that they do not need to clean. This is concerning as clean premises are FUNDAMENTAL to this business.” Panel member response Owners pointed out that young people are taught no first aid or health and safety skills, and leave school sometimes lacking any common sense. This makes them very resource-intensive in both management time and for insurance purposes; one owner complained that he was prepared to manage school leavers but the cost and bureaucracy of getting them onto other people’s construction sites effectively excludes them from the workplace. Problems with time-keeping were also highlighted, with businesses indicating that class hours and a lenient view of absence have meant that school leavers are not prepared to do unsocial hours or even to get up early. Also, owners complained that crucial but menial tasks were considered by school leavers to be beneath them and in some cases they refused to do the work. Small businesses believe that part of the reason for these attitudes is that students are not trained in employability. 65% of respondents to our training and skills panel felt that a greater focus on employment skills would make them more likely to take on young people. Apprenticeship courses could tackle part of the problem by offering more basic training modules which give lessons on the importance of time-keeping and other attributes valued by employers. This would help young people to improve their employability and would aid small businesses in recruiting someone with a good attitude to the workplace. Small firms also need more support in helping to find the right applicant for the job. There are training providers that offer this service, by sifting through applicants, but this is not available to those who run their cobber Pack: U PL: CWE1 [O] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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own apprenticeship. Our members have said the Government could help by making it easier to let unsuitable recruits go, an idea which is explored in more detail in the next section.
What could be done to help small firms?
Is the extra funding promised by the Coalition Government necessary for apprenticeships? How can this funding best be spent?
In August 2011, prior to the funding announcements on apprenticeships, we asked our members what could be done to incentivise small firms to take on young people; the figures are available in figure 2.
Red tape is a frequently cited barrier to small businesses taking on young people. As discussed above, small firms would like the Government to make it easier to let new recruits go if they do not “fit” with the business. Employment law can put small firms off employing people, especially young people such as apprentices, as they are viewed as a recruitment “risk” due to lack of workplace experience. One of the focus group attendees had regularly recruited apprentices for a number of years but stopped after a bad experience with one recruit. He found it was almost impossible to let the person go and instead had to keep them on until the end of the apprenticeship. This was resource intensive to the business as the apprentice required a lot of supervision, without the return of a productive employee at the end of the training period. There should be greater support for small businesses from training providers when problems such as this arise.
22% thought health and safety was an issue. Risk assessments were cited as examples, as business feel they often lack common sense. One business owner commented during the focus group that she had been pulled up by an inspector for not having told a young person to wear flat shoes, because they could trip on the stairs if they wore a heeled shoe.
The Government has announced that all employers who go through the NAS and already meet national standards will not be required to comply with any additional health and safety rules. This measure is welcome and will help to reduce the health and safety requirements who take on apprentices through the NAS and some training providers. However, as we understand it, this measure will not apply to all training providers. Local colleges often require extra health and safety inspections to be carried out prior to placements, so we would like to see this exemption extended to all apprenticeship courses.
Figure 2
WAYS THAT WOULD ENCOURAGE SMALLER FIRMS TO TAKE ON YOUNG PEOPLE
Make it easier to let recent recruits go if they are not right for 78% the company Reduce the cost of employment for the business 74%
Greater focus on employability attributes by educators 65% (attitude, work ethic etc.)
Improved literacy and numeracy skills amongst young people 57%
Reduce legal requirements for recruiting staff 54%
Higher levels of compentency in vocational skills 52%
Funding of business to define the training employees may 39% need
Ability to use a wide range of providers to create your own 35% bespoke apprenticeships Relaxing of health and safety laws which assume young 22% people are a greater risk
More funding for colleges to undertake tailoring of courses 17%
A modular system of appenticeships to allow staff to fit study 16% around their personal life
0% 10% 20% 30% 40% 50% 60% 70% 80%
Making the system more employer-focused was a theme that emerged in both the panel research and the apprenticeships focus groups. We explored this theme in more detail in figure 3 by asking how the training and skills system could be more employer focused. cobber Pack: U PL: CWE1 [E] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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Figure 3
HOW TO MAKE THE TRAINING AND SKILLS STRUCTURE MORE EMPLOYER-FOCUSED
Provide smaller firms with vouchers to spend on 31% training for staff
Just look to tailor apprenticeship schemes more for 25% the employer
Cut employers taxes such as National Insurance and 23% let them decide what to do with their money
Cut taxes for employers and make them take greater 9% responsibility for training
4% Less red tape/employment law*
Make funding easier* 1%
Reintroduce technical colleges* 1%
Trust the Local Enterprise Partnerships to provide a 0% local business and training support solutions
They should not look for an employer driven skills 5% system, just retain the current one
0% 5% 10% 15% 20% 25% 30% 35%
Panel respondents favoured the idea of extra funding or tax breaks to incentivise small firms to take on young people. Therefore the announcement of the incentive payment for small businesses who take on apprentices is welcome. When asked about the specifics of the funding, the average level of subsidy businesses wanted to see was £1,590, with the majority of respondents feeling this would be best distributed in quarterly instalments across two years. The current funding announcement proposes a £1,500 payment for small firms with the payments split across two instalments. Although the method of payment is not the same as suggested by our members, the level of subsidy is about the same as the amount announced by government.
While this subsidy is welcome, again it applies only to businesses that go through the NAS. We feel there should be further incentives for businesses who wish to provide their own apprenticeship schemes or for those who want to conduct more general training, such as up-skilling of staff.
Recommendations (i) Make apprenticeships more small business friendly by providing more information and by breaking the scheme down into smaller chunks. 46% of our businesses have used the apprenticeship scheme to recruit and train individuals but one in four would like to see the scheme more tailored to their needs. New businesses could benefit from taking on young staff and developing them over time along the lines of a modular course. This would allow them to prioritise the skills needed for the business as well as improve staff morale. At present, members report that freelancers are preferred over apprentices. They offer more flexibility and require less training. They also do not involve NI and other costs. Agencies need to stop imposing many rules and conditions on placements to incentivise small employers to take on young apprentices. (ii) Incentivise and reward small businesses to take on young people. Although apprentices are productive and start to pay back after three years according to BIS research, this is too long for a small business, who need funding to cover training costs and some of the wages. While we welcome the announcements on apprenticeship subsidies for those that go through the NAS, we feel such incentives should be extended to those who conduct in-house training, either through subsidies or tax breaks. (iii) Work with businesses to deliver training provision that meets local needs. Whilst we call for all skills offerings to be brought together and well signposted, we also believe training providers must work with small businesses to better understand the needs of the local community and create courses which reflect the job opportunities in the labour market. A more proactive approach in reaching out to businesses will better shape the schemes they are offering and the benefits to small firms will become clearer in the process. (iv) Simplify other aspects of the training schemes. The recent announcements on reducing health and safety compliance for small businesses that employ apprentices are welcome, but this cobber Pack: U PL: CWE1 [O] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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reform should go further in cutting red tape, by reducing employment law burdens and making it easier to let unsuitable apprentices go.
As well as recommendations on apprenticeships, we believe improving the skills system more generally would help to improve the quality of training schemes. In our submission to the growth review stage two we called on the Government to make the following changes: (i) Improve the employability skills of pupils. Small businesses need employees that are, if not always job ready, then certainly workplace ready. Basic soft skills should tackle some issues but more emphasis on links between schools and businesses may help with attitudinal issues. We believe the government should reconsider its plans to remove statutory work experience for 14 to 16 year olds. The wider the variety of workplaces that a pupil visits, the better the chance they will not just find a vocation that suits them, but they will learn from direct exposure some of the soft skills needed for work. (ii) Announce a plan to bring together skill offerings in one place, on the new Business Link website, complimented by a diligent call centre that can signpost businesses to appropriate providers. Many small businesses lack the resources—both administrative and financial—to invest in a trawl of what skills training is available. Overall access to training has grown worse over the last 12 months, as business support schemes are in limbo and businesses are not making the profits to afford training schemes. Business Link and Connextions were cited by our members for offering little help when approached and with the introduction of Local Enterprise Partnerships to the already confusing landscape, employers need clear advice as to where to go for their skills’ needs. 27 January 2012
Written evidence submitted by JTL
Introduction
JTL is a Registered Charity which was established by the Electrical Contractors Association (ECA) and Unite the Union in 1989 in response to statutory changes in the Construction Industry. JTL operates within the building services engineering sector (BSE).
Since 1991 JTL has focused on the delivery of Advanced Apprenticeships and is directly responsible for the successful achievement of over 50,000 full-time Employed Status Apprenticeships, 90% of which are at Level 3, which represents over 70% of all Apprenticeships in the Sector. Whilst initially setup to provide Electrical Apprentices, since 2002 JTL has operated in the both the Plumbing and Electrical disciplines but also delivers Electrical Maintenance, Engineering Maintenance and Heating & Ventilation Apprenticeships at Level 2 and 3.
1. Success of National Apprenticeship Service (NAS)
How successful has the NAS been since it was created in April 2009? Has it helped bridge the gap between the two funding departments? (BIS & DFE)
The objectives of the National Apprenticeship Service (NAS) include increasing the number of Apprenticeship opportunities and providing a dedicated service for very large employers which JTL fully supports.
However, any focus on small and medium employers (SME’s) and individual learners is of questionable value. The vast majority of employers within the BSE sector are SME’s. Any focus from the NAS on this group would only confuse the marketplace and individuals. This role is best achieved by supporting training providers who have a wealth of experience and have built trusted relationships engaging with this type of employer.
Another area where the NAS has been weak is in the implementation of apprenticeship vacancies via its matching service. This has forced additional bureaucracy onto training providers who have also had to cope with both the simultaneous pressures of their income being cut, via funding reductions and of reduced Apprenticeship demand. In the experience of JTL, the matching service has failed to create a single employer placement in Building Services Engineering sector that would not have existed otherwise.
On a more positive note the Skills Funding Agency (SFA) on behalf of providers gives a seamless service to training providers and has hidden the multiple sources of funding involved. Whilst the NAS may have had some part in this, surely having “brokered” this arrangement, as it is now in place perhaps now is a pertinent time to fully amalgamate the NAS with the Skills Funding Agency both to simplifier bureaucracy and to cut costs? In addition, with the almost simultaneous resignation of both Chief Executives of the Skills Funding Agency and the NAS now would appear that optimum time. cobber Pack: U PL: CWE1 [E] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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2. Extra Funding Is the extra funding promised by the Coalition Govt necessary for apprenticeships? How can this funding best be spent. Yes, the extra funding is vital; especially with an economy at best stagnating. Based on JTL experience funding can best be spent on full-time employed-status Apprenticeships, led by successful training providers underpinned by an effective FE College partnership. This method of delivery offers excellent value for money in both the short (a job) and long term (more SME’s) for the economy. However, the proposed funding of work placements is open to abuse from potentially unscrupulous employers. This could be reduced by limiting the exposure of any Apprenticeship programme which is based on internships, work placements or volunteering being limited in duration to no more than four weeks. After this time, individuals should be paid for their efforts and have full employment rights. Additionally, at a time of great financial constraints funding must not be directed to “potential work” in a sector where there is no long term relationship between an individual and a specific employer in that sector. The example of Further Education networks creating a black market plumbing workforce churning out non- industry recognised plumbers is a clear example of this “potential work”. The importance of a sustainable, industry-recognised qualification (which a regulated Apprenticeship is) and that with an employer with a skilled trained workforce is particularly relevant during economic difficulties when Government funding is under intense pressure.
3. Apprenticeships—Quality Are apprenticeships of a high enough quality to benefit apprentices and their employers? Should there be more level three apprenticeships? The UK must obviously have an appropriately skilled workforce in order to compete globally. Within the sector that JTL operates, this must be industry led, whilst being robustly regulated and match job roles which exist. For example, Plumbing has Intermediate (Level 2) and Advanced (Level 3), whilst Electrical Installation in the commercial sector operates at Advanced (3) only. It should also be noted that an individual’s ability to achieve an advanced apprenticeship cannot be taken for granted and this should not prevent some individuals who may only wish to aspire to a lower level for which a role exists from obtaining that recognised qualification. As they develop as an individual their aspirations may change, but for some individuals, a two year commitment is more attractive than a more daunting four year commitment, initially. Apprenticeships, at their best are a long term commitment by an individual and an employer, where both are focused on the development of that individual, for personal gain whilst allowing the business to meet its objectives and grow. The current suite of apprenticeships in the BSE sector, allow individuals to prosper fully in the industry, whilst also permitting them to transfer and support other industries or indeed become their very own SME. Additionally, there should be more emphasis on Higher Level 4 Apprenticeships, the framework for which should be grant supported by Government, but not attract learner funding as there are clear business benefits for employers willing to participate to this level. The current low volume of individuals involved prevents anyone investing in the framework, thus the need for outside support. Further, the current Sector Skills Council within the BSE sector, Summit Skills, has been ineffective in developing a L4 apprenticeship; furthermore, it has done little to improve the quality of apprenticeships and serves only to perpetuate its own existence. Efforts to dissolve these ineffective quangos should continue, with providers who have decades of proven skills, experience and trusted engagement with employers which have culminated in the development and delivery of apprenticeships. These training providers should be able to tender for the opportunity to complete this action on behalf of the industry. There is also potential threat to the Apprenticeship brand from some training providers offering three month Apprenticeships which do not lead to a recognised qualification. Whilst the NAS is currently investigating forty-five such providers and the funding will hopefully be returned to Government this bad publicity is not helpful to robust, proven Apprenticeship frameworks that exist within the building services engineering sector and the training providers that operate within these regulations.
4. Apprenticeship Bonuses Apprenticeship Bonuses, how should they function? Will they encourage the involvement of more small and medium sized business to take on apprentices? If not what will? Apprenticeship start bonuses can have a small impact on the take up of apprenticeships, however, in JTL’s experience, on-going wage subsidies, managed by training providers has had better success. Completion bonuses have little impact on start numbers. cobber Pack: U PL: CWE1 [O] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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What is more likely to assist small and medium sized businesses involvement in Apprenticeships is via a legal obligation to do so within the awarding of public sector procurement contracts. These should specify a specific number of intermediate and advanced apprentices, each contributing at least 35 hours per week, to the delivery of that contract, irrespective of whether or not they are employed by the main contractor or a sub- contractor. Further, employers who do not have apprentices should be excluded from public sector procurement. This would have just as much effect as apprenticeship bonuses, whilst also supporting the employers who train only to have their skilled staff “poached” for their efforts. It is a disappointment to note that the Private Members Bill, the Apprenticeships and Skills (Public Procurement Contracts) Bill 2010Ð11, which received its First Reading in the House of Commons on 14 September 2010, was only due to receive its Second Reading on 20 January 2012. It is of further disappointment that the House of Commons expected to be only able, due to time constraints, to discuss the first three Private Members Bills allocated time for discussion on this day. JTL also understands that this particular Private Members Bill was number 38 on that list. This Bill would have provided a logical coordinated means to increase the number of Apprenticeships starting, particularly at a time of a lack of recruitment within the sector that JTL operates due to the economic climate. This Bill would also act as a clear example of good practice to the private sector.
5. Funding Methodology Is the current funding arrangement for training of apprentices for 100% for 16Ð18 and 50% for 19Ð24 year olds appropriate? From JTL’s experience, based on working with more than 3,000 employers the vast majority of our employers prefer to recruit 19+ Apprentices rather than 16Ð18 year old Apprentices. This empirical evidence has been borne out in Employer Surveys administered by JTL. It would appear logical for funding to mirror what employers want and an increased level of funding for 19+ age ranges could help to reduce the growing number of people not employed in education and or training (NEET) within this age range. As a result of this insufficient 19+ funding, providers subsidise their 19+ provision from their 16Ð18 provision, but this is becoming increasingly difficult as the requirements of the contracts (such as the Apprenticeship Vacancy Matching Service) increase. Gerry Low Strategic Research Officer JTL 25 January 2012
Written evidence submitted by Microsoft Microsoft welcomes the opportunity to contribute to the Business, Innovation and Skills Committee’s inquiry into apprenticeships. Given the success we have had in working with SMEs to encourage them to take on apprentices, we have used the first part of this submission to highlight the role that Microsoft and its partner network play in assisting thousands of young people to gain training and employment through IT apprenticeship schemes. In the second part of our response we have commented on the steps we feel can be introduced to ensure there are even more and better opportunities for apprenticeships in future.
About Microsoft Microsoft Ltd was formed as a UK subsidiary of Microsoft Corporation in 1982 and currently employs over 2,500 people. We have our headquarters at Thames Valley Park in Reading and satellite offices in Edinburgh and Manchester, along with Victoria—Central London. In addition, our reach extends to a partner network of 30,000 small to medium sized enterprises with whom Microsoft retains close links and provides support in terms of joint business opportunities, advice and guidance. In 2009, Microsoft launched its Britain Works Programme which is helping to get Britain back to work over a three year period. This programme utilises our unique partner network and, through a series of partnerships with non-governmental organisations (NGOs), community learning centres and public authorities, we are aiming to help half a million people into jobs in the areas of the economy that will lead the recovery. These will be digital jobs, requiring the use of computer skills, and will be in a range of industries from manufacturing to services and the IT industry itself. To date we have helped 284,000 people into work through the partnerships developed within Britain Works.
Executive Summary Through Britain Works, Microsoft introduced the Microsoft Partner Apprenticeship Programme to help more young people gain access to jobs and skills in the ICT sector and create opportunities in Microsoft’s network of 30,000 SME IT service companies in the UK. cobber Pack: U PL: CWE1 [E] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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The apprentices are trained by a Microsoft IT Academy in one of 13 training centres nationwide, and after seven to twelve months are working full time for the partner. In 2012 we plan to build on this progress and expand our apprenticeship programme even further. We support a broad range of apprenticeships at different skill areas and levels, from level 3 technical support to level 4 software development. This is a successful programme which is delivering newly qualified young people into good quality jobs. Programme completion rates are 85% and 80% of the apprentices take on newly created jobs. In 2012 we plan to build on this progress and expand our apprenticeship programme even further, as well as support and recognise the dedication of the apprentices and apprentice providers involved in the scheme through our Microsoft Apprentice of the Year Awards. Microsoft believes there should be a more flexible funding model for delivering apprenticeship programmes. Such a model would help to ensure that successful apprenticeship schemes benefited from greater direct support from Government. More broadly, this response identifies the importance of encouraging small and medium sized businesses to take on a greater number of trainees and apprentices through the provision of direct incentives. This submission also makes the case for the extension of the upper limit of funding for 18 to 19 year olds to 100%, in order to provide greater encouragement to those considering applying to an apprenticeship scheme post A levels, as well as offering their prospective employers greater certainty.
Microsoft Support for Apprentices Microsoft recognises the vital importance of work experience and training to ensure that young people acquire the skills and understanding they need in order to become effective employees. At the same time, we are also acutely aware that many young people are currently suffering disproportionately as a result of global economic uncertainty, with nearly over a million 16 to 24-year-olds in England not in education, employment or training (“NEETS”) between April and June 2011, according to recent Government figures.50 As a world leading business, we also know the significant role we can play in assisting young people to secure the skills they need through apprenticeships and workplace training. Microsoft has worked with the National Apprenticeship Service, e-Skills and the training company QA to create an apprenticeship scheme that enables young people to enter the IT industry. As part of Britain Works, we introduced the Microsoft Partner Apprenticeship Programme to support the UK Government in qualifying more young people in the ICT sector and create opportunities in Microsoft’s network of 30,000 SME IT service companies in the UK. Potential apprentices are selected by JobCentre Plus and recruited by local Microsoft partners looking to take on technical support professionals. The apprentices are trained by a Microsoft IT Academy, and after seven to 12 months are working full time for the partner. The apprenticeships are offered in technical support, technical sales and software development nationally across 13 centres. The apprenticeships are at level 3 and level 4, leading to City & Guilds qualifications and Microsoft vendor certifications. To date, 500 apprentices are in training; programme completion rates are 85% and 80% of the apprentices take on newly created jobs. In 2012 we plan to build on this progress and expand our apprenticeship programme even further, as well as support and recognise the dedication of the apprentices and apprentice providers involved in the scheme.
50 DfE/BIS NEET Statistics—Quarterly Brief—Quarter 2 2011 http://www.education.gov.uk/rsgateway/DB/STR/d001019/index.shtml cobber Pack: U PL: CWE1 [O] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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Case Study
Apprentice Biography:
Name: Tom Bensted Age: 18 years old From: Sidcup Job Title: IT apprentice at QA and Dataquest UK • Currently part of the Leaving Care programme that helps young people move from care to independent living, Tom was fostered in 2006 and does not have regular contact with his biological family. • Tom completed his A-Levels in Media Studies, ICT and Physical Education at Bexleyheath Academy in May 2011. • Without the resources to go to University, Tom would also have had to forfeit his benefits, including his flat, in order to study for a degree. • Tom began a Microsoft Apprenticeship with QA on 10th October 2011 and will complete this in 12 months time. • The apprenticeship provides a means for Tom to gain a range of qualifications as well as a job immediately upon the completion of his training. • Tom now divides his time between QA and DataQuest UK, based in Old Street, London (a Microsoft partner company) and is currently a Junior IT Apprentice on the technical Apprenticeship programme.
Responses to Specific Questions Raised 1. How successful has the National Apprenticeship Service been since it was created in April 2009? Has it helped bridge the gap between the two funding Departments? (BIS and Department for Education) Although the National Apprenticeship Service (NAS) has attracted some criticism, it has played an important role in identifying apprenticeship funding for interested employers. Microsoft has found the NAS keen to engage, but has observed that successful engagement with the body has typically relied on having good quality contacts within the organisation. Furthermore, Microsoft has identified from its contacts with its partner community that the body continues to have problems engaging with small and medium sized businesses, such as those involved in the Microsoft Partner Apprenticeship Programme. We believe that the NAS funding system is significantly weakened by the fact that the funding is allocated to providers of apprenticeship schemes at the beginning of the year, with the NAS then seeking to claw back under-spending over the next twelve months. This approach to the arrangement of payments has generated a number of challenges for providers, making it particularly difficult to find funding when establishing a new scheme during the course of the year as all funds have been already allocated.
2. Is the extra funding promised by the Coalition Government necessary for apprenticeships? How can this funding best be spent? There is a strong case for extra public funding to support apprenticeships, due to the significant investment likely to be made by the employer in order to train and prepare those participating in an apprenticeship programme. This investment by the employer has the potential to significantly offset the value gained from the new recruit and there is, therefore, a robust argument for public investment directed at helping to mitigate this. To ensure any investment in apprenticeship schemes delivers value for money, it is essential that funding be sufficiently flexible so that it can be directed towards those schemes that lead to genuine employment. At the same time, apprenticeship funding should not be invested in schemes that involve the accreditation of existing employees, as this has a limited impact on youth unemployment. Moving to a stronger focus on payment by results would have the effect of ensuring that genuine employer- led schemes with positive job-creation and employment outcomes would continue to receive funding as numbers grow and pressure on resources increases. This would serve to promote best practice and provide a further incentive for those businesses participating in the scheme. Payment by results would also limit the adoption of schemes where the apprentice is “employed” by the training provider, unless the provider was effective at identifying subsequent placements. cobber Pack: U PL: CWE1 [E] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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3. Are apprenticeships of a high enough quality to benefit apprentices and their employers? Should there be more Level 3 apprenticeships?
It is unsustainable to employ the term “apprenticeship” to cover a diverse range of schemes, from a 6- week L2 retail placement to a L6 professional engineering training programme. Much of the recent growth in apprenticeship numbers has been in L2 apprenticeships which have replaced aspects of the “Train to Gain” programme. The strong association in the public mind of apprenticeships with these types of schemes has made it difficult for Microsoft and similar companies to persuade schools and learners to consider its L3+ apprenticeship opportunities. Consequently, there is a significant risk that, over time, the apprenticeship training model will be debased to the extent that it becomes solely perceived as a low skills, short term training scheme. The welcome, though limited, funding presently available for Higher Apprenticeships does little to ameliorate this as the numbers of people trained are small relative to L2.
L2 Apprenticeships continue to provide valuable training. However, they should be rebranded as pre- apprenticeship training, to prevent the wider debasement of the apprenticeship model. At the same time, apprenticeships should be at least L3 and a greater emphasis should be placed on whether these are Advanced or Higher apprenticeships to build more recognition and quality into the system.
4. Apprenticeship bonuses—how should they function? Will they encourage the involvement of more small and medium sized businesses to take on apprentices? If not what will?
Microsoft’s experience in engaging small and medium sized businesses through its supply chain and through the Microsoft Partner Apprenticeship programme suggests that apprenticeship bonuses would significantly increase the number of businesses that would be prepared to take on apprentices.
The bonuses would assist in mitigating the engagement and on-boarding costs for small and medium sized businesses associated with supporting apprentices, especially for those businesses that have not taken on apprentices before.
It would be important to ensure that any apprenticeship bonus scheme only rewarded those businesses that saw the programme through. This could be achieved through the inclusion of a terminal bonus. However, an upfront payment should be made to the business once they have taken on an apprentice to offset the upfront costs in businesses where cash flow is a real issue.
It is amongst small and medium sized businesses that an apprenticeship bonus has the potential to make the most significant difference, driving uptake within a key sector where currently there has been less appetite than in larger organisations for taking on apprentices. As a result, the funding available through an apprenticeship bonus should be principally targeted at smaller businesses and the first apprentice taken on, with a cap on the total bonus payable.
5. Is the current funding arrangement for training of apprentices of 100% for 16Ð18 year olds and 50% for 19Ð24 year olds appropriate?
Microsoft recognises the need to fully fund training for 16Ð18 year olds and the lower level of funding for those aged 19Ð24, although this does lead to a particular challenge in making training provision for older candidates viable.
Microsoft would like to take on students into higher apprenticeships in our partner community following their A Levels. However, these students take time to receive their A level results, assess their options and apply for schemes, by which time many have turned 19 and the funding available has been reduced to 50%. We would therefore suggest that the upper limit for 100% funding being extended from 18 to 19, at least for those undertaking higher apprenticeships. 3 February 2012
Written evidence submitted by Wm Morrison Supermarkets plc
About Morrisons — Morrisons is the largest provider of apprenticeships in the UK, helping tens of thousands of people gain recognised qualifications in a range of skills from butchery to customer service. We are the UK’s fourth largest supermarket with 476 stores across the UK, employing 132,000 people. In 2012 we will create 7,500 new jobs. — We want our stores to be truly part of the communities they serve. As such, we go to great lengths to recruit local people and invest millions of pounds in training and development. We see first-hand the transformative effect of apprenticeships on individuals, and believe that having skilled colleagues serving our customers is vital to our success. cobber Pack: U PL: CWE1 [O] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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1. Summary 1.1 We are concerned about the scarring effects of high youth unemployment and the risks of young people out of work never finding jobs. We are also clear about the value of apprenticeships to individuals, customers and business. Apprenticeships are a key means to address social exclusion and mobility—transforming the prospects of people trapped in unemployment or entry level jobs with no hope of progression. 1.2 We support the increased emphasis and funding that the Government is putting behind apprenticeships. This must be part of a powerful and joined-up youth agenda, rather than the somewhat fragmented approach we have at present. Apprenticeships help young people often from challenging backgrounds progress from exclusion to inclusion, unqualified to qualified, dependent to independent. At Morrisons they can go all the way from shop floor to top floor. 1.3 Apprenticeships enable employers to hire people without any qualifications and give them the opportunity to build a career. Last year alone 2,500 Morrisons colleagues progressed from entry level jobs to junior management positions after first gaining an apprenticeship. In 2012 we will train 15,000 new apprentices in relevant skills such as retail, customer service, butchery and bakery. 1.4 The range of qualifications which constitute an apprenticeship has been expanded over time. However, there is limited awareness of the different levels of apprenticeship available, which threatens to damage public confidence in the system. Greater clarity is needed to ensure apprenticeships are transparent and well understood. 1.5 Broadly speaking we think about apprenticeships in three groups: generalist (eg retail and customer service), specialist (eg butchery and bakery) and technical (eg engineering). We believe these definitions more clearly reflect the types of apprenticeship available while continuing to indicate that they are a route to higher levels. 1.6 We recommend that the Government considers replacing the current classification of apprenticeships (“intermediate” “advanced” “higher”) with the more explanatory “generalist” “specialist” “technical”.
2. Full Response 2.1 We support the Government’s determination to increase the number of apprenticeships. Morrisons is the largest provider of apprenticeships in the UK because we believe that having skilled people serving our customers is vital to our success. We also recognise the broader role apprenticeships play to address social exclusion and provide meaningful career opportunities to those who may otherwise be shut out of the labour market. 2.2 The Skills Minister John Hayes is right when he says that the vocational route must be a highway not a cul-de-sac.51 Apprenticeships give people a chance to develop basic literacy and numeracy, which has benefits for society, while earning a decent wage. But apprenticeships do not only repair the gaps in knowledge left by the education system. They are often the first step towards the fulfilment of career goals, which can lead to positions at senior levels in our business. 2.3 Morrisons is increasing the number of apprenticeships available and expanding access to them. A recent report by the Association of Chief Executives of Voluntary Organisations (ACEVO) noted that apprenticeships are often out of reach to the most disadvantaged (who stand to gain most) because they are unable to live off the £2.60 apprentice minimum wage.52 Morrisons recognises this problem. We pay all of our apprentices at least the national minimum wage (two-and-a-half times more than the apprentice minimum wage) and are investing in pre-employment training to help get people work ready. 2.4 The ACEVO report is right to warn of the scarring effects of youth unemployment and the risks of young people out of work never finding jobs. By increasing the availability and accessibility of apprenticeships, we are helping to move individuals, and in some cases whole communities, from exclusion to inclusion. 2.5 With 30% of senior management having originally started working for Morrisons without a university qualification, we have a heritage of taking employees’ careers from the shop floor to the top floor of the company. We will be working to ensure that our current generation of apprentices build long term careers in the business. 2.6 We understand the value of our apprenticeships (the majority of which are Level 2 or “intermediate”) to individuals, to customers and to our business. As the recent National Audit Office report identifies, apprenticeships offer good value for money and are associated with higher earnings.53 We believe these benefits justify the increased spending on apprenticeships by Government and employers. 2.7 The strong focus on apprenticeships must form part of a joined-up approach to the connected challenges of youth unemployment and social exclusion: one youth agenda rather than the somewhat fragmented approach we have at present. These are major issues facing Britain which have eluded traditional solutions. Modern 51 ippr, Rethinking Apprenticeships, November 2011 52 ACEVO, Youth unemployment: the problem we cannot afford, 6.02.12 53 National Audit Office, Adult Apprenticeships, 1 February 2012 cobber Pack: U PL: CWE1 [E] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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apprenticeships, which are accessible to all and offer the first steps towards meaningful careers are key to tackling unacceptable levels of unemployment, particular among young people. 2.8 Morrisons has responded to the Government’s broadening of what constitutes an apprenticeship by increasing the number of apprenticeships we offer. These changes in Government policy have led to a degree of confusion over what “apprenticeship” actually means. Some argue that apprenticeships should only be used to provide a technical training in a discipline such as engineering and are either ignorant or dismissive of the benefits (and need) of more general training. 2.9 “Apprenticeship” is not a blanket term for a specific level of training. There are different categories of apprenticeship which we believe need to be better communicated in order to retain public confidence in the system and to make that system more accessible to learners. 2.10 Broadly speaking we think about apprenticeships in three groups: — Technical—for example technical apprenticeships in engineering. These require a high level of specialist skill, provide training to do a technical type of role and are often completed over a longer timeframe. — Specialist—for example a craft apprenticeship in butchery. These are aimed at people who want to build on their knowledge of working in a sector by developing the skills to perform a specialist role. — Generalist—for example an entry level or “frontline” apprenticeship in customer service. These are aimed at people who need basic training in the skills needed to perform the role. 2.11 We recognise that the Government has already taken steps to sharpen the branding so that it is clear that an apprenticeship at Level 2 is an intermediate apprenticeship.54 However, we believe that there is scope for further improvement, and that the definitions identified above more clearly reflect the types of apprenticeships that are available while continuing to indicate that they are a route to higher levels. 2.12 As such, we recommend that the Government considers replacing the current classification of apprenticeship (“intermediate” “advanced” “higher”) with “generalist” “specialist” “technical”. These more explanatory definitions will improve public understanding of the system and help to preserve the integrity of apprenticeships, which we care so passionately about. Norman Pickavance Group Human Resources Director 13 February 2012
Supplementary written evidence submitted by WM Morrison Supermarkets plc FOLLOW-UP TO THE EVIDENCE SESSION HELD ON 27 MARCH 2012 Norman Pickavance, Group HR Director, WM Morrison Supermarkets plc promised to come back to the Committee on one point, as per the exchange below. Q329 Mr Binley: Mr Pickavance, how many of your apprentices were on a Train to Gain scheme? Norman Pickavance: I am not sure I could answer that immediately. Q330 Mr Binley: Could you come back to us with the information? Norman Pickavance: Yes. The answer is that 2,232 were on Train to Gain and have progressed to an Apprenticeship. David Scott Head of Policy Wm Morrison Supermarkets plc
Written evidence submitted by the National Apprenticeship Service (NAS) SUMMARY OF ACHIEVEMENTS Since its launch in April 2009, the National Apprenticeship Service has been working to deliver a range of activities to support the Government’s vision for Apprenticeships. In our first three years we have seen: More new employers In 2010Ð11 there were 50,000 more workplaces with Apprentices than in 2009Ð10 (based upon internal data). More Apprentices There has been an unprecedented growth in the number of Apprenticeship starts with 91% more Apprenticeships over the past two years including 49% more 16Ð24 year old apprentices. 54 ippr, Rethinking Apprenticeships, November 2011 cobber Pack: U PL: CWE1 [O] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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More Advanced and Higher level Apprentices In 2010Ð11 there was faster growth for Advanced Apprentices than Intermediate and establishment of a Higher Apprenticeships programme. More Success Success rates continue to rise to record levels with a new record overall success rate of 76.4% in 2011Ð12 compared to 70.9% in 2008Ð9. More outstanding Apprenticeship providers were considered good or outstanding by Ofsted following inspection. More employer support NAS has now supported 75,000 employers to find out about Apprenticeships since its inception and has become a well known and trusted support service. Our work with employers generated 78,000 Apprenticeship opportunities in 2010Ð11 (based upon internal data). More success at international skills competitions Team UK, most of whom are Apprentices, had an outstanding performance at World Skills London. Finishing fifth place overall, the Team won five gold, two silver and six bronze, and half the team won medallions of excellence, our best performance ever. More growth in London In 2010Ð11 Apprenticeships in London grew by 103%, including a 35% increase in 16Ð18 year olds (national increase 13%) transforming the long term position of Apprenticeship under achievement in the capital. More Opportunities On-line In 2010Ð11 477,430 individuals activated an Apprenticeship account enabling them to use the on-line system and apply for Apprenticeships. This is 185,340 (or 63%) higher than in the previous year. The Apprenticeship website now attracts 100,000 visits per week (website data based upon internal data) More Ambassadors In addition to the highly influential national Apprenticeship Ambassadors Network, chaired by Sir Roy Gardner, there are now influential groups of employers in every region of England committed to being ambassadors for Apprenticeships. NAS introduced a new network of young Apprentice ambassadors in 2010 and they are used to inform and motivate young people, teachers and parents to the opportunities that Apprenticeships present. More good news stories Apprenticeships featured in thousands of good news stories throughout the year with Apprenticeship Week, World Skills London and our 100 in 100 campaigns being particularly notable. Our new campaign features six current/past Apprentices.
Introduction The National Apprenticeship Service was created in April 2009 following the publication of World-Class Apprenticeships: Unlocking Talent, Building Skills for All. This Government strategy document analysed the barriers to growth in high quality Apprenticeships. It concluded that there was an urgent need for a dedicated service that would drive the expansion of Apprenticeship opportunities. The new National Apprenticeship Service was given end to end accountability for the Apprenticeship programme with a dedicated field force to support employers. Working in partnership with employers, providers and other key stakeholders its leadership and activity would be solely focussed on the delivery of an expanded, high quality Apprenticeship programme in England. The initial aim was to achieve further expansion in Apprenticeship numbers, including significant growth for those aged 25 and over; as well as growth at Level 3 in line with the skills needs projected in Lord Leitch’s skills review. This remit has broadened over time and this is reflected here. This note to the BIS Select Committee addresses the first question “how successful has the National Apprenticeship Service been since it was created in April 2009”. In doing so it examines progress against the initial expectations of the NAS in World Class Apprenticeships and also the subsequent additional requirements of the Coalition Government. Our submission uses the original expectation of the NAS as its structure as follows: — Strengthening Apprenticeships. — A new delivery system. — Boosting employer supply. — Culture change around the value of Apprenticeships. — Addressing inequality. cobber Pack: U PL: CWE1 [E] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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Plus it also embraces the more recent Coalition Government expectations and announcements made in the November 2011 Apprenticeship Summit, including:
A renewed focus on quality: To ensure that the maximum return is achieved for the government investment in Apprenticeship a renewed focus on Apprenticeship quality has been announced. Actions include: — NAS to introduce a compulsory 12 months duration for 16Ð18 year olds and remove any sub standard or overly short duration provision for adults. — NAS to require all Apprenticeship providers to offer Functional skills in English and Maths at level 2 to all intermediate apprentices, and publish their progress towards achieving this. — NAS to continue to Increase Minimum Levels of Performance MLP to ensure that success rates continue to rise. Simplification: — NAS to introduce a new incentive payment for SMEs taking on young Apprenticeships for the first time. This scheme will offer SMEs an incentive payment of £1,500 for each new Apprentice aged 16Ð24 that they employ in 2012Ð13. — Employers with less than 250 employees will be eligible, but the project will prioritise more than 50% of the 40,000 places for those with less than 50 employees. Support for smaller employers: — NAS will streamline processes so that it will take just a month for an employer to advertise for and recruit an Apprentice. NAS will support the establishment of seven City Apprenticeship “hubs” in 2012 which will co-ordinate the delivery of Apprenticeships in their city areas and engage new employers. NAS will also focus its efforts on generating Apprenticeships where they deliver greatest value—including on younger adults, new employees, higher level qualifications and particular sectors, especially “STEM”.
Strengthening Apprenticeships Standards The introduction of the Apprenticeship Act and the Specification of Apprenticeship Standards for England (SASE) set new minimum standards for Apprenticeships. Compliance with the SASE is a statutory requirement of the Apprenticeships, Skills, Children and Learning (ASCL) Act. All Apprenticeship frameworks in England have been reviewed by the issuing authority to ensure the framework is SASE compliant. NAS has worked with the UKCES and supported the Sector Skills Councils/Bodies in this process to ensure quality and authorise funding for the Frameworks. The introduction of SASE has helped ensure that there is minimum on and off the job training time and that there is greater clarity about job roles, NAS has been pivotal in ensuring that providers understand how their delivery models need to be adapted to comply with the new SASE quality standards. Since August 2011 all Government funded Apprenticeship starts have been on SASE compliant frameworks. Functional Skills were introduced into SASE and Apprenticeship frameworks from April 2011. The Minister agreed to the dual running of Functional Skills alongside Key Skills until September 2012 whilst the sector completed its preparations. Functional skills will now be awarded alongside GCSE English and Mathematics. NAS’s role in this has been to prepare the frameworks, providers and employers of Apprentices for this change, as well as working closely with Awarding Bodies to ensure that support materials are available. NAS has been communicating to the sector its expectations that providers give greater regard to the expected duration of Apprenticeships set out by SSCs. In only three cases is this duration set at less than twelve months. This is to ensure there is sufficient time spent on practising learnt skills in the workplace and becoming more confident employers.
Employed status Arguably the biggest single boost to the standing of Apprenticeships was the requirement that Apprentices should be employed from the start of their training. At the Minister’s request, NAS took decisive action to reduce Programme Led Apprenticeship programmes (where the Apprentice was an unpaid trainee often in a College setting) which were 21% of 16Ð18 Apprenticeships in 2009Ð10 (based on internal management information). These were almost completely phased out by March 2011. cobber Pack: U PL: CWE1 [O] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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The only exceptions to normal employment conditions affect a limited number of skills, trades and occupations that the Minister exempted through an “alternative completion” exemption. Those that have been identified as exempt ie where employment through receipt of a wage is not the norm within the sector are: — Sports designated as Olympic/Paralympics and Commonwealth Games. — Sea Fishing. — Selected occupations within the Creative Sector.
The Apprenticeship Agreement is due for implementation in April 2012 and addresses the legal status of the Apprentice. All Apprentices now have employed status and the introduction of the Apprenticeship agreement will make the employment status of Apprentices clearer for all parties.
These changes have ensured the protection of the Apprenticeship brand from the concerns of previous Ministers and the Coalition Government that Apprenticeships were not undertaking real work.
Quality
Working with leading Apprenticeship practitioners NAS has developed and published a statement on the Quality of Apprenticeship Delivery Models.
This was in response to the sector’s desire for greater clarity about expectations of quality in the delivery of Apprenticeships and NAS is working with the Association of Colleges and the Association of Employment and Learning Providers on implementation of this guidance. In addition to this NAS has developed a Quality Action Plan. This was approved by the Minister on 19 December 2011.
There are a range of indicators that are used to monitor quality. An important measure is Apprenticeship success rates. Success rates measure the percentage of Apprentices that have successfully completed all elements of their Apprenticeship programme. These have improved year on year and the January Statistical First Release reported record levels of successful completion rates.
Table 1
PUBLISHED APPRENTICESHIP SUCCESS RATES BY ACADEMIC YEAR Level 2006/07 2007/08 2008/09 2009/10 2010/11 Intermediate Level Apprenticeship 60.2% 64.4% 70.4% 73.4% 75.3% Advanced Level Apprenticeship 56.4% 62.8% 72.1% 74.8% 78.6% Higher Apprenticeship numbers too small to validate 84.6% All Apprenticeships 59.0% 63.9% 70.9% 73.8% 76.4% Source: January 2012 Statistical First Release
A second indicator of the quality of the Apprenticeship experience is reflected in inspection reports and grades. The annual Ofsted report was published in November 2011 and judged that the proportion of independent learning providers who were good or outstanding for overall effectiveness has increased considerably compared with last year. Of the 167 independent learning providers inspected this year, 55% were good or outstanding compared with 47% in 2009Ð10 despite the fact that risk assessment ensures that weaker providers continue to be prioritised for inspection. The 2010Ð11 annual report was compiled after inspecting Apprenticeship programmes that involved around 65,000 learners.
The increase in the percentage of independent learning providers judged to be Outstanding, from 4% last year to 10% this year, is particularly striking. The Outstanding providers inspected this year predominantly offered relatively large-scale, mainstream programmes. This is unlike last year when most outstanding providers were specialist providers.
The report states that: — Success rate data show that Apprenticeship provision across the learning and skills sector has been improving. — Structured pathways to enable learners to progress are being developed actively and successfully in most provider types, particularly in colleges, providing good progression routes for learners from foundation and pre-entry programmes through to higher levels of training and education. — The most positive features of Apprenticeship programmes across the sector are the very high standard of work produced by learners, the acquisition and application of theoretical and practical skills and the range of skills that learners gain which are specific and applicable to their employers’ needs. — In Apprenticeship programmes delivered by employers themselves apprenticeships are often tightly tailored to meet business needs, producing apprentices who are job-ready from early on in their programmes. cobber Pack: U PL: CWE1 [E] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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Monitoring NAS’s Service to Employers NAS monitors employer satisfaction with the service that we offer to employers that have contacted us through a quarterly survey. This is not a published or conclusive evaluation but it provides a useful indicator of employer views. The vast majority of employers that we speak to are small and medium businesses and this is reflected in their responses. For NAS the two most important questions that we ask in the survey are; (i) Why an employer that was interested in employing an Apprentice doesn’t end up taking on an Apprentice. (ii) How helpful were the National Apprenticeship Service. Employer responses indicate that financial or organisational constraints are the primary reasons for not to taking on an Apprentice after showing an initial interest. Provider behaviour and Apprenticeship availability are also key factors. NAS works with the Skills Funding Agency to ensure that provision matches demand and where new frameworks are needed, it support their development. The Skills Funding Agency also asks each Apprentices and each Apprentice employer to complete an annual satisfaction survey as part of the overall quality assessments. Their main focus is on the quality of teaching and learning that has been received. Results for these surveys are only available at provider level and are not presented publicly.
Progression The clear expectation of NAS arising from Leitch and continuing with the Coalition Government was to increase the number of Apprenticeships especially Advanced and Higher Apprenticeships. While in some sectors, such as retail, the majority of employer demand is for intermediate level skills, across the employment sector as a whole the need for higher level skills is paramount. NAS has stimulated employer and individual demand for Advanced and Higher level Apprenticeship programmes, through promoting the business benefits to employers, the personal and social benefits to individuals. Alongside this has been the development of Higher level Apprenticeship programme. The results of this activity can be demonstrated in the rise in numbers of Advanced Apprenticeships over the last couple of years. Apprenticeships at Level 3 (Advanced Level Apprenticeships) and above grew by 75% in 2010Ð11 and are continuing to grow this year. Table 2 STARTS BY ACADEMIC YEAR AND LEVEL 2006/07 2007/08 2008/09 2009/10 2010/11 Intermediate Level Apprenticeship 127,400 151,800 158,500 190,500 301,100 Advanced Level Apprenticeship 56,900 72,900 81,300 87,700 153,900 Higher Apprenticeship 100 100 200 1,500 2,200 All Apprenticeships 184,400 224,800 239,900 279,700 457,200 Source: January 2012 Statistical First Release While the growth in Higher Apprenticeships from 160 to 2,200 over two years is a start, recent announcements about the Higher Apprenticeship Fund will mean up to a further 19,000 opportunities in a range of new sectors including Engineering, IT and Professional services Of those Advanced level Apprentices completing in 2005Ð06, 5% moved immediately into higher education,# increasing to 13% of the same cohort after another three years. Of the 2008Ð09 cohort, 7% moved immediately into higher education and this number is rising. # Smith, S. and H. Joslin, Apprentice Progression Tracking Research Project Report, University of Greenwich, 2011
A New Delivery System The development of a dedicated National Apprenticeship Service changed the nature of the Government’s engagement with Apprenticeships. Instead of having oversight of all skills matters, the NAS was an organisation with a clear focus on the Government’s key skills programme Apprenticeships. The organisation would drive the Government’s skills ambitions by tackling the key issue of a lack of employer opportunities through its own sales team. It would also have “end to end” accountability for Apprenticeships so that someone was responsible for the first time for all operational issues and ensuring the whole system delivered. This cobber Pack: U PL: CWE1 [O] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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removed the risk of progress being hampered by any one stage of the development and delivery of Apprenticeships. The move was fundamental in the shift from oversight to a more dynamic delivery of operations in a single programme of top importance to Government. The essential role for the NAS was to make it simpler for employers to find out about Apprenticeships and to take them on. This service would overcome concerns that it was just too complicated and bureaucratic. NAS was established to ensure that help was available and professionally delivered. In understanding its work, NAS segmented the employer market by size and tailored its services accordingly.
NAS’s Penetration of the Employer Market Measuring the impact of NAS’s work and the response of the sector is perhaps best achieved by looking both at the number of workplaces offering Apprenticeship opportunities; and by the number of the opportunities (or starts) at each. We are therefore looking at the spread of employers and the depth of their engagement. The table below shows that we have increased the number of small, medium and large workplaces that have employed Apprentices and the average number that each has taken. Table 3
THE RECORDED NUMBER OF WORKPLACES WITH STARTS OVER A 2 YEAR PERIOD Employer No. of Workplaces Apprentice starts Starts per workplace Size 2009/10 2010/11 2009/10 2010/11 2009/10 2010/11 0—49 52,770 80,190 105,680 192,280 2.0 2.4 50—249 10,270 15,090 41,750 84,360 4.1 5.6 Total 63,040 95,280 147,430 276,640 2.3 2.9 [note this table contains internal, management information which is not validated and is produced for the purposes of this report only]
NAS Support for larger Employers
The National Apprenticeship Service has a dedicated field force that is critical in stimulating and growing Apprenticeship demand among employers. Having Employer Account Managers allows NAS to develop relationships directly with employers who are not already using Apprenticeships, to engage with them in understanding their needs and advise them on how to go about implementing an Apprenticeship programme. An external review of employer take up of Apprenticeships identified clear market failure in the 250 to very large size employer market. It was evident that engagement was far stronger with the SME market and that providers continued to serve this market well. In August 2010 NAS refined its employer strategy and focused more on achieving higher engagement with 250+ employers and set itself an overall ambition of achieving 42,000 Apprenticeship Starts in this area. This first year (2010Ð11) of change introduced a number of new large and macro employers to Apprenticeships. Our overall achievement in 2010Ð11 was to generate more than 78,000 Apprenticeship starts. This included driving the development of Apprenticeship programmes in several new sectors such as IT support, Retail and the National Health Service. In order to simplify processes for large employers the National Employer Service was fully integrated into the National Apprenticeship Service in 2011.
NAS Support for SMEs
The NAS support to SMEs has been revised in response to the growth in interest and feedback from Government and employers. NAS is committed to providing a bespoke and streamlined service to SMEs which is also more efficient and effective. The support has been designed to differentiate between employers needs. Each employer will receive a response tailored to their particular requirements and business strategy from a range of sources including the Apprenticeship website (www.apprenticeships.org.uk) and a team of dedicated online specialist advisers. An employer who decides to go ahead and employ an apprentice will quickly be put in contact with a range of quality providers chosen on the basis of their specialism, success rates, location and flexibility of service. The employer-provider referral will be monitored to ensure that the process is satisfactory to the employer. The service is a nationally managed but locally based service that provides a bespoke service to SMEs. cobber Pack: U PL: CWE1 [E] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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Apprenticeship vacancies online The Apprenticeship vacancies system was launched to providers and employers in December 2008 and to candidates in early 2009. It provides a one stop shop for all parties whether they are looking to recruit, train or apply for an Apprenticeship. We have since made some significant enhancements to the Av system to improve the customer and supplier journeys and functionality, these include: There have been five major systems releases since 2009 to improve the usability and functionality for employers and candidates The recent release was in response to the BIS commissioned Av evaluation and included improvements to employer accessibility and a series of interfaces to enable us to promote vacancies externally and increase applications In 2010Ð11 477,430 individuals activated their account, once registered, to use the on-line system and apply for Apprenticeships. This is 185,340 (or 63%) higher than the previous year. Account activations from all age groups were significantly higher than 2009Ð10. 16Ð18 account activations were 57% higher than 2009Ð10 compared to 68% for 19Ð24 and 79% for 25+ year olds. Table 4 INCREASING APPRENTICESHIP VACANCIES USAGE Volume of Active Candidates 60,000 2009/10 50,000 40,000 2010/11 30,000 20,000 10,000 0
Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul
Source: NAS internal Management information not validated NAS are also working with the Skills Funding Agency to ensure their service of offering information, advice and guidance (IAG) to individuals through the National Careers Service has the most up to date information on Apprenticeships for all ages. We are also working with providers to ensure all recruited apprenticeships are available through the Av service so that all advisers are able to access them. The Apprenticeships web site has a raft of information advice and guidance for individuals wishing to know and understand more about Apprenticeships including information on the range of frameworks that are currently available.
Deployment of NAS staffing NAS has undergone a process of change to ensure staff work in the most appropriate role and business function that will enable us to meet our aspirations and Government objectives. The core roles are outlined below although we are flexible in our approach to meeting customer’s needs. Changes in the NAS administration budget reflect the reduction in staff numbers. This change process has allowed us to position resource nationally, regionally and sub-regionally as necessary. As noted recently by the NAO the NAS has reduced its operating costs whilst significantly increasing the number of Apprenticeships that is has generated. As of January 2012 NAS employs the equivalent of 310 full time staff, with just under 5% (15 posts) being occupied by Apprentices. cobber Pack: U PL: CWE1 [O] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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Of which:
30 Staff are involved in the management, assurance and administration of the programme and the rest are customer facing.
The customer facing staff are split between: — Sales and employer support (150 posts). — Small employer and the Apprenticeship Vacancy services (50 posts). — Competitions, quality and marketing (30 posts). — Large employer support and business development (50 posts).
Boosting Employer Supply
Growth in Apprenticeships and workplaces
Apprenticeship starts have grown strongly since 2008Ð09 along with the funding that has been made available. Employers have expanded 25+ Apprenticeships most quickly, initially in response to World Class Apprenticeships and the additional funding subsequently made available and then in response to the Coalition Government’s policy to make Apprenticeships the vehicle for most of its workforce skills training and to expand its funding even further. However there has been strong growth at all ages and in difficult economic circumstances. See the tables below.
Table 5
APPRENTICESHIP FINANCIAL YEAR BUDGETS Programme FY 2008–09 Budget * FY 2009–10 Budget * FY 2010–11 Budget * 16Ð18 Apprenticeships 627,526 687,815 744,870 19+ Apprenticeships 266,085 267,738 314,722 25+ Apprenticeships 66,825 116,482 136,158 Grand Total 960,436 1,072,035 1,230,880 * budgets rounded to nearest ‘000
Table 6
APPRENTICES “IN LEARNING” VOLUMES In Learning Age 2008/09 2009/10 2010/11 16Ð18 211,340 223,350 240,360 19Ð24 167,760 191,850 236,660 25+ 78,260 93,010 223,040 Total 457,360 508,210 700,060
[note this table contains internal management information which is not published and is produced for the purposes of this report only]
Summary the tables above demonstrate that although 25+ funding represents under 12% of the total budget, it actually funds 32% of all Apprenticeships.
During 2011Ð12 NAS has started to rebalance the programme by gradually reducing the volume of 25+ Apprenticeships whilst continuing growth in the 16Ð24 range.
In Spring 2010 the Coalition Government announced that an additional 50,000 Apprenticeships were to be delivered in Financial Year 2010Ð11, as the Train to Gain programme was wound down.
The target of an additional 50,000 Apprenticeship was surpassed in year one of implementation, (see table below) and the final number of additional Apprenticeships delivered was over 100,000 in the end. cobber Pack: U PL: CWE1 [E] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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Table 7 DELIVERY OF THE ADDITIONAL 50,000 APPRENTICESHIP PLACES
Progress towards the additional 50,000 in the FY 2010-11
275,000 250,000 225,000 200,000 175,000 150,000 125,000 100,000 Profile 75,000 50,000 19+ actual 25,000
0 Apr - 10 May -10 Jun - 10 Jul - 10 10 - Aug Sep - 10 - 10 Oct Nov - 10 Dec - 10 Jan - 11 Feb - 11 - 11 Mar
Source: ILR records
Employer Incentives Over NAS’s period of operation we have developed two specific incentives to support employers with their recruitment of Apprentices. The first was the Apprenticeship Grant for Employers (AGE) of 16, 17 and 18 year old Apprentices that was announced in December 2009. The key features of the programme were that: — It was designed to stimulate the formation of new Apprenticeships for young unemployed people aged 16 or 17. — The programme offered a grant to employers who established such Apprenticeships of £2,500. This grant was payable in two instalments—of £1,500 on the Apprentice’s start on programme and £1,000 after 12 weeks. The programme was focussed on small and medium sized employers who were interested in employing an Apprentice for the first time or who were taking on an additional Apprentice over and above their normal intake. Employers were asked to sign an agreement confirming that one or other of these conditions applied to them. This incentive resulted in thousands of small employers taking on Apprentices for the first time. NAS commissioned an independent research organisation to evaluate the programme and summary findings highlighted that it was a substantial administrative achievement to design the programme, co-opt partners and providers, engage thousands of employers, and supply 5,000 new Apprenticeship placements in a matter of twoÐthree months. The grant appeared to have been pitched at an appropriate level, in that it was attractive to employers, but not hugely expensive. In November 2011, Vince Cable announced measures to further strengthen the UK’s world class Apprenticeships programme. This included encouraging thousands of small firms that don’t currently hire apprentices to take on a young apprentice aged 16 to 24. Building upon the success of AGE, NAS will introduce the second of its specific incentives to support employers with their recruitment of Apprentices. This incentive will offer a payment to SMEs taking on young Apprenticeships for the first time. The incentive is a payment of £1,500 for each new Apprentice aged 16Ð24 that they employ in 2012Ð13. Employers with less than 250 employees will be eligible, but the project will prioritise more than 50% of the 40,000 places for those with less than 50 employees. Additional success criteria are currently being developed.
Overtraining and supply chain support pilots Expansion pilots were a Government initiative to support around 3,000 new apprentices that were to be trained at 21 organisations over a two year period 2009 and 2010. NAS funded these large employers and sector bodies to support the recruitment and training of Apprenticeships in their SME suppliers. The pilots also allowed smaller organisations to benefit from the expertise. Expansion pilots were effectively models of employer overtraining into their supply chains. An independent assessment found the majority of these to be successful to some extent in getting a number of higher quality apprentices into the supply chain or wider sector. In most cases the trials were successful in ensuring that more apprentices where trained than would have been if Apprenticeship Expansion Pilots had not existed—for some employers it was seen as a recession “rescue package” allowing them to take on an apprentice in a year where they would not have otherwise been able to. In some cases the Apprenticeship Expansion Pilot funding led to ongoing expansion of Apprenticeships but this wasn’t the case with all employers. cobber Pack: U PL: CWE1 [O] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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There was also evidence of a “(re-)awakening” of interest in apprenticeships among some SMEs that were engaged as part of Apprenticeship Expansion Pilot. One Apprenticeship Expansion Pilot—Rolls Royce—was delayed until 2011 (issues linked to capital investment). Interestingly this project is reporting major successes in engaging smaller employers in it supply chain and locality and will expand its offer to 200 smaller employers when their new academy opens later in 2012. The project is also supporting Bombardier to recruit new apprentices following their difficulties in 2011. NAS intends to work with UKCES to explore this model as part of the recently announced Employer Ownership Pilot.
Sectoral impact NAS has worked with Sector Skills bodies to increase the choice and availability of frameworks. The introduction of SASE has introduced circa 47 additional frameworks than were available pre-SASE. As well as more frameworks, we are seeing apprenticeship growth across most if not all sectors of the economy, including those sectors that have not traditionally engaged with Apprenticeships eg: IT and Finance Where employers seek training for job roles where no framework exists then NAS works with the relevant sector body to support their development. We are increasingly seeing growth in sectors that traditionally have not engaged in Apprenticeships, this can be attributed to: — more employers attracted by high quality apprenticeships as an alternative source of recruitment and training, in addition to or instead of graduate recruitment, enabling employers to grow their own talent and shape individuals to suit business needs, earlier on. Examples of this are in the banking sector (HSBC) and IT sector (IBM); — “opening up” the professions to non traditional employees, particularly for those sectors that are dominated by graduates, unpaid interns or older free- lance workers. Apprenticeships provide an alternative route in and provide an additional pipeline of talent. This is particularly relevant in for example the Creative industries; and — We would also expect the new Higher Apprenticeship projects to make a real difference here as a way of providing an alternative progression route and an entry point at degree level to those professions not traditionally associated with Apprenticeships—eg: in Professional Services (tax, audit and management consultancy) PR, advertising and textiles. In determining its approach to sectors, NAS will, with the relevant Sector Skills Council undertake an analysis of the potential and how Apprenticeships can tackle market failure, for example: — in the Creative Industries, a prevalence of SMEs and a domination of graduates/interns has meant that it has been hard for employers to access Apprenticeships and there has been a plentiful supply of voluntary/high qualified labour. Yet the sector suffers from a lack of diversity and a lack of structured skills or talent development. This threatens the sectors future global position; and — Apprenticeships could provide the solution to both these issues. NAS is therefore working with Sector Skills Councils to develop group training approaches to apprenticeships for SMEs, a wage incentive for SMEs and develop higher apprenticeships at degree level which will open up another route into the sector in addition to university route and widen the pool of talent. In terms of sectors, high economic returns have been demonstrated in traditional industries for Apprenticeships such as engineering, construction and advanced manufacturing, (see McIntosh (2007) A Cost- Benefit Analysis of Apprenticeships and Other Vocational Qualifications) whilst newer industries and the service sectors also offers strong opportunities, such as in digital and creative media. It would however be the wrong approach to focus the programme narrowly on a limited number of sectors. Rather, we will seek both to maximise Apprenticeship opportunities in key growth sectors and to explore how quality and returns can be further strengthened across the programme. We take a balanced approach to sectors, developing new markets while ensuring that existing employer demand is met and sufficient opportunities are created to utilise the Apprenticeship budget. We maintain a sector analysis for all major sectors which is developed and deployed jointly with the leading sector bodies and employers. A specific example of this sector work would be the way that we use our “sales force” to broker the introduction of Apprenticeships across all of the major public sector services from 2009 to 2011. As well as this we have run sectoral marketing campaigns that have been created and deployed jointly with sector skills bodies, these are based on an analysis of the labour market intelligence for the sector and are targeted to respond to the specific skills needs in that sector. This approach has led to tailored, sector specific marketing campaigns in the following sectors: — 2009–10—Public Sector, Construction, Logistics, Engineering, Hospitality, Retail. — 2010Ð11—Logistics, Financial Services, Creative and Cultural, IT, Retail, Manufacturing and Engineering (where we wrote to every manufacturer in the country). cobber Pack: U PL: CWE1 [E] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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More recently we have worked with National Skills Academies (which are sectoral) and Sector bodies such as Construction Skills to ensure that the Government’s SME incentive payments are targeted at employers of higher value.
As well as stimulating demand we also take an active role in ensuring that the supply side is able to respond. One of the ways that we do this is to sponsor the development of new frameworks where there is proven employer demand and demonstrable return for the state. For example we are currently using the Higher Apprenticeship Fund to develop, with sector bodies and employers, 20 new Advanced and Higher Frameworks in the following sectors; Energy Engineering (renewables) Research and Development, the Creative Industries, Emergency Healthcare, Lifelong Learning, Logistics, Insurance and Banking, Professional Services.
A Public Sector Focus
NAS was asked to prioritise the Public Sector in 2009Ð10 and worked with employers and departments to introduce Apprenticeships where they had not been considered previously and to expand the volume of Apprenticeship recruits where employers had previously been involved.
Our Sales team spent time with every major department to agree their Apprenticeship policy and practise. The results of this were quite dramatic and Apprenticeships are now firmly embedded in public sector employers such as the NHS.
Public sector procurement and the Olympics
NAS worked with the Office for Government Commerce and latterly the Cabinet Office to produce guidance and support or public sector procurers, to help them build Apprenticeship requirements into their contracts.
Before NAS existed, the main Olympic Delivery Authority relationship was with the LSC/SFA (National Projects Team) and they remained the primary contact for all skills issues at both the strategic and operational level. The SFA team were actively involved in the discussions around the Construction Skills National Skills Academies for the Olympics and in agreeing a target of 350 apprentices with Olympic Delivery Authority contractors. In their final report the Olympic Delivery Authority stated that 426 apprentices “experienced work on the Olympics project”.
Over the last two years London Organising Committee of the Olympics Games have also directly employed 28 apprentices on fixed term contracts, to undertake a range of administration and marketing activities, in their Head Office. NAS has been actively involved in brokering these opportunities and the selection of a local training provider.
Alternative Delivery Models
Group Training Associations (GTA) are employer collectives that share Apprenticeship training costs and administration.
NAS worked closely with and funded development activity with GTA network to support the development of GTA England as a representative body for existing GTAs.
NAS support for the development through GTA England of cross-GTA quality improvement, exploration of new areas for GTA activity, both sectors and higher qualification levels, and more recently supporting the launch of the GTA England Commission to explore how the GTA model can be adapted to give support to employer led bodies in new sectors.
NAS provided direct support to several new GTAs such as “Fairtrain” a GTA for Third Sector employers and for the Social Care GTA.
Apprenticeship Training Agencies (ATA) offer a unique approach to the recruitment of apprentices. They are specifically designed to support small and medium sized employers who wish to take on an apprentice but are unable to take the risk in the current economic climate. They support the sharing of employees among employers, whilst ensuring the quality of the Apprenticeships experience.
ATAs were introduced in 2010 after working with key stakeholders such as the London Apprenticeship Company, to develop delivery models that would be valued by employers and offer a high quality Apprenticeship programme valued by individuals. NAS also created a prospectus to make available the options and routes in to Apprenticeships that were being delivered through the ATA model.
ATAs and their progress since inception in 2010 have been evaluated. The research was qualitative picking on the experience of the pilots at that point but given that many had started late, it was an interim position. Broad conclusion was that there was value in the model but that it was a hard model to operate and manage and in particular the financial model was challenging. cobber Pack: U PL: CWE1 [O] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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Culture Change Around the Value of Apprenticeships Marketing and branding strategy The National Apprenticeship Service have been working closely with BIS and the cabinet office on a new marketing and communications campaign that launched during National Apprenticeship Week on 9 February 2012 to promote Apprenticeships to employers, young people and parents. The campaign creatives lead with the strapline “Apprenticeships deliver” designed to be inspirational and to showcase young talent in Apprenticeships. Direct mail, public relations and advertising will focus on themes that define “a new era for Apprenticeships”—quality, growth, pride and value. The campaign stars six apprentices from employers including Bentley, insurance brokers Blue Fin, BT, builders Jelson Homes, housing association In Communities and recruitment giants SEC. We will use the stars of this campaign and their case studies to showcase the benefits of Apprenticeships to both the individuals and the employers. Planned activity will also include the first national Skills Show, further details of which will be announced later in the month. Key facts from the campaign: — You can get an Apprenticeship in over 250 industries, and choose from more than 1,200 different jobs. — There are over 9,000 Apprenticeship vacancies available (as at the beginning of February 2012) through the National Apprenticeship Service website. — Eight out of ten apprentices rate their training as good or very good. (Youth Cohort Study & Longitudinal Study of Young People in England: The Activities and Experiences of 18 year olds: England 2009). — 82% of employers take on Apprenticeships to build skills in their business. (British Chambers of Commerce, 2011). — Four out of five employers say Apprenticeships will play a bigger part in their recruitment policy in future. (National Apprenticeships Service research by Populus, 2012). — Three quarters of employers say Apprenticeships have helped them cut their recruitment costs. (National Apprenticeship Service research by Populus, 2012). We feel that now is the right time to introduce a new era for Apprenticeships as it underlines the commitments NAS has made, including the introduction of new Higher Apprenticeships in desirable careers, taking action on raising standards by placing quality at the forefront of the drive to encourage more employers to offer Apprenticeships and more young people to take them. The campaign will be supported by in-house PR and communications activities and work undertaken with partners, employers and training providers on co-produced events and activities such as the annual National Apprenticeship Week and the 100 in 100 campaigns.
Competitions and celebrations NAS, in partnership with the Skills Finding Agency, is working with the FE Sector, employers, schools and key representative bodies to increase the reach and impact of skills competitions to showcase and celebrate excellence in Apprenticeships and vocational education and training. The goal is to use skills competitions at all levels as a central element of a total “see, try, act” experience package as demonstrated successfully at World Skills London 2011, to engage and enthuse individuals and employers, and those who advise them, to aspire to excel in vocational career pathways. This total experience model will culminate annually in a new national Skills Show, a high profile public visitor attraction under one roof that has at its heart the UK finals of skills competitions, wrapped in Have-a- go, showcasing, careers advice and guidance, exhibitions, seminars, VIP employer and stakeholder packages, and opening and closing ceremonies celebrating the best in youth achievement, not least the Apprenticeship Awards. NAS will use the UK skills competition cycle to identify exceptional talent to develop to world-class standards to represent the UK at future WorldSkills International events, demonstrating globally the breadth and depth of vocational education, training and skills available in the UK. We continue to engage with employers through a range of planned activities that take place annually over a week long period—Apprenticeship Week. Activities include regional based activities with employers and providers. Another mechanism is through the annual Apprenticeship Awards ceremonies. Apprenticeship Awards recognise individuals of all ages, and employers, for their exceptional achievement and commitment to Apprenticeships. The NAS also run, in association with Investors in People (IiP), the National Training Awards which recognise and celebrate IiP accredited organisations that have delivered outstanding organisational benefits by directly linking the training needs of their people to the business needs cobber Pack: U PL: CWE1 [E] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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of their organisation. Both of these Awards provide prominent case studies which are used to celebrate and showcase examples of excellent quality and galvanise increased participation in Apprenticeships. Last year there were over 1,600 entries to the Apprenticeship Awards and 277 to the National Training Awards- in the next year we hope to grow entries to both of these Awards. Our Divisions also run campaigns recruiting Apprenticeships into Employers focusing on sectoral themes; including our 100 in 100 events where 100 Apprenticeships will be recruited in 100 days within a specific locality. These local 100 in 100 campaigns have proven very popular. Our record is the North East campaign that saw 1,000 Apprenticeship opportunities created in 100 days. We also continue to encourage Sector Skills Councils to support sectoral 100 in 100 campaigns for example in the Security Industry. NAS have developed links with equivalent Apprenticeship support bodies in all of the major Apprenticeship countries. This has led to exchanges of information and best practice, including three annual seminars, with 17 countries attending in 2012.
Certification In order to support enhanced recognition for Apprentices a single national Certification scheme has been introduced. This has replaced over 20 separate certification processes and reduced costs and administration for employers and providers alike. This became available on 25 January 2012 and all Apprentices now receive a common, approved Apprenticeship certificate upon the completion of their programme. NAS will support training providers, employers and local partners to ensure that every apprentice has the opportunity to be formally recognised for their achievements as they receive their Apprenticeship certificate.
The Apprenticeship website The NAS developed Apprenticeship website is a major source of information for all stakeholder including employers and individuals. The website has been kept updated and reflects current information relating to all things Apprenticeship. Visits to the website have steadily increased since its launch in April 2009. NAS also has senior leads for all stakeholders and a regular stakeholder newsletter gets sent out to 30,000 recipients. Table 8 INCREASING WEB HITS TO APPRENTICESHIP.ORG.UK Dates Web visits Visitors Average Apr 09—Mar 10 3,137,400 2,594,100 60,300 visits from 49,900 visitors per week Apr 10—Mar 11 4,761,300 3,557,200 91,600 visits from 68,400 visitors per week Apr 11—14 Jan 12 5,394,000 3,960,300 131,600 visits from 96,600 visitors per week [note this table contains internal, management information which is not published and is produced for the purposes of this report only] Please note that these numbers have been rounded to the near 100. The National Apprenticeship Service Chief Executive and Chief Operating Officer attend meetings of the national Apprenticeship Ambassador Network about three times a year. In addition, the National Apprenticeship Service has set up regional Apprenticeship Ambassador Networks. These networks are instrumental in expanding NASs reach into the wider employer channels, and encourage greater penetration through business to business sales. Membership of the Apprenticeship Ambassador Network includes union representation in the form of the TUC. The TUC Boosting Union Capacity on Apprenticeships project began in April 2009. The project was initiated by the NAS and designed jointly between NAS and the TUC to increase union involvement with Apprenticeships, particularly to leverage Union Learning Representatives in helping to influence employers to take on apprentices. The key objectives were: — Raise awareness amongst unions of the benefits of Apprenticeships. — Support unions, including union reps and Union Learning Representatives, to increase employer engagement in high quality Apprenticeship programmes, including through a major “ask an employer” campaign. — Support unions and Union Learning Representatives to build Apprenticeships into bargaining arrangements and learning agreements. — Engage 20 unions nationally and engage 120 employers of 50+ employees over the life of the project. The project has worked with over 150 employers across a variety of sectors and industries. We have been particularly successful in supporting unions to engage employers in local government, logistics and health. cobber Pack: U PL: CWE1 [O] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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We have set up an Apprenticeship Advocates Network where union representatives come together to talk about how to support apprentices in the workplace. Currently we have over 70 Union Apprenticeship Advocates from a broad range of unions and industry sectors involved in this network. They have continued to develop a range of excellent tools and resources to support unions in promoting apprenticeships with employers and working with apprentices directly.
Addressing Inequality Under-represented learners NAS has as one of its priorities to take positive action to ensure more people from disadvantaged areas or under-represented groups have the right and are able to start an Apprenticeship programme. BME is defined by grouping the ethnicity categories for Asian, Black, Mixed and “Other ethnic group”. The proportion of BMEs increased last year to 10.0% of all starts, an increase of 2.0% from 2009Ð10. BME groups are still under represented on Apprenticeships overall (against a national population figure of 11%): — Greater under representation can be shown as we look at Advanced/Higher Apprenticeships. — The groups within BME (such as Black or Black British, Asian etc) will have different participation, success rates—some of this determined by cultural differences such as Asian young people follow parental influences into HE route. Table 9 THE PROPORTION OF STARTS BY ETHNICITY Ethnicity Group 2007/08 2008/09 2009/10 2010/11 Asian/Asian British 2.9% 3.9% 3.4% 4.2% Black/African/Caribbean/Black British 1.6% 2.1% 2.3% 3.2% Mixed/Multiple Ethnic Group 1.4% 1.6% 1.8% 1.8% White 92.6% 90.8% 91.1% 89.0% Other Ethnic Group 0.4% 0.5% 0.5% 0.8% Not Known/Not Provided 1.0% 1.0% 1.0% 1.0% BME 6.3% 8.1% 8.0% 10.0% Source: January 2012 Statistical First Release Note: Data collected for LLDD Apprenticeship starts is reliant on self declaration on the ILR. NAS has also worked hard to support learners with Learning Difficulty or Disability (LLDD). Whilst the actual number of Apprenticeship starts declaring a learning disability/difficulty has increased year on year the overall proportion has decreased over the past four years. Table 10 THE AMOUNT OF STARTS BY APPRENTICES WITH LLDD Category 2008/09 2009/10 2010/11 Learning Difficulty/Disability 23,710 9.9% 26,390 9.4% 36,670 8.0% No Learning Difficulty/Disability 214,570 89.4% 250,640 89.6% 416,910 91.2% Not Known 1,670 0.7% 2,650 0.9% 3,640 0.8% Total 239,900 100.0% 279,700 100.0% 457,200 100.0% Source: January 2012 Statistical First Release Recognising the low uptake in Apprenticeships of young people with LLDD NAS are working closely with Peter Little OBE on his report commissioned by the Apprenticeship Unit. This will provide us with an informed and up to date description and analysis of the issues related to the inclusion of people with LLDD in Apprenticeship provision. NAS joined the meeting that officials in the Apprenticeship Unit convened with Lord Addington, British Dyslexia Association (BDA) and other stakeholders. This was a very useful platform to discuss the challenges that exist within Apprenticeships for those with dyslexia and in particular challenges for the assessment of key skills and functional skills for those individuals. We will be working with the Apprenticeship Unit to look at what we can do within the system to assist those individuals, particularly alongside awarding bodies to ensure assessment methods they set out do not disadvantage those with dyslexia. NAS work in partnership with major union bodies including the TUC to support Apprenticeships and their employers. For example we are currently working with the TUC to scope out a review for BME and Gender (similar to the work undertaken by Peter Little). This review would be made public. cobber Pack: U PL: CWE1 [E] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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Gender Gender segregation in Apprenticeships is on the whole reflective of the workforce within sectors. Research by IES (2009) concluded that addressing the issue of gender segregation by using the apprenticeship programme was an “unrealistic goal” however this does not mean we should continue to work to breakdown the barriers to access in this context. Apprenticeship starts in 2010/11 53.8% female 46.2% male in 2009/10 49.6% female 50.4% male Apprenticeship frameworks—Gender 2010Ð11 (internal information) — Engineering—females account for 5% of starts this year a 2% increase from last year. — Children’s Care—males account for 6% of starts this year a 3% increase from last year. — Food manufacture—females account for 30% of starts this year a 5% increase from last year. — Industrial Applications—females account for 12% of starts this year a 5% increase from last year. — IT and Telecoms Professionals—females account for 12% of starts this year a 1% increase from last year. — IT User—females account for 47% of starts this year a 12% increase from last year. Note: the majority of these frameworks have also seen a significant increase in overall starts which could also account for the changes eg Industrial Applications—overall numbers have increased by 194% (3,630 starts), Food Manufacture increased by 257% (1,920 starts).
Diversity Pilots During autumn 2010, the National Apprenticeship Service and the Skills Funding Agency commissioned 16 pilots across England to undertake trial activities which would aim to increase demand for, and supply of, apprenticeships among under-represented groups. These are known as the Diversity in Apprenticeship (DiA) pilots. The pilots became operational in winter 2010Ð11, and the funding period extends until spring 2012. The funding is focused on seeding approaches that will be embedded in local contexts. NAS and SFA commissioned the Institute for Employment Studies (IES) to undertake a good practice evaluation of the pilots; the evaluation work commenced in autumn 2011. The main areas being explored by the pilots are gender stereotyping, learners with disabilities/difficulties and BME. NAS and SFA commissioned the Institute for Employment Studies (IES) to undertake a good practice evaluation of the pilots; the evaluation work commenced in autumn 2011 with an interim report produced in December 2011 and the final report due in April 2012. The interim report indicates that significant work has been taking place to reach out to communities who would otherwise not have engaged in Apprenticeships—it also suggests that these under represented groups are finding it particularly challenging given the current economic situation where employers have a wide choice of candidates. NAS will use its allocation of adult ESF funds to support the employment and training of individuals from under represented groups in Apprenticeships. This will include, for example those who are “NEET”, “BME”, have a LLDD, live in areas of high deprivation and or are under represented by Gender. ESF has been used widely in regional interventions such as in London where funding was focussed at increasing the numbers of BME apprentices.
Mentoring The National Apprenticeship Service has developed a service to provide specialist and intensive online mentoring and coaching facility, currently contracted via a company called Horsesmouth. It is free to use, open to anyone over 16 years old and users can remain anonymous. There are a range of mentors online who have different experiences and backgrounds. They are both current and former apprentices. Individuals can view each mentors profile and then decide which mentor would be able to give them the best advice.
Unfinished Business While we are very pleased with the progress that NAS has made and the increases in Apprenticeships, we fully appreciate how much more there is to do. The proportion of employers offering Apprenticeship opportunities is still lower than in other leading Apprenticeship countries. The recent expansion in Apprenticeships has been welcome and we are confident that those new employers of Apprenticeships will provide more opportunities in years to come. However, we need to ensure their current experiences lead to permanent changes in recruitment and training. cobber Pack: U PL: CWE1 [O] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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NAS is very actively working to ensure high quality for all Apprentices and Apprenticeships. We are making good progress in eradicating short duration Apprenticeships but we need to remain alive to any practice that could harm the reputation of Apprenticeships. John Hayes has made very clear that every Apprenticeship needs to be able to demonstrate a real journey of learning for the individual and we need to ensure this is delivered by providers. While we are very pleased with the contribution that Apprenticeships makes to upskilling the adult workforce, we are clear that opportunities for 16Ð24 year olds are the bedrock of the Apprenticeship programme. We are therefore prioritising these groups in our own work and in delivering new interventions such as the Adult Grant for Employers. We know that reducing bureaucracy is vital for improving the accessibility of services for employers and especially for SMEs. We are committed to ensuring that all enquiries are followed up promptly and NAS have assured all employers that they will streamline processes so that it will take just a month for an employer to advertise for an Apprentice, through from first enquiry to agreeing a training package. A number of important initiatives began in 2011 while need to be followed through to realise their full potential. Most important is the work to open up to 20,000 Higher Apprenticeship opportunities. Finally, the minister for Apprenticeships, John Hayes has made absolutely clear to NAS that we need to do more to provide improved access for those groups of people who have been underrepresented in Apprenticeships including those with disabilities, ethnic groups, women in STEM occupations and returning servicemen and women. We have not seen as much progress as we would want across these groups of people and relish this challenge and the opportunity this direction from the Minister provides. 10 February 2012
Supplementary written evidence submitted by the National Apprenticeship Service Apprenticeships in Retail Retail is one of the largest employment sectors in the UK economy and has been identified as one that is expected to continue to grow and employ more people. Between 2007 and 2017 UKCES estimate that over 215,000 additional jobs will have been created in retail. This sector would therefore be important in any expansion of the Apprenticeships Programme, which is increasingly being focused on new jobs. By 2010Ð11 retail had become one of the top five employers of Apprentices in England. The Committee may be interested to note that the retail sector is also the second largest employer of apprentices in Germany. Quality of provision has improved greatly while volumes have grown and success rates have doubled over recent years and are now at over 70%. Research into Apprenticeships in retail indicate that there is a clear return on investment for the state, even if returns are lower in this sector than in many others. cobber Pack: U PL: CWE1 [E] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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FIG 1: NET LIFETIME EARNINGS BENEFITS, PER ACHIEVEMENT AND PER £ OF GOVERNMENT FUNDING BY SECTOR1 200,000
£27 160,000
120,000
£12 80,000
Net Present Value Net Present £15 £15
40,000 £9
0 Construction Engineering Hospitality Business Retail and Administration Customer Service Sector
1. The figures above the bars show the NPV per £ of government funding Source: McIntosh (2007), A Cost-Benefit Analysis of Apprenticeships and other Vocational Qualifications
The funding that is paid for training in this sector is lower when compared to many others. Some examples are as follows:
FIG 2: TYPICAL AVERAGE FUNDING RATES PAID FOR APPRENTICESHIPS IN 2010Ð11 Apprenticeship Framework 16Ð18 19Ð24 25+ Retail Intermediate £4,202 £1,966 £1,573 Advanced £4,272 £1,998 £1,599 Hospitality and Catering Intermediate £5,954 £2,785 £2,229 Advanced £6,956 £3,254 £2,604 Engineering (basic) Intermediate £9,071 £5,547 £4,439 Advanced £16,914 £11,851 £9,483 With a further 25% discount applied to starts at large employers (over 1,000 staff)
NB. To note rates can vary dependant upon the qualification used in a framework and the age and circumstances of the learners. Therefore these figures should be treated as a guide only
While attention has focused on training of the existing retail workforce, this is a sector that is not only expanding but often has high staff turnover and is accessible for many who are unemployed. Many retailers have active policies of recruiting from the local area. An Apprenticeship gives the skills that help prevent the problem of people who are NEET enduring a series of short term employment opportunities. They are given the investment to motivate them to stay and be more attractive to employers and to progress in work. .
In summary, NAS believes that the retail sector provides important Apprenticeship opportunities in terms of both creating employment and also in the upskilling of low skilled workers. Large retail employers often provide vital employment opportunities to those returning to the workplace and can be the most significant employer in areas of high unemployment.
Our pricing strategy reflects the costs associated with training in different sectors and we further reduce rates significantly for Apprenticeships that take place in larger employers.
With new tighter definition of Apprenticeships, funding should only go to retail employers where there is a significant amount of new learning that is needed, especially new recruits and returners. Apprenticeships are not for those who simply need accreditation of existing skills. This is clearly set out in the 2012Ð13 funding rules of the Skills Funding Agency. cobber Pack: U PL: CWE1 [O] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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Morrisons The balance of contributions between Morrisons and Elmfield to Apprenticeships The committee asked to see the contribution of Apprenticeship training delivered by Morrisons as the employer and Elmfield as the training provider. This is set out in the table below: Morrisons input Induction and continual updating—skills and knowledge for the job Coaching and mentoring—performance in the job Career pathways—progression through the business Development support—positive place to learn Training rooms—off-the-job environment Elmfield input Recruitment of young people—individual assessments Targeted pre-employment training—capability for work Additional training—skills and knowledge for the role/sector Coaching—confidence and motivation Numeracy and literacy training and assessment—threshold skills for career Assessment—competence to national standards Certification—passport into labour market Programme design—efficient use of resources Quality assurance—ensuring effective use of public funds Contract management ¥Administration and compliance
Apprenticeships and Train to Gain Provision The committee have heard concerns that Morrisons Apprenticeships are re-branded Train to Gain. They are of course different products, with a broader package of learning required to achieve an Apprenticeship. Morrisons used Train to Gain to train their staff, but switched to Apprenticeships as these offered a more appropriate training and development solution to their workforce. Morrisons staff were given the choice to enrol on either an Apprenticeship or a Level 2 retail diploma. This was a completely voluntary choice—each individual member of staff took the decision whether or not to enrol on the Apprenticeship and approximately 50% of staff on the programme elected to do so. We have been assured that everyone who enrolled on the Apprenticeship understood the requirements of the framework, including the need to meet national standards in numeracy and literacy (which Morrisons have said was a very important skills issue for many in the workforce).
Growth in Numbers The committee heard concerns that the growth of the Morrisons programme was uncontrolled and the programme was not effectively managed by NAS/SFA. Morrisons planned its programme in phases, with each phase consisting of staff in different departments. The growth in their funding contract was directly linked to each phase successfully meeting its targets. There was a continuous and frequent process of contract monitoring, discussion and negotiation with NAS/ SFA over performance, priorities and future plans. Audits by the SFA provider financial assurance team show a very low error rate and no issues of non-compliance. The number of Apprenticeship starts supported by Elmfield at Morrisons in 2009Ð10 and 2010Ð11 academic year are shown below. Morrisons starts Total Apprenticeship % (delivered by Elmfield) starts Final Year 2010/11 25,220 457,200 5.5% Final Year 2009/10 5,280 279,700 1.9% Overall 32,230 736,900 4.4%
Short Duration Apprenticeships The Committee heard concerns about Apprenticeships in Morrisons taking six months. The average duration has been 32 weeks which is shorter than the new expectation but not uncommon in the sector. The standard Apprenticeship in Morrisons is now expected to last 54 weeks which is in line with the Government s new requirement that Apprenticeships take a minimum of one year.
Additionality External reports of evidence given to the Committee state that Morrisons have said that they would have provided training without Government support. It has been made clear to NAS/Skills Funding Agency by cobber Pack: U PL: CWE1 [E] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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Morrisons however that the level of training that they would have provided without public support would be significantly less than Apprenticeship training. If not, NAS/Skills Funding Agency would use public funds elsewhere where it would be of greater value.
Delivery Partner Morrisons were offered a choice of how to deliver this project by the NAS. They could either have a direct contracting relationship (through the then National Employer Service) or use an approved training provider. Morrisons reviewed the options and decided to appoint Elmfield as their training partner. The Apprenticeship frameworks they use (including retail) were mapped across job roles. The Morrisons Apprenticeship programme is delivered through Talent Coaches who are employed by Elmfield and based at Morrisons stores. Each Talent Coach has a case load of around 70 apprentices at any one time.
Progression Routes Over the next five years we expect that many of Morrisons staff will progress to an Advanced Apprenticeship or other Level 3 qualification. Morrisons are piloting a programme for 18Ð24 year olds which leads to a Foundation Degree and Higher Apprenticeships.
Elmfield The Committee has heard evidence questioning the suitability of Elmfield to receive large amount of public funds. Elmfield have delivered Apprenticeships for 10 years, having acted as the provider supporting direct Large Employer contracts worth several millions of pounds with Phones 4U, Vodaphone, DHL, Littlewoods, JD Wetherspoon and others during this time. They have held a direct contract with the LSC/Skills Funding Agency since 2009. They have therefore been known to NAS/Skills Funding Agency (and their predecessor bodies) for much longer than has been implied. They have also therefore been the subject of Ofsted inspections as the provider partner of the employer contract holder before holding a contract with the Skills Funding Agency in their own right. In order to become a contract holder, Elmfield has gone through and satisfied the Skills Funding Agency s procurement and quality assurance process. Elmfield deliver both 16Ð18 and 19+ Apprenticeships. They have also historically delivered large volumes of Train to Gain activity. The totality of this training activity was usually offered as a package to employers. They continue to be successful in securing blue chip employer businesses. Elmfield directly deliver the vast majority of their contract although they have registered the use of two small sub-contractors with the Skills Funding Agency.
Quality of Delivery As an employer delivery partner, Elmfield had previously been inspected as part of large employer inspections where the outcome was overall Grade 2 on each occasion. Their first OfSTED Inspection in their own right took place from 25Ð29 July 2011. The grades profile is set out below. SUMMARY OF OFSTED GRADES JULY 2011 Overall effectiveness 3 Capacity to improve 2 Outcomes for learners 2 Quality of provision 3 Leadership and management 3 Contributory grade—Safeguarding 3 Contributory grade—Equality + Diversity 3 Sector subject areas Retail 3 Business admin 2 A summary of the main findings are at annex A (the report was published 27 August 2011). Elmfield have developed and are implementing an action plan to respond to OfSTED s findings, which are being monitored by their account management team. cobber Pack: U PL: CWE1 [O] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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Success Rates As highlighted by OfSTED, Elmfield have good success rates across their programme which is well above the national averages. These are set out below. YEAR APPRENTICESHIPS Elmfield National 2009/10 Overall success rate 80.7% 73.8% Retail success rate 80.7% 68.7% 2010/11 Overall success rate 82.6% 76.4% Retail success rate 81.6% 75.7% Business Administration—Contact Centres 75.0% 71.1% Business Administration—Customer Service 85.0% 79.2%
Financial Information Financial Position of Elmfield Training THE TABLE BELOW SETS OUT THE VALUE OF DIRECT CONTRACTS WITH THE AGENCY Years ending 31 July 2012 2011 2010 2009 2008 £000 £000 £000 £000 £000 Direct contract £41,101 * 42,818 14,607 0 0 * in year amount which could vary
Each quarter the Agency reviews the contract position of all providers and adjusts contract amounts according to performance. Elmfield were awarded 13% of the recycled adult Apprenticeship funding available in 2010Ð11. As with all providers we remove funds that are not being used so that we can reallocate it to providers that are able to use it and Elmfield s 16Ð18 allocation was reduced at quarter two of this academic year because they were not on track to use all of the money available to them within the year. The employer contribution for adult Apprenticeships does not have to be in cash, it can be made in kind therefore any contribution by Morrisons would not necessarily be visible in Elmfield’s accounts. Financial health assessments are carried out to assess the exposure for the direct contracts, and Agency financial health assessments of Elmfield have been “Outstanding” throughout. 14 May 2012
Written evidence submitted by the TUC Introduction 1.1 The TUC welcomes the opportunity to contribute to the Committee’s inquiry into Apprenticeships. The inquiry comes at a key time in the Government’s agenda around apprenticeships, coinciding not just with the increased expansion in apprenticeships, but also with a continued media attention on low paid and short-term schemes. It is imperative that the inquiry thoroughly examines the issue of quality at a time when apprenticeships are the main focus of the Government’s skills strategy and increasingly seen as a leading policy response to the record levels of youth unemployment. 1.2 The TUC has developed a clear voice in the apprenticeships agenda, both in terms of policy contribution and in terms of delivery. The TUC has set out its views on the apprenticeships agenda through its contribution to the recent publication “Rethinking Apprenticeships” (IPPR 2011),1 its joint work with Platform 51 (formerly the YWCA)2 on gender equality in apprenticeships and recent research looking at apprenticeship pay.3 The TUC, through the work of its learning and skills organisation, unionlearn, supports trade unions to engage with apprenticeship schemes, challenge employers to introduce new apprenticeship schemes and support apprentices in the workplace. 1.3 The TUC’s submission to the Committee’s inquiry focuses on the key issue of apprenticeship quality, which the TUC believes is the critical factor in deciding whether apprenticeships can be a clear, holistic, opportunity to combine learning with work, and thus develop a credible opportunity to start a career. If the current concerns about quality are not urgently addressed, there is a risk that apprenticeships will become a damaged brand and go the way of past failed schemes such as YOP or YTS. 1.4 The submission also looks at other areas the TUC views as critical including the relatively weak issue of employer take up of apprentices, which some research puts as low as 4%.4 Equality issues such as gender segregation and pay disparity and the significant barriers to accessing apprenticeships for people from BME groups and disabled people are also of major concern. The TUC believes that apprenticeships present a real cobber Pack: U PL: CWE1 [E] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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opportunity to develop social partnership between employers, government, trade unions and the wider community in a way that reflects the successful models of other European Countries.
Quality
2.1 While supporting the rapid expansion of apprenticeships since the late 1990s, the TUC has pressed governments to ensure that all apprenticeships are of a high standard and that pressure to achieve numerical targets does not lead to lower standards of quality. Apprenticeships must be high-quality, holistic career development opportunities and should not be viewed simply as a means of subsidising employers to deliver occupation-specific training, although that form of training is one element of the apprenticeship framework.
2.2 All too often, apprenticeship completion rates are used as a proxy for quality. While completion is an important indicator, this overlooks other crucial aspects of the training experience, including: the duration of the apprenticeship; the amount of time spent training; and the opportunity to progress to further training or employment. Apprenticeship programmes should always identify a clear programme of training with sufficient time off-the-job to attend college or workplace training centres and to engage in private study.
Time off for training
2.3 The TUC continues to raise concerns about the amount of time given over to training in some apprenticeship programmes. Whilst recognising that many of the high quality apprenticeship schemes contain considerable time in college or other study environments, the TUC continues to receive anecdotal evidence of schemes that have little training time, and examples of how apprentices are expected to carry out their study for qualifications in their own time, such as in evenings or lunchtimes.
2.4 According to Steedman’s international comparison of apprenticeships,5 time off for training in England is at the bottom end of the scale. She notes that, while most countries require off-the-job training of at least one day per week, “in Australia and England the minimum is rather less”. In her inquiry, Professor Alison Wolf highlights similar concerns about young (16Ð18) apprentices.6 While acknowledging the benefits of the work-base learning route, she recommends that these young people “should, nonetheless, be primarily engaged in learning—including, primarily, generalisable and transferable skills [which] is standard practice in other countries with large apprenticeship programmes”.
2.5 The introduction of the Specifications for Apprenticeship Standards in England (SASE) was a welcome development, given that there was previously no national minimum standard for apprenticeship frameworks. However, the standards set by the SASE for minimum Qualification and Credit Framework credits and the minimum time to be spent “off work station” are very low. The minimum requirement is 30% of 280 guided learning hours per year, which equates to less than two hours per week. The TUC continues to call for the minimum requirement to be increased to at least one day per week spent on “off workstation” study.
Duration
2.6 The TUC is aware that much of the negative publicity around apprenticeships in recent months has focused on so-called “short apprenticeships”. Some of the worst examples include a 16-week programme offering an apprenticeship in catering or hospitality, and a retail scheme offering a six month, part-time, £2.60/ hour apprenticeship, that just happened to coincide with the Christmas retail period. Additionally the TUC has expressed concern about the increased numbers of adult apprenticeships being taken on by existing staff over short durations, that appear to be little more than accreditation of prior learning.
2.7 The TUC has worked with employers, media and other learning organisations to challenge the National Apprenticeship Service to take a firmer stance on these short apprenticeships not just out of concern for the apprentices involved, but also due to a wider worry about the increasing damage being done to the public perception of the “Apprenticeship” brand.
2.8 The TUC, therefore, welcomes the recent announcement by the Skills Minister John Hayes that from August 2012, all Apprenticeships for 16Ð18 year olds must last for at least 12 months and must entail a rigorous period of job-relevant learning and the practice of new skills. The subsequent announcement that the National Apprenticeship Service will look into whether this requirement should extend to older apprentices is also welcome.
2.9 Steedman’s analysis finds that “in all apprenticeship countries except Australia and England most apprenticeship programmes take three years to complete or, in the case of Ireland, four years”.7 In Australia, “traditional apprenticeships” last for three years with traineeships lasting on average for one year. In England the average for all apprenticeships is between one and two years. In the TUC’s view, it is hard to justify any framework of less than at least one year for an Intermediate Apprenticeship and two years for an Advanced Apprenticeship. In some occupations apprenticeships should last considerably longer, as is often the case with highly regarded apprenticeships in parts of the engineering and ICT sectors. cobber Pack: U PL: CWE1 [O] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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Progression 2.10 Progression goes to the heart of the union view on learning at work and the need for individuals to have the opportunity to continue to develop their skills, knowledge and understanding to support career progression and improve their quality of life. We have a large proportion of apprentices engaged in level 2 training (roughly around two-thirds) and a large proportion of them (around two-thirds) do not progress to a level 3 apprenticeship. Professor Wolf noted in her review that “the young person who follows first a level 2 course in a vocational area, then a level 3 one, and then goes on to a long-term career in that sector is the exception not the rule.” 8 2.11 The Coalition government has made a welcome commitment to tackling barriers to progression and to increase opportunities for people to achieve a level 3 apprenticeship and to progress to higher education. However, the question remains as to what degree this policy objective can be achieved through exhortation and funding incentives, or whether some form of regulation needs to be invoked to empower apprentices to have some form of “right to progress”. The TUC believes that all apprentices who have the aptitude and desire to progress should be given opportunities to do so.
Group Training Associations/Apprenticeship Training Agencies 2.12 The TUC recognises that many small and medium-enterprises (SMEs) feel they lack the capacity to take on apprentices. The TUC believes that a potential answer to this is through collaboration and the Group Training Association (GTA) model. In this model the employer directly employs the apprentice but the training is pooled within the GTA. The GTA model offers a good vehicle for supporting groups of employers to come together, often with union support, to develop high-quality apprenticeships. 2.13 The TUC has frequently raised concerns about an alternative model, the Apprenticeship Training Agency (ATA). In this model, the ATA employs the apprentices and hires them out to other companies. The TUC has noted that increasingly ATAs are running low-paid, poor-quality schemes with little progression or career development. Additional concerns about ATAs include limitations on collective bargaining, union organising and recruitment, and the employment status of apprentices who are often employed as agency workers. The TUC has put out guidance on ATAs to its affiliate unions.9
Employer Engagement 3.1 The TUC is concerned about the continuing problem of demand among young people (and adult employees) for apprenticeship places outstripping supply.10 Employer engagement on apprenticeships in the UK lags behind the rest of Europe. For example, only 30% of companies with more than 500 staff have apprenticeship schemes, compared to virtually all companies of that size in Germany.11 Overall engagement amongst UK employers is considered to be somewhere between 4%12 and 13%.13 3.2 The TUC welcomes the recent announcement that, as part of the Government’s Youth Contract, small businesses will be offered incentive payments of £1500 to take on apprentices if they have not done so already. However the TUC believes that the Government needs to ensure that it builds on this scheme to ensure sustainability rather than encouraging a “learned reliance” as some have called it14 on government subsidies for training and apprenticeship opportunities. A review of a similar scheme, the previous Government’s “Apprentice Grant for Employers” noted how training providers found it much easier to recruit employers when a subsidy was involved,15 leading some commentators to suggest that the scheme was not sustainable, and potentially detracted from the normal apprenticeship process.16 3.3 A number of additional policy options could also be explored to tackle this issue. The government should investigate further the potential of public procurement to drive up the number, and quality, of apprenticeships. The Coalition government supports this in principle, saying that it will “work with public sector bodies to encourage and support them to use public procurement as a lever to raise employers’ engagement with Apprenticeships”.17 The previous government had begun to do this by requiring employers winning major government construction projects to recruit a certain number of apprentices. 3.4 Even during a time of government spending cuts, the public sector spends a colossal amount of money procuring goods and services. The government should establish “a task force, comprising of Ministers and Officials from the Department for Business, Innovation and Skills, the Department for Work and Pensions, the Department of Energy and Climate Change, the Cabinet Office and the Treasury, to consider a procurement policy that increases the UK’s levels of skills, sustainability and employability”, including specific requirements on apprenticeship recruitment.18 For example, in parts of the construction sector where procurement is being used in this way, there is a rule of thumb that one apprentice should be employed for every £1 million of contract value. This approach should be embedded and extended to other sectors. 3.5 Other incentives could also be considered to encourage employers to invest more—more intelligently and more fairly—in apprenticeships and other training. For example, employers could be required to include a short summary of their training provision in annual reports to better inform customers, employees and shareholders and demonstrate accountability regarding training and development, and, in particular, recruitment of apprentices. cobber Pack: U PL: CWE1 [E] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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3.6 The government could also review the current arrangements for tax relief for work-related training. A recent policy paper by unionlearn estimates that the total cost of this relief to the Exchequer is in the region of £5 billion per annum, with little available data on how it is being used by those employers that qualify for it.19 This relief could be much more effectively targeted, for example, to give much greater priority to accredited training such as apprenticeships. 3.7 Having said this, the TUC remains concerned that some apprentices are being introduced to supposedly displace existing employees, especially in the current economic climate when redundancy programmes and apprenticeship recruitment can be occurring simultaneously. The TUC and all its affiliated unions are opposed to any circumstances involving apprentices being recruited as a cover for job substitution. Unions have sought to mitigate this threat by developing apprenticeship agreements with employers which prohibit this practice. 20 3.8 The TUC is also concerned by anecdotal evidence it has gained from affiliate unions and colleges that some employers are not paying the set employer contribution as stipulated in the funding formula. This is resulting in providers running apprenticeship schemes on limited budgets and employers being able to pull down free workplace training for adults in what appears to be direct contradiction of the spirit of the Apprenticeship Programme.
Equality 4.1 Quality and equality are two aspects of the apprenticeship experience that go hand-in-hand and should be given the highest priority. The Coalition government has stressed that it aims to “make Apprenticeships the primary means for people to gain skills in the workplace”.21 It is imperative that there is an equivalent emphasis on equality and diversity within apprenticeships as for all other major educational and vocational pathways, such as schools, colleges and universities. 4.2 The TUC, through its learning and skills organisation, Unionlearn, is working closely with the union movement to ensure that the widely acknowledged role of ULRs in supporting disadvantaged groups to access training at work is equally applicable to apprenticeship provision. However, the latest picture—especially relating to gender, ethnicity and disability—shows that there is still a mountain to climb. 4.3 Gender segregation remains a huge problem with only 3% of engineering apprentices accounted for by female participants compared to 92% of hairdressing apprentices. This is one of the reasons for an overall gender pay gap of 21%, but even within the same sector women are being paid less: for example 61% of apprentices in the retail sector are female but they are paid 16% less than male retail apprentices.22 Recent research by unionlearn reinforces these earlier findings, showing that occupations with the highest-paid apprenticeships tend to have a much lower ratio of female apprentices.23 4.4 Black and minority ethnic (BME) communities also face huge barriers. For example, while 18- to 24- year-olds from BME communities account for 14% of this age group in the overall population, they account for less than 8% of apprenticeship places. Although different levels of awareness of the apprenticeship programme may play a part in this, race discrimination affecting black workers more generally in the labour market is also likely to be a key factor. 4.5 Disabled people face similar barriers, with trends suggesting a worsening of the situation. Access to apprenticeships for people declaring a learning difficulty and/or disability has fallen from 11.5% in 2005Ð06 to 8.2% in 2010Ð11. A number of organisations have challenged the collection of data on disability and apprenticeships, suggesting that a significant proportion of declarations are people with basic skills needs that would not normally be classified as having a learning difficulty or disability. As a result, it is very difficult to establish where barriers exist to the progression and retention of apprentices with disabilities and more effective data should be collected on this issue. 4.6 In 2010 the National Apprenticeship Service set up a number of “diversity pilots” to increase access to apprenticeships. However despite an initial plan to fund these pilots for an 18-month period, funding was reduced to an annual contract with no chance of renewal. Anecdotal evidence that the TUC has gained from working with these pilots suggests that although the focus and dedication of this work has the potential for success, funding restrictions and the shortness of the contract has led to little opportunity for the work to become sustainable. A report on the success of the pilots is due to be released later this year. 4.7 Despite these concerns, the new diversity pilots were a welcome step towards responding to challenges in this area. However there is a pressing need for a wider policy approach to tackle equality of access at the general level but also with respect to gender segregation within apprenticeships. There are similar issues for BME and disabled participants, in particular their under-representation in apprenticeships that attract the highest number of applications. 4.8 The TUC and unionlearn have recommended a number of specific actions to help tackle the challenge of widening access to apprenticeships, including: improving careers advice, promoting best practice in recruitment procedures, publicising positive images of women/BME/disabled apprentices in industry, and improving equality and diversity training in all sectors. There are other targeted policy levers available to government, including the use of procurement policy to require suppliers to recruit a balanced intake of apprentices as a contractual requirement. Publicising apprentice pay rates and prioritising collection of data are also important cobber Pack: U PL: CWE1 [O] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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strategies alongside strengthening monitoring systems to enable NAS and the government to assess how their strategy on increasing diversity in apprenticeships is working.
4.9 Unions also play a crucial role is supporting diversity through their negotiations with employers on the recruitment and career progression of apprentices, including the promotion of flexible working and training. The mentoring and support that union representatives provide to individual apprentices in the workplace can also ensure that apprentices facing particular barriers complete their training and, wherever possible, find a permanent post with the employer in question.
Social Partnership
5.1 While it is difficult to detail every aspect of a high-quality apprenticeship, the “expansive—restrictive apprenticeship” model24 is helpful in this respect. The authors have previously highlighted the central role for social partnership in this model, saying that “the State has a duty to involve the social partners in a genuine alliance to produce a statement of purpose, as exists in some other countries, for apprenticeships [which]... would provide the statutory underpinning needed to formalise apprenticeships in the education and training system”.25 The Organisation for Economic Co-operation and Development (OECD) has also highlighted the need for unions in the UK to operate in a way that replicates the role played by their counterparts in countries where a social partnership involving high-level agreements between employers and unions underpins the way that apprenticeships are administered.
5.2 For example, the 2008 Jobs for Youth study noted that: “In countries with a long tradition of apprenticeship training, unions are a key player alongside employers and the institutional actors. In Germany, unions have been instrumental in securing action from employers when apprenticeship places have proved to be insufficient to meet demand. In England, unions should be involved in the design of apprenticeships and other work-based learning initiatives alongside Sector Skills Councils.”26
5.3 Union involvement in apprenticeships at the institutional level in the UK is largely restricted to the “union voice” on SSCs. While this is important, it is a far cry from the social partnership arrangements and binding sectoral/sub-sectoral collective agreements in other countries. Nevertheless, governments, past and present, have acknowledged the important role that trade unions can play at the workplace level in promoting take-up, quality and equality through the activities of union representatives. However, less heed has been paid to the influential impact of enterprise-based collective agreements between employers and unions in some sectors, such as in parts of manufacturing, and the degree to which such agreements continue to play a crucial role in maintaining quality apprenticeship provision.
5.4 Building the capacity of union representatives is a central feature of a joint project between unionlearn— the TUC’s learning and skills organisation—and the National Apprenticeship Service (NAS). The project aims to equip representatives with the necessary skills to encourage employers to offer more apprenticeship opportunities, to enable all participants to enjoy a high-quality apprenticeship, and to help unions to negotiate collective agreements where possible.
5.5 The Coalition government has also recognised the new dimension to union engagement on apprenticeships resulting from the pioneering role of union learning representatives (ULRs). With the support of the government’s Union Learning Fund and unionlearn, over 28,000 ULRs have been trained since 1999. The government’s skills strategy relies on unionlearn to help “enable trade unions and Union Learning Representatives to work more effectively with employers to increase the number of high quality Apprenticeship places available; in particular by promoting the benefits of Apprenticeships to disadvantaged groups in the workforce and to employers who have not previously trained apprentices”.27 Every year unionlearn helps unions to encourage employers to deliver several thousands more, better quality, apprenticeships.
5.6 In addition to the direct support of union representatives, apprentices in workplaces where union recognition is present benefit from the wider advantages associated with a unionised workforce (see above). Research by the TUC shows that, on average, union members receive better pay and conditions and, tellingly, substantially more training, than non-members28 and there is little doubt that the “union advantage” translates into a “quality boost” for apprentices in such workplaces. According to research by IPPR, many apprentices choose to leave due to the poor quality of training provision and a lack of employer investment in the apprenticeship programme.29
5.7 There is also a need for new regulatory measures at the sector level. The government needs to build on its welcome announcement to promote a social partnership approach through the combined actions of the UK Commission for Employment and Skills (UKCES) and the Sector Skills Councils (SSCs). In order to give this traction, employers and union representatives on SSCs could be required, as a condition of UKCES licensing, to draw up a clear picture of their joint ambition on apprenticeships in particular sub-sectors over a specific time period. These “apprenticeship agreements” should be governed by a regulatory “carrot and stick” framework, developed by UKCES in partnership with employers and unions at a national level and drawing on best practice from Europe. cobber Pack: U PL: CWE1 [E] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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Conclusion 6.1 The TUC believes that making quality count should not just be a slogan when it comes to apprenticeships. This ambition should be at the heart of what government, employers, unions and other stakeholders aspire to for all apprentices, regardless of their individual circumstances or their place of work. There continues to be a wide consensus that revitalising apprenticeships is the “right thing to do” if society is to develop suitable vocational pathways that best meet the needs of individuals and employers alike, especially in the current context of rapidly increasing youth unemployment. 6.2 To achieve this, we need to learn from those European countries (and our own domestic sectors) where the apprenticeship brand is synonymous with quality, otherwise we risk going down the road of discredited and poor-quality youth training schemes from previous decades. Strengthening the regulation of apprenticeships and adopting the European social partnership model are two challenges that need to be tackled in order to achieve a universal quality mark for apprenticeships. 6.3 The UKCES is committed to social partnership. Sector bodies such as SSCs, which are licensed by the UKCES, provide an appropriate vehicle to build a new social partnership approach with the aim of boosting the number of high-quality apprenticeships and guaranteeing equality of access. Drawing on best practice from other European countries, the government would need to give these partnerships real teeth in order to ensure that they could genuinely impact on the volume and quality of apprenticeship opportunities offered by employers. However, there would also be a challenge for trade unions to respond in kind and work together with employers, especially at the sector level, to make a reality of these new arrangements. 6.4 Regulating the training market is something all governments have shied away from in recent decades, but this is a necessary step if employers and unions are to be given greater ownership of, and responsibility for, the apprenticeship agenda as in most other European countries. Regulation needs to play a role in building a quality apprenticeship brand by setting some minimum national standards that would apply to all provision, including: — a minimum duration; — a right for participants to progress to a full level 3 apprenticeship if they wish; and — greater enforcement of equality of access. 6.5 Compared to most other European countries, employer involvement in apprenticeships in the UK remains poor and it is increasingly evident that encouragement and exhortation are not enough to persuade more employers to get engaged in this form of training. A range of measures needs to be adopted to achieve a breakthrough on this front, including: — binding sectoral and sub-sectoral agreements by social partners; — more extensive use of procurement; — more effective use of tax relief on training; and — human capital reporting requirements in annual reports. 3 February 2012
References 1 IPPR (2011) Rethinking Apprenticeships 2 TUC/YWCA (2010) Apprenticeships and Gender 3 unionlearn (2011) Apprentice Pay and Conditions 4 Shury J, Winterbotham M, Davies, B and Oldfield K with Spilsbury, M and Constable, S (2010) National Employer Skills Survey for England 2009, UKCES 5 Steedman H (2010) The State of Apprenticeship 2010: International Comparisons—Australia, Austria, England, France, Germany, Ireland, Sweden, Switzerland. A Report for the Apprenticeship Ambassadors Network, London: Centre for Economic Performance, LSE 6 Wolf A (2011) Review of Vocational Education: The Wolf Report, London: Department for Education 7 Steedman H (2010) 8 Wolf A (2011) 9 Unionlearn (2010) What do I need to know about Apprenticeship Training Agencies (ATAs)? 10 Steedman H (2010) 11 Ibid 12 Shury et al (2009) 13 Steedman H (2010) cobber Pack: U PL: CWE1 [O] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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14 Keep E and James S, Employer Demand for Apprenticeships in IPPR (2011) Rethinking Apprenticeships 15 Wiseman J, Roe P and Parry E (2011) An Evaluation of the Apprentice Grant for Employers (AGE) programme 16 Keep (2011) 17 Department for Business, Innovation and Skills [BIS] (2010) Skills for Sustainable Growth 18 TUC (2011) A Budget for Economic Growth and Social Cohesion 19 unionlearn (2011) Tax Relief on Training: Investigating the Options for Reform 20 For example, in 2010 the Council of Civil Service Unions negotiated a framework agreement with civil service employers regulating the recruitment of apprentices. In addition to agreeing pay and conditions, it also provided safeguards against apprentices being recruited to posts where there were surplus staff within reasonable travelling distance. 21 Hayes J (2010) Speech to the Institute of Directors, 29 September 2010 22 TUC (2008) Still More (Better Paid) Jobs for the Boys: Apprenticeships and Gender Segregation 23 unionlearn (2011) 24 Fuller A and Unwin L (2008) Towards Expansive Apprenticeships: a Commentary by the Teaching and Learning Research Programme 25 Ibid 26 OECD (2008) Jobs for Youth: United Kingdom Summary 27 BIS (2010) 28 TUC (2009) The Union Advantage: the Positive Impact of Trade Unions on the Economy and British Society 29 Lawton K and Norris E (2010) A Qualitative Study of Apprenticeship Pay, IPPR
Written evidence submitted by West Northamptonshire Development Corporation 1. Executive Summary 1.1 The delivery of apprenticeships is particularly challenging in the construction sector. It is a very segmented industry, with high levels of sub-contracting. In addition, the supply and demand of skills is dramatically affected by the impact of economic cycles, while there is a fractured connection between academia and industry. As a result, the level of construction apprenticeships is still relatively very low, despite an increase in government funding. 1.2 In Northamptonshire, an innovative solution has been successfully established, at nil cost to the Exchequer. It is called Construction Futures and involves using the planning and procurement system to secure construction apprenticeships on new developments. 1.3 Construction Futures is the only scheme of its kind in the UK and was launched in 2009. There is evidence to suggest that its approach has major implications for the way construction apprenticeships can be increased and improved across the country. Based upon this evidence and the experiences of the Construction Futures team, a number of recommendations are made. 1.4 The recommendations are as follows: — Harness the planning system—local planning authorities can embed the requirement for construction apprenticeships on new developments into their local planning policy frameworks, including the community infrastructure levy. — Set realistic targets in partnership—using industry led software, local planning authorities can accurately and realistically forecast apprenticeship opportunities on proposed developments and agree the opportunities in partnership with developers. — Make obligations contractual—once planning permission is provided the apprenticeship opportunities can be made contractual and embedded in legal agreements. — Delivery support—it is crucial to provide delivery support to all parties. Local coordination teams can help to ensure that potential apprentices are sourced from local training providers and other agencies, placed on a skills database and selected in partnership with contractors. — Monitoring—the contractor’s obligations should be enforced and monitored by the coordination team. cobber Pack: U PL: CWE1 [E] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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— Local delivery—the Construction Futures model helps local people directly benefit from developments in their area. It is led by local planning authorities, working in partnership with local training providers. As such, it offers a method to put localism into practice and provides a local solution to a national issue. — Enhance public procurement—as well as securing apprenticeships through the planning process, any public sector organisation procuring capital works has the opportunity to embed construction apprenticeship requirements into their contracts. These apprenticeships can be delivered in partnership with contractors and local colleges, as per the Construction Futures model. — Take an innovative approach—there are innovative ways the Construction Futures model can be deployed. For instance, in Northamptonshire, links are being established with a wide range of agencies, including the probation service, to help elements of society that have particular difficulties accessing apprenticeships and training opportunities.
2. Introduction 2.1 This written evidence is based upon the experience and industry knowledge of the Construction Futures team. It will therefore focus upon the provision and delivery of apprenticeships in the construction sector. 2.2 Construction Futures was established by the West Northamptonshire Development Corporation and is part-funded by the European Regional Development Fund. It has created a ground-breaking way to deliver construction training and apprenticeships through the planning and procurement system at nil cost to the Exchequer. Launched in 2009 by the Communities Minister Iain Wright, it is the first scheme of its kind in the UK. 2.3 WNDC is one of three Urban Development Corporations in the UK, and the only one outside London. WNDC was set up in 2004 to facilitate growth and regeneration within West Northamptonshire. In order to harness the employment and training opportunities inherent in its delivery programme, Construction Futures was established. 2.4 The national potential of the Construction Futures approach has been recognised, and the scheme is being promoted across the East Midlands to other local planning authorities, as well as private sector developers.
3. Evidence 3.1 Is the extra funding promised by the Coalition Government necessary for apprenticeships? How can this funding best be spent? 3.2 Although the additional funding announced by the coalition government is most welcome, its impact has varied from sector to sector. For instance, the construction industry has particular circumstances, which funding alone cannot address.
The Problem 3.3 Despite the significant rise in public funding, the number of construction related apprenticeships in 2010Ð11 only rose by 5% compared with 2009Ð10. This is markedly lower than the rise of over 50% across all sectors as a whole during the same period. 3.4 The lack of apprenticeships in the construction industry is a long standing problem, which has resulted in sector skills shortages and a heavy reliance on imported labour. There are several root causes of this situation: 3.5 Industry Structure: the construction industry is highly segmented, with particularly high levels of subcontracting. Large-scale apprenticeship programmes and initiatives are traditionally very difficult to implement in this fractured environment. Additionally, the transient nature of sub-contracted work for most SMEs in the sector means that long-term investment in skills, training and apprenticeships remains unattractive, despite public subsidies. 3.6 Economic Cycles: the construction industry is usually the first to be affected by economic downturns, as commercial developments and public works are stalled or cancelled. For similar reasons, it is typically the last sector to leave recession. Naturally, when the industry goes into decline, skills leave and enter other sectors. As a result, when the industry begins to recover and grow, there is a structural skills shortage. Given the time it takes to attract and train new people, these shortages remain, restricting growth, until the next recession when the cycle starts again. 3.7 Academia and industry dislocation—there is a dislocation between the provision of construction training and industry demand. Not only is this due to the cyclical issues associated with economic downturns, but also the curriculum being pursued by most training providers. Construction is changing, as along with the traditional trades, new skills are increasingly required, particularly those related to low carbon construction techniques. However, without a direct link to industry, it is challenging for training providers to ensure supply meets demand. 3.8 The experience of the Construction Futures team has also revealed a dislocation between the targets of training providers, such as colleges, and the apprenticeships agenda. At an operational level, heads of cobber Pack: U PL: CWE1 [O] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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departments and tutors are performance managed according to the grades that their students achieve rather than student conversion rates into employment. There is therefore little incentive for them to proactively promote and facilitate apprenticeship programmes.
Solution One—Harness the planning system 3.9 There is a solution to these sector specific problems, which can be implemented at a local level, by planning authorities. It lies in making construction apprenticeships a contractual and legal requirement for developers when planning applications are determined. Links can then be established between contractors and local training providers, such as colleges, to ensure trainees can be supplied when developments start on-site. 3.10 Using the above approach, Construction Futures has secured apprenticeships, as well as short-term training placements, in 37 legal agreements to date in West Northamptonshire. This has secured in excess of 2,000 training weeks, with many more in the pipeline. 3.11 When a planning application is made, Construction Futures uses industry led-software to accurately forecast the number and nature of apprenticeships and training placements that could be created by a proposed development. These requirements are agreed with developers and embedded in the legal agreements tied to an eventual planning permission. The apprenticeship obligations can then be passed down to a contractor through the developer’s procurement process. 3.12 The above approach has been considered by local planning authorities in the past and has started to be promoted by Construction Skills. Indeed, some authorities have written the requirement for construction apprenticeships into their planning policy frameworks. However, authorities have struggled to turn the policy into action. The solution lies in providing implementation support, with a specialist team establishing links with local training providers to source trainees, monitoring the contractors and enforcing their obligations.
Solution Two—Enhance Public Procurement 3.13 Working in partnership with the construction industry, Construction Futures has established the legal framework to embed training requirements in development contracts. Once the development is on-site, Construction Futures then works with local training providers to supply suitably skilled, site-ready trainees. This approach relies on a unique set of tools and systems: 3.14 Legal Tools: All of the necessary procedures and documentation relating to the procurement and planning process have been tested and implemented successfully in West Northamptonshire. 3.15 Skills Forecasting: A bespoke forecasting model is used to identify the training and employment opportunities on a new construction site, depending on its size and value. It specifies the exact range of trades that can be covered, consistent with industry standard labour modelling. It has been developed in partnership with Davis Langdon and takes an “industry-led approach” resulting in realistic and deliverable obligations rather than aspirational targets, which are unlikely to be achieved. 3.16 Skills Tracking Database: Construction Futures has helped to develop a powerful database which matches candidates to training and employment opportunities. It manages the range and phasing of placements on a site and handles all monitoring and reporting functions.
Funding 3.17 The construction Futures approach itself, as outlined above, does not incur any public sector expenditure. It is funded by developer contributions through the section106 process. The coordinating and delivery team is supported by a levy of £97 per dwelling or £1 per sq m for commercial development. The contractor then uses the government subsidies available to help fund and deliver the contractually committed apprenticeships.
4. Recommendations for Action 4.1 Harness the planning system—local planning authorities can embed the requirement for construction apprenticeships on new developments into their local planning policy frameworks, including the community infrastructure levy. 4.2 Set realistic targets in partnership—using industry led software, local planning authorities can accurately and realistically forecast apprenticeship opportunities on proposed developments and agree the opportunities in partnership with developers. 4.3 Make obligations contractual—once planning permission is provided the apprenticeship opportunities can be made contractual and embedded in legal agreements. 4.4 Delivery support—it is crucial to provide delivery support to all parties. Local coordination teams can help to ensure that potential apprentices are sourced from local training providers and other agencies, placed on a skills database and selected in partnership with contractors. 4.5 Monitoring—the contractor’s obligations should be enforced and monitored by the coordination team. cobber Pack: U PL: CWE1 [E] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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4.6 Local delivery—the Construction Futures model helps local people directly benefit from developments in their area. It is led by local planning authorities, working in partnership with local training providers. As such, it offers a method to put localism into practice and provides a local solution to a national issue.
4.7 Enhance public procurement—as well as securing apprenticeships through the planning process, any public sector organisation procuring capital works has the opportunity to embed construction apprenticeship requirements into their contracts. These apprenticeships can be delivered in partnership with contractors and local colleges, as per the Construction Futures model.
4.8 Take an innovative approach—there are innovative ways the Construction Futures model can be deployed. For instance, in Northamptonshire, links are being established with a wide range of agencies, including the probation service, to help elements of society that have particular difficulties accessing apprenticeships and training opportunities. 2 February 2012
Supplementary written evidence submitted by the Department for Business, Innovation and Skills
When I appeared before your Committee on 16 May to discuss the Apprenticeships programme I agreed to provide additional information.
I promised to provide written evidence “On the number of post-25 apprentices that are previously in employment and, secondly, the nature of the training they get which distinguishes the course as an Apprenticeship as opposed to more conventional work-based training.”
As I explained during my evidence, as a policy priority, the Government have chosen to make Apprenticeships, alongside all else they do, the principle vehicle for upskilling and reskilling the existing workforce.
This new footprint is demonstrated by the Apprenticeship Pay Survey 201155 which shows that 94% of apprentices aged 25 years old and above worked for the same employer prior to the start of their Apprenticeship. We would not claim, however, that all of these are long standing employees; some are “new” to the business, the sector or to employment per se in that they have worked for less than three years. The survey shows that 23% of the 94% had been with their employer for less than 12 months suggesting that Apprenticeships are being used as a means of recruiting and training new staff. This is good news and I have commissioned further work to establish the size of the cohort who have worked for between one and five years.
From April 2011 the 2010 Specification of Apprenticeship Standards for England (SASE) introduced minimum standards for Apprenticeship frameworks. This is the first time that the quality of Apprenticeships has been governed by statute, reflecting this Government’s emphasis on quality and drive to maintain and build the Apprenticeship brand. Each framework must include five distinct elements: 1. A competence-based qualification—designed to demonstrate the ability to discharge the functions of a certain occupation which is typically certified via work-based assessed National Vocational Qualifications; 2. A knowledge-based qualification—provides the theoretical knowledge underpinning a job in a certain occupation and industry and is typically certified via a technical qualification. The competence and technical elements may be combined within a single qualification; 3. Transferable skills—such as functional skills or GCSE in English and mathematics, and ICT where deemed a requirement for the job role; 4. Personal learning and thinking skills, namely: independent enquiry, creative thinking, reflective learning, team working, self management and effective participation; and 5. Employee rights and responsibilities—to ensure that apprentices fully understand their rights and responsibilities in the workplace.
The SASE also set a minimum duration of 280 guided learning hours.
The Employer Ownership Pilot
The committee asked for an update on the Employer Ownership Pilot. More specifically they asked about the criteria for the success of the pilot and how we will ensure public funds are best used. 55 BIS Research Paper No. 64 “Apprenticeship Pay Survey 2011” cobber Pack: U PL: CWE1 [O] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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The overall aim of the pilot is to find more effective ways to improve skills in the workforce and to use these improved skills to drive up productivity and growth. We are looking for proposals from employers that demonstrate how they will support one or more of the following key objectives of employer ownership: (a) Employer ownership increases the impact of work readiness, workforce development and Apprenticeships activity. (b) Employers are better able to secure the training they need by having the influence they require over quality and content and can shape training provision to meet their needs. (c) Collaboration amongst employers to address cross-sector or supply chain skills challenges is increased. (d) Employer leadership, commitment and investment in skills is increased, including the involvement of employers who do not have a track record of investing in skills. We will evaluate the first round of the pilot to establish whether it is successful in meeting these aims and use the findings from the evaluation to inform future work. There are rigorous value for money criteria in the bid appraisal process which will minimise deadweight. Only the bids showing the best value for the public purse and the highest quality will be supported and robust quality assurance will be built into the monitoring and management of those bids that are successful. We are developing a comprehensive evaluation process, with short, medium and longer-term measures of success, to assess value for money. All successful bids will undergo due diligence checks before projects begin.
Apprenticeship Grant To Employers I pledged to update the committee on the Apprentice Grant for Employers scheme. The first data will be available in late June and I will write again at that time to share the results with the committee.
Employer Investment Survey I undertook to share a recently published study of the investment by employers in Apprenticeships. The study is BIS Research Paper No. 67 “Employer Investment in Apprenticeships and Workplace Learning: The Fifth Net Benefits of Training to Employers Study.” Your committee will want to know that this Government’s approach has been characterised by more detailed analysis of Apprenticeship quality than has happened in past years.
Return For Government Investment In Apprenticeships I committed to providing further background to the return to investment figure calculated by the National Audit Office (NAO). The NAO estimates that the net economic benefits from the apprenticeship programme amount to £18 per pound of government investment—£16 for intermediate Apprenticeships, and £21 for advanced Apprenticeships. In fact BIS estimated that the value may be higher as we considered benefits to apprentice employers which NAO did not. So £18:£1—though impressive—may be a lower return than other estimates suggest. We believe that the productivity benefits for employers extend beyond those that are passed on to individuals in the form of higher wages or non wage costs. A study by Dearden, Reed and Van Reenen (2005) suggests that the increase in productivity from training is in fact double the increase in wages. Although this study is not specific to Apprenticeships, the Department considers it is the best estimate of the impact of training beyond the wage effect. The NAO would accept that they have not demonstrated our position is without merit, but they consider that further evidence is required to fully demonstrate this level of return. The Committee will doubtless note that for the NAO estimate to be sufficient, it would need to be accepted that employers received no additional benefit from Apprenticeships exceeding the benefit they transfer to their employees in higher wages and associated non-wage labour costs. The growing levels of participation suggest this is not the case and other evidence indicates that employers report substantial benefits from Apprenticeships. For example, a survey published by my Department last week demonstrates that employers report significant benefits to their organisation resulting from their involvement in Apprenticeships—most commonly, improved productivity (72%), followed by improved staff morale, improved product or service, a more positive image in the sector, better staff retention, and the introduction of new ideas to the organisation, each mentioned by around two-thirds of employers.56 The committee will wish to have a little more detail about how the respective NAO and BIS estimates of the economic benefits are calculated. Each consider the benefits of Apprenticeships in terms of: — Increased employment prospects for learners—leading to higher earnings. — Increased wages earned by learners in employment—reflecting their higher productivity. 56 IFF Research and Institute for Employment Research (2012)—“BIS Research Paper No. 77, Evaluation of Apprenticeships: Employers” http://www.bis.gov.uk/assets/biscore/further-education-skills/docs/e/12Ð812-evaluation-of-apprenticeships-learners.pdf cobber Pack: U PL: CWE1 [E] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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— The benefits of increased productivity, captured by employers—ie which are not passed on to workers in the form of higher wages (the assumed extent of these benefits is the key difference between BIS and NAO estimates).
From these are deducted the costs of Apprenticeships, in terms of: — Government funding costs. — Fees paid by employers. — Foregone productivity whilst learning takes place.
This figure is divided by government funding costs to arrive at the net economic benefits per pound of government investment in the system.
A full explanation of the NAO’s estimates are outlined in their technical report at: http://www.nao.org.uk/publications/1012/adult_apprenticeships.aspx
And the Department’s estimates are published at: http://www.bis.gov.uk/assets/biscore/further-education-skills/docs/m/11Ð816-measuring-economic- impact-further-education
I greatly enjoyed my time with your Committee, a member of which I note judged the Apprenticeship scheme the Government’s “flagship” policy. I know that your members know that, whether economic waters are stormy or calm, our investment in skills is vital to economic success and the common good.
I look forward to your final report. John Hayes 27 May 2012
Written evidence submitted by the BIS/DfE Apprenticeship Unit
APPRENTICESHIPS FUNDING
I refer to your enquiry regarding the availability of analyses linking Apprenticeship funding policy and demand, and to our subsequent exchanges, and would make the following points in response: — Firstly, I should perhaps draw reference to the principles underpinning current funding policy in relation to apprentice age, as included in the Government’s written evidence to the Committee. — In terms of funding policy interactions with demand, we know that current policy has supported the substantial expansion of the programme, with benefits assessed for individuals, employers and the wider economy and with strong returns for government investment, as the NAO report has helped demonstrate. — Demand has risen most strongly for 19Ð24 and for older age groups, though public funding is significantly reduced in these cases. We know from research that many older learners are gaining skills within existing jobs whilst at the younger age ranges apprentices are more likely to be new (or newer) employees, and so any direct comparisons of employer demand and sensitivity to funding for different age groups would be challenging to make. — The employer investment case studies that BIS published in May 2012, and which Gila Sacks mentioned during her session with the Committee, explore in some depth the costs and benefits of Apprenticeships for a variety of employers and types of employee and across different sectors. These also highlight the different ways in which employers are using the programme. — Published in parallel, our last major survey of employers explored the impact (as reported by employers) if public subsidy was reduced or removed, finding that the number of apprentices would be 85% lower if employers faced full fees and 73% lower with half fees. — As you know, the Government has introduced the Apprenticeship Grant for Employees (AGE) as an incentive for SMEs to take on new young employees (16Ð24), to boost overall demand and bring new employers into the programme. The scheme recognises the challenges faced by many small employers to take on and train new young employees given current economic challenges. Following early feedback and analysis, Ministers took steps to simplify and increase the opportunities available through the scheme. A more formal evaluation is currently underway. cobber Pack: U PL: CWE1 [O] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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— In terms of socio-economic factors, which you have specifically mentioned, data on learners by eg gender, disability and ethnicity is reported in the Statistical First Release. Additional Learning Support is available for disadvantaged apprentices; also, a programme of pilots has been supported by NAS across the country to promote diversity, with a recent evaluation of these published on the NAS website. Nick Grout BIS/DfE Apprenticeship Unit 16 October 2012
Supplementary written evidence submitted by the National Apprenticeships Service NOTE ON APPRENTICESHIP TRAINING AGENCIES Purpose 1. This paper is to provide the Committee members with information about ATA’s and in particular the ATA recognition process that has been developed in response to concerns around quality.
Background and Introduction 2. In 2009, 12 organisations were awarded a share of £7 million NAS funding to establish Apprenticeship Training Agencies (ATAs) under the ATA/GTA Pilot Programme. The programme also funded two Group Training Associations (GTAs) as well as one hybrid ATA/GTA. The Pilot Programme ran from autumn 2009 to March 2011. 3. The Pilot Programme was in part a response from the previous government to the down turn in economic conditions. It was aimed at supporting SMEs so that they were more able to take on Apprentices with the aim of employing them either during or at the end of their Apprenticeship Programme. 4. The Pilot ATAs drew their inspiration from the Australian Group Training Organisations (GTO). GTOs have been a feature of Australia’s apprenticeship and system for over 20 years. They support SMEs, promote training in traditional trades, and employ young people placing them with suitable employers. See ANNEX A for a list of Funded Organisations.
Key Points/Issues Apprenticeship Training Agencies in Brief 5. The Apprenticeship Training Agency (ATA) model is intended to support the delivery of a high quality Apprenticeship programme with a focus on small employers who wish to use the services of an ATA to source, arrange and host their Apprenticeships. This could be for a number of reasons including them not being able to commit to the full framework, short term restrictions on employee numbers, or uncertainty about the value of an Apprenticeship. 6. The distinctive feature of the ATA model is that it is the ATA which acts as the apprentice’s employer and which places them with a host employer. The host employer pays the ATA a fee for the apprentice’s services; this fee being based on the wage agreed with the host (at least the minimum Apprentice rate) and the ATA management fee. 7. If circumstances change and the host employer is unable to retain the apprentice the ATA will find alternative and appropriate employment for the apprentice giving them the reassurance that they can continue their Apprenticeship. 8. Organisations should carefully consider the reasons why an ATA is required before establishing one: — Is there a sufficient sustainable demand from small businesses in your sector(s)/geographical area? — Can demand be met via the traditional route of direct employment of apprentices? — As with all apprenticeships host employers should offer apprenticeships which lead to real jobs? Not just filling short-term labour gaps? 9. The ATA is not a “temporary work” business but rather a means to manage and give real flexibility to the delivery of a high quality Apprenticeship. This flexibility also applies where employers may not be able to offer all aspects of a framework but linking them with other host employers allows the full range to be covered. 10. For the apprentice the ATA gives another route into an Apprenticeship which can offer them the opportunity to experience a range of employers and increased security around the continuation of their Apprenticeship. cobber Pack: U PL: CWE1 [E] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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11. It is NAS’s aspiration that 85% of apprentices whom complete their full apprenticeship framework go on to gain permanent employment (this aspiration will be tested during 2012). However, it is always NAS’s ambition to support long-term employment security for Apprentices. 12. The ATA should provide the apprentice with an opportunity to progress where appropriate to Advanced and Higher Apprenticeships. See Full ATA Framework ANNEX B.
ATA Recognition Process & National ATA Register 13. As the government body with responsibility for Apprenticeships in England the National Apprenticeship Service (NAS) is keen to ensure that all Apprenticeship Training Agencies) ATAs deliver high quality Apprenticeship programmes and operate in accordance with the ATA Framework. Apprentices and stakeholders need to feel both confident and assured that the service they receive from ATAs is first class. 14. There has been significant growth in the number of ATAs operating over the past two years. With this number looking set to increase further, NAS are conscious that the strength and value of the ATA model is dependent on maintaining a high quality of service. To support this NAS has introduced a new ATA Recognition Process and a National Register of Approved ATAs. NAS Recognised ATAs will have provided evidence to demonstrate that they are operating in accordance with NAS guidelines. 15. NAS has been in consultation with the Confederation of Apprenticeship Training Agencies (COATA) to develop the ATA Recognition Process. COATA are the newly formed over arching ATA body with a membership of the majority of the ATAs involved in the Pilot Programme. 16. ATAs/Providers were informed of the new process prior to its launch on 1 April 2012. NAS/SFA is administering the assessment and roll-out of the process with the support of COATA. COATA’s intention is for their new members to be assessed and approved as recognised ATAs before permitting membership to their organisation. To give existing ATAs time to prepare applications and to ensure ATAs can continue to operate from April 2012 prior to making an application for ATA Recognition, there is a window in which organisations will be able to operate without recognition until 31 August 2012. 17. For those new ATAs which are not quite ready for full ATA recognition, they will be asked to register with NAS as an “ATA in Development”; this provides a maximum of 6months to develop their ATA business and to make a full ATA application. 18. Once Approved ATAs will have their details published on the National ATA Register to be housed on the NAS website. 19. Under the ATA Recognition Process Apprenticeship Providers will be asked to work with either Approved ATAs or those “ATAs in Development” to safeguard the quality of the Apprenticeship programmes.
Government Support for ATAs 20. Although there is no direct funding stream available for ATAs. Organisations can make bids to establish ATAs under the Government’s Growth & Innovation Fund (GiF). NAS has made a specific Grant to Skillsmart to develop a Retail ATA to address a market failure in the retail sector.
Annex A SUCCESSFUL PROPOSALS Trading Name (where Lead Region Organisation different) Contact Details East of Essex County Essex Works Dr Craig Elliott England Council [email protected] North West Economic Solutions North West Apprenticeship Mark Hayes Company [email protected] West JHP Logistics Apprenticeship Catherine Fisher Midlands Training Academy South West Triangle Fusion South West Apprenticeship Paul Rawson Company [email protected] North East Gateshead College North East Apprenticeship Jenny Godden Company [email protected] London NSA Creative and Pauline Tambling Cultural cobber Pack: U PL: CWE1 [O] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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Trading Name (where Lead Region Organisation different) Contact Details London E-Skills Ben Sweetman [email protected] East West Nottinghamshire Vision Apprentices Graham Howe Midlands College [email protected] London South London SLB Logistics Peter Pledger Business [email protected] Yorkshire Hull College Yorkshire and the Humber Andrew Ellams and Humber Apprenticeship Training Agency South East KEITS South East Apprenticeship Jamie Stevenson Company [email protected] London Lewisham College/ Apprenticeship First Mark Cook CoNEL [email protected] West Black Country The Apprenticeship Works Midlands Training Group East Leicester College Midlands North West Training 2000 Stephanie Whalley [email protected]
Annex B APPRENTICESHIP TRAINING AGENCY FRAMEWORK April 2012 The Apprenticeship Training Agency (ATA) model is intended to promote and support the delivery of a high quality Apprenticeship Programme involving employers who wish to use the services of an ATA to source, arrange and host their Apprenticeships. This could be for a number of reasons including them not being able to commit to employment for the period of the full framework, short term restrictions on employee numbers, or the uncertainty about the value of an Apprenticeship. Although a focus of the ATA must be on allowing access to Apprenticeship opportunities with smaller employers, ATAs can engage with larger employers and public sector organisations. The proportion of smaller employers ATAs contract with will need to be greater than the number of larger employers (NAS will seek to identify a percentage split by autumn 2012). The ATA will not replace the traditional model of Apprenticeship delivery based on direct employment of the apprentice, into a permanent job role, by an employer and linked to high quality training delivered by an accredited training provider. The ATA is designed to create new Apprenticeship opportunities not to displace existing programmes. As with traditional Apprenticeships a focus of the ATA will be progression into permanent employment, whilst there is not necessarily a guarantee of a permanent job at the end of the Apprenticeship, the offer to support on progression opportunities as the Apprenticeship nears the end should make this the most likely outcome.
Purpose of the Framework The framework is intended to help all those involved in an Apprenticeship delivered through the ATA model make a judgement as to the extent to which their experience is reflecting the best practice available. For ATAs to be listed on the National Approved Register of ATAs they will need to demonstrate to NAS/SFA that they are able to operate in accordance with the framework. It sets out the core features which underpin the ATA model and gives examples of the behaviour apprentices, employers, training providers and others should expect to see. Aspects of the ATA delivery model will be regulated through the normal work of bodies such as the Employment Agency Standards Inspectorate, Ofsted and Awarding Bodies. The framework will set out standards against which other interested parties can make judgements. The National Apprenticeship Service will review the model as part of its wider responsibility for Apprenticeship development and quality.
Key Features 1. An ATA is a business whose core functions are the sourcing of employers and candidates interested in engaging with Apprenticeships, leading to the employment, training and development of apprentices. Under the model the apprentice will be hired out to host employers who provide the productive employment, key to the Apprenticeship. Training will be delivered by an SFA contracted training provider. ATAs may also impact cobber Pack: U PL: CWE1 [E] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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on growth in traditional “directly” employed Apprenticeships and/or offer “recruitment only” or Access to Apprenticeship programmes that are designed to ease both candidates and employers into apprenticeship take-up. 2. An ATA will always aim to contribute to a high quality Apprenticeship experience. To ensure this they will make the quality of the apprentices’ working and learning experience central to all they do, working closely with training providers and host employers. 3. An ATA will focus on the creation of new Apprenticeship opportunities with employers who wish to benefit from using the ATA model to engage an apprentice(s). They should complement, not displace Apprenticeships directly employed by an individual employer. 4. An ATA will agree clear terms and standards with all the employers, providers and apprentices with which they work. These terms and standards should underpin the delivery of a high quality Apprenticeship. 5. ATAs must be aware of and comply with all relevant employment law and regulation including those appropriate to Employment Agencies and Employment Businesses where these apply.
Key Behaviours Associated with an ATA 1. An ATA is a business whose core function is the employment and development of apprentices. Under the model the apprentice will be hired out to host employers who provide employment key to the Apprenticeship. Training will be delivered by a Skills Funding Agency (the Agency) contracted training provider. This can be recognised by the ATA: — Being a distinct entity established to recruit and employ apprentices with the intention of hiring them out to host employers to support the Apprenticeship. The ATA will have ultimate responsibility for the welfare, health and safety, learning and employment of the apprentice. — Operating a business model that offers sustainability over the longer term and is based on a commercial charge on the host employer and in some instances on the training provider. Income should not be dependent on SFA participation funding which must be used in adherence with the Agency terms and conditions and solely support the delivery of training. — Having clear and robust systems to support their role as an employer. The workforce will include 16Ð18 year old apprentices, an age group that requires greater support and structure. The systems should reflect this as well as the nature of the operating model. — Offering full time employment of the apprentice as the norm. Part time employment is only available in limited circumstances based on the individual apprentice’s personal circumstances. There will be a contract of employment giving clarity around all aspects of their employment. The contract length should ensure the individual has sufficient time to complete the Apprenticeship with scope for an extension to allow for any delay. An apprentice must not be employed under any form of self employment. — Agreeing a wage in conjunction with the host employer which must be at least the legal minimum Apprenticeship wage currently set at £2.60 per hour (as of 1 October 2011). In line with the ATA delivering a high quality Apprenticeship they should not be promoted as a minimum pay model. — Ensuring clarity on responsibilities as an employee set out for the apprentice in some form of handbook or guidance document.
2. An ATA will always aim to contribute to a high quality Apprenticeship experience. To ensure this they will make the quality of apprentices’ working and learning experience central to all they do. This can be recognised by the ATA ensuring: — Where appropriate there should be independent advice and guidance (IAG) for the apprentice before embarking on a framework. — The host employer(s) will offer the apprentice productive employment which supports the Apprenticeship framework. The majority of the apprentice’s time should be spent in productive employment with a host employer not through simulated work place activity. — That the host employer’s vacancy should be clear from the outset and where possible offer productive employment for the length of the Apprenticeship. Given that a feature of the ATA is that it allows employers who cannot commit for the full period to engage with Apprenticeships there will be examples where the offer of productive employment is for part of the length of the Apprenticeship. — Where it is clear from the outset that the vacancy cannot offer the range of productive tasks or the full period of the Apprenticeship then the ATA (working with the training provider) should agree a combination of host employers to offer a structured Apprenticeship programme. — Where there is an interruption in employment with a host employer, there is an agreed period of continued employment with the ATA whilst suitable alternative arrangements are made with an appropriate host employer. — An Apprenticeship Agreement is in place covering all aspects of the training and including all parties (apprentice, host employer, provider and ATA). cobber Pack: U PL: CWE1 [O] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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— Training provision supports the employment opportunity offered by the host employer (the Apprenticeship should be based on the job role not on the training available). — The length of the programme should support the beneficial outcomes associated with Apprenticeships, including those gained from working in productive employment. ATAs will encourage the development of Apprenticeships driven by good Apprentice training practice.
3. An ATA will focus on the creation of the new Apprenticeship opportunities with employers who wish to benefit from using the ATA model to engage an apprentice(s). They should complement not displace directly employed Apprenticeships. This can be recognised by the ATA having: — A clear rationale for the services offered that they are able to share with employers. — A close working relationship with organisations currently engaged in the promotion of Apprenticeships to employers. This will include the National Apprenticeship Service, colleges and independent training providers, Sector Skills Councils, National Skills Academies and other organisations. — A clear engagement strategy and engagement criteria to secure host employers. There will be a focus on ensuring employers both understand, and are committed to Apprenticeships and to supporting the apprentice for the period of the Apprenticeship. — Clear systems to ensure that host employers can give necessary and appropriate support to the apprentice during their Apprenticeship. — A focus on engagement with employers looking to recruit into future jobs rather than on employers who use the ATA as a source of temporary agency staffing or offering temporary work experience. — Systems in place that allow the host employer to recruit the apprentice directly during the period of the Apprenticeship should the opportunity arise and subject to payment of a fee at least equal to the income expected from the hosting placement should it run to completion. — A focus on securing employment for the apprentice at the end of the Apprenticeship. This could be with the host employer, other employers linked with the ATA or through support on job search by the ATA. — Systems in place to ensure that those applying for an ATA Apprenticeship are encouraged to maintain their search for an Apprenticeship if not successfully placed with a host employer within a reasonable period (including registrations with Apprenticeship Vacancies and other sources).
4. An ATA will agree clear terms with all the employers, providers and apprentices that they work with. These terms should reflect best practice in the delivery of an Apprenticeship. This will be recognised by the ATA having: Apprentice — An engagement strategy and criteria to attract suitable apprentices. — A clear process to recruit suitable apprentices based on a link with real vacancies and training opportunities. The Apprenticeship Vacancies system should be a key feature of the recruitment process. — A clear process to match suitable apprentices with vacancies and training opportunities. The Apprenticeship Vacancy system can support this process. — Ensured that the apprentice fully understands the position of the ATA and is clearly aware of the nature of the employment. — Ensure that the apprentice is clear on the role and responsibilities of the ATA, training provider and host employer and who they should contact for support. — Ensured that the apprentice is clear about their responsibilities in relation to the Apprenticeship delivery. — Systems in place so that should a hosting arrangement break down, the ATA should aim to find the apprentice a new host whose business activity compliments the training programme. During any such break the ATA is expected to maintain the employment and training programme for an agreed period. ATAs should have plans and provision to facilitate this.
Host Employer — A formal agreement in place between the ATA and the host setting out the roles and responsibilities of both parties (there may be some variation depending on the sector and/or employer characteristics). The ATA should have systems in place to withdraw the apprentice where the host does not discharge their roles and responsibilities appropriately. — Made clear the key role the employer plays in the delivery of the Apprenticeship. The host should understand their role in supporting the apprentice and where necessary be supported by the ATA and training provider to ensure work place activity is appropriately linked with training. cobber Pack: U PL: CWE1 [E] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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— Clear agreements in place with host employers to ensure that moves between host employers can be managed. This to include an agreed notice to be given by the host employer.
Training Provider — A strategy and systems in place for selecting high quality training providers (providers must as a minimum be SFA accredited). Where ever possible associated providers should be named. — Agreements in place with all associated providers to ensure on roles and responsibilities
General — Systems in place to monitor the quality of the Apprenticeship experience from the perspective of the apprentice, host and training provider. The ATA should be able to evidence the success of the Apprenticeship programme measured in terms of successful completion and progression into a job.
5. ATAs must make themselves aware of and comply with all relevant employment law and regulation including those included in the Employment Agency regulations. ATAs will show they have: — Clarity on their status in relation to Employment Agency Standards Regulations and the Employment Agency Standards inspectorate. — Governance structures that will include access to appropriate expert advice. — Risk strategies that include the position of their apprentices and how they can be best protected. 6 July 2012
Supplementary written evidence submitted by the National Apprenticeship Service—Central Division 1. Purpose To provide the Select Committee with a note of the work the National Apprenticeship Service (NAS) Central Division is undertaking to support schools.
2. Background The Central Division (East Midlands, West Midlands and Central Eastern areas) has three Apprenticeship Ambassador Networks (AAN) that include key employers and employer representative bodies (CBI, IoD and FSB) as members. Each of the Networks identified a major concern with the potential lack of access to information, advice and guidance in schools on Apprenticeships. Many of the employers cited difficulties encountered with schools in terms of talking to school students about future employment and career options. Even those employers who now have good engagement with schools had identified along history of problems with school engagement that had taken a great deal of time and effort from the employer to address. Many of the AAN members believed that there was a barrier to offering the full range of students’ access to basic information about options post 16 (outside of sixth form of College enrolments). The Ambassador Networks believed that the lack of access to good quality information, advice and guidance was the key barrier to the effective growth of Apprenticeships and considered that young people were being poorly served in this regard. One of the AAN members Abacus Lighting is a world leading lighting company focusing on green energy that employs more than 300 people at its three sites in Nottinghamshire, Great Britain, St Petersburg, and in Shanghai. The company regularly recruits apprentices but struggles to engage with local schools to promote the sector in general and more specifically the wealth of high quality job opportunities available to local people. Sometimes the company’s recruitment falls short in terms of volume of apprentices or the calibre of applicant to cope with the Advanced and Higher level Apprenticeship requirements, especially in mathematics. In response to this important feedback, the NAS has invested non participation Apprenticeship funds to support some key business development activity to address the AANs’ concerns. The proposition was to develop a sustainable model of support that would connect each secondary school to an employer, apprentice or provider “Apprenticeship Ambassador” or “Champion” to help schools inform their students about Apprenticeships as a viable option for skills and career progression, included updating schools on Apprenticeship developments eg Higher Level Apprenticeships. Early feedback from schools and employers alike was that using employers and their apprentices (preferably ex-pupils of the school) was one of the best ways to inspire school students to consider post 16 or 18 options including, considering new sectors for employment. In response to this feedback we are in the process of creating and populating a sustainable database with every secondary school in the area linked to a provider (Further Education or Work Based Learning) and an Apprentice Ambassador/former Apprentice. cobber Pack: U PL: CWE1 [O] Processed: [05-11-2012 13:49] Job: 021099 Unit: PG08
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The NAS worked with ACER (Association of College Eastern Region), the Derbyshire Network (East Midlands) and Performance Through People (a private training provider that leads the West Midlands network of providers) to help develop the model in each of the respective geographic areas.
3. Progress to Date The main activities to date have been: All schools have been contacted to gauge interest in closer employer links. The feedback is that schools are supportive and welcome the engagement of employers, apprentices and providers to support students make informed choices about their futures; but not all schools are prepared to engage. Ambassadors have been recruited to support the schools and in the Central eastern area over 85 have already received training. We are developing a full briefing and resource pack for all Ambassadors and these packs will be updated when new policy initiatives are confirmed. All Ambassadors will receive regular newsletters and updates; this will help maintain the knowledge and skills of the Ambassadors/Champions. Work has already started in a number of schools with Ambassadors supporting open evenings, careers events and classroom presentations; this has been particularly welcomed in promoting some sectors including Science, Technology, Engineering and Mathematics (STEM) subject areas where young people can sometimes fail to understand how such subjects can be extremely valuable to local employers especially in the advanced manufacturing sector. Rolls-Royce Ltd are at the leading edge of schools engagement and have a series of open days; parents evenings; site tours as well as a major campaign of presentations in to schools, linking their current and past apprentices to their former schools where possible. Rolls-Royce has managed to maintain a high profile Young Apprenticeship programme with the Derby City schools which has proved invaluable in changing attitudes of teachers, parents and students to a career in the advanced manufacturing sector. It is this kind of engagement with schools that employers are keen to replicate. Aldi, a major retailer, that had struggled to find applicants of the right calibre for 18 Retail Apprenticeship vacancies (with progression to Assistant Manager positions with salaries of £25k per annum) has engaged with the project to ensure that vacancies were brought to the attention of local Nottinghamshire Secondary Schools. This has proved invaluable in promoting the retail sector as one with significant career progression and opportunities for real employment with training. In Birmingham and Solihull presentations have been designed and presented to schools aimed at raising the profile of Apprenticeships and awareness of the NAS website and Apprenticeship vacancies system. These have been well received and have broken down some barriers between schools and providers. In Coventry and Warwickshire, a partnership with Local Authority 14 to19 coordinators is engaging with schools and developing a local Apprenticeship Ambassador Network to support school engagement. The coordinators see this work as supportive of the “Raising of the Participation Age” activities through offering a full suite of options to young people at post 16 and 18 stages. In Hereford, Worcester and Shropshire a Provider Association is producing a database of 63 schools with linked providers and Ambassadors. A pocket sized “spotty” grid matrix, which details local Apprenticeship provision, has been produced for circulation to school pupils, this coupled with signposting and access to the Apprenticeship vacancies website can help the smooth transition for young people in to an Apprenticeship. July 2012
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