Apprenticeships driving business

12 - April - 2010

Report from Kevin Brennan, Minister for Further Education

All governments have to respond to circumstances. The present Government, like any other, has had to change tack a few times over the past 13 years – notably in order to protect British people as far as possible from the effects of the global recession.

But along with what has had to change, there are many important things that haven’t. For example, one of the salient features of this Government’s approach to skills ever since we first came to power in 1997 has been our consistent commitment to apprenticeships.

And it shouldn’t be a surprise either that the current Prime Minister has a huge personal commitment to apprenticeships – after all, when he presented his first budget back in 1997, he had a special new budget box made by apprentices from his constituency. It was a hugely symbolic gesture, so we shouldn’t be that surprised that there are now nearly 4 times as many apprentices – 230,000 to 60,000.

So, I think it’s timely to take an overview of what contribution apprenticeships are making to our national economic recovery and to the Government’s longer-term skills objectives.

And my basic contention is that apprenticeships work.

The basic apprenticeship model has delivered skills effectively in this country for nearly 1,000 years. And it continues to do so today.

The principle is really straightforward. What better way can there be to learn the skills needed for a job than by actually doing the job and by learning from people who have those skills already? Combine that concept with underpinning transferable skills, technical skills, robust quality-assurance and accreditation arrangements and you have an approach to work-based learning that can really deliver for individuals and employers alike.

Obvious. But back in the 1980s and early 1990s it seemed as if apprenticeships might die out in this country – along with British manufacturing itself. When we came to power, there were barely 65,000 new apprentices a year. However, since, then, over 2,000,000 mainly young people have followed this route to a better chance in life and now nearly a quarter of a million start an apprenticeship every year.

I should add that we have also delivered record numbers of successful completions; record completion rates; and record number of Advanced Apprenticeships at level 3. Overall more than 70% are now completing their apprenticeships, compared with less than half that percentage back then. And of course we have set up the National Apprenticeships Service as a field force to promote and help create more apprenticeship opportunities.

The advantages of the apprenticeship model for employers are clear. And our economic problems of the past couple of years have shown that more clearly than ever. Those employers who heeded the call of the CBI, the trade unions and Government to keep training have reaped the benefits. Our expanded apprenticeships programme and the money we have invested have played a pivotal role in enabling them to do so.

You don’t have to take my word for it. Research has shown that more than 60 per cent of businesses in England have benefitted from employing apprentices during the recession. Half report that their apprentices have helped increase productivity and reduce recruitment costs.

Altogether, four out of five employers think apprenticeships offer value for money.

Britain is now emerging out of recession. Surveys show that employers are getting more confident and that over half are looking to take on new members of staff.

Apprentices will make their contribution to filling those vacancies – and to ensuring that they’re filled by people with the right skills to do the job.

Even during the recession, the Government carried on working to remedy Britain’s long-standing weakness in intermediate skills. The demands that renewed growth will bring are set to give renewed urgency to that task.

Our plans for this were set out only recently in Skills for Growth, which I know many of you will have read. Among other things, this set out our ambitious vision to increase dramatically the number of Advanced Apprenticeships, creating up to 35,000 new places for 19-30 year-olds over the next two years to support creating a modern technician class.

Because the level of skills needed in the workforce for Britain to remain economically competitive in the coming years is rising, Skills for Growth also underlines the need to build stronger routes from apprenticeships into higher education. Our proposals here include the development of an apprenticeship scholarship programme.

We have other ambitious plans for apprenticeships, too.

For example, the Apprenticeships, Skills, Children and Learning Act puts the apprenticeship programme on a statutory basis and will ensure that an apprenticeship place is available for all suitably qualified young people by 2013. We will focus on ensuring that apprenticeships are a mainstream option for 16-18 year-olds, alongside other education and training routes. Within the next decade, we anticipate that one in five of all young people will be taking an apprenticeship.

And my colleague at the Department for Business Innovation and Skills, Pat McFadden, announced last September that the Government would aim to support 20,000 apprenticeship places over the next 3 years through public-sector procurement, as part of our wider aim to increase apprenticeship numbers.

We are making real progress in opening up apprenticeship opportunities through this route including on the Olympics park development, Building Schools and Colleges for the Future, and the Homes and Communities Agency’s £5 billion a year house-building budget.

We’re committed to doing all this because we believe the apprenticeship programme is an effective route into work that gives people the skills that business values.

But for this to work, we need business to champion the apprenticeship programme, work with sector skills councils to develop new advanced and higher apprenticeship frameworks and offer more advanced and higher apprenticeship places.

This was underlined only last week, in the open letter that the UK Commission for Employment and Skills sent to employers. This made clear that, I quote, “employers are best placed to create opportunities for opening young minds to the world of employment, maybe even leading to sustainable jobs as the economy recovers”.

Indeed, while it is important that people are supported to gain new skills, it is equally important that these skills are used by employers if they are to drive productivity. And this is something that only business can do.

The best businesses already see investing the skills of their workforce as one of the most powerful things they can do to drive their business forward. So the contribution of training organisations and business to this work is crucial. As the theme of today’s conference makes clear, apprenticeships drive business. But businesses also drive apprenticeships. And as the demand for skills grows it’s incumbent on all of us here to play our part in ensuring that apprenticeships continue to make their full contribution towards meeting that demand.