Official Report (Hansard)

Session: 2008/2009

Date: Wednesday, 12 November 2008

Contingency Arrangements for Apprentices

12 November 2008

Members present for all or part of the proceedings:
Ms Sue Ramsey (Chairperson)
Mr Robin Newton (Deputy Chairperson)
Mr Alex Attwood
Mr Paul Butler
Rev Dr Robert Coulter
Mr David Hilditch
Mr William Irwin
Ms Anna Lo
Mr David McClarty
Mrs Claire McGill

Witnesses:
Mrs Catherine Bell )
Mrs Nuala Kerr ) Department for Employment and Learning

The Chairperson (Ms S Ramsey):

I welcome Catherine Bell and Nuala Kerr from the Department for Employment and Learning. I will hand over to you so that you can update us, and then we will take questions from members. Thank you very much for coming.

Mrs Catherine Bell (Department for Employment and Learning):

Thank you very much. We welcome the opportunity to engage with the Committee, especially after the Minister’s statement yesterday.

The unemployment figures for Northern Ireland — and I realise that new figures have been released today, but we do not have the Northern Ireland figures just yet — are up to over 30,000. That is the highest figure for the past four years. Interestingly, 65% of those are from the construction industry, which is up from 58%. I am aware that the focus is on apprenticeships and what we are doing for apprentices, and of the three areas most affected — construction, engineering and motor vehicle apprenticeships — construction is by far the largest. Our latest figures show that, in the building industry, 301 apprentices have been made redundant; in the motor vehicle sector, there have been 41 redundancies; and in engineering, there have been 50 redundancies. That is why we have concentrated on those three particular areas. Those figures have increased since the Committee received information that was supplied by our colleges.

The other thing that we have noticed is that, on the Training for Success programme — apprentices are employed, and the Training for Success scheme is what it says it is: it is about training — the figures on our pre-apprenticeship programme are up by 800 from this time last year. There is a message there. That is a 20% increase on last year’s figures. In looking at the overall apprenticeship figures, more people are on the apprenticeship programme than have been previously. The reason for that is because we have opened up apprenticeships to all ages — they are not restricted to 16- to 24-year-olds. All ages are eligible, and that has helped. What has also helped is that we have opened the scheme up to people who work reduced hours, not just full-time employees.

On Tuesday, the Minister outlined the contingencies that he is making. As I have said, apprentices are employed, so our preferred model is for larger employers to foster, or take on, apprentices additional to the number that they need. Some of the major employers have indicated that they are willing to consider doing that, and discussions are ongoing. The Department will have to pay something towards the employment of those apprentices.

If an apprentice aged 16 to18 loses his job and cannot be taken on by another employer, there is provision, under Training for Success, whereby he will get training in skills in a realistic working environment in a college; that is, both technical-certificate training and essential-skills training. That young person will be paid the educational maintenance allowance of £40 per week.

The difficulty arises when that person is over 18. If he or she has been made redundant, he or she is entitled to claim jobseeker’s allowance. The Department is obliged to observe the benefit regulations, and that is why we have had to do what we have done. Under Steps to Work, however, an adult who has been made redundant will be able to attend a college or training organisation for four days a week to undergo skills training, but he or she must have at least one day with an employer. That will be challenging in the context of the economic downturn. Another point is that that cannot be regarded as education, because of the benefit regulations. However, we have made arrangements with our colleges to run the technical certificate, which is an essential requirement of the apprenticeship framework, in the evening or on Saturdays. At this stage, however, we have no indication of the numbers who will take that up.

As I said at the outset, we are focusing on those three areas because that is where the numbers are: that is where the increase has taken place. If we see an increase in other sectors, we will have to consider them.

This is our initial response. I am happy to answer any questions that the Committee might have.

The Chairperson:

Unfortunately, every time you have spoken before the Committee, it has been like a battle. I do not want you to take it personally; you happen to have been landed with these projects.

The figure that we received around the end of October was 230: over a two-and-a-half-to-three-week period, that has jumped to 392. I make that a rise of 162 in that period. You may not have it now, but I would appreciate it if you obtained for the Committee the average age of these apprentices. You have said that, for 16- to 18-year-olds, there is provision under Training for Success, but for those over 18 a difficulty arises. If we knew, for example, that 90% of the apprentices were over 18, we would know what we are up against.

I know that other Members are interested in this and, following the Minister’s statement yesterday, they will flesh out some of their questions. I will steer clear of those issues. I am concerned about the impact that this will have on the colleges. Have they said that they can deal with it? Can they deal with it?

Can you tell us who the fostering employers are? I do not mean to criticise any employer stepping up to the mark: fair play to them for doing that. However, when we look at apprenticeships, we must bear in mind the Assembly’s Public Accounts Committee report on Training for Success.

Is it possible that some people might use this situation to their advantage by taking on apprentices and allowing other workers to be paid off? Is that possibility being monitored?

Mrs Bell:

I will ask Mrs Kerr to deal with the figures, but I will deal specifically with the question of the apprentices.

I met the principals of the colleges two weeks ago in order to discuss the point that you have made; I asked whether there was enough capacity in the colleges in the event of an increase in the number of apprentices being made redundant. The principals of every single college assured me that they would pull out all the stops and would do whatever needed to be done. I followed that up, particularly with the specialist inspector for construction. I was keen to find out whether there was enough capacity.

As members of the Committee will know, we have put millions of pounds into those institutions, and they have been brought up to the standard that they now maintain. I wanted to know whether they could provide realistic working environments in which the apprentices could continue their skills training. The construction inspector assured me that the colleges have that capacity. The big disadvantage with that, however, is that the young adults will not be working under operational pressure, which is what they experience when they are with an employer. That is the advantage of skills training with an employer.

The second part of the question was about employers who could use the system to their advantage. That fear was also expressed by the Public Accounts Committee and by people involved with Training for Success. In answer to that, we will monitor the situation closely. No employer will get a foster-apprentice if he or she has made other people redundant. We have set up a system with our employment service and careers colleagues in order to monitor that. We think that we will be able to ensure that the system is not abused. That is one aspect that we will keep under close scrutiny.

I will ask Mrs Kerr to talk about the figures.

Mrs Nuala Kerr (Department for Employment and Learning):

As members will know, we are only firming up the figures at this time of year while the young people register with training providers. That is reflected in the figures that were previously provided to the Committee. We are in a fluid situation during this early part of the year with regard to statistics.

The previous figures that we provided to the Committee were obtained by contacting the colleges and asking them to give us their most current information. We are now able to pick up more accurate information from our management information system, because, at this stage, we are beginning to get the figures from it. Since we furnished the Committee with the previous set of figures, the new figures are firming up and a clearer picture is coming out. Evidence to suggest that additional redundancies have occurred is now available, alongside that more accurate picture. However, as you said, Chairperson, 400 redundancies are a matter of concern.

You asked who would foster the employees. The large employers who already employ apprentices in this sector have indicated that they have the capacity to take on additional apprentices and train them alongside those who are already in place. We have had verbal indications from several employers, but we will meet the Alliance of Sector Skills Councils on 17 November 2008, and that will give us an opportunity to pin down more accurately those employers who are likely to participate in such a scheme.

Mrs Bell:

After that meeting, we will furnish the Committee with a list of employers who have made a commitment to take on foster-apprentices.

Mrs Kerr:

I should say that those employers who have said that they are interested in principle are from the three sectors that we have the difficulty with, including the construction sector. However, we will see whether a casual conversation can result in an actual commitment.

The Chairperson:

I have several questions but, because everyone has an interest in the subject, I will invite members to go first. If my questions are not covered, I will return to them. However, is the issue of age important?

Mrs Bell:

Yes.

Mr Newton:

I welcome Catherine and Nuala to the meeting. I have said it in the Chamber, and I repeat it in the Committee, that I recognise that significant progress has been made on apprenticeship training since the days of the Public Accounts Committee’s report on Jobskills. No one wants to return to that situation.

I failed to make this point well in the Assembly — we are in danger of creating a tiered system of apprentices. There are engineering apprentices who are fortunate enough to secure Bombardier apprenticeship training, electrical apprentices who get into Northern Ireland Electricity’s (NIE) training centre, and there are those who get a job and are subject to economic ill winds. The latter may or may not become qualified, and it is now known that 392 of them are in a very difficult situation. Then there are the apprentices who have employment status but no job. I am concerned that there are favoured and less-favoured positions. I assume that there are no apprentices from Bombardier or the NIE centres among those 392.

Mrs Bell:

I do not believe so.

Mr Newton:

Therefore, in many ways, Bombardier and NIE apprentices have a greater degree of protection than their counterparts.

When I raised that question, the Minister indicated that he would reflect on it, but he went on to say that he was reluctant to return to classroom-based apprenticeships. No one wants to go back to that, and I am not arguing for a return. However, if we cannot protect apprenticeships as much as possible, the progress that we have made does a disservice to many of our young people. I would love it if all apprentices had the same opportunities as those who are employed by the companies that I have mentioned.

The Chairperson:

I have given the Deputy Chairperson a lot of latitude, but no one after him. [Laughter.]

Mrs Bell:

I totally agree with Mr Newton. The Department was pleased that, with the support of the Committee, it was able to separate out apprenticeship from Training for Success and brand it Apprentice NI, with the attendant publicity.

The focus is on a mixture of classroom learning, off-the-job skills training, and on-the-job skills training under operational pressure. Unfortunately, some apprentices are losing the fundamental part of their training that is with an employer. Motivation is another factor. The Department knows from speaking to apprentices and other young people that the big motivation at the age of 16 is to get a job with a career pathway and good training. Now, all of a sudden, they have lost their jobs.

I am also concerned that, in the future, young people may be minded to stay in academic education for as long as they can and do things that are safe. The economy must break out of that if it is to value an approach that gets people into work.

My discussions with the colleges were not about classroom-based learning — although apprentices must also do that — but about skills training. The fear is that young people lose their motivation because they do not have employers. We will have to monitor the situation as closely as we can.

Mrs McGill:

Last week, I asked for the geographical spread of apprenticeship losses in the further education colleges.

The Chairperson:

We asked for that information, but we are still waiting for it.

Mrs McGill:

I did not receive it. Coming from the west, that information is important to me because, for example, we do not have Bombardier. The Deputy Chairperson is correct — there is an issue, and it is important that the Department identifies the areas where there are acute problems for apprentices and where there is no work. As someone who represents a constituency in the west, I am pessimistic about the future for apprenticeships and the work that goes with them. The Department must examine that.

Mrs Bell:

I can give you the figures that I received just before I came here. Across the six college areas, the northern area is suffering the most; there are 119 apprentices in the area around the Northern Regional College, which covers Ballymena, east Antrim, Causeway and Ballymoney. Unsurprisingly, the area that suffers most after that is Belfast, where there are 78 apprentices. The north-west area has 74 apprentices, and the south-west, which covers the Ards Peninsula, has 65 apprentices. The south-west area, which covers Fermanagh, Omagh and Dungannon, has 32 apprentices. The southern area, which covers Armagh, has 55 apprentices.

Mrs McGill:

The south-west area would not cover the Ards Peninsula.

Mrs Bell:

Sorry, the south-east area covers the Ards Peninsula.

Mrs McGill:

What were the totals for the north-west and the south-west areas?

Mrs Bell:

The south-west area has 32 apprentices, and the north-west area has 74. We will give you those figures when we respond to you in writing.

Mrs McGill:

Thank you. How does an apprentice who has lost his or her apprenticeship know where to go to be fostered?

Mrs Bell:

That would be done through our careers service with our providers. There will be a mechanism to signpost people.

Mrs McGill:

Is that mechanism in place?

Mrs Bell:

Yes, it is. On Monday, someone asked whether the scheme will be retrospective — it will cover anyone who has been unemployed since 1 September.

Mr Hilditch:

You said that the figures were more accurate because of the increase due to the situation firming up. At this time of the year, apprentices are moving to higher levels, which means that they are due an increase in their payment from employers. Is it the case that employers are realising that it is time for them to cut their cloth, which affects the figures? Instead of the foster grant, would the Department consider paying a top-up to an employer to cover the increase in the wages of apprentices and, therefore, keep them on?

Mrs Kerr:

You raised several interesting points about why employers dispense with the services of apprentices, and cost is clearly an issue. However, we have not got to the bottom of why employers make apprentices redundant. We must examine that issue more closely and carry out a further assessment to determine whether the intervention that you suggest is required.

We do not subsidise the cost of apprentices. The apprentices agree their wages with the employers, and DEL pays for training and makes a completion payment to the employer. At present, there is, therefore, no incentive to keep an apprentice in place. Whether the current system offsets the cost of keeping an apprentice in place is hard to say.

Mrs Bell:

It is worth examining that question because, at present, the Department pays the money for training to the people with the contract, and it is up to them to work with the employers. We may need to revisit the rules and put something else in place — and that may have to be in the form of a top-up payment — because the training will also be expensive, and there must be an incentive for employers to retain apprentices. We will re-examine the system, and it was an excellent suggestion that we do so.

Another of our concerns is that as the work dries up, notably in construction, finding an employer who will offer work experience, particularly to those over the age of 18, will be extremely challenging for us. We must do anything that we can to encourage an employer to at least offer work experience, and if the Committee can help us with that, we would be very grateful.

Mr Attwood:

The situation that you and the rest of us face is beyond our control and, to that extent, I have sympathy with the Department’s position. However, in such circumstances, we must ensure that we do all that we can in the areas that we can control. I must say, Catherine, that I am not too impressed by the Department’s response. The situation with apprentices has been emerging for a considerable period.

One of the headlines in the Minister’s statement earlier this week was that employers had said that they might take on apprentices. This morning, however, we hear that the Department does not know the number of employers or apprentices concerned. Given that the situation has been emerging for months, I am not too impressed that now, when we are talking about 392 people, there is no real sense of what that means.

That brings me to my two questions: what happened to the 164 construction workers whom the Department’s letter of 24 October 2008 advised had lost their apprenticeships? What happened to those 164 people in the past three weeks and in the weeks leading up to 24 October? Where have they — and the eight electricians and the 28 plumbers — gone? What has happened to those individuals? You said that they were all individual cases, so what has the Department been doing to address their immediate and critical needs.

Secondly, and I do not know whether this is possible, but can we do anything to imitate the Scottish model through the £16 billion of public contracts over the next investment period? That amount is available under the second investment strategy for Northern Ireland.

Although that amount of money is inadequate, it does exist. Therefore, would it be possible, like in the Scottish model, to tie in awarding contracts with a requirement to employ significant numbers of apprentices? If that were to happen and the process of awarding contracts is accelerated, which we hope it will be if the Executive ever get round to meeting, the 166 construction workers that you mentioned could be absorbed into such a scheme.

Mrs Kerr:

Concerning your first question, we outlined how unemployed young people, between the ages of 16 and 18, will continue their training when they join Training for Success pre-apprenticeship programmes. People over 18 are concerned about what they will live on and the benefits to which they will be entitled. Although many of those people are already jobseekers under the various existing programmes, we propose that, instead of them having to run the gamut of time, waiting to join those programmes, they will be eligible to access the available training facilities for technical certificates as soon as they become unemployed. There are signs that some people have chosen to go back to full-time education; nevertheless, I expect that such people will either join Training for Success programmes or become jobseekers.

Mr Attwood:

I apologise for missing the start of your presentation. Are all of those 166 people now in Training for Success?

Mrs Bell:

We cannot say for certain whether that is the case for them all.

Mr Attwood:

In general, is that where they are?

Mrs Bell:

They are either in Training for Success or on a full-time course, or, if they are over 18, they would have taken up jobseeker’s allowance.

I understand your concern about us not giving you a commitment to foster employers. However, although we have worked with individual employers, it is not just a matter of us asking them to introduce apprenticeship schemes. In many instances, employers must gain approval from their head offices. Furthermore, given the fact that we would have to, for the want of a better word, subsidise employers to take on such people, we had to ensure that we were not breaking European state-aid guidelines.

Mr Attwood:

You have been undertaking that work over the past few weeks, but this problem has been emerging for months —

Mrs Bell:

We have been engaging with employers for some time.

Mr Attwood:

The Minister said that you have been working on the problem for a few weeks.

Mrs Kerr:

He said “for some weeks”.

Mrs Bell:

You asked about apprenticeships being tied to contracts under the investment strategy for Northern Ireland. We are actively exploring that option, and things look reasonably hopeful.

Mr Attwood:

When did you begin to consider that option?

Mrs Bell:

We had meetings —

Mrs Kerr:

We have been considering the model for a considerable period of time. However, although we discussed the matter with our counterparts in the Department of Finance and Personnel (DFP), that option would result in changes to standard contract terms, so DFP has the lead. Consequently, in an attempt to make progress, the Department of Finance and Personnel has been discussing the matter with the industry for some time. Yesterday, the Minister for Employment and Learning gave a formal undertaking to write to the Minister of Finance and Personnel seeking information about how far those discussions have progressed.

Mr Attwood:

If agreement is possible, when do you think the discussions might get over the line?

Mrs Kerr:

Although I do not know the timescale — and we cannot commit DFP to a timescale — we are optimistic that the objective is achievable, and we would support such an outcome.

Rev Dr Robert Coulter:

Some years ago, I was involved in a scheme similar to this in a further education college where we discovered some things about the quality of training that is given when apprentices are fostered. How robust will your scheme be in monitoring the quality of training? I can think of one girl who was an apprentice on the catering side, and who was fostered by a catering firm. She did nothing but cook chips for one month solid, which was not what we had in mind.

Mrs Bell:

Apprentices will be fostered by those employers that already have apprentices, and they are already subject to inspection. The lead provider will be inspected, and the inspectors will visit trainees on employers’ premises. When an inspector visits an apprentice at his or her employer’s premises, he or she will visit the fostered employees as well. Although not every employer can be inspected, the employers who will be involved in taking on additional apprentices — and we are talking about three areas — will be the larger employers who generally provide very good training anyway.

In our discussions, we have found that the apprentices receive exactly the same training as the employers’ existing apprentices receive: they become part of the workforce. The fact that they do not receive the same salary is a separate issue, but they are subject to the same inspection regime as other apprentices.

Mr Irwin:

You said earlier that you may have to revisit the issue of subsidising employers. Bearing in mind the fact that employers who foster apprentices already receive £40 a week, if I were an employer, I would have thought that, under the economic climate and with money being tight, apprentices, who are probably not paying their own way, would be the first to go. It is important for that situation to be looked at urgently. There is an issue for encouraging employers to keep fostering.

Mrs Bell:

That is an issue that we will examine again. However, we will have to be careful that there is no displacement. Some employers are expanding and would have been taking on apprentices anyway. We are talking about public money, and we will certainly look at the matter again.

Mr Irwin:

The situation could last for some time, given the current economic climate.

Mrs McGill:

Alex referred to the fact that apprentices have lost their places, and Mrs Bell said that she had spoken with the principals of the colleges, who had assured her that there was capacity. Would it be helpful, Chairperson, if the Committee were to have direct contact with the colleges? I would certainly like to see how the colleges are coping in the north-west and the south-west.

The Chairperson:

I will finish this session and then make suggestions as to how the Committee advances. Members had a good opportunity yesterday and this morning to comment on the overall issue of apprenticeships. However, the situation changes every day, and it is important for the Committee to be updated weekly by the Department. Can we have a response to the points that were made and the information requested as quickly as possible so that members can have an idea of the situation?

Although Mrs Bell said that colleges have capacity, I am being told that young people are losing their places at college because they have lost their apprenticeships. We must, collectively, obtain all the relevant information and find a way round that situation.

Thank you for coming at short notice. I hope that the relationship can be ongoing and that we can be kept up to date with the situation.

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