Geoff Russell, CEO of the Skills Funding Agency points to David Way, CEO of the National Apprenticeship Service, at the BIS Select Committee, chaired by Adrian Bailey

Members of the Business, Innovation and Skills (BIS) Select Committee have criticised the poor value for money offered by retail apprenticeships.

MPs questioned David Way, interim chief executive of the National Apprenticeship Service (NAS) and Geoff Russell, chief executive of the Skills Funding Agency (SFA) about the scheme delivered at Morrisons during an evidence session held at the House of Commons last week.

Ann McKechin MP said: “We have taken evidence from Morrisons, one of the major providers of apprenticeships in this country, and they stated on the record that they would have carried out this training anyway, the only issue was the issue of certification of their employees.

“For which the UK taxpayer spent £40 million in the last tax year; do you consider that to be value for money?”

Mr Russell said the apprenticeship programme at Morrisons did offer good value for money because it offered employees better training and the “kitemark” of a nationally recognised qualification.

“The bit we paid for – and we pay far less for that sort of service than we did for the full training of a young apprentice coming in for the first time – represents an important part of upskilling the existing workforce, which is the single biggest strategic skills weakness the UK has,” Mr Russell said.

Adrian Bailey MP, chairman of the Committee, said: “It would seem that a lot of money is being spent in an area where at best, the benefits, the overall economic benefits are not obvious.”

Geoff Russell said: “That is a legitimate challenge, but I think we’re clear that there is value.

“It is important to recognise that this is a programme led by employers, it’s a market, and we could if we wished say we will not fund retail apprentices.”

Mr Bailey said while he agreed that the apprenticeship programme was led by employers, it was “funded by the taxpayer” and still needed to represent good value for money.

The NAS interim chief executive replied: “A clear influence on the return for the investment made in public money depends on the individual employer and the way in which the apprentice is then either stretched and supported – otherwise the attitude is you’ve done your apprenticeship and it’s business as usual.

“So with an employer like Morrisons, which takes its training development so seriously, you would expect to get a better return than what you would in some other employers, who put people through a retail apprenticeship but don’t extract the full value by giving that apprentice post training the opportunity to develop and grow and get further training.”

Adrian Bailey MP, chairman of the Committee, said he was “astonished” by the £23.8 million awarded to Elmfield Training in 2010/11 to deliver apprenticeships at Morrisons “before it had even been assessed by Ofsted.”

“What sort of judgement or criteria did you make this decision?” Mr Bailey asked the SFA chief executive.

“We award monies to companies that have demonstrated that they can deliver successfully,” Mr Russell said.

“That’s how the system works.”

Mr Bailey later asked Mr Russell why the SFA had awarded Elmfield the extra money without “any assessment or evidence to demonstrate that this was value for money”.

“Well we don’t do a value for money assessment as part of our day to day business awarding money,” Mr Russell said.

Questions have been raised over apprenticeships offered by a fast-food chain.

Dudley MP Ian Austin is demanding answers after it emerged that Subway are offering £2.60 per hour for a role as a ‘sandwich artist’ in the Black Country.

Mr Austin said the apprenticeship was advertised by Job Centre Plus and an identical job in Dudley was advertised earlier this month.

He has asked the National Apprenticeship Service (NAS) to investigate.

Although the MP has put questions to government over the issue, apprenticeships at Subway were first put in the spotlight by FE Week last month.

Mr Austin said: “I want to see every youngster in full-time education or proper training and I want to see more apprenticeships.

“Schemes must give apprentices the skills and experience they need to advance their careers and they have to have proper training. They call it an apprenticeship but there doesn’t seem to be much training and it says it’s permanent.

“I’ve asked the National Apprenticeship Service to look into the apprenticeships Subway are offering to see if they are genuine apprenticeships or simply a means to pay young staff below the minimum wage.”

In response, a spokesperson for Subway said they offer “a comprehensive training programme for all its team members”.

The spokesperson added: “Each franchisee candidate is required to complete formal training and sandwich artists are trained on customer service excellence, food quality and health and safety procedures.

“Although Subway stores do not operate a nationally accredited apprenticeship scheme, individual stores or franchises may pursue their own scheme in their local area.”

When asked by FE Week whether they would be conducting an investigation into Subway, a NAS spokesperson said they could not comment due to purdah.

However, the spokesperson added: “The NAS is clear that all apprenticeships should offer employment, significant new learning and a nationally recognised qualification, and represent value for money in public spending. The Specification of Apprenticeship Standards for England and actions to drive up quality will ensure every Apprenticeship meets rigorous standards.”