I am very grateful to the noble Baroness, Lady Sharp, for explaining her amendment so clearly and for regaling us with the examples. I agree that the Olympic legacy was amazing in many respects, particularly in relation to apprenticeships and the partnerships in east London that she described. There is a debate on the Olympic legacy on Thursday, and I am sure I will be able to use the noble Baroness’s material to good effect.
My favourite example of good practice is Crossrail. I have been down the tunnel. I do not like racing cars, but I like Crossrail. What Valerie Todd said to the committee was extremely well put. Crossrail is good not only at apprenticeships but at giving contracts to firms outside London and to SMEs, so there are three good things coming together there.
I am also extremely grateful to the noble Lord, Lord Stevenson, for agreeing that I may answer on quality under a later grouping. Groupings moving around makes life difficult for those of us who are trying to shine a light into the proposals we are discussing in this Committee.
Amendments 49E and 50A relate to employment by subcontractors. They allow the employment of apprentices by subcontractors of a public body to be included in targets set for the public body. They also allow a public body to set apprenticeships targets for its subcontractors. There is a broad definition of subcontractor. Clause 18 will improve the capacity and capability of the public sector, ensuring that it benefits from the same positive impacts that apprentices bring to the rest of the economy.
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The noble Baroness’s amendment would, we fear, put this ambition at risk. It would enable public sector bodies captured by the duty to meet their targets via
persons who supply goods and services to them. These apprenticeships might have no interaction with the relevant public body, so the benefit that apprentices could bring to the public sector would be lost. That is a perverse effect, which I do not think is the intention of the noble Baroness. The Government believe that the public sector should deliver its fair share of apprenticeships. This does not mean that the duty should be shifted back to the private sector. I can reassure the noble Baroness that the clause makes provision for apprentices who work directly for a public body, but are employed by the apprenticeship training agencies, to count towards this target. This will help to minimise administrative burdens for bodies in employing apprentices.
We will work with departments and the wider public sector to encourage apprenticeship growth in their relevant sectors. However, we do not judge that it is appropriate for individual public sector bodies to set their own targets on the private sector. Nevertheless, we recognise that certain public procurement contracts can be a key means of upskilling workforces and reducing youth unemployment, and that including requirements to take on apprentices can be valuable. That is why the Government introduced changes to procurement policy to take a company’s apprenticeship and skills offer into account when awarding larger central government contracts. I am not sure that as much publicity has been given to this provision as perhaps it should. We are already doing something which will build on the good practice of the Olympics and Crossrail.
From 1 September, all bids for relevant central government contracts worth more than £10 million and lasting 12 months or more must demonstrate a clear commitment to apprenticeships. Bidders propose the number of apprenticeships they will create under each contract—perhaps between 3% and 5% of the contract’s workforce. They will then be bound to this figure in the ensuing contract, with action taken should they fail to deliver on the promised number.
Officials in my department and the Crown Commercial Service will work together with officials in the Department for Communities and Local Government, the Local Government Authority and local authorities to identify existing best practice and experience and bring forward proposals in early 2016 for extending the policy to local government contracts as well. Information on the number of apprenticeships delivered as a result of these proposals will be reported through single departmental plans issued by individual departments.
Therefore, we are not doing it in exactly the way proposed in the amendment but we have taken the point that it is important for us to use the opportunity of government contracts to encourage apprenticeships. With that explanation, I hope that the noble Baroness feels able to withdraw her amendment