Oral evidence: Apprenticeships, HC 206Wednesday 8 June 2016

Oral evidence, 8 June 2016.

Witnesses

Mark Dawe, Chief Executive, Association of Employment and Learning Providers, Martin Doel, Chief Executive, Association of Colleges, and Shakira Martin, Vice President (Further Education), National Union of Students, gave evidence.

Chair

Welcome to our second part of today’s first session on our inquiry into apprenticeships. It is nice to see you all. Martin, I am especially pleased to see you because I thought you were moving on to another pasture.

Martin Doel

Not until September. I have to learn a new set of language to make what I say much more complicated, and every time I say anything I have to reference it with a footnote.

Chair

Well, it is great to see you here today. Could you all, starting with Mark, say who you are and what your purpose and institution is?

Mark Dawe

I am Mark Dawe. I am the Chief Executive of the Association of Employment and Learning Providers, so we represent about 800 learning providers. There are regional networks of about 2,000 and obviously we are involved in delivering a substantial part of the apprenticeship programme at the moment.

Martin Doel

Martin Doel, Chief Executive of the Association of Colleges, which represents and promotes the interests of the 320—this week—further education colleges in England, but also has close links with colleges in Scotland, Northern Ireland and Wales, and clearly an interest in the delivery of apprenticeships.

Shakira Martin

Hello, my name is Shakira Martin. I am the Vice President of Further Education for the National Union of Students, representing 7 million students across the UK. In 2014 we set up the National Society of Apprentices, to which we have 150,000 in all industries and sectors across the UK.

Chair

What is the purpose of that society?

Shakira Martin

The purpose of the society is a representative body to represent apprentices across the country and to put policy forward for the National Union to campaign on on their behalf.

Chair

Thank you. It is great to see you here. All three of you heard what we were getting at before and we are going to pursue the same sort of lines with you. I guess the overriding question is with all of these reforms, either started, underway or proposed, what are their purposes? Are they going in the right direction and can they be improved? Michelle is going to start off with some questions along those lines.

Michelle Donelan

Yes. Thank you all for coming. I was going to start with the key question to all of you in terms of how effective have the existing apprenticeships been and how pressing is the need for reform? Anybody can give those.

Mark Dawe

I think there is a high volume at the moment. If you look at Ofsted, they are saying 80% good or better in terms of delivery. If you look at employer satisfaction, if you look at learner satisfaction, it is all 80% and above for a whole range of questions, so they are not totally dissatisfied with the system. Clearly there were some concerns that the apprenticeship programme and the apprentices that were coming out were not meeting employers’ needs exactly as they felt they needed. It does feel a little bit like the baby out with the bath water here, so just, “Right, let’s start afresh, get rid of qualifications and rewrite all of this”. When you go around and tell the majority of employers there are not going to be qualifications in their apprenticeship any more, they are appalled; you tell learners they are not going to be walking around with a qualification any more, they are shocked. So there are some changes that are going on that you have to question, but clearly having more employer involvement was a good thing. There is an extra £1 billion going in, which is great. How that is spent, how that is allocated between levy payers and non-levy payers again is a challenge.

Martin Doel

I would echo some of the points that Mark has made. I am concerned at the scale and pace of the reform programme. No doubt there was a need for some additional reform and to increase the scale of delivery, so those are the right things to do. The aggressive timescale that has been applied here and the breadth of the reform programme that you have heard about this afternoon in terms of wholesale changes to the standards, wholesale changes to the way in which apprenticeships are assessed, the wholesale change to the way in which apprenticeships are funded I think has taken a number of employers particularly by surprise in terms of the scale of that reform programme. In terms of the timescales for it, this is an extraordinarily large project to carry out and I think I have said previously to some people if the Germans were doing this, I think they would have set a 10-year timescale and they would have applied a huge amount of governmental effort to preparing the ground and carrying forward this programme by consensus and over time. In our typically aggressive way, we are trying to do it in two years.

Michelle Donelan

Do you not recognise the timeframe is because of the need as well?

Martin Doel

I agree, but then there has to be a corresponding allocation of resource and policy-making expertise.

Michelle Donelan

So you are saying it is the process?

Martin Doel

I think subsequent to the election, there has been a good deal more resource applied to this in terms of civil service effort, consultation and determinate policy making, but the timescales have become inevitably compressed, so some of the detail that needs to be worked through has been worked through at real speed, which you could also say—as in the earlier session about Trailblazers having been taken forward with a limited amount of scrutiny in terms of the position we have now reached—we are very much making policy on the hoof at times, it feels, rather than doing this in a considered, properly pacey way, but nonetheless effective. I have to say post-May 2015 it got better in this regard, but there is still a huge amount of things to do on the project plan to deliver standards by 2017, to implement the levy, to begin to bring in end point assessments. The scale of this is very substantial.

Michelle Donelan

So in a nutshell you are saying to do it that fast you need more resources?

Martin Doel

You need more resources and a very strong project management plan, which is emerging now, but I think was not in place when the declaration of 3 million apprenticeships as a target was made. In policy-making terms—and I do not want to overstate this—we are doing it at warp speed and whether or not it would work out exactly as is planned in those circumstances is an open question.

Mark Dawe

There is an opportunity for some transitioning, I feel. Yes, let us keep the pace up, but let us make sure there is some transition through the funding, through the standards and everything, so it does not all change suddenly in one go. We can ease this through.

Shakira Martin

NUS welcomes and supports the ambitious target set by the Government to have 3 million apprentices. However, we do have some concerns about those apprenticeships turning into well-paid jobs at the end of it. I think fundamentally it comes down to quality. With apprentices being left out of being around the board of the Institute for Apprenticeships, it is quite frustrating to see how we can develop an apprenticeship programme or process without apprentices around the table. This current model for the levies being lifted from Europe, similar to what is happening in Germany, it does not seem that underpinning fundamental quality assurance issues has been raised with that. That is my concern.

Michelle Donelan

So it is listening to the apprentices more as well. How would you gauge that? You have set up your body and you are talking to them, but that will not be everybody that is in the system, so how would you listen to them to make sure that their views are reflected?

Shakira Martin

I am more than happy to put you in contact with the National Society of Apprentices. I know I put a question to Iain Wright at the FE apprenticeship forum and that is still welcome, and I will e-mail you shortly about that. I do think a big part of this process is missing, and that is information, advice and guidance not only to get the demand in, but also my concerns are about not blurring the lines in thinking that an apprenticeship is better than higher education and higher education is better than further education. I do not think without a plan to deliver significant, effective, efficient IAG to these young people will they be able to decide what route is better for them. What I find increasingly frustrating when talking to Government are the statistics and facts, which I know are important in evidence and planning ahead. However, when talking about 3 million apprentices I would like to just remind the Government these are 3 million individual lives and we cannot afford to get it wrong, not only for resource purposes but for the purpose of that individual and a member of our society.

Michelle Donelan

Do you believe that the changes will include more young people or will listen to more people?

Shakira Martin

Based on the Institute for Apprenticeships not having training providers and apprentices around the table currently, as of today, no. I do think that if we get it right by listening to the voice of apprentices—like I say, an apprenticeship is nothing without an apprentice, otherwise it is not an apprenticeship; it is just something else. I do think if you use NUS, and in our national society we have up to 30 elected leadership teams across the country, it would make a big difference in building this process and ensuring that the apprentices get what they require and what they expect out of it, which is a well-paid job and skills that are transferable that they can use in other industries and other sectors. It is not just about education. It is about education for a career and not just a job.

Michelle Donelan

A final question just for Martin and Mark. To what extent do you believe that the providers were consulted with the Government changes and how much of that consultation was listened to?

Martin Doel

I think increasingly so, but the limitation has substantially been about the pace, about getting things done. We have had good conversations with the apprenticeship teams doing the reforms and with Ministers, so I think we have been listened to, but things are moving at such a pace that it is quite difficult to assert reasoned, developed arguments at points. The team is on a really tight schedule and the opportunities to go and consult with apprentices, to consult with us, is necessarily constrained. We have tried to up our game in terms of coming to the table quickly to provide responses and we are doing that, but this pace issue, it is quite difficult to correspond with a process that is going this fast.

Mark Dawe

It started off with, “Let’s listen to employers and employers alone and they will lead the way” and then it has realised that providers did have an expertise and an understanding that needed to be listened to. A good example is the non-levy payers and expecting a contribution from them. There seemed to be a belief that this would work. All our providers talking to their employers, their employers were just totally stunned when they heard that in April they would be paying a contribution and we do not believe the 3 million target will ever get hit in 2020 if that happens. If you talk to those small employers, they are investing time, some would say they are being the mother, the counsellor, giving them equipment, paying them, putting them on day release. They are not productive and they are taking productive staff away to train, so for 16 to 18 year-olds in the lower level apprenticeships, level 2, level 3, we just think if there is a charge it will cause a real problem. That is an example of where if we had sat down at the table at the beginning and talked through the policy and the approach, then maybe we would have had some influence upfront, rather than now coming back when things are starting to be set in stone, saying, “This is going to cause a problem”.

Martin Doel

Just to reinforce Mark’s point, at times it has felt like a very linear process, so you only wanted to speak to employers about standards, because the employer is the predominant voice in what the apprentice needs to be able to do, that is right, but that should have had some involvement from providers talking about what is achievable in terms of those standards, and then finally you are going to talk about the requirement to employers. You might have then talked to providers about how they deliver that requirement, then you might talk about audit bodies or assessment organisations and how you assess it. It started out feeling like a very linear process, “We are only talking to employers about the first one. We will come to you when we have the standards sorted out, and we will talk to you about how you deliver them. Then we will come to the people that do the end point assessments when we have reached that point” when in reality this needs to be seen as a holistic programme with everybody being involved in the conversation with different leads at different points. That would have been a better way to do it. I think we have reached that point now, because the imperative of delivering is getting so close and we are getting involved in the conversation about how we get this done. So it felt linear and I think it has become more involving as it has gone on.

Shakira Martin

Just following on from what Martin said—and what I did not say in my first question—is that there are concerns about the definition of what an apprenticeship is, whether it is work, education, one or the other or is it both? That creates a lot of barriers going down the line for individuals, say, for example, an estranged 16 year-old who has moved out from their parent and it is classed as work so they are not entitled to council tax benefits. Again, they feel like they are being penalised for working or trying to better themselves, which again is off-putting and is probably one of the reasons why.

Ian Mearns

Is the role of the training provider sufficiently clearly defined in the employer-led system?

Mark Dawe

I think there has been an attempt to define them. The thing that worries me the most at the moment is the providers are the salesforce. They are the ones who are talking to the learners, they are the ones that are talking to the employers, yet they do not find on a Monday morning a queue of employers outside their front door saying, “I would like an apprenticeship”. They are out and about selling it and what they are saying to us is, “We are not quite sure what we are selling yet”. Many of the standards do not exist. There are no rules about the funding for levy payers and non-levy payers and these are employers that in April are going to start being levied and all the systems are going to change, so I think there are concerns definitely around that and how the providers are being engaged.

Ian Mearns

So what should a clearly-defined role look like in that case, from your perspective?

Mark Dawe

At the end of the day, our providers have the expertise in delivering the learning and the training, and we are not anti employers saying, “We would like to become a provider”, but they need to go through the same process that any other provider goes through with the quality inspection, with the audits that all providers face, because it is Government money and it is a Government programme. We might point out a bit more about what is the difference between just employer training and a Government apprenticeship programme, but if it is Government money going in, then those systems need to be in place. So there is a very clear role. It is not clear what the inspection regime is going to be. If the discussion is about the employer and the provider having a discussion about what the training programme will be up to the end point assessment, that is a decision between the employer and the provider. Does that mean both get inspected and how do you define what good learning is during the programme rather than just the end point assessment? There are many questions around that that are challenging and we are not hearing answers at the moment. The last thing is the Alison Wolf anecdote that they went out and they could not find any decent apprenticeships. Those were frameworks that are Government frameworks. They were not the providers’ fault. The providers are just providing what is available and they get blamed for delivering the apprenticeship that they are being asked to deliver.

Martin Doel

To advance the question, I think defining the roles too simply is a mistake, particularly when you talk to smaller employers. In those relationships, I think the provider might have a role that was talked about in the previous session, of hand-holding and assisting that smaller employer, who might only take one apprentice on every five years in a different way than you would do a large employer like British Aerospace, who have a well-defined HR function and understand the system. They might present more in the way that theoretically, as Mark implies, the employer should come with an apprentice and look for somebody to do the training. That is a very simple system, but I think for many other employers they are looking for a more one-stop service in terms of a training provider to find the apprentice for them, provide the training and also handle some of the documentation and bureaucracy around this. That has been the pattern in the past and I do not think it is a bad pattern in relation to some employers. Simple role definition I do not think is capable of getting that and we need to talk more in terms of partnerships in this. Very much one of the things that I might take from the German model is a partnership model between the training providers, the chambers and the employers. We seem to be setting this up as a very much kind of directed system, when behaviours will not act in that manner.

Ian Mearns

So from your perspective, have the foundations yet been laid properly for these very ambitious governmental targets by 2020?

Martin Doel

I think they are beginning to be laid at pace. We could go back to the same thing, we are beginning to see the signs of that. I do not think they have been tested as far as they ought to be in terms of how people, as Ewart was saying in the previous session, might game the system, which is a tendency that is always liable to be out there, so understanding how people will behave and react to the policy I do not think has necessarily been modelled as far as it could have been at this stage, but I am sure work is going on in that regard.

Ian Mearns

But the task is not just about the quantity, which is the 3 million target, but it is also making sure that that 3 million target encompasses quality of provision.

Martin Doel

Exactly, and I think the last session particularly touched on it, and Mark did as well, that you need to have some clearer definitions of what quality is within the system. One of the simple things here you might argue is rather than having a concentration of 3 million starts you have a concentration of 3 million completions, which then begins to say you have achieved something from this funding rather than just activity. Then you can look at what is involved in a high-quality apprenticeship. One of the areas I think that probably is easiest to assess in terms of quality is the off the job training. It can be seen, observed, there can be measurable outputs from it. It is much harder to assess reliably what goes on in the workplace, albeit you can consider how you do this. We do need to think about what the relevant quality measures are here to ensure that we hit the target and do not miss the point.

Mark Dawe

That is the very point around assessment driving it, again that just because it is harder to assess should not mean we do not assess it. I think one of the debates that keeps going around—and I heard it again today—is the confusion between level type of apprenticeship, for example, what sector and quality. There are level 2 defined apprenticeships. They are delivered in a very high-quality way to the care sector, the retail sector or the engineering sector and people seem to have views that a level 2 in the retail sector is not a quality apprenticeship. That is not what we are talking about when we talk about quality. It is, “Define the standard, define the expectation and then make sure it is delivered in a quality way.” That to me is what quality is.

Ian Mearns

Shakira, from the learner perspective?

Shakira Martin

Yes, so quality from a learner’s perspective is about on the one hand quality teaching and learning, ensuring that the assessors and the framework is put in place, not only just to let the apprentice go through the motions, but learn on the job. Again, that is being done by collaboration, working in partnerships with businesses, employers and the apprentices. I do have concern about businesses taking on the role of training the employers, because they are not teachers and they do not understand about teaching theory and pedagogy, so I do think that if that is an option it needs to be considered. They need to be aware of what quality teaching and learning looks like to enable the apprentices to complete their course.

Ian Mearns

I guess from a learner’s perspective the bottom line is what lies at the end of the qualification in terms of employment prospects as well.

Shakira Martin

Definitely. That is the whole aim of them going into an apprenticeship, to get a job at the end, so quality would be when they are in a secure, quality, well-paid job.

Ian Mearns

To Mark and to Martin specifically, what role are your members playing in the development of the Trailblazer standards?

Mark Dawe

It varies. It depends often whether they have been invited. Sometimes they are definitely not invited. The ones where they have been invited we have had positive reports or reports like, “Thank God I was there, because I was able to explain that trying to assess or train in this way just won’t work”, right the way through to groups that we know are not involving either training providers or awarding bodies and they are coming up with ideas that when it hits the ground just will not be practical to deliver. So you have the whole spectrum, some really positive reports, but some really negative ones as well.

Martin Doel

Nothing really to add to that. That is precisely right. There is a spread of practice, there is no guarantee that training providers or colleges will be involved in the process and I think some of those that are being produced without that involvement have suffered as a consequence.

Ian Mearns

Would you regard the Government’s apprenticeship programme, its policy on apprenticeships and the process of further education, area reviews, as a complementary process?

Martin Doel

Area reviews—and I am trying to make the connections in a progressive manner—if they result in a pattern of colleges that are more stable, with greater ability to invest in the products that they are developing, and more able to deliver effectively to employers within their areas, should support the growth of 3 million apprenticeships. The danger is doing these two reform programmes at the same time with colleges who are necessarily concerned about their structural reform and therefore challenged to be expansive and speculative about how they prepare themselves for apprenticeships. I think they are, but it has been, from an AOC point of view, a real effort on our part to continue to keep colleges up-to-date with what is coming in 2017 and to get them into a position to be prepared for that while they are going through an extensive review of their pattern of provision, how many there will be and where they will be. The challenge is doing the two things at the same time, but yes, one should lead to the other, with more capacity to deliver higher-quality apprenticeships.

Ian Mearns

The way in which that is being done, does that feel like joined-up Government to you?

Martin Doel

I think it is joined up on the paper. I do not know if I feel it is joined up in the practice.

Mark Dawe

The independent training providers are not part of the area review process. They deliver about 76% of apprenticeships on the ground and if the apprenticeship programme is the major focus for vocational learning alongside what happens with Sainsbury, then it does not feel that joined up, but while the colleges are having to look at their structure and everything, our guys, senior management teams, are out talking to employers and preparing them for the levy. So there are people on the ground out there doing that work now, but it does flow through.

Martin Doel

One area where I think I am more convinced that scale is important in the size of a college is in the delivery of apprenticeships. Insofar as with the money moving to levy payers having the money rather than the college getting a grant, it has become inherently more speculative as a business and will reward having dedicated, professional business development units within colleges, which is hard to build within a relatively small college that might be more exposed in terms of having lost or won a particular contract. Area reviews leading to fewer, larger, more resilient providers in the context of apprenticeship delivery has some logic to it.

Chair

Thank you. I am going to move on to the Institute of Apprenticeships and ask Mark and Martin in particular what role you think that Institute should have when it is fully formed. Mark?

Mark Dawe

Every time there is a difficult question, we are told the Institute for Apprenticeships will resolve it, and they do not have a board or management team or staff yet, as far as I can tell, so that is the difficulty, that all these—

Chair

It is a clean sheet of paper. It is very clean, and you yourself have made that clear, so what do you think you should put on that paper?

Mark Dawe

We are keen to be part of it. It goes back to the point that employers should have a role there, but it is important that the providers are there because they have the expertise of delivery. There is definitely a role around quality and they have been given the role through end point assessment. I do not quite get why when there is a Government agency that does quality on assessment, but that is a different discussion. There is a role there, there is a role about maintaining the standards. This comment that was made earlier by one of the Alisons around refining and changing rather than major system change all the time, if we can get into a system where there is a conversation about the apprenticeship standard, “Does this work? Do we need to tweak it? Do we need to add in a unit?” It goes back to your automotive things. The automotive glazing, great, but there should be a core automotive learning unit and then you specialise in particular areas. At the moment we are going in the other direction, we are getting the specialism and I think maybe, especially if Sainsbury comes in with fewer routes, there will be a need to start retro-fitting. That is what the Institute for Apprenticeships should be doing, it should be holding the baton around those standards and around the quality.

Chair

Martin, do you concur with that?

Martin Doel

I think it should oversee all elements of technical and professional education. To give a new organisation a more burgeoning role just beyond apprenticeships seems to add to the problem that Mark identified, giving it new jobs before it even exists. I do not see any logic that you would have a separate body overseeing the implementation of the Sainsbury panel, the recommendations for college-based or classroom-based technical and professional provision separately from apprenticeships. I would be looking at both aspects of technical and professional education. I would be seeing that they oversee standards, that they put in place quality processes. It does not mean to say they have to carry out the quality checking, but that they ensure that rigorous and proper quality measures are in place. I think they need to be in a position to determine whether or not the economic impact of technical and professional education is being realised in terms of gains in productivity and that there should be an expert but independent adviser to Ministers on this area of business. To do that, I do think it needs to be employer-led but not employer-dominated, so there would be value both in having an apprentice representative on there to bring that perspective to bear on the business and providers at the table also, but the preponderance of numbers within that board you would expect to be employers providing that advice. I have to say, when the last session talked about how they would be recruited, I do not want to look backwards in this, but the UK Commission for Employment and Skills had a perfectly good process for open recruitment to the Commissioners that involved providers and employers as well, and I can see that as a reasonable template to adopt for setting up the Institute in the first place. Finally, I would agree with Mark, I think you could see the Institute usefully bringing together some of the apprenticeship standards, the Trailblazer standards, into families where you could identify core skills and then more specific skills relating to narrower occupations. In that way they could bring together the recommendations of the 15 technical professional routes of Sainsbury and apply that as an organising concept to the Trailblazer standards. So I think overseeing technical and professional education generally would be the role I would be seeing for them.

Chair

Thank you. Shakira, what would you like to say?

Shakira Martin

I just have three points that I would like to make. One thing that I would ask is that the Government should not be confused about the aim of meeting the requirements for skills for individual employers. By doing that, it means that it needs to employ a dominated institution. NUS also believes that it is vitally important for professional training providers again to be around the table for them to be able to have understanding of teaching pedagogy to be able to ensure quality standards and oversight for your premises to do that.

Chair

Thank you very much. How do you think when this Institute is up and running—and I appreciate we do not know what it looks like—we should be formulating ways of measuring its performance and holding it to account and checking it is doing what it should be doing?

Mark Dawe

There was a question along those lines the other day. I went back to the point that all the indicators at the moment seem to show that employers are quite happy with the apprenticeship programme, the engagement, the productivity benefits they get, the staff that come out of it are all positive in the 80%, 90% and for learners as well. So my point was if these indicators are saying things are so great but the employers are saying they are not, what is it they are measuring? What is it that they are concerned about? Let us make sure we are measuring those things so that we know what the baseline is, which seems to be they have a low view on some things, and let us make sure those are achieved as well. But also the benefits for the learners. There is this balance—and this is a Government-funded programme with Government money—to ensure that young people, young adults, get portable skills that they can use and that benefits obviously the employers but also the individual. There does need to be that balance, because otherwise we might as well just let the employers do their own training for their own business and leave it at that. The whole reason this is a Government programme is that wider skills base and the wider benefit and that portability.

Martin Doel

It is going to have to be this great question, and one I have not given as much thought to as I perhaps should have done in the past: there is going to be a variety, a range of measures. The one measure I know it should not be measured against is 3 million apprenticeship starts. It should be measured in terms of the quality of those apprenticeships, the quality of the conversations they have engendered with employers and, more likely, if you are going to take a macro-level assessment of their effectiveness is what productivity gains have we achieved as a consequence of the reforms of technical professional education that the IFA is being charged with overseeing.

Chair

It is a very interesting point, thank you. Shakira, do you have any thoughts?

Shakira Martin

When people are in well-paid, secure jobs that they are happy with, for me that is a benchmark of success and progression.

Chair

All 31 million of them?

Shakira Martin

3 million of them.

Chair

No, I was thinking about you said when people are in secure jobs there would be 31 million people.

Shakira Martin

That is the thing that we need to do. We need to ensure that there are jobs for these young people to do once the apprenticeship is over.

Chair

Okay, thank you.

Stephen Timms

Can I ask you just a bit more about the apprenticeship levy? Mark was present at a seminar we had a month or so ago when there were some draconian warnings about what the apprenticeship levy might do. What is your assessment of how employers’ willingness to offer apprenticeships is likely to be affected by the introduction of the levy?

Mark Dawe

Overall it is a great thing. It is engaging 85% of the large employers that were not engaged before, even if it is them looking at it and saying, “We will just pay the tax”. But they are all looking at it; they are all talking about it. The finance director is talking to the HR director, there are conversations. It will drive the game changer for technical and professional education. I used the phrase this morning “a parity of opportunity”. We will see at 18 opportunities to go through higher apprenticeships, degree apprenticeships, alongside the academic HE route, and parents and young people will think equally about both of them. Especially what is described as the £100,000 choice: £50,000 worth of debt into university and 55% do not get into a graduate job, or at 18 you go in, probably earn £50,000 and you are in a graduate job at the end of it. That is getting quite a stark choice. That is fantastic. We have to watch for dead weight activity in gaming. There are 235,000 employer-funded degrees at the moment. If they all just flipped over into apprenticeships that would be a loss that would not be right. I am worried about the non-levy payers. No matter how hard I push, to me it sounds like they are going to pick up the scraps of the levy.

Stephen Timms

Can you explain to us a bit more why you are worried about them?

Mark Dawe

Because the only budget we are told is available is the levy and the expectation is the levy payers will not spend it all, so there will be some money left for the non-levy payers. But I believe that those levy payers will slowly use up that levy. They will find ways of using it up, and in a positive way. I am not saying this is a bad thing. They will have a whole range of apprenticeship programmes. As far as we are told, there is no other money. So at the moment there are about £800 million, probably £900 million, of SME apprenticeships being delivered. There is no guarantee that that will stay at that level. If the money starts running out, the organisations, which I believe are the drivers of innovation and productivity, are the ones that may not have access to money to support apprenticeships. That just seems wrong. One of the commitments we are looking for is at least guarantee the amount of money going to SMEs that is there at the moment, if nothing else, just so we have some certainty going forward.

Stephen Timms

Do you think the concerns about non-levy payers have been addressed adequately so far?

Mark Dawe

This is where the 3 million target helps, because our view is that in the run-up to April there is a lot of selling going on at the moment, because a lot of apprenticeships are free. When employers are finding out they could be contributing up to a third, we have talked 10%, 20%, 30%, they just say, “No way. I am just going to do a bit of training myself so that the person can do the job. I am not paying for the Government’s programme, particularly at level 2, level 3” which does not give them enormous amounts of productivity during the apprenticeship programme. They are not going to pay for it. We do think the numbers will just fall away in April. That is where the 3 million helps, because if they want to hit that target they have to support the SMEs, and this is my point about transition. At least if you had two or three years of saying, “We want you to pay in the long run, but in the short term we understand this is a big change. We will support you, we will support you at 16 to 18 year-olds, level 2, level 3, and over time expect to start having to pay something”. That would be a much better approach and help quality apprenticeships and hit the target.

Martin Doel

Pretty much the same as Mark said. I will keep it fairly short. I do think the levy was a game changer—is a game changer—in terms of ensuring at least we have the prospect of 3 million high-quality apprenticeships rather than 3 million things that we can afford from normal revenue funding. So it has opened the door to the potential for high quality. It is also a potential game changer in the types of conversations we will have with employers, because employers will be more sensitised to the fact they are paying the levy, therefore become more aware of apprenticeships and talk about taking on apprentices. Those are all clearly good things. It is a very complicated area of public policy. As Mark implies, there is a concern about displacement, employers paying and then seeking to rebrand other training, which we have seen with the Train to Gain and other examples in the past. There is also the potential for employers gaming the system more directly as employer providers to consume their own levy, rather than getting truly additive training in terms of what the employer is receiving. So those all represent complications. It is still complications, although Ewart said he thought they had a solution to the boundary issues of across borders, I do not believe those issues are resolved for people like British Aerospace working in the Bristol area as clearly as he implied. With Mark, my greatest concern is about non-levy payers. The presumption that they would make a cash contribution, particularly to 16 to 18 apprenticeships, where arguably you are still in the business of the period of entitled education up to age 18, which it seems quite strange to me that you can have fully funded 16 to 18 education if it is fulltime, but if it is an apprenticeship then the employer is going to have to pay as an SME for a part of that education. It just seems somewhat strange and anomalous to me. But also in terms of the point Mark was making is there is no history of having made payment in this area and how you introduced a cash contribution, it is difficult to see what the consequences will be. But the 3 million target, I agree, is helpful in this limited regard. But the other thing, to be fair to the apprenticeship team, they will not know what surplus exists from the levy until you start to apply the levy. Up until that point you are going to make a broad calculation to what surplus you might have and also what more general revenue funding you might have available in BIS in order to sustain SME. So whatever way Ministers do this, they are going to have to take a gamble or a risk or a calculated gamble in the first few years around SMEs, which strikes me as being a potentially problematic area.

Mark Dawe

Can I just add one bit about funding breaks, because we are moving from a rates system—there is a set rate—to what has been described as a cap with a negotiation with every employer, with a provider, about what the funding per apprentice will be by standard, by age and everything else. I get why that is there, to create a bit of competition, create efficiency, but our real concern then kicks in around quality. If you had a cap and some unscrupulous providers are walking around saying, “I can do you two for one, we will scrape through the EPA. We might teach the test. There is a bit of a GCSE reflection here, do not worry about all the training, they just have to get through this test and then we can draw down the money”. If that sort of thing starts happening, it is going to undermine the whole quality agenda. If we are not going to have rates, at least have bands where you say, “This is the 100% rate, but we do not expect it to drop below, say, 70%, so aim in that range”. Because if you go below 70%, there is no way you can deliver a high-quality apprenticeship to all those learners.

Stephen Timms

So you are happy with the idea of a cap, but you think there ought to be an underpinning level?

Mark Dawe

Our preference is a rate, so you just agree what you are going to do for a set rate. But if there is going to be a cap, then we think there should be a base, a floor, as well.

Stephen Timms

What factors do you think ought to be taken into account in deciding what the cap is?

Mark Dawe

Under many qualifications now and delivery qualifications, it is the cost of delivery, and that is why you have standards that are costed from £3,000 up to £27,000 depending whether it is high-end engineering with substantial learning, substantial equipment over a number of years with complex assessment, or something that is pen and paper and you do not need the same equipment. It goes back to the quality point. They are both high-quality apprenticeships, they are just different delivery and involve different time and different processes.

Martin Doel

I would not want to contradict Mark’s general point because I share his concern, but just to show how it is hard to predict behaviour here, I spoke to a large employer just last week whose view is the polar opposite to that. They said they are unlikely to use the full amount of their levy because of their workforce requirements. So they absolutely wanted to buy at the cap, so they would buy the highest quality possible from the levy that they were contributing because they would have less not used, so they would negotiate up to the cap. This is my whole point about modelling behaviour and understanding behaviour in the system. The other thing I would add, if you are going to go through this negotiation process every time, you are inevitably making it a more complicated system. There are more touch points, negotiating points, contracting points, points of dispute, but if you had, as Mark suggested, either a rate or a band below within which you would operate, then you would make the negotiation process simpler both for providers and for employers.

Stephen Timms

Shakira, have you anything to add on the levy?

Shakira Martin

Yes. In principle NUS welcomes the levy. However, we are disappointed in a lack of ambition of how employers will spend the levy, because we believe that these funds could be used to widen access and get much more different types of groups of people involved within the apprenticeship. But instead it seems like it is geared exclusively for training, reserved for training. I just want to emphasise again that the system should be education for career and not just for a job. It should be accessible for all, so we think the levy misses out a great opportunity to guarantee a wider spread of young people.

Stephen Timms

Can I pick you up precisely on that? This moves towards the next question that is going to be raised, but the census data says that 7.5% of the UK population currently is Asian. As far as I can see from the apprenticeship stats, only 3.7% of apprenticeship starts last year were by Asian apprentices. There is quite a serious issue about under-representation of ethnic minority groups among apprentices currently, which I think is the point you were just starting to move towards. I wonder whether you think this is something that ought to be addressed and, if so, what ought to be done about it.

Shakira Martin

Yes, 100%. There is definitely an issue regarding both ethnicity and gender-based barriers, for example, not only for BME people and Asian people as well, but regarding the amount of women who will get into STEM projects, and having equal pay for men and women to be able to go into different industries. I know the Government has had a commitment to increase BME apprenticeships among the BME by 20% in 2020 and it will be important for the Government to confirm that this is a commitment about the rate of apprenticeships taken up by BME and not just a number. So I want to see how this is going to be done in principle and what other agencies are they going to be working with to engage these type of young people at a community level.

Stephen Timms

Sorry, what do you mean by the rate as opposed to the number? What is the distinction?

Shakira Martin

I do not want this just to be a number that is plucked out of the air to be seen to be done, but again, I am going to reiterate that it is not about getting 20% of BME students into apprenticeships, but continuing that progression, in them being in secure well-paid quality jobs.

Stephen Timms

What sort of things do you think need to be done to attract more ethnic minority persons?

Shakira Martin

You need to be working on these young people to be able to understand their worth and their self-value and have the confidence to step outside the comfort zone and know that an apprenticeship is a start to an end and you are going to have work hard. It might not be the right amount of money that you want at the time, but the progression and the career success is endless. But again, you need to go in and let these young people know the options by giving them clear, efficient and effective IAG. Without any IAG, I do not believe this is going to be as effective because an apprenticeship is not for everybody, same as higher education and further education, and I do not want it to be blurred to say one is better than the other, but we need to make sure that this is for the best of the individual person and that will differ.

Stephen Timms

Do you have any views about why it is? It seems that young people and not so young people from ethnic minority communities are less willing to start on an apprenticeship than people from other groups. In quite a number of the apprenticeships, women are significantly under-represented as well. Do you have a view about why that is?

Shakira Martin

Yes. It is like discrimination of how young people are viewed, especially black and BME people, in the newspaper. There are a lot of BME people who at school are dyslexic and it is not addressed until they have gone into college, so they have lacked confidence, motivation, they have come from a community of deprivation and do not know how to get out of that or what a career path is. So there needs to be a lot of work to address that individual self-confidence. With women, as a woman and a mother myself, I know how hard it is to be a working parent and it is not easy. There are no perks other than not being a statistic to the Government, so to speak. But again, it is about women not being able to feel confident to be in a workplace and have progression, and especially single parents who have caring responsibilities. There needs to be better support mechanisms, which I believe could be used from the levy money, raised from the levy, to support these people back into work, because again you are feeling penalised for trying to better yourself.

Stephen Timms

Mark and Martin, what do you think about these diversity issues, apparent under-representation in most apprenticeships?

Martin Doel

It makes a great case, which is very immediate as well. I do not know that I have a great deal more to add, but to add the fact that some of these are fairly deeply embedded gender stereotypes and cultural stereotypes that are going to take some time to redress. Career education is one element of redressing that, but also it is about delivering high-quality apprenticeships so people see that they are progression routes to good jobs and a prosperous future. Over time you would expect to break those stereotypes down. We have to dig in for the long term on this, as well as taking short-term action, and be persistent about how we present the different types of apprenticeship so you do not get gender stereotypes being borne out with hairdressers being women and engineers being men, and both are possible. We might need to be persistent and we need to be determined around this.

Stephen Timms

Are there examples of colleges doing a better job on this than the average? Across the system there is a worry here. Can we look at particular colleges who are doing well?

Martin Doel

I am not briefed if there was, Stephen. I will say some colleges are demonstrably doing better around STEM for women than others. I would anticipate those that are doing better with STEM for women will do better around apprenticeships for women. In terms of BME reach, some colleges disproportionately made provision to BME populations compared to universities and to schools. Therefore, as colleges move more of their provision towards apprenticeships, then you would expect an increase in BME involvement in apprenticeships, but I could not say that is a guarantee.

Stephen Timms

It looks to me as though the BME under-representation in apprenticeships is worse than in higher education, from what I can see from these.

Martin Doel

You perhaps need to be more targeted in that as well. Putting BME as one definition does not tell you enough rich information to say where within that BME population are apprentices not being taken up and where are they being taken up. Anecdotally, the Afro-Caribbean BME population is probably not as disproportionately out of apprenticeships as the Asian population. We need to be more targeted in order to address the issue.

Mark Dawe

The only thing I would add is obviously this reflects a wider employment, education and social issue. It is not just apprenticeships here. Let us remember that a lot of apprenticeships come out of existing workforce, so if that existing workforce is not representative then you are going to get apprenticeships that are not representative as well. One of the interesting issues will be—and this is more of the social issue—the thing I was talking about, the game changer and the apprenticeship route at higher levels being seen as an equal if not better route for higher education, whether the sharp elbows of the middle classes come out and take those places, and we still have this social issue of elbows over access. We have to monitor this very carefully and make sure there is proper access for everyone through the different levels.

Chair

Does anyone have any further questions for our panel? We have covered a fair bit of ground there and we are about to have a Division anyway. I want to thank all three of you for some excellent contributions. It has been very good and you will look forward to our report, I hope. Thank you. Oral evidence: Apprenticeships, HC 206 2