Education Press Release

Annual Apprenticeship Conference 2020

KEYNOTE SPEECH

I’m  now eight weeks into my new role as Shadow FE and HE Minister and I want to give thanks to my predecessor Gordon Marsden whose dedication and commitment to FE and HE was unrivalled, he is a truly decent man and I can only hope to do his work justice and build on the positive relationships he developed throughout the sector.

Introduction

Prior to being elected I was a primary teacher for eleven years, National Education Union employee and education activist so it was no surprise that after entering parliament in 2017 I chose to serve on the Education Select Committee. I was delighted to asked to become the Shadow FE and HE Minister, and I cannot see a future where I am not involved in education.

Since accepting the role of Shadow FE Minister, I have been touched by the warm welcome from the sector and the clear and tangible desire you have to improve the life chances of people throughout the UK.

Labour party committed to a National Education Service in its 2019 manifesto and I believe that Lifelong Learning should be a right of everyone in the UK. That this not only benefits the individual but brings benefits to wider society. That includes the world of business and commerce.

Apprenticeships are an ideal vehicle for providing a pathway to improvement throughout a person’s working life and so a natural fit with our vision for the UK of the future.

Thanks to the work of all of you and people working in FE up and down the country the prestige of apprenticeships is rising. Within the last month there have been three parliamentary debates on FE with two dedicated solely to apprenticeships. The Speaker of the house of commons has announced he will have an apprentice and this year’s Apprentice Week in the House of Commons was very well attended. For the first time in years there is a growing consensus that being an apprentice is a ‘good thing’ in the same way that they were highly sought after in the past.

So how can something as universally ‘good’ as apprenticeships be failing in so many areas?

Challenges

Despite the hard work of the FE sector the funding cuts and ill-considered changes have created an education system where “if at first you don’t succeed, then you don’t succeed” as life chances and opportunity have been taken away from those who need it the most.

The rushed implementation of the Apprenticeship Levy has resulted, not in an increase in apprenticeships and opportunities for the most disadvantaged, but quite the opposite.

This approach has thrown up several questions. Is the levy a skills tax or an individual companies funding pot? What is an apprenticeship? Who, exactly, is the levy primarily intended to help?

Alison Wolf, The governments skills advisor, warned the Education Committee in June 2016 that rushed implementation could result in “unforeseen consequences and perverse incentives” but her warning has not been heeded.

Rebadging apprenticeships

There are significant concerns that companies are rebadging existing qualifications. The Sutton Trust was quick to spot the developing situation and warned in November 2017 that an estimated two-thirds of businesses apprenticeship schemes were merely ‘converting’ existing employees and certifying existing skills, and that the Levy may encourage more of these ‘conversions’ and re-badgings as a way for levy payers to reclaim their money.

The controversial EDSK paper by Tom Richmond illustrates an example where 23 HE institutions have worked together to create an apprenticeship which requires a Level 8 or PHD to start, surely this should not be considered an apprenticeship.

The government should end the 100% use of levy money for master’s courses.

Degree apprenticeships though are a different matter. They provide opportunities for people who have never considered they could have a degree the chance to learn and earn at the same time.

They have the potential to be real drivers of social mobility and address current occupational shortages.

More work must be done to ensure equal representation within Degree Apprenticeships, and I support the expansion of them at HE institutions throughout the country.

I believe that Degree apprenticeships should continue to be fully funded from the levy for people 25 and under, occupations on the shortage occupation list and adults who do not already have an equivalent qualification.

Low skilled qualifications

The Government’s stated vision for apprenticeships “to be available across all sectors of the economy, in all parts of the country and at all levels” was an invitation for low value schemes without effective safeguards in place.

We have seen levy funding used to deliver various “low-skill and generic jobs that are now counted as an apprenticeship which lack occupation-specific knowledge and skills.

There is little doubt that when over 35% of pupils leaving school without the qualifications they need to start on L3 that L2 is a crucial first step but it should not be an endpoint.

A L2 qualification currently provides no average wage increase compared to a worker without L2 but L3 gives average wage increase of 20%.

Currently two thirds of apprentices engaged in L2 do not go onto a L3.

I believe that there are simple changes that the government could make to address this imbalance.

I support the TUC who believe that all apprentices who have the aptitude and desire to progress should be given opportunities to do so and the Sutton Trust who think “Progression for those beginning on lower level apprenticeships should be seamless and automatic so that young people don’t drop out before getting a good quality apprenticeship.”

To reinforce Level 2 Apprenticeships being seen as a starting point and not an end point they should be rebranded as Foundation Apprenticeships.

Young Apprentices

We have seen a 20% fall in 16-to-18 apprenticeships which is cutting off the apprenticeship progression route.

Apprentices in this age group also face challenges with loss of child benefit for parents and being expected to pay full price for prescriptions.

There should be full funding for all 16-18 year old apprentices out of the education budget. This would be a recognition of the extra resources and time required by employers for this age group and give an equal status of apprenticeships with other qualifications taken by young people.

Over 35% of students did not get a grade 4 or above in GCSE English and Maths at first attempt which indicates they need support above and beyond what they had at school to obtain the results they need.

We have a situation where around half of the working-age population lack basic numeracy skills. This proportion is similar in all the regions of England and in Wales with one in six of the working-age population lack basic literacy skills.

I share concerns that the current funding rate of £471 per subject in functional skills is almost 50% less than the stand-alone rate for the same programme. But even the standalone rate of £724 per learner is not enough to deliver the subjects without incurring financial losses.

There must be double the funding for maths and English in apprenticeships.

Levy issues

When I questioned the FE Minister at a debate in February, she told me “We do not and did not anticipate that all businesses that paid the levy would need or want to use all the money” If companies were never intended to use all their levy why give them access to all?

Companies now are using 78% of their levy with all indicators showing the trend is for companies to spend more but the current system the government created is based on the premise that they will only use 60-70%. The levy is running out of money.

The government should end the 10% contribution to levy payers digital accounts and stop the 95% funding for levy payers who have used all their levy.

SMEs

Traditionally, SMEs have been the largest recruiters of young apprentices, and they have generally been the recruiters of apprentices at a starter level. They have suffered the most under the botched levy reforms introduced by this government.

There has been a fall of 171,000 apprentices in SME. That is down an estimated 49% since the levy was introduced and SMEs receive only half as much apprenticeship funding compared with April 2017, when the levy was introduced.

Current estimates are that between 30,000 and 40,000 SME apprenticeship vacancies remain unfilled and there could be a loss of 75,000 apprenticeships in SMEs by the end of 2020.

Yet we find that for once in education there is unity; the chief executive of the employer-led Institute for Apprenticeships and Technical Education believes that the apprenticeship levy needs to be topped up with additional Government funding to address the shortage of funds available for apprenticeships offered by smaller businesses. Her comments follow similar concerns expressed by Ofsted’s chief inspector that the levy is not working in a way which would satisfy the Government’s ‘levelling up’ agenda across the UK regions.

Government must provide a separate ring-fenced funding stream for SMEs of £1.5bn.

The government’s suggestion to solve the problem by putting SMEs on the digital platform will not solve the problem. Even increasing the numbers by 15,000 will not be enough to cover the 49% decrease they have already seen.

Giving people more access to a system that does not have enough money just means that they have greater access to having no money; it does not solve the problem.

There are also specific concerns with the design of the online digital platform for SMEs which need addressing.

Addressing Disadvantage

Disadvantaged people of all ages are disproportionately clustered at the lower levels of apprenticeships; they are significantly more likely to be studying at Level 2 or 3 apprenticeships than in higher or degree-level apprenticeships.

However, not only has the Levy led to a dramatic fall in Level 2 and level 3 provision but at the same time people from deprived communities are being squeezed out of higher-level apprenticeships.

In 2015-16 – before the introduction of the Levy – the most deprived 20% of the population accounted for 21.9% of apprenticeships starts at level 4 or higher. By 2018-19, this figure had dropped to 16.4%.

The Social Mobility Commission has warned that a “two-tier system … based on apprentices’ backgrounds,” may be emerging.

We know that too many leaners are facing apprenticeship poverty and spending more money on travelling to work and college than they earn.

I recognise that although the national apprenticeship minimum wage is £3.90 the average wage is £6.70, but that is still nowhere near a living wage. The National Women’s Trust reported that one reason young women stop apprenticeships is because they receive less in wages than it costs them to do the apprenticeship. Social mobility is an unrealistic dream if the barriers to learning are too high.

It is outrageous that 26% of employment law cases involving employers not paying the minimum wage are from apprentices despite the fact they only make up 3% of employees. This blatant exploitation is appalling.

What makes this even worse is that between January 2016 and June 2017 fewer than five employers were prosecuted.

The £240m saved from ending the 10% employer contributions to levy payers should be used to create a bursary package for disadvantaged apprentices to support with travel costs, equipment and related expenses and reach underrepresented groups.

The apprenticeship minimum wage should be increased.

It is not enough to “name and shame” employers who exploit apprentices, they should face criminal prosecutions and the government should invest in more effective enforcement.

Future Proof Apprenticeships

We need to future proof apprenticeships. The world of work is changing and few can agree on the impact of automation but we need to be honest and ask, with some of the apprenticeship standards we are developing are we training people for work in a specific company or giving them the transferable skills, they need to survive in a changing world.

We need to look at providing relevant qualifications for all levels of apprenticeships to enable people to take their learning with them.

Climate change is happening now, and effects will become increasingly apparent. There will be increasing demand for existing solutions as well as big rewards for being first to develop workable new solutions. Labour’s pledge to create 320,000 climate apprenticeships was with the purpose of making the UK a world leader in the technologies of the future.

We need to develop new Green Apprenticeship standards.

The most difficult challenge of all is to transform our society into one that loves and values lifelong learning. We must forever change from “if at first you don’t succeed you don’t succeed” to “you never stop learning.” We need to make the country fall in love with learning.

We need a universal, right to learn throughout life, underpinned by a minimum entitlement to fully-funded local level 3 provision and the equivalent of 6 years’ publicly-funded credits at level 4 and above, with additional support for priority groups.

Labour will be bringing forward amendments in the upcoming Employment Bill to introduce a universal Right to Learn for every citizen in our country.

To fully utilise the legislative power having a ‘Right to Learn’ gives, we need to look again at having Individual learning accounts. This would give every individual the right to learn and the resources to access the learning they need.

Conclusion

Our actions show what we value. At every stage, if it’s not working for the disadvantaged in our society then it’s not working. The government should complete an equality impact assessment for every change, so they don’t continue to make the same mistakes.

We cannot do nothing. Doing nothing is an active choice to allow deterioration to continue for our young people and SMEs.

When the government talk of hard choices the most disadvantaged always seem to suffer the most.

I believe everyone is equally important. Education can be the most powerful tool in the world and everyone deserves equality of opportunity. Equality is not giving everyone the same and wondering why some achieve and others don’t, it is about giving everyone exactly what they need to achieve and recognising that needs to be bespoke.

This is why FE is so crucially important.

As your Shadow representative and future Minister, it is my ambition to work closely with you to focus that desire for true equality of opportunity relentlessly at the government until we see the changes that young people and the sector needs.

Disclaimer: This article by Emma Hardy MP is not binding nor official Labour Party policy and is open for discussion.

 For more information contact Sean Clough Parliamentary Researcher sean.clough@parliament.uk or Lee Holland Communications Manager lee.holland@parliament.uk

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