Education Committee
Oral evidence: Quality of apprenticeship and skills training, HC 344
Tuesday 16 January 2018
Ordered by the House of Commons to be published on 16 January 2018.
Members present: Robert Halfon (Chair); Lucy Allan; Michelle Donelan; James Frith; Emma Hardy; Ian Mearns; Lucy Powell; Thelma Walker; Mr William Wragg.
Questions 1 - 54
Witnesses
I: Joe Dromey, Senior Research Fellow, IPPR, Dr Carole Easton, Chief Executive, Young Women’s Trust, and Dr Lee Elliot Major, Chief Executive, Sutton Trust.
Witnesses: Joe Dromey, Dr Carole Easton and Dr Lee Elliot Major.
Q1 Chair: Good morning, everyone. Thank you very much for coming to our Committee today. Could I just put on the record, before we begin, a thank you to Sutton Trust for all the work they are doing on social justice? “Skills 2030” is really the Wikipedia of skills, Joe, if you do not mind us calling you by your first name, and is a must-read. I am also grateful for “Young Women & Apprenticeships”, because everything you need to know is in these documents. It is really appreciated, and we are going to question you on some of those things today.
If I could just start off, what do you think “quality apprenticeship training” means?
Joe Dromey: I will start by saying that it does what it says on the tin, so it is a job with training. Shall I sit back a bit?
Chair: Have you a mobile phone?
Joe Dromey: I will turn it off. I know there are some issues, some concerns, among some employers and providers about the 20% off-the-job element, but an apprenticeship would not be recognised as such in most of Europe and indeed much of the world if it did not have that element of high-quality off-the-job, as well as on-the-job, training.
As well as the delivery, what matter too are the outcomes. A high-quality apprenticeship is one that gives a young person or an adult the best opportunity for entering and succeeding and getting on to the ladder of opportunity within their trades and occupations. That is about the employment outcomes afterwards and the wage benefit that the apprenticeship delivers. It is about what is delivered but also the outcomes thereafter.
Dr Easton: For me, when I have thought about it, there is quality that applies to the individual undertaking the apprenticeship so that they come out, as you say, Joe, with an increase in skills and knowledge, and their employability and opportunity for work has increased.
For women, we are particularly concerned, too, that they have skills that are transferrable, so that equality is not just about being able to do something really specific and do slightly better than what you were doing before or possibly even the same thing as you were doing before, but they are gaining out of it new learning, new ability to progress, and some things that would interrupt that tendency just to circle in and out, which is something we have seen as well, of the same level or the same work.
Then, we think that there are measures of quality of the apprenticeship scheme as a whole, which are: are apprenticeships available to a wide and diverse group of people? Is gender segregation being addressed? Are people getting and staying in work? Particularly, are women getting into sectors that are predominantly male but staying there as well? There is the social mobility issue, which I know we will get on to, so are people from lower socioeconomic groups more likely to be in work?
We think reputation is also an important quality issue as well. Do people think highly of apprenticeships, or are they thinking they will get paid badly and, therefore, are being put off? Is it filling a skills gap? Is it filling the skills gap, and are schools recommending them? There are some individual measures and some more structural, systemic measures that we think are important.
Dr Elliot Major: It is a good question, Chair, because in the last five or 10 years we have had a lot more attention on apprenticeships, in part by the Chair’s and other people’s drive in this area. Now we need a debate about quality. I am glad you are opening with that question.
I would echo the others’ comments on this. I would say that I do think it is about progression. In social mobility, whether you are talking about the academic routes or vocational routes, progress has to be part of this. Sadly, in this country, we still have a lack of progress for many of the apprenticeships that we talk about. They tend to be at Level 2 GCSE type level without the automatic progress embedded into them. That is a key issue the Committee could look at in this inquiry—progress.
I also think about level as well. If you compare us to somewhere like Germany, where I think it is about 90% above Level 3, so A-level equivalent, in this country we estimate it at about 40% for us. While we talk about that big figure of 3 million apprenticeships for this country, I do think we need a bit more of a debate about what we mean by quality. It is about level and progress.
Q2 Chair: Ofsted says that 37% of apprenticeship providers are less than good in its most recent report. First, would you recognise that figure, and why is that, and is there a distinction between the quality provided by private providers and FE, or is it much of a muchness?
Dr Elliot Major: I do not know if we have evidence on the difference between private providers and FE. As a charity, we do have general concerns about the level of resource in further education colleges and the support that teachers get in that area. There is a golden rule of social mobility that you cannot scrimp on these things. The further education sector in many ways is one of the most important sectors for social mobility, but if you compare it to other parts of the education system, it is very underfunded. I would make that general comment about further education. I would urge the Committee to really challenge the Government on that.
I would also say that we do not think the inspection regime is fit for purpose in this area. We think they could be far more focused on challenging providers, whether they are private or in the FE college sector, and in the workplace in terms of what the quality of training is. Is it extending those young people to do more, to progress? We think it could be tightened up.
Joe Dromey: I recognise that figure is a minimum. The reality may be worse than that, and that is because Ofsted obviously has a risk-based approach to assessing apprenticeship providers, where it focuses on those that it is most concerned about. That is understandable when you have had a massive increase in the volume of apprenticeship delivery and indeed a significant increase in the volume of apprenticeship providers, at the same time as a significant budget cut to Ofsted. Ofsted has had to targets its resources where it is most concerned. The outcome of that potentially is exemplified in the Learndirect scandal, where we know that Learndirect had gone into significant troubles far earlier than it was rated as failing by Ofsted. There may be more to the concerns that we have around provider quality than the actual Ofsted figures imply.
AELP would tell you that private providers are more likely to be rated good and outstanding than, say, general FE colleges. Both of them suffer from the same challenge, which is underfunding. You cannot really blame the actors within the system for the challenges that we have around quality. The fundamental causes of the problems with quality are underfunding and underregulation, and both of those are getting worse at the moment.
Dr Easton: Certainly, from the women we have spoken to, I am not surprised by that statistic. Women and people from lower socioeconomic groups are likely to say the quality of the training they received was less good, and that may be part of the sectors and the types of training they are receiving as well. I would not be surprised if that figure was an underestimate because, if Ofsted were also including measures of diversity and measures of successful completion, the figure would get worse, probably. I would suggest that is an underestimate of success rate measures as they exist currently, rather than ones one might like to see for the future.
Q3 Chair: I have just one final question before I come over to my colleague, Lucy. We say—and I was one of those people in my former role—proudly that we have more apprentices on record, with 900,000 at the moment, 2 million-plus apprentice starts, and so on and so forth. Should we be looking at this completely differently? Should we be saying that we have X apprentices going from Level 2 to Level 3 or 4 and looking at progression, as well as at completion and employment? That will measure the true success of whether or not we are succeeding to build an apprenticeship nation.
Dr Easton: Certainly, for women, that would be really important. For many of the women who are going into hairdressing or social care, they are stuck at the same level. That is what I was implying at the beginning. It is not helping them progress. They are not getting transferrable skills that mean they could then go off and improve their prospects. That would be really important, and also would encourage, as we would like to see, not just a focus on higher-level apprenticeships—the degree level—but that pathway of really creating opportunity, rather than just moving slightly in and out of that level with potentially just a little bit more skill.
Dr Elliot Major: Yes, I would agree with that, Chair. I do not know if you were involved in those decisions, but education has lots of arbitrary targets that appear. One of them is 3 million apprentices. The 50% figure for university participation is another one of these things that seems to have come. It is about genuine progression, and I would aim for those advanced ones—I agree, it is about Level 3, A-level and above. We do need more degree apprenticeships, but I would focus on that progression from 2 to 3. That is the priority for us over the next few years.
Q4 Chair: Why not 3 to 4?
Dr Elliot Major: Also 3 to 4, but I think there are a lot at Level 2 at the moment in those figures that you quoted. Yes, progression throughout would be ideal, but particularly 2 to 3 because you see the earnings returns are pretty healthy at Level 3. If you do an apprenticeship compared to someone else at that level who might take the other route, you do see good earnings. If you go up to higher-level apprenticeships, what is often not known in schools is that there is very good earning potential if you do it in the right area. It is just that we do not have enough of them, and we need a better system in this country so people can make a genuine choice that is right for them between a more academic route and a more vocational route. We just do not have that option for many of our young people. Often they end up doing university for the wrong reasons.
Joe Dromey: Just very briefly on the 3 million apprenticeship target: it is understandable why it was offered. It is a good retail policy and it sounds good in a manifesto and it sends good signals, but I think it is bad policy. The reason I think it is bad policy is because focusing on numbers at the same time as reducing inspection capacity and stimulating employer investment through the levy means that you risk getting quantity but not quality.
Everyone talks about the need to address parity of esteem between the vocational and the academic route. What we absolutely need to do is protect and improve the esteem of the vocational system and of apprenticeships, and there is a risk that we may undermine quality by focusing on quantity.
I also think you get what you measure. If you focus on 3 million apprenticeship starts, then we may be less concerned about completions. We have seen the completion rate fall significantly in recent years. The 3 million apprenticeships starts do not focus on outcomes, so we need to talk, as I say, about completion of apprenticeships. We need to talk about progression to high-level studies, as colleagues have said. Only 52%, the majority of apprenticeships, are currently at Level 2. That is an important stepping stone but it should not be a destination. We need to talk about the wage premium and, related to that, the productivity benefits of apprenticeships. We should not just be focusing on delivering a manifesto target. We need to be focusing on improving productivity, improving progression, and improving pay, which remains below the pre-crash levels.
Q5 Lucy Powell: Thank you all for your excellent work in this area, as Robert has said, and apologies from me that I am going to have to leave soon, so I will not hear the full session, but I will read it through. It is a prearranged commitment that I had.
You have answered part of my question, which was about how we can better measure quality. Maybe you might want to expand on that a little further. Related to that, how else, other than the traditional means of Ofsted, can we share best practice and raise quality across the system by getting people working together and other means, other than simply just relying on, as you say, a very underfunded and, out of necessity, very finite inspection regime as the only means by which quality may or may not be raised in this area? Joe, you are nodding away there.
Joe Dromey: Yes. In terms of how you measure quality, first of all, someone has to measure quality. Ofsted needs to be resourced at least commensurate with the increase in apprenticeship numbers, and at the moment they seem to be going in opposite directions: a soar in number since 2010 and a significant reduction in capacity. Ofsted itself has expressed concern about its ability to regulate and to inspect the growing number of apprenticeships, given that funding gap.
In the medium term, there needs to be a much greater focus on the outcomes from apprenticeships—not just the outcomes in terms of successful completion, but the actual labour market outcomes of people completing apprenticeships. That is the employment rate, progression to higher-level study, apprenticeship or other study, and the wage premium that they offer. The LEO dataset offers fantastic opportunities to do this, so we need to be making sure that in the future providers are paid in significant proportion to the value that they deliver to learners, obviously taking into account where those learners are starting and the value that they are delivering.
Also, if the Government want to persist with effectively a skills market approach with the idea that employers and individuals will choose the provision based on quality and that will drive up standards and drive up quality, if they want to pursue that approach, then there needs to be high-quality information within the system to guide the decisions of both employers and adults. The LEO data offers that potential, but we need to make sure that if we are relying on rational actors making informed decisions, then we need to inform those actors.
Dr Easton: I would agree. I think we are probably going to be very much parallel in our thinking here, which is great.
I would like to add, in terms of the measures, a measure of the difference that apprenticeships are making, so the system. Particularly when you look at differential completion rates in different sectors, I would look again—this is of particular interest in respect of gender, but also socioeconomic status—at who is dropping out and who is completing. It is not just about the headline number—more complete in nursing and less in whatever—but who is it who is not completing and, therefore, whether steps can be taken to improve the completion rates of different groups of people. That could be about disabled people as well. It is really important we do not just look at it in the round. That would be one big difference that Ofsted could—you get a gold mark if you are improving in one of those areas, not just overall. That is really important.
There was another part to your question that I was thinking of and now I have lost. It was partly measures and partly sharing good practice, wasn’t it?
Q6 Lucy Powell: Yes. How else do we drive up quality, rather than simply relying on inspection regimes? It is not what we would do in the school system, for example.
Dr Easton: Yes. For the young person undertaking the apprenticeship, it is not just about the training. It is also about the quality and support that they are getting at work, and employers sharing good practice as well. That is four-fifths of what they are doing. Last year, for example, we published good practice guidelines. There is a huge amount more that employers can do among themselves as well, particularly making sure that some of those generic skills are cross-cutting and looking at how they are encouraging people to get that. That will be really important, not just laying it all at the doors of the training institutions.
Lucy Powell: No, I agree. I agree.
Dr Elliot Major: I agree, it is an issue, and we have been thinking about this. Of course, you have the levy as well, which is encouraging companies to invest in apprenticeships. It feels a bit like a crude way. I worry that you get a lot of these so-called conversions in companies so that it is not really extending people. I do not have the answer to that, I am afraid. We have had social mobility marks for various organisations. Maybe companies that do have genuine progression in their apprenticeship offerings might get some sort of recognition of that. I agree, you need to look at other areas than just inspection.
Saying that, on inspection, I do think you should look at English and maths as well. It is one of our concerns that many of these young people do not have the basic numeracy and literacy skills. In this country we are losing that skills race internationally. If you look at the comparisons of the proportions of young people without basic numeracy and literacy in this country, we compare very poorly to most of those other nations. I would want to look for more for that as well. Unfortunately, I go that—
Q7 Lucy Powell: A numeracy and literacy functional skills component of an apprenticeship?
Dr Elliot Major: Exactly; that should be there as well.
Lucy Powell: I would agree with that, yes.
Dr Elliot Major: We know and all the evidence suggests that if you have those, then your long-term outcomes are far better. It is a bit patchy, I would say, at the moment in terms of whether that is being looked at, but that puts you back toward the inspection regime. I agree, you might want to look at the levy as well.
Joe Dromey: Could I just throw in a couple of brief other things? One other way to ensure quality, portability and recognition of an apprenticeship by other employers within the sector is to have a recognised qualification within it, which is very much supported by providers and by TUC and by many employer organisations. It is very important and unfortunate that that is not the direction that has been gone in recently.
The final thing is to have an employee voice within the system. There are huge benefits with having an employer-led system, but obviously, with a system with a levy, there are incentives for employers to stretch the definition of an apprenticeship to maximise their recouping of their levy funds. Most successful vocational systems on the continent have a social partnership base and have a strong voice for employees through trade unions. If we have a national retraining programme that has the TUC involved alongside the CBI, I see absolutely no reason why there should not be employee representatives on Trailblazers and designing apprenticeship standards, and employee representation on the Institute for Apprenticeships, too.
Q8 Ian Mearns: I was very interested in the answers you were giving there, and I am really concerned about this burgeoning of Level 2 apprenticeships. The crucial question for me is: how many of those Level 2 apprenticeships end up being a dead end, and how many of them end up being a portable passport to the next level? That is a crucial question, because it is pointless having a burgeoning of numbers if the quality of the outcomes for the young people is not there. I do not think it is particularly rocket science when we are looking at quality qualifications. We want to have, for young people, qualifications that have a value in the labour markets and provide the appropriate skills for the person to do the required job or to progress into entry level for the next level up. It is not much more complicated than that, is it, really?
Dr Elliot Major: One figure we have is that only 25% of those on Level 2 progress to Level 3, which gives you some indication of the lack of progress. I think you are absolutely right on that.
The other thing I would say, just looking at the Committee and all the different areas of the country that you represent, is that the exciting thing about this, by the way, from a social mobility perspective, is that we have the chance to improve lives across the country in all regions. Apprenticeships give you that in a way that perhaps the academic routes do not, by the way, because there is a tendency for young people from different parts of the country to end up in London on that academic route. They go to university. I just think there is something very powerful, if we can get this right, to improve jobs and opportunities in all parts of the country. There is an important dimension there.
Joe Dromey: On that, there is a challenge, but we should recognise some progress is being made. Both Level 3 and Level 4 and degree-level apprenticeships are increasing, but they are increasing from a very, very small base. Still, the majority are Level 2, GCSE equivalent, basically. Although there is a lot of talk about degree-level apprenticeships, there were only 1,600 starts last year, so 0.3% of apprenticeship starts. Again, that is increasing, but from a very, very small base.
When we are talking about this, it is very, very important not to—and I am not suggesting you were—denigrate the importance of Level 2. It is vital as a stepping stone, rather than a final destination. If the system, as it currently is in too many areas, sees Level 2 as the endpoint, then we know that the labour market returns from those qualifications are not fantastic, and it means that people will not be able to get on that ladder of opportunity, and it means that many will be working poor. There needs to be an absolutely central focus on progression from Level 2 upwards, and I do not think the current system, nor the focus on 3 million apprenticeships, is facilitating that focus.
Q9 Emma Hardy: Welcome, everyone. It is really interesting, everything you have said so far. One of the things I am concerned about is that in my constituency there is a very small local provider of apprenticeships. It is the North Humberside Motor Trades Group Training Association, so that rolls off the tongue easily. It trains children from more disadvantaged backgrounds in the motor industry, and has done this for quite a while, and has been very successful moving from Level 2 to Level 3, and equal numbers start on Level 2 and Level 3.
The problem that they have, I think, is replicated across the country, which is that they have to be subcontracted because of the minimum contract values. Because they were introduced, they now have to get a subcontractor. Now, each year, they are finding it increasingly difficult, particularly in the past two years, to find a subcontractor to keep them going, because they are registered as a charity. I am also more widely concerned about subcontractors creaming off so much money when they are providing and commissioning services.
I do not know if you have any suggestions about what can be done to support these quite focused, high-quality local training providers like this Motor Trades Group in my constituency.
Dr Elliot Major: It is something we should look at. That is something that is a concern. I do not think we have picked up on that in our reports. There is the issue of sustainability that I guess you are talking about, in terms of—
Q10 Emma Hardy: Sustainability and the problems of these smaller ones and the subcontractors. We have just seen what has happened with Carillion, and we have just seen the problems of a massive company having dominance in the market. You have, I am sure, all around the country, these very local, very focused, high-quality providers that are just getting squeezed out because they cannot meet that minimum contract value, and yet they are providing a good-quality service. It is really about what can be done to support these and stop them getting squeezed out, and stop the exploitation by the subcontracting system.
Dr Easton: I have to say, too, it is not something we have done particular work on, but it mirrors a little bit the concern for smaller organisations, both providing the work or providing the training, and it is more challenging, I think, than for big organisations that can put infrastructure in and have bigger contracts, too, with training providers. Also, young people are more likely to be exploited in smaller firms, where they will get stuck on the lower pay without the chance of progression. That issue of size, both in terms of the training provider and in terms of the business, is really important, but I have to say we have not done research on that issue particularly.
Q11 Chair: Could I just come in on the subcontracting? There are some suggestions that it is becoming a bit of a con. Of course, there will always need to be some subcontracting for specialisms that FE or whatever it is may not have, but it seems to me that it has become a growth industry that providers can, in essence, cream off a huge management fee, of which the transparency is not clear despite the measures by the DfE to get those figures out there. They cream off a big fee for doing nothing—ie just subcontracting—and they are not even inspected, for reasons you have highlighted earlier in terms of Ofsted and resources, and it seems to be prevalent.
Learndirect is a massive example of how much money they were getting just for subcontracting, and there are others. Do you think that that is diluting the quality of apprentice training, and do you think subcontracting should not just be curtailed but hugely curtailed, and it should be really only used where there is a genuine niche need by an FE college or an apprenticeship provider?
Joe Dromey: That is totally right. There are three concerns for me around the prevalence of subcontracting, and I believe it is £700 million-worth of publicly funded apprenticeship delivery last year that was subcontracted, according to AELP. There are concerns over value for money because, as you say, there is a huge amount of that being creamed off and kept by the prime, and that is public funding that is not going into the training of apprentices but is just going to large provider companies for not actually doing the delivery. There are concerns over the quality. ESFA says that the primes are responsible for enforcing quality of delivery in their supply chains, but we know that is not happening. Learndirect is one of the obvious examples.
There are concerns over the sustainability of the system as well. If the prime gets into trouble, then the whole system falls and it can take down much-valued local providers, like in your constituency. It is not unique to the apprenticeship system. We see something very similar with welfare-to-work, with the Work Programme, where we were supposed to have a rich ecosystem of specialists and small providers.
Q12 Chair: Unfortunately, that is not our job. It is another Committee’s.
Joe Dromey: Yes. There is a similar challenge when you rely on a model of primes supposedly bearing risk.
Q13 Chair: Should it be scrapped?
Joe Dromey: Yes.
Q14 Chair: Let us say, for example, with an FE college, they may not have an accountancy specialism, so they have a subcontractor, or they may not have a special need, but why do they not just employ directly the organisation that provides that niche? Why do you need to have subcontracting at all?
Joe Dromey: I totally agree. There are some instances where it may make sense, but the way that the system has recently been almost encouraging it, with those minimum contract values, serves no one. It increases inefficiency, reduces transparency and undermines quality within the system.
Q15 Emma Hardy: My worry with getting rid of subcontracting would be losing really valuable, very successful—this local Motor Trades Group does a fantastic job with the children that it has. It is brilliant. The answer for them, what they would prefer, is that the minimum contract value be dropped and for them to be able to bid directly with Government for the service they deliver. They take on 60 apprenticeships a year. It is really low numbers. Do you think that would be a solution—getting rid of the exploitation of subcontracting, but also making sure that these small, localised providers providing a need in a specific area are still allowed to exist?
Dr Elliot Major: It sounds sensible to me. I have to say we have not looked into it. We have a parallel worry about small businesses as well in all this. Remember the world is not just made up of big companies. I would urge the Committee to look into that as well, to be honest, because of course the levy comes in at a certain scale as well. That sounds sensible. I am being tentative because we have not looked at the evidence fully.
Dr Easton: Likewise, we have not, but the value of making sure that young people are being trained for something that there is available, certainly that the pathway is clear, we know is terribly important. I, myself, have done focus groups with young women, who go, “Well, we did this training and then there was nothing anyway”. As much as I do not want to undervalue hairdressing and nail bars, there probably are only so many that we need. I would rather that women were being given transferrable skills or being encouraged to work in the motor industry, where they knew there was employment subsequently. I am not going to comment on the actual structure of the funding except to say when I even first started this job and went around FE colleges and training institutions, they were just really struggling. It is a real constant struggle for funding. The more diverse they get, the more difficult it gets for them.
Joe Dromey: There is a minimum contract level for a reason, because you would not want DfE or ESFA overseeing thousands of small providers, but you need those small providers. That is why an element of devolution needs to be brought to the system, because it is still remarkably centralised, designed and run by DfE and ESFA and Ofsted. If you want small, specialist providers delivering on a local level, it is local areas that best understand the needs of local learners, the needs of the local economy, and are best able to manage small contracts on a local level that meet specific needs.
At the moment, if you take the Mayor of London, for example, the only control he has over apprenticeships in his area is the GLA’s apprenticeship levy funds. There is no accountability and no powers for directly elected and accountable local leaders to oversee the needs of the system locally.
Q16 James Frith: Just very briefly on that, and devolution comes into the regional skills imbalances later on, would you support the idea—if you take devolution to the next degree—where you are co-ordinating or at least mandating a proportion of response, either by a particular industry or level or sector or indeed size of company? At the moment, this levy is apportioned to the larger employers but is expected to pick up the great appetite and range of apprentices and apprenticeships that are available. The demand and supply is incomplete, therefore. Do you think there is a job of work to do from a planning position that centrally and then subsequently devolves this idea that you would spell out or prescribe rather more areas where these apprenticeships should be taken up and in which industry, based on the demand that you are foreseeing in those sectors?
Dr Elliot Major: Workforce planning has a chequered history, hasn’t it? It does seem to me we need some idea of regional planning in that way, and maybe thinking about what are the sectors that are strong, if that is what you mean. We have regional schools commissioners now, and part of their job is to almost try to manage the market. I wonder whether there is—
Q17 Ian Mearns: You are talking about regions. The regions that they cover are not what anybody would expect to span a planning region.
Dr Elliot Major: Sure, but I just wonder whether there is some sort of local or regional role.
Chair: We have to get on to the next one.
Q18 James Frith: Fine, but would you support an apprenticeship commissioner being responsible for that—the idea of an apprenticeship commissioner that oversees that?
Chair: Can we have one-word answers because we have a lot to go through?
Dr Elliot Major: It is something to explore, I would say.
Dr Easton: I am not sure.
Joe Dromey: I do not know.
Chair: We are going to come on to traineeships.
Q19 Michelle Donelan: I am asking about the barriers to apprenticeships for those from disadvantaged backgrounds, but I am also interested in the barriers to progressing within apprenticeships, like we talked about before, with Level 2 potentially being a stepping stone for those that it suits. I was wondering whether you thought that the barriers were more to do with the cost of apprenticeships or the stereotypes around certain roles, for potentially going into STEM, or in fact the legacy that is left over, and not taking parents and teachers with us yet in terms of the value of apprenticeships and the differences between the different levels and routes. Is it more of a question that there just is not that amount of support and guidance, and that that has not got on the same track as we have with apprenticeships and it has not caught up?
Dr Elliot Major: I can start. It is a combination of those factors. We do a lot of polling of parents and teachers and pupils, and what we find is, basically, a lot of advice and guidance. I think we are worried about advice and guidance and information at schools generally, to be honest with you, about careers as a whole. There is a whole issue around that. Certainly, while, for example, it is patchy on university destinations, it is incredibly poor in terms of quality apprenticeships. We find that 30% of the young people said that teachers had not advised them to consider apprenticeships. There is something about the school system and that being seen as an expectation. I definitely think that is an issue.
Our figures also show that there is an access gap already emerging. As you know, the Sutton Trust does lots of work around ensuring that your background should not prevent you going to university or whatever opportunity. Your work, your talent, should determine where you end up. For advanced apprenticeships—this is, again, Level 3—we find there is already a gap emerging. If you are on free schools meals, you are less likely to get to a Level 3, basically, so the proportion in Level 3 is lower than the population as a whole.
Q20 Michelle Donelan: That is progression as well as those entering?
Dr Elliot Major: Yes. There is a Matthew effect in education: the rich get richer, the poor get poorer. You see that a lot. The opportunities that lead to earnings tend to be captured by those that are already to some extent better off in life. While it is early days on this, and a lot of this discussion is about improving quality, which is the right direction, you do need to also think about the access issue. As the quality hopefully increases, you will see an access gap, as we see in other opportunities. For example, should the levy be used to some extent to ensure that we have equitable access and that you have outreach to areas of the country and schools that might not be doing that?
Q21 Chair: How would you do that? How would you use the levy? How would you change it to make sure you help the disadvantaged?
Dr Elliot Major: On the academic side, the Sutton Trust does lots of work in terms of outreach. We work with other charities and universities. We have summer schools for young people, for example, who go to a university campus, and then they will—
Q22 Chair: How would you do that specifically? You said, “We need to change the levy”.
Dr Elliot Major: Part of that resource could be used to do outreach with organisations like the Sutton Trust. For example, we have been speaking to the BBC about its apprenticeships. It is a very prestigious organisation, with very sought after apprenticeships. While we do not have a programme with it right now, one of the things that we are challenging the BBC on is, “Look, can you ensure that these are accessible to people all around the country—because the BBC has a presence all around the country—and that it is people from genuinely all backgrounds?” You can do some outreach work. You could publicise that in all schools. There are all sorts of things you could do, but part of that levy could be used for that.
Q23 Michelle Donelan: You are saying that it is more promotional?
Dr Elliot Major: It is partly about promotion. What we find in the trust is that the school you go to often determines where you are going to go because the quality of advice you get varies so much. Yes, it would be about connecting with those schools.
Dr Easton: I will add perhaps to that and then go back to the barriers, if I may. I understand that the payment employers and trainers get from the levy fund is higher for those aged 16 to 18 because more work is considered to be necessary to support those young people. At Young Women’s Trust we have been recommending that additional payments could be made both to employers and trainers from the levy to encourage certain groups and certain occupations, so to get women into STEM, for example. You add a premium, if you like, to the payment that both the training provider and the employer are going to get from the levy to provide maybe mentoring, women’s networks, increased outreach and all the activities that could encourage people, both the groups you want to address and the work areas that you want to address. An apprenticeship diversity fund existed, but was subsequently disbanded, to help with that. It could be for BAME groups or disabled groups, so that there is a little bit of an incentive to people to go the extra mile for those groups.
Q24 Chair: You would use the levy for that? Was that it?
Dr Easton: Yes; increase the payment from the levy that employers and education providers receive.
Can I go back to the barriers that you asked about? Obviously, this is something we have researched a lot among young women, and young women from lower SES groups. Certainly, one of the big ones is lack of part-time and flexible apprenticeships. We are doing more work and looking at good practice in that area, but at the moment there seems to be a misconception that there is low demand, and then young people thinking there is low availability, partly because they cannot find them when they go on the website to look for them and there is no easy way of doing it. Clearly, as with work, people have other commitments, so it is going to rule out a lot of people if there are not part-time and flexible apprenticeships.
Pay is clearly another huge issue, and again research that we did showed that people are just making assumptions even about pay. It is the reputation issue. It is not even what they are receiving. They are going, “Well, if I do an apprenticeship, the minimum wage is £3.50. Why on earth would I go and do that when I could get a job that pays more?” People we have spoken to who have opted out of apprenticeships, as well as those struggling to make ends meet while doing them, say that pay is an enormous barrier and accounts for some of the dropout as well.
There is a lack of financial support in terms of bursaries or loans that are available to some people doing higher education in certain areas. We have even come across a hospital that is giving bursaries to men to go into nursing. If that is acceptable within discrimination legislation, then it should be acceptable too to provide bursaries to women to go into certain apprenticeships.
Childcare provision is a huge issue particularly for women, but not exclusively—the lack of real, accessible, affordable childcare, particularly for children under three. Then there is gender segregation, the challenges of getting into work and staying in work where women are seriously underrepresented. Those are the main areas. The affordability, the diversity and the flexible part-time sum it up for us in terms of women.
Joe Dromey: Can I say something very briefly? As I think Lee mentioned, it is very important to ensure that there is the support for people to meet the requirements to get on to an apprenticeship. If we look at one of the reasons why young people on free school meals are underrepresented in terms of apprenticeship starts, at 10% of starts compared to 13% of the population, it is because they have not been supported to achieve their potential at school, less likely to reach their access requirements, and, therefore, less likely to get on an apprenticeship. Part of the solution is about supporting people to get to the requirements to access an apprenticeship, but the other part is about shifting the incentives for employers. At the moment, the public funding going into the apprenticeship system, both for levy-payers and for non-levy-payers, is not sufficiently incentivising employers to recruit people who may have struggled earlier in life.
One of the obvious ways to do it would be an apprenticeship premium, and the Learning and Work Institute has recommended something along those lines. It is basically giving employers and/or providers more funding for taking on young people who have been on free school meals, or for addressing gender segregation that there may be in certain industries. You use that investment in a smart way to stimulate better access to apprenticeships. Again, that would best be done on a local or regional level, rather than DfE or ESFA mandating from London.
Q25 Thelma Walker: Just to extend the idea of practical financial barriers, especially for women, I think about people living in rural areas, for instance, and funding transport. We have not discussed that so far and how we address that. Childcare you have mentioned, and I do know that there is the Care to Learn funding, but I believe that that is only for publicly funded apprenticeships. That is another aspect that you have already mentioned.
There are even just the basics of somebody having to wear a uniform that is not funded or smart wear. It is those things that could prevent somebody from having that true accessibility to apprenticeships. It is about how we address those and make sure that people can physically get to the place of work.
Dr Easton: Yes. Transport is a huge one, either in rural areas or in areas where it is so expensive that it is taking a huge chunk of people’s incomes, particularly if you are on the minimum or less than the minimum wage, which we know quite a lot of our young people are. We would certainly be looking to subsidies from transport providers or, as I say, bursaries for young people who have little resource to be able to manage living on a very low salary for a period of time.
On Care to Learn, as far as I understand, it is only up until 20. That is for education. We would like to see it extended at least up to 25 so that women with children are given a bit extra. There is a discretionary fund that some FE colleges have but it is not appropriate for apprentices because they are considered to be in work. Sometimes apprentices lose out because they are considered by some to be in work and others to be in training, so you lose out on both counts. We have to be realistic and there have to be ways of making subsidies and bursaries in particular and of having that partnership so that people from lower incomes can afford to do them. I would agree completely.
Joe Dromey: Just on costs, TUC has highlighted research showing that 40% of apprentices are spending more on undertaking their apprenticeship than they are being paid as part of their apprenticeship in terms of work clothes, travel and childcare. We know obviously the apprentice minimum wage is quite low. It is understandable, in a way, because we want lots of opportunities, but it means a lot of people who want to take them are facing poverty as a result.
Q26 Thelma Walker: Just to come in on that, if there is no progression, it is a double whammy, isn’t it?
Joe Dromey: Exactly, and there is no guarantee of a job at the end. As we know, many of them do not lead to a job.
Q27 Ian Mearns: Is there a concern about exploitation?
Joe Dromey: There is a significant concern about exploitation and we know that a large number of apprentices are not getting the minimum wage, low as it is, and that is particularly sectorally focused as well. I think it is something like 40%-odd in hairdressing are not getting the minimum wage.
Q28 Chair: Isn’t it the case that over 80% of apprentices get paid much more than the apprentice minimum wage?
Joe Dromey: I would not say much more. We know that there—
Q29 Chair: Isn’t it £6 or—
Joe Dromey: We know the apprenticeships survey shows that there is a significant number who are getting paid below the minimum wage. It is very sectorally focused. I will dig out the details. We also know that for young people weighing up whether to take it, young people aged 16 to 18 are no longer eligible for a child benefit if they take an apprenticeship, which can affect their decision. We know that age 16 to 18 is the only group where we have not seen a significant increase in apprenticeship starts. It is a difficult balance, because you do not want to put off employers from taking apprentices, but we cannot be expecting apprentices to be living in poverty, particularly when there is often not progression.
Q30 Chair: I accept that, and I am particularly interested in the travel expenses for some apprentices, but I think it is the case that over 80% of apprentices get paid much more than the minimum apprentice wage of £3.50. Also, just in terms of the completion rate, is it not the case that the completion rate is about 90% in terms of those who get jobs at the end of it or go on to further employment? Sorry, not completion. Those who complete; I beg your pardon. Those who complete get jobs or go on to additional education. Is that not the case?
Joe Dromey: I think it is 86%, but that is of those who complete, and we know that the completion rate has fallen from about 77% to about 67% now, I believe. The last apprenticeship survey in 2014 showed that 15% were not even receiving the legal minimum apprenticeship, and this is very sectorally focused. In hairdressing, it is 46%; in childcare, 27%. We know there is a gender issue there as well.
Q31 Chair: Yes. That is a question of the law, not a question of policy. That is a question of the law being applied, surely.
Joe Dromey: Of course.
Q32 Lucy Allan: I just wanted to quickly come in on the 16 to 18 barriers to entry and also the gender barriers. Every school that I go to in my constituency always talks about how to get 16 to 18-year-olds into university. There seems to be nothing that schools are doing to tackle some of these barriers, and I just wondered if that is a perception that I have developed or whether it is actually true that schools discriminate against the whole concept of apprenticeships, both for women in certain sectors but also overall. Possibly, they hold some of the views just being expressed by Joe, that financially it would not benefit them and they are going to get stunted at Level 2. Is that the case that schools do not promote them?
Dr Easton: Certainly what we hear from women is exactly what you say: first on apprenticeships themselves and secondly on the narrowing of sectors and gender discrimination going on. Certainly, as I said before, why should teachers hold different views from the young people? The young people we researched who went on to university or higher education, who did not go to do apprenticeships, said that one of the main reasons was the perception of pay. As I say, it may be true that 80% do, but then there is a large percentage who get considerably less than the minimum. Also, their view of it is that they will earn more in other routes.
That is also the view of teachers and parents. I even gave a presentation recently to a school, and the head teacher said, “Please could you talk about apprenticeships? I am having a huge problem persuading the parents that this is an alternative pathway for my students”. Again, Ofsted could have a role there in terms of saying, “This is a successful school. If we not only get X number of students into university but we get X number of students into successfully completed apprenticeships”, and that might shift the balance in terms of the reputation of the school as well and the view that the teachers themselves have of it, too.
Dr Elliot Major: The national statistics really bear out what you are saying. 80% of 16 to 18-year-olds say they expect to go to university or higher education, but only 20% say the same about apprenticeships. There is that real imbalance. Then we have found that more than half of young people aged 11 to 16 say they would be interested in apprenticeships, so there is in the young people a demand there, but 30% say that their teachers have never discussed apprenticeships with them at school. You are absolutely right. What is happening in your schools is probably happening across the country.
Joe Dromey: This is partly a factor in the information, advice and guidance system within schools, which too often relies on non-specialist, very busy teaching staff, effectively just with another hat that says they are responsible for careers, and most normally have not been through the vocational system themselves to provide all the options available.
It is perhaps a bit understandable as well, given that apprenticeships have increased significantly, but for many, many years, very, very few 16 to 18-year-olds took them. It was not necessarily a route that siblings and the family had taken. The careers strategy could help address this, particularly requiring access to schools for other education providers to stop schools from trying to keep hold of their kids but allow them to make a free choice.
It is partly rational. Teachers and parents and young people respond to the reality of what they see. We talk about promoting parity of esteem between vocational and academic routes. We need to make sure that we are improving the quality in the vocational system and avoiding the risks of undermining it, because that is going to be the best way in the long term to make sure that people really want to choose these routes as the best opportunity for them.
Dr Elliot Major: A parallel concern for us is the variation in the higher education sector. What the Sutton Trust would say is it is about informed choice. Have a look at what is on offer in your local university or universities across the land, but just remember that not all degree courses might be the same value. I think there is an issue around that, that we have bought into that a university degree, per se, is good. There is huge breadth within that sector, so it is about informed choice.
Q33 Ian Mearns: Carole, you have touched on much of what would be required to facilitate part-time apprenticeships, but is the infrastructure there to support that? How feasible is it at the moment?
Dr Easton: There are some organisations that do do it. We are at the point of completing a piece of work with the Learning and Work Institute and Timewise on the delivery of part-time and flexible apprenticeships, but largely, from the preliminary outcomes, it is a perceptual issue that it is more complicated or not even acceptable within the guidance. Obviously, it will take longer and there have to be some adaptations made, but for women—particularly women, but not exclusively—that potential could open up the possibility of doing an apprenticeship, which at the moment is being ruled out.
Joe Dromey: It would be fantastic to support more part-time apprentices. We would need to look at the willingness of employers to take them and, therefore, look at potentially better incentives for employers to offer part-time. The main concern that I heard, speaking to employers about the current apprenticeship system, is the 20% off-the-job time, so it is having to backfill for that 20% off-the-job time. If you retain that 20% for a 2.5-day or three-day, that means a lot more difficulty for the employer in backfilling. It is absolutely something that we need to support, but we would need to recognise that it would need to be incentivised for employers to take them on. Just making it a bit more flexible, I do not think we would necessarily get the demand from employers to increase the numbers that we need.
Q34 Ian Mearns: I am also looking at it from the perspective of being an MP for an area where over 20% of the workforce are in part-time employment now, so how feasible is it for people who are already in part-time employment to gain an apprenticeship part-time in another skill or trade?
Dr Easton: At the moment, it is not. It is much less likely that they will be able to, which is one of the other reasons why we are wanting to encourage—
Q35 Ian Mearns: At the moment, they are stuck in part-time employment, in low wages, but they are stuck there because if they try to branch out and to get an apprenticeship elsewhere, they would probably be worse off in the immediate period. Unfortunately, that would be a real barrier to people making that transition. How are we going to get over that particular conundrum?
Dr Easton: Yes. I think it will be about sharing practice as well. As I say, I am hoping just a little bit later this year that we will have some guidance almost for employers out of the work that we are doing, but I cannot be specific about that at the moment. Also, there are just some small things at the moment, like on the website on which people look for apprenticeships, you cannot put in “part-time”. You have to go through every single one. You cannot find them. At least that might be a small change that could be done virtually immediately.
Q36 Ian Mearns: When it comes to the sectors—and I am looking at you, Joe, in particular—where there is an awful lot of malpractice with regard to not paying the minimum wage, and you mentioned some sectors before, I understand it is about the law being applied but it is also about regulation and enforcement, isn’t it?
Joe Dromey: Yes. It is hairdressing 46%, childcare 27%, construction 25%, health and social care 17%. It is endemic avoidance of the national minimum wage, yet we know that enforcement is very, very low for avoidance of the apprenticeship minimum wage. Thankfully, it is getting better for the national minimum wage and the national living wage, but for apprenticeships there is very, very little, even though there is evidence of widespread avoidance. It is an enforcement issue but we need to think about enforcement and how that is being done in the design and delivery of policy.
Also, the other thing that is obvious about three of those four sectors—hairdressing, childcare, and health and social care—is women make up the vast majority of both employees and apprenticeships in those sectors. We know there is a very significant pay gap for apprentices, but also a gender pay gap, and many are not even being paid what they are legally entitled to.
Q37 Chair: We have a lot to get through and very little time left, so could we have, just very kindly, slightly shorter answers?
Joe Dromey: Sorry.
Chair: James has to go, so he is going to ask one very quick question before he goes, please.
Q38 James Frith: I should just declare an interest on the register of interests. I am a director of a careers education company, which was a job I was doing before I came here, and I should have said that at the first. Colleagues will be familiar with it; the panel might not be.
We talked a bit about the employer-led system. How have these efforts to build a more employer-led system affected the quality of provision, do you think?
Chair: Very quick answers, please.
Joe Dromey: There is an incentive for employers to design apprenticeships in many sectors to maximise the amount of the levy that they can recoup, so to rebadge and redesignate existing training as apprenticeships. Obviously, the Institute for Apprenticeships is supposed to push back on that, but I have concerns that a lot of what we are currently calling apprenticeships would not be seen as apprenticeships elsewhere.
Dr Easton: We do not know particularly yet whether it will become too specific based on employers meeting their own needs, rather than the transferrable and generalisable skills and knowledge that we would like to see included.
Dr Elliot Major: I would just add that we would need an inspection regime that looks at the employer training aspects as well as off-work as well. I will just stop there.
Q39 Emma Hardy: I will try to be as brief as possible. Hull and East Yorkshire Hospitals NHS Trust has identified shortages that it has, which I am sure are national: nursing, operating department practitioners, radiographers, people like that. It says that the levy funding is restricting and hindering its progress because the levy funding can only be spent on training or education, and the levy cannot be spent on apprentice salaries. They are saying that their levy pot is being underused. Could you see a need for the levy pot to be used for apprenticeship salaries where we have such a clear and identified skills gap that needs to be filled?
Joe Dromey: I think so. Indeed, the Conservative manifesto suggested some flexibility around that when they talked about the national retraining scheme under which, in certain circumstances, the levy could be used to pay wages for an existing employee. It would have to be restricted very much to certain areas, certain sectors, because otherwise the risk is that you just get employers spending their levy funds on wages, which would have a huge amount of dead weight and not lead to a large amount of extra training. It would be for certain sectors, in particular areas like construction and adult social care, where we think there will be a significant impact from any likely future restrictions in EU migration.
Dr Easton: The answer is yes, with similar caveats, and also possibly combined with an issue like bursaries so that it benefits the employer and it also benefits the diversity of applicants.
Dr Elliot Major: Yes, we are agreed on this. With a social mobility lens, it would be for minimum salary in sectors that we know are currently underpaying. There should be some flexibility, but it would have to be targeted on social mobility for me on those sorts of issues.
Q40 Chair: Is there not a danger if you ask employers to use the levy to pay salaries that there will be enormous amounts of abuse? The whole idea is to create an apprenticeship nation and to genuinely change behaviour so employers want to invest in apprentices, not just because they do not have to pay the levy because it is going to be used to pay employees’ salaries?
Joe Dromey: That is why it would need to be constrained to certain areas.
Dr Elliot Major: You would have to be very careful of that. I agree.
Q41 Emma Hardy: In things like nursing, where we already have a massive shortage and that shortage is going to increase, it seems sensible to be looking at using the levy in maybe a different way. I completely accept that for specific, tightly-identified skills gaps—
Joe Dromey: The other thing is to potentially restrict it to certain learners. For example, 16 to 18 year-olds, where we know there has not been an increase in numbers and where there has been a massive increase in under-25s and over-25s, so potentially restricting it to certain age groups as well.
Q42 Mr William Wragg: Good morning, everybody, and thank you to those Members who have stuck around for this question at the end. I just want to ask, is devolution the answer to regional skills imbalances?
Dr Elliot Major: Is it the solution? I think that is quite strong. It could be part of it. I favour more devolution in this area, generally, particularly in the skills area, and I am conscious of the really big, sizeable gaps that nationally, compared to other countries, we have, but also regionally. I am struck by the fact that there are different sectors in different parts of the country, and maybe you need some more strategic oversight of that in the region. My gut instinct is that it could be part of the solution. Yes.
Dr Easton: I would agree with Lee. What is really important and was touched on in response to one of the other questions is that realistic relationship between what people are taking apprenticeships in and the outcomes in relation to the reality in their locality, rather than some overarching view and just a headline number. That does require a level of devolution of delivery, yes.
Joe Dromey: Devolution is absolutely part of the solution, but it has to be devolution with money or else it will be meaningless. The ability for local areas to shift the incentives to focus either on areas where there might be skills gaps, as Emma was talking about, or areas where local leaders want to develop a strategic advantage, that is absolutely vital.
There is some progress in this area with the adult education budget devolution, so that is going to London and a number of other areas, but in London here, for example, it is going to be £400 million a year. It has been reduced by 40% since 2010. It is about £8 per adult per year, so you cannot do a huge amount with that. I fundamentally believe that it is local areas that understand the needs of their local communities and local employers too, so there needs to be more devolution in the system.
We have gone away from that. The apprenticeship grant for employers, as it was, was going to be devolved to Manchester and other areas, allowing them to have greater local flexibility, and we have now gone back to a highly centralised system and that needs to be addressed.
Q43 Mr William Wragg: As an MP for Greater Manchester, does anyone on the panel want to comment perhaps on the model in Greater Manchester, particularly the Greater Manchester Work and Skills Strategy for 2016-19, and if you think that offers a model that might be replicated in other areas?
Dr Elliot Major: I would say it is worth looking at. In general social mobility terms, we know—the Sutton Trust and others have published on this—that your chances in life vary incredibly by the area where you happen to be born. It is not who you are born to; it is where you are born that increasingly matters in this country. This is perhaps for another inquiry, but certainly Manchester and other major cities—I know we have mentioned rural areas there but we need to think about outside London what we are doing. Of course, there are issues in London as well but I really feel that the balance needs to change and we need to think about not just Manchester but all major cities.
Joe Dromey: I think Manchester is doing some good stuff on it. Sean Anstee, who is responsible on the Combined Authority, has done some very good work in Manchester.
One thing that I would highlight finally is the apprenticeship levy. Again, because it is effectively just an important but relatively blunt tool, the apprenticeship levy will raise far more money in London and the south-east, which already have high levels of skill, high levels of productivity and high levels of pay, and will raise less money in Greater Manchester and stimulate training less in Greater Manchester, and in other areas that arguably have greater need for investment. That is why IPPR has called for a top-slice on the levy fund, which could be devolved according to skills needs to really power skills devolution.
Q44 Mr William Wragg: Centralisation of funds, but devolution of the management of those. Thank you very much.
Joe Dromey: Top-slice of funds in order to devolve.
Q45 Chair: If I could just ask two or three questions just to conclude, you talk, Joe, in your report in terms of social disadvantage of a credit system, and you model other countries like Singapore and so on. Can you just briefly set out how that would work and how it would improve the quality of apprentice training?
Joe Dromey: Our model was not necessarily for apprenticeships. It is effectively to kind of complement it. We think that the apprenticeship levy is a very good idea in encouraging and supporting employers to take more responsibility for training their existing staff, but if you are unemployed, if you are self-employed or if you are in a job where your employer just does not see the business case for training you, we know that employers are currently more likely to invest in the skills of already well-skilled staff. If you are not getting those opportunities, you need to be able to invest in your own skills and you need to be able to control your own career and education future. Yet recently we have seen a restriction of the entitlement for publicly funded training for people in work and the introduction of Advanced Learner Loans, which have been followed by a very significant drop.
Q46 Chair: Sorry, just explain how your system would work.
Joe Dromey: It would be, as you say, modelled on Singapore and on France, where, if you are an adult in work on low pay and with low levels of qualification, you get £750 a year to invest in an accredited, recognised qualification. That might be something to do with your current job, or it might be something to do with another job that you want to move into, but it is basically encouraging adults who are currently less likely to be involved in training, adults with low skills, but who could currently benefit most from participation in training.
Q47 Chair: Everybody would get it?
Joe Dromey: Ours would be focused on those who are currently less likely to be involved but more likely to benefit, so adults—
Q48 Chair: How would you target it?
Joe Dromey: People on low pay, so below two-thirds median, and people below NVQ Level 2. We have costed that as, I believe, around about £1 billion a year nationwide.
Q49 Chair: I appreciate you did not just mean apprentice training, but how would it improve the quality of apprenticeship/skills training and how do you avoid the problems as when a smaller version of this was introduced in the past?
Joe Dromey: The Personal Learning Credit, as we call it, itself would not improve the quality, so there would need to be robust measures in place to ensure that quality is protected. Learning accounts have a bad name because of the largely failed experiment under the previous Government. There is a fantastic report on that by the Public Accounts Committee following the experiment, which showed it was the way it was designed and delivered, it was the absence of controls on quality, it was the active effort to encourage loads of new providers to come in, and it was very, very poor subcontracted provision again. Reading that report, there are ways in which you can design a system that ensure that individuals have control over their own careers and the ability to invest in their own skills, but we do not see a diminution of quality.
Q50 Chair: This is my final question to the whole panel. You have talked about a skills levy as opposed to an apprentice levy. My concern about that is that we want to change behaviours in our country, literally building an apprenticeship nation, especially for women in STEM and the socially disadvantaged and so on. If you have a general skills levy it becomes a bit of a mish-mash because there are so many different skills qualifications.
However, there is a need to increase funding. Would the panel agree, in terms of improving quality and helping the socially disadvantaged, that either we should increase the number of companies that have to pay the levy, because at the moment it is only 2%, or you increase the levy of the existing companies? Would the panel be in favour of that?
Joe Dromey: Both. Our model would require a higher levy contribution but more flexibility for employers in how they can use it. That is basically a recognition that if you restrict it only to apprenticeships, arguably to meet the 3 million apprenticeship manifesto target, then the incentive for employers is to rebadge training so that it is an apprenticeship and that benefits no one.
Dr Easton: Honestly, I would rather see pay increased.
Q51 Chair: See what, sorry?
Dr Easton: Pay.
Chair: The apprentice minimum wage increased?
Dr Easton: Yes, absolutely. I would rather see that if it can be achieved through what you are saying, but in order to improve the reputation and to encourage people in, we need to do something about pay.
Q52 Chair: By how much? What should the apprentice minimum wage be?
Dr Easton: We would like it to be the same as minimum wage for anybody else.
Dr Elliot Major: I think that is right. This discussion is so interesting. I would say you want parity of condition as well as esteem for these routes. It always strikes me that people talk about the academic route as the “royal route” and I think that is because it is a seamless route, you get all the support you need. There are issues, as you know, but I just feel that this route should be equal in condition. Whatever it is we were talking about—bursaries, about pay—should be equal. Why shouldn’t it be? These are amazing qualifications that, if done well, will lead to life-changing opportunities. You need parity of condition as well as esteem. Social mobility is as much about progress in the workplace as it is in education.
Q53 Chair: What does parity of condition mean, in a nutshell?
Dr Elliot Major: I have just been thinking of a path for someone who is on the academic route. Everything is signposted, you know the options, you get supported at transition points. I would love the report that you produce to almost compare two people. My sense in apprenticeships is that there are lots of dead ends, as we talked about, so these Level 2s that end up nowhere. There are pitfalls. Sometimes it is a very confusing route. I think we just need to almost map out steps. Social mobility is about transition points and ensuring people do not get lost at those points.
Q54 Chair: Would you increase the levy, though, in the way that I—
Dr Elliot Major: I would consider it. I would want to improve how it is used right now before going there, but I do think there is room for more to be spent in this area.
Chair: Thank you. It is invaluable, what you have said today, and will inform our report. I think we will be probably speaking to you quite a bit, and there was a lot in this report on automation and the effect of the fourth industrial revolution, something I very much hope as a Committee that we will be looking at in the future. The figures in the report are quite horrifying in terms of the impact, especially on the socially disadvantaged. What you are doing, all of you, is really important in terms of us building a skilled nation and enabling people to climb the ladder of opportunity. Thank you.