19/12/11 - Chris Kelly MP speech on apprenticeships

Thank you, Mr Deputy Speaker.

I should begin by declaring an interest as a non-executive director of my family's business which has a long established apprenticeship scheme.

Mr Deputy Speaker, apprenticeships are a shining success in the first year-and-a-half of the Coalition Government. The figures paint a hugely pleasing picture with the number of new apprenticeship starts in my constituency of Dudley South sharply up, as in most other parts of the country. In 2009/10 the number of new apprenticeship starts in Dudley South was 550 and in 2010/11 that number has grown to 910. That’s a two thirds increase compared to 2009/10 and, more importantly, 360 more young people have been given access to the life changing opportunities that an apprenticeship and skills for life provide.

Mr Deputy Speaker, give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime so I’d like to use this opportunity to thank all of those employers in my constituency who have taken on apprentices and, especially, those who have taken on apprentices for the first time recently. As the son of an apprentice I make a commitment that any business in Dudley South employing apprentices that makes contact with me wanting a visit from their local Member of Parliament will get one as I think it is absolutely right to celebrate the best in business.

I’d like to make a special mention, Mr Deputy Speaker, of the National Apprenticeship Service website, apprenticeships.org.uk. It has been re-developed and is now easier to use for both employers and apprenticeship candidates so I would like to congratulate the minister on his department’s effective use of communications technology. It’s good to see the ‘roll of honour’ on there giving deserved recognition to those businesses that are playing their part in training and developing our future workforce.

Things are certainly heading in the right direction. In the 2010/11 academic year 442,700 people started apprenticeships, a 58% increase on the number started in the previous year. Much of this increase is due to many more people aged 25 and over starting apprenticeships. The majority of people starting apprenticeships chose frameworks in the service sectors, such as business administration and retail, and a majority of apprenticeship starters were, for the first time ever, female. So apprenticeships are not just for school leavers and are not just for the traditional industries such as ‘metal bashing’ for which the Black Country is famous, but also for the service sector. This is particularly relevant in the Dudley borough where Stourbridge College’s hospitality and retail academy is sponsored by Westfield, owners and operators of the Merry Hill shopping centre in Brierley Hill in my constituency.

Whilst the early figures are encouraging I know that my Hon. friends on the front bench are not complacent and that’s why this Government has introduced incentives to support up to 40,000 young apprentices in 2012-13. The Government will offer an incentive payment of up to £1,500 to small businesses, the final payment of which – quite rightly – won’t be made until the apprenticeship has been completed and the apprentice has progressed to sustainable employment.

Whilst recognising that money is tight at the moment, I would ask the minister to look to see what more he might be able to do on this incentive payment. For every £250 increment in the payment there will be a large increase in the number of employers willing to take on new or additional apprentices. I would further ask the minister if his department could undertake some research, if not already done so, on the effects on take-up of increasing that payment offer to £1,750 and £2,000.

Mr Deputy Speaker, the British Chambers of Commerce published a recent report on apprenticeships which found that time, cost, and inexperience were barriers to taking on apprentices. It also found that a fifth of firms with fewer than 10 employees – and also a fifth of those with between 10 & 50 employees – recruited an apprentice from 2010-11. This rose to over a third of companies with 100-249 employees, and to over a half of all companies with more than 250 employees.

The £1,500 maximum payment is clearly going to be important in incentivising small and micro-businesses to take on apprentices but the BCC is quite right to also identify time and inexperience as barriers.

That’s why I’m pleased that the Government has responded by reducing red tape, ensuring that employers are able to advertise a vacancy within one month of deciding to take on an apprentice and have them ready to start work within three months; and removing all excess health and safety requirements for apprenticeships. In the new year, Mr Deputy Speaker, the Government will be enabling businesses to design, develop and purchase the apprenticeship and other training programmes they need through a new quarter of a billion pound pilot fund.

Mr Deputy Speaker, in 2009 30% of large employers with over 500 staff offered apprenticeships whilst only 5% of small businesses with 2-4 employees did so. This is precisely where we need to see the next increase in take-up coming from. Small and medium-sized enterprises account for almost half of the private sector in the UK, and yet just 2% of small businesses employed apprentices in 2009. I generally don’t like bandying around statistic but that truly is a damning one. So this Government’s incentive payment to employers – along with the £250 million pilot fund & proposals to slash red tape – will certainly help to address this past failure. Like Dr. Adam Marshall, Director of Policy at the British Chambers of Commerce, I commend the Government for, and I quote, “offering real help to firms and apprentices alike.”

One of those small businesses I’ve talked about is in my constituency of Dudley South and recently hosted me for a visit. The business, Generic Punching Systems in Netherton, has been helped by this Government to take on two apprentices. It’s a family business with the Managing Director’s son and daughter working alongside their father in production and accounting roles. The only other employees are two new apprentices. I commend GPS for investing in the future by taking on and training up apprentices. The only concern, however, is that the Managing Director told me that he hadn’t found it possible to employ apprentices through the local college system and this is something we need to be mindful of. Instead he used his personal network within the area to identify willing and able candidates to be interviewed for apprenticeships.

I’m pleased that the Government has announced £18.7m worth of projects from the £25m Higher Apprenticeship Fund, to support the development of 19,000 new Higher Apprenticeships (level 4 and 5) – compared to just 100 in 2008/9. This money will be available for candidates working in important sectors for the UK economy including construction, advanced engineering, insurance and financial services. In my region of the West Midlands the next generation of construction and advanced engineering skills are going to be vitally important for our local economy going forward, contributing to a private sector led recovery from the last Government’s debt crisis.

Mr Deputy Speaker, I mentioned one of the many family businesses in my constituency earlier. I’m Chairman of the All-Party Parliamentary Group for Family Business and I know from first-hand experience that one of the key traits of successful family businesses is taking a long-term view and investing in staff development and training, one of the main reasons that family businesses typically have amongst the lowest rates of staff turnover in any industry. This naturally extends to apprenticeship so I would like to put on the record a recognition of the role family businesses, in particular, play in providing apprenticeships in all manner of industries in our country.

Apprenticeships are, Mr Deputy Speaker, a key enabler of social mobility and I can do no better than quoting my Hon. friend, the Member for South Holland & The Deepings, who, in a speech last February to launch Apprenticeships Week, said:

... we celebrate every business that joins, or reinforces its commitment to the cause… I know that this is about skills changing lives by changing life chances – apprenticeships give life to social mobility and breed social justice. The chief aim of the Apprenticeships programme is not the creation of ever-bigger numbers to quote, but of an ever-bigger society in which everyone can benefit. Apprenticeships are the Big Society. More than perhaps any other form of learning – including, I must say, many degree courses – Apprenticeships say to people, “Aspire, whoever you are and whatever your background. All that’s required is the strength of will to take the first step.” The power of will is the path to success. 

Click here to read in Hansard. 

In winding-up, the Minister said:

My hon. Friend the Member for Dudley South (Chris Kelly), who has had a 67% increase in apprenticeships, offered himself as the Kelly visiting services for any company in his constituency that has taken on apprentices. He spoke with great experience as his own family business has long taken on apprenticeships, before it even became fashionable.

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