Pay up, or else…

The announcement by Education and Employment Secretary David Blunkett earlier this month that the Government is to fund 10,000 new modern apprenticeship places this year should be good news for engineering. It will bring the total number of modern apprenticeship places to 82,000 a year and provide more young people with the opportunity to learn […]

The announcement by Education and Employment Secretary David Blunkett earlier this month that the Government is to fund 10,000 new modern apprenticeship places this year should be good news for engineering. It will bring the total number of modern apprenticeship places to 82,000 a year and provide more young people with the opportunity to learn while they earn.

Since 1994, when the engineering sector launched the first modern apprenticeship scheme, the number of engineering apprentices starting each year has doubled from around 4,000 in the early 1990s to about 8,000 today.

But is Blunkett’s announcement the good news it seems? Engineering employers and trainers say it depends on how the 79 local Training and Enterprise Councils, which hand out the cash, divide the money between sectors.

Tecs are paid a standard rate for modern apprenticeships, which cover three key skills information technology, communications and application of numbers and an NVQ level 3. But the engineering apprenticeship scheme requires a minimum of five key skills (including improving learning performance and working with others) plus college-based vocational academic education, such as a City & Guilds, GNVQ advanced or BTEC national or higher national. So it is a lot more expensive than a hairdressing apprenticeship, say, which can adequately be covered by the minimum requirements.

Not surprisingly, then, some Tecs are reluctant to sponsor and fund expensive modern apprenticeships such as engineering. And, says Ann Bailey, head of education and training at the Engineering Employers’ Federation, there are wide variations across the country in how much Tecs are prepared to spend on an engineering apprenticeship. If this does not cover all the training costs of a modern apprenticeship, the employer has to make up the shortfall.

So unless some of Blunkett’s 10,000 places are targeted at engineering, the industry could face a further erosion of training funds.

The promised extra funding adds up to an average of around £5,000 per apprenticeship. The EMTA, the training authority which administers the engineering modern apprenticeship, says direct training costs of an engineering apprenticeship are £7 £8,000. The total, including wages and training costs, is estimated at £25,000 £30,000.

According to a recent EMTA survey of how much Tecs contribute, one Tec in the north west is prepared to pay £10,350 for an engineering apprenticeship, while another in the south east pays only £3,000.

There are also concerns over the high levels of ‘rainy day money’ surpluses that Tecs have built up, ostensibly to fund existing trainees if state funding stopped. With funds running at around £5 £8m per Tec, questions are being asked about whether some courses, such as engineering, are being short-changed.

The result, says Ian Carnell, training systems manager at the EMTA, is that the number of students doing engineering apprenticeships seems to have hit a ceiling at around 25,000, representing around 10,000 firms. The EMTA and the EEF estimate Britain needs about 36,000 engineering apprentices in training at any one time.

The problem is compounded by the rise in the number of young people staying on at school after 16, which rose from 46% in 1986 to 73% in 1993. ‘We saw an enormous rise in the number of young people staying on at school into the sixth form because of the perception that there were no training opportunities out there for them,’ says Carnell.

Also, as the recession started to bite around 1989/90, companies cut back their training budgets and apprenticeships. In a hangover from the days of the training levy, when firms received money for training, it was traditional for large firms to train a surplus of apprenticeships. ‘They would keep the best ones and the others would leave and disappear into local industry, supporting the supply chain,’ says Carnell. But once the recession hit, it killed off the surpluses and the number of engineering apprenticeships declined sharply.

The problem, says Carnell, is that companies want good apprentices but are reluctant to pay for them or to release trainees for off-the-job courses.

John Berkeley, Rover Group Senior Fellow at Warwick University, believes the root of the problem is the UK’s voluntary approach to training. Berkeley has chaired the UK’s national committee on engineering training since 1993. ‘There has to be a fundamental change in the funding regime. We cannot go on relying on diminishing state funding. I can see little alternative to a return to some form of compulsory levy,’ he says.

He says funding for UK engineering apprenticeships is upside down. Tecs will pay for the NVQ which trainees do at work. ‘But they won’t pay for the GNVQ, the BTEC or City & Guilds which provide the vital underpinning theory to complement workplace skills. The Government should fund those aspects of education that are of longer term benefit to society at large, not those of short-term benefit to employers.’

Berkeley also believes apprentices are paid too much. Typically they start at 50% of the full craft rate when they sign up, around £3.50 an hour, rising to 65% on completion of the first six-month foundation stage.

‘They are paid far more than in Germany while contributing nothing,’ says Berkeley. ‘If they were paid less, companies could afford more apprenticeships. I see no reason why, now that we have established that individuals should contribute to their higher education, they shouldn’t contribute to the work-based route to higher education, with individuals accepting lower pay, at least in the first couple of years.’