Skills crisis comes of age

We finally appear to have a government committed to plugging the skills shortages sinking our industrial future. Employers' organisations have been clamouring for more focus on intermediate and higher skills. Lo and behold, thousands more apprenticeships are promised and the emphasis is on adult apprenticeships. Not just a plan to convert our youngsters into the technicians of the future, but also to reclaim those who missed the first skills train and would love to get on board further up the line. Taken at face value, it was possible to read the Department for Business, Innovation and Skills' (DBIS) 'Skills for sustainable growth' report more as an early Christmas present than yet another government strategy. But, before we succumb to hope, perhaps we should all read the small print. Before delving into the detail, however, it's worth looking at how today's apprenticeships are performing. Recently, there have been signs of increasing unhappiness with the current shape of vocational skills teaching. The CBI's view that "the skills system presents employers with an alphabet soup of different organisations and programmes" is mild in comparison to some. David Fox, founder of Power Panels - a multi-award winning company and one of the UK's most successful and profitable SMEs - made his views crystal clear in WM's Opinion page last month (p11). In essence, he believes years of effort have been wasted in developing generally available 'catch-all' training programmes. They are so unspecific that they simply fail to answer the real needs of individual businesses and their shopfloors. On the other hand, a recent CBI report shows 58% of manufacturers are involved in apprenticeships although markedly few are SMEs. Many businesses are reporting real difficulties in finding higher-level technical skills, equating to A-levels and above - exactly the area supposedly addressed by the advanced apprenticeship. So there is still widespread support for the vocational route, despite the fact that many of those using it would still like to take a carpet beater to its more infuriating features. Let's look at a company whose experience of apprenticeships highlights some of the difficulties but also shows exemplary determination in overcoming them. Sharpak Yate, part of Sharp Interpack, makes thermoformed rigid plastic packaging at its 181-strong plant. Its apprenticeship programme started in 2007 to solve a problem common across industry: the potential retirement of most of its skilled engineers within the next decade. "We had just gone through a very difficult recruitment process for an electrician. It was virtually impossible to find someone who was the right fit for our business," explains HR manager Angela Jones. "We could see the problem was just going to get worse - so we decided to grow our own." The first student will complete her four-year advanced apprenticeship in electrical engineering this year. There are two more in the pipeline also aiming for a higher-level qualification. Sharpak is working with Brunel and Gordano Training (BGT) - part of City of Bristol College - which runs schemes for several local companies. Jones is frank that aspects directly mirror Fox's concerns. In each year, the vast majority of apprentices come from local MoD sites, working alongside just five students from separate companies. It's therefore only too easy for learning to slant towards MoD's needs, rather than core generic skills. The saving grace for Jones is the BGT account manager who acts as a regular intermediary between her and the learning provider. Since she pointed out her reservations to him, she has seen marked improvements in course content. The apprentices spend their first year in college. Many companies dislike the idea of paying for an apprentice who promptly disappears for 12 months. Sharpak stays in close contact throughout: "They spend time working with us before they go and again in their holidays. We have regular meetings; we speak on the phone; we visit them; we have regular reports back from the account manager and we go to open evenings." In years 2-4, the apprentices return to the company for four days a week - a crucial stage in translating generic learning into specific workplace needs. Jones says it can take even qualified electricians a good six months to learn Sharpak's bespoke machinery and plant: "This is the absolute benefit of growing your own." The programme is working well but no one should underestimate the effort involved, advises Jones: "The input is very high across the business but we decided we would do it right or not at all." Sharpak is a lean company. Training makes heavy demands upon the engineering manager and the sole electrician and mechanical fitter on each shift. "Without their support, it would be impossible but they wanted to give youngsters the same opportunity they had 25 years ago." Sharpak originally intended to take on apprentices in five successive years but has now stopped at three. "If we take any more, we will start to dilute the quality of what they get - and that is so important," says Jones. She is confident that the trio will become highly qualified, competent young engineers capable of making a major contribution to the future of the business. Nonetheless, she has strong reservations about how apprenticeships are operating nationally. First of all - funding. There were so many caveats that Sharpak decided to pay for the whole thing itself. Ironically the lesser two-year programmes would have been subsidised. The abolition of the Learning and Skills Council in favour of the Skills Funding Agency has not helped. She feels the departments involved haven't yet caught up with the changes. Jones is still incredulous about the complete disinterest of the three local schools she approached to find potential candidates. They didn't even return her calls. She believes, like so many others, that most schools are only interested in pushing their pupils to academic rather than vocational courses. "We want the best. What we offer should not be seen as inferior to university!" If apprenticeships are to become a qualification of choice, the change has got to start at school level. She is even more concerned about the uneven quality of the final product. "I worry for the recruiters of the future. What value can they place on the word 'apprentice' in CVs?" Finally, she's appalled to see large employers regularly taking on many youngsters and cherry-picking ones to continue into the next year: "Apprenticeship is a joint contract between an employer and an individual, and both must commit to it fully." So where does that leave us in the new scheme of things? Will changes announced by DBIS actually address the issues highlighted by committed employers like Sharpak? Take the straightforward one first - persuading schools to give apprenticeships a fair airing. By April 2012, BIS promises a new All-Age Careers service that it claims will "provide [schools] with the information and tools to secure independent and impartial guidance that empowers pupils to make informed decisions about their futures". It's a start but there remains a lurking suspicion that open-minded teachers will use those tools more than the bigots and diehards. Now more complex issues. It would be graceless not to acknowledge that every employers' group from CBI to EEF welcomes positive government support for higher-level vocational training. But there is real nervousness about how it will all be funded. The government may create a raft of new apprentices but it doesn't mean there will be a raft of new money to keep them afloat. The coalition says it has "committed additional resources to fund a further 50,000 adult apprenticeships this year above the level inherited by the previous government, rising to 75,000 by the year 2014/15". There is, however, widespread confusion about the word 'adult'. Even among industry bodies, many people have assumed that the term includes anyone embarking on an apprenticeship, regardless of age. This is emphatically not the case. Apprenticeships are indeed open to any age but the majority of those "additional resources" is being very firmly directed towards the 19-24 age group. For them, the provision appears to be sensible although not generous. There will be some measure of support for first qualifications at both level 2 (basic) and levels 3 (higher) for apprentices between 19 and 24 up to and beyond 2014. The situation is, however, very different for higher-level skills for those aged 24 and upwards. According to Peter Winebloom, EEF's apprentices and skills manager, in the last year of the now-cancelled Train to Gain programme, learning providers are currently being encouraged to shift money from that pot into mature apprenticeships. From 2012 there will be a transitional "co-funding" arrangement between government and employer available, according to BIS's spokesman Oliver Fry, from the National Apprenticeship Service (NAS). In most cases it will be paid directly to the learning provider although large employers with a direct NAS contract may receive it themselves. This will apply until 2013/14 when employers and - much more radically - individuals will be expected to bear the entire cost jointly. DBIS's explanation runs thus: "From 2013/14 we will expect both learners and employers to share responsibility by contributing towards the costs of intermediate and higher-level training. We will be introducing loans for learners, including apprentices, aged 24 and over who are undertaking qualifications at level 3 and above. It will be for employers to discuss with their staff the level of contribution each is expected to pay towards the training." On the surface it looks reasonable: "Individuals will only start to contribute when they realise the benefits of their training and are earning a decent wage" - although note "decent" has not yet been quantified. But hang on - this is not the same thing as student loans, although it looks like an attempt to put the funding on the same footing. The whole rationale for apprenticeships was 'earn as you learn' - not 'run up debt while you earn less than you did before.' Already employees often take a pay cut to start an apprenticeship. Is it reasonable to expect them to put even more on the line when many will already have family commitments? Especially as, unlike undergraduates, their learning is often of immediate practical application. Sharpak's Angela Jones says that her young apprentices are making a real contribution to the workplace from their second year onwards. How much more value will come from someone who's worked for years in the business and can bring new skills to old problems? This change inevitably means that, unless companies agree to fund the whole thing themselves, many existing employees will turn down once-in-a-lifetime opportunities. That will be to the detriment of themselves and their company. David Fox makes a fiercely logical case for manufacturers to cut their ties to the public begging bowl by specifying exactly what training they need and meeting all costs themselves. But will other companies see it the same way? According to Peter Winebloom, the larger ones might, "but SMEs may well say to employees we'll give you the opportunity but you will have to use your skills loan". He thinks it will be an offer many can refuse. Frankly, this is crazy. Manufacturing cannot meet its skills needs purely through training fresh young minds. Jones talked convincingly of the "joint contract" between apprentice and employer. If it applies to new recruits, how much more should it apply to people who have been loyal to the company for some years and are self-evidently capable of much greater things? Is that loyalty repaid by bypassing them in favour of unproven - but funded - youth or asking them to shoulder new debts? The puzzle to me is that thousands have demonstrated against FE student loans but scarcely a voice has been heard protesting against a system that is manifestly even more unfair. The legislative process for these changes is still some time away. Minds can and should be changed.