On 22nd October 2024, the Bishop of Leeds spoke at the second reading of the Institute for Apprenticeships and Technical Education (Transfer of Functions etc) Bill, calling for improvements to the apprenticeship levy, thereby incentivising small and medium-sized enterprises to hire apprentices and expanding opportunities for the most vulnerable young adults and learners:
The Lord Bishop of Leeds: My Lords, it is a great pleasure to follow the noble Lord, Lord Aberdare. I realise that I stand in the way of the maiden speech of the noble Lord, Lord Beamish, which I look forward to hearing shortly. I shall try to be brief.
I support the Bill in principle, and certainly the ambition behind it—and I certainly understand the logic behind it. A number of questions have already been raised about it that will need some careful addressing and answering if the House is to be confident about what is proposed. I want to focus on the FE sector, which has been facing some difficulty in recent years—facing the uncertainty while awaiting the outcome of the Government’s pause and review of level 3 qualifications, deals with FE pay being considered separately from the ongoing negotiations for the recently resurrected School Support Staff Negotiating Body, and faces up to the impact of sustained cuts and falls in funding in real terms. But FE is doing amazing work, particularly with particular sectors of our young people.
My questions relate to the move of IfATE into Skills England in relation to several issues. First, on young people, the apprenticeship levy has resulted in fewer young people undertaking apprenticeships. Young people in general, but especially those not in employment, education or training, form a demographic that stands to benefit immensely from apprenticeships, but it seems to me that we have seen a trend of employers choosing to spend their apprenticeship levy on older employees or career changers, as young people are sometimes perceived as harder to work with. How will Skills England incentivise the recruitment and training of young people through apprenticeships?
Secondly, on SMEs, small and medium-sized enterprises have not found the apprenticeship levy simple to navigate. It is much simpler for those with a turnover of more than £3 million a year, as they contribute automatically. Complexity and perceived uncertainty around a solution of co-investment has limited the take-up of apprentices by SMEs, which can disproportionately affect smaller or more rural communities, where larger businesses simply may not operate. How will the new structures around apprenticeships incentivise and support provision of apprenticeships by small and medium-sized businesses?
On the question of levels, the apprenticeship levy has had a much bigger impact on higher-level qualifications, such as higher and degree apprenticeships, and in turn therefore helps higher education institutions. But it is not improving the range and offer of courses available at lower levels, such as intermediate apprenticeships at levels 2 and 3, to anywhere near the same level. Arguably, that increases the options available to already more privileged or socially mobile apprenticeship candidates, while restricting the options available to those most in need.
I shall give an example to illustrate my point. There is currently a crisis in care. Statistically, care-experienced young people are far more likely to study at FE institutions than HE institutions. Given the weaker social fabric supporting them, and the complexity of transitioning to independent adulthood after 18, which is challenging enough as they leave the care system, these young people should be the ideal candidates for apprenticeships and the training and salary or wages that they provide. However, they are more likely to need to undertake a lower-level apprenticeship in the first instance, and are seen by some providers as harder to work with, as I indicated earlier, and are therefore doubly passed over in favour of older and more experienced candidates undertaking higher or degree level apprenticeships, for which a young learner may not be eligible, depending on their prior education. How will Skills England use apprenticeship structures and incentives to make sure that our apprenticeship structures and technical education are making the most impact for our most vulnerable young adults and learners?
Extracts from the speeches that followed:
Lord Storey (Lib Dem): The noble Lord, Lord Aberdare, referred to things being rather cosy, with Skills England, the director-general and the Civil Service, which does not have any public profile and operates behind closed doors. Where is the grit in this figurative oyster? That was also picked up by the noble Baroness, Lady Evans. The right reverend Prelate the Bishop of Leeds talked about apprenticeship levies and how it was difficult to navigate around them. I shall come back to that in a moment.
Currently the institute is responsible for bringing employers together to develop the apprenticeship standard and what apprentices need to learn—in short, the apprenticeship plan. They are good at this and the employer input is very important to ensure that consistency in training, assessment and outcomes. I ask the Minister: who will set the apprenticeship standard and who will regulate assessment plans developed by awarding bodies?
We need to avoid inconsistencies of outcome. We need to be reassured that Skills England develops a partnership with business skills bodies to secure that quality and consistency of apprenticeships and that there is a partnership involving employees, giving industry skills bodies a formal role in the skills system, to set standards and assessment requirements.
We were getting to the position of seeing the regions working with FE, understanding the needs of industry and understanding SMEs. We have to be sure that the new arrangements do not lead to unintended consequences and that the progress and working relationships that are beginning to be successful are not lost.
The Government need to invest in skills and training. Any business will tell you that the apprenticeship levy does not work. They often cannot get the funding they need to train staff and the ridiculous situation whereby hundreds of millions of pounds of training funding goes back to the Treasury at the end of the year if it is not spent is absolutely crazy.
We also believe that the lower minimum wage for apprentices should be scrapped and that they should be paid the same minimum wage as those other employees of their age. Apprenticeships are critical for social mobility and ensuring that people from a diverse range of backgrounds can access high-quality training. They can tackle skills gaps and help learners of all ages to upskill and reskill. The Open University, interestingly, carried out a survey that found that 72% of apprentices received a pay rise on completion, and 71% gained promotion.
When the apprenticeship scheme was conceived— I think it was by the coalition Government—it was aimed very much at 16 to 18 year-olds. But, over the years, the number of 16 to 18 year-old apprentices dropped dramatically, and they are often the ones in the most vulnerable situations. I hope that the new Government will try to ensure that there are plenty of opportunities for that age group.
Baroness Smith of Malvern (Lab, Department for Education): It is absolutely not our intention to allow the transfer to cause a delay or drop in apprenticeship numbers. We will mitigate the risk of that through the transition plan I have talked about. On the point raised by the right reverend Prelate the Bishop of Leeds, any approvals by IfATE will transition and will not have to be redone as a result of this legislation. These decisions will continue to stand until such time as the occupational standard, apprenticeship or technical qualification in question is reviewed under successor arrangements and a new decision is taken.
My noble friend Lord Layard and the right reverend Prelate the Bishop of Leeds rightly talked about the significance of young people and how we can ensure that we improve our skills system for them. This is where our commitment to developing a youth guarantee is very significant, and my noble friend Lord Layard once again made his strong call for the apprenticeship guarantee, which I have discussed with him on numerous occasions. He is pushing us further as a Government than we are able to go at this time, but he continues to make a strong case and I will continue to listen to him.
The Church of England in Parliament 
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