Public Sector Apprenticeship Targets Regulations 2017

Thursday 30th March 2017 Lords Chamber

Motion to Approve

12:19

Moved by

[Viscount Younger of Leckie]

That the draft Regulations laid before the House on 6 March be approved.

[Viscount Younger of Leckie (Con)]

My Lords, these regulations are the first use of the power under Sections A9 and A10 of the Apprenticeships, Skills, Children and Learning Act 2009 which enables the setting of apprenticeship targets for prescribed public bodies. There is a fair amount of ground to cover so I hope the House will forgive me if my remarks take slightly longer than usual.

I will start by setting out what we are trying to achieve, the scale of our ambition and how these regulations enable that to be met. The public sector comprises bodies ranging from large government departments, such as the Department for Work and Pensions, to more independent institutions such as local NHS trusts. With 4.2 million people working in the public sector, in professions stretching from front-line nursing to local council administration, it is vital that all those employed have the skills they need to succeed.

Apprenticeships are the cornerstone of our skills strategy and across the country employers are hiring apprentices as part of the workforces of the future. Therefore, to encourage public sector bodies to incorporate apprentices into their own workforce planning, these regulations set an apprenticeship target for prescribed public bodies. The apprenticeship target is for the number of apprentices who start working for the public body over the target period to be equal to 2.3% of the public body’s headcount in England. The target period is from 1 April 2017 to 31 March 2021.

I do not intend to go into the formula used to set the target at 2.3% of a public body’s headcount but I will say that this figure reflects the public sector’s proportional share of our broader target to achieve 3 million apprenticeship starts by 2020. Across the public sector, 2.3% means a goal of more than 80,000 new, employer-led, quality apprenticeships in each year the target is in effect, with the positive impact felt by everyone from police forces to schools to government agencies, and the public benefiting throughout from the delivery of world-class public services.

To realise this, the regulations prescribe the public bodies in scope of the target, how public bodies can calculate their progress towards meeting the 2.3% target, and the information they must publish and send to the Secretary of State. The regulations enable the Government to effectively set and monitor this target, and they will be supported by statutory guidance, assisting public sector bodies to understand how they can best have regard to the target.

I will now focus on quality and benefit. Historically, the public sector has employed far fewer apprentices than the private sector and that is why it is necessary to establish the target, to ensure that all parts of the economy are able to benefit from a skills revolution. Through these regulations we are creating more opportunities for people to earn as they learn in an apprenticeship.

Quality remains at the core of the Government’s apprenticeship reforms. New, employer-led standards will ensure that each apprentice will be fully competent in their profession, and the Institute for Apprenticeships, which is coming on stream on 1 April 2017, will oversee the quality of apprenticeship standards and assessment plans. We have also legislated to protect the term “apprenticeship” by creating an offence for a person to provide or offer a course or training as an apprenticeship in England if it is not a statutory apprenticeship. This is crucial as we must uphold quality in order that the strong benefits of apprenticeships may continue.

Employing apprentices makes sense for everyone involved. It makes economic sense and delivers a high return on investment, with research indicating that adult apprenticeships at level 3 bring £28 of economic benefits respectively for each pound of government investment. Employers benefit, too. In a 2015 survey 87% of employers said they were satisfied with their apprenticeship programme. That is the latest survey that we have.

Finally, the financial benefits to apprentices themselves are immediately apparent. Apprenticeships boost current earnings by 11% and 16% for levels 2 and 3 apprenticeships respectively.

Although we are not intending to set sub-targets for individual groups, we remain committed to improving access to apprenticeships for all, including those from BAME backgrounds, those with learning difficulties or disabilities, care leavers, and those from deprived areas. We are taking a range of actions to make apprenticeships more accessible, including implementing the recommendations of the Maynard taskforce for people with learning difficulties or disabilities, and establishing the Apprenticeships Diversity Champions Network.

We are also investing over £60 million in supporting apprentices from deprived areas. As a priority, we are establishing parity of esteem to ensure that doing an apprenticeship is no longer seen as a secondary choice to the academic route. This is particularly important as we ensure that apprenticeships are valued by all and remain opportunities open to all. Apprentices no longer fit the image of old; now they work in all sectors from education to planning and administration, at all levels from first job even up to management level, and they are from all backgrounds.

During the passage of the Enterprise Act 2016, which inserted this provision into the Apprenticeships, Skills, Children and Learning Act 2009, this House debated and voted on provisions enabling the Government to set apprenticeship targets for prescribed public bodies. At that time there was cross-party support for what was rightly recognised as an opportunity to improve public services and provide more opportunities for people of all backgrounds.

We consulted extensively on the proposed bodies and scope and the calculation of the target, and heard from a wide range of 180 public bodies and representative groups of different sectors. The majority of respondents felt it vital that the public sector engaged with our reforms and that public sector bodies also benefited from the growing apprenticeship movement, with one trade union commenting that they,

“welcome the extension of good quality apprenticeships”.

We also listened to concerns raised. For example, some respondents were critical of the target being assessed on an annual basis. As such, while still continuing to monitor public bodies’ progress in annual returns, for grouped bodies the target is calculated as an average over the target period. For all other public bodies, the target is calculated with respect to only those years in which the public body has 250 or more employees. This will enable organisations to plan their training and recruitment of apprentices to meet their workforce needs, and for government to monitor and support public bodies where needed.

Following consultation, we will also allow local authorities to separate the headcount of those bodies where they employ staff but do not direct the workforce planning—including schools and emergency services—in their information returns. We have also responded to those who were concerned about how the target may impact them given their high proportion of part-time workers. We suggest that these bodies can, should they choose to, use their full-time equivalent number in parallel under their obligation to report on headcount, in order to explain any underachievement of the target as necessary.

I will move on to reporting requirements. In order to promote transparency, public bodies will be required to publish and/or provide information relating to their progress. They must do this in the six months following 31 March, in each year of the target period in which the body is in scope. There are two parts to this requirement. First, to make it clear which bodies are leading in their investment in apprenticeships, public bodies must publish and send information about their progress towards the target. This includes how many apprentices they employ as a percentage of their total headcount.

Secondly, public bodies will have to send an “apprenticeship activity return” to the department, detailing the actions they have taken to have regard to the target, why they may not have met the target, and their intended future actions to do so. This information does not have to be made available publicly but will instead be used by government to determine which bodies have had regard to the target before offering suitable support and guidance thereafter. To be clear, we do not intend to use a heavy hand in our approach to public bodies in this respect but rather consider the details that they have provided in the return, before assessing whether they have had regard, or enough regard, to the target.

We do not wish to overburden the public sector unnecessarily and we remain aware of the challenges faced by different bodies. That is why the Department for Education is liaising with the Department for Communities and Local Government, the Department for Health, the Home Office and other departments across Whitehall to support them in delivering apprenticeships throughout their own wider public sectors. Departments will also work with public bodies to develop new, employer-led apprenticeship standards and increase the number of quality apprenticeships, thereby directly improving services delivered to the public.

12:30

Let me take this opportunity to highlight the progress we have already made across government to ensure that there are opportunities for apprentices to develop their careers throughout the public sector. Four main areas of the public sector will deliver a majority of apprentices towards the target: the NHS, schools, local government and the emergency services. I will now set out what we are doing to ensure not only that they can have regard to the target but that they can employ apprentices most effectively to deliver the services that people need.

First, we estimate that there will be 100,000 new apprentice starts in our National Health Service over the course of this Parliament, and the Department for Health and its partners are working proactively to make this a reality. With all NHS trusts included within scope of the target, there is a real opportunity to ensure access to high-quality careers in the health sector nationwide, building from a strong start which saw 20,000 apprentices employed in the NHS in 2015-16. The Department for Health and Health Education England have worked closely with Skills for Health and the National Skills Academy for Health to develop guidance for employers to support them in creating quality apprenticeships in the NHS. In addition, Health Education England is taking the lead in bringing trailblazing employers together in order to develop suitable standards. To date, they have focused on creating a pathway of apprentice standards in nursing, starting with level 2 healthcare support worker and leading to level 6 nursing degree apprenticeship.

Secondly, on schools, we recognise the importance of ensuring that apprentices in the educational sector are employed in the school setting. Not only will this help build skills and deliver more for local parents and students, but it will ensure that young people are exposed to apprentices working around them, allowing them to more easily recognise the value of the apprenticeship route. In order to support schools to practise what they preach in employing apprentices, the Department for Education and the Department for Communities and Local Government have been working closely to prepare schools for this Government’s apprenticeship reforms, including both the apprenticeship target and the apprenticeship levy. For example, the Department for Education has previously carried out mapping work to establish what wider existing apprenticeship standards could be utilised by schools. It has since published this as part of a guide to the new apprenticeship system, which outlines how different types of schools can be part of these apprenticeship reforms and, where relevant, how they should look to work with their local authority to maximise their impact. On standards, an apprenticeship option for teaching assistants has been available for a number of years, and a new standard is currently being consulted on. The Department for Education is also supporting a number of other trailblazer groups, which are developing apprenticeship opportunities in schools, including an apprenticeship standard for teaching.

Thirdly, the local government sector will be the largest contributor to the public sector apprenticeship target, aiming for more than 30,000 new apprenticeship starts each year. This means that councils across England are being set an ambitious collective target to deliver more than 120,000 apprentices over the period the target is in effect, ensuring that this policy will have a truly national impact. Some councils have already made great progress in incorporating apprentices into their workforces, and with all but the smallest councils being in scope of the target, there is a great opportunity for them to learn from each other. The Department for Communities and Local Government has been actively working with the Local Government Association and other stakeholders on a range of awareness-raising activity. This activity has already reached hundreds of councils, and DCLG will continue to work closely with the LGA to identify suitable standards to meet the skills gaps of the sector. This includes consideration of standards in social care, regulatory services and planning functions.

Fourthly, our emergency services—so important, as we know from the awful events of last week—will also be utilising the opportunity that this target presents to build the skills that they need as first responders to keep our neighbourhoods safe. The target will aim for 5,000 police and 1,000 fire and rescue apprenticeship starts per annum, with all police forces and all but two fire and rescue services, in scope.

To achieve this, the Home Office has been working closely with stakeholders across government and front-line bodies to develop “blue light” entry schemes for apprentices. For example, the police, fire and ambulance services have come together and are currently developing an emergency call handling apprenticeship standard. In addition, a standard for police constables has now been approved, subject to some final revisions, and a trailblazer group of leading employers is developing a new firefighter standard.

To conclude, the impact of these regulations will be felt, we believe, across the public sector in some depth, impacting and improving the lives of citizens nationwide. The regulations are an important part of our wider plans for the delivery of world-class public services and a skills system with apprentices at the heart of the workplace. They set an ambitious and demanding target, but one that has the potential to bring transformative results to public services nationwide, while opening up more opportunities for people from all backgrounds to progress in the workplace. I commend these regulations to the House.

[Lord Watson of Invergowrie (Lab)]

My Lords, I thank the Minister for his comprehensive introduction of these regulations. He has gone into considerably more detail than Mr Halfon did in the other place, and that is helpful. I will look with interest in Hansard at the amount of information on the different sectors that the noble Viscount outlined. It would probably be quite a surprise if I began by saying anything other than that we welcome these regulations and the aim of the Government that they seek to facilitate. The extent to which it is achievable may be slightly more problematic, but only time will judge on that.

As the Minister said, apprenticeships have a crucial role to play in ensuring that young people—but not only young people, of course—are provided with the ability to take up proper training that enables them to progress to well-paid and sustainable employment into their adult lives. The public sector clearly has a major role to play in that, and I welcome the fact that the Government have placed an onus on the public sector to play, and to be seen to play, its part in the long haul towards the target of 3 million apprenticeship starts by 2020.

On that point, I would ask the Minister to clarify the target for the four years spanned by these regulations. I listened carefully to what he said and I think I am correct in saying that he mentioned the figure of 80,000 each year, which he said reflected the public sector’s proportionate share of the 3 million target. We are slightly puzzled by that because those projections do not suggest that the public sector will be pulling its full weight towards the aim of 3 million. My understanding is that the public sector accounts for some 16.2% of the total workforce, yet the figure of 320,000 apprenticeship starts over four years represents around 11% of the 3 million target, and 16.2% of 3 million is almost 500,000. Perhaps I am missing something—the fact that there is a significant gap between the two figures suggests that I may well be—so it would be helpful if the Minister could explain why the public sector target is not more in line with that figure of 16.2%.

I was struck by the fact that the only government department excluded from these regulations is GCHQ. I can just about understand why that might be—although is it not rather a shame that there will be no openings for apprentice spies, albeit those who operate in front of a computer screen or in a darkened room wearing headphones? Just imagine the surge of applications for those apprenticeships, had they been available—or is it the case that they are available but the information is classified?

A question which the Minister might be more comfortable answering relates to the figure of 2.3% of a department’s or a body’s headcount being the target for apprenticeship starts. That figure is to be averaged over the four years beginning next month, which is not unreasonable as the target is unlikely to be achieved in the first year and perhaps also in the second year. If that happens, it is self-evident that in future years the figure will need to exceed 2.3% to achieve the average. Is the Minister confident that that will happen? If he is, on what basis does he have such confidence?

I will not repeat the argument made by my honourable friend Mr Marsden in the other place about the demands being placed on local authorities by the funding shortfall that they face. The Local Government Association estimates that figure at £5.8 billion by 2020. The Minister cannot deny that this will place many in a very difficult position when it comes to funding apprenticeships. Yes, most will be subject to the apprentice levy on the basis of their pay bill and will be able to draw from that pot—but the smaller ones will encounter real difficulties.

The Local Government Association has advocated that apprenticeships emanating in supply chains should be open to public bodies to assist them in reaching their target. The Government have changed their position—which I welcome—by allowing a figure of 10%, although that is said to be provisional, to be included. Can the Minister say how the figure will ultimately be arrived at? By that I mean: how will it be calculated? I believe that there is considerable potential for including supply chains, given the multiplier effect that they have.

In terms of social mobility, it is also to be welcomed that Mr Halfon, the Apprenticeships and Skills Minister, announced some £60 million this year for apprentices from disadvantaged backgrounds. Apprenticeships really can make a difference by giving young people opportunities that previously they were unaware of or turned away from. I look forward to hearing of at least a similar figure for the other three years of the scheme. In the meantime, as one who advocates moves that assist social mobility, the Minister will, I am sure, join me in welcoming the vote in your Lordships’ House on Monday on the Technical and Further Education Bill, which provided assistance for apprentices who might be dissuaded by families who stand to lose benefits if their son or daughter takes up an apprenticeship, when they would not do so had their offspring gone into further or higher education.

A similar situation was secured in that vote for care leavers in terms of bursaries. Both these measures will assist with social mobility and so, for consistency’s sake, surely the Minister can regard them only as positive developments. I trust that his colleague Mr Halfon will also adopt that view and will not seek to overturn the vote then the Bill returns to the other place.

Mr Halfon made an intriguing comment in the debate on these regulations earlier this week in relation to Schedule 2, excluding both Houses of Parliament. He mentioned that, although the ban on smoking in workplaces did not formally apply to the House of Commons, the Speaker had decreed that it does. Although I am not aware of the formal position in your Lordships’ House, I presume there must have been an equivalent decree by the Lord Speaker. So will the Minister say whether, although these regulations do not apply to your Lordships’ House, he would be in favour of seeking a means by which they could be applied? It would set an excellent example to other public bodies and there would be many opportunities for apprenticeships in interesting and fulfilling jobs within Parliament were that the case.

My final point concerns the gender balance within apprenticeships. It is widely acknowledged that 53% of apprentices are female, yet they tend to be in lower-paid sectors of the workforce. A year ago, in answer to an Oral Question in your Lordships’ House, the then Parliamentary Under-Secretary of State at the Department for Business, Innovation and Skills, the noble Baroness, Lady Neville-Rolfe, stated that since May 2015 there had been 366,000 apprenticeship starts in England and that, while a narrow majority were females,

“of the 74,060 apprentices in engineering and manufacturing”,—[Official Report, 14/4/16; col. 354.]

a mere 6.8% were female, while in ICT the figure was 17.5%. I doubt that those figures will have changed markedly in the intervening period, but these regulations allow the Government to lead by example and begin to turn them around, ensuring that young women are encouraged to apply for apprenticeships that both require and develop skills that involve the STEM subject areas. There is certainly a wealth of opportunity within the public sector for that gap to be addressed.

A year ago, the noble Baroness, Lady Neville-Rolfe, told noble Lords that only 26% of apprentices in her department were women. It would be both interesting and helpful if the Minister could tell noble Lords what the current percentage is within the Department for Education. His officials may have the figure at their fingertips—but, if not, I would be quite happy for him to write to me, including an outline of what specific plans his department has to ensure that it not only reaches a figure of 2.3% of the headcount as apprentices but indeed exceeds it. Can he say what the projected figure for the Department for Education in the first year will be?

I have posed a number of questions, not all of which the Minister will be able to answer in his reply, but questions of a wider nature will need to be resolved if the Government are to achieve the success that we on these Benches want to see in terms of a broad expansion of apprenticeships, not least in the public sector.

[Lord Storey (LD)]

My Lords, I very much welcome the statement from the Minister. We have seen a revolution in apprenticeships, which of course was started by the previous Government. While I am in favour of targets, they have to be sympathetic to the quality of the provision—I would much rather see quality provision even if we do not reach the exact target that we want.

I have four particular questions. Some of my other questions have already been asked. First, the Minister said that there were not going to be subtargets for people from different ethnic backgrounds—men, women et cetera—but I presume that if, from the information we get back, we find a lack of opportunities for, for example, young people from particular ethnic backgrounds, we might have to revisit that issue. Similarly, if we find a concern about the spread of levels of targets related to age, we might have to revisit that as well. So while I accept his comment about subtargets, we have to keep this under review.

12:45

My second question is relevant to the target for local government of 125,000 apprentices but applies equally to other public sector employees. How do we ensure, given that local government is strapped for cash, that full-time permanent jobs are not replaced by apprenticeships to save money?

My third question is on reporting. Of course there has to be reporting back on numbers, but we have to keep it simple. We do not want to get involved in too much red tape. If, for example, a school is taking on apprentices, the last thing it wants is yet more form filling.

My fourth question is on the different levels. How can we ensure across the piece that apprentices cover each level? We do not want to see them predominantly at one level.

To conclude, over the next three or four years apprentices will revolutionise higher and further education. Already we see an increasing number of young people who might have chosen to go to university suddenly saying, “Ah, if I do an apprenticeship with, say, the BBC at level 7 in media post-production, not only will I not have to borrow and worry about finance but I shall get paid while I do it, I shall get practical experience, I shall get the equivalent of a degree and at the end of it I have a good chance of getting a job”—and I think that at levels 1, 2 and 3 we shall see changes as well. So that’s a yes to apprenticeships. I welcome the Minister’s statement and I hope that he will answer some of the questions that I have raised.

[Viscount Younger of Leckie]

My Lords, I thank the noble Lords, Lord Watson and Lord Storey, for their comments and questions. First, I am pleased that in general they welcome what we are doing. As the noble Lord, Lord Storey, said, these initiatives started under the previous Government. We realise that this is long-term work. We fully intend to roll this out and stick with it over the long term. It takes many years to ensure the success of this sort of initiative.

The noble Lord, Lord Watson, asked about the Department for Education in relation to apprenticeship participation. This is a fair point. The Department for Education is confident that it will meet the target. I shall write to the noble Lord setting out precise numbers and the wider plan in the education sector. I shall also cover his other points as to the percentage of apprenticeships in the department and the percentage of women apprentices. I can certainly do that.

The noble Lord also asked whether the House of Commons or the House of Lords were in scope of the targets. In other words, would we and the other place be taking on apprenticeships? While we are not imposing this target on this House and the other place, there is nothing to prevent us or the other place from creating apprenticeships. We do not fall in scope because we do not seek to have Ministers tell us what to do.

[Lord Watson of Invergowrie]

I understand that the Minister cannot direct either House and I accept that. That is why I referred to smoking in the workplace. That, equally, cannot be enforced. However, it is de facto, if not de jure. I welcome the noble Viscount’s response because he is encouraging both Houses to adopt this measure. It is interesting to have that on the record. We shall see what figures emerge over the next two to three years and proceed with that, perhaps even jointly.

[Viscount Younger of Leckie]

I entirely agree with the noble Lord that having this recorded in Hansard encourages the Houses to initiate it.

Perhaps more important, though, is the question that the noble Lord raised about the target and the clarity of the target—in other words, the 80,000 which I mentioned. I may have to write to clarify this matter further because it is somewhat complex. I say, to be helpful, that this is a proportional target. It is based on the proportion of public sector employees as part of the total workforce in 2015. As this target is set from 2017-18 up to 2020-21, the number is not an exact copy of the 2015 number. In addition, following reaction to the consultation, we have excluded certain bodies who presented a good reason for not being included. We reiterate that this remains an ambitious and transformative target. It is important to have targets, but it is not set in stone. However, the 80,000 figure is there, and it is meant to be.

The noble Lord, Lord Storey, asked about the support offered to engage those from BAME backgrounds. We are taking action in this area, as he will know. We have launched the diversity champions network, chaired by Nus Ghani MP, to champion equality and diversity. Public sector organisations, including councils and NHS trusts, are among our diversity champions. We are also celebrating the BAME apprenticeships in our Get In Go Far publicity campaign. The question that he really asked concerned what we would do if there was concern about the targets not being met. I reassure him that the targets in these areas will be kept under review. Although I cannot promise any particular action, being kept under review means that, if there were any concerns, they should rightly be addressed.

The noble Lord, Lord Watson, asked about child benefit eligibility in an apprenticeship. Ministers fully understand the intention behind the noble Lord’s amendment. The Government need to analyse costs and the impact on the wider system. It is best for the Government to respond to this in the other place.

The noble Lord, Lord Watson, also asked about supply chains in the target. Supply chains are mostly, normally, in the private sector, so they are not included. However, the Government are using their procurement for contracts of over £10 million to take this forward. In the Department for Transport, for example, we should see 30,000 apprenticeships in the road and rail sectors through the use of the Government’s procurement programme. We anticipate that this will be about 2.3% of employees in those workforces.

The noble Lord also asked about the target of 2.3% and whether a higher target would be achievable in later years. That is a fair question. As I mentioned, we are asking public bodies to have regard to this figure. Some will achieve it each year, and some may not. But where they do not achieve it in the early years, we will look to employers to make further progress. We will do our best to support them to make that progress.

I hope that answers all the questions. I will, of course, read Hansard to check what questions were raised—quite a few questions were asked by the two noble Lords—and I will, of course, write to them if there are other questions to be answered.

Motion agreed.