Advancing apprenticeships

In my latest Sutton Trust post, I consider how to translate cross-party backing for apprenticeships into a serious offer for young people after the next election

This year’s party conferences were all about setting the scene for next May’s general election. But aside from the tax cuts, coalition in-fighting or forgotten deficits, there was a surprising degree of consensus on the importance of one issue that could be crucial to social mobility: apprenticeships.

Ed Miliband pledged that as many young people would start on good quality apprenticeships as go to university by 2025. The Prime Minister made the commitment to three million more apprenticeship starts in the next parliament.  Business Secretary Vince Cable promised to lift apprentice pay. This was an issue that was talked about at Manchester, Birmingham and Glasgow.

Having placed apprenticeships as one of the ten core social mobility policies in our Mobility Manifesto, and, in partnership with Pearson, organised platforms to debate the issue at all three conferences, this was to be welcomed. Yet beneath the big numbers, the issue remains about what the pledges mean in practice.

For years, politicians have played a numbers game on apprenticeships. A good apprenticeship should offer a paid job (often at lower than average rates) with a strong combination of on-the-job and college-based training, preferably through day release, leading to a good qualification. They typically last two to three years.

But in the early years of the coalition the majority of new ‘apprenticeships’ were only at level 2 (GCSE standard) and many lasted a matter of months. Many of the new apprenticeships, especially those at higher levels, were also for older rather than younger people. These qualifications will often not have represented genuine training to enter employment, but certification of existing skills for those already working (essentially a rebranding of Labour’s Train to Gain offer).

That has started to change. No longer will shelf-stacking at Morrison’s be treated as being as much an apprenticeship as an elite course at British Aerospace or Rolls Royce. Apprenticeships cannot be a matter of months; they must last at least a year. The training element has been strengthened too.

But we are still a long way from where we need to be. The danger is that if politicians engage in a quick fix numbers game, quantity will once again trump quality. In that sense, a commitment to an extra 300,000 good quality apprenticeships each year at level 3 (A-level standard) or above in a decade’s time may be of more value than three million places over the next five years, if the vast majority are at level 2 and too few are for young people. The parties need to provide detail.

That’s why the analysis prepared by the Boston Consulting Group for the Sutton Trust last year, and the recommendations that emerged from our joint summit with Pearson in July are so important. They offer a route map of where we need to be if we are serious about making apprenticeships a world class brand rather than a catch-all title for courses at all levels.

Vince Cable told our fringe meeting in Glasgow that it was absolutely right to focus on advanced and higher apprenticeships for young people in any expansion. Matthew Hancock, the former skills secretary, told our July summit that he was expanding them significantly. Ed Miliband told the same summit that he wanted new technical degrees that would offer a more advanced apprenticeship route. He made the expansion of good quality apprenticeships – along the lines recommended in the Sutton Trust/BCG report – one of his six key policy commitments.

But it is going to be a real challenge moving from rhetoric to reality. For a start, a key part of the best systems would involve a fundamental change in the mindset of government and employers. We need to have progression within a three year apprenticeship, where level 3 or above is the goal, rather than getting young people to complete a separate level 2 apprenticeship before joining one that will lead to level three. That changes ambition, and recognises that different young people may need to start in a different place.

Then, we need a cultural change. To some extent, it is already happening. Middle class newspapers openly promote apprenticeships in a way that they previously reserved for higher education. Politicians see them as a vote-winner. But we still are some way from parents of all backgrounds treating a good apprenticeship as being as valid an option for advancement as many university courses. With fewer than one in five employers offering apprenticeships, we are also a long way from the German system where one in two does so.

And we need to look at incentives: enhanced destination data to encourage schools to promote apprenticeships and more financial support to increase employer engagement, backed by greater simplicity in the range of qualifications and the right intermediary bodies. We may not be able to replicate the German system, but we should try to emulate their ambition. There is now a degree of welcome political consensus that apprenticeships will play a big role in the options offered to young people after the next election. We need to translate that cross-party ambition into an apprenticeship system that matches the best in the world.

Back to the university drawing board

I know the Government is getting desperately confused in its higher education policy, but the answer is not to introduce a two-tier fees system for home students. Instead, the Government needs to examine the problems it has created for itself in its higher education policy. The most important mistake was in getting the pricing wrong, assuming that universities would not charge £9000 while it was cutting their teaching budgets. This was a false economy, as the Government has to pick up the tab for the extra loans, which although attracting some interest are now only repayable when earners exceed £21k in income. It looks like there was no proper modelling done which included the likely impact of abolishing all state funding.

Perhaps now is the time to look again at the inter-relationship between several aspects of the new system: the size of the maximum fee and the availability of loans, the loan repayment terms, the extent to which government and universities underwrite those loans and the level of HEFCE grant for non-science subjects. A better balance could certainly be more manageable - and fairer- than allowing rich kids to indulge in a spot of arbitrary queue jumping. Vince Cable - if he can refocus on his department for a moment - and David Willetts need to go back to the drawing board.

Cable is right: Cameron's kneejerk immigration policy is bad for business

Vince Cable is in many ways the biggest disappointment of the Coalition. He is a shadow of his former self, showing little sign of the sparkling wit that brought forth the cruellest jibes against Gordon Brown when he was the Lib Dems' stand-in leader. But today, in criticising David Cameron's knee-jerk approach to immigration as 'very unwise', he has redeemed himself a little. The coalition's ludicrous immigration quotas are a threat to British business.

Labour had, rather more sensibly, developed a points system which meant that skilled people could be recruited where they were needed. But by substituting a quota system, the Government has tied itself in complete knots.

Universities are a good example. Higher education is big business for the UK, worth almost £5bn a year in fees and spending by overseas students. While there are bogus private colleges that operate above chip shops, there are also hundreds of thousands of legitimate degree-level students who can choose to study in Australia, Canada, New Zealand or Malaysia rather than Britain. Labour rightly expanded their numbers and actively recruited in countries like China and India. Instead of focusing its clampdown on the bogus colleges, the coalition is using a blunt axe as part of its migration policy to make recruitment, including in private degree providers that might provide real competition (alongside FE colleges) to keep fees down. And it is reducing incentives for overseas students, denying them the chance to use their skills in the UK after graduation (something Sir James Dyson has criticised).

The truth is that immigration made and makes a real contribution to economic growth, so long as migrants pay taxes and contribute their skills. Both are surely useful attributes to a government with no obvious growth strategy. Of course we need to improve the skills of British youngsters, but to pretend that having more skilled or paying migrants is bad for Britain is simply bad economics. Any business secretary who didn't recognise these facts wouldn't be worthy of the title.

Vince Cable's extraordinary permutations

There were two options open to Vince Cable on his approach to tuition fees. The first was to battle for a credible series of concessions and support the policy that his Department agreed to. To some extent, he has achieved improvements on the existing system in the repayments schedule, but his failure to secure continued teaching funding for non-STEM courses suggests he didn't try hard enough. He had plenty of cards to play, but he chose to fold early on the final deal. Even so, he could still argue that as the minister responsible, he had a duty to support the final package. The other option is to argue that he made a solemn pledge to oppose a rise in fees - however daft that pledge was - and he should march into the No lobbies to oppose himself.

Had he chosen the first approach, with a clearer set of concessions and a fulsome apology for his party's stupidity and deceit to student voters, he may have retained some credibility. But by promising to abstain, then to vote for, then being not sure, and finally to vote for (probably) his stance looks absurd. All that is left is for him to borrow from Eamon DeValera in 1927 when he had to take the oath of allegiance to take his seat in the Dail, despite a solemn pledge not to do so. DeValera declared he was merely signing a piece of paper that had no meaning, except it allowed him to take his place in the Dail. Perhaps Cable could try the same logic on his bemused voters: he is merely voting with the Government as it allows him to take his place at the Cabinet table. It is no less credible than his shifting stances of the last week.

The economics of Nimbyism

The October Spending Review is likely not only to have a severe impact directly on public sector jobs, but also indirectly on the private sector through reduced spending power and a loss of public contracts. That is a given in George Osborne's plans. But there is also an assumption that the private sector will still be able to step in to fill the gap created, generating sufficient growth to outweigh the negative impact of the cuts.

That theory might be fine if it were not for three deeply damaging protectionist policies that are achieving exactly the opposite effect, and which are set further to stunt prospects for growth. In a welcome breath of fresh air, Vince Cable has told the Financial Times this morning that the ludicrous cap in non-EU skilled migrants is having a real impact on key economic sectors, echoing views expressed by the London Mayor Boris Johnson. Meanwhile, Damian Green's zealously populist embrace of Home Office antipathy to overseas students - who contribute £5 billion a year to the UK economy - not to mention the ties that are created with many graduate entrepreneurs afterwards - is likely to see them turn to other countries with less short-sighted attitudes instead.

But there is a third element that is exemplified vigorously in today's Bristol Evening Post: the coalition's support for Nimbyism over the national interest, whether in the expansion of Heathrow Airport or in major economic developments. What the Post accurately describes as a 'rutted former tip' has been given the status of a 'town green' because 22 local residents successfully appealed in a planning inquiry against a £150 million investment in a world-class football stadium at Ashton Vale that could have provided 6,000 jobs and £150m if the World Cup comes to Britain. Yet far from reducing the impact of such Nimbyism, the coalition in a misguided piece of localism has handed far more power back to small groups of residents and abolished the independent Infrastructure Planning Commission, to the dismay of industry.

Combined with an appetite for cuts that has already choked infrastructural investment in schools and transport, it all amounts to a recipe for economic stagnation. Let's hear more from those in the coalition who recognise this reckless folly for what it is.

Will the coalition really adopt a graduate tax?

Today's Times (£) claims that the coalition has now come down in favour of a graduate tax, following David Willetts' interview with James Landale on Marr yesterday. When I saw the Times headline this morning, I assumed I must have seen a different interview. But, no, the Times uses the following quote to justify its position:

“We do have a preference for a way of going forward that involves graduates after they have got into work,” he said. “Graduates on average earn at least £100,000 more during their lives than non-graduates. We think [they] should make a higher contribution to the benefits of the university education they have received.”

I also heard Willetts telling Landale that the Browne review was 'looking at' a graduate tax along with everything else. But Willetts was very careful, whilst soothing his boss Vince Cable's injured ego, to avoid saying anything that could be seen as an endorsement of the graduate tax.

What he was describing in his quote could just as easily mean extending the payments required under the existing system. The difference between doing that and what Cable wants is that the latter would involve graduates paying a fixed proportion of their income for life, while the former could be paid off quickly if one's earnings grew. It may be that David Cameron and George Osborne are committed to raising income tax from all graduates. But I doubt it. Which makes it rather odd to see the Times getting so excitable about some (perhaps too) clever wordplay by David Willetts yesterday.