Apprenticeships and Skills (Public Procurement Contracts) Bill

Diana Johnson Excerpts

Friday 1st November 2013 Commons Chamber

[Andrew Gwynne]

That is a fair question. The point of the Bill is that there is still the misconception—as we have heard today—that public bodies cannot do this because of European Union procurement rules. My Bill makes it clear to all that if they want to include apprenticeships in their tendering processes, they can do so. It also aims to drive up standards through the key provision that apprenticeships could be required to be at the higher or advanced level.

[Diana Johnson (Kingston upon Hull North) (Lab)]

I congratulate my hon. Friend on the Bill. Does it not also signal to employers that they will be expected to provide training for our youngsters? Not only will employers benefit from a skilled work force, but the Bill will benefit the community by creating better jobs, making businesses more competitive, and increasing the number of people who wish to use the services provided by those businesses. It is a win-win situation.

[Andrew Gwynne]

My hon. Friend is absolutely right. I hope that Members in all parts of the House will support the Bill, because it sends the message that we should be upskilling our work force, that we have confidence in the young people in our country, that we expect their future to be our country’s future, and that we should therefore invest in them through public procurement.

--- Later in debate ---

[Andrew Gwynne]

My hon. Friend is absolutely right and I commend the superb initiative in Birmingham. He is absolutely right that we must ensure that those who are the hardest to reach and who most need such opportunities have access to them. My Bill requires that those opportunities be advertised in the local jobcentre, because that is the only way to ensure that those hard-to-reach groups have the opportunities to access their way out of poverty, and to develop the skills and education that so far, sadly, they have missed. I am extremely pleased that my hon. Friend is here today to support these measures, because they will have a big impact, in cities like Birmingham, in driving up the ambitions and the skills of young people.

The hon. Member for Shipley (Philip Davies) asked why, if this work is already taking place, there is any need for the Bill. In my discussions with a variety of public bodies, local councils, companies large and small, and training organisations, they have said that for all the good practice that exists, far too many public bodies still do not regard public procurement as a way to drive up skills. Perhaps that is because they do not have the ambition to do that, or because they have unfounded fears that some bogeyman in Brussels will say that it is not permissible. If the hon. Members for Bury North and for Shipley are fearful that my Bill might fall foul of Brussels, I invite them to join us in the Aye Lobby later, because I know that they both love nothing more than a scrap with those bogeymen in the Berlaymont.

I do not believe that Brussels is a problem, but others are looking to Government to provide them with the certainty that they need, so that local authorities, public bodies and Government Departments may require certain public procurement contracts to include a commitment to skills training.

[Diana Johnson]

I wonder whether my hon. Friend, with his vast experience and knowledge of the national health service, feels that the NHS and the new structures that have been created by the coalition are playing their part in providing apprenticeships and training for our young people.

[Andrew Gwynne]

My hon. Friend makes a good point, because while there was some good practice in the national health service, this is one area where we have witnessed in recent months the rolling back of skills training. I do not know whether that is because the new NHS bodies have been so fixated on reorganisation that they rather neglected skills training, or whether it is purely because some of the new bodies do not realise that they have the power when commissioning services—as clinical commissioning groups have, as providers of public services—to ask some of the people bidding for those contracts to provide apprenticeships. My Bill would make it quite clear that public bodies—my definition would encompass clinical commissioning groups—would be able, as part of their contracting process, to ask companies that bid for those contracts to provide adequate skills training.

--- Later in debate ---

[Barbara Keeley]

It very much is, and I really do agree with my hon. Friend.

I agreed with the point my hon. Friend made earlier about long-term unemployment, particularly youth unemployment, being high in Salford and my constituency, as it is in his. In my constituency—only a part of Salford—we have almost 3,000 jobseekers, of whom 900 are unemployed young people and 390 are over-25s who have been unemployed for two years or more. In fact, the number of people who have been unemployed for two years or more has risen this summer by 34%. I hear from young people, week in, week out—as I am sure do other hon. Members—about how over one or two years of unemployment they can start to lose hope. I get some really desperate appeals for help and support from them.

The previous Labour Government’s offer was that by 2015 there would be an apprenticeship for every 16 or 17-year-old who wanted one and was suitably qualified. We should keep that in our minds, because obviously, with the economic difficulties in recent years, we do not want 16 and 17-year-olds who are not in education, employment or training to lose hope, and I think they could do so. Worryingly, the number of apprenticeship starts for under-19s has fallen by 20,000 from 132,000, in 2010-11, to 112,000 last year. That is a dismal record. Youth unemployment remains stubbornly high, yet the number of apprenticeship starts for that age group have fallen. That is pathetic.

Government Members, in particular, have spoken about the difficulties of small employers taking on apprentices. You might be aware, Mr Deputy Speaker, that I took on an apprentice in my constituency some years ago. She was a 17-year-old who had started her business administration apprenticeship in a bakery, but was interested in working in an MP’s office. She was an excellent staff member and completed her apprenticeship, becoming one of the highest-achieving apprentices the college had ever worked with. In her early 20s, she is now a county councillor serving part of your constituency, Mr Deputy Speaker. We can, therefore, support apprenticeships. It is an interesting development that not only did she train in business administration, but she has gone into local government and I am sure is doing an excellent job.

[Diana Johnson]

I am listening carefully to my hon. Friend. I, too, took on an apprentice in my office—a young person who had been made redundant part way through his apprenticeship—and he was such an excellent employee that I kept him on and found him a job. MPs showing how apprentices can bring added value to even a small office is a good example of the value of apprenticeships.

[Barbara Keeley]

Indeed, it is. I should say—I am sure it was the same for my hon. Friend—that that excellent experience was partly due to the training supervised by my office manager, to whom I give credit. As employers, we have to remember that we can play our part. Like all employers, we must offer training. What is more, having a 17-year-old working with us really revitalised my office. I was invited to a 21st birthday party—the first I have been to in a long time!

Apprenticeships.org is the website of the National Apprenticeships Service. In May, we were worried that only 37 apprenticeships in Salford were available on the website, and now there are still only 44, so the situation is not improving. There are other websites, but that is the national one. Salford city council is doing an excellent job providing support for apprentices and apprenticeships through Salford Futures, an employment initiative that has been running since April 2012. It, like the earlier example from Tameside, provides support to unemployed Salford residents through the provision of work experience placements and pre-employment training and support. It also encourages local employers to create and develop employment opportunities through the provision of grants, funding and wider business support. I have managed to link up employers who contacted me with that business support, and I know it is excellent.

Salford Futures is being delivered with the support of the Greater Manchester combined authority, not just individual authorities. The hon. Member for Shipley talked about his local authority perhaps not excelling in procurement, but local authorities can work together on this, and that might be a solution for any authority that feels it does not have the skills to do it. It is supported by the Greater Manchester combined authority and co-funded through the Greater Manchester commitment to youth employment scheme. There are some excellent partnerships in areas such as Greater Manchester, which are committed to ensuring that we tackle the scourge of youth unemployment. The package of support for employers includes

“Access to a 13-week wage subsidy, paid at national minimum wage, for any employer that recruits an eligible Salford resident into an apprenticeship or job with accredited training for a minimum period of six months…Brokerage and dedicated recruitment support…Information and advice on accessing additional funding opportunities, including the National Apprenticeship Service’s…initiative…Wider business support from Salford City Council's business team”.

I commend the business team. I put an employer who was interested in taking on apprentices in touch with them, and I know that they gave that employer a great deal of support.

The Bill would ensure that suppliers who won major public contracts began to offer apprenticeship opportunities if those contracts were at a certain level. We have just had a lot of to-ing and fro-ing about the circumstances, but the Bill actually follows on from “Apprenticeships”, the fifth report from the Business, Innovation and Skills Committee. Having looked into it, the Committee recommended that approach, and suggested that at least one new apprenticeship could be provided for every £1 million of procurement spending.

I have described what Salford city council has been doing, but there is also good news from Salix Homes. Our housing associations are really showing the way ahead. Salix Homes was recently named by Salford council as the chosen landlord to take ownership of the 8,500 council homes in Salford in a proposed stock transfer, although that is, of course, open to consultation. It has worked to secure a commitment from its contractors—or subcontractors—to recruit two apprentices for every £1 million invested in homes and communities throughout Salford. That amounts to more apprenticeships than the number recommended by the Select Committee, and it shows what can be done. Salix Homes has promised that if the stock transfer goes ahead, it will invest a further £700 million over the next 30 years, which it says

“could generate more than 1,000 new apprenticeships for…young people.”

--- Later in debate ---

[Lyn Brown]

I am not very good at icing cakes either.

[Diana Johnson]

I went to the Hull training awards last Friday in my constituency. The overall winner, the apprentice of the year, was a woman engineer, which I was delighted to see because we are missing out on a huge pool of talent among young women, who do not think engineering is for them. They make some of the very best engineers in this country.

--- Later in debate ---

[Diana Johnson (Kingston upon Hull North) (Lab)]

The speech by my hon. Friend the Member for West Ham (Lyn Brown) was a tour de force. She talks with great passion about an issue that is very much in her heart—the future opportunities of young people who live in and around her constituency. Many other hon. Members will be very concerned about the shockingly high rates of youth unemployment in this country.

I congratulate my hon. Friend the Member for Denton and Reddish (Andrew Gwynne) on introducing this Bill. To be honest, it is a no-brainer: why would anyone not want to support it? It is short but very focused and clear in what it wants to do. My hon. Friend the Member for Worsley and Eccles South (Barbara Keeley) clearly set out the advantages that local authorities and housing associations can gain in making a commitment to apprenticeships and how positive that is a for a local area. My hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) spoke about the situation in Liverpool, which is very similar to the one I find in Hull. Hull has twice the national average of young people not in education, employment or training, and every Hull MP has been grappling with this issue for some time: how can we ensure that our young people get the opportunities they so richly deserve? If we can squeeze money out of the public purse without adding any additional costs and in a way that benefits our youngsters, that is the way to go.

[Andrew Gwynne]

I am grateful to my hon. Friend for contributing to this debate. Her points about Hull are pertinent. She will be aware that our parliamentary neighbour, my right hon. Friend the Member for Kingston upon Hull West and Hessle (Alan Johnson), is a sponsor of the Bill. When I approached him, he made precisely the same points: if we cannot procure, through public procurement, extra job opportunities for local people in Hull, when can we?

[Diana Johnson]

Absolutely. My hon. Friend puts the point so well. My right hon. Friend the Member for Kingston upon Hull West and Hessle (Alan Johnson) has always been a strong champion of ensuring that young people have the opportunities that they should have. Any Member who has read his book about his early life, which tells of his disadvantaged background and lack of opportunities, will understand why he wants to stand up and fight for young people.

I want to talk about the Bill from a business perspective. When I was growing up, my dad was an electrician and he had a small business. He trained as an electrician during the second world war and when he left the forces, he set up a small business with his sister, my Auntie Betty. My dad took the view throughout all his life in business that it was incumbent on him to train the next generation of electricians. I remember growing up in my household and hearing my dad say that he wanted to give a chance to young lads leaving school. He used to say that it was outrageous that some of the other, bigger businesses in the area—his was a very small business—did not train apprentices, and yet when a young person finished their apprenticeship, those businesses would go straight in to try to poach them to work for them without going through all the hard work that my dad did to train them.

I knew from a very early age how important it was to give young people those opportunities, and how good people in business—small businesses and others as well—who had a local commitment to their area and communities understood that they were there not only to provide services, but to make sure that young folk had an opportunity to train and get the skills they needed.

[Lyn Brown]

Given the example that my hon. Friend has just given, would it not be the right thing to do to ensure that supply chains from public procurement reward people like her dad who do the right thing? Those firms would get the subcontract from big procurement contracts and I think that would be the right way to go.

[Diana Johnson]

Absolutely. My hon. Friend puts the point very well.

My dad’s business carried on for many years because he was a good business man who did the right thing, and my brother, who was an apprentice electrician and did his training, now runs the business. He is doing exactly what my dad said he should do—training apprentices and the electricians of the future—but whenever I see him, he tells me about issues with public procurement. For example, if a school needs to be rewired and the local authority is putting the contracts out to tender, some local authorities take into account whether local firms have apprentices, and that is a good thing, but they do not all do that. It is really frustrating for local businesses that are doing the right thing to feel that they are not being rewarded in the way that they should be because other companies that are cutting corners and are out to make a fast buck do not invest in local people and local communities.

[Nic Dakin]

My hon. Friend is making a good point. Does she agree that there is greater value for money if funds from the public purse benefit local businesses and young people in the way that she is describing?

[Diana Johnson]

Absolutely. My hon. Friend has been a champion of ensuring that youngsters have those opportunities and that businesses provide the apprenticeships that they should provide.

[Barbara Keeley]

It was pointed out to me last week that the Care Bill, which I hope will return to this place in a few weeks, makes commitments on health education. Health education costs £4.9 billion. Caring for older people in our communities is a vital job, which now takes place mainly in the private sector, but there is no reward of the sort that we are discussing for the few employers who bother to train people. This is a new area that is opening up as we integrate health and social care. We cannot spend a huge amount—£4.9 billion—on the health side of the equation and not train people, for example through apprenticeships, to take up a valued career in social care.

[Diana Johnson]

Absolutely. My hon. Friend has a great deal of experience of social care and carers. Earlier in the debate, I raised with my hon. Friend the Member for Denton and Reddish (Andrew Gwynne) the issue of how the NHS is spending its money and whether it takes into account whether businesses offer apprenticeships. Given all the reorganisations and changes in the NHS, we need to ask whether clinical commissioning groups are doing everything they should be doing to ensure that their contractors are providing training and apprenticeships. My hon. Friend the Member for Worsley and Eccles South (Barbara Keeley) makes the important point that we need to focus on training people in the care sector. There have been scandals in many parts of the country because people have not had the skills that are needed to care for the elderly.

I want to mention again the Hull training awards, which I attended last Friday. A number of businesses in the city have supported apprenticeships for many years. I have been going to the awards for about five years. The number of businesses is growing year on year, but many employers still do not offer apprenticeships and do not feel that it is something that they want to do.

According to surveys, more than 80% of those who employ apprentices agree that they make the workplace more productive and 81% of consumers would favour a company that takes on apprentices. More than 200 types of apprenticeship are available, offering more than 1,200 job roles. Among employers who employ apprentices, 92% believe that apprenticeships lead to a more motivated and satisfied workforce, and 83% rely on their apprenticeship programme to provide the skilled workers they need for the future of the company. One in five employers is hiring more apprentices to help them through the tough economic climate.

I started by saying that offering apprenticeships was a no-brainer. Why would a business not choose to do it? The facts and figures suggest that every employer should at least consider hiring an apprentice. Money from the public purse should be spent on companies that provide more than just the service or the widget by investing in communities and young people.

[Andrew Gwynne]

My hon. Friend is making the case for smarter public procurement. It is not just the cost of the contract that must be considered, but the wider impact on the community. Does that not demonstrate why the Bill is right to insist that local job opportunities should be promoted in the local area?

[Diana Johnson]

That is absolutely right.

Research shows that, on average, an apprentice earns more than £100,000 more throughout their lifetime than other employees. We need to get such facts out there. Given the decimation of the careers service, we need to get the message across to youngsters about what an apprenticeship can mean and how it can enhance people’s opportunities. Of course we want young people to go to university if that is what is most appropriate for them, but apprenticeships are also valuable qualifications.

[Andrew Gwynne]

My hon. Friend is making another pertinent point. No doubt in her constituency, as in mine, the vast majority of young people will not have the opportunity to go to university or a higher education institution. The best way in which those people can get a higher education level qualification, as well as on-the-job training, is by doing a higher or advanced apprenticeship.

[Diana Johnson]

My hon. Friend is absolutely right.

Before I finish, I pay tribute to Mark Walker, whom I took on as an apprentice in my office several years ago and who has proved all the points that I have just made. He has added value to the office, made it more productive and made it a more motivated and satisfying place to work. I have experience of apprentices in my constituency office, and I also have the experience of my dad, which says it all for me—if he thought apprentices were worth investing in, it is absolutely the right thing to do.

I am really pleased to be here today to support my hon. Friend’s Bill, and I hope that the Front Benchers will give it a fair wind so that we can move on to Committee.