Mike Payne, Regional Political Officer, welcomed the following announcement as a major step forward for young people across Wales.
More Apprenticeships in Wales – statement
Jeff Cuthbert
The Deputy Minister for Skills
I am particularly pleased that I have the chance to talk today about our apprenticeship programme in Wales. This week is National Apprenticeship Week. Through a number of engagements I have planned, I will have the opportunity to see the apprenticeship programme in action and be reminded of the benefits to learners and employers alike.
Apprenticeships have commanded a great deal of interest over the past year. In October, the report following the Enterprise and Business Committee's inquiry into apprenticeships was published, and concluded that, while we have a strong apprenticeship programme in Wales, the full potential and capacity of apprenticeships for supporting the Welsh economy remains unrealised.
In November, as part of the draft budget agreement with Plaid Cymru, we agreed to allocate an additional £20 million to apprenticeships for the financial year 2013-14 and an indicative £20 million for the financial year 2014-15. As a result, negotiations have taken place with Plaid Cymru to consider potential activity that will enable us to satisfy the essence of the recommendations from the inquiry and to focus the additional funding in the most appropriate way. The associated costs of the proposed activity, which I will come on to talk about, are based on best estimates, but the ethos of our commitment remains the same.
First, over the next two years, we will allocate an additional £22 million to support approximately 5,650 additional apprenticeship places. The report from the apprenticeship inquiry called for investment in higher apprenticeships. We will ensure that we have sufficient and relevant higher apprenticeship frameworks available for delivery in Wales, and we will increase the number of higher apprenticeships being delivered. We will ensure that the right skills are being delivered to meet the needs of the Welsh economy. Therefore, we will make higher apprenticeships one of our top priorities on this programme. Out of the 5,650 additional apprenticeship places that we will make available, we aim to deliver 2,650 places at level 4 and above, thereby contributing towards an increase in the average level of qualification held by working-age apprentices in Wales. We will work with stakeholders such as employers, sector skills councils and the UK Commission for Employment and Skills to accelerate the increase in the number of higher apprenticeship frameworks available in Wales to meet employers' needs.
We will also continue to focus our support on the 16 to 24 age group. We will, of course, still retain an all-age apprenticeship programme in Wales—it has been one of our great success stories and is valued by businesses—but we must ensure that additional funding is targeted at maximising opportunities for 16 to 24-year-olds. In doing so, we will support 16 to 24-year-olds to remain engaged in education, employment or training, attempt to drive down the average age of apprentices, and support a demographic that has been one of those worst hit by the recession.
Secondly, employer engagement was also a strong theme emerging from the recommendations of the inquiry. According to the 2012 employer perspectives survey, 12% of all establishments in Wales offer formal apprenticeships that lead to a nationally recognised qualification. It is our aim to increase this existing employer base, and particularly to engage with small and medium-sized businesses. In order to do so, we will increase our offer of support through our successful young recruits programme by offering an enhanced wage subsidy to employers taking on additional apprentices between the ages of 16 and 24. For eligible employers, we will pay £100 per week for the first 26 weeks, reducing it to £50 per week for the remainder of the 52-week period. Employers will, therefore, receive a maximum of £3,900 over 52 weeks for employing a young person between the ages of 16 and 24. This is an increase of £1,300 compared with the previous offer. We will also extend the YRP to include learners following higher apprenticeship frameworks, thereby not limiting it to those on levels 2 and 3, and, again, offering support to businesses to take on learners at a higher level.
During the inquiry, the Federation of Small Businesses stated that the time and cost of recruiting an apprentice were significant barriers to small and micro businesses offering apprenticeships. Small and micro businesses can ill-afford the downtime associated with the recruitment of an apprentice, and, therefore, do not consider apprentices as a suitable option for their businesses. In response to this, we will offer small and micro businesses a one-off payment of £500 to assist with these costs, and we will work closely with stakeholders, such as the Federation of Small Businesses, to identify other barriers associated with the recruitment of apprentices in the expectation that we can support businesses to overcome these issues. To maximise these opportunities, we need to increase the number of businesses that offer apprenticeships. To do so, we will also focus efforts to enable the young employees to secure a sustainable position within the company and to gain qualifications.
We will direct approximately £3.4 million towards developing a more coherent system by which school or college leavers can access apprenticeships, and to strengthen relationships between employers, schools and work-based learning providers in order to promote apprenticeships as a valued option in their career path. As a part of this activity, we will develop action that engages young people with apprenticeships within the STEM sectors, as well as trying to promote higher skilled apprenticeships as valuable alternatives to college or degree courses. We will also look at gender imbalances across apprenticeship delivery and work with the necessary stakeholders to identify the imbalances, and to consider activity that will go some way towards redressing them.
Finally, we will aim to increase the provision of Welsh-medium and bilingual apprenticeships. It is important to this Government that those who are first-language Welsh speakers, and those who have been through a Welsh-medium education, are able to continue with their education on a vocational path through the medium of Welsh. We will work proactively to maximise the opportunities in accordance with the levels of demand. We will begin very shortly by assessing what is already available for delivery through the medium of Welsh versus what is currently being delivered. Then, working with our network of work-based learning providers, we will undertake work specifically focusing on emerging demands relating to Welsh-medium apprenticeships.
My chief desire is that apprenticeships, underpinned by high-quality qualifications and the wider curriculum, will become the gold standard for vocational competence in Wales, where the achievement of an apprenticeship certificate is recognised, valued and highly prized by all as an endorsement of the skills, professionalism and ambition of our country within the global economy. The year 2012 saw a great deal of development work in terms of apprenticeship policy, and I am confident that 2013 will mark the emergence of an even stronger apprenticeship programme in Wales.
Nick Ramsay
I thank the Deputy Minister for that thorough statement. I think that you covered most aspects there. If I may, I will join you, Deputy Minister, in talking up the benefits of apprenticeships, both to the individuals involved and also, importantly—which we often forget—to the companies themselves. Apprenticeships are also of great benefit to those companies that are training young people. As you say, the Enterprise and Business Committee has done a lot of work in this area. We found some interesting findings. We know that there is an interesting situation in Wales but, apparently, for a long time now, in Wales, we have had fewer apprenticeship opportunities than in some other parts of the UK. However, at the same time, and positively, we have had more people going to the natural end of the apprenticeship, but that has not always happened elsewhere. So, there is a good story to tell in that respect.
Specifically, as the Enterprise and Business Committee recommended, will you undertake to publish the figures relating to apprenticeships regarding each sector? I know that the sector approach of your Government to the economy, which has been spoken about a lot in this Chamber, is a cornerstone of the economic policy of the Welsh Government, but it would be interesting to see a little bit more in terms of the apprenticeships provided per sector. I do not think that we have seen that to date.
As you say, there are some very well-established apprenticeship programmes, many of which are being run by larger and well-known companies in Wales. As you said in your statement, some other small and medium-sized enterprises are not so good at providing apprenticeships; so, how can we spread best practice? What are you doing to see that those larger companies are in a better position to mentor and to link up with some of the smaller SMEs and to help them in that way?
I am sure that you would agree that we must make provision for the future economy—future needs in the growth areas of the next decade; a good example of which would be in relation to care for older people, where we know that the demand will increase massively. Clearly, we would like to see more apprenticeships in a growth area like that. So, how are you making sure that the foundations for the apprenticeships of five to 10 years' time are being laid now, so that, in the area of care for older people, there will be people who are skilled up to fill those jobs?
You did not mention cross-border issues, so I will. Constituents may not have raised these issues with you, but as an Assembly Member from a border area, I have been contacted by employers in my constituency whose apprentices are finding it difficult to get funding, because they are studying with apprenticeship providers in England. Now, as I understand it, they are Welsh Government-approved apprenticeship providers, but because they are over the border, it seems to be more difficult for those young people in my area to access apprenticeship opportunities. As I said, we have not spoken about this to date, but I would like to hear from you whether you were aware of the problems and what you intend to do about the matter.
Finally, Deputy Minister, you mentioned the very worrying figure of, I think, 24% of 16 to 24-year-olds who are not in work. How will you make sure that these apprenticeship opportunities, which are great as far as they go, actually provide lasting, real, permanent jobs, perhaps not in the companies where the apprenticeships are served, but so that those people who receive that training are best placed and have the best opportunities to make the most of their apprenticeships, which we all want them to really benefit from?
Jeff CuthbertCymEng
I thank the Member for Monmouth and the Conservative spokesperson very much for his generally positive and supportive comments; I do appreciate that.
You are right to talk up the benefits; we need more people to do that, quite frankly, because there is still a perception out there that apprenticeships are not as valuable, perhaps, as degree courses. While I am not in any sense belittling academic courses, there needs to be a greater understanding of the value of vocational provision. That is just as important for the employer, as you rightly point out, as it is for the apprentice.
You are quite right to point out that there is a drop in the number actually taking apprenticeships, but that is because, whereas the completion rate was about only 50% just a few years ago, it is now over 80%. Obviously, it follows that young people are staying on longer in order to complete their apprenticeships, and that affects the number of places that may be available, although that, of course, is about to change, with this enlarged programme.
I am not aware of any reason why we cannot publish figures relating to sectors. I will speak to officials on that. I think that we do have information on that, but I will certainly write you on the matter, as I will on the cross-border issues. If you would care to write to me with particular instances where this has been an issue, I will certainly look into the matter, although I must stress, of course, that the Welsh Government's priority is apprenticeships that are delivered within Wales. So, we do have to look at that very carefully, but if you write to me, I will certainly look into it.
You asked how we will ensure that apprenticeships of the future are relevant to the economy. That is why we set up our labour market intelligence unit. That unit will identify skills gaps and take information from the UK Commission for Employment and Skills. That will help to determine which occupational areas are going to be the priority for the future. You would not be surprised to hear that that will then clearly inform where we offer apprenticeships and seek to encourage young people to look for future employment.
On your final point, yes, you are quite right that there are some very big companies that offer apprenticeships, and they do it very well indeed. However, they have very large supply chains, which are often SMEs. We are certainly looking to the anchor companies to work with their supply chains and to cascade good practice. Again, by working with organisations like the FSB, we will look to involve more organisations—one area, of course, being our shared apprenticeship scheme, in which small employers can share, as the title suggests, an apprentice between them.
Christine ChapmanCymEng
I thank the Deputy Minister for his statement today.
Deputy Minister, you outlined the importance of apprenticeships to young Welsh people and to the Welsh economy, but I think that there are still some issues of perception that we must make every effort to tackle. The Chartered Institute of Personnel and Development, for example, found that fewer than 20% of the people it surveyed gave apprenticeships parity with university education. I would like to have your thoughts on how we can change that. The same survey found that only 15% of parents reported that they or their children had received information on alternatives to higher education from teachers. So, it is about embedding this cultural change within our schools. What work is being done to make sure that teachers are aware of the benefits and opportunities that apprenticeships can offer, for example, through placements in industry? I am concerned about this because, over the years, the number of teachers going into industry on a placement has gone down.
I welcome your commitment to look at the very real gender imbalances that exist within apprenticeship numbers as a whole. It is not good that just one out of 10 IT apprentices, but nine out of 10 health and social care apprentices, are women. The numbers are very imbalanced. The situation has changed very little over the years, and I just wondered whether you had any information on any new approaches that we could make to address this imbalance.
Finally, it is welcome to hear that there is financial support to allow small and microbusinesses to take on apprentices. That is very welcome. We know that these are the mainstay of the Welsh economy. What support is available to these tiers to help them to manage the mechanics of taking on an apprentice?
Jeff Cuthbert
I thank the Member for Cynon Valley very much for those comments. I agree that perception is a key issue here. I am familiar with the statements of the CIPD, and indeed I have instructed my officials to set up a meeting with the Wales region in order to discuss this further. My reading of the CIPD article and comments is that it is bemoaning the fact that the value of apprenticeships is not as well understood as it might be, so I would certainly like to explore ways of working with CIPD in order to improve that perception out there. That is the key. Certainly employers have a big role to play in that, and so of course does the careers service, and we will be looking to the reorganised careers service to work very closely with schools, colleges, learning providers and pupils and their parents to ensure that the value of apprenticeships is properly understood. That is why I announced that we were earmarking roughly £3.5 million for that very purpose: to help to promote apprenticeships.
There are excellent examples of companies—they tend to be the bigger ones, such as Airbus, for example—that have brought in careers teachers, and other teachers involved in helping to advise on careers, into the work site to explain what an engineering apprenticeship could offer to their pupils. As I understand it, it worked very well indeed. Those are the sorts of initiatives that we want to see, with more and more employers stepping up to the mark and engaging with educationists to make sure that the message comes across.
You rightly raise gender issues and that is why I referred to those in the speech. It is particularly an issue in the STEM subjects. We want more girls and young women to get involved in those subjects. I mentioned in response to Lindsay Whittle last week—he is not here at the moment—that I recently attended the Engineering Employers Federation apprenticeship awards, and more than half of those receiving apprenticeship awards were young women. I used the term 'young ladies' last time, and it provoked some amusement, but I think you know what I mean. The key issue is that, where that message is understood, there is absolutely no reason why young women cannot do at least as well as young men, and in many cases, far better.