Enterprise Bill [HL]

Debate between Lord Stevenson of Balmacara and Baroness Sharp of Guildford

Monday 2nd November 2015 Grand Committee

[Lord Stevenson of Balmacara (Lab)]

My Lords, as we move on to this session on apprenticeships, I want to reassure the noble Baroness the Minister that we are very supportive of what is being planned here generally. We will make a few points and ask some questions of a probing nature, but we do not intend to do anything that would in any sense be too aggressive, and I hope that our comments will be taken in the spirit in which they are intended.

I am slightly short-handed today because, unfortunately, my noble friend Lord Mendelsohn is unable to be here—although I hope he will join us later—so I am largely on my own. I shall be slightly scrabbling to make some of the points that I had thought that others might be making, so your Lordships may find that today has a slightly surreal feel to it, as I gloss over some of the more difficult and trenchant issues. However, I shall be heavily reliant on others who put their names down against the amendments and who, I am sure, will be equally testing and trying for the Minister.

On the group of amendments starting with Amendment 49DA, in which we have a number of amendments and which is on the generality of the new approach to apprenticeships that the Government say that they wish to take—which, as I said, we are broadly in favour of—I wish to make three main points.

First, Amendment 49DA, which is a probing amendment, picks up on an issue that has been raised with us by a number of local government bodies and other agencies. They feel that the powers being taken to set targets for public bodies on the number of apprentices that the Government would wish them to have appointed by the end of the Parliament, in pursuit of this very ambitious target of 3 million new apprentices within that period, will cause real problems. Could the Minister therefore explain what negotiations and discussions she has had with local government and other agencies on these points?

For example, one issue that has been raised with us is that there is quite a range of development in the sector in terms of who is ready to take on an increased number of apprentices and who is not—and we are talking about a very significant increase if we do the calculations. What figure do the Government have in mind overall for the sectors concerned, and would they be receptive to having further negotiations and discussions with those bodies in order to try to arrive at an equitable basis on which this could operate? We are not against the proposal—it is a good thing that everybody should be set stretching targets—but we slightly regret that there is not more in the Bill tying the increase to contracts, procurement issues and other activities in which, in previous Bills, we have discussed how one could lever up the numbers of apprenticeships. Specifically on the target for public bodies, we would like to have a bit more information about how it will work in practice.

Secondly, it is glaringly obvious that the Government feel strongly that apprenticeships will flow only if targets are applied to the public sector—we did not know that targets had come back into fashion, but that is obviously a nice thing to see in a Bill of this nature—but it has been pointed out that there is no target for the private sector. Why is this? Is there some other force here that we are not aware of that is preventing the Government taking what seems to be the logical step? If we are to get to the 3 million target, there surely has to be an obligation—we would perhaps put it no stronger than that—on the private sector, which will carry a large proportion of this. Of course, money will flow in support of those, so there should be no net cost to them in relation to how the targets will be reached. I am sure that it would be to the benefit of the country as a whole if both the public sector and the private sector were jointly engaged in this process.

Thirdly, on Amendment 49EB, there has been a lot of concern, expressed very often by my noble friend Lord Young, about the quality of apprenticeships. Indeed, he mentioned it in the debate in this Room only a few days ago in relation to a statutory instrument that had been put forward. The numbers are one thing but the quality is very much another. Obviously, the quality will be tackled, through the Bill and the Act, by creating the term “statutory apprenticeship”, and that is a good thing. However, the amendment suggests that there may be more return if the restriction on statutory apprenticeships could focus on the higher-quality and the higher-skilled elements. In other words, they should be at levels 4 and 5 in the training schemes and not at levels 1 and 2.

I am sure there are other points that others will wish to make on that, but that gives the flavour of the way in which we want these amendments to be considered. I beg to move.

[Baroness Sharp of Guildford (LD)]

My Lords, I rise to speak to our Amendment 50 and to the other amendments in the group. Before doing so, I should declare my interests. This is not at present in the list in the register because it is very new, but I am very recently president of the AoC Charitable Trust. I am also an honorary fellow of the City & Guilds Institute and a patron of the 157 Group.

I think we have similar probing questions about this clause and, in particular, about the definition of precisely what is and what is not a public body. That is really what Amendment 50 is about. It raises questions about the slightly odd wording at the end of new Section A9, which says that,

“‘public body’ means … a public authority, or … a body or other person that is not a public authority but has functions of a public nature and is funded wholly or partly from public funds”.

There are difficulties with such a definition. For example, Kids Company is largely funded by public funds. Is that a public body? A lot of charities are largely funded by public funds for one reason or another. Are they public bodies? I certainly would not have thought of them as being public bodies. Or are you going to take the ONS definition? The ONS, for example, is now classing housing associations as public bodies, although a lot of the money they receive does not come from the public sector. However, equally, the ONS does not class the Student Loans Company as a public body in spite of the fact that the Student Loans Company receives all of its funding from a public body. Therefore, as I say, that definition strikes us as being extremely loose, and I think it is necessary to know precisely what the Government have in mind when giving such a definition in the Bill.

In general, I share very much the view of the noble Lord, Lord Stevenson, in asking questions about how far the Government should go in setting targets here, there and everywhere for public bodies—so much for localism, if I might say so. To provide that “The Secretary of State shall set such targets” leaves very little discretion to the locality. One would hope that, actually, the whole thing was done very much in conjunction and consultation with localities. A great many local authorities, such as in Birmingham, work very closely with local enterprise partnerships and do set targets for themselves. Indeed, as I shall go on to explain later, they also set targets for vulnerable young people who should be taken into apprenticeships. This clause raises lots of questions on which we need some clarification.

--- Later in debate ---

[Lord Stevenson of Balmacara]

My Lords, our Amendment 49J and Amendment 52 in the names of the noble Lord, Lord Stoneham, and the noble Baroness, Lady Sharp, are really two sides of the same coin. The worry we share, I think, is that the apprenticeship levy system, which we have already discussed and which is raising some concerns among those who will be involved in it, may have an impact on existing training and expenditure. Obviously, if the result of bringing in the levy is to reduce the overall quantum of money that is going into training, that would almost certainly be a bad thing. We want to grow the training budget, not reduce it. I look forward to hearing what the Minister has to say about that, as well as about the issues that are raised in Amendment 52. I beg to move.

[Baroness Sharp of Guildford]

Amendment 52 is in my name and that of my noble friend Lord Stoneham. As the noble Lord, Lord Stevenson, said, both these amendments are asking for a review. We have been talking about the quality of apprenticeships. I say in passing that although many of us have been rather negative, there are quite a number of extraordinarily good apprenticeships in operation.

I spoke earlier about what happened at the Olympic Park, and that is an example of how apprenticeships can be created, but one only has to look at companies such as BAE Systems and Rolls-Royce, which offer an absolute gold standard in terms of apprenticeships. Other companies are aspiring to do the same, and those sorts of apprenticeships are extraordinarily good. They offer not only higher-level apprenticeships but a route to progression. Sadly, there have been some bad examples—picked up by, among others, Ofsted—and it is important that in pushing forward the number of apprenticeships, they aspire to best practice rather than picking up worst practice. The idea of producing an annual review and asking the Secretary of State to report on such an annual review is to pick up this whole notion of the quality of apprenticeships and make sure that they are the sorts of apprenticeships that one would like to see.

The other aspect of this is that this part of the Bill is expressly about creating apprenticeships in public sector bodies. Our Amendment 52 asks for a review of how far this is working within the framework of the public sector and what impact it is having in both public and private sectors. However, I think we have had enough discussion of the general issue of equality and the need to promote equality that I do not need to go any further.