6 Nov 2012

Apprentice firms profit at public’s expense – govt report

The government is paying too much money, too easily, on apprenticeship schemes, leading to “excessive” profits being made at the public’s expense, according to a new report.

Apprentice firms profit at public's expense - govt report (Getty)

A committee of MPs said urgent reform was needed for apprenticeship programmes to succeed, so that workers and employers could be better served.

The Business, Innovation and Skills (BIS) select committee said the government should outline a formal definition of an apprenticeship, to state clearly that they are aimed at developing skills.

“Without clarity, there is only confusion. Confusion as to what the government is trying to achieve, what apprentices should be focusing on and what employers should be offering,” said committee chairman Adrian Bailey.

“An apprenticeship programme without a clear strategy and purpose will not achieve its goals. But it will be open to abuse. This needs to be addressed as a matter of urgency.”

He said there were many areas of apprenticeships that needed careful monitoring, or even complete reform. The committee, which held an 11-month inquiry into apprenticeships, said the business department should explain the impact of funding on different age groups because places were not just for young people.

The National Apprenticeship Service (NAS) should be given statutory responsibility for raising awareness of apprenticeships within schools, the committee urged. Mr Bailey added: “It is important that we continue to invest in skills.

“We heard evidence of excessive profits at the public’s expense, of a government paying out too much money far too easily and of a lack of genuine value for money being provided by apprenticeship schemes. This is unacceptable.”

Equal value

In response to the report, the Federation of Small Businesses said: “The FSB agrees with the BIS select committee that clarity and a clear definition of an apprenticeship is essential, as we state in our new report ‘The apprenticeships journey’.

“Too many small businesses do not know what the apprenticeship programme involves. The committee is right to point to the need for an increased role for NAS to promote the apprenticeship programme in schools. Young people need to know that vocational routes into a career are of equal value to academic.

“Furthermore we believe that quality rather than quantity should be government’s focus; then the numbers will follow. One of the most crucial elements is to ensure that young people go into apprenticeships with the right skills, attitude and knowledge about the workplace.

“Schools need to engage with local small businesses as a matter of routine to ensure that young people are inspired, informed and equipped for the modern workplace.”