My Lords, I declare an interest as an apprenticeship ambassador and an ex-apprentice. Noble Lords can guess from that introduction that I shall focus on apprenticeships in my contribution.
I start from the premise that I want the apprenticeship levy to succeed. I was a bit puzzled about the Government’s commitment to it when I looked through the list of Ministers, only to find that we no longer have a Minister for Apprenticeships. I do not know whether that is intended to signal a lack of interest or is just the accidental result of a reshuffle, but if we look at the list of government Ministers—I can see a puzzled response—we will not find a designated Minister with that responsibility. Of course, the Secretary of State has the ultimate responsibility, but that is not quite the same as when we had a Minister for Apprenticeships.
The Government had a target of 3 million apprentices during the life of this Parliament. I remember many of us saying that they should forget the target and focus not on the quantity but on the quality of apprenticeships. You need to convince people—potential apprentices, their parents and their teachers—that this is a worthwhile career path. It seems that the Government are beginning to realise, first, that they will not reach that target, and, secondly, that we were right when we said that they should focus on quality.
I started to look at some of the statistics, and the most worrying was for the starts at level 2. Why does that matter? Level 2 apprentices are often the young people who will not go on to an academic education. They are the young people who, perhaps, have a more practical bent at this point in their lives and who—I hope—we want to prevent becoming NEETs: not in employment, education or training. They really are an important group. I listened carefully to what the noble Baroness, Lady Garden, said, and I agree with many of her points. If you look at those statistics, it really is quite worrying. We started in 2016, before the levy, with 260,000 and we are now down to 142,000. That is a worrying loss.
I discussed the next area of statistics that I am concerned about with the Government. I told them that if they wanted the apprenticeship levy to succeed, they had to ensure that they moved the needle on the
dial on the number of small and medium-sized enterprises involved. Again, I failed significantly. It is really hard to get statistics, but the House of Lords Library gave me this one: we started, again in 2016, with 473,761, and by the time we reached 2019, we were down to 170,325. That is a really worrying drop in the number of apprentices employed by SMEs.
I acknowledge that the Government have listened to large employers who said, “We’re not managing to spend our levy money; we would like to send more of it to our supply-chain SMEs”. The Government increased the amount to 25%. Did that solve the problem? No, because, as companies tell me, you cannot just throw money at these SMEs in their supply chains; they have to be managed. One thing I want to say to the Minister—I do not expect a reply today—is that some of that levy money ought to be used in the management of these supply chain SMEs, in admin costs, for example. If the Government really want to increase the number of SMEs employing apprentices, I recommend that they look at what are known as group training associations, which deal with things such as admin and basic skills.
I was really interested in the comments of the noble Baroness, Lady Featherstone, who is in her place, about the 2012 Olympics. A major theme in that unforgettable opening ceremony was the NHS. I could not help thinking that we have 40,000 nurse vacancies at the moment. It was a really smart decision by the Government to charge potential nurses for their degree programmes. Why would we do that when we are desperate to fill those skilled vacancies? That has had an unfortunate impact on morale in the National Health Service. The Government ought to scrap the charges for nursing degrees. We surely want to encourage a vocational route and encourage healthcare assistants who have the potential to become nurses, which many have.
I am coming to the end of my allotted time, so I will be brief. On average, employers claim only 50% of their levy money. They say to me, “What will happen to the unclaimed levy?” Sending it back to the Treasury does not seem a very smart solution to me.
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