Exclusive interview with BIS committee’s chair

With the Business, Innovation and Skills Select Committee report highlighting a number of apprenticeship issues, FE Week deputy editor Chris Henwood met chairman Adrian Bailey MP to discuss where he thinks the government is getting it wrong.

Are you critical of the government’s aims on apprenticeships?
The government has interpreted this programme as being a numbers-driven game so that it can proclaim it is improving the skills levels of the country.

However, what is hasn’t done is to ensure that the apprenticeships programme is of the quality that is needed and that it is focused on areas where there are skills shortages. And by not doing that, it is in danger of wasting a lot of public money.

We believe as a committee that the government should define exactly what its objectives are in spending money on apprenticeships, and then back that up with the appropriate policies designed to achieve those objectives.

Which recommendation would make the most difference?
That’s a difficult question because they’re all interrelated, but the crucial one is on the quality and definition of apprenticeships.

Once you have a tight definition and ensure that an apprenticeship course is perceived as having quality, then you are far more likely to get people aware of it and willing to take one on.

Were you surprised by the lack of definition?
Yes. I hadn’t realised the range of courses that were described as apprenticeships when, in fact, the public does have a fair idea of what apprenticeships should involve: a certain length of time, training both on and off-the-job and appropriate accreditation to ensure that whoever has taken one of these courses has genuinely learned something and enhanced his or her ability to take on further jobs.

Did the inquiry hold any shocks or surprises for you?
Yes, there were a couple of things. First, the lack of awareness in schools — we heard of a survey that demonstrated that only something like 7 per cent of young people in schools were aware of apprenticeships as a possible career choice.

That is quite frightening. Further investigation demonstrated that this was very much because schools are judged and geared to delivering A-levels and university entrants. If we are ever to get our best and brightest into vocational pursuits, then we’ve got to raise the status of apprenticeships.

The National Apprenticeship Service has to take responsibility for promoting them in schools and schools need to refocus slightly . . . they have to be judged in part on how many young people they deliver into apprenticeships.

The second thing that came as a shock was the excessive profiteering of one or two operators in the market. When the chief executive of a company, in this case Elmfield, says he has been overpaid by the government, that is a matter of real concern. The government needs to introduce processes to prevent it from happening in the future.

What would you consider a fair profit margin?
I would have said 15 per cent is on the high side. One of the concerns the committee had was that you’ve got this pot of money and you’ve got a delivery chain — and different bodies at different stages in the chain make a profit.
But if they’re all making 15 per cent, it doesn’t leave much for the actual delivery at the workface, which is why the committee recommended the delivery chain needs to be streamlined.

There are too many operators and it appears, in some cases, they are taking too much money out of the programme. That inevitably impacts on the ability to deliver the number and quality of apprentices at the workface.

Do you think there are lots of providers with high profit margins?
The committee didn’t carry out a wide-ranging investigation into this, but certainly evidence has been put forward that there is some abuse.

I wouldn’t say it was widespread. It’s not just a question of abuse. There are legitimate companies — some of them doing a very good job — but there are so many of them and the supply chain is so long that you’ve got to ask ‘couldn’t we organise this delivery of skills in a more cost-effective way?’

That is not to blame individual companies and accuse them of not delivering or taking excessive profit, but just to get a system that gets money to where it needs to go quickly and with fewer people involved.

The government has introduced the Richard Review, which is a belated recognition that it didn’t get it right when it introduced the apprenticeship programme. The committee’s findings will no doubt be reflected at least in part by that review.

Given the combination of the likely outcome of this review and the committee report, to which it’s got to reply, I do think BIS will take the inquiry seriously and hopefully come up with some sort of recommendations or actions to implement these changes. At the end of the day my report has aroused a lot of public interest — the government recognises it has to respond to that concern.

Were there any positives for apprenticeships?
Yes. First, there is an undoubted government commitment to skills and that is shared across the party divide in the Commons — a recognition that there is a need to raise skill levels in this country.

Second, the government recognises that it didn’t quite get it right and needs to change some of its delivery. But there is now a greater awareness among both businesses and young people of the potential of apprenticeships. That is positive, but it’s been a long hard road to get to where we are and we need to go a lot further.

The report is critical of the number of official bodies involved in apprenticeships. Do you see a future for the Skills Funding Agency and National Apprenticeship Service in their present forms?

The committee was inclined to think the SFA and NAS should be merged and I think the government may well look at this again.

There was disagreement among witnesses at the inquiry, but instinctively we felt you would be taking out one link of the long chain delivering apprenticeships and, above all, making it simpler for would-be providers to have one port of call. My feeling is this should happen and probably will happen.

The number of apprenticeships recently topped 500,000. Would you question the validity of any of those?
I would question whether they are apprenticeships in the terms that we would want them to be defined. Something like 70 per cent of the increase has been in provision for those over 24, mainly in the retail sector, and I believe these are mostly people employed already.

That doesn’t mean that’s a bad thing . . . there’s a good argument for raising the skill levels of people in employment so that they can enhance their prospects.

But a lot of work needs to be done to demonstrate that in terms of the money that has been invested, the actual benefits do accrue to both the individuals themselves and the economy as a whole.

We also need to know whether that money might not be better targeted to other groups who may enhance their training more and contribute more to the economy.