Institute for Apprenticeships and Technical Education (Transfer of Functions etc) Bill [HL]
Wednesday 9th October 2024
(5 months, 2 weeks ago)
Lords ChamberInstitute for Apprenticeships and Technical Education (Transfer of Functions etc) Bill [HL] 2024-26 Read Hansard Text
Institute for Apprenticeships and Technical Education (Transfer of Functions etc) Bill [HL]
Tuesday 22nd October 2024
(5 months ago)
Lords ChamberInstitute for Apprenticeships and Technical Education (Transfer of Functions etc) Bill [HL] 2024-26 Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Baroness Smith of Malvern
That the Bill be now read a second time.
The Minister of State, Department for Education (Baroness Smith of Malvern) (Lab)
First, I thank noble Lords who contributed to the debate following His Majesty’s gracious Speech, when we first discussed this Bill. That was also my maiden speech, and it seems an awfully long time ago. I thank noble Lords who attended the recent open briefing sessions with me in this House to talk about the Bill and the work that the Government are doing in this area. Our central mission is to grow the economy. We have set out a modern industrial strategy with a primary objective of long-term sustainable growth in our highest-potential growth-driving sectors.
To succeed in our growth mission, we need to harness the talent of our people, meet businesses’ skills needs and break down the barriers to opportunity. Education is critical to breaking down those barriers, and we are focused on ensuring that all children and learners can achieve their ambitions and thrive in education, work and life, no matter their background.
However, I am sorry to report that this country’s workers still lack the skills they need. This means that businesses cannot grow and people are not able to make the most of the opportunities that come their way. For example, around 7.5 million working-age adults do not have even basic digital skills, despite most employers saying that these are vital for their businesses. As recently as two years ago, UK employers put over one-third of their vacancies down to skills shortages.
Our businesses have become overly reliant on importing skilled workers from abroad as they have not seen a plan to develop the skills they need in this country. Compared with other countries, our workers are underqualified. The OECD states that 26% of the UK workforce are underqualified for their job, compared with an OECD average of 18%. That underqualification is in part the result of a “missing middle” in our skills system. Not enough people attain post-school qualifications in sought-after disciplines.
Technical training at levels 4 and 5, between A-levels and undergraduate study, is low compared with other countries and with our own historical levels. In England only 4% of people have level 4 and 5 qualifications as their highest qualification, compared with around 20% in Germany and 34% in Canada.
Not only do we lack the skills we need today; our economy’s skills needs are changing, with 1.4 million jobs in new fields projected by 2035. England’s skills system has a crucial role in ensuring that businesses and individuals are prepared for the future, but the current fragmented skills system is preventing young—and older—people from seizing the opportunities that are out there.
That is the sorry state of the skills system that we have inherited from the last Government, a system that employers and individuals report is overly complex, where people cannot find the training opportunities that would help them achieve and which is holding back our businesses, our public services and our economy from accessing the skills they need to grow. After 14 years of tinkering with qualifications, introducing a levy that has seen apprenticeship starts fall, and a failure to look to the future needs of our economy, the skills system is failing individuals and our country. The skills system needs an overhaul. It needs to be strategic, creating opportunities for young people to get on and for adults to upskill and retrain, and delivering the skills that will help our businesses to grow.
The Bill is a crucial step towards creating a skills system fit for the future, enabling our growth and opportunity missions to deliver better life chances for all, meeting the challenge of our industrial strategy, supporting our NHS to have access to the people and skills that it will rely on, and delivering the skills to build the houses and infrastructure that we need and to support our clean energy superpower mission.
This Government have already begun to take action. In July the Prime Minister announced the launch of Skills England, which then published its first report in September. This new organisation will bring coherence to the system, ensuring that we have a clear assessment not just of where the skills gaps are now but of what we will need in the future to realise our potential in a rapidly changing world. It will use that assessment to ensure that there is a comprehensive suite of apprenticeships, training and technical qualifications for individuals and employers to access. At its heart will be employers working with trade unions, training providers across our further education, higher education and independent sectors, and local and regional government—a partnership raising the profile and impact of our skills system. Skills England’s strong board and chair will deliver the operational independence, external expertise and challenge to drive the change that we need to see. Its link back into government will provide the voice and the advice to ensure that skills sit at the heart of joined-up decision-making across government.
Skills England will transform our ability to determine and then deliver the skills that our country needs, giving it a key role as part of an even more ambitious programme of reform and national renewal. The launch of our industrial strategy will provide the firm foundation and confidence for businesses to plan. We are moving away from the chaos of recent years, where policy changed as quickly as Prime Ministers. Skills need to support this growth and investment rather than being the barrier that many employers highlight, so Skills England will work closely with the industrial strategy council to remove those barriers.
Skills England will work closely with the Department for Work and Pensions on our major cross-government effort to get Britain working and tackle deep-seated challenges in our labour market. It will work closely with the Migration Advisory Committee to ensure that we have a strong skills pipeline.
We plan further fundamental reform to support a vibrant and responsive skills and education system. We are creating a growth and skills levy to bring the focus and flexibility lacked by the last Government’s levy; a curriculum and assessment review to ensure that our schools are providing the learning to maximise all children’s chances to develop the skills, knowledge and creativity to make the most of their education; a youth guarantee to ensure that all young people have access to jobs and training; and a new national jobs and careers service to provide direction and support for people entering the workforce.
To create a single, unified body in Skills England, it is crucial that the functions that currently sit with the Institute for Apprenticeships and Technical Education are folded into it. Skills England will build on IfATE’s role in securing the quality of technical qualifications and apprenticeships, and we are grateful for the role that IfATE has played in doing that—but, to pave the way for Skills England, the Bill will abolish IfATE. It will remove functions relating to IfATE’s current accountability to the Secretary of State and Parliament, transfer IfATE’s functions to the Secretary of State and amend five of them. It will allow the skills system to operate without organisational boundaries and administrative hurdles. Skills England will help the skills system become more agile and responsive by identifying what skills are needed where in the economy, supporting our industrial strategy and securing the availability of high-quality qualifications that meet those needs.
The Bill is narrow in scope and technical in nature. There are two main elements. The first part of the Bill, as outlined, will abolish IfATE and transfer its functions to the Secretary of State. These functions will largely be exercised by Skills England, operating as an executive agency. The Bill will also enable the transfer of IfATE’s property, rights and liabilities to the Secretary of State. The second part makes changes to some of the functions to be transferred. We have examined the functions carefully and determined that the way some of them are set out in the existing legislation is overly prescriptive and could hamper the responsive and agile skills system we need.
The Government therefore propose some changes to functions relating to apprenticeships and technical education to increase our responsiveness and allow the Secretary of State to make small and fast adjustments to our education and training programmes. This should provide the speed and flexibility the skills system needs. Clauses 4 and 5 remove the requirement for each occupational standard and apprenticeship assessment plan to have been prepared by an appropriate “group of persons”.
Employers will continue to be central to how technical qualifications and apprenticeships are produced. In the preparation and design of standards and apprenticeship assessment plans, while design by employers and others will be maintained as the default position, these changes will allow greater flexibility in scenarios where preparation by a group can be unnecessary or restrictive—for example, where training requirements are already tightly defined as a result of there being a regulator or an industry-recognised qualification, such as the dental hygienist occupation being regulated by the General Dental Council. Giving the Secretary of State the flexibility to consider whether to convene a group of persons in such cases will enable the skills system to be more agile.
Where the Secretary of State makes the determination not to use a group of persons to prepare standards or apprenticeship assessment plans, a high level of rigour and recognition of the value of external input will be upheld, for example by publishing standards in draft for stakeholder comment before they are finalised.
Clause 6 will retain the duty to maintain arrangements to review technical education qualifications, standards and apprenticeship assessment plans. But we will remove the duty to review these at regular intervals and publish information about these intervals. This change is necessary in light of there now being more than 700 standards, spanning a huge range of sectors and occupational specialisms. The frequency with which different standards should be reviewed and updated will depend on their performance, how widely they are used and the pace and extent of technological advancements resulting in changes to the type of tasks performed and expertise required. This change will therefore allow the Secretary of State flexibility to focus on reviews with the greatest need and impact.
Clause 7 will remove the requirement for a third-party examination of a standard or apprenticeship assessment plan to be carried out before approval. Again, we expect the default position to remain that standards and assessment plans will be examined by independent third parties. The Secretary of State will deviate from this only in a minority of instances, where appropriate. This change will allow flexibility where examination would add limited value—for example, in highly regulated occupations in the health and finance sectors where the assessment plan simply sets out the regulator’s requirements.
Clause 8 will allow the Secretary of State to grant an exception to Ofqual, which is currently prevented from exercising its accreditation power for technical qualifications. This amendment would allow Ofqual, where the Secretary of State deemed it appropriate, to be given the discretion to apply its accreditation power to specified technical education qualification types, subject to appropriate consultation. This change reintroduces the potential for technical qualifications to be accredited in the same way as general qualifications, so that learners and employers can be assured of the quality of the most high-stake qualifications.
These flexibilities reflect the calls from employers and others to ensure that the system is agile and flexible and can respond to rapidly changing needs. In developing Skills England we are already building the vital partnership I mentioned earlier through a series of engagement events. So far, the round tables led by Skills England’s interim chair, Richard Pennycook, have involved more than 100 key stakeholders, including a wide range of employers. These sessions have emphasised the need for greater flexibility in the skills system and more opportunities becoming available to shape technical qualifications and apprenticeships so that they best reflect the changing needs of industry, particularly in the most critical sectors. It is in this spirit that we bring forward the Bill.
The Bill makes vital, practical changes that enable us to deliver Skills England, to bring coherence to the skills system and ultimately to deliver the skills we need for the future. These reforms will sit at the heart of this Government’s missions to drive economic growth and to spread opportunity across all parts of this country. I beg to move.
The Earl of Effingham (Con)
My Lords, I look forward to hearing the maiden speech from the noble Lord, Lord Beamish. The apprenticeship model is a win-win that builds a skilled labour force while at the same time stimulating local economies and creating jobs. There are surely few better ways to foster innovation, enhance productivity and drive growth. IfATE was part of our commitment to deliver employer-led apprenticeship standards.
Since 2010, 5.7 million people have started an apprenticeship—our system is working, and we were on track to building a skills and apprenticeships nation. We would have increased investment in apprenticeships to £2.7 billion per year by 2025. Leading companies agree with our policy: Amazon, Specsavers and Premier Inn all make the most of their levy funds to recruit talent. In fact, 98% of the apprenticeship budget was spent over the last two years.
More than 690 apprenticeships are now available for a broader variety of jobs than ever before. We train nurses, lawyers and scientists, with around 750,000 people currently on apprenticeships. These apprenticeships are all designed by employers, so apprentices can be confident that they are learning skills valued by businesses. A national survey of apprentices revealed that 92% of respondents felt that the employer-defined knowledge, skills and behaviours they are required to learn through their apprenticeship would equip them to succeed in the future, while 80% said they felt empowered to have successful careers in their industry.
One has only to look to Preston in Lancashire, where BAE Systems has a vast college in which it trains apprentices on its fighter programmes, or to Barrow-in-Furness in Cumbria, where they train on submarines. BAE’s number of apprenticeships has nearly tripled since 2017. Higher apprenticeship levels 4 to 7, from foundation degrees to master’s level, increased from 27,000 to 112,000. These levels give apprentices the opportunity to earn a degree, combined with enjoying many years of work experience at top UK firms, and the benefit of avoiding taking on significant student debt.
In February this year, BAE Systems and the University of Portsmouth launched the UK’s first ever degree apprenticeship in space systems engineering. Not content with stopping at space systems, IfATE is also helping heritage industries such as stonemasonry. In 2020 just one person took up an apprenticeship. Last year, that number jumped to 53. In March this year, we pledged to create a new £60 million investment fund to enable up to 20,000 more apprenticeships, including for young people and small businesses.
Our record speaks for itself, so we have concerns around various proposals in the Bill. It is not yet clear whether Skills England will be established in statute as IfATE was, which raises questions about its independence from the Department for Education and its ability to galvanise other government departments. How will it be able to pitch for the money needed from the Treasury to fund the skills gap that we know we have? Can the Minister please enlighten the House on this?
Clause 4 gives the Secretary of State the power to prepare apprenticeship standards either herself or to commission others. It would therefore technically be possible for an apprenticeship standard to be prepared without the input of employers, providers or industry groups. The Secretary of State could even close down or fundamentally change Skills England without the consent of Parliament. Can the Minister explain what failsafe measures will be put in place to avoid this happening to the detriment of employees, employers and the many people who currently benefit from the apprenticeship programme?
There are concerns that the Bill may decrease the standards of technical qualifications because Clause 6 removes the IfATE requirement that reviews of approved technical qualifications should happen at regular intervals. The reason given in the Explanatory Notes is
“to enable flexibility to review standards according to priorities and employers’ needs”.
But how can the Government guarantee to maintain the high standard required if this clause is left in place? A regular review process significantly improves performance via proactive feedback, identifying areas for improvement and setting clear and achievable goals. We designed an apprenticeship programme to encourage personal and professional growth, which ultimately leads to enhanced productivity and job satisfaction. Will the Minister please explain whether there will be a guaranteed minimum amount of reviews per annum?
The Bill’s impact assessment states that there may be a drop in apprenticeship starts while IfATE’s functions are transferred to the Secretary of State and, ultimately, Skills England. It states that this will disproportionately impact adult apprentices and disadvantaged learners and regions. AI and technology are transforming the nature of work and the skills people need to be successful. Many older people need help to be better with technology. We have more than 5 million older workers in the UK who are thinking of retiring early and, of those, circa 500,000 said that they could not keep up with the skills needed. These are the people who will be hit, according to the impact statement. What assurances can the Minister give us that this negative impact will be mitigated as much as possible?
There are also concerns that the unions will have a disproportionate influence over Skills England, to the detriment of employers. The senior deputy general secretary of Prospect welcomed the launch of Skills England, but argued that it
“won’t achieve its objectives without engaging and involving trade unions at every level”.
What reassurances can the Minister give the House that there will not be undue involvement of the unions, to the detriment of employers and learners?
The Government have said that they will build 300,000 new homes every year, but we do not have the electricians, plumbers, bricklayers or roofers needed to build that number of homes every year. Their skills cannot be conjured up; they need training and apprenticeships, which take time.
In March this year, the current Secretary of State for Work and Pensions announced that Labour would fund 1,000 new careers advisers in schools and a number of employment advisers in new young futures hubs. The Government committed to 1,000, but what is the timetable for getting them all in place?
In the Government’s manifesto, they set out plans to reform the levy and allow businesses to use 50% of their funds for non-apprenticeship training. But analysis has shown that, if you allow employers to use half the funds for other skills training, you materially reduce the number of apprenticeships. Are the Government still taking this course of action and, if yes, why?
Apprenticeships and technical qualifications are the engine room of the UK economy. A successful programme leads to innovation, productivity and growth. This must work, so that everyone in the country feels the benefits. We very much look to forward hearing from the Minister on our concerns.
Lord Addington (LD)
My Lords, I am looking forward to the maiden speech of the noble Lord, Lord Beamish.
It is an odd experience to find yourself looking at a document with a background that seems to agree with you. In the last speech I made in the previous Parliament on this subject I said that levels 4 and 5 needed tremendous support and encouragement. We now have a document which, in the policy summary notes, says more or less that. So I can sit down and say. “The Government are listening to me at last” and all will be right in the world.
But when you see something that is all going to the Secretary of State—their office, but really the person in charge—alarm bells start to ring. If the Secretary of State is going to do it, what happens if they do something which is slightly off? What is the warning construction? Does Skills England go back and say, “You’re wrong”? How would we resolve that? Would we actually find out if there was real disagreement? That is something we should have a long hard look at during this Bill.
We also have to make sure that we have a balanced approach to skills. Key to this is the approach—the previous Government did start this—to careers guidance. The two have to work together to get a decent result. We have to make sure that people know what the skills are and where you are going to start to apply them. I was never comfortable with the previous Government’s approach to the breakdown between the local skills structure and the national skills structure. We should get a better balance, especially for levels 4 and 5, with a big emphasis on the technician level. We have historically been bad at this—for decades we have been bad at this. When I first got into Parliament, I was told that we were bad at it.
If we are going to do that, where should that support come? Where are we going to look at that balance of getting a high technical level of training? It might be delivered by the higher education sector in places—indeed, it probably should be. One of the things we might have lost when we lost polytechnics was something that bridged that gap. I know that that battle was already lost before this came in, but how will we deliver that higher level of training? Apprenticeships are one way to access this, and colleges will be another. How do we balance these two things and how does Skills England take on this role? That is one of the important things we have not heard about in enough detail to pass judgment.
If we are being more flexible and removing barriers to flexibility, we are also removing potential safeguards. It is the trade off, balancing the two. How will we know when the Government have decided that something has gone wrong? And it will—there will be mistakes and misjudgments; all Governments make them. It is not making a mistake that damns you; it is not realising and not adjusting. How will they report back and let us know what is going on? How will they let the sector know that they are making changes? That will be vital to ensure confidence, which is once again a feeding-in point; if there is confidence across the sector, people will buy in. It is important that we hear that during the Bill’s progress. Our skill here will be tested with probing amendments, but we need to know what the Government’s approach is in more detail than we will get tonight.
I could speak for a long time but I do not think it is appropriate—I could try to work salmon into my speech but I think I will give that a miss. The final brick that will make this work is knowing where we will get the structure to examine what is being done, if it is all held in the department. This has got to talk to every other bit of government, and then all the bits outside government. If there is a central structure, how that is intended to happen and its capacity to change—how to extend bits that work well and what to do when bits do not—is what we are coming to.
The intention behind the Bill is basically good; it is the delivery that we should talk about. How do we bring in practical solutions, from inside and outside government—indeed, from inside and outside the Department for Education? The Department of Health, for instance, will know what it requires, and if those two bits of Whitehall can talk to each other, that is great. But anyone who has been here for any length of time knows that Chinese walls take a lot of kicking to get through. Everybody here has done that. Whoever is looking after trade or local government will have an input. If Ministers can say what they expect to happen, at least within Whitehall, I would be much more sanguine about the Bill. But we will have to find out how this works to have real confidence in the process.
I wish the Government well, because any sane person would, but we are not writing them a blank cheque yet. We would like to hear about the process behind this, because if it achieves success then that will be great, but knowing how they will recover from any mistakes and adapt to them—the cock-up school of history is one I agree with—would reassure me. I hope that the Government will be forthcoming about their plans. In that way, we will all be able to rest a little easier in looking at the training agenda.
Lord Aberdare (CB)
My Lords, it is always a pleasure to talk about the importance of skills with many who we might think of as the usual suspects assembled here this evening, even at rather a late hour. I too look forward to the maiden speech of the noble Lord, Lord Beamish.
I welcome this Bill, which is an important, if mainly technical, step towards a much-needed revamp of overall skills policy. Other elements of this include the establishment of Skills England, a new growth and skills levy to replace the apprenticeship levy, and the curriculum and assessment review addressing those two aspects of education. All this is in the overall context of the industrial strategy launched last week, which rightly includes a strong focus on people and skills.
Three of the Government’s five missions, on growth, net zero and opportunity for all, make specific reference to jobs, productivity or education, and the NHS mission also depends on skills. The skills system is a critical enabler of economic growth. Yet employers across virtually all sectors report significant skills shortages, combined with growing future skills needs. Meanwhile, the education system is failing to respond adequately to these needs, particularly for young people who are less academically inclined and do not aspire to university but are not made sufficiently aware of the alternative technical and vocational pathways available to them and the rewarding and fulfilling employment opportunities that those pathways can lead to. In her foreword to Skills England’s first report, the Secretary of State for Education highlights that we have a
“fragmented and confusing skills landscape that lets down learners, frustrates businesses and holds back growth”.
This Second Reading debate poses an unusual challenge: whether to focus on the Bill itself, which is relatively short and technical, or to address the bigger skills policy picture, of which the Bill is a harbinger. The Minister has managed skilfully to ride both these horses. By the way, it is very good that we have the Skills Minister in the House of Lords, and I wish her every success in her crucial role. Taking my cue from her, but possibly in another order, I shall address some provisions in the Bill before raising questions about other aspects of the Government’s overall skills plans.
The Bill transfers IfATE functions to the Secretary of State, with the intention that most of them will be passed on to Skills England when it is up and running. What can the Minister tell us about what criteria will be used to determine which functions will or will not be transferred?
Clauses 4 and 5 provide the option for standards and apprenticeship assessment plans to be prepared by the Secretary of State rather than “a group of persons”—typically a group of key employers. I have heard mixed reactions from employers to this: it is welcome if it speeds up the review process for minor changes so long as it does not become the default, but there are concerns if it results in employers becoming less engaged or even bypassed and the quality and consistency of apprenticeship being undermined. I was reassured by some of what the Minister said about the intentions.
Can the Minister confirm that both standard-setting and assessment plans will be transferred to Skills England to avoid inconsistent outcomes for the same apprenticeship if these functions are separated? In particular, will Skills England be required to work closely with industry skills bodies to ensure effective employer input?
The Bill’s impact assessment, as a previous speaker mentioned, recognises that there may be some delays in approving qualifications during the transition process. What is the Government’s assessment of the likely impact of these on learners and employers, and what steps are they taking to mitigate or minimise that impact? Together, the points I have mentioned come down to a single underlying question: what reassurance can the Minister give that the specific proposals in the Bill will not be used in a way that results in the influence and centrality of employers in the process being diluted?
I turn now to three broader skills policy issues. I could have covered many more, so I will try to keep to just the three. The first relates to the proposed growth and skills levy and how it might address the perennial challenge of persuading more small businesses to offer apprenticeships. Taking construction as an example, the Government are seeking to build 1.5 million new homes over the next five years which, according to the Construction Industry Training Board, will require the current workforce of the sector to increase by an estimated 30%, or some 152,000 people. Where are these people going to come from if not from SMEs, which account for 98% of the construction industry?
Yet the tight margins on which SMEs in the sector operate, exacerbated by issues such as cash retentions—about which noble Lords have regularly heard me complain—mean that they find it hard to invest in apprenticeships and other forms of training and lack sufficient incentives and support to do so. How will the growth and skills levy seek to overcome the challenges of funding and bureaucracy preventing so many SMEs, not just in construction, from offering apprenticeships? Might the Government be considering some sort of weighting in the allocation of growth and skills levy funds—for example, to prioritise apprenticeships in smaller businesses, or for younger people, or for higher priority sectors, or at lower levels, given that employer skills needs in construction are primarily at level 3 and below? Hitherto, it has been very unclear what the desired balance of apprenticeships in these areas might be.
My second issue concerns the limited focus, and lack of alignment and agility, of the education system in meeting the skills needs of the employment market which students will need to navigate. The Education for 11-16 Year Olds Committee on which I served last year, some of whose members are here today, found an alarming imbalance between the academic subjects required to obtain good GCSE results and the more technical and vocational options that develop the essential practical and life skills sought by employers, including digital skills, communication skills, such as oracy, which I wish I had learned, teamwork, problem-solving, resilience and creative skills. An effective skills strategy must be clear not only about the skills that employers in key sectors need, now and in the future, to boost productivity and growth, but also how the education system should be adapted to provide those skills. Will these issues be fully taken on board by the curriculum and assessment review, and how will employer needs be reflected in the review, given that there seem to be no employer representatives in its membership?
Finally, to pick up on what previous speakers have said, what can the Minister tell us about how Skills England, as a non-statutory—and “Why non-statutory?” I ask—executive agency within the Department for Education, headed by a chief executive at Civil Service director level, and with a range of detailed technical and regulatory functions to fulfil, will at the same time be able to co-ordinate skills needs across sectors and regions, building on local skills improvement plans and driving strategic collaboration across the whole of government, in partnership with sector skills bodies, unions, the devolved nations and others? That is an enormous task for any single organisation to fulfil, particularly at that level of government. How will the pieces of this complex puzzle fit together to create a coherent national strategy, fully integrated with the industrial strategy, to ensure that the identified demand for skills is matched by the provision from education and training at all levels, and who will be responsible for driving this process across government? To pick up on what the noble Lord, Lord Addington, said, what tools will be available to identify and fix things that are not working, and who will exercise them?
The Government have set themselves ambitious and inspiring goals for skills policy, and I look forward to hearing more from the Minister about how they will be achieved and what part this Bill will play in what will be a long, complex and vitally important process.
The Lord Bishop of Leeds
My Lords, it is a great pleasure to follow the noble Lord, Lord Aberdare. I realise that I stand in the way of the maiden speech of the noble Lord, Lord Beamish, which I look forward to hearing shortly. I shall try to be brief.
I support the Bill in principle, and certainly the ambition behind it—and I certainly understand the logic behind it. A number of questions have already been raised about it that will need some careful addressing and answering if the House is to be confident about what is proposed. I want to focus on the FE sector, which has been facing some difficulty in recent years—facing the uncertainty while awaiting the outcome of the Government’s pause and review of level 3 qualifications, deals with FE pay being considered separately from the ongoing negotiations for the recently resurrected School Support Staff Negotiating Body, and faces up to the impact of sustained cuts and falls in funding in real terms. But FE is doing amazing work, particularly with particular sectors of our young people.
My questions relate to the move of IfATE into Skills England in relation to several issues. First, on young people, the apprenticeship levy has resulted in fewer young people undertaking apprenticeships, Young people in general, but especially those not in employment, education or training, form a demographic that stands to benefit immensely from apprenticeships, but it seems to me that we have seen a trend of employers choosing to spend their apprenticeship levy on older employees or career changers, as young people are sometimes perceived as harder to work with. How will Skills England incentivise the recruitment and training of young people through apprenticeships?
Secondly, on SMEs, small and medium-sized enterprises have not found the apprenticeship levy simple to navigate. It is much simpler for those with a turnover of more than £3 million a year, as they contribute automatically. Complexity and perceived uncertainty around a solution of co-investment has limited the take-up of apprentices by SMEs, which can disproportionately affect smaller or more rural communities, where larger businesses simply may not operate. How will the new structures around apprenticeships incentivise and support provision of apprenticeships by small and medium-sized businesses?
On the question of levels, the apprenticeship levy has had a much bigger impact on higher-level qualifications, such as higher and degree apprenticeships, and in turn therefore helps higher education institutions. But it is not improving the range and offer of courses available at lower levels, such as intermediate apprenticeships at levels 2 and 3, to anywhere near the same level. Arguably, that increases the options available to already more privileged or socially mobile apprenticeship candidates, while restricting the options available to those most in need.
I shall give an example to illustrate my point. There is currently a crisis in care. Statistically, care-experienced young people are far more likely to study at FE institutions than HE institutions. Given the weaker social fabric supporting them, and the complexity of transitioning to independent adulthood after 18, which is challenging enough as they leave the care system, these young people should be the ideal candidates for apprenticeships and the training and salary or wages that they provide. However, they are more likely to need to undertake a lower-level apprenticeship in the first instance, and are seen by some providers as harder to work with, as I indicated earlier, and are therefore doubly passed over in favour of older and more experienced candidates undertaking higher or degree level apprenticeships, for which a young learner may not be eligible, depending on their prior education. How will Skills England use apprenticeship structures and incentives to make sure that our apprenticeship structures and technical education are making the most impact for our most vulnerable young adults and learners?
Lord Beamish (Lab) (Maiden Speech)
My Lords, it gives me great pleasure to give my maiden speech in your Lordships’ House. I begin by thanking Black Rod and her staff for their help and assistance since my introduction. I also thank the principal doorkeeper and other doorkeepers and other House staff for their welcome and advice, along with the warm welcome that I have received from noble Lords from across the House.
I also take this opportunity to thank my two sponsors, the noble Baroness, Lady Ramsay of Cartvale, and the noble Lord, Lord Grocott. I have been friends with the noble Baroness, Lady Ramsay, for many years. We served together on the NATO Parliamentary Assembly. On our many travels, she used to describe me as her unofficial Batman, as I carried bags through numerous airports around the world. However, it was a delight to undertake that role for such a noble Baroness.
The noble Lord, Lord Grocott, has similarly been a good friend and, like me, is an early riser. We were both members for many years of the House of Commons tearoom breakfast club, which meets at 7.30 am every day. It is an opportunity to read the morning papers, and usually by 9 am the assembled masses have put the world to rights. I am also pleased to be reunited in your Lordships’ House with the noble Lord, Lord Arbuthnot of Edrom. We served together on the House of Commons Defence Committee, but more importantly we have also worked for more than 15 years on the campaign to get justice for sub-postmasters affected by the Post Office Horizon scandal. Although we are of different political parties, we have worked well together and over the years have helped right a grave injustice. In your Lordships’ House I hope to continue that work on Post Office justice. The latest scandal is around a system called Capture, which pre-dates the Horizon system and has just been the subject of a report by the Department for Business highlighting a similar scandal that took place with that system. It is something that I think we now need to address.
I join your Lordships’ House having had the honour of being the Member of Parliament for North Durham for 23 years. Many people have inquired about the origins of my title, Lord Beamish. Many, including my good friend Gavin Robinson, the leader of the DUP in the Commons, asked me whether it is in honour of the famous Irish stout. No, it is not. It is one of the many villages that make up the North Durham constituency and, as those from the north-east know, it is also the site of the world-famous open-air museum. As your Lordships know, it is always difficult to decide which village or community to include in one’s title, but I drew the line at a village very close to Beamish called No Place—I did not think that being Lord No Place would have the same ring.
I am the third former Labour Member of Parliament from North Durham or its predecessor constituency to enter your Lordships’ House, the others being Jack Lawson—Attlee’s Minister of War in the 1945 Labour Government—in 1950, and Giles Radice in 2001. I know that many noble Lords will remember him with affection. In his maiden speech to your Lordships’ House in 1950, Lawson said that
“I have listened to the debates in this House for some weeks. I confess that from time to time I felt very much like David Copperfield on one occasion, when we are told he felt ‘very, very young’”.—[Official Report, 23/5/1950; col. 442.]
Being a 60 year-old, I think I understand what he was saying.
My maiden speech in the House of Commons in 2001 described North Durham as
“a rural constituency with urban problems”.—[Official Report, Commons, 9/7/01; cols. 585-86.]
It is a former coal-mining constituency with beautiful countryside, and the sad thing is that the economic reason why most of the communities existed is no longer there: coal mining closed and industry moved away. The jobs now are mainly to be found to the north, in Newcastle, Sunderland and the A1 corridor. The communities are still very strong, but jobs are needed. The other thing that is needed is to raise the aspirations of many young people who live there. That is why I welcome the new Government’s commitment, as one of their key missions, to economic growth and concentration on skills.
There has been much debate about the need for capital investment but, unless we invest in people, the economic gains that we strive for will not be achieved. If your Lordships look around the world, the most successful economies are those that invest in their workforce. This Bill is a key step in that direction. As the Minister said in opening the debate, the skills landscape for too long has been fragmented. If Skills England is to succeed, though, it will need to be a genuine partnership between government, the education sector and the private sector. Government and the private sector will need to come together not only to identify the areas where skills are needed but to make sure that resources are directed towards them. I also argue that skills and Skills England need to be hard-wired into all government departments—they need to be thinking about skills when policies are developed.
I note that the policy publication for the Bill, produced by the Department for Education, refers to work with devolved Administrations, combined authorities and government department such as the Department for Energy Security, DWP and the Department for Science, Innovation and Technology but does not mention other departments such as, for example, the Ministry of Defence. As many noble Lords know, defence has been one of my interests, as a former Defence Minister. According to ADS, aerospace, defence, security and space employ 427,000 people in the UK, from large primes down to small SMEs, and provide some 20,000 apprenticeships every year. It is therefore vital that the Ministry of Defence and groups such as ADS work in partnership with Skills England when drawing up strategies for those sectors.
As has been said in this debate, skills are important for the economic well-being of our nation, but I also argue that they are vital for our national security. As a former member of the Intelligence and Security Committee, I saw at first hand that if we are to defend our nation against those who wish to threaten us, whether they be nation states or not, we will need a new generation with computer and IT skills and mathematicians in the future. That is something that needs to be thought about. I also draw the Minister’s attention to the work that is going on at GCHQ with the neurodiverse community, tapping into a resource that is not only having great beneficial results for the individuals but helping it develop new programmes and ways to protect our country.
When government departments, particularly the Treasury, are awarding contracts, they also need to think about skills. Some 38p in every pound spent on a defence contract with a UK company not only comes back to the Government in tax and national insurance but helps grow the skills base of our country. This was clearly demonstrated in Philip Dunne’s excellent 2018 report Growing the Contribution of Defence to UK Prosperity. Sadly, the last Government completely ignored that excellent report.
I conclude by making a plea for what I call our traditional skills. There is still a need for stonemasons, glass craftsman and traditional carpenters, and I commend the work being done by the Beamish museum in giving apprenticeship opportunities to young people in those skills, which are in danger of dying out. If the Houses of Parliament ever decide to get around to the restoration and renewal programme of the Palace of Westminster, these skills will be vital.
I thank your Lordships for listening to my maiden speech. I look forward to making further contributions and taking an active part in the work of the House.
Lord Blunkett (Lab)
It is my great pleasure and privilege to follow my noble friend and congratulate him on an excellent maiden speech. We are very glad that he is here, bringing the experience he outlined, his cross-party campaigning zeal on the Post Office scandal and his work on defence. My noble friend on our Front Bench will very much welcome his expertise. I agree with him about craft skills, which my city was built on as well, and the collaboration between the public and private sectors that we will need if we are to make the skills agenda work. I appreciate that very much.
I knew about the Beamish open-air industrial museum. As my noble friend was making his maiden speech, I was thinking that he had moved from one museum to another. This is more like a natural history museum where the occasional dinosaur moves around the corridors—responsible, in part at least, for not changing the sitting hours of this House. So here we are debating something really important late on a Tuesday night, perhaps too late to do it justice. I will therefore cut my speech down. I declare my interests in the register on a wide range of issues relating to education.
I congratulate my noble friend the Minister on being able to ride the two horses—and Houses; she has been in both—referred to earlier of addressing the minutiae of this legislation and the greater vision of Skills England. I was proud to lead on the learning and skills proposals published two years ago from which Skills England, the growth and skills levy and much else have been drawn.
I am still struggling with the idea of being on the Government Benches rather than in opposition. After 14 years, it is quite hard not to make a remark like “This Bill is necessary but not necessarily sufficient” sound like a criticism. While the Bill is needed to transfer IfATE’s duties to Skills England, it is only a tiny part of creating a vision and pathway to generate the energy, drive and commitment of everyone involved to make Skills England a force to be reckoned with. Some of the questions already asked today arise directly from that.
Figure 7 in chapter 3 of the paper published on 24 September—the day the Prime Minister made a speech at Labour’s party conference—lays out the challenge of getting the right skills in the right places, not just now but for the future. That paper made some interesting comments that I strongly welcome and hope we can build on in Committee and in responses from the Government, as well as in wider workforce planning.
My noble friend Lord Beamish referred to using other departments as a template. He noted the massive investment of the Ministry of Defence. Defence procurement reminds me that we have an enormous opportunity that has not yet found its way into government policy: using procurement to drive apprenticeships as well as the necessary skills agenda for the future. When asked what consultation he had carried out on the production of his first car, Henry Ford indicated that, if he had bothered to consult anybody, their first thought would have been “faster horses”. In just the first 25 years of the last century, the proportion of movements by mechanical means moved from 5% to 95% due to the creation and development of vehicles. We are at a point where enormous change is happening as we speak.
That is why, as I imagine my noble friend will know, there is such controversy in Germany at the moment about where it is going on the skills agenda and investment for the future. We have always turned to Germany as an example of what we might have done in the past and might do today. I fear that the world is changing around us, sometimes leading us and sometimes giving us an example of how we have to skip a generation in what we are doing in order to be in the right place to deliver the skills we need for the future.
My noble friend mentioned dental technicians. I make a plea that we move very rapidly to decentralise the accreditation of industry standards to organisations such as the Construction Industry Training Board and the ECITB—both of which had a role in this area before 2016 when IfATE was created—to cut out the bureaucracy. Over the last eight years IfATE has undoubtedly developed a bureaucracy, but we owe it a debt of gratitude because it has had a thankless task. I thank the noble Baroness, Lady McGregor-Smith, its chief exec, all its staff and Richard Pennycook, who has done an incredible but unsung job in a very short period of time to get shadow Skills England off the ground.
There are questions about the level of the post of chief exec, which I hope my noble friend will address not just now but in the weeks ahead. We have an incredibly powerful director-general in the Department for Education who has a reputation for delivery and is in a position to drive Skills England forward. However, we are talking not about individuals in a post but about whether Skills England will have a chair who can deal with business, trade unions and departments in an independent and vigorous fashion and advocate for the resources needed.
The apprenticeship levy—I hope the Chancellor of the Exchequer will say much more about it next week—is fundamental and should be expanded. The Treasury should stop top-slicing it and thereby diminishing the amount of money and resource available to deliver. Skills England can play an important part in making that advocacy work, but not if it does not have the clout or reputation to ensure that it can be done.
I was going to raise many other questions but, to respect those still to come on this late Tuesday night, I will end with this. We have to be really ambitious. Microcredits and modular learning will mean that in future we will need a learning passport; to answer a query raised earlier, we will need to reinstate the Union Learning Fund created in 1998. I was very proud of that, because along with it went learning representatives who advocated alongside management for learning in the workplace and beyond. There are many examples of how well that worked, such as the UK Commission for Employment and Skills.
Let us not reinvent the wheel; let us work out what worked in the past and what did not, and then build on it. Let us also rejoice in the fact that we have a Minister of State in this House with hands-on experience, who understands the economic and business needs required and who can be a great leader in ensuring, along with the Secretary of State, that we get it right. Tonight is the beginning of a journey that I hope we will be on together.
Baroness Evans of Bowes Park (Con)
My Lords, I am pleased to be speaking in tonight’s debate and I draw attention to my registered interests. I also congratulate the noble Lord, Lord Beamish, on his maiden speech and very much look forward to his contribution to the House.
As this debate has already shown, across the House there is cross-party agreement on the importance of an effective skills agenda to develop a high-skill, high-productivity workforce that fulfils employers’ needs and provides the opportunities and training that employees need to thrive.
I, too, recently served as a member of the Education for 11-16 Year Olds Select Committee with a number of other noble Lords speaking today. While our focus was on the schools system, during our evidence sessions we heard time and again from witnesses about the need for an increased focus on skills and training to equip our young people for the world of work both now and in the future.
The data bears that out. Studies consistently highlight the importance of skills to growth, with around one-third of average annual UK productivity growth between 2001 and 2019 attributable to the expansion of skills in the workforce. As we have heard, it is estimated that there will be 1.4 million new jobs in the economy by 2035.
For instance, evidence to our Select Committee suggested that, over the next five to 10 years, more than 200,000 jobs could be created in the energy efficiency sector, with the retrofitting of buildings alone requiring the training of 45,000 new technicians a year. It is against this context of the changing skills demands of the economy that we are considering this Bill.
Yet the Bill does not tell us anything much about the Government’s approach to the challenges. As the Minister said in her opening remarks, the Bill is narrow in scope and technical in nature. That is certainly true and it raises some concerns.
The Bill abolishes the Institute for Apprenticeships and Technical Education, giving the Secretary of State significant powers as a result, but includes nothing at all about the new body, Skills England, that is intended to be at the centre of the skills landscape under this Government and absolutely fundamental to the delivery of their agenda.
Despite the department’s policy summary repeatedly referring to the role of Skills England, as the Minister set out in her opening remarks, the Bill itself does nothing practically to progress its establishment. Surprisingly, the organisation which is intended to be the “driving force” behind a
“much-needed upskilling of our economy in the coming decades”
is not mentioned once in the Bill. Instead, most measures transfer a significant number of powers and functions directly to the Secretary of State.
In its briefing on the Bill, CITB noted that this was
“contrary to the previous characterisation of Skills England that was outlined in the … King’s speech … and contrary to the vision for Skills England to be an independent body, established in law, with a cross-governmental role”.
In her introduction to the first report published last month by Skills England in its shadow form, the Secretary of State set out a number of responsibilities that will be invested in the new organisation: first, bringing together business, training partners and unions with national and local government to develop a clear assessment of the country’s skills needs and how they can be filled; secondly, working closely with the Industrial Strategy Council, the Migration Advisory Committee and across government to deliver the necessary skilled workforce required in the future; and, finally, shaping the Government’s response to skills needs by identifying key priorities, including advising on the new growth and skills levy.
In his foreword, Richard Pennycook, interim chair of Skills England, added a further list of actions the body will be taking, including working with providers in further and higher education to clarify and strengthen the skills landscape, and supporting schools in the provision of high-quality advice to students on career opportunities.
There is no question but that these roles are extremely important and need to be fulfilled, but there is no detail about any of this in the Bill. So we are being asked to abolish IfATE and give the Secretary of State significant powers, but with no legislative underpinning of what Skills England will actually do in practice, and no details about how it will fulfil its extremely important functions to achieve the laudable outcomes the Government want.
I am not sure how the Bill fits with the speech made by the Attorney-General last week, in which he said:
“Excessive reliance on delegated powers, Henry VIII clauses or skeleton legislation upsets the … balance between Parliament and the Executive. This not only strikes at the rule of law values ... but also at the cardinal principles of accessibility and legal certainty”.
The Labour manifesto itself made several very clear commitments about Skills England: that it would work with the Migration Advisory Committee, co-ordinate with local and regional authorities and determine which courses would be eligible for levy funding. So I would be grateful if the Minister could explain why at the very least these are not included in the Bill, with reference to the creation of Skills England.
The lack of a statutory footing for Skills England and the centralisation of powers in the Secretary of State in the Bill raise questions for many of us. With all the powers in the Bill passed to the Secretary of State, how independent will Skills England—and indeed the board—really be able to be in practice? Will they truly feel able to challenge Ministers if they believe that government policy is not delivering on the outcomes intended if they have no legal independence? How in practice and on what basis will their relationship develop with the Industrial Strategy Council and the Migration Advisory Committee? What role will they have in approving new qualifications or overseeing the system and what will be the extent of their responsibilities?
There are also important unanswered questions around how Skills England will be asked to oversee the apprenticeship system. Policy Exchange’s report, Reforming the Apprenticeship Levy, published last year, found a recurring complaint from employers of all sizes that standards were too inflexible for their needs. How will Skills England address this problem and what safeguards will be in place to ensure that powers taken by the Secretary of State are used appropriately?
Unfortunately, with the paucity of detail about the new body within the Bill, there is a very long list of questions. So, in conclusion, I believe the Bill raises more questions than it answers and I look forward to our more detailed discussions during its passage, when I hope the Minister will build on her opening comments to provide much more detail on the role and responsibilities of Skills England, and, perhaps most importantly, offer clear reassurances that it will have the autonomy, responsibility and flexibility to lead the revitalisation of our skills system that we all want to see.
Lord Hampton (CB)
My Lords, as ever, I declare my interest as a teacher in a state secondary school in east London. I thank the organisations that briefed us—there were a lot of them. I also congratulate the noble Lord, Lord Beamish, on his excellent speech. I have to admit that I am rather sad not to be congratulating the noble Lord, Lord No Place—but that was maybe a good choice.
This is an interesting one. We get very little detail in the Bill, so this debate is more about a wish list than talking about the Bill itself. Through the Bill we get Skills England and its utopian dream: stronger, flexible, nimble, swerving, agile, breaking through barriers. This is less of an arm’s-length body and more of a job description for an England rugby fullback.
So here is the first question the Minister might like to answer. According to the Association of Employment Learning Providers:
“The remit of the IfATE had become bloated and not fit for purpose”.
Given the larger remit of Skills England, how will it remain nimble? Now that so much power will be vested in the Secretary of State, how is this agility going to work? I am not being flippant when I ask: does the department have the skill set for this new agile way of working?
As my noble friend Lord Aberdare quoted, in its first report Skills England said that over a third of the vacancies in 2022 were the result of skills shortages. It said that the qualifications landscape for employers was “opaque”; that, for learners, career paths were “not sufficiently clear”; and that the current skills system was not always equipping learners with the necessary skills.
There is work to do; we need to go back to fundamentals. We must not confuse skills with knowledge. Skills are practical abilities developed through practice and application. The knowledge-rich curriculum in schools has been to the detriment of skills. For too long, we have concentrated too much on getting the best maths results this side of Mars, while downplaying skills that employers want and need. By prioritising mathematics and engineering, the Government sought to boost innovation and competitiveness, but neglected the very sectors that have made the UK a cultural powerhouse: arts, music, design and literature. Obviously, an ability in maths and English is important, but not to the exclusion of everything else. The Empire is gone; there are no jobs for life.
As a teacher, I am constantly amazed that students can name every god in the major religions but cannot use Microsoft Office. Designing and populating a spreadsheet should be part of the basic maths taught in primary school. Every student should leave school having started at least one business, and I commend the work of Young Enterprise in this field. Every student should have the skills to build healthy work, social and sexual relationships, and again I urge the Minister to look at the work of the charity Tender if she does not know it. These are some of the many reasons why every child should be in school. Maybe by making the curriculum more relevant, we could tempt the abstainers and their families back into the fold—it might also be fun to teach—otherwise, I have no idea where the thousands of new teachers will come from.
I welcome the recent government Statement on the British film industry:
“Britain is open for business, and creativity is … at its heart”.—[Official Report, Commons, 9/10/24; col. 317.]
That is great news given that successive Governments spent time downgrading creative subjects.
Can we say goodbye to Ebacc and Progress 8, which penalise schools and give them no credit for large amounts of high-performing creative subjects? Can the Minister expand on an answer she gave during Oral Questions earlier this afternoon, when she said that the “curriculum and assessment review” would be “creating space for … creativity”?
Qualifications are a mess. Apparently, Skills England will intervene “sometimes” in the award of technical qualifications. Clause 8 means that Ofqual may not decide whether there may be an accreditation requirement for approving technical education. Can the Minister explain the high-stakes qualifications and the specified technical education types? I am afraid that I still do not understand them.
I am member of the APPG on T-levels and I have chaired a conference on them. Time and again, we hear that they are too technical and that schools and colleges are struggling to find meaningful relations with industry. The Minister said in an answer yesterday that T-levels would be beefed up—great gung-ho language. Does she have more detail of the beef to be applied? I have taught both the unloved BTECs and V Certs, and friends of mine have taught unteachable V Certs. What will happen to those lower qualifications?
According to the CITB, each year 58,900 people either on a construction apprenticeship or an FE course fail to achieve their qualification or immediately progress into construction employment on completion of their qualification. The main reasons for this training wastage are the limited focus, the lack of alignment and the limited agility of the education system to meet construction employer skills needs, which are primarily at level 3 and below. Ultimately, this leads to low apprenticeship completion rates and unacceptable FE outcomes for the industry. The Minister mentioned the short qualification reform review; can she say how that is going?
Overall, this Bill is to be welcomed. Skills England talks a great fight, and if it can truly deliver the skilled workforce that this country so desperately needs, it will have achieved something monumental. However, this Government need to be brave, for Skills England can thrive only in an education system that is as agile and relevant as Skills England itself.
Lord Layard (Lab)
My Lords, I congratulate my noble friend Lord Beamish. I warmly welcome this Bill for two reasons. The first is economic growth. That is obvious, but equally importantly—I want to stress this perspective—skills are crucial for people and their individual ability to earn a living. For those two reasons, it is highly desirable that we have a well-focused system of skills development led by a single body. That is what this Bill will provide.
However, when I read the brief from the DfE for Skills England and the first report that it produced, I immediately noticed what seems to be an imbalance. It is concentrating entirely on the first of the two reasons I gave: the perceived needs of existing employers for labour and the estimates of the new types of jobs of the future. This is very important—it is crucial that we know all that in order to have the right balance of training that fits the pattern of future jobs—but there is also the other perspective: that of the individual.
If one were thinking about the need for a particular volume of training, that would lead one to ask how many young people need to be trained to earn a decent income. I have not seen them mentioned in the documents I have read so far. It is quite impracticable to say how many people should be trained just by adding up the estimates from employers and the estimates of new jobs. If you want to think about the numbers that have to be trained, you have to think about how many people are out there. The estimates from employers and the estimates of new jobs are vital for understanding the pattern of training.
If we want to think about the total volume of training, we should start with the very simple principle that it is in the national interest that every young person achieves the highest level of skill they can and wish to achieve. It is a prime duty of the state to get every young person off to the best possible start in working life. It is a much lower duty of the state to support lifelong learning, and indeed most in-service training should be, as it always has been, paid for by employers. By contrast, getting people off to a good start in life is central to the Government’s opportunity mission, but we are currently far from achieving that.
Where is the problem? The problem is not in schools. At age 15, our young people do better in the PISA tests than youngsters in France, Germany and most other European countries. However, by age 25, they are way behind, unless they are in the group who went to university. It is after school that the real barriers to opportunity exist.
For example, in the Government’s apprenticeship matching scheme there are three times more applicants than there are places on offer, so it is no wonder that at the age of 18 a third of our young people are getting no education or training. This is a shocking state of affairs. Let me break it down. There is the 14% who are NEET—not in education, employment or training—that we often talk about, but I think just as bad is the 20% who are in jobs without training and heading for a lifetime of low pay. It is this lack of training that I consider one of the biggest problems facing our country: the people who are getting nothing beyond the age of 17. It is completely extraordinary.
That is why I am encouraged that the Government are offering young people up to the age of 21 a Youth Guarantee of education, training, or help with finding work. That is good, but it is not nearly enough. What we need for these young people is, in addition, inside the Youth Guarantee, a guarantee of training if that is what they want and are qualified for, and I hope the Government can modify the Youth Guarantee in that way.
In 2009, the previous Labour Government passed an apprenticeships Act which obliged the Government to ensure that every young person who was qualified for a level 2 or level 3 apprenticeship could expect to receive an offer. That was repealed a year later. The guaranteed offer is, of course, what we do for people going down the academic route to university. They are pretty much guaranteed a place—not necessarily what they want but a place. We have never applied it to the other 50%, and that is why we have low productivity, low pay and inequality in our country.
To apply this guarantee principle would require a major administrative effort at the centre, working through local authorities, and, if necessary, an extra element of subsidy. I suggest that every local authority would be required to assess the number of young people likely to want an apprenticeship and it would then do its best to persuade local employers to provide these opportunities. The research shows that employers like the idea of an apprenticeship guarantee. They are not averse to it. The Chartered Institute of Personnel and Development found that 85% of those surveyed supported the idea and 60% of them said that, if it was introduced, they would provide more places than they currently do.
This guarantee would be only fair to that cohort of young people, but also it is a very good investment, because, according to our calculations, within 12 years it would recoup enough in extra taxes and reduce benefits to repay the cost of the apprenticeship to the Treasury. The total cost of such a guarantee would in fact be no more than 40% of the growth and skills levy, so my proposal is that 40% of the growth and skills levy be ring-fenced for young people aged up to 21 taking an apprenticeship up to levels 2 and 3. These are mostly young people without A-levels and I think we have a prime responsibility, if we are looking for change, to focus above all on that group. Their claims must come before the claims of people doing levels 4, 5 and 6, who have already been helped through their A-levels and are now eligible for student loans.
The future of the levy is a crucial early issue for Skills England. I hope it will be interested in some of the arguments that I have put forward, but whether or not it accepts the idea of a guarantee and some ring-fencing of the levy, it is crucial that Skills England not only looks at what employers and the jobs of the future suggest but includes a serious study of the number of young people who are needed to acquire a skill—that is a crucial point. I hope we can continue to discuss that additional focus for Skills England in the later stages of the Bill. It is a vital dimension, because in the end the economy is for people and not people for the economy.
Baroness Finn (Con)
My Lords, I congratulate the noble Lord, Lord Beamish, on an excellent maiden speech, which was both informative and entertaining, and I thank the Minister for her exposition of the rationale for this Bill. While I applaud the ambitions for Skills England—our country must obviously have the right skills to meet the challenges of modernity— I wish to provide some gentle warnings of the risks that I fear will inevitably arise with the Government’s approach.
First, I readily accept that, despite the previous Government’s best efforts, skills shortages remain a challenge for the UK, as for most developed economies. Despite record participation rates in higher education, a generously funded apprenticeship scheme and soaring levels of net migration, skills shortages remain. I sympathise entirely with the Government’s desire to act to shore up skills gaps.
The last Government had considerable success with their reforms to apprenticeships, and the Institute for Apprentices and Technical Education—IFATE—was set up as part of those reforms. Its purpose was to be independent of Government and to represent employers in setting standards for technical qualifications. It succeeded through instilling confidence in the integrity of apprenticeship standards. Employers are fundamental to the input of the qualifications they need in the workplace.
I pay tribute to the chair, the noble Baroness, Lady McGregor-Smith, and her team for the work of IfATE. It has, among other successes, created and maintained around 690 apprenticeships, which supported around 750,000 people on apprenticeships last year. It created 21 T-levels and 174 higher technical qualifications, and enabled 120 employer leaders to set strategic direction for skills in their sector. Perhaps the best assessment of IfATE comes from apprentices themselves. A national survey found a 90% satisfaction rate with IfATE from apprentices who had completed their apprenticeships—what other part of government can report a 90% satisfaction rate?
Established in statute, IfATE has an independent chair and a board that afford a certain distance from the Department for Education. The chair of IfATE is independent of the department, while ultimately remaining accountable to the Secretary of State. This governance arrangement has been key to instilling confidence among employers and being able to galvanise others in support of the standards that IfATE sets. However, Skills England is to be an executive agency of the Department for Education. Under the Government’s proposals, Skills England will report to a senior official in the DfE. In my view, this change in status is both critical and presents significant risks.
In all so-called arm’s-length bodies, there is a hand at the end of the arm. This hand exercises a certain amount of control depending on how the body is set up. The Bill will place far greater control in the hands of officials, rather than employers, in setting and ensuring the rigour of future standards.
This concern is borne out in Clause 4, which gives the Secretary of State, or the officials reporting directly to her, the power to prepare apprenticeship standards herself or to commission others to do so. David Kernohan, in a recent article, highlighted the issue thus:
“This tweak makes it technically possible for an apprenticeship standard to be prepared without the input of employers, providers, industry groups or indeed anyone. The Secretary of State could knock out an apprenticeship standard while bored on a train provided she is ‘satisfied that it would be more appropriate for the standard to be prepared by the Secretary of State than by a group of persons’”.
Such wide-ranging powers lead to genuine concerns that the Bill could decrease the standards of technical qualifications.
Clause 6 removes the IfATE requirement that reviews of approved technical qualifications should happen at regular intervals. The reason given in the Explanatory Notes is that this is
“to enable flexibility to review standards according to priorities and employers’ needs”.
Can the Minister explain why a statutory requirement for regular reviews of the suitability of qualifications is to be replaced by such a broad discretion? Would she also be able to provide some clarity on who will decide these priorities and how the decision-maker will determine “employers’ needs”?
As my noble friend Lord Effingham highlighted, the new skills foundation will give increased influence to trade unions, with Sue Ferns, senior deputy general secretary of the union Prospect, arguing that:
“Skills England … won’t achieve its objectives without engaging and involving trade unions at every level”.
Although trade unions play an important part in the workplace, they should not be allowed to push out employers and exercise a disproportionate influence on the standards and formation of qualifications. There is a very real danger that a successful organisation such as IfATE could be subsumed in a new Skills England and become merely a convening body for interested parties.
On the levy, Ms Ferns has called for flexibility and argued that it
“must extend beyond a demand-led model”.
While I appreciate that she does not speak for the Government, I wish to express my alarm that anything other than a demand-led model is appropriate for solving a skills shortage. Such an approach would imply that Skills England is at risk of taking on the role of a central planner for skills—an approach that Governments long ago experimented with and which I hoped had been consigned to the dustbin of history.
I close by acknowledging the scale of the challenge facing the Government. Skills shortages arise in almost every advanced economy and there is a wide variety of tools by which government can contribute to meeting this unmet demand for skilled workers. My fear is that Skills England assumes, philosophically, that the state knows best. One need look only at the alarming number of skilled vacancies within the National Health Service and the startling paucity of specialist skills within the Civil Service to recognise that the Government are not best placed to fill skills shortages among those they directly employ, let alone those they do not.
IfATE may not be perfect, but it has gone a long way towards remedying many of the underlying problems. I urge the Minister to give careful thought to whether a governance arrangement that places so much discretion in the hands of civil servants is one that is likely to best meet the needs of our economy.
Baroness McGregor-Smith (Non-Afl)
My Lords, I congratulate the noble Lord, Lord Beamish, on his excellent maiden speech. I declare my interests as set out in the register in a number of businesses that would benefit from a strong economy.
My background is business and I am passionate about business and economic growth in the UK, but today it is a pleasure to speak to your Lordships in my capacity as chair of the Institute for Apprenticeships and Technical Education, known as IfATE. I recently met with the noble Baroness, Lady Smith of Malvern, in her role as Minister of Skills in the Department for Education, and we agreed that the progress and achievements made by IfATE offer firm foundations for Skills England to build on, and that they support the Government’s ambitions on growth and opportunity across our economy.
I am proud of all that IfATE has achieved. No arms-length body is perfect, but it has done some fantastic things to begin the reform of the skills system that is so desperately needed. The baton will now pass to Skills England, an organisation whose remit will be much broader and wider. What matters now is keeping employers’ voices at the heart of the skills system. This has been central to the successes that IfATE has had and should form part of Skills England’s DNA. Growth will be underpinned by employers getting the skills that they need.
I will take the opportunity to outline to this House some of the achievements that IfATE, and the thousands of employers who have worked with it, have had since 2017. Apprenticeships and technical qualifications in the UK are all now based on IfATE’s occupational standards, which have been created using expert input from employers across the economy, covering everything from nursing to aerospace engineering. These standards capture the essential knowledge, skills and behaviours that employers want within their businesses, increasingly including more and more technology and AI. They form a spine within our skills system, from which apprenticeships and technical qualifications can grow.
I am proud of the breadth and range of standards that we have, which demonstrates how employers from every sector have engaged in the development of the skills system. I am also proud of the recent prototype, the skills compass, which IfATE has been developing in collaboration with the Gatsby Charitable Foundation and Innovate UK. It will use labour market insights and AI to update rapidly these standards and capture changing skills needs. This is what we need in a responsive and flexible skills system.
IfATE has worked with employers to develop and approve over 700 apprenticeships, and 750,000 people participated in an apprenticeship in England last year. The estimated annual gain for employers from apprenticeships is between £2,500 and £18,000 per apprentice during their training, and many apprentices will remain loyal to their apprenticeship employers long-term. I am sure the many noble Lords who have met apprentices will know that they are so passionate and committed to what they do. I have been a big employer of them and am hugely proud of so many of their continuing achievements.
IfATE has set out occupational maps of career paths using apprenticeships and technical qualifications. They show everyone, from school leavers to employers, how you can progress in technical and professional careers. I am pleased to say that seven out of 10 of the mayoral combined authorities now use these maps and the back-office digital interface developed by IfATE to support their own careers guidance offerings. These maps are a real asset that can be transferred to Skills England as a result of this Bill.
IfATE has made great strides in working with employers to identify where existing occupations and apprenticeships can become greener, supporting sustainable growth and our net-zero targets for the UK. We have also supported the Government’s ambitions on T-levels. As we know, T-levels offer routes to professional careers, such as construction, nursing, agriculture and digital, with students able to progress to high-quality apprenticeships. They also offer an alternative route to university education, and 97% of T-level students who applied this year were offered a university place.
IfATE has approved over 230 technical qualifications at levels 4 and 5, providing a quality mark showing alignment to employer-led occupational standards, enabling learners to enter their chosen profession or progress to higher education. This is about expanding the opportunities that learners have to develop their careers and for businesses to get the high-quality skills that they need.
The list goes on. I wanted to share this picture to assure everyone that Skills England will inherit a skills system with the foundations in place. It still needs to be developed, but we are ready to realise the Government’s ambitions to reshape the economy and unlock growth. However, there is a lot more to do.
As well as translating the existing duties that IfATE has into powers for the Secretary of State, the Bill seeks to introduce flexibilities which will help to increase the pace at which we can deliver the skills that are needed by employers and learners. For example, the Bill sets out that groups of persons, currently in the form of employer groups known as trailblazers, may not always be required in the development of occupational standards and apprenticeships as is the case now. This provides the flexibility to make standards based on labour market data and information, and could avoid delays in revising and improving standards.
My view is that, while this flexibility is a sensible tool for the Secretary of State, we should still seek for the norm to be to combine this type of data-led insight with the views of groups of employers and other experts. This matters because it provides them with a direct stake and role in the shaping of the skills system. I would encourage the Secretary of State to make clear and publish her rationale for any exceptions where a group is not used in the development or updating of standards.
I also note that the Bill, in abolishing IfATE, removes the general duties that IfATE has with regard to the needs of learners and employers in exercising its functions. These are not replicated in the transfer of powers to the Secretary of State. I would welcome clarification from the Government on how they envisage Skills England will continue to ensure that those interests are considered under the system. In due course, strategic guidance to Skills England from the Secretary of State may be one helpful way of ensuring that these priorities are protected.
Before I finish, I want to thank my fellow IfATE board members, who represent many of the largest employers in the UK, and all the IfATE employees for all the outstanding work that has been done since 2017. I also thank Jennifer Coupland, the chief executive of IfATE, whom I really admire for her passion, expertise and leadership of the organisation.
In conclusion, I urge the Government not to lose momentum on the work that IfATE has done since 2017—there is too much at stake for everyone involved in the skills system—and to always keep the employer voice central to the development of apprenticeships, qualifications and flexible skills training. We should not forget that, as our workplaces are changed beyond recognition by further advances in technology and AI, we have to ensure that the entire country’s workforce still has the opportunity, under any new system, to constantly reskill.
Baroness Garden of Frognal (LD)
My Lords, this looks such an innocuous little Bill, but there is so much more to it than meets the eye. It is a precursor to the arrival of Skills England, which we all hope will bring together the myriad of agencies operating in FE and skills to ensure quality and accessible education and skills for 100% of the population, as the Association of Colleges so heartily wishes, along with all of us who really care about technical and vocational skills and the well-being of the further education sector.
However, the Bill does something that those of us on these Benches will always be wary of, as my noble friend Lord Addington has set out and other noble Lords have alluded to. It transfers powers from IfATE, a body made up of professional people who know and care about apprenticeships and vocational education, to the Secretary of State. It is a great pleasure to follow the noble Baroness, Lady McGregor-Smith, who has chaired the board of IfATE so successfully. I add my congratulations, too, to Jennifer Coupland, the chief executive, and the other key members who have shown knowledge of, and dedication to, the further education sector and work-based qualifications.
Alas, they are to be replaced by a here today, gone tomorrow Minister, almost certainly university-educated, with little direct knowledge of, and, sadly perhaps, even less interest in further education colleges and the work-related training and qualifications which they so brilliantly deliver. In a democracy, we should never aspire for unlimited power to be given to politicians. The Minister may argue that this is an interim stage, but it appears that Skills England, when it comes, will not have a statutory basis—as many other noble Lords have pointed out—and will be at the whim of the Secretary of State, who could fundamentally change it.
Skills England will legally be part of the Department for Education, so not as notionally independent as IfATE was. The Education and Skills Funding Agency is also an executive agency, and as such could be easily abolished without parliamentary debate. So what will happen to IfATE’s “employers first” approach to developing policy and qualifications, which could well be at risk if the Education Secretary of the day prescribes a different policy?
It was hoped that Skills England would be able to work across departments, have recourse to employers and be flexible enough to be responsive and approve standards to ensure that work-based qualifications were always employer-led. As I know from my days at City & Guilds, work-based qualifications have always been employer-led. This was by no means true at first with T-levels, which were always billed as different because they were employer-led. Will that be the case when it is set up?
As we have heard, the impact assessment states that there will be a drop in apprenticeship starts while functions are transferred from IfATE, which will disproportionately impact adult apprentices and disadvantaged learners and regions. What will the Government be doing to minimise this? We know that the numbers of young people starting apprenticeships are already disappointing. If these changes make the position worse, what steps will the Government take? What steps are being taken to ensure that apprenticeships under the growth and skills levy will be available to learners of all ages and at all levels, and how will the growth and skills levy do a better job than the apprenticeship levy?
Lifelong learning matters now more than ever. Can the Minister say what steps are being taken to incentivise flexible lifelong learning? What assessment has been made of the lifelong learning entitlement and its introduction from 2026? It is crucial to improving the UK’s economic growth. Supporting and encouraging adults to upskill and reskill will help with increasing productivity and filling skills shortages in growth areas of the economy. Flexible study is also essential in allowing people to fit their studies around busy work and family lives and in allowing people to access higher-level skills in the local area where they live, even if there is limited face-to-face provision. However, over the last 15 years, the number of adults aged 21 and over accessing higher-level skills courses has fallen dramatically. Policy and funding interventions are now long overdue for flexible higher education provision.
This little Bill could hide a very damaging move to overpowerful politicians overriding experts in the field. We shall monitor this with great care as this Bill and the Skills England Bill proceed. Of course, we all hope for the best, because this is a vital area, but we shall be watching carefully for the independence of Skills England if it really is to fulfil its ambition.
Lord Watson of Invergowrie (Lab)
My Lords, I offer my congratulations to my noble friend Lord Beamish on an excellent maiden speech. It is clear that he is going to be a real asset to your Lordships’ House.
It is probably not unfair to say that there have been few more uncontroversial Bills presented to your Lordships’ House than the one we are discussing this evening. That is not at all to denigrate this Bill, which is an important cog in the wheel that will power the development of the skills needed to drive the economy in the uncertain years ahead.
There is little that I want to say about the Bill itself, other than perhaps to ask my noble friend to say a little more about the additional powers being given to Ofqual around accrediting technical qualifications for the first time. The Secretary of State will have the power to ask Ofqual to do so, and it would be helpful to have some clarity as to when that power might be exercised. There is another issue that I want to raise, which I will speak to later.
Skills England is not mentioned in the Bill, but I follow other noble Lords in using this as a convenient means of welcoming the formation of a new body and considering what role it might play in a future likely to be dominated by AI. I envisage Skills England being key in developing a new post-16 skills strategy, co-ordinating engagement across government with key agencies and devolved bodies.
I must say that it is a pleasure to be on this side of the Chamber for a change when debating skills provision. Several noble Lords, not least the noble Baroness, Lady Barran, who is here today, were involved three years ago when the skills Bill was making its way through your Lordships’ House, demonstrating to the then Government that we felt their plans lacked the breadth and depth needed to address the shortfall in providing for training and skills development.
At that time, local skills improvement plans were identified as the means of achieving the spreading of opportunity more evenly across the regions. Many noble Lords, including some on the then Government Benches, submitted amendments to the skills Bill. They highlighted that, with a disproportionate role given to employers, existing structures were being ignored, such as metro mayors, combined authorities—many with democratic accountability for local skills and economic regeneration —local enterprise partnerships, trade unions, universities, FE colleges and training providers. All were originally excluded, and only university and training providers were eventually allowed a meaningful say. It is refreshing that the current Government appreciate the contribution to be made by a wide range of bodies and are willing to empower them to coproduce local plans in recognition of their unique feel for priorities and skills development in their areas.
I like the description given to Skills England by the Association of Colleges in its briefing to noble Lords for this debate. It describes it as a “new social partnership body” bringing together business, FE colleges, training providers and unions with national and local government to ensure we have the highly trained workforce needed to deliver the industrial strategy announced last month.
On the subject of FE colleges, if they are to be able to play their full role in delivering the Government’s missions and in helping to ensure that Skills England is a success, it is vital that the long-term underfunding of the sector compared to schools and higher education is addressed. With that in mind, I was one of a number of Labour peers who wrote recently to the Chancellor emphasising that point and asking that greater funding for the FE sector be a feature of the Budget.
Following the UK’s departure from the EU, skills shortages are a major problem. Indeed, one third of all job vacancies are due to the lack of people suitably skilled to fill them. That is an indictment, surely, of the previous Government’s record, and it is not acceptable simply to cite the pandemic or exiting the EU as reasons.
Skills England has not allowed the grass to grow beneath its feet. The organisation had been in existence for just two months when it published its first report. Its title, Driving growth and widening opportunities, is certainly relevant and it included an index, ranking the demand for each occupation across the UK labour market.
I studied economics, but I had never come across something called an SSVD—a skills shortage vacancy density. Worryingly, the report revealed that the sectors with the highest vacancy density are construction, information and communications, and manufacturing, with health and social work and education not far behind. All those sectors are pillars of any economy, essential in achieving the growth everyone is searching for.
That report noted that much of the UK economy is dependent on skills gained in higher education. Future job projections suggest that occupations requiring higher education are expected to see the most employment growth over the next decade. Addressing shortages in higher-level skills is therefore essential to achieving government missions to drive growth and widen opportunity, making universities critical delivery partners to Skills England. What role does the Minister envisage for universities in the development of Skills England?
Also critical to the effectiveness of Skills England will be the re-shaped growth and skills levy. I echo the point my noble friend Lord Blunkett made about the money that goes back to the Treasury from the existing apprenticeship levy. A means has to be found to use money that has not been spent in whatever the period is—currently two years—so that it stays within the training budget and is not just returned to the Treasury, where it will be spent on anything the Treasury deems then appropriate.
Since the introduction of the levy, there has been a steep decline in apprenticeship starts for young people and a shift in starts from the most deprived parts of England to London and the south-east, as well as a decline in starts in sectors where skills challenges are most acute. Added to that is a growth in management and leadership courses and a decline in starts for those from the most disadvantaged backgrounds. It is to be hoped that Skills England will address the effects of those trends by bringing greater transparency, especially in how the growth and skills levy is spent.
Apprenticeships are essential for ensuring that young people from a diverse range of backgrounds can access high-quality training. They can also tackle skills gaps, particularly in the public sector. Across the apprenticeships landscape, almost two thirds of those who started a degree apprenticeship in the health, public services and care sector in 2022-23 were aged 25 and over, including 93% on the social worker programme and a large number of those on the nursing programme. Apprenticeships must be available to learners of all ages and at all levels to enable them to upskill and reskill, which I know is the Government’s aim.
Open University students tend to be older compared to the rest of the sector, and that is a good example of flexible lifelong learning, which is crucial to improving economic growth. Can the Minister say what steps are being planned to incentivise flexible lifelong learning? Linked to that, of course, is the lifelong learning entitlement. Can she also reveal what assessment has been made of it and its introduction, we understand, from 2026?
I turn to my final issue today as the only Scot taking part in this debate. I have given notice to my noble friend that I would raise questions relating to the assumption that, as education and skills are devolved matters, the Bill applies only to England and Wales. However, as set out in Clause 10, that is not the case. That is because the remit and responsibilities of Skills England will feed into UK-wide policy and funding agendas, resulting in both direct and indirect implications for the post-16 skills landscape and higher education in Scotland.
Both the Skills England report to which I referred earlier and the Government’s industrial strategy are UK-wide in scope. Skills England is responsible for identifying where skill gaps exist and, as my noble friend said in her opening remarks, is expected to work with the Migration Advisory Committee to address them. The MAC is, of course, UK-wide in scope.
The same applies to the growth and skills levy. The apprenticeship levy is collected at UK level by HMRC, and Scotland receives a proportion via the Barnett funding formula. The Scottish Government then have discretion as to how the levy is distributed north of the border. Without going into detail, I will just say that they do it differently.
Can the Minister say what engagement the UK Government have had with the Scottish Government on the creation of Skills England? What mechanisms are the Government considering in order to ensure strong connectivity between Skills England and the Scottish Government—indeed, all the devolved Administrations —where the work of Skills England feeds into UK-wide agendas such as the industrial strategy and the recommendations of the Migration Advisory Committee?
Ensuring that the country has a sound base of the skills needed for the demands of a fast-evolving economy should not be seen as a cost. It is clearly an investment in the future and an essential part of driving economic growth. I welcome the establishment of Skills England as a decisive step in that direction.
Lord Ravensdale (CB)
My Lords, I declare my interests as a chief engineer working for AtkinsRéalis, the chair of Midlands Nuclear and president of the Sustainable Energy Association.
I deal with skills challenges on the ground every day. I work in business and my industry, the nuclear industry, is undergoing a significant period of growth. We currently have around 83,000 people in the sector but, to meet growing demand and replace people leaving, we need to fill around 40,000 new jobs by 2030. My business in Derby has some really specialised technical skills that are difficult to find on the market, which is acting as a brake on our ability to grow our business and contribute to the Government’s economic growth goals, as well as the national goals of clean power and the defence of the realm. For example, software engineers, electrical, control and instrumentation engineers, and process engineers are very difficult to find. The Minister will be aware of the Nuclear Skills Taskforce and the resulting nuclear strategic plan for skills, which are a great first step in meeting these opportunities.
In that vein, I welcome the intent of the Bill in taking a more integrated and joined-up approach to skills across the country, particularly in better considering regional needs. I will concentrate my remarks on how Skills England will work from a regional perspective.
First, local skills improvement plans—LSIPs—were set up as part of the previous Act, to which noble Lords have referred. I was grateful to the Minister for speaking at a recent Cross-Bench meeting where I raised this issue. Overall, LSIPs have been a welcome development in helping to set out plans to meet local skills needs and provide better join-up between local businesses and skills providers, but we have sometimes found limited join-up nationally. This can result in them being fairly generic or overlapping, in some cases. Can the Minister provide more detail on how Skills England will help set the strategic direction for LSIPs and other potential reforms to these plans?
Secondly, on regional partnerships, in the Midlands where I live, we are now blessed with two combined authorities. We have the East Midlands Combined County Authority and the West Midlands Combined Authority, but these cover only a relatively small part of the region. How will Skills England operate regionally and deliver for those areas not covered by combined authorities?
For me, part of the answer is in the regional partnerships—for example, the Midlands Engine and the northern powerhouse. I am currently chairing an energy security task force for the Midlands Engine that is all about how the region can seize the opportunity of the energy transition. One of our offers to the Government is to work right across the region to collaborate, test and scale a skills-hub approach to address the technical gap in the region’s clean energy and manufacturing sectors, intervening where the markets currently cannot. In fact, following a meeting earlier this year with the noble Baroness, Lady Barran, we are setting up a regional nuclear skills hub, which will start to reap some of those benefits. Such hubs could provide specialised training and school-level engagement, foster innovation, support workforce transition, and encourage collaboration between academia, industry and local communities, leveraging the region’s wealth of universities and colleges. I would be grateful if the Minister could say how Skills England might work at a broader regional level to ensure that the overall skills picture and demand is being considered.
Finally, following on from the remarks of the noble Lord, Lord Hampton, on better linking up schools’ under 16 education with regional opportunities, there is a real opportunity here for the Government, and that is something else that we in the Midlands region are considering carefully. There are lots of successful opportunities, such as the Science Summer School of the noble Lord, Lord Mawson, and Professor Brian Cox. In many regions across the UK, it is doing a great job of linking up schools with broader opportunities. As the noble Lord, Lord Beamish, said in his excellent maiden speech, this all feeds in to raising aspiration in many areas across the country and getting young people excited and enthused about contributing to the national goals that the Government are pushing. I very much look forward to working with the Minister and her team on this important Bill.
Lord Lucas (Con)
My Lords, I declare my interests in the Good Schools Guide and as a member of the council of City & Guilds.
It is good to see a skills Bill here so early on and being tackled with such impetus—it gives me great hope for what this Government might achieve—although I celebrate IfATE’s achievements and our own achievements, and I join the noble Baroness, Lady McGregor-Smith, and my noble friend Lord Effingham in what they have said about that. But this Government clearly think we must do better—a phrase I recognise from my school reports.
I hope that the Government will start by taking the advice of their own excellent Science Advisory Council and the Chief Scientific Adviser, Professor Viner, and establish from the outset of this change a set of metrics that will enable them to know how well they are doing and assemble the evidence of what works, understand where the gaps in that evidence are and what they are going to do about it, and fundamentally evaluate the process that they are setting out on, from the start, so that whatever happens we end up with a really good body of knowledge as to how to improve the skills system in this country.
I hope that the Government will work back through the conclusions they arrive at on skills in their schools policy. I have been gently disturbed recently by some of the cuts made in science spending in schools. I share with the noble Lord, Lord Hampton, the thought that there are some basic skills that we are not teaching in schools at the moment which are pretty fundamental to the subsequent skills agenda. At a time when we are reforming the Civil Service—the future fast stream will be 50% STEM rather than 10%, as it is at the moment—we need to look right back into our school system to see where these skills are going to be coming from. I hope too that the Government will take a critical look at our qualifications landscape. I like T-levels, but we need BTECs alongside them because we are not providing for anything but the brightest students if we insist on T-levels.
I hope we will look at university courses that say they are teaching skills. If you go back a few years, the Next Gen. report showed that 80% of the courses at universities which said that they were something to do with the computer games industry were rubbish and just using that in their titles as a way of seducing students. The same situation pertains. If you are looking—as doubtless many noble Lords have—to help your children choose a university course, the titles are there but there is no information as to what children go on to do afterwards. Is this a good course for getting into the industry that it says it is about? Is it actually teaching what those industries want? The information is not there. Given how much students are investing in their education, we really owe them better information on which to make those decisions.
At the other end of the scale, I hope the Government will pay attention to the developing world of micro- credentials. The idea that you can pick up someone, give them a relatively short bit of training and have them ready to go and be useful is the structure of training in a lot of industries—it certainly is in IT and a lot of the creative industries. We need to work out how to work with that. What IfATE has done to help bring the bigger qualifications up to speed more quickly is admirable, but the world is changing so fast—for instance, in artificial intelligence and cybersecurity—and we need to understand how to move at that pace and how to offer pastoral support to people whose careers start to be made up of an accumulation of bits and pieces that there happens to be a demand for at the time.
To pick up on what the noble Lord, Lord Ravensdale, said, I hope that we will see an emphasis on local skills, but somewhere in my town of Eastbourne there is a nuclear engineer, and that will never be picked up by a local skills policy. We need to understand the needs and talents of children and young people and not just the needs of the local industry, and make sure that we are offering the education that our children need, rather than just the education that their employers are after.
I turn to the abolition of IfATE. I very much support all that the noble Baroness, Lady McGregor-Smith, said about it. I saw the previous Government on several occasions do the exact opposite, but it is hugely important to preserve the network of relationships that has been built up by an institution which is being supplanted. It takes a long time for these personal relationships to subsist; they exist at not only the senior level but the junior level. Those relationships need to be preserved; you do not want to have to rebuild them from the base up. We also need to build a structure—which is not easy in the Civil Service—where such relationships can be maintained. We cannot have endlessly rotating civil servants responsible for maintaining long-term relationships with industry. A sense of career and institutional memory has to be built into this.
A last question for the Government is this: how does the Careers & Enterprise Company fit into this?
Baroness Wilcox of Newport (Lab)
My Lords, I am delighted to speak at the Second Reading of this Bill. It gives me the first opportunity to welcome my noble friend the Minister to her place. I should have had that opportunity last week, in Thursday’s Questions, but unfortunately illness prevented me attending the House. I thank my noble friend Lord Watson of Invergowrie for asking the Question on my behalf. I congratulate my noble friend Lord Beamish on an excellent maiden speech and an introduction to the open-air museum which brings the history of north-east England to life. I note that we have an excellent open-air museum in south Wales, St Fagans, and I highly recommend it to your Lordships.
I am sure that many noble Lords will be familiar, after my time spent in debates such as this, with the fact that education is at the heart of my lifetime’s experience: I served as a teacher for almost 35 years. I know that education is at the centre of Labour’s mission to spread and expand opportunity. From our earliest years through to learning or retraining as adults, gaining knowledge, skills, qualifications and exploring our interests and abilities, it enables us to build the lives that we want and the society that we wish to share.
Labour will track progress on its education mission through three stages of education. These are: to boost child development, with 500,000 more children hitting the early learning goals by 2030; to see a sustained rise in young people’s school outcomes; and to build young people’s life skills, with an expansion of high-quality education, employment and training routes so that more people than ever are on pathways.
The ONS, which is based in my home city of Newport, released updated data this summer. The percentage of all young people not in education, employment or training in April to June 2024 was estimated at 12.2%, up 0.9 percentage points on the year. It is clear evidence that over 14 years the former Tory Government did not develop the appropriate apprenticeships and skills pathways that allow youngsters to develop, coupled with an inability for adults to reskill and upskill throughout their lives. The result is that we have too few people with the skills we need for growth.
The former Government’s levy saw millions of pounds that should have been used for skills training going unspent, even as businesses reported growing skills shortages. Labour’s plans, giving businesses flexibility, would ensure that money could be best spent on a greater range of training courses, including basic English, maths and digital skills, so that businesses can fill those gaps and people can gain new skills. The Bill’s technical changes set out what is needed to begin to redress this serious imbalance in our opportunities for growth in the economy. The transfer of IfATE’s powers to the Secretary of State will enable closer integration of employer input with broader government strategies and policies.
Skills England has been tasked with driving forward a national ambition to meet the skills needs of the next decade. This will be driven by pushing power and decisions on skills spending out from Westminster to local communities, so that those communities can better match up skills training with their local business needs and grow local and regional economies. It will transform the skills system to make it truly world-leading. It will help to build a high-skill, high-productivity workforce that is matched to employers’ needs, and ensure that everyone, regardless of their background, can access the opportunities they need to thrive, and deliver change by bringing together formerly disparate functions into a single organisation, with a single feedback loop into government.
It will be an executive agency. It will be legally part of the Department for Education and will have a role in convening education providers, employers, unions and regional and national Governments, which is the sort of social partnership approach that sector bodies have been pushing for over many years. It also changes the overly prescriptive functions, and the DfE believes it can make the skills system more responsive. It is about speeding up the amendment or introduction of standards and assessment plans, bypassing what can be an arduous exercise of lengthy reviews involving employers, awarding organisations and multiple layers of officials. We cannot afford to continue to let overly complex bureaucracy stand in the way of growth and opportunity. I draw on my previous experience as a senior A-level examiner when developing new specifications. I remember the level of detail and delay that went into such changes. A minimal tweak could delay the introduction by a whole academic year.
People are ambitious for their futures. They want to learn new skills to get new jobs. We will reverse the trend of the past 14 years and give businesses the flexibility they need to train people up with new skills, from digital technologies to the green skills needed to tackle climate change. Understandably, there are always concerns in the sector when any changes are proposed, but the department has noted that any possible temporary disruptions affecting learners and apprenticeships during the transition would be limited and has promised to address the impact. From digital skills and green skills to childcare and social care—this Labour Government will harness the talents and abilities of the British people so that we can strengthen our economy and break down barriers to opportunity.
I was extremely pleased to read last month’s first report on Skills England and to note that Richard Pennycook, the interim chair, said that while it is called Skills England, the UK skills needs do not change or stop at Chepstow or Carlisle. Skills England intends to work closely with colleagues in the devolved nations to ensure that students and employers have a seamless experience across the UK. Indeed, the whole relationship between the UK Government and the Welsh Government, in terms of engagement, has been transformed in the last three months, notwithstanding the establishment and successful first meeting of the Council of the Nations and Regions just two weeks ago.
Let us harness the changes needed in the education system by changing those persistent skill mismatches. Let us change the high proportion of the working-age population who lack essential skills for work and redress the undersupply of highly technical training.
This Government will provide more training opportunities so that people can gain new skills, access better jobs and grow our economy. That is the difference we will make, and the technical changes in the Bill begin an important and necessary part of the journey.
Lord Storey (LD)
My Lords, I thank all the organisations that sent excellent briefings. I also congratulate the noble Lord, Lord Beamish, on his maiden speech. I was fascinated by his final comment about traditional skills, which we often forget. I know that Liverpool’s Anglican Cathedral is desperate for masons to repair the sandstone blocks. When I drive round Cumbria, I always wonder where we are going to get the skills to repair those dry walls.
The Minister kicked off this Second Reading by referring to harnessing opportunities for our young people. I thought we would all be agreeing with each other and was quite surprised that that was not the case. However, on reflection, we did in our own ways agree with each other, albeit from different angles. My noble friend Lord Addington talked about what to do when things go wrong and how to make sure that they are put right. The buck will stop with the department that takes all these powers.
The noble Lord, Lord Aberdare, referred to things being rather cosy, with Skills England, the director-general and the Civil Service, which does not have any public profile and operates behind closed doors. Where is the grit in this figurative oyster? That was also picked up by the noble Baroness, Lady Evans. The right reverend Prelate the Bishop of Leeds talked about apprenticeship levies and how it was difficult to navigate around them. I shall come back to that in a moment.
The noble Lord, Lord Blunkett, was very sure that Skills England needed the independence, the force and the fundamental clout to make things happen, although there are two powerful Ministers in charge of delivery—a Minister in this House and a Secretary of State.
I am always fascinated when the noble Lord, Lord Hampton, talks, with his knowledge of state education. He went off-script a little bit and rightly asked where we were going to get these 1,000 new teachers from. My mantra has always been that one thing that is holding back the creative industries has been the wretched EBacc. We were promised that T-levels would be a practical opportunity for some young people, and perhaps they are too technical.
I, too, pay tribute to the noble Baroness, Lady McGregor-Smith. Perhaps the title IfATE, given what its fate was to be, was a bit ironic. She talked about apprentices being passionate about what they do, but foundations are being put in place there that are going to be hugely important to the future and where we go.
My noble friend Lady Garden was, as usual, in her own inimitable style, very direct. She talked about the potential power of Ministers in this regard, and rightly raised the issue of lifelong learning, which matters now more than ever, and what will happen to lifelong learning entitlements.
The noble Lord, Lord Watson, started off by saying that, like me, he thought this was one of those few uncontroversial Bills, and like me he was quite surprised by the tenor of some of the comments made. I thank the noble Lord for raising the issue of Scotland and Wales. I scratched my head about that and thought, “Is this yet again a purely English thing?” But I did not know about Clause 10 of the Bill—so I thank him for raising that.
The noble Lord, Lord Ravensdale, talked about the jobs that we need. Not just in his sector but in all sorts of sectors across the UK, there is a huge skills shortage and jobs shortage. He wanted to know how Skills England would operate at a regional level.
I was absolutely fascinated by the point that the noble Lord, Lord Lucas, made that the Government need to set up metrics for how well we are doing so that we can evaluate progress. I want to come to that at the end of my contribution. I hope that, if they do that, that metrics or evaluation will be published on a regular basis.
As a nation, we develop and prosper by nurturing, educating and training our young people. We have been very successful at developing those young people of an academic disposition but less so for those young people who want or need to follow a vocational route. At a time when we need people with particular skills and have skill gaps in many industries and businesses, we seem constantly to wrestle with the problem, slow in identifying the skills needed and even slower in providing the training and opportunities for those skills.
I am still scarred by Objective 1 in Merseyside in the 1970s. Merseyside was one of the poorest regions in Europe, measured by its GDP, and as a result it received literally millions of pounds from the EU. But in terms of training, Objective 1 money was spent on hairdressing and beauty courses. Why? Because those courses could easily attract and enrol students and give a much-needed income stream to the FE college. The college that needed the revenue did not have the financial security to develop courses that would provide the skills for the developing industries. That is, I hope, a lesson that we have now learned. I relate that historic situation because it shows that FE needs to have resources, finance and flexibility to provide skills not just for today but also for tomorrow.
We are probably not aware of the skills that are required for the future. We were not aware of AI five or 10 years ago. We probably thought that it was a Geordie expression, “Wey aye, man”. That did not go down well—I shall refrain from doing jokes; it is not my forte. We are not opposed to the Bill, but we have concerns and we would like reassurances. We also have ambitions that could be picked up by this Bill.
Currently the institute is responsible for bringing employers together to develop the apprenticeship standard and what apprentices need to learn—in short, the apprenticeship plan. They are good at this and the employer input is very important to ensure that consistency in training, assessment and outcomes. I ask the Minister: who will set the apprenticeship standard and who will regulate assessment plans developed by awarding bodies?
We need to avoid inconsistencies of outcome. We need to be reassured that Skills England develops a partnership with business skills bodies to secure that quality and consistency of apprenticeships and that there is a partnership involving employees, giving industry skills bodies a formal role in the skills system, to set standards and assessment requirements.
We were getting to the position of seeing the regions working with FE, understanding the needs of industry and understanding SMEs. We have to be sure that the new arrangements do not lead to unintended consequences and that the progress and working relationships that are beginning to be successful are not lost.
The Government need to invest in skills and training. Any business will tell you that the apprenticeship levy does not work. They often cannot get the funding they need to train staff and the ridiculous situation whereby hundreds of millions of pounds of training funding goes back to the Treasury at the end of the year if it is not spent is absolutely crazy.
We also believe that the lower minimum wage for apprentices should be scrapped and that they should be paid the same minimum wage as those other employees of their age. Apprenticeships are critical for social mobility and ensuring that people from a diverse range of backgrounds can access high-quality training. They can tackle skills gaps and help learners of all ages to upskill and reskill. The Open University, interestingly, carried out a survey that found that 72% of apprentices received a pay rise on completion, and 71% gained promotion.
When the apprenticeship scheme was conceived— I think it was by the coalition Government—it was aimed very much at 16 to 18 year-olds. But, over the years, the number of 16 to 18 year-old apprentices dropped dramatically, and they are often the ones in the most vulnerable situations. I hope that the new Government will try to ensure that there are plenty of opportunities for that age group.
To go back to the noble Lord, Lord Hampton, at the end of his contribution he made the point that if the Government got this right and delivered what they said, it could be one of the major successes of this Government, which will be lauded for generations to come. We want this to be successful. We are not here hoping that this will not work, we want it to be successful and, never mind turning around the health service, it would be absolutely amazing if they could turn around the skills sector and the skills shortages. It would be something that would be remembered for years to come.
Baroness Barran (Con)
My Lords, as I rise to speak at Second Reading, I say first how much I enjoyed the maiden speech of the noble Lord, Lord Beamish. I look forward to the insights he will bring to your Lordships’ House.
The goal of improving our skills system and meeting skills gaps is not a new one. Indeed, today, as my noble friend Lady Finn said, it is an international one. Under successive Governments, we have seen work to simplify the system, achieve parity of esteem with academic qualifications, place employers at the heart of the system and improve the quality of skills-based qualifications. In their manifesto, His Majesty’s Government committed to establishing a new body, Skills England, to deliver their skills strategy, but unfortunately this Bill merely abolishes the Institute for Apprenticeships and Technical Education and transfers its functions to the Secretary of State; in effect, absorbing them into the Department for Education. We have no details on the plans for Skills England itself, nor on how the Government’s proposed changes to the funding of skills-based qualifications will work in practice.
On these Benches, we have three main concerns. First, we do not believe that the proposed machinery of government changes are likely to make the difference that the Government hope they will. In the last 50 years, there have been no fewer than 12 skills agencies, or 13 including Skills England. If the creation of a new body was alone enough to address our challenges in this area, surely one of the earlier iterations would have been the answer. Secondly, as we have heard across the House, we believe that the powers of the Secretary of State created by this Bill are too wide-ranging, have little accountability and will risk directly damaging the status of these qualifications. Thirdly, we have real concerns that these changes will lead to harmful delays in addressing some of the most important strategic issues in skills development that the Government face and have set out.
Given that all noble Lords want the most effective approach to developing our skills system, it is important to recognise the achievements of the last Government and the key challenges that remain so that the new Government benefit from the institutional memory of this House and avoid repeating any past mistakes. The last Government delivered on a major simplification of the system in relation to T-levels, higher technical qualifications and apprenticeship standards. We raised the value of skills-based qualifications in the minds of students and employers, particularly in relation to apprenticeships, which we put on a statutory footing for the first time.
The noble Baroness, Lady McGregor-Smith, spoke eloquently about the importance and effectiveness of putting employers at the heart of the system, which IfATE brought as well as the creation of local skills improvement plans, which linked employers and providers for the first time. We improved the quality of qualifications across the board, including for the missing middle which your Lordships have referred to, and we laid the foundations for lifelong learning through the skills Act and the lifelong learning Act of 2023 so that options for training and retraining were available at every stage of a person’s career. I hope the Minister will confirm that the Government will not discard the progress of the past 14 years but build on it and focus on the key challenges of the future.
If we look at the challenges of improving our skills system, I am genuinely baffled as to why one would start by creating a new agency within the DfE and abolish IfATE. I am not sure how this helps build demand for newer and less well-established qualifications such as T-levels and HTQs. I am not sure how it addresses the workforce pressures in further education or the decline in investment in training by employers or how it will help the Government realise the potential of the lifelong learning Act. How does it quickly set out the plans for the new growth and skills levy which the Government promised in their manifesto, so that we avoid a hiatus in skills development and investment, as alluded to in their impact assessment? Can the Minister explain why the Government could not have achieved their goals of co-ordination with the industrial strategy council and the Migration Advisory Committee through IfATE rather than placing Skills England within the DfE, with all the time, cost and reorganisation that would have avoided?
If we had a blank sheet of paper—in the words of the noble Lord, Lord Hampton, perhaps a sheet of paper that was nimble, agile and other good adjectives—and had to choose between an independent, employer-led body and an internal team within a government department to create the best skills system, I am pretty sure that most people would naturally assume that the former would be more effective. It would help if the Minister could give the House examples of where such centralisation of power has actually delivered on the Government’s aspirations.
We are also really concerned about the powers of the Secretary of State and expect to come back to these in Committee. In the King’s Speech, the Government committed to creating a new body, Skills England, but as noble Lords have noted, the Bill does not do that. Far from simply replacing the institute, the Bill abolishes it, leaving the Secretary of State in control. We now understand that Skills England will not be on a statutory footing and therefore will unquestionably be less independent than IfATE.
The Bill gives the Secretary of State sweeping powers to prepare apprenticeship standards and plans, either personally or by commissioning others. Clauses 4 and 5 make it possible for the Secretary of State to bypass industry groups and employers entirely. In her opening speech, the Minister helpfully set out some examples to reassure the House about some of the limitations on how those powers might be used, but can she explain what the barrier is to putting them in the Bill if the Government are clear on what those limits are?
Secondly, we should be concerned about the potential impact on the quality of technical qualifications. Clause 6 removes the requirement for reviews of technical education qualifications, standards and apprenticeship assessment plans to be published at regular intervals. What will the arrangements be to do this in future, and why has the duty to publish been removed? This flexibility is supposedly to align qualifications with employers’ needs, but we know that without rigorous and independent oversight, standards can slip. Can the Minister tell the House how she plans to ensure that we have standards that are recognisable and high, without that regular independent review?
There is the further risk of dilution of quality via Clause 7, which removes the requirement to have a third-party examination of a standard or apprenticeship assessment plan before approval, leaving the power for the Secretary of State to appoint one if she sees fit. What should we expect from this? How often does the Minister expect this power to be used and under what circumstances? It would also help if the Minister could clarify under what circumstances the Secretary of State would use her powers set out in Clause 8 in relation to Ofqual.
Clause 9 is also of concern, as my noble friend Lady Evans of Bowes Park pointed out, quoting the Attorney-General. Through regulation made by statutory instrument, it allows for the Secretary of State to make provision that is consequential on other provisions in the Bill. This is a very broad Henry VIII power, applying to existing and future legislation passed in this Parliament. I would be grateful if the Minister could give an example of how Clause 9 would be used. Perhaps she could commit to listing the existing legislation where Clause 9 will apply.
The assumption of power by the Secretary of State reverses the reforms of the Enterprise Act 2016 and risks severely eroding the parity of esteem between academic and technical qualifications. Imagine the outcry if A-level standards were directly controlled by the Education Secretary—I hope your Lordships see the point I am making. Yet the Bill gives ministerial control over all technical qualifications, which risks undermining their credibility and status.
Leaving the specifics of the Bill, we are genuinely concerned that Skills England will not achieve its goals. The Government are actually creating not one but three new bodies with an interest in skills: Skills England in the DfE, the Labour Market Advisory Board in the DWP and the new Industrial Strategy Advisory Council. How will these three—or four, if we include the Migration Advisory Committee—potentially competing bodies work together?
This approach raises so many questions. Can the Minister reassure the House about the level of seniority the head of Skills England will have? How will Skills England, sitting in a corner of Sanctuary Buildings, have the authority to influence other government departments? How will it work with the devolved Administrations and the mayoral combined authorities? How will it interact with the Office for Students? It is of great concern and regret that the objectives and limits of the new body are not clearly set out in statute, and we will seek to gain as much clarity as possible on these points during the passage of the Bill. I ask the Minister again: where is the evidence that such an approach has ever worked in this country before and will be successful now?
My belief is that, if His Majesty’s Government were serious about progressing quickly with the urgent strategic issues around skills reform, they would build on the success of IfATE, rather than dismantling it. The real risks here are, first, that the Government will unwittingly create confusion, lower standards and erode trust in technical qualifications; and, secondly, that the time and cost involved in creating yet another overcentralised agency in the DfE delays addressing the big opportunities and challenges that need to be grasped in this area and leaves us with an unwieldy, unaccountable and ineffective approach.
The Bill threatens to undo much of the progress made under successive Conservative Governments in building a world-class apprenticeship and technical education system. I have no doubt that the Minister wants the best for our skills system and those who learn and work in it, but I have grave doubts that this Bill will deliver the system that the country needs and that she wants. I hope very much that the Minister will listen to these concerns and act to address them when the Bill reaches Committee.
Baroness Smith of Malvern (Lab)
My Lords, I thank noble Lords for their contributions and acknowledge the many passionate and informed speeches that we have heard and the expert knowledge that this Chamber has brought to the debate.
I particularly welcome and give a special mention to the maiden speech of my noble friend Lord Beamish. He and I served together in the other place. I remember the breakfast meetings that he used to have in the tea room—particularly when I was Chief Whip, because no Chief Whip likes to know that there is plotting going on in the tea room. My noble friend was a steadfast colleague and a strong supporter of the Government. As he outlined in his maiden speech, he used his real enthusiasm to challenge the Government on issues relating to defence and to protect those affected by the Post Office scandal. Based on his maiden speech and what I know about his history, I know that he will certainly play a very important role in this House, and I am very pleased to welcome him.
The Government’s first mission is to grow the economy. To succeed, we need to harness the talents of our people. A skills system fit for the future can enable people to learn the skills that they need to seize opportunity and businesses to access the skills in the workforce that they need to grow. I join the noble Earl, Lord Effingham, in celebrating both those who are taking part in apprenticeships and those who are delivering them. There is excellent work going on across the country, which I often have the opportunity to celebrate, where providers and employers are providing a splendid apprenticeship opportunity.
The noble Earl asked me, as did the noble Baroness, Lady Barran, to celebrate the last Government, but I have to point out that apprenticeship starts peaked in 2015-16 at 509,360 and in the most recent year were at only 337,140—in other words, a 34% reduction on the levels seen in 2015-16—so I do not think it is enough for us simply to rest on what the previous Government have done. In fact, we need a fundamental change in our skills system if we are going to ensure the potential of our people and our economy.
On the specifics of the debate, I will start with the number of contributors who have asked questions about how we maintain an employer-led approach to the skills system. The noble Baroness, Lady Finn, the noble Earl, Lord Effingham, and the noble Lord, Lord Storey, asked questions about that. I reassure noble Lords that employers will continue to play a central role in the design and delivery of apprenticeships and technical education. Indeed, it is crucial that apprenticeships and technical qualifications reflect the needs of employers and that employers have confidence in them. That is why, through Skills England, we will ensure that there is a comprehensive suite of apprenticeships, training and technical qualifications for individuals and employers to access, all of which will be informed by what employers and other partners tell us that they need.
The default will be that employers will set standards and assessment plans—I hope that responds to the point made by the noble Lord, Lord Storey. It is not the case that this legislation enables the Secretary of State to rewrite a standard on a train, even if she were to have the time to do that. Employers remain fundamental. In fact, regarding standards and assessment plans, the legislation states that the Secretary of State will be able to prepare these only where she is satisfied that it would be more appropriate than using a group of persons. Each time the Secretary of State does this, she will need to make such a consideration and she will not be able to proceed without doing so. That approach will be taken in only a minority of circumstances where there is a clear rationale for doing so, some of which I outlined in my opening speech and all of which I will be very happy to go into more detail on in Committee. I think the important point was made by my noble friend Lady Wilcox, who, using her experience, identified some very good examples of the need for flexibility in the system, as was also recognised by others in the debate.
My noble friend Lord Watson asked about the Ofqual amendment. This amendment will ensure that, should the Secretary of State wish to in the future, she could grant an exception so that Ofqual can consider whether it is appropriate to accredit certain types of technical education qualifications. It will therefore reintroduce in a managed way the potential for Ofqual to exercise its accreditation power for technical education qualifications. Where the Secretary of State deems it necessary to maximise the quality of and confidence in technical education qualifications, it will become possible for the full suite of regulatory options to be applied to them, helping to put them on an even footing with other academic and vocational qualifications.
On the specific point about Clause 9 raised by the noble Baronesses, Lady Barran and Lady Finn, these are not sweeping powers. This is not an undermining of the correct exhortations made by the Attorney-General on the use of delegated powers. Clause 9, in introducing Schedules 2 and 3, details the primary legislation that we are amending simply to remove references to IfATE as a result of its abolition. We have attempted to identify all the primary legislation that will need to be amended as a result of the Bill and the Henry VIII power that is included in the Bill exists solely in case we uncover any other Acts in need of consequential amendment after the passage of the Bill, so there is no way that this could be called a sweeping use of delegated powers.
To return to the nature of Skills England, at its heart will be the role of employers, alongside an important partnership to ensure that we are developing the most effective skills system. The noble Earl, Lord Effingham, questioned whether trade unions should play an important role in that, but my noble friend Lord Blunkett rightly identified the enormously important contribution that trade unions have made to the development of skills for their members, citing in particular the important work done by the Union Learning Fund. We make no apology for including trade unions in our work to improve the jobs and skills that their members will get. It is also a feature of high-performing systems across the world that trade unions are involved.
My noble friend Lord Watson talked about the role of higher education. We certainly believe that it has a very important role to play in this partnership with Skills England.
The noble Lord, Lord Ravensdale, talked about regional flexibility and the excellent work that he identified. Skills England will collaborate with combined authorities as well as with equivalent bodies in places which have devolution deals but where there is no combined authority present, and it will also work with a wide range of regional organisations as well as other local and regional partners, such as employer representative bodies. It will support them to construct skills systems which reflect and feed into both local and national priorities. That is the partnership that Skills England will bring together to deliver the impact we need to see in our skills system.
I turn to the charge made by several speakers in the debate that, somehow or another, as an executive agency Skills England will not have the independence or, frankly, the oomph that it will need. That is wholly wrong. As an executive agency, Skills England will have operational independence from the department. A permanent chair and board members will be recruited to oversee Skills England. I am glad that my noble friend Lord Blunkett recognised the status, experience and impact that the current chair, Richard Pennycook, is already having in this role, and I can tell noble Lords that we have had several hundreds of applicants for the board of Skills England—clearly, people understand the significance of that role and the impact that it will have.
I am sure that the noble Baroness, Lady Garden, did not mean to suggest that I was a “here today, gone tomorrow” politician with no clue about what I was doing, despite the fact that that is what she said.
Baroness Garden of Frognal (LD)
I assure the Minister that it was not personal.
Baroness Smith of Malvern (Lab)
Okay. I do not note any other Ministers in the Chamber—but anyway, in that case I will not take it personally.
The important point here is that, once in place, it will not be Ministers who decide the day-to-day activity of Skills England; the board will provide scrutiny that Skills England is operating effectively within the agreed framework and will provide assurance functions as well as leadership and direction.
However, while operationally independent, it is critical that Skills England, for many of the arguments made in the debate, has sufficient proximity to government to directly influence and inform policy decisions, as many have argued for. This will allow Skills England to use its insights to influence skills policies and funding decisions. It is important that they are retained by the Secretary of State, but Skills England will have a crucial role in informing them.
For further reassurance, I say that we do anticipate the relationship between the Department for Education and Skills England will be set out in a publicly available format and updated periodically. I expect us to talk about this more in Committee. People have argued that we know little about Skills England and its functions —the noble Baronesses, Lady Evans and Lady Barran, for example—but having been set up only in July, Skills England has already produced a report which, as others have mentioned, outlines its functions and ways of working. That is how we expect Skills England to operate in the future.
I thank the noble Baroness, Lady McGregor-Smith, for the excellent work she has done in leading IfATE. I echo her thanks to the board and the chief executive for that work. In talking about how employers will remain at the heart of Skills England, I hope to learn from the way in which IfATE has done that. However, bringing the functions currently held by IfATE into Skills England is essential to address complexity and fragmentation in the skills system. The majority of IfATE’s functions will be transferred to the Secretary of State but will be exercised by Skills England unchanged, so we will be able to ensure continuity of skills delivery through the transition process. My officials are working very closely on this with IfATE’s senior leadership team. The noble Baroness, Lady McGregor-Smith, has been very clear about this, as she was when we met. She has been very engaged in ensuring that there is a transition plan which will ensure minimal disruption to learners, employers, providers and IfATE staff, and which will safeguard the good elements of the work that IfATE has already done, which she outlined.
It is absolutely not our intention to allow the transfer to cause a delay or drop in apprenticeship numbers. We will mitigate the risk of that through the transition plan I have talked about. On the point raised by the right reverend Prelate the Bishop of Leeds, any approvals by IfATE will transition and will not have to be redone as a result of this legislation. These decisions will continue to stand until such time as the occupational standard, apprenticeship or technical qualification in question is reviewed under successor arrangements and a new decision is taken.
The noble Lord, Lord Aberdare, also raised points about the sharing and transferring of IfATE’s functions. We have been clear that we expect the functions of Skills England to include broad continuation of the core work IfATE does with employers. I will be very happy to talk more about that in Committee. My noble friend Lord Watson asked about the engagement between Skills England and Scotland on UK-wide organisations such as the Migration Advisory Committee and the Industrial Strategy Council. We have had close collaboration with devolved Governments, as was recognised by my noble friend Lady Wilcox. This is critical to ensuring that there is an effective skill system regardless of where in the UK you live, work and train. We have had regular meetings with senior officials from all four nations to share best practice and approaches and their long-term strategic goals. These relationships will be important to Skills England’s success, as has already been set out by Richard Pennycook in his role as the chair.
My noble friend Lord Layard and the right reverend Prelate the Bishop of Leeds rightly talked about the significance of young people and how we can ensure that we improve our skills system for them. This is where our commitment to developing a youth guarantee is very significant, and my noble friend Lord Layard once again made his strong call for the apprenticeship guarantee, which I have discussed with him on numerous occasions. He is pushing us further as a Government than we are able to go at this time, but he continues to make a strong case and I will continue to listen to him.
However, we have of course already started to think about how we reform the apprenticeship system to ensure it better serves young people, who have particularly seen the numbers of apprenticeships fall off. That is why we recently announced that we would develop foundation apprenticeships to provide a route into apprenticeships for young people who have not been able to benefit from apprenticeships up to this point.
We have also heard calls with respect to the growth and skills levy. Our reformed growth and skills levy will deliver greater flexibility for learners and employers, including through shorter duration and foundation apprenticeships in targeted sectors. We will want Skills England and the employers it engages with to have a crucial role in determining how that skills levy is spent. I also recognise the significance of the role of further education, as outlined by my noble friend Lord Watson and others in the discussion, and I can assure him that we will continue to do more than perhaps has been the case for FE previously to raise the status and significance of that sector, because it is so important for young people. We will include more about our overall role in the post-16 strategy, which we are currently working on.
The role of schools is really important, as my noble friend Lady Wilcox and the noble Lords, Lord Aberdare, Lord Hampton and Lord Lucas, outlined. I can assure noble Lords that the curriculum and assessment review will look at the significance of digital skills, creativity and how enterprise can be developed in our schools.
If we are to meet the skills gaps that persist in our economy, we must address the fragmentation in our skills system. To respond to the challenge of the noble Baroness, Lady Barran, I do not believe we can do that by simply building on IfATE. We need, with Skills England, to make sure that we do more than the excellent work that IfATE has done. We have to make and maintain an authoritative assessment of national and regional skills needs in the economy, now and in the future, combining the best possible insights from employers and other key stakeholders.
This legislation will enable Skills England to build on IfATE’s work but will also enable us to build that broader partnership and assessment that will help us to transform our skills system. This Bill is an important milestone in the delivery of the Government’s manifesto commitment to establish Skills England. I look forward to further discussion through the passage of this legislation.
Baroness Smith of Malvern
That the bill be committed to a Grand Committee, and that it be an instruction to the Grand Committee that the bill be considered in the following order: Clause 1, Schedule 1, Clause 2, Schedule 2, Clause 3, Schedule 3, Clauses 4 to 13, Title.
Institute for Apprenticeships and Technical Education (Transfer of Functions etc) Bill [HL]
Thursday 21st November 2024
(4 months ago)
Grand CommitteeInstitute for Apprenticeships and Technical Education (Transfer of Functions etc) Bill [HL] 2024-26 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 38-I(a) Amendments for Grand Committee (Supplementary to the Marshalled list) - (21 Nov 2024)
Baroness Barran (Con)
My Lords, I shall also probe whether Clauses 2 and 3 and Schedules 1 to 3 should stand part of the Bill.
At Second Reading, we heard about the importance of skills development to boost economic growth, the gaps that employers face in finding the skills they need to fill vacancies, the continuing complexity of the skills landscape, and the ambition of the Government to meet these challenges. At this point, I thank particularly the Learning and Work Institute and the Association of Colleges for their advice and their perspectives on the Bill. On these Benches, while we accept that the Government have a real commitment to address these issues, we also believe that they need to give Parliament and employers much greater clarity on their plans. The Bill is clear in the door that it closes—the abolition of IfATE—but is silent on the door it opens; that is, Skills England and its powers and accountability. We are left with an interregnum, with the Secretary of State holding all the powers of IfATE and a few more for good measure.
I will try also to explain the logic of my Amendments 32 and 33. Ideally, we would have liked to be debating a much clearer, more detailed Bill and have all the answers to the concerns expressed across the House at Second Reading. I note that in her closing remarks at Second Reading, the Minister committed to setting out the relationship between the Department for Education and Skills England in a publicly available format which will be updated periodically. Even the phrase “updated periodically” begs questions about the clarity and stability of roles and accountability. No doubt the Minister will give us further details on this today.
My amendments suggest solutions on a sliding scale. At one end, we are proposing to stick with the status quo through the stand part notices for Clauses 1 to 3 and the associated schedules; from there, to different degrees of independence and accountability for a new body called Skills England; to, finally, although not in this group of amendments, accepting the Government’s proposals, but with a clear and rigorous reporting requirement to Parliament. At this stage, these are probing amendments.
As we heard at Second Reading, there are genuine concerns about the transfer of IfATE’s powers to the Secretary of State, in terms of compromising the independence with which apprenticeships and wider technical qualifications, including T-levels, are accredited, and in diluting the voice of employers. These concerns are only amplified by later clauses which extend the powers of the Secretary of State beyond those of IfATE to prepare standards without employer input, and remove requirements for regular reviews of technical qualifications and third-party examination of standards. We will, of course, debate these points later in Committee.
The proposed creation of Skills England as an executive agency within the Department for Education, rather than as an independent statutory body, although not part of the Bill, has raised questions about both its autonomy and its effectiveness. More broadly, our stand part notices seek to elicit from the Minister explanations on the following points.
First, why does the Minister believe that this organisational change will be any more effective than the previous 12 changes in the past 50 years?
Secondly, the impact assessment set out that the Government had considered both keeping IfATE as an organisation separate from Skills England and expanding its powers to take on Skills England’s full set of powers. My Amendment 32 attempts to reintroduce this as an option for the Government to consider. It would create an executive agency of the department, which would be called Skills England, and would focus on wider skills strategy, as well as keeping IfATE as an independent body for the accreditation of technical education qualifications and for its other responsibilities.
That amendment has a lot in common with Amendment 21 in the names of the noble Lord, Lord Storey, and the noble Baroness, Lady Garden of Frognal, although Amendment 21 would not retain IfATE, as mine would. One can make the case that it is more coherent to have everything in one place, but one can also argue that Skills England has a huge brief and should focus on some of the more urgent priorities, leaving IfATE to continue its good work in setting up clear lines of communication.
It is hard to avoid the conclusions that the Government are knowingly diluting the voices of employers; that they want to have as much control as possible over these qualifications in future; and, importantly, that they are seeking to reorganise the structures to deliver skills reforms rather than getting on with “doing the doing”, which is much needed on the ground. The impact assessment sets out briefly the advantages of the Government’s chosen approach but says almost nothing about the drawbacks of losing an independent, employer-led organisation that the Government acknowledge does an excellent job. It would be most helpful if the Minister could explain in more detail the barriers to doing this and how His Majesty’s Government evaluated the shortcomings of this approach.
Moving along the sliding scale, I turn to Amendment 33, which aims to commit the Government to introducing a draft Bill that would create an independent arm’s-length body, to be called Skills England. I note that organisations such as the St Martin’s Group, which represents employers, training providers and awarding organisations, have been clear in their briefings that it is
“crucial that Skills England’s independence needs to be exerted in statute”.
Given the independence that this would create from the department, we have assumed that IfATE would no longer need to exist. I hope very much that this is something to which the Minister can respond positively.
In my Amendments 32 and 33, we stipulate that the chief executive of Skills England must report to the board of Skills England. It seems extraordinary to have to make this point but noble Lords may have noticed that the job description for the CEO of Skills England made no reference to the board; rather, they report to the relevant director-general in the department. Given the emphasis that the Minister put at Second Reading on the strength and operational independence of the Skills England board and its members, it seems a major drawback that the chief executive of the organisation, on whose board they sit, does not report to it. Could the Minister undertake to reconsider this?
Finally, I turn to my Amendment 42, which I tabled, as the French might say, “pour encourager”. I am hopeful that the Minister will take my other amendment seriously as a way of actively demonstrating her commitment to the independence of Skills England but, failing that, this amendment seeks to sunset this legislation and give the Government time to come back with a Bill that addresses the concerns that we heard at Second Reading—and that we will no doubt hear more of in Committee. I beg to move.
Baroness Garden of Frognal (LD)
My Lords, I consider myself encouragée. We on these Benches have some sympathy with these wrecking amendments. We have never supported taking decision-making out of the hands of experts and into the hands of a Secretary of State, whoever he or she may be and however informed and enthusiastic he or she may be about colleges, further education, and technical and vocational qualifications. As I said at Second Reading—I do not apologise for repeating it—politicians are almost always university-educated and may have little understanding of or enthusiasm for the world of skills. I exempt our Minister from this because I know that she cares but, of course, there is no guarantee that she will not be replaced—not for some time, I hope—by a “here today, gone tomorrow” Minister with no knowledge of this sector. These posts do not last, as we all know.
I speak with some knowledge. In the coalition Government, I was appointed Minister for the Olympics and Sport, having never had any interest in sport in my life. At school, I was a fat little bespectacled nerd who was always chosen last for any team. But, given the portfolio, I spent days and weeks of my life learning all there was to know about rugby league—thanks to my noble friend Lord Addington—cricket, hockey and other unmentionables in order to give educated answers to questions. But that is not the same as having a lifelong enthusiasm, and, because Ministers have almost always been educated—surprisingly enough—and can display an astonishing academic superiority, they may look down on practical achievement, as I discovered when I worked in Michael Gove’s team.
We are disappointed, as we always thought of Labour as a party supportive of education in all its guises, yet it has brought forward the damaging VAT on independent schools Bill, which would make us the first country in the world, I believe, to tax education—shame on them—and now this damaging Bill to attack practical education. It is a sad day indeed. We are also bemused that this apparently is the skills Bill, yet there is no mention of skills in it. It might as well have been the flying fish Bill because there is no mention of flying fish either. Some of the amendments in this group try to remedy this, including Amendments 32 and 33 in the name of the noble Baroness, Lady Barran, which we broadly support.
I will speak to Amendment 21 in this group in the name of my noble friend Lord Storey, who much regrets that he cannot be here today, to which I added my name. We are spelling out what is missing from the Bill—namely, the establishment of a new executive agency to be called Skills England. Our amendment sets out the conditions for Skills England to be established and the need for both Houses to agree proposals. Other, linked amendments have been regrouped for some reason—I had some work today to try to work out where the groupings have changed since yesterday; I am not quite sure why they were—but we still have the amendment in the name of the noble Baroness, Lady Barran, which seeks to keep some of the duties of IfATE alongside the new body. As IfATE contains many real experts and champions, we feel this is a sensible move and we support it.
We have very strong objections to the power grab by politicians over the experts who really care. We will seek to change this and to convince the Government of the harm that could be done to enhancing the much-needed skills of the country if this goes through unamended. I hope that our listening Minister will appreciate how much is at stake in the Bill and will take note of the very well-intentioned and well-informed amendments that have been tabled.
Lord Knight of Weymouth (Lab)
My Lords, I start by reminding the Committee of my educational interests, in particular that I serve on Pearson’s qualification committee, which includes its oversight of BTEC and other technical and T-level qualifications. I apologise that I was not present at Second Reading, but I had to be elsewhere. I have a number of noble friends who would have liked to have been here today but unfortunately are unable to be, particularly my noble friends Lord Blunkett, Lord Watson and Lady Morris.
I listened carefully to the noble Baroness, Lady Barran, with all the considerable respect that I afford her and was reminded of the ill-fated Schools Bill. She is playing the same game that some of us played at her, with the stand part notices and trying to wipe clauses out, which we did successfully in the case of the Schools Bill. It is interesting to reflect on that, because there are a few lessons that the department perhaps needs to learn about introducing controversial Bills in the Lords. There is controversy, as we have heard from the noble Baroness, Lady Garden, who spoke more fruitily than I might have expected.
Lord Knight of Weymouth (Lab)
Well, not fruity—more forthrightly than I would have expected. Is that better? There is some reflection to be had on that because if a House of Lords starter gets significantly amended, it is difficult to undo that anywhere else.
I also think some learning from the Schools Bill is necessary in respect of the Secretary of State taking on significant powers without really consulting or properly engaging and not having time to do that. In the case of the Schools Bill it was a trio of ex-Ministers—the noble Lords, Lord Nash, Lord Agnew and Lord Baker—who did for it. We do not have a trio of ex-Ministers trying to do for this Bill, so I hope that is a relief to my noble friend the Minister.
Lord Aberdare (CB)
My Lords, I very much support the intention and aims underlying the Bill; namely, to create a new and more effective UK skills system, with Skills England at its heart, to replace the current system—if you can call it a system at all—which is complex, fragmented, lacking in clear measures of success, and failing to deliver the skills we need.
The King’s Speech spoke of a Skills England Bill and that promise is surely not met by a Bill which does not mention Skills England at all. It has required considerable ingenuity on the part of several noble Lords to produce amendments that do mention Skills England and are deemed to be in scope.
The Bill focuses entirely on abolishing IfATE and transferring its functions—not to Skills England but to the Secretary of State—but it says nothing about the role, status and powers of Skills England, to which presumably these functions will in due course be passed, nor, as other noble Lords have mentioned, about how Skills England will combine the essentially practical, administrative and awarding functions it inherits from IfATE with its much broader and important role of aligning the skills system with the aims of boosting growth and spreading opportunity.
I feel some sympathy for the amendments from the noble Baroness, Lady Barran, to remove Clauses 1 to 3 and their respective schedules, because they and other amendments address the fundamental issue of how Skills England is intended to work, how we are supposed to get there from here—I was interested in the point made by the noble Baroness about the interregnum—and what the transition plan is.
I would prefer Skills England to be a statutory body, with sufficient authority and independence to fulfil its vital mission across the numerous government departments and other bodies involved and to bring together the demand challenges that employers face with skills shortages and so forth, given that the education and training systems are not delivering the skills we need to meet that demand.
For those reasons, I have considerable sympathy for Amendment 21 in the names of the noble Lord, Lord Storey, and the noble Baroness, Lady Garden, and for Amendment 33 in the name of the noble Baroness, Lady Barran, which would ensure the establishment of Skills England, preferably as an arm’s-length body.
It is frustrating that there are so many key aspects of skills policy that we need to talk about, as well as the role of Skills England in delivering that policy—I welcome the principle—but the Bill doesn’t enable us to discuss those things. I therefore hope that the Minister will shed more light on how Skills England is expected to tackle the current mismatch between employer needs and education provision, including plans for the comprehensive strategy for post-16 skills promised in the manifesto.
Lord Johnson of Marylebone (Con)
My Lords, I want to speak to the amendments tabled by my noble friend Lady Barran, raising the issues that arise from the fact that Skills England, for all the hype, is to all intents and purposes the DfE. As others have mentioned, it will not have a statutory basis of its own. It might have a grand name and have been billed heavily in advance by the Government, but it is not a non-departmental public body which would be legally separate from the department and staffed by public servants rather than civil servants; it will be created by simple administrative action rather than legal instrument, meaning that it is basically just the department.
Executive agencies, of which Skills England will be one, are units of central government, perhaps administratively distinct to some extent but remaining legally very much part of it. What does this mean in practice? In some ways, it could be good. Potentially, it means a shorter feedback loop into Ministers’ red boxes, where responsibility for overarching skills policy rightly resides—there will be no room for excuses; the buck will stop with the Secretary of State for Skills England’s performance; and there will be no excuses for any failure of Skills England to work successfully across government departments and to corral Treasury to fund our skills system appropriately. However, that is the upside and, to be honest, I think there is potentially rather more downside from this change, because it is a misdiagnosis of where priorities need to be right now.
A prerequisite for a successful skills system is a reasonable degree of stability and certainty necessary to get businesses to invest in training, and there is no doubt in anyone’s mind that our businesses are not investing enough in training their workforce—as we all know, we are spending less than half the OECD average. Instead, we have near-permanent policy churn in this area. Supposedly once-in-a-generation reforms take place nearly every Parliament, sometimes every other year, creating chronic instability in the policy framework for investment for skills.
Now we have a massive machinery of government change with the abolition of IfATE, which was created less than seven years ago. Machinery of government changes are rarely worth the cost, disruption and distraction from other necessary priorities. This really is not what we should be debating right now. Machinery of government changes are no substitute for Ministers driving their teams hard, doing the difficult work of policy development and securing funding for skills from a very sceptical Treasury.
I am worried, therefore, that we are losing focus on the real issues. To my mind, there are two very big areas where I would prefer us all to focus our attention right now. The first is securing clarity from the Government on their plans for the defunding of applied general qualifications. I appreciate that there has been considerable movement from the Government on this matter since they took office in July, but further clarity is still needed on which qualifications that were due to be defunded next year will now be retained and when providers will get that vital information.
The second area I would prefer us to focus on is how we can end the confusion over the future of the lifelong learning entitlement, which has been delayed yet again in recent weeks and now will not start until sometime in 2027, and the provision by the Government of a clear statement as no one knows how the LLE will interact with their planned new growth and skills levy. These are two really important reforms and there is a desperate lack of clarity across our system on how they will work together. I would be very grateful if the Minister could help us with those two issues and take the opportunity to confirm that, in her mind, the LLE will still deliver the skills revolution that the last Government wanted from it and that Skills England will not quietly be asked to kill it off in the months to come.
Baroness Blower (Lab)
My Lords, in rising to speak very briefly in this debate, I apologise for the fact that I was not at Second Reading. Most of the points that I sought to make have already been made. Therefore, I do not need to repeat them, save that I am sure that there is an absolute commitment in this Room that what we need is high-quality skills training and education and that no one would demur from that. The differences—or possibly the similarities—across the aisle are that we want to make sure that it is done effectively and as speedily as possible while ensuring it is done properly.
I am very sympathetic to the view expressed by my noble friend Lord Knight about the consideration that might be given to a statutory body. Some noble Lords who know my history may know that I have not always been a great fan of everything being held in the hands of the department or the Secretary of State—obviously, it depends on the Secretary of State. In this case, we can afford, if we to make a move, to think about making the appropriate move. From the discussions that I have had, it seems that the appropriate move from where we are would be to a statutory body, for all the reasons that a number of speakers have outlined. That may well confer a greater sense not just of stability but of consistency, which is where we need to be if we are to carry with us young people, their teachers, their parents and employers, who are all extremely concerned, and to ensure that we have excellent skills provision and skills acquisition in this country.
Baroness Wolf of Dulwich (CB)
My Lords, I too apologise that I was unable to be at Second Reading, although I have read all the contributions made by noble Lords, including those here, at the time. I add my general support to pretty much everything that has been said, including on Amendments 21 and 33. I have considerable sympathy with the proposal to get rid of Schedule 1, and specifically with those noble Lords who have said that we really need a statutory body. Just putting everything inside the Department for Education in an extremely unclear way is really unsatisfactory.
Lord Hampton (CB)
My Lords, I was at Second Reading. I am a teacher and an optimist, and I genuinely trust the Government. As the noble Lord, Lord Knight, said, we all desperately want this to succeed; we want the 13th iteration to be the Bismarckian iteration that actually cuts through and cuts down flab. We were talking about this and I said that it is like trying to amend fog. We have the sunshine coming through, but at the moment we cannot really see it.
Amendments 21 and 33 seem like a sensible idea because there is a real worry about something going into a government department. I will talk about my amendments later but they are all about scrutiny. There seems to be less scrutiny rather than more once something has disappeared into a government department, which is slightly strange. If we could get Skills England to being a statutory body, out in the open and with more scrutiny, people would have a lot more belief in it.
Lord Lucas (Con)
My Lords, I share many of the concerns expressed by noble Lords. The Bill should by no means leave the House in the state in which it entered it. It is important that whatever body Skills England occupies has a great deal more status than the Government have proposed. I just do not think that what they have proposed will ever work in Whitehall. We need to take more care with the preservation of the relationships that have been established by IfATE, which make it work so well. I do not see anything in the transition proposed here that does that and, as I said at Second Reading, I would like to know what is going to happen to the Careers & Enterprise Company.
The Minister of State, Department for Education (Baroness Smith of Malvern) (Lab)
I thank noble Lords for their broad enthusiasm for Skills England that we heard on this first set of amendments. I hope my response will reassure noble Lords not only that the intention behind the legislation is precisely to transfer functions from IfATE into Skills England—legislatively, that needs to be done via the Secretary of State—but that, furthermore, Skills England is already making an impact on the types of issues that have been identified in the debate. Legislation is important, but it does not always drive action. This Government’s absolute commitment to bringing the current fragmented landscape together has enabled us to make progress already, which I will outline for noble Lords.
The Institute for Apprenticeships and Technical Education has worked closely with employers to develop, approve, review and revise apprenticeships and technical qualifications. It is important to acknowledge IfATE’s achievements, most notably to develop and revise a suite of more than 700 high-quality occupational standards across sectors.
However, despite IfATE’s success in embedding employers into the processes for designing technical qualifications and apprenticeships, the wider skills system remains too fragmented and complex. It is insufficiently responsive to the present and future skills needs of the economy.
To address this fragmentation and unlock the potential for skills which drive growth and widen opportunity, we are creating a single organisation—Skills England. On the point sort of implied by some people that Skills England is, in some way, just a figment of Ministers’ imagination, I reassure noble Lords that it is not just the Department for Education; it is already operational in shadow form. Noble Lords may remember its announcement by the Prime Minister in July, which was one of the earliest actions of this Government. It is already driving change in the way that skills gaps are identified and how key organisations are working together to fill them.
On 24 September, Skills England published its first report, Driving Growth and Widening Opportunities, which provides an authoritative assessment of the key skills challenges that limit growth and opportunity, and an initial assessment of the skills needs in the economy. It also laid out its ambitions for the way in which it would operate, for noble Lords and others to read.
Over the coming months, Skills England will continue to work closely with government departments and relevant stakeholders to expand on the initial assessments of skills needs within 10 particular sectors, both identified in the industrial strategy and because they need quick action. Skills England will continue to develop a detailed, consistent approach to skills measurement and cement its position as the single authoritative voice on skills needs in the economy, which should be addressed to support growth and opportunity.
As I say, Skills England is already working across government. It is working with the industrial strategy advisory council to support the industrial strategy. Regarding when Skills England will broadly take on functions currently delivered by IfATE, it is our intention to lay commencement regulations promptly following Royal Assent to bring into force the provisions that transfer IfATE’s functions, along with its assets and liabilities. Skills England is already operational, and we are determined to ensure that there is no delay in enabling it to become even more effective.
The noble Lord, Lord Aberdare, referenced the Government’s post-16 education and skills strategy, which we are currently working on. I talked about the broad principles of the strategy at the Association of Colleges conference last week. We will publish a broad framework for that relatively soon, with further detail at the beginning of next year.
Skills England will provide an authoritative assessment of skills needs in the economy. It will then use those data and insights to develop and maintain a comprehensive suite of technical qualifications and apprenticeships. As I said, it is already working with key stakeholders to ensure that the identified need and available training are reflected in local and regional skills systems. In response to the noble Baroness, Lady Barran, who argued that it would be appropriate to run Skills England and IfATE concurrently, that would very much lose the benefit that comes from bringing those functions together so that the available training and qualifications that are developed exactly reflect the analysis that Skills England will be in a better place to do. Skills England will take on functions currently delivered by IfATE, delivering them alongside and in line with its broader strategic purpose. In doing so, it will ensure that the system becomes more responsive and better able to quickly and efficiently supply the skills most needed by the economy.
We intend to establish Skills England as an executive agency of the Department for Education. In our debates on the Bill so far, and in Amendment 33 in the name of the noble Baroness, Lady Barran, it has been suggested that Skills England should instead be established as a statutory body. I reassure the Committee that we have considered carefully the risks, opportunities and benefits of different models, to understand from the beginning how the organisation will be successful.
Thanks to the progress that IfATE itself has driven, the system for developing technical qualifications and apprenticeships has matured since IfATE was established in 2017. However, as I said, at the same time we have seen a growing severity in the skills challenges the economy faces. We need Skills England to be a different type of organisation, to support the Government’s growth and opportunity missions. Working as an executive agency, Skills England will balance on the one hand the need for rapid action and independent objective analysis of skills gaps and on the other—this was the point made by the noble Lord, Lord Johnson—proximity and clear links into central government to inform decision-making. This is an appropriate balance of independence and the ability to drive at speed what all noble Lords have argued is the impact that we need Skills England to have.
Skills England will, as with any arm’s-length body, be subject to the highest standards of governance and transparency, including any relevant requirements for review. I will come to some of the questions raised on that in a moment.
Clause 1 introduces Schedule 1, which transfers functions to the Secretary of State and will therefore enable Skills England to take on and deliver functions currently delivered by IfATE, alongside other functions as appropriate, in line with its strategic purpose. This will help address the fragmentation that is holding the system back and restricting improved workforce development and productivity gains.
Clause 2 introduces Schedule 2, which makes provision for a transfer scheme to transfer IfATE’s property, rights and liabilities smoothly to the Secretary of State. It will ensure functional continuity of property, rights and liabilities, including the many contracts that are critical to the operation of the skills system, and it will set a firm basis for the operation of Skills England.
Lord Knight of Weymouth (Lab)
I am sorry to interrupt my noble friend’s flow, but is it likely that this framework document will address that issue of the Secretary of State becoming, in effect, the awarding body for T-levels? Does she have any reflection on how precarious that makes the Minister if things go wrong with being an awarding body, which they do? Sometimes that becomes a resignation matter.
Baroness Smith of Malvern (Lab)
Perhaps I could write to my noble friend with more details on that point. Currently, IfATE controls the licensing of T-levels, which is awarded to awarding organisations for them to develop and deliver. IfATE is not an awarding organisation but the contractor; that responsibility will transfer to the Secretary of State. It is the certification of T-levels that is delivered by the department. As I say, I will respond to my noble friend with a bit more detail on T-levels.
I was attempting to provide noble Lords with some assurance about the governance of Skills England through its framework agreement. On the point made by the noble Baroness, Lady Barran, about internal governance, Skills England will be run by a permanent CEO within a clear governance and accountability framework, and with a robust management structure at all levels. The CEO will be supported and challenged by an independent chair and a strong board with the experience and knowledge to support Skills England’s delivery. Once appointed, the chair and the board will help set the direction of the organisation, establish key relationships and provide important expertise on matters related to Skills England’s strategic aims and core functions. We are currently recruiting for these positions; we have received a large volume of very high-quality applications. In the meantime, I put on record my gratitude for the work of Richard Pennycook, who has been working as the interim chair of Skills England to support the creation of the new body.
I understand the noble Baroness’s specific point in relation to the governance and the reporting arrangements of the CEO, and I accept her point about the reporting arrangements and the role of the board. Perhaps I could come back to her with more clarity on her point about the advert for the CEO and where we see that accountability going.
Baroness Garden of Frognal (LD)
I apologise to the Minister but can she explain something? We are all talking about Skills England but there is no mention of it in this Bill. Can she explain why that is?
Baroness Smith of Malvern (Lab)
It is because, as with all executive agencies, the process for setting up Skills England as an executive agency does not require legislation, but for it to hold the functions that enable it to operate in the coherent manner I described, the functions currently held by IfATE need to be transferred to and delivered by Skills England as an executive agency of the DfE. It is the route through the Secretary of State that enables that to happen. I reiterate my earlier point: Skills England might not appear in the legislation in this place, but it very much appears on the country’s skills landscape. Notwithstanding the significance of the scrutiny that this place is able to give, as well as the concerns about Skills England’s longevity, that is probably more important than whether it is in a Bill.
The passage of the Bill provides an opportunity for both Houses—as we are doing today, in fact—to consider the approach we are proposing, which is to move away from the current, narrow IfATE model. Creating any further requirement for parliamentary approval before Skills England operates fully would frustrate the intentions of the Bill to enable a smooth transfer and the delegation of functions to Skills England; the efficient and orderly closure of IfATE; and the ongoing work in the service of employers and learners. I assure noble Lords that the practical transition of functions will be designed to ensure that, where standards or apprenticeship assessment plans are in the process of preparation or approval at the point of transition, these will continue. Similarly, approval decisions for technical qualifications that are part-way through the process will also continue. It is our intention that employers and other stakeholders perceive no interruption in that work.
The noble Lord, Lord Johnson, asked about the progress on the review of level 3 qualifications. Briefly, let me say that we will, as I have said all along, make public our decisions on the review of those qualifications; they are due to be defunded in 2025, before Christmas.
I have talked in the House about this Government’s commitment to the lifelong learning entitlement. We will now be introducing it for courses starting from January 2027, precisely to ensure that it has the impact that the noble Lord rightly identified that it can have for lifelong learning.
I hope I have set out the intentions behind Clauses 1 to 3. For these reasons and those that I outlined on the remaining amendments, I hope that the noble Baroness, Lady Barran, will not press her stand part notices and amendments.
Baroness Barran (Con)
I thank all noble Lords who contributed to this debate and the Minister for her remarks. I hope she heard loud and clear that no one in this Committee is arguing about the Government’s ambition for skills reform; rather, we are all rooting for success in this area. This is not about what the Government are trying to do but more about how they are trying to do it.
I was struck by the almost unanimity of view about the importance of greater independence from the department for Skills England. It was raised by the noble Lords, Lord Aberdare and Lord Knight of Weymouth. He triggered what I think is the ex-ministerial version of PTSD—I call it PLSD, or post-legislative stress disorder—by talking about the Schools Bill, but I will forgive him this once. Importantly, it was also raised by my noble friend Lord Johnson, who talked about the importance of credibility with employers, which need stability in our system, and by the noble Baroness, Lady Blower, who rightly mentioned the importance of bringing students, families and others on this journey.
I was also struck by the constructive tone of the noble Baroness, Lady Wolf, and the aspiration to make this the best it can be to deliver for our country. However, as the noble Baroness went on to say, there is a lack of confidence that this approach will deliver without that independence. Ironically, it is almost the fact that, as the Minister says, Skills England is already operating when the Bill has not even passed. It is just kind of happening within the department. There will be a framework published, but without any potential to input to it. It feels like DfE marking its own homework, which is not a healthy place to be.
I did not feel a lot of movement in the Minister’s remarks. I am sure that, when she looks at Hansard, she will note the strength of feeling across the Committee but, for the moment, I withdraw my opposition to the clause standing part.
Lord Blunkett
“(3ZA) A group of persons in subsection (3) may be an organisation that is the representative body for a sector.”
Lord Blunkett (Lab)
My Lords, I first apologise to my noble friend the Minister and the Committee that I will not be able to stay until the very end of the debate. I have a medical appointment in Sheffield for one of the many ailments that seem to be striking me down at the moment, but maybe I will be in better shape next Tuesday.
Baroness Barran (Con)
My Lords, I shall speak to Amendments 3, 4 and 7 in my name, and to Amendment 1 in the name of the noble Lord, Lord Blunkett—who I am delighted to see is well enough to join us today—and to which I have added my support.
As we have already heard, the Bill moves the powers from IfATE and transfers them to the Secretary of State while removing the requirement for external stakeholders to be consulted in all circumstances. The effect of this is to reduce independence regarding both the powers transferred and the examination processes—perhaps I should say “scrutiny processes” for the avoidance of doubt—as well as removing the requirement to work with those outside stakeholders which best understand the needs of their respective areas.
As also noted earlier in the debate, the Bill does not specify who will be consulted in reference to a group of persons. This lack of detail is concerning, and my amendments seek to rectify that. Amendment 3 in my name would include a list of relevant stakeholders which must be consulted before the creation of standards, which includes employers, mayoral combined authorities and sector representative bodies.
The spirit of the amendment is to retain the focus that IfATE had on employers and those with a strategic interest in technical education, whether that be regionally or by sector. They are all important to provide knowledge across a range of issues. Employers employ and train those who are undertaking apprenticeships and other qualifications and so can provide a perspective as to what business and the economy are in need of in relation to these qualifications. Mayoral combined authorities will be able to provide information as to what skills a particular region is lacking and advocate for a change in qualifications when necessary, and the local skills improvement partnerships will be able to provide their data as to what current, future and priority skills are in certain areas and expertise in how to increase collaboration between employers and regional authorities.
As noted by the Association of Colleges, there is a real opportunity here to bring together local plans, which sometimes exist in a vacuum, and a national plan, to encourage alignment and avoid duplication or gaps. Given that the Minister explicitly referred to this point at Second Reading, I hope that she will see the merit of my amendments.
The sector representative bodies will be able to provide knowledge on what skills and qualifications are relevant to the sector, both now and in the future, to ensure that these qualifications remain up to date and relevant to their economic needs. One of the central pillars of IfATE was its focus on employer and business needs to create and maintain suitable qualifications to equip people for the world of work. As such, we want to recognise the importance of keeping that focus to ensure that businesses can still trust the qualifications so that they continue to invest in the future generation of employees.
As mentioned at Second Reading, the Bill gives wide-ranging powers to the Secretary of State without maintaining those clear external links and the accountability that they help to provide. This is potentially damaging to the status of these qualifications. When in government, we delivered an increase in the value of skills-based qualifications, with a relentless focus on quality and developing a range of apprenticeships in particular that aim to reflect the breadth of our economy.
As such, we on these Benches want an effective approach to developing our apprenticeship and technical education system—I am sure that sentiment is echoed across the Committee—but I am concerned that the reduction in accountability and scrutiny in the creation of standards will not do that. That is why my Amendment 4 seeks to remove the Secretary of State’s power to act alone when creating standards. If the Government do not accept my Amendment 4, my Amendment 7 at least seeks to increase the transparency about when and how these powers will be used.
At Second Reading, the Minister was careful to set out some of the circumstances in which these powers to act alone would be used. She talked about making “small and fast adjustments” and allowing
“greater flexibility in scenarios where preparation by a group can be unnecessary or restrictive”.—[Official Report, 22/10/24; col. 581.]
Although it is unnecessary to have these powers, if the Government are so clear about these circumstances then surely it would be responsible to put them in the Bill so that the power of any future Government is constrained by the same things. I hope that, when she responds, the Minister will give the Committee some encouragement on this point. I also hope that she will reiterate the Government’s commitment to publishing standards in draft for stakeholder comment before they are finalised, and how the Government will respond if stakeholders have concerns.
As we heard, Amendment 1, in the name of the noble Lord, Lord Blunkett, to which I added my name, also seeks to bring the perspective of, and give greater responsibility to, sector representative bodies in the development of standards in future. This has much in common with my Amendment 3. The Minister will have views on the relative merits of “must” and “may”, but the spirit of the amendments is similar and aims to link the Government’s decisions as closely as possible to the real world. As the noble Lord, Lord Blunkett, put it so eloquently, it aims to ensure that we do not lose that focus on delivery.
We recognise the merits of Amendments 2, 5, 6 and 8, in the name of the noble Lord, Lord Aberdare. All of them drive broadly in the same direction—namely, to urge the Secretary of State to bring as much clarity as possible to the people she chooses to include in the group of persons referred to in Clauses 4 and 5, and to the circumstances in which she would exercise her powers in new subsection (3A) in Clause 4. The noble Lord’s Amendment 6 would give the Secretary of State more time to do so than my Amendment 7, but the aim of the amendments is similar.
Lord Aberdare (CB)
My Lords, I have a number of amendments in this group, which the noble Baroness kindly just introduced for me. Most of them are based on concerns expressed by employers that they should remain genuinely at the heart of the new system and that it will continue to meet their real needs. I have heard concerns from employers in the construction industry, CITB, the engineering services sector and the energy and utilities sector, for example, that the changes will possibly lead to less engagement of employers. To succeed in its aims, Skills England will need to foster close collaboration with employers of all types and sizes across all key sectors, including the eight growth-driving sectors identified in the industrial strategy.
Baroness McGregor-Smith (Non-Afl)
My Lords, I would like to talk a bit about Amendment 1 in the name of the noble Lord, Lord Blunkett, to which the noble Baroness, Lady Barran, has added her name. As the outgoing chair of IfATE, I have listened carefully to some of the words expressed both today and at Second Reading. There are a small number of things that I would urge everyone to consider here; I say that to the Minister in particular.
Today, we have not yet discussed what really sits at the heart of the skills system with IfATE. We talk about the technical side of it, but we need to talk more about the employer voice. Yesterday, one of our board members, Robin Miller, who is one of the most famous music producers in the country and has been there from day one of IfATE—I have not—said something really interesting to me. He said that it took five years to get employers on side and to believe that IfATE could do really good things. Nothing is perfect. No arm’s-length body is ever perfect. Everyone can have their criticisms. I wish Skills England well for the future—I really want it to build on the momentum that has been built up in the skills system, as fragmented as it is—but I urge us to do more than just holding webinars with employers. Employers sit at the heart of the system; I can say that having myself been a very large employer in this country.
We need to understand how momentum will be built around the critical skills that this country is going to need in future. While this transfer is going on and all this is happening, behind the system sit employers with skills gaps to fill. They need urgently to make sure that everything they are doing in terms of the new apprenticeships, new qualifications and new, high-level technical qualifications that they need is done quickly and brilliantly. I genuinely do not understand how putting it into an executive agency that is part of a bigger department will necessarily do that; I would love to believe that it will, but we are going to need more evidence of how that will be done. I am, and many other people are, here to support that but, frankly, the quicker we can do it, the better.
Speed, momentum and delivery are what really worry me. The noble Lord, Lord Blunkett, asked whether Skills England might be swamped by the very technical things that it may have to do now. Yes—that will be the case. Does Skills England really want to sit there with the Secretary of State and be the awarding body, as the noble Lord, Lord Knight, said? I do not necessarily think so. We need to look closely at how these functions will move and what will be done so that employers understand.
Even more importantly, let us talk about the learners. Let us talk about the young people doing T-levels today. Yesterday, we spoke to one of them for half an hour about what she was doing in her journey. At the age of 16, her journey is fantastic. She is doing a T-level. She is heading towards an apprenticeship degree. She wants to be a chartered surveyor, as one example of many young people’s aspirations in this country. However, she said that too few people understand T-levels, career pathways and so on. There is so much work to be done. I simply urge us all not to forget during the passage of this Bill that the employer voice and the learner voice need to be heard more highly.
Baroness Wolf of Dulwich (CB)
My Lords, I rise to speak to the two amendments in this group in the name of the noble Lord, Lord Aberdare, to which I have added my name. More broadly, I want to speak to the general thrust of the group. I think that our joint amendment was not specific enough. It is not so much that we need criteria; we need to know that employers will be there and who else will be there. It is not just that we would like some criteria published.
It is important that some of this is publicly and legislatively specified because, as the noble Baroness, Lady Garden, alluded to a little, things start very well, people know exactly what they are doing and then they slide. It might seem inconceivable to anybody involved in setting up Skills England that apprenticeship standards would, in the future, be written without really consulting employers. All I can say is, “I wish”.
I have been looking back at the history of skills policy and implementation in this country, as I do periodically when I decide to write something, and it has reminded me how easy it is for harassed and busy civil servants to just get things through and for powers given to a department, which do not require them to go out beyond the department, to be used by it. It is not that anybody means badly, but that is sort of how it goes. That is why, on repeated occasions, we have ended up with disastrous skills policies and approaches, in essence, for which there is equal-opportunity guilt across the parties. They became just a small group—harassed, busy, pulling very few people in—not putting down the infrastructure to ensure that what you get reaches out into whole economy. We need to do that.
I was staggered when I was working as an expert adviser in government to discover, for example, that most people in the apprenticeship division in the DfE had been in their jobs for only a couple of years. There were some wonderful people, but there was no real collective memory of why things had gone wrong before. That is why you have to make it clear in legislation that, as Skills England goes forward and as, particularly in this context, its apprenticeship functions go forward, it has to involve everybody, even though it takes longer, it is awkward and sometimes it does not work out well.
IfATE has not been perfect. I think more than 700 standards is mad, actually, and when I was involved in the Sainsbury review, I expressly asked that there should be fewer of them. It is not that what we have is perfect, but we have to be aware of the lessons that come from previous mistakes. It is very risky to put everything inside the department without anything that, in effect, says, “You’ve got to do this. You’ve got to do that. You’ve got to talk to employers and the key organisations”. Yes, it takes longer, it is awkward and you do not always think they are very good, but it has to be there. The general feeling coming out of these amendments is that we need Skills England to be better than what we have at the moment and not be set up such that the institutional structures invite a repeat of the things that went wrong in previous decades.
Lord Knight of Weymouth (Lab)
I agree with the noble Baroness, Lady Wolf, on the importance of consulting employers and that 700 standards might be a little “mad”. I reinforce the sense that it is important to consult not just large employers as, for small and medium-sized employers, that granularity is really challenging.
I am glad to see the noble Lord, Lord Willetts, in his place, because he and I did a little work with EngineeringUK looking at apprenticeship take-up. We heard quite strongly from the SME community that it needs more sectoral standards, with more modularity for the specificity that you see in the 700. There is an opportunity attached to more modularity which could address the problem of English and maths requirements within apprenticeships, as it would then be more possible to think about sector-specific English and maths at level 2 and 3, as appropriate, so that the relevance of the learning to the English and maths content could be made much clearer and much easier for those learners. In that context, I support what the noble Baroness and most noble Lords have said. I listened very closely to the noble Baroness, Lady McGregor-Smith, and my noble friend Lord Blunkett.
Baroness Blower (Lab)
My Lords, the interesting Library briefing on the Bill contains the following paragraph:
“Unifying the skills landscape to ensure that the workforce is ‘equipped with the skills needed to power economic growth’, by bringing together mayoral combined authorities and other key local partners, large and small businesses, training providers and unions”.
That brought joy to my ears. In this question about determining standards and all the other things that need to be done, we have a wealth of experience and expertise within trade unions of various kinds. My own experience, of course, is in education, but there will be other unions covering other sectors. It is important, when we are thinking about this, to ensure as we move forward with skills that we take account of those people who are either delivering the training or have themselves done the jobs. The best way to hear that voice may well be through the trade unions. I therefore commend to the Government listening to trade unions and having trade unions in the conversation.
Lord Hampton (CB)
My Lords, I shall speak briefly to Amendments 2 and 6, to which I have added my name. The great thing about following so many intelligent noble Lords is that I have little to say. In particular, my noble friend Lady McGregor-Smith talked about the employer, which is important for everybody. I have been playing bingo with words and phrases and “clarity” has come up many times. With due deference to my noble friend Lord Aberdare, I am going to repeat myself: we need clarity; employers need clarity; teachers need clarity. This is my second bite at the cherry and I am not sure whether I declared my interest as a teacher at first. Everybody needs clarity from the Bill and these amendments give more rather than less, which is vital.
Baroness Garden of Frognal (LD)
My Lords, it is great to see the noble Lord, Lord Blunkett, with us, because his voice has enormous stature in these discussions. These amendments are all to do with the creation of standards. My noble friend Lord Storey added his name to Amendments 2 and 6, but we are broadly supportive of all the amendments in this group. It is vital that in any work-based qualification the voice of employers is heard loud and clear. I should perhaps have declared that I worked for 20 years for City & Guilds on what we always called “vocational qualifications”, because while some were technical, some were craft qualifications. I always regretted the fact that we had taken over the word “technical” to cover all those myriad work areas.
Of course, employers may not be expert in teaching or assessment, as we discovered in spades when we were developing national vocational qualifications. Employers had wonderful, grandiose ideas about all the things that they wanted to assess, but when we got the colleges and City & Guilds with them, they realised that if they wanted staff to know about fire, they could not actually create a fire for every member of staff to have a real experience of dealing with fire. Assessment bodies had their place, as well as the colleges.
I was working for City & Guilds when the first national vocational qualifications were established. NVQs were going to revolutionise the “skills” word with a very easy to understand grading, which would have enabled parents, teachers and everybody to understand exactly where the vocational system was in relation to the academic one. Alas, where are they now? Why do we have local skills improvement plans and partnerships if they are not to be used for all the skills they have in this brave new world? I think it is important that the Secretary of State must set the priorities for LSIPs and review them regularly to ensure that their priorities are reflected in national strategies for the creation of standards, so I think this set of amendments has a great deal to commend it.
Baroness Smith of Malvern (Lab)
My Lords, like others, I welcome the fact that my noble friend Lord Blunkett has both attended and made his usual well-informed and passionate contribution in this debate. It appears that very little in the way of ill health or accident will prevent him from making his contribution. We all hope that he recovers as soon as possible. He rightly made an argument about the centrality of skills for everything that the Government are trying to achieve. He is exactly right about the role of skills in delivering all the missions that this Government have set out: growth, opportunity for individuals, rebuilding the NHS, delivering a green superpower, providing opportunities for young people as part of the contribution to keeping our streets safer, and building new homes. I completely agree with him about that and I hope that his words will help our efforts with the Treasury in the way he identified to ensure that that is recognised there as well.
The debate on this set of amendments has been interesting. I will talk about the relatively narrow nature of Clause 4 in a moment, but noble Lords have understandably also taken the opportunity to argue for the significance of a broad range of inputs into the activity of Skills England. I agree with the overarching argument about the importance of the involvement of a wide-ranging set of stakeholders. That is how Skills England has already set off in its work. It has already begun to engage with a wide range of employer representative bodies, individual employers and education and training providers. As I said, it will work closely across government and, in working on the industrial strategy, it will work in partnership with business, devolved Governments, regions and other stakeholders in developing the industrial strategy sector plans.
As my noble friend Lord Blunkett emphasised, there needs to be a sectoral approach to the way we develop skills across the economy. That has been an early focus for Skills England. It will work with employer representative bodies and directly with employers. It will work with education and training providers and with mayoral combined authorities. My right honourable friend the Secretary of State and I had a good meeting just last week with mayoral combined authorities on skills, and Skills England has been meeting regularly with them. On the point raised by my noble friend Lady Blower, one of the important elements of Skills England has been the engagement of unions, in a way that was not the case previously in the development of the skills landscape. I hope that I can give noble Lords some assurance that that is already the approach that Skills England is taking.
Narrowing the discussion down more specifically to the nature of the intention behind Clause 4, I make it clear that this is to provide the Secretary of State with greater flexibility in the minority of circumstances where preparing occupational standards using a group would be disproportionate or unnecessary for the limited scale or nature of the change or where the system needs to move particularly quickly to respond to employer demand. With over 700 standards currently in place, this clause ensures that the system for preparing and reviewing standards is fit for the future.
Baroness Wolf of Dulwich (CB)
Can the Minister give an example of what might spark that off? I am finding it hard to imagine a situation in which it might occur.
Baroness Smith of Malvern (Lab)
I will be delighted to, and I was coming to that.
Before I do that, I note the comments of the noble Baroness, Lady McGregor-Smith, and repeat from Second Reading my gratitude for her contribution to the development of IfATE. I recognise her point about what is necessary to get employer engagement in some of the detailed work that IfATE has been engaged in and that will be transferred under this legislation to Skills England. She is absolutely right about that; it needs consistent work. But it also needs, as employers have told us, appropriate flexibility and agility to enable those standards to be developed in a way that reflects changing developments and does not put too onerous a responsibility on employers in terms of their engagement.
Let us be clear that the default position will remain that a self-forming group of persons will prepare a standard. It is probably worth noting that this definition of “a group of persons” also legislatively guided IfATE in its engagement on occupational standards and apprenticeship assessment schemes. Our proposals do not weaken legislatively the engagement of employers. When a group does not convene itself to prepare a standard for an occupation which the Secretary of State is satisfied requires a standard, the Secretary of State may convene a group to prepare one. In both circumstances, we would expect that such a group would normally, but not exclusively, include employers that are representative of that occupation. Only when the Secretary of State is satisfied that it is more appropriate for them to prepare a standard than for a group of persons will the Secretary of State then do so.
To come to the noble Baroness’s point, scenarios in which it may be appropriate for the Secretary of State to use this power to prepare a standard are those where using a group would be disproportionately onerous for employers or other stakeholders; unnecessary because only minor adjustments or revisions were required; or where it could create undue delays. This might include—I say for illustrative purposes—updating standards to align with changes to mandatory qualifications within the standard; creating or updating standards to align with industry-recognised qualifications or statutory requirements; or creating or updating standards more efficiently where employers do not have the capacity. We envisage that the Secretary of State may also use the power to create and update standards for emerging or rapidly developing occupations, such as those in the digital sector. The clause also enables the Secretary of State to ensure that standards are developed or updated quickly to respond to acute skills needs or urgent regulatory changes required in an emergency, such as the updates to the level 3 community fire safety adviser following the Grenfell disaster.
Finally, employers themselves tell us that current processes for preparing standards can feel slow, bureaucratic and time-consuming. This is not a criticism of IfATE; it is a criticism of a requirement currently in legislation that we want to use this opportunity to make more flexible. It is a barrier to their engagement. We want to focus their input where it has the most impact.
Lord Aberdare (CB)
Those are all reasonable grounds for using the power, but there is nothing in the Bill that says that the default is a group of persons or that those are the kinds of circumstances in which the Secretary of State might take the power. There is nothing in the Bill that reassures employers that the powers would not be used unreasonably. There is nothing to stop them being used in any circumstances; nothing says that using a group would have to be disproportionately onerous, or indeed what the definition of “disproportionate” or “undue delays” is. In one sense, I am reassured, but in another, I do not see why there cannot be something in the Bill that lays it out a bit more clearly.
Lord Addington (LD)
Before the Minister continues, I have been listening as attentively as I can manage. That exact thought occurred to me. Could we get something, such as some guidelines—or, at least, some idea of the current government thinking—on when you would not consult and the criteria around pressure and speed? This would put my mind slightly more at rest.
Baroness Smith of Malvern (Lab)
I hope to provide noble Lords some reassurance by way of guidelines, which I will come to in a moment, but I also hope to convince noble Lords—I shall try—that there is, in fact, a conflict between the idea of doing something as flexibly as possible in order to engage employers and spelling it in the Bill. I will make that argument as I continue.
I turn first to Amendment 1 in the name of the noble Lord, Lord Blunkett, Amendments 2 and 8 in the name of the noble Lord, Lord Aberdare, and Amendment 3 in the name of the noble Baroness, Lady Barran. They all relate to the membership of the group of persons. At present, as I have suggested, there are no statutory criteria that prescribe the make-up of a group that forms or is formed to prepare an occupational standard. Employers play a prominent role and are well placed to define or describe what occupational competence looks like in most cases, but different expert voices might have a role to play in different circumstances. This point was made by the noble Baroness, Lady Garden —although probably more with respect to assessment, which we will come on to in Clause 5.
We do not see any benefit in seeking to shape or fetter the structure of these groups with criteria that would prevent the membership of a group reflecting the specific factors relating to the need for its preparation. IfATE is under an existing duty to publish information about matters that it will take into account when deciding whether or not to approve groups of persons; I assure noble Lords that this duty is being transferred to the Secretary of State unamended, so it will remain in existence. Novel and additional criteria in primary legislation to specify the make-up of a group, for which noble Lords are arguing, might provide some assurance here. However, it would be a new constraint in the system.
Slowing down groups coming together, and slowing down the development and maintenance of occupational standards, could lead to a focus on ticking boxes instead of flexibly, broadly and inclusively finding the best people to define the knowledge, skills and behaviours required to be competent in the occupation. The optimal composition of a group will vary from occupation to occupation; for example, to represent the breadth of an occupation and the employers in it that will employ apprentices, it may be necessary in new, emerging or highly specialised occupations to look openly at who can bring to bear the relative expertise in the preparation of a standard. Retaining the existing flexibility around the make-up of a group of persons is critical to achieving high-quality occupational standards.
Amendment 4 in the name of the noble Baroness, Lady Barran, would remove the ability of the Secretary of State to prepare a standard if they are satisfied that it would be more appropriate for the standard to be prepared by the Secretary of State than by a group of persons. I hope I have assured the noble Baroness of the need for this greater flexibility. I reiterate that it is needed for a minority of cases to ensure that standards are kept up to date without a disproportionate burden, given the volume of standards that now exists.
Amendment 5 in the name of the noble Lord, Lord Aberdare, would create a duty on the Secretary of State to consult with the relevant industry skills and standards-setting body when preparing a standard. Such bodies are important to the preparation of occupational standards, and in most cases high-quality occupational standards are developed by an inclusive and independent group. In fact, current guidance states that groups must seek advice and guidance from organisations with responsibility in their industry for defining skills standards in England and the wider UK. We expect this requirement to remain.
I emphasise that in only the minority of circumstances, where the Secretary of State considers it more appropriate, will standards be prepared by them rather than by a group, so there is a role for industry bodies in this process and we expect that they will continue to be engaged. However, this amendment would undo the flexibility and efficiency sought through Clause 4, by placing a requirement on the Secretary of State to consult specific bodies when they consider it more appropriate for the Secretary of State to prepare a standard than by using a group. That would be exacerbated in circumstances where the relevant industry skills or standards-setting body is unable to participate when required. It therefore risks giving them precedence over others, including employers.
Amendment 6, also in the name of the noble Baroness, Lady Barran, and Amendment 7, in the name of the noble Lord, Lord Aberdare, would impose a duty to publish criteria for the preparation of occupational standards by the Secretary of State. To be clear again, employers remain best placed to define and describe what occupational competence looks like in most cases. As I have indicated, the Secretary of State would not convene a group in only a minority of circumstances. Setting criteria for that minority of circumstances would frustrate the necessary agility that this clause aims to bring to the process. It would restrict the Secretary of State’s ability to be responsive and to ensure that the suite of high-quality standards is kept up to date and relevant.
I hope that I have set out the intentions behind Clause 4 and provided some assurance and reassurance for noble Lords. For the reasons that I have outlined, I hope that the noble Lord, Lord Blunkett, will withdraw his amendment.
Lord Blunkett (Lab)
My Lords, I am grateful to my noble friend the Minister for her kind words, which I hope do not turn out to be a hostage to fortune. I am grateful to everybody who has contributed to a thoughtful debate.
As my noble friend the Minister described, we are debating areas that are obviously very much in flux. I was interested in the earlier debate about consistency and continuity on the one hand and collective memory on the other. It is important to carry this forward in a way that picks up the best of what is already in place and iterates that very speedily and easily, with the support and confidence of employers. The noble Baroness, Lady McGregor-Smith, was quite right to draw attention to the importance of that.
The amendments in this group were trying to explore the way in which the operation proceeds. There may be things that we come back to, as I know that amendments in later groups will return to this issue. On that basis, it is appropriate to withdraw my amendment now.
Lord Aberdare
“(6ZA) Within six months of the day on which the Institute for Apprenticeships and Technical Education (Transfer of Functions etc) Act 2024 is passed, the Secretary of State must publish criteria for selecting membership of a group of persons described in subsection (6).”Member’s explanatory statement
This amendment, and a similar amendment to Clause 4, requires the Secretary of State to publish criteria for selecting members of a “group of persons”, which is not otherwise defined. The 2009 Act states that the “group of persons … must have been approved by the Institute”.
Lord Aberdare (CB)
My Lords, I have Amendments 9, 12, 13 and 15 in this group and have added my name to Amendments 10, 11 and 14 in the name of the noble Baroness, Lady Barran, with the same reservations about Amendment 10 as I expressed about Amendment 3. Your Lordships will be glad to know that I have failed to think of additional points that I have not already made in speaking to identical amendments to Clause 4, so I will content myself with saying that I beg to move Amendment 9, on the same grounds as set out previously.
Baroness Barran (Con)
My Lords, that is quite a challenge to follow, and it is tempting to take the same approach—I think my popularity with the Committee might improve—but, in all seriousness, as the noble Lord, Lord Aberdare, said, my Amendments 10, 11 and 14 are based on a very similar argument to that debated in the previous group about the concerning lack of detail regarding what we mean by “a group of persons” and the potential dilution of employer focus. With that, I commend the amendments.
Lord Addington (LD)
My Lords, I rise just to give my much wiser noble friend a break. The assessment plan for any qualification is of the essence. If you get that wrong, you might as well not bother doing it. When you have a group of people looking at this, you stand a better chance than you get from one centre. There are a series of clichés about Secretaries of State, and I will try not to kick and wring every one of them, but the basic one is that if the Secretary of State has spoken to somebody who just does not understand or gets it wrong, the whole thing can go wrong. If you have a group, you stand a better chance of getting a correct result. Nothing is guaranteed either way, but that is what it is about.
I hope that we can get some response from the Minister on where we are going to get this expertise in to check on what is happening. That is it, in essence, because we have had Secretaries of State who know exactly what they want and will talk to a certain group that agrees with them. That is very easy to do, and we have all done it. I hope that we will get some assurance that the Secretary of State will talk to a divergence of opinion to go through these things to make sure that they work. If we do not and start to get them wrong, the price will be huge and we will have nothing useful. Being a little slower and a bit more certain is infinitely better than taking the chance of getting it horribly wrong. I hope the Minister can give us a reassuring answer.
Baroness Wolf of Dulwich (CB)
I do not have very much to add, everybody will be glad to hear, except to highlight the fact that assessment is not the same as getting to the end of the standards. We have a complex set of awarding bodies and some assessment standards which require an external qualification and some which do not.
It would also be good to be confident that the department has worked through all the ramifications of this. I am conscious that I do not think I have and am going to go back and look through some of the original legislation, but I do not think the considerations are exactly the same as they are for standards. Because we have a rather strange system in this country, with a lot of formal qualifications and a lot of awarding bodies, it is very easy to get the qualifications wrong or suddenly find that you have a huge political fuss on your hands, as I am sure everyone in this Room will recognise from the current BTEC discussions.
I just flag that it is not just the same as for standards. The complexity of many endpoint assessments and standards for which there are required external qualifications means that we need to be very careful that we have not inadvertently stored up some real problems for ourselves by just moving everything wholesale and saying, “But where necessary, the Secretary of State can cut through the bramble patch”.
Baroness McGregor-Smith (Non-Afl)
My Lords, I have a little sympathy for this additional request for the Secretary of State to do this if the defaults are not working. Having seen how the current system works, my only observation is: will that be quicker? If it is about speed, I am not necessarily convinced that, as the Secretary of State will be so busy, this will be one of the highest-priority things in the Department for Education, and that concerns me. With more employers and more people involved in the system, there is always a danger that this will slow down. I am not really sure in what circumstances this power will be used. I could probably see it for the odd exception, but I still cannot quite imagine what it could be. However, I have a little sympathy, as long as it is around speed in the odd exceptional circumstance.
Baroness Smith of Malvern (Lab)
I thank noble Lords for their concise contributions on these amendments. As the noble Baroness, Lady Wolf, made clear, that does not undermine how important the nature of assessment is. I wholly agree with the noble Lord, Lord Addington, that the best chance of getting assessment right is by engaging appropriately at the right time.
On Clause 5, we are talking specifically about proposals regarding apprenticeship assessment plans and the transfer of the function from IfATE. Clause 5 amends the requirement for assessment plans to be prepared by a group of persons by making it subject to a power for the Secretary of State to prepare apprenticeship assessment plans if that is more appropriate. This will simplify the process for updating and creating assessment plans.
Noble Lords will recognise that our previous discussion also related to the use of groups of persons. We might find that some of the considerations are similar, but I assure the noble Lord, Lord Aberdare, that I will have a few different arguments in response to this, not least because the arguments for apprenticeship assessment are different to the arguments for standards. But the principle about agility and flexibility remains at the heart of this.
Where the intention behind Clause 4, which we have just discussed, is to provide the Secretary of State with greater flexibility in a minority of circumstances in respect of preparing occupational standards, here we are concerned with flexibility in respect of apprenticeship assessment plans. In both cases, our intention is for employers to have a continuing and vital role in the composition of groups of persons. In both cases, it is important, as I am setting out, for the Secretary of State to have some limited flexibility not to define the membership of the group in advance and not to have a group if it is not needed in a small number of cases.
The default position will be that an assessment plan will be prepared by a group of persons that has been approved for this purpose. Only when Skills England or the Secretary of State is satisfied that it is more appropriate for them to prepare an assessment plan, rather than a group of persons, will the Secretary of State do so. Scenarios in which it could be appropriate to consider the use of this power are where using a group would be disproportionate or create undue delay—I hear the point made by the noble Baroness, Lady McGregor-Smith, about the need for speed.
Scenarios could be, first, updating assessment plans to make adjustments that do not materially change the assessment or occupation competence of learners—for example, where they are aligned to deliver the competence required by a regulator, such as in regulated professions in the health sector. In such circumstances, using a group is unnecessary and burdensome because it is a reflection of updating that has happened in a regulated profession. The second scenario is creating assessment plans for emerging occupations, such as certain digital occupations. The third is creating or updating assessment plans where there are acute skills needs requiring an urgent response, and where there is a lack of capacity in the system to respond. Relying on a group in instances such as these can create undue delays and hinder responsiveness. Without this clause, changes to assessment plans to reflect straightforward adjustments would incur delays and require unnecessary time and resource.
I note Amendment 11 in the name of the noble Baroness, Lady Barran, which seeks to remove the power held by the Secretary of State to prepare an assessment plan if they are satisfied that it would be more appropriate for the plan to be prepared by them than by a group of persons. However, for the reasons I have outlined already, it is crucial that we respond to feedback from users of the system to make the process for developing apprenticeship assessment plans more agile.
Amendments 9 and 15 in the name of the noble Lord, Lord Aberdare, and Amendment 10 in the name of the noble Baroness, Lady Barran, seek to set criteria for membership of a group of persons and to name in legislation a particular type of person that must be included as part of a group of persons. In the discussions on Clause 4, we went through some of the arguments about the impact this would have in reducing flexibility. There are no existing statutory criteria for how a group is formed to prepare an apprenticeship assessment plan but, as I said previously, IfATE is under a duty to publish information about matters it will consider when deciding whether to approve groups of persons. That existing duty is being transferred to the Secretary of State unchanged.
When a group is convened, it is critical to consider who the experts are in the field in question. The noble Baroness, Lady Garden, correctly identified that the experts in assessment will not always be the same as the experts in developing an occupational standard—and, of course, this will vary from occupation to occupation. Employers play a prominent role and are well placed to define and describe occupational competence, but they do not always exclusively hold expertise about how apprenticeships are assessed, and other contributions may be valuable. It is important that there is the opportunity for groups of persons responsible for preparing apprenticeship assessment plans to reflect and draw on a broader range of expertise, such as in assessment methodologies, practical training delivery and costs.
Professional bodies, awarding organisations, providers, regulators and others with a background in assessment can be well placed to be involved in the development of an assessment plan. In new and emerging occupations or highly specialised occupations, such as digital, artificial intelligence and nuclear, it may be necessary to take a broad and creative look at who is best placed to be part of a group preparing an assessment plan. There are scenarios where it is unnecessary or disproportionate to rely on a group to create or update assessment plans. For example, attempts have been made to convene a suitable group to update the interior systems installer assessment plan for nearly a year. This has significantly delayed the commencement of necessary, time-sensitive revisions in the important construction and built environment industry—a sector that is critical to this economy.
Setting criteria would therefore create additional hurdles for, and potentially even prevent, groups being convened. This would further slow the development of assessment plans and risk employers and others losing confidence in the system and in our ability to meet acute skills needs. It is not in anyone’s interest, not least learners or employers, to incur such delays. That is why we are removing unnecessary barriers to simplify and speed up processes.
Amendment 12 in the name of the noble Lord, Lord Aberdare, would undo the intended flexibility and efficiency by placing a requirement on the Secretary of State to consult specific bodies when they have considered it more appropriate for them to prepare an assessment plan than to use a group. That also risks slowing progress when that body is unable to participate, and it risks giving unintended precedence to those bodies over others who may be well placed to determine how competence should be tested.
I should also note that we see no reason why Skills England would not continue the approach currently taken by IfATE whereby all new assessment plans and those that have undergone material revisions—whether prepared by a group of persons or the Secretary of State—are published online for comment by any interested parties before approval.
Amendment 14, in the name of the noble Baroness, Lady Barran, and Amendment 13, in the name of the noble Lord, Lord Aberdare, would establish a duty to set and publish criteria in relation to the preparation of an apprenticeship assessment plan by the Secretary of State. As I emphasised, we are improving the system in response to feedback from key partners. Employers, trade bodies and providers tell us that the processes for developing and reviewing assessment plans need more pace and agility to respond quickly to changing and future skills needs. They report that current processes can feel bureaucratic, drawn out and time consuming—all barriers to the expert engagement that we need from them and to the smooth operation of assessment for employers and learners.
Setting criteria that the Secretary of State would need to meet in order to prepare assessment plans—in the minority of circumstances when it is more appropriate to do so than using a group of persons—would restrict the Secretary of State’s ability to be responsive. It would be overly prescriptive and fly in the face of stakeholders telling us that processes need to be simpler. I hope I have set out the intentions behind Clause 5 and, for the reasons I have outlined, I hope that the noble Lord, Lord Aberdare, will feel able to withdraw his amendment.
Lord Aberdare (CB)
My Lords, I thank all noble Lords who have taken part on this group, particularly my noble friend Lady Wolf and the noble Baroness, Lady McGregor-Smith, who added some valuable points. I thank the Minister, who mostly but not entirely managed not to give me the impression that I had wandered into a Groundhog Day scenario—there were some additional points there, I was glad to see.
The Minister emphasised agility and flexibility as the advantages of the proposed system. This is probably something wrong with me, but I have an inherent unease about flexibility in the hands of Secretaries of State when compared with flexibility in the hands of an organisation with an independent statutory role. The noble Baroness, Lady McGregor-Smith, mentioned that agility might not be quite such a feature once it gets into the hands of the department. Also, there is a slight conflict with the point that my noble friend Lord Hampton made earlier: employers are looking for clarity, and there is a slight danger of clarity being obscured by too much flexibility. Of course, all these concerns reflect points raised with me and, no doubt, with others by employers about the way the new system might work in comparison with the existing one.
Having said all that, I will study all the contributions, including the detailed differences from the previous set of amendments. Meanwhile, I beg leave to withdraw the amendment.
Lord Hampton (CB)
My Lords, reluctant as I am to join the noble Baroness, Lady Barran, in the bonfire of the clauses, I rather took against Clause 6 and was advised by the Table Office that this was the best way to discuss it. During the word bingo I have been playing, we have had “flexibility”, “agility”, “lean”, “speed”, “quick”, “quicker”, “responsive”, “speed”, “momentum”, “rapidly developing”, “fluidly” and “speed” about five more times.
In Clause 6, taking away the fact that we will be reviewing approved technical educational qualifications “at regular intervals”, the Government are getting terribly excited. It is like someone at new year who is going to join the gym, going to play tennis and going to run around the block every time. Then, gradually, the pie shop starts calling, it rains—yes, I am speaking for myself—and it becomes a little more flabby. The trouble is that there is this great enthusiasm—the Minister will be running around and talking to everybody—but, as my noble friend Lady McGregor-Smith said, it took five years to get IfATE. What will happen in five years?
In the Bill, we are mistaking consultation, scrutiny and review for rigidity and delay. We need more clarity, reassurance and scrutiny. By taking out looking at education qualifications at regular intervals and taking out the publication of information on standards and apprenticeships at regular intervals, we are putting a cloud of suspicion into this when we really need clarity. I beg to move.
Lord Aberdare (CB)
My Lords, I added my name to this stand part notice. My original thought was to table an amendment requiring the Secretary of State to publish regular reports detailing which technical education qualifications or standards and assessment plans had been approved without any review and why such review was deemed unnecessary. I was also concerned that the clause, as it stands, would seem to make it possible for no review at all to be conducted. The clause stand part notice in the name of the noble Lord, Lord Hampton, is more straightforward: it removes the clause altogether. I look forward to hearing from the Minister what exactly the Government’s intentions are for carrying out reviews and why these should not be spelled out in the Bill.
Similarly, although no amendment has been tabled, Clause 7 would make it possible for no third-party examination of a standard or apprenticeship assessment plan to be undertaken at all. Again, I hope that the Minister will tell us what the Government mean to do about such independent examinations. It has been suggested to me that they might be even more valuable sometime after a standard or a plan has been approved and put into practice, rather than before the approval, when it is not known what the effect will be.
Baroness Garden of Frognal (LD)
My Lords, there is no mention of awarding bodies in the Bill but, when I worked for City & Guilds, it was part of our role to review qualifications at regular intervals. I wonder why that does not feature anywhere in the Bill and why the Secretary of State is apparently taking over a function that was done very effectively in those days by awarding bodies.
Baroness Barran (Con)
My Lords, I was delighted to add my name to the Clause 6 stand part notice in the name of the noble Lord, Lord Hampton. Like him and the noble Lord, Lord Aberdare, I am baffled about why the Government do not want to review the approvals of technical education qualifications, published standards and assessment plans at regular intervals. As the noble Lord, Lord Hampton, intimated, it seems that the closer one is to the department and any Secretary of State, the more one will need independent scrutiny to retain the confidence of employers, learners and providers. Obviously, there is a risk that, without that independent oversight, standards of technical qualifications could be eroded or become less relevant than they should be.
Does the Minister agree that Clause 6 potentially introduces conflicts of interest? By removing the requirement for independent oversight, are the Government not placing an undue burden on those directly involved in the design and delivery of standards to act as their own assessors, where they end up marking their own homework? It would be helpful if the Minister could explain to the Committee why the Government do not believe that this level of scrutiny is needed. I absolutely appreciate that, in some areas, the review might be very light-touch—for example, because of the suitability of a set of qualifications—but we have seen how qualifications rise and fall in popularity and relevance over time. As we have heard from a number of noble Lords this afternoon, including the noble Baroness, Lady Wolf, there are clear calls from the sector for greater simplification of qualifications.
At Second Reading, the Minister committed to publishing information about the intervals for reviews of different qualifications. I wonder whether she could update the Committee on when that will happen.
Similarly, my Amendment 16 to Clause 7 seeks just to restore the status quo; namely, that the Secretary of State “must”, rather than “may”, make arrangements for an independent third party to carry out an examination of a standard or an apprenticeship assessment plan. As the Committee knows, independent reviews are there to provide feedback to policymakers and training providers by, for example, identifying areas for improvement and best practice. I very much hope that the Minister will consider this amendment and stand part notice positively.
Baroness Smith of Malvern (Lab)
I thank noble Lords for their contributions on this group. I feel confident in thanking noble Lords, because I am confident that I am on strong ground on this one. I hope nobody proves me wrong.
In preparing to transfer functions from IfATE to the Secretary of State, an assessment of the current operation of the system was undertaken to identify any functions that should be amended rather than simply being transferred in their current form. In that consideration, the proposal for a relatively small change to Clause 6 came forward. Clause 6 amends the requirement to review technical education qualifications and standards, and apprenticeship assessment plans, at regular and published intervals, by removing the requirement to publish information about the intervals at which reviews will be conducted.
The noble Lord, Lord Aberdare, argued, rightly, that there is a need for review. The point about this clause is that there is no change to the broader review requirement. The Secretary of State and Skills England will still be required to maintain arrangements to review approved technical education qualifications and standards, and apprenticeship assessment plans, with a view to determining whether they should be revised, be withdrawn or continue to be approved. I wholeheartedly agree with noble Lords who have said that that is an important function, and it is absolutely right that that duty should remain.
Removing the requirement to publish information about the intervals at which reviews will be conducted will allow Skills England to determine when reviews of technical education qualifications and more than 700 high-quality occupational standards and apprenticeship assessment plans should be carried out, based on need rather than a fixed review point, as is currently the case. Originally, IfATE expected to carry out reviews every three years but, with the proliferation of standards, assessment plans and technical education qualifications to review, it has been unable to do so; nor was it able to do this by undertaking reviews on a route-by-route basis. It has since adopted a more risk-based approach. The current approach, which fixes review points, has been too rigid and fails to recognise the differences in starts and achievement rates and rapid changes in skills needs; for example, where occupations evolve quickly.
Clause 6 will ensure that standards, technical education qualifications and apprenticeship assessment plans are kept up to date, coherent and relevant, and are reviewed appropriately. The amendment would remove a statutory obligation and provide the Secretary of State flexibility that is in line with the current risk-based approach taken by IfATE to determine whether a review should be prioritised; in other words, we believe that IfATE has arrived at the right, flexible position, but that would not be reflected without this legislative change. It recognises that flexibility is needed to take a targeted approach to administering the significant volume of reviews based on whether there are specific issues with the performance of the standard and how widely used it is, rather than on meeting an arbitrary timetable.
Without this clause, standards, technical education qualifications and apprenticeship assessment plans would need to be reviewed at published intervals, rather than based on need, preventing resources being deployed effectively to ensure that standards, technical education qualifications and apprenticeship assessment plans are kept relevant and up to date as required.
Amendment 16, in the name of the noble Baroness, Lady Barran, would remove the flexibility that we intend to create, and it would mean that the Secretary of State would be required to arrange for an independent third-party assessment for every new standard and assessment plan. Clause 7 amends the 2009 Act to substitute a requirement for independent third-party examination of all new standards and assessment plans with a discretionary power for the Secretary of State to make arrangements to do so. The default position will remain that the Secretary of State will make arrangements for independent third-party examination of new standards and assessment plans prior to their approval.
The clause will provide an alternative approach in certain circumstances where obtaining third-party examination is duplicative or not necessary. For example, the option not to arrange an independent third-party review might be deployed where employers place unequivocal high value in a professional body’s mandated qualification or key skills and behaviour learning outcomes, and where the occupational standard adopts that very closely, such as the CIPD and HR standards. In these cases, an external review would be nugatory.
In highly regulated occupations, such as the health sector, the regulatory requirements for occupational competence must be reflected in the occupational standard and assessment plan, and deviation from this is simply not possible. Again, the need for third-party review would be redundant.
Without Clause 7, examinations that do not improve standards and assessment plans but take time and resource to deliver would continue to be required. That would continue to place unnecessary burdens on those involved, slow down the process and make it excessively onerous.
For the reasons I have outlined, I hope the noble Lord, Lord Hampton, will feel able to withdraw his opposition to Clause 6 standing part of the Bill.
Lord Hampton (CB)
My Lords, I thank everybody who took part in this short debate. It is always quite exciting to see the noble Baroness, Lady Barran, describe herself as baffled—in my short career here, I have not seen that yet. The noble Lord, Lord Aberdare, and I talked about how there is no third-party examination and there is a conflict of interest. It looks like Skills England is not only marking its own homework but writing its own exams.
I did not join the Minister in her strength of feeling that she had got it absolutely right, because it is all based on need, but, again, who defines need? It is the Secretary of State. We are losing this clarity—this is a trust issue again. But I am sure that some conversations can be had between now and Report, so I withdraw my opposition to the clause standing part of the Bill.
Baroness Barran (Con)
My Lords, this group of amendments seeks greater clarity from the Government about how the different bodies involved in the regulation of technical education will work with the Secretary of State, given her new powers under the Bill, and, in turn, whether that impacts on the responsibilities and relationships between them. I was trying to think of what the collective noun might be for a group of regulators, and I could come up only with a “regime”. There are certainly several involved in this area, including, of course, IfATE currently, as well as the department itself, Ofqual and the Office for Students.
It will help to hear from the Minister her reflections on how the Government will set the strategic direction in this area and then bring clarity to the different—that word again—roles of each regulator and how they can contribute to that goal. Despite their best efforts, and with apologies to those drafting the Explanatory Notes, I am still not entirely clear about the impact of Clause 8 on Ofqual’s powers in this area. I have already raised this with the Minister and made absolutely clear that this is a probing amendment by which I merely seek to understand whether there would be any change in Ofqual’s powers as a result of these amendments to the Apprenticeships, Skills, Children and Learning Act 2009. Although I have reread her comments at Second Reading, I very much hope she can set out for the Grand Committee the impact of Clause 8 in practice—ideally with a couple of examples—so that at least I, if I am the only one left standing, am completely clear on this point.
Baroness Wolf of Dulwich (CB)
I was about to take this opportunity to ask for clarification, but it follows on from something that the noble Lord, Lord Johnson, said earlier, so perhaps he will follow up on it. We have a lot of regulators in this area, and I also am a little concerned. I cannot say that I understand the clause, by the way—I have just looked at it but cannot make head or tail of it—but I will try to get some clarity into my head. I know that, at the time that IfATE was set up, there was quite a lot of discussion between it and Ofqual about who was allowed to do what; the noble Baroness, Lady McGregor-Smith, may be able to elucidate this.
My concern going forward is with the LLE, because the intention was always that these were not just standard university qualifications that one could take but that there would be a mechanism for approving high-quality qualifications at the right levels, for which you could also take a loan. That is critical, and I know that the OfS has been struggling with this on the regulatory side but it does not seem to have got very far. It is critical that we have a clear pattern here and do not inadvertently create obstacles to that approval process again.
It slightly worries me that, as I read it, the Secretary of State would have to give Ofqual instructions on a qualification-by-qualification basis. That again does not sound as though it will be very fast or flexible. I just ask the Minister, if she is totally clear about this, to give us a little lesson now; and, if she is not, whether she could seek clarification, perhaps from her higher education experts as well as from her apprenticeship experts, on whether we are inadvertently making this more difficult rather than easier.
Baroness McGregor-Smith (Non-Afl)
Once more, I will say a few words about process and reiterate to the Minister my words on speed. Any changes to any process will slow things down; it will not improve in the short term. Creating constant momentum and change is really important, as is simplification. The more I think about having four regulators, the more worried—traumatised, almost—I begin to feel.
Whether or not we like what the current system has done and whether or not things need changing, it is important for us all to appreciate that the speed point is critical. I have yet to see things speeding up as systems move within government; they tend to slow down. So let us be very careful and cautious. I am nervous about the unintended consequences of change. Through all of this, there should be a delivery plan that talks purely about building momentum for the skills system. At the moment, we do not have that.
Baroness Smith of Malvern (Lab)
My Lords, in responding to this part of the debate, I am confident that I will be able to explain to noble Lords the intention of Clause 8; however, given the broader questions about the roles of a range of regulators in this field, I may well write to noble Lords to set that out, because it goes broader than Clause 8.
The amendments in this group relate to proposals regarding quality assurance and the accreditation of apprenticeships and technical qualifications. Section 138 of the Apprenticeships, Skills, Children and Learning Act 2009 allows Ofqual to set an accreditation requirement for individual qualifications or descriptions of qualifications. If it does that, any such qualification must be accredited before it is awarded.
Ofqual accredits a qualification submitted by an awarding organisation, first, if the awarding organisation has been recognised in respect of that qualification or type of qualification; and, secondly, if the qualification submitted meets the relevant criteria. This is a rigorous process that gives confidence in qualifications—our A-levels and GCSEs. However, since 2022, Ofqual has been prevented from making determinations on accreditation for technical qualifications. This means that, in respect of accreditation, technical qualifications are treated differently from academic qualifications and are prevented in all instances from benefiting from an important tool for ensuring quality.
Clause 8 will change that by enabling the Secretary of State to forge a route to technical qualifications being accredited. The clause provides the Secretary of State with the discretion to determine, should it be deemed appropriate, that an exception could be granted to the general prohibition on Ofqual being able to accredit both approved technical education qualifications and technical education qualifications that the Secretary of State is considering approving. This will mean that, where it is directed to do so by the Secretary of State, Ofqual could exercise its power to determine whether an accreditation requirement should apply to certain technical education qualifications, subject to appropriate consultation.
In some instances, the Secretary of State may deem it appropriate to ask Ofqual to consider whether imposing an accreditation requirement on the qualifications in question could help maintain their quality and signal to the wider system that they are broadly commensurate with other accredited qualifications in terms of rigour. For example, the Secretary of State could use this power in instances where it is important to ensure that students who opt into and successfully complete high-quality technical education qualifications are in no way disadvantaged as compared to their peers who pursue academic qualifications. They may consider, for example, whether a category of technical qualification provides a particularly important springboard for onward progression but where those who successfully complete the qualification may be competing with those who have studied other qualifications that have been accredited, such as GCSEs or A-levels.
It may also be the case that the Secretary of State therefore considers using this power where they are persuaded that a particular category of technical qualification is not subject to any broader review or has reached a certain level of maturity in delivery, and/or is being taken by a sizeable number of students. It is important that the potential for the accreditation of technical qualifications is reintroduced in the managed and considered way the clause allows. Here I come to the questions about why Ofqual does not have a complete permission and ability to consider technical qualifications.
The clause provides the Secretary of State with the discretion to determine, should it be deemed appropriate, that an exception could be granted to the general prohibition on Ofqual being able to accredit. This is because of the relative newness of many technical qualifications and is in order to consider carefully the interactions with the ongoing and vital reviews both of post-16 qualifications and of curriculum and assessment. These considerations are more significant for technical than non-technical qualifications. I say to the noble Baroness, Lady Barran, that we are doing this not because we necessarily have specific examples in mind but to enable them to be considered in response to some of the reviews, where it would seem appropriate.
Amendment 34, in the name of the noble Baroness, Lady Barran, would impose a duty on the Secretary of State, within six months of Royal Assent, to lay before Parliament a report on the effect of this Act on the powers exercised by regulators, including the Office for Students and Ofqual. We are committed to ensuring transparency in the way that the Bill’s powers are discharged and the effects that their transfer and execution will have on regulators, other public bodies and parts of government. We intend to follow the usual methods for agreeing and making this information available publicly and to Parliament, and therefore consider the amendment to be unnecessary, notwithstanding my commitment to write to noble Lords with some more detail about the way that different regulators work.
Specifically, Skills England’s published framework document will govern the relationship between the body, the department and the rest of government. There is a further and pre-existing published framework document already governing the relationship between the Department for Education and the Office for Students, and an equivalent document is being developed between the department and Ofqual to support effective working arrangements.
IfATE currently has memorandums of understanding with Ofqual and the Office for Students, and we anticipate that equivalent documents will be developed and published in respect of Skills England in due course. These documents will set out the nature of the relationship between Skills England and the regulators it will work with, in line with their respective framework documents.
For the reasons I have outlined, I hope the noble Baroness, Lady Barran, feels able not to press her amendment.
Baroness Barran (Con)
I thank noble Lords—or noble Baronesses—for their contributions to this short debate, and the Minister for her response and explanation of what Clause 8 intends to do, which, at least for the moment, I think I understand. What I heard her say is that the intent is to improve the rigour in the system and send a message to the system about rigour in relation to technical education qualifications, but that there are no current plans to use that power. That raised the question: if some qualifications are then accredited by Ofqual that have a particular status, what impact will that have on all the others? That is a little policy joy for her to consider. I very much look forward to her letter explaining the network of regulators and how this legislation will impact them, as I am sure other noble Lords do.
I very much support the comments from the noble Baroness, Lady Wolf, on the importance of moving on as quickly as possible with the lifelong learning entitlement. I hear loud and clear my noble friend Lady McGregor-Smith’s comments about the need for speed. The slight concern many of us might feel is that agility and speed are not always the first words that come to mind when thinking about central government.
Lord Lucas
“Review: Chief Skills AdviserWithin six months of the day on which this Act is passed, the Secretary of State must lay before Parliament a review of the impact of this Act on the case for creating the role of Chief Skills Adviser, with responsibility for advising Government and reporting to Parliament on the state of skills needs in the economy.”
Lord Lucas (Con)
My Lords, I acknowledge that a great deal of the thinking behind Amendment 17 comes from the Edge Foundation. Skills England is a big change and a big opportunity. The Government’s ambitions to unify the skills landscape and respond to the skills need, which is very large and well acknowledged, will require impetus, which Skills England seems to have, but also connection—connection which allows competing interests, particularly between departments, to be resolved and common pathways to be evolved.
It does not seem to me that we can run a skills system by diktat. There is nothing about any department, except the Treasury, that allows it to impose diktat on others. My amendment suggests to the Government that they look at the success of the chief scientific adviser structure. Obviously, there would be the chief skills adviser in the DfE, but skills advisers should be in each department, as with the chief scientific adviser network. It is about evolving a combined understanding and having someone in each department for whom skills is their principal occupation, who has status in that department and who is intimately connected into the Department for Education’s network.
Every department has skills needs and its own understanding and ideas about them. Fragmentation impedes employer and provider engagement. Anyway, modern life needs cross-cutting skills and a lot of jobs require skills whose roots are in several departments, and these things need to work together. The Government’s missions are very much dependent on effective collaboration on skills.
Looking at the individual departments, we see that even within the DfE skills cross schools, FE and, notably, higher education. There is plenty of need for communication just within the one department. Having a chief skills adviser would help.
In other departments, one wishes that the Treasury would import some people who understand the real world a bit better, but it is also responsible for the evolution of skills in the financial and accounting space. Those are the kind of skills that spread into a lot of other careers.
The Foreign Office handles languages, history, geography and diplomacy. Diplomacy is not something that social media seem to cultivate; the Foreign Office must care where that skill is coming from.
The Home Office covers police and security but, above all, migration—bringing in the skills we have not generated here. I remember plenty of conflict with the Home Office in my 30 years here on whether particular skills would be allowed into this country and the speed at which that should be done.
The Department for Business and Trade obviously covers management and skills for business, but a huge skills effort is actively under way there under the heading of the industrial strategy. The people and skills division is trying to solve underinvestment in skills by industry and to improve management and tech use skills. A huge agenda is being actively pursued there, not as a subsidiary of the DfE but as a subsidiary of the industrial strategy.
The Department of Health and Social Care is a huge user of skills and a very big user of microcredentials. Really small bits of learning have evolved to be accepted by the particular employers at which they are aimed. When you have a bigger employer such as the Department of Health, that is really quite easy. So these skills qualifications are evolving in large numbers and at great speed not only in Health but in a lot of other departments.
DESNZ needs the green workforce, the MHCLG has construction and especially housing, DSIT uses the sciences, DCMS has creative skills, and the Cabinet Office needs skills for the Civil Service. If productivity is slipping back in the Civil Service, there is clearly a need for big skills investment. The MoJ needs legal skills and the Department for Work and Pensions is concerned with access to skills. What qualifications are available for people who are bottom of the heap when it comes to employment? The MoD has a huge range and depth of training, the DfT has skills from lorry driving to logistics, and Defra uses environmental skills.
Local government, through the LSIP network, has a real interest in how the skills agenda is delivered. The word I hear is that LSIPs have been a real success, as they are effective and flexible. It takes a couple of years for the DfE to evolve a qualification but LSIPs can do it in weeks, because they are so focused on the actual local employer need and work closely with a provider. The Minister for Women and Equalities brief is now in the DfE but it used to wander around Whitehall. It has a very strong interest in the skills agenda.
Every department in Whitehall is intimately linked to the skills agenda and needs to be bound to a common sense of progress. It is not possible to do that by pushing; it has to be by linking. A structure like that of the chief scientific advisers would help, and the DfE has experience of this. It has its own chief scientific adviser and a council of scientific advisers to go with it. This is a resource that the DfE is used to having.
By having a chief skills adviser network to feed into and get feedback from, the Government and the DfE will know and understand the skills challenges of all departments so that they can synthesise and co-ordinate. Individual departments would have immediate access to the DfE resource, so that they can plan and integrate. That would be a good way forward for a skills structure.
I would be very grateful if the Minister replied to the questions I asked at the end of my previous intervention. I have seen too many sets of relationships die when institutions change. Some of the sector skills councils had really good relationships with business and they were just trashed. Most relationships with local enterprise partnerships just ended; they went nowhere, because local authorities were not capable of maintaining them in the same way. I want to be sure that what IfATE has built will continue under the new arrangements. As I said, I would also be interested in how the Careers & Enterprise Company fits into this structure. I beg to move.
Baroness Garden of Frognal (LD)
My Lords, I added my name to the amendment from the noble Lord, Lord Lucas, on the importance of a chief skills adviser. As I have said before, skills always need advocates within government because it has a predominantly university-educated membership. This role could be key to ensuring that skills changes will be enacted by someone who can take a view over the country of which skills are in short supply in which areas and need local support. The network of skills advisers in all departments that the noble Lord proposes would be a great way forward, and I support the amendment.
Lord Johnson of Marylebone (Con)
My Lords, I shall speak briefly. I think that this amendment is worth very serious consideration. When I was Science Minister, I saw up close—as the whole country did during the pandemic—the value of the Chief Scientific Adviser and the network of scientific advisers across government departments. They play a really useful role in ensuring that policy is informed by the strongest possible understanding of science and in bringing the scientific method to policy-making. They have had a huge impact and made a huge contribution.
However, I would just flag that this raises an interesting question about what exactly the role of Skills England is. My understanding, from what the Government have said so far about Skills England, is that it was meant to be a body working across government and doing the difficult job of ensuring that all the different interests of different government departments in the skills agenda are given appropriate balance and focus. To my mind, that may be somewhat duplicative of what Skills England is itself seeking to do. In that sense, it may be a perfectly good alternative to Skills England if you have a chief skills adviser, informed by skills advisers in the various departments, feeding into the DfE; then, you may not need the horizon-scanning, policy-making function that Skills England is proposing to offer. I suggest that you have either one or the other; you probably do not need both.
Baroness Barran (Con)
My Lords, I am grateful to my noble friend Lord Lucas for setting out so clearly the case for the appointment of a chief skills adviser and a network across government departments. However, I also have a lot of sympathy with the remarks from my noble friend Lord Johnson about the risk of duplication. In a way, this debate has made me feel like we are coming back to Clause 1 of the Bill, which I promised not to do, and to the appetite for understanding the Government’s thinking about how Skills England will work in practice. Clearly, this is a kind of alternative model.
I will make just a couple of brief points. In the previous Government, we benefited from the advice of Sir Michael Barber in his role as an adviser on skills policy delivery. My first point on that concerns the importance of the word “delivery”. His focus was on the delivery of skills policy. We all know that writing a great policy document is about 10% of the task while about 90% is effective delivery of that policy at scale, in real life. On behalf of my former colleagues in the department, I thank Sir Michael for his excellent advice in this regard; I had only one conversation with him but I have thought about it and used his advice many times since.
My second point is that Sir Michael reported not only to the Secretary of State for Education but to the Chancellor of the Exchequer. I wonder whether that is something that the Minister might consider.
Baroness Smith of Malvern (Lab)
My Lords, Amendment 17, which makes up this sixth group, was tabled by the noble Lord, Lord Lucas. As he outlined, it points us towards considering the case for a new and separate chief skills adviser—or, as I think the noble Lord described it, a network of chief skills advisers across government. I certainly agree that we need champions of skills in this country in a broad sense. Earlier, my noble friend Lord Blunkett made the case for having to make that argument across government and the challenges in doing so over the years. I do not dispute that need. Harnessing the skills of all our people is crucial to unlocking growth and spreading opportunity.
As it stands, our skills system is fragmented and not meeting the skills needs of either the economy or our people, so I have some sympathy with the idea that we need a unifying force that can also have an impact across government. However, that unifying force, as the noble Lord, Lord Johnson, said, is Skills England. As this legislation paves the way for us to establish Skills England, it is not necessary, I would argue, to include consideration of a chief skills adviser in parallel; doing so would only add a further layer of complexity and, arguably, make it less clear where the accountability for delivering a step change in skills provision sits.
Lord Lucas (Con)
My Lords, I am very grateful for that reply. I completely understand that this is a direction in which the Government do not want to take at the moment, but I cannot recall, in my unexpectedly long time in this place, seeing any structure like that of the chief scientific advisers that really enabled collaboration between departments. It gives each department a sense of ownership of the policy, that it is in some way its own, rather than something that some other department is trying to impose on it.
Looking at long-running problems, such as how to care for the elderly, we see that the inability to get a few government departments to work in collaboration with each other causes immense problems, such as bed-blocking in hospitals, and questions about whose budget something is supposed to be on. The difficulties of working cross-departmentally are legendary and real. Clearly, Skills England is setting out to have cross-departmental impact. I wish the Government great fortune in that, but I hope that, if things start to prove sticky, they will turn their minds back to doing something, perhaps within Skills England, to produce a structure that makes collaboration work. The more we can do that within government, the more we will solve some of the big problems that have proved intractable in terms of making government work well. I am happy to withdraw the amendment; I do not expect to be here to bring it back.
Institute for Apprenticeships and Technical Education (Transfer of Functions etc) Bill [HL]
Tuesday 26th November 2024
(3 months, 3 weeks ago)
Grand CommitteeInstitute for Apprenticeships and Technical Education (Transfer of Functions etc) Bill [HL] 2024-26 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 38-II Second marshalled list for Grand Committee - (22 Nov 2024)
The Deputy Chairman of Committees (Lord Ashton of Hyde) (Non-Afl)
Good afternoon, my Lords. If there is a Division in the Chamber while we are sitting, which I do not expect, this Committee will adjourn as soon as the Division Bells are rung and resume after 10 minutes.
Amendment 18
Lord Storey
“Report: functions transferred to the Secretary of StateWithin six months of the day on which this Act is passed and annually thereafter, the Secretary of State must lay before Parliament a report, explaining how they have discharged the functions transferred to them by virtue of this Act.”Member’s explanatory statement
This amendment requires the Secretary of State to lay a report before Parliament at regular intervals detailing how they have used powers transferred to them by virtue of the Act.
Lord Storey (LD)
My Lords, I offer my apologies for not being able to be present at the first day in Committee, but I have read the Hansard of that day.
My amendment is very similar to lots of others in the various groups, and I think they all point to the same thing, really. The Minister talked about the “narrow IfATE model”. I would have thought an executive agency within her department is a very tight model, and I can perhaps see why from her point of view, whereas on these Benches we would prefer a wider, more inclusive model. Having said that, I understand and can see the driving force behind what the Minister wants to achieve from the comments she has made. She said that the Government want
“to move away from the current, narrow IfATE model. Creating any further requirement for parliamentary approval before Skills England operates fully would frustrate the intentions of the Bill to enable a smooth transfer and the delegation of functions to Skills England”.—[Official Report, 21/11/24; col. GC 96.]
I suppose we are all anxious for progress in this area. The skills shortages are frightening. You have only to look at any particular industry. I have spoken to the construction industry, and the number of job vacancies and areas where it just cannot get skilled labour are holding back not just that industry but the country.
Given that we are where we are, and that I, no doubt like my colleagues, trotted along to the Bill office and said, “I’d like to put an amendment down on this”, to be told, “Oh no, it’s not in the scope of the Bill”—the Bill is very tightly written, so we are frustrated in that we cannot talk about or suggest for improvement some of the things in the area of skills that we wanted to—mine is a simple amendment. It simply says that the Secretary of State must lay before Parliament at regular intervals how they have used the powers transferred to them. It is a supportive and helpful amendment because you do not want, in 12 months’ or two years’ time, to say, “Do you know what? I’ve been let down by my executive agency. It has not delivered”. But if you are able to report to Parliament on a regular basis—it does not specify a time—then we can share those successes and concerns and maybe, from time to time, we can make some helpful suggestions.
I should add that I added my name to the amendment from the noble Lord, Lord Knight, which I also support. I beg to move.
Lord Knight of Weymouth (Lab)
My Lords, as the noble Lord, Lord Storey, said, this is part of a range of amendments all essentially about reporting and, as he accurately described, any number of us were wrestling with how to get something that looks like Skills England into the Bill. A way involved a reporting requirement— I was not allowed to mention Skills England in my amendment—in which I lifted some of the detail in paragraphs (a), (b), (c) and (d) from statements that the Government have made about Skills England and what they want it to be able to focus on and achieve. Hence the amendment lists:
“identification of skills gaps … the provision and funding of training to meet the skills needs of employers; … the development of occupational standards; …work with regional and local bodies to improve the skills of the workforce in England”.
I pay tribute to the noble Lord, Lord Ravensdale, for managing to get in something around the green skills agenda, which I tried to get in in my amendment but failed to draft it as skilfully as he clearly was able to do in order to get that in. I also support having a specific mention of the responsibilities in climate legislation and its relationship to green skills.
As I understand it, IfATE has a requirement to report to Parliament annually. It does so well and has shown its success, so the capacity is there, assuming that IfATE’s capacity will successfully transfer into the executive agency. So I do not see this as onerous, and it is important that we as Parliament should receive a report on the additional things that IfATE does not currently cover that would be covered by Skills England.
It is, incidentally, important for Parliament to have an opportunity to scrutinise the really important work that Skills England will be able to do. The annual report is a common mechanism that we all use when we are trying to get a little more traction for Parliament, but I think it is merited in this case. I hope that, reflecting on this group and the next, which is also about reporting in slightly different ways, the Minister will be able to give some consideration as to whether this is a relatively straightforward crumb of comfort to give some of us who have been slightly anxious about the absence of Skills England in the legislation.
Baroness Evans of Bowes Park (Con)
My Lords, I shall speak to Amendment 35 in the name of my noble friend Lady Barran, to which I have added my support. Although we have only just started this debate, the range of reporting requirements set out in amendments in the group and mentioned in the speeches we have already heard is because we are all concerned about the lack of detail and statutory underpinning for Skills England currently in the Bill. We share concern that there needs to be greater clarity and purpose for the organisation in the legislation. It is certainly that lack of detail about the way the Government will decide their strategic priorities and create new technical qualifications, where IfATE has previously acted independently and consulted with employers and businesses, that is the rationale behind the amendment I am speaking to now.
The amendment is an attempt to understand how the Government will make these decisions and mandate Skills England to publish the process it intends to follow. I hope that, in her reply, the Minister can provide some further detail and reassurance to the many in the sector who are rightly concerned by the uncertainty that the Bill is creating—about the lack of detail, in particular, on what were previously established and well-understood processes. In order for Skills England to have the effect that we all hope, the decision-making process it undertakes and uses to decide which sectors will receive new technical education qualifications needs to be transparent, robust and retain the confidence of employers, training providers and, of course, the students themselves.
I hope that, in addition to Amendment 35, the Minister will give careful consideration to Amendments 23, 31 and 36 in this group, which, if adopted as a whole, would bring some much needed further clarification and credibility to the work of Skills England from the outset and, as the noble Lord, Lord Knight, just said, provide a suitable opportunity for parliamentary scrutiny of its work.
Lord Addington (LD)
My Lords, it might be an appropriate time to mention my Amendment 22. There seems to be an unwritten law in Parliament that, if the noble Lord, Lord Addington, is taking part in an education debate, he has to mention special educational needs. Yet again, I remind the Committee of my interests in that area.
The opportunity for the cock-up school of history to strike has been pointed out here on numerous occasions. If you do not have an opportunity to write it in, it gets ignored and left behind. I am sure that a lawyer would be rubbing his hands at that, saying, “Yes, we have legislation that will mean you can get into it”, but, as we know, at the moment, special educational needs is an area that is a little too rich with lawyers and court cases. I hope that the Minister will be able to tell me that, in future, the Government will make sure that there is a clear and definable duty—and, indeed, limitations—for where special educational needs and disabilities have to be covered in getting qualifications, and that, where there are practical difficulties, we would find out what is going on.
The technology is moving on all the time. I thought the stuff that I was using for my day-to-day activity was cutting-edge 10 years ago and discovered that it is not, and that I should have an upgrade, often using stuff that is built into computers now. There is a need to address this. Exams are now so much easier to take by means other than pen and paper—indeed, it is the norm—but only if you make sure that the system works and is compatible with what is required out there, which means monitoring.
I hope the Minister will be able to give me an answer that means I can stop worrying, and that we can take the Pepper v Hart reference and use it in any future disputes. Unless we get somebody who is on the ball and being told they have to do it, history says that the aforementioned cock-up school of history will come in and we will make other lawyers happy and certain candidates unhappy.
Lord Aberdare (CB)
My Lords, I never know what the protocols are for when to speak in Committee, but since both the amendments that I have added my name to in this group have been introduced, I will leap in. I hope the Minister does not think I am stalking her, having attended her evidence session this morning with the Industry and Regulators Committee, which was very interesting. I also look forward to reading the Government’s new White Paper Get Britain Working.
I have added my name to Amendment 18 in the name of the noble Lord, Lord Storey, which I see as a catch-all for some of the reporting required from the Secretary of State by many of the amendments tabled. Of the 22 amendments we are discussing today, 12 would require the Secretary of State to produce reports, so I very much welcome the idea of the noble Lord, Lord Knight, that an annual report might cover most if not all of those requirements.
I have also added my name to his Amendment 23, another reporting requirement, which focuses on many of the central functions of Skills England, identifying skills gaps and shortages and promoting ways of addressing them. It includes looking at training needs. One thing I would add to that is the education side of the picture, not just the training stage: making young people aware of the skills they need to find rewarding employment suited to their abilities and of the range of opportunities available to them.
I also welcome the inclusion in the amendment of working with regional and local bodies. I would expect to see Skills England, as I think the Minister mentioned this morning, playing an active role in consolidating local skills improvement plans, to ensure that, together, they properly address national as well as local needs and seek to forge a joined-up approach between the different government departments, which might otherwise be tempted, as they have been in the past, to develop their own skills policies that may not add up to a coherent whole. I am pleased to add my support for those two amendments.
Lord Blunkett (Lab)
My Lords, I was pleased to add my name to Amendment 23 in the name of my noble friend Lord Knight, and I thank noble Lords who have supported Amendment 31 in my name. I said quite a lot last Thursday, which seems a lifetime ago—I was on so much medication I would have been disqualified from the Olympics—so I will try to keep it brief today.
Amendment 31 has elements which have already been overtaken by announcements by the Government, reinforced, at least as far as I can manage to access it, by the White Paper produced today. Thankfully, the foreword, signed by four Secretaries of State, mentions skills a lot and indicates the critical importance of the skills agenda to getting some of the 2.8 million people who are economically inactive back into work. It also mentions the youth guarantee and the reappraisal of priorities—for Skills England, I hope, but it is not entirely clear who is making decisions about what in terms of the growth and skills agenda and the new levy, and therefore who has actually made the decision in respect of what we are pressing for and what has been pressed for publicly in terms of prioritising entry-level and foundation apprenticeships.
Baroness McGregor-Smith (Non-Afl)
My Lords, I just want to give some context on IfATE being a statutory body, since I chair it. Statutory bodies take their responsibility very seriously when they issue reports to Parliament. First, when we go through that detail at IfATE annually, it is a rigorous and detailed process. It is absolutely evidenced and fact-checked. I would like to see that level of reporting, or even more, done in Skills England. I will not stand up and say that I am the expert on mechanisms, but I am concerned to think that that level and standard of reporting will not happen under a new, enhanced body.
Secondly, it is important that we do not lose sight, during the progress of the Bill, of what this transfer of powers is going to do. By transferring the powers of IfATE to the Secretary of State, we transfer the approval of technical qualifications as a whole—an end-to-end process that is understood and respected by employers and understood by colleges. Everyone must understand how qualifications will be arrived at and approved. I would like some assurances from the Minister that that process of end-to-end scrutiny with employers will continue and be enhanced in Skills England.
Lord Watson of Invergowrie (Lab)
My Lords, I am pleased to speak in support of my noble friend Lord Blunkett’s important Amendment 31 on apprenticeships and the growth and skills levy. Although it is important that apprenticeships are available to all age groups, thus ensuring that lifelong learning plays a key role in skills development in the years ahead, I am particularly keen that more young people should see them as a first step on a career ladder. That is clearly set out in Amendment 31.
Unfortunately, the bright new dawn that many of us expected when the apprenticeship levy was introduced in 2017 has failed to materialise. Noble Lords will be familiar with the analysis commissioned on behalf of the Association of Colleges earlier this year, which showed —I think this was for 2022-23—that some 160,000 fewer apprenticeships were started than in 2017. You might ask “How on earth can that possibly be the case?”, but it is. That decline was particularly alarming because it disproportionately impacted on those most in need of training, particularly younger people and those from disadvantaged backgrounds.
There were regional aspects to it as well, because the decline was particularly prevalent in regions of the country such as the north of England, which traditionally had high levels of apprenticeships, and among SMEs. There are particular structural issues with the levy for SMEs, but that is for another day. That decline in the apprenticeship statistics must be reversed and returned at least to the pre-2017 levels, so I was pleased to hear my noble friend the Minister say on Second Reading that foundation apprenticeships are to be developed as an alternative route for young people who may have faced barriers in the past.
The noble Lord, Lord Storey, recounted how difficult it had been to get some of his amendments tabled, because the words “Skills England” could not be used. In today’s Marshalled List, any time that “Skills England” is mentioned it is in quotation marks. It is almost as if it is some soiled rag that needs to be picked up with a glove and held at some distance from your body. It is astonishing. Why should we be so afraid to say that, when we all know what we are talking about here? Let us just be open about it.
Critical to the effectiveness of “Skills England” will be the reshaped growth and skills levy. That must be released from the straitjacket of its predecessor, whose unspent employer funds reverted to the Treasury rather than being retained in the education and training budget. I think that there was some disappointment across the House that the Chancellor had nothing to say about the growth and skills levy in the Budget. I am at a disadvantage because I have not had the opportunity to look at today’s White Paper, to which other noble Lords have referred, but I hope that my noble friend might be able to say something about the growth and skills levy in her reply in respect of this amendment, regarding the scope and level of investment that it might enjoy.
This must affect local priorities, of course, which is why the amendment stresses the role of local skills improvement plans in delivering the co-ordination needed to plug the skills gaps. LSIPs already play a role there and I retain my belief that Skills England should be established as a statutory body, rather than an executive agency, the better to co-ordinate efforts across departments to ensure that we have the most effective approach and that we develop the skills that the country needs going forward.
That said, it is encouraging that Skills England, still in skeletal form, has already published its first report. Its title, Driving Growth and Widening Opportunities, is one that it must live up to. The report to Parliament outlined in Amendment 31 should further concentrate minds in the DfE to set out the direction being pursued and to provide a clear delineation of Skills England’s role in that, having been given those tasks and—I say this only to be helpful, I hope, to my noble friend the Minister—looking to the outcome of a buoyant skills landscape, which the Government and every noble Lord here today want to see emerge.
Baroness Wolf of Dulwich (CB)
My Lords, I support this amendment. Indeed, I express strong support for all the amendments that have managed to get themselves tabled in spite of the language of this Bill, which at this point are just calling for report. It seems quite extraordinary that, at a time when we have a Government who recognise the centrality of skills and have committed to a system-wide approach—as in today’s White Paper, for example—we are being asked to pass legislation that puts everything inside the department, reported to a DfE official, so that under this Bill there is not even a report for other government departments, never mind for the public at large and for Parliament. I cannot believe that this makes sense in terms of the Government’s expressed ambitions for Skills England: that it should be system-wide; that it should do something that goes beyond the remit of individual agencies and quangos; and that it should take in the whole scene effectively. I would very much prefer to see it as a statutory body, but I hope that, between now and Report, the Minister will at the very least take away this widely expressed request for us to have regular public reporting of what is going on, which everybody can use, so that we have documents in the public domain allowing us to see what is happening and how the Secretary of State’s new responsibilities are being carried out.
Lord Johnson of Marylebone (Con)
My Lords, I add my support for Amendment 36 in the name of the noble Baroness, Lady Barran. Like other amendments, it calls for—among other sensible things—a report, in this case on levels of investment in skills by employers.
If you have believed the CBI over the past few days, you would think that the investment climate for business had taken a turn for the worse in recent weeks, with what it is calling the “triple whammy” of increased employers’ national insurance contributions, the higher national minimum wage and various changes in labour market rules. The CBI feels that there is a palpable sense in the business community that the UK is becoming a more difficult environment for investment. Of course, skills are very much part of that picture. There is a clear risk that our levels of investment in skills, which are already running at half the levels of our peer group in the OECD, will suffer further if this climate of paralysis in the UK with respect to business investment is allowed to continue.
On the uncertainty that noble Lords have alluded to with respect to big government policy, notably the development of the growth and skills levy and the future of the LLE, these things may become compounding factors that risk current low levels of investment in skills dipping even further. Clearly, we cannot afford that as a country, so I believe it is vital that the Government take steps as rapidly as possible to lift the policy uncertainty that will potentially blight levels of investment in skills over the current year and accept the amendment, which will provide a healthy baseline against which we can measure progress in this respect in the months to come.
Lord Hampton (CB)
My Lords, I have a tactic nowadays of speaking towards the end, when everybody else has said it better than I can. I just want to add that I have put my name to Amendment 18, and I agree with Amendment 23 and pretty much everything that includes the word “reporting”.
I am slightly concerned that our positions became entrenched in the last day in Committee, and that nimbleness is seen as being reduced by reporting. There is a lot that we do not know and a lot that we need to know. In my own profession of teaching, we have to teach with the door open and, at any time, somebody senior could come in, observe your lesson and give you formal feedback. At the very least, you get one formal observation a fortnight and—let us face it—we all work better with that kind of incentive. Skills England needs to be held to account; otherwise, we are looking at it being held to account by Henry VIII.
Baroness Barran (Con)
My Lords, I am also slightly uncertain about the order of speakers; I thought it was in the same order as the amendments.
The Deputy Chairman of Committees (Lord Ashton of Hyde) (Non-Afl)
It can be in any order.
Baroness Barran (Con)
It can be in any order. I rise to speak to my Amendments 35 and 36 and to support Amendment 31 in the name of the noble Lord, Lord Blunkett. Before I talk to the amendments in detail, I will reflect briefly on some of the important points that were raised earlier in Committee and that have a bearing on the groups that we will be debating today.
In addition to the fundamental concerns raised about the abolition of IfATE, which we have heard again from your Lordships today, and the absorption of its powers by the Secretary of State, we heard concerns from my noble friend Lady McGregor-Smith about how long it takes for a new body to bed in and gain the trust of employers and, again from her, from my noble friend Lord Johnson and from the noble Lord, Lord Blunkett, about the risk that we lose momentum in implementing the Government’s skills reforms. Similarly, the noble Baroness, Lady Wolf of Dulwich, and the noble Lords, Lord Aberdare and Lord Knight of Weymouth, among others, expressed their doubts about the Government’s approach.
In particular, there was a real sense, as we have heard again today, that everybody wants Skills England to succeed but there is a worry that it will be swamped by the volume of technical work that it will have to do, which could prevent it from delivering on the changes that the nation needs to see. I absolutely echo the earlier words of the noble Lord, Lord Blunkett, in hoping that the Government will bring forward their own amendments to address these concerns on Report.
My Amendments 35 and 36 seek to bring some focus and clarity to the work of Skills England by requiring regular reporting to Parliament. I congratulate the noble Lord, Lord Aberdare, on the 12 different versions that he tracked in the Marshalled List. Without this, Skills England might disappear from view, buried under a mountain of technical processes. Importantly, critical accountability disappears with that; we will not be able to name who is accountable for different decisions.
I will first explain my Amendment 35. There are many people in the sector who are concerned by the uncertainty that the Bill creates surrounding previously established processes, such as the granting of new technical education qualifications. As your Lordships know, IfATE was an independent body and new qualifications were decided with the help of employers and businesses, informing them what skills were needed in the economy. However, with the arrival of Skills England we need to understand two things: first, how will the Government decide on its strategic priorities and, secondly, how will this be operationalised in the creation of new technical qualifications? With this transition, it is likely that the processes to decide which sectors receive new qualifications could change, so my Amendment 35 seeks to clarify how these decisions will be made and what will guide this decision-making. We need a level of transparency that retains the confidence of employers, training providers and, crucially, students for this approach to have a chance of success.
Next, I will give details on my Amendment 36, which seeks to place a duty on the Secretary of State to produce an annual report on various skills metrics. Your Lordships will have noted that this is a long list that reflects the complexity of this area. There may of course be better metrics and, ideally, a shorter list, but this is our starter for 10—or perhaps I should say 12, since the list stretches from paragraphs (a) to (l). I will go through these points individually—I apologise to your Lordships for the length of this, but it underlines how many areas we do not have clarity on where we need clarity.
Paragraph (a) in the proposed new clause seeks clarity on the level of need or skills gaps by sector, level of qualification and region. Without this, I fear we will get a generic report with broad-brush headings that might well reflect the national averages but does not give any actionable insight about where to focus or prioritise, or about the amount of progress made from year to year.
Paragraph (b) aims finally to bring some consistency to different qualifications across the sector, particularly as they apply to key core competencies. At the moment, we have a long and varied list of qualifications, and they are not really interoperable. For example, the standard of generic digital skills is not the same in two digital skills qualifications at the same level, and this contributes to the complexity of our system and is a blocker to streamlining it. This would be a key step to achieving the aims also mentioned in paragraph (i).
Paragraph (c) intends to give visibility to the earnings impact of completing different qualifications at different levels and in different regions. I do not think that we could answer that question today with solid data.
Paragraphs (d), (e) and (f) follow the same structure as paragraph (c) but in relation to how the Government are spending their budget in the area and how the landscape is evolving in terms of new qualifications, as well as the impact of both of these on trainees.
Paragraph (g) intends to explore whether the system is still meeting employer needs. We keep hearing from employers an urgent need for more clarity on what would happen if there were a gap in, say, engineers on Teesside, and what the Government, through Skills England, would do about it.
Paragraph (h) turns to the funding of skills training by employers. I thank my noble friend Lord Johnson for his comments on this. As he said, this is an area that we all know has declined significantly in real terms over the past 20 years, and we now lag badly behind other industrialised nations. We hope that there is some way that this can be measured annually to shine a light on this important area, both in financial terms and in relation to take-up by employers of new qualifications. Of course, this will be impacted by changes to the apprenticeship levy that the Government have proposed.
All these elements intend to create a far clearer picture of the impact of technical education qualifications on the people who take them, and the differences that happen through their learning. It also seeks to explore the way in which Skills England will work differently to IfATE and to provide an outcome-based framework by which its efficacy can be judged and adapted if necessary.
The letters after that intend to provide a framework to evaluate Skills England more generally, judged on the factors that matter to both employers and students. As noted above, paragraph (i) intends to ensure that this new system is created in a manner that is easy to understand for employers and students. For example, it is unclear how and where the Secretary of State will get advice on the content, accessibility, assessment and rigour of T-levels. This has much in common with Amendment 30 in the name of the noble Lord, Lord Blunkett.
Paragraph (j) seeks to get regular updates on the impact of changes in the post-16 education strategy that the Government have committed to delivering, and its inclusion would commit the Government to detailing how they are delivering the objectives of the new strategy and what difference it is making on the ground.
I hope that, if my noble friend Lord Lucas reads the Hansard of this debate, he will be pleased to see paragraph (k), which looks at careers advice and seeks to ensure that there is a sufficiency—to be clear, I mean quality rather than just volume—of careers information, advice and guidance.
Paragraph (l) mirrors the wording in paragraphs (a) to (c) in subsection (1) of the proposed new clause to be inserted by Amendment 31 in the name of the noble Lord, Lord Blunkett. This would ensure that the Government’s reforms focus on the areas where there is the most urgent need for increased participation.
Finally, I want to touch briefly on Amendment 31 in the name of the noble Lord, Lord Blunkett, which I support; I have already spoken about its proposed subsection (1). The second subsection seeks to get a clearer sense of how the skills and growth levy will operate in practice and to build on the promising start that we have already seen from the local skills improvement partnerships.
I look forward to hearing the Minister’s comments on this, but I hope that she has heard the message from all noble Lords who have spoken this afternoon: there is a pressing need to build confidence in the Government’s approach. A commitment to putting Skills England on a statutory footing, linked to a rigorous reporting regime, would be a helpful step in that direction.
Lord Ravensdale (CB)
My Lords, I declare my interests as set out in the register, including as a chief engineer working for AtkinsRéalis and as a director of Peers for the Planet. I shall speak to my Amendment 36A; I thank the noble Lord, Lord Knight, for his earlier support. I agree with the noble Lord, Lord Watson: I am a bit bemused that I was unable to mention Skills England in my amendments, but we are where we are.
The skills landscape in the UK is undergoing seismic change and gearing up for both the industries of the future and the energy transition. In my engineering business, we are recruiting as fast as we can to deliver the transition in clean energy that is currently working its way through the economy. Renewables, carbon capture, nuclear, hydrogen and grid expansion are all seeing bottlenecks in terms of the skills availability in the UK to deliver the Government’s aspirations in this area. Of course, net zero is much broader than just the energy system. It is interesting to note, perhaps, the success that we are having in reskilling engineers from other industries. For example, we have recruited from Dyson many engineers who have fallen victim to the recent job cuts there and reskilled them to work on clean energy projects. They have gone from designing vacuum cleaners to designing nuclear reactors—no problem.
In 2021, I worked on my first Bill, which became the Skills and Post-16 Education Act 2022. Following the excellent work of the noble Baroness, Lady Hayman, and others, the Government agreed to include a climate duty in local skills improvement plans; this was a great step forward. Although that climate duty is very welcome for the development of LSIPs, what we have seen to date is quite a piecemeal approach in that area. I set out some of the issues with LSIPs at Second Reading, including the need for a greater, systems-level join-up of these plans in order to avoid duplication and ensure consistency.
At the heart of this is the fact that we are currently without a national picture of how the UK can prepare workforces to close the skills gaps related to our net-zero targets; to seize new net-zero opportunities; and, crucially, to address the challenges posed by transitioning from high-carbon sector roles, for example in the oil and gas industry. That last point is crucial in maintaining public support for this agenda.
Some really good work has been done at a sector level, which I think we can work from. I highlight the excellent work done by the Nuclear Skills Taskforce, which resulted in the National Nuclear Strategic Plan for Skills. Crucially, it recognised that a tailored approach to the UK regions was necessary; as a result, we now have a number of new regional skills hubs for nuclear that co-ordinate approaches across regions, all tied together through an overarching strategy. We can learn from that. In the Midlands, we are planning to expand this regional hub approach more broadly across clean energy. One of our offers to the Government includes working to set up regional skills hubs and to provide the skilled workforce that will be so important if we are to maximise the opportunity from the energy transition. But we do need that national plan.
It reminds me in some ways of the commonality here with how we are implementing clean energy. We have local area energy plans rolling up to regional plans and the national plan, which is the Strategic Spatial Energy Plan. In the same way, we need that roll-up through the skills system, as also brought out by the noble Lord, Lord Blunkett, in his excellent Amendment 31.
The Minister of State, Department for Education (Baroness Smith of Malvern) (Lab)
My Lords, in speaking to amendments in this first group, I wholly recognise the point made by noble Lords that this is about the importance of accountability and reporting, and I begin by reassuring your Lordships that the department, in this legislation and all the work we have done so far, takes transparency, accountability and reporting very seriously, including to Parliament. As the noble Lord, Lord Aberdare, said, I was accounting to the Industry and Regulators Committee just this morning on the inquiry that my noble friend Lord Blunkett referenced. Alongside my honourable friend the Minister for Employment, hopefully we both demonstrated cross-government working and gave a considerable amount of detail on a range of issues that have been raised during the course of this debate and were raised last week as well. In addition, the Government have today published the Get Britain Working White Paper that noble Lords have referenced.
I will just say, in response to the points made by my noble friend Lord Blunkett about the name of the Bill, that I remember, back in 1997, sitting on the Bill Committee for that piece of legislation. I was not clear at the time that the name had been as significant as my noble friend suggests, but I know that what was included not only in that legislation but in the commitment of that Government to make progress was what made such a difference to the education system under the leadership of my noble friend and that Labour Government.
All noble Lords have complained about how difficult it was to talk about Skills England, while talking at length about Skills England. Nevertheless, I would argue that there is a lot of information already in the public domain. In less than three months, this Government announced Skills England and ensured its first public report was delivered, which talks a lot about many of the questions that noble Lords have rightly identified as important: where are the current skills gaps; what will be the role of Skills England; how will Skills England work across government and with other stakeholders, including employers, trade unions and others? That was in less than three months after the start of the Government.
But we take accountability and reporting seriously and, as noble Lords have said, Amendments 18, 23, 31 and 36A, in the names of the noble Lords, Lord Storey, Lord Knight, Lord Blunkett and Lord Ravensdale, and Amendment 36 in the name of the noble Baroness, Lady Barran, all touch on that issue.
Through this legislation specifically, as we discussed last week, functions currently held by IfATE will be transferred to the Secretary of State, who is already accountable to Parliament. This fundamental accountability to Parliament naturally includes the exercise of any functions that are transferred from IfATE through this legislation. However, I understand that we need to go further than that to reassure noble Lords about the public accountability of Skills England. These functions, having been transferred to the Secretary of State, will be exercised by Skills England where appropriate.
As already discussed, we intend for Skills England to operate as an executive agency of the Department for Education. I emphasise that we are establishing Skills England as a new arm’s-length body, not as a department within the DfE or, as one noble Lord suggested, in some corner of Sanctuary Buildings. In establishing it as a new arm’s-length body, the department will adhere to the requirements set out in guidance published by the Cabinet Office, which provide the highest standards of corporate governance. Once set up, Skills England will report on its functions and performance in publicly available documents. In response to several noble Lords who argued for Skills England producing an annual report, I absolutely commit to that. In response to the noble Baroness, Lady McGregor-Smith, I assure her to the extent possible that equal care will be taken with that report to ensure that it is rigorous and accurate.
I can go even further than that. A sponsor Minister within the department will be accountable to Parliament on all matters concerning Skills England, including setting the policy framework in which it will operate. We will ensure that an annual letter from the Secretary of State sets the priorities on which Skills England will focus. That letter will also be publicly available.
As discussed at last week’s session, a framework document will be agreed between the Department for Education and Skills England in accordance with the Treasury’s handbook Managing Public Money. That publicly available document will set out matters including the governance and accountability framework within which Skills England will operate, Skills England’s core responsibilities and how the relationship between Skills England and the department will work in practice, including on financial matters. This will include setting out the responsibilities of the chief executive to the board and to the department. Once in place, the independent board will provide scrutiny of Skills England, ensure that it is operating effectively within this framework and provide assurance functions, as well as leadership and direction.
In response to the specific points made by noble Lords, particularly my noble friend Lord Watson, about progress on the growth and skills levy, first, we have committed to developing the growth and skills levy out of the apprenticeship levy precisely because we have heard calls from business for greater flexibility in our apprenticeships system and on how employers spend levy funds. It is true that fewer young people are starting apprenticeships now; there has been a 40% drop since 2015-16. That is why a key first step we announced back on 24 September was shorter-duration apprenticeships and new foundation apprenticeships for young people in targeted, growing sectors. These will help more people learn high-quality skills at work and fuel innovation in businesses across the country. The reformed growth and skills levy will also enable employers to fund training that meets priority skills needs identified by Skills England.
The noble Lord, Lord Johnson, rightly made an important point about the fall-off that we have also seen in employers’ investment in skills—an issue that we discussed at some length in the committee that I attended this morning. However, it is certainly the case that one of the things that would be likely to encourage employer investment is the flexibility and the listening to businesses that we have already done in order to ensure that the products available respond to the concerns of employers, both for more flexibility and for those changes to apprenticeships that will enable them to use them more freely.
This new offer will also be aligned with our industrial strategy, which I will return to in a moment, thereby creating routes into good skilled jobs in growing industries such as construction, digital and green skills. Skills England is currently engaging on the details of the growth and skills levy, and we expect to be able to say more about that when Skills England has completed that engagement in the spring next year.
I move on to the reporting requirements that the noble Baroness, Lady Barran, included in her Amendment 36, all of which I consider to be important to be in the public domain. Much of what the Secretary of State would be required to report on as a result of that amendment, however, is already publicly available, or will be available as a result of the establishment of Skills England. I hope that I can provide some reassurance to noble Lords about that. Skills England will consolidate different sources of data and insight to inform its assessments of national and regional skills needs, which it will publish regularly. As I have already alluded to, the shadow Skills England published the first such assessment in September this year.
Skills England will also publish further analysis, including the delivery of a standardised taxonomy for the UK and mapping of education pathways to understand the most common routes into priority professions. The noble Baroness, Lady Barran, is right to say that it is important to bring greater clarity for learners about the appropriate pathways and routes. It will continue to provide published assessments of skills analysis as needed in support of the industrial strategy and the growth and opportunity missions.
Alongside Skills England, the Department for Education publishes a comprehensive catalogue of data. There are currently 11 statistical summaries available relating to further education and a further 119 datasets publicly available to explain the statistics. These include the Employer Skills Survey, which provides information on the skills challenges that employers face within their workforce and when recruiting, the nature of any training provided, and awareness and involvement in various initiatives and programmes. They include apprenticeship data that includes starts, achievements and participation, as well as breakdowns by age, sex, ethnicity, subject, provider and geography, and they include statistics on the employment, earnings and learning outcomes of further education learners in the year after completion of their qualification, including national and regional breakdowns available, and are split by the level and sector subject area of qualification.
Given the significant amount of data already published and Skills England’s role as the single authoritative voice of skills analysis and its publication of data and insights, placing an additional requirement in statute on the Secretary of State to report on a long list of different skills metrics is not necessary. We are taking action through Skills England to ensure skills, data and insight are better used to identify skills gaps and to help determine how they should be addressed. We have been clear from the outset that this is central to its role within an improved skills system.
Lord Storey (LD)
My Lords, I listened with great interest to what the Minister said and will read Hansard carefully—particularly her comments about accountability and accessibility to all. But, at this stage, I beg leave to withdraw my amendment.
Lord Addington
“Report: effect on other Government departmentsWithin six months of the day on which this Act is passed, the Secretary of State must lay before Parliament a report on the impact of this Act on the remits of all government departments.”Member’s explanatory statement
The amendment requires the Secretary of State to lay before Parliament a report detailing the impact of the Act on the remits of all government departments.
Lord Addington (LD)
My Lords, noble Lords will not be surprised to find this amendment in this group, which basically says, over and over again, “Tell us what you’re going to do in this new structure”. It starts by saying that, when the new structure is in place, we will find out how it will relate to the rest of government. The noble Lord, Lord Blunkett, tabled an amendment—to which I put my name—that mentions the departments. Either amendment would do, but, starting with government, at least government can talk to itself quite easily—or it should be able to. We all know that it does not often happen and that there are different agendas, but it should be able to happen. Other amendments in the group track different groups in a similar vein: they all want to know how we will structure this new arrangement for skills, which is necessary for growth going forward.
There is not much point in going on because, as the noble Lord, Lord Aberdare—who is a contributor to this—pointed out, everybody is in agreement that we do not have enough knowledge. When the Minister answers on these amendments, can she tell us how the Government intend to bridge this gap? If we just say that it is all published somewhere, that will not really do it. It should be published in a place where we can find it out and get hold of it, so that Parliament can discuss it. That is what we are about here.
I hope that, when the Minister responds, she will have an answer that addresses this basic point. We do not know how this body will relate or how it will work, and we do not know how to monitor it. We also do not know how to raise when something goes wrong. Everything goes wrong at some point or does not work as well as it should. I hope that, by having reports coming backwards and forwards, we will have a way to get in, see where the problems are, allow government to change it and allow the agenda to happen. Having said those words, I hope the Minister will give us a favourable response and I beg to move.
Lord Aberdare (CB)
My Lords, I have Amendment 20 in this group, and I am grateful to my noble friend Lord Hampton and the noble Lord, Lord Storey, for adding their names to it. I apologise for any repetition that may creep into what I say.
The Labour manifesto states that Skills England will
“bring together business, training providers and unions with national and local government to ensure we have the highly trained workforce needed to deliver Labour’s Industrial Strategy. Skills England will formally work with the Migration Advisory Committee to make sure training in England accounts for the overall needs of the labour market. And we are committed to devolving adult skills funding to Combined Authorities”.
My Amendment 20 would require the Secretary of State to report on how it has engaged with these and other bodies in discharging the functions transferred under the Bill. Specifically, it includes the industrial strategy advisory council, since the industrial strategy will provide the overall context for skills policy. It includes the Migration Advisory Committee and mayoral combined authorities, in line with the commitment made in the manifesto. It includes employers through the industry sector skills bodies, as well as the employer representative bodies responsible for developing the 38 local skills improvement plans across all areas of England. It includes education and training providers at all levels, which will need to deliver the skills identified as needed. It also includes other government departments, most of which will have their own skills needs and challenges, as well as trade unions and the devolved Administrations.
Like others, the amendment seeks to spell out the tasks that Skills England should undertake by requiring the Secretary of State to report on them. Taken together, all these reporting amendments underline the breadth and extent of these tasks, from taking over IfATE’s existing functions—which it seems to be performing pretty well—to defining new technical education qualifications and defunding existing ones, and to a wide range of new strategic tasks requiring close engagement with employers, other government departments, local and regional bodies, and trade unions. The only omission I can find is Uncle Tom Cobbleigh.
I cannot help thinking that it might be better if the issues on which we are seeking reports from the Secretary of State were embodied in the Bill. The crucial purpose that the Bill seeks to promote—developing a skills system that will more effectively identify the skills we need and match them with the skills we produce through our education and training systems—will not be reliably met by abolishing IfATE and setting up Skills England as an agency within the Department for Education, with a hugely broad and important remit but no statutory basis and limited scope for parliamentary oversight.
As I have said, I strongly support the concept of Skills England as the key to addressing this purpose, but the Bill seems a somewhat underwhelming first step to establishing it on the right footing. Despite the Government’s laudable desire and commitment to tackle the systemic skills challenges we face, I am not convinced that it will—or about how it will—avoid the fate of so many unsuccessful previous attempts to resolve them.
I hope we may find a way on Report to encourage the Government and the Commons to think about whether the Bill should more clearly spell out the status of Skills England, ideally through a government amendment, as suggested by the noble Lord, Lord Blunkett, in his remarks on the previous group. Much of what the Minister said was extremely encouraging but none of it is in the Bill, which is where I would like to see at least some of it.
Baroness Evans of Bowes Park (Con)
My Lords, I shall speak to Amendment 27 in the name of my noble friend Lady Barran, to which I add my support. It would require the Secretary of State to consult LSIPs, mayoral combined authorities and other relevant employer-related groups on the introduction and number of technical education qualifications before exercising her powers under the Act. Such consultation is vital to ensure that any technical education qualifications introduced align with local and regional skills needs—one of the priorities of Skills England—to ensure that the workforce is equipped with the skills required to support the improved economic growth that we all want to see.
I recognise that Skills England has the potential to play a crucial strategic and co-ordinating role in bringing together local and national skills agendas—the Minister touched on this in her comments on the previous group—but I again come back to the fact that the approach set out in the Bill, in terms of the centralisation of powers in the Secretary of State, jars with the Government’s stated intention that Skills England will
“bring together business, training providers and unions with national and local government to ensure we have the highly trained workforce needed”
to ensure that our regional and national skills systems are meeting skills needs. I am afraid the approach set out in the Bill raises questions that the Minister is hearing time and again around whether we can be truly confident that this is the approach that will be taken when there is nothing in legislation or out there to ensure that that happens. As the Learning and Work Institute has said, it is important that Skills England must
“not be primarily a creature of Whitehall”.
I hope that the Minister can set out again, in a bit more detail, how Skills England will engage and involve local areas, local leaders and employer groups from the outset; and the mechanisms that will be developed to ensure we can have confidence that Skills England will effectively and consistently ensure, through the technical education qualifications introduced, that our regional and national skills needs are met.
Lord Blunkett (Lab)
My Lords, I shall speak to Amendments 28 and 29 in my name. Given my noble friend the Minister’s comprehensive and extremely thorough response to our debate on the first group, I will try not to fall into the trap of once again appealing to the Oscar Wilde agency that cannot speak its name. If we are to have a whole-system approach—the White Paper on getting people back to work, which was published today, mentions this—and we start with ensuring both that there is joined-up thinking in government and that that is translatable in terms of relationships with business, then we need to be reassured that we are clear on where decisions are being taken. Again, I mentioned this in our debate on the first group.
I declare an interest in this group because I have some interest in a major infrastructure project at the moment. The excellent contribution from the noble Lord, Lord Ravensdale, on the first group highlighted the issues around net zero and other environment-related issues, but there are major problems for us as a nation, as we know. HS2 has set us back. In this country we tend to look at what we are bad at rather than what we are good at, so we will obviously be affected by what has taken place with HS2 and by the massive mistakes that have been made, but there are other major infra- structure projects—some of which, in the nuclear industry, have been mentioned—where success has been substantial.
I had the privilege of going down to a college in Somerset to talk about Hinkley Point. I was deeply impressed with what has been done there but there seems to be a mismatch between the overall picture—the holistic picture, if you like—and the minutiae. I have written to my noble friend the Minister so I do not expect her to deal with this matter in detail this afternoon but, whatever we call boot camps in future and whatever immediate requirements on the ground are to be met by something such as one, if the decisions on funding them are to be devolved, how should an infrastructure project covering a substantial geographical area—as well as a sectoral one—deal with them?
I have another interest because, on Friday, I have the pleasure of initiating the new learning resource digital centre at the Northern College for Residential Adult Education. There are only two left in the country, and one is at Wentworth in Barnsley. That project has been funded because of the local schools improvement plan and the partnership that is arisen from it in terms of the digital needs of learners through lifelong learning. The reason why I am raising this and have touched on boot camps is that there is a real danger that, in our enthusiasm for devolution—I am an enthusiast for it—we start to create joins that did not exist. The Northern College has survived only because the elected Mayor of South Yorkshire has so far managed to find the resources but it was not possible to find resources joined up with West Yorkshire, which has students at the college because it is very much on the edge of South Yorkshire and West Yorkshire but does not fall within West Yorkshire—so it is not West Yorkshire’s concern any more.
With the best will in the world, the devolution that we are engaged in could disable unique things, where there is limited provision available and a holistic approach is difficult to achieve if people are not collaborating. With this Bill and the new executive agency, it would be possible to join things up if we knew where decisions were taken. It would be possible, if we accepted Amendment 29, to make sure that departments across government think and work together in order to ensure that the department responsible for housing, say—whatever it is called these days—understood what was needed to ensure that workers had a green card to get on site in the construction industry and be able to do the job.
Somehow, we have to put the bits back together while we are doing devolution where appropriate, either regionally or sectorally, and ensure that we do not by default end up with the department and Skills England, which will be part of the department, not being clear about who is doing what. In the example I gave in relation to infrastructure projects, it is not yet totally clear. I hope that, by raising the issue, we might be able to clarify it, but, at the moment, the embryo Skills England body will have to refer that to the department because nobody can give me an answer.
Baroness Garden of Frognal (LD)
My Lords, I have added my name to Amendment 30 in the name of the noble Lord, Lord Blunkett, partly because—I remind the Committee of this—I worked for City & Guilds for 20 years. I was working for it when national vocational qualifications were introduced—1990, I think—precisely to reduce the complexity in the qualification system. There are times when one feels that one has been around too long, but that was exactly it.
Those qualifications came in with levels 1 to 5 in order to be a simple way in which people could understand practical qualification levels. Levels 6 and 7, covering managerial and degree-level subjects, were then introduced as well. The qualifications were called “vocational” because we always wanted to include craft qualifications as well as technical ones. I worry now about what is happening to the encouragement of craft qualifications, which are vital to the economy of the country. I am not suggesting that we go back to NVQs again—they had their day and they went—but it worries me that memories are so short on this. It is a complex system because anything as complex as the myriad variations of employment inevitably will be so, but having a simple way in which one can measure levels of expertise seems to have some advantage to it.
This made me wonder how much discussion there has been with the awarding bodies. City & Guilds has been around for well over 100 years, as I say. Obviously, apprenticeships have been around since the Middle Ages, but I am not suggesting that we go back to then to find out what they did with them. The BTEC has been around for at least 50 or 60 years, I think. There is a mass of expertise there, yet they do not seem to be referenced or involved; I wonder why this is because they have some very useful skills to offer to this Bill.
I just felt that I needed to go down memory lane when I saw that the noble Lord, Lord Blunkett, had referred in his amendment to reducing
“the complexity of the qualifications system”.
Lord Storey (LD)
My Lords, I added my name to the important amendment in the name of the noble Lord, Lord Aberdare. I was fascinated to hear that he actually read the Labour manifesto; that is very impressive. I also support my noble friend Lord Addington’s amendment.
It is quite important that the noble Lord, Lord Ravensdale, and the noble Baroness, Lady Barran, mentioned mayoral combined authorities—the noble Lord called them pan-regional partnerships, which I had not heard before—and local skills improvement partnerships. Can the Minister tell us how those will feed into the department or how she will consult them?
Lord Ravensdale (CB)
My Lords, my amendment follows on nicely from what the noble Lord, Lord Blunkett, said earlier. He put it very well: devolution is really good and something that we can all support, but it creates joins that we then have to knit back together. We have to consider carefully how we do that knitting together, which is what my Amendment 36B is aimed at.
I shamelessly copied Amendment 27 in the name of the noble Baroness, Lady Barran, which I support, in order to do this. However, I made one slight tweak to include the regional perspective, which I mentioned in our debate on the previous group, so that pan-regional partnerships are consulted; that refers to partnerships such as the Midlands engine and the northern powerhouse.
At Second Reading, I set out my concern that local areas that are not part of a combined authority or have other devolution deals could lose out under the proposals that the Government are putting forward. I listened carefully to the Minister’s response at Second Reading, which allayed some of my concerns, but I would like to test this issue in some additional detail.
Taking the Midlands, where I live—I live in Derby—as an example, following welcome devolution in recent years, we are now blessed with two really good combined authorities. We have the West Midlands Combined Authority and, as of recently, the East Midlands Combined County Authority. Although these combined authorities cover areas of the west and east Midlands, they account for less than half the population in the Midlands region, which is around 11 million people.
As I said at the start, this highlights something of a problem with the devolution agenda. The combined authorities have been successful at working with governments to unlock additional funding for their areas, but this has meant that those living outside combined authorities have sometimes been left behind. As an example, for many years, the East Midlands has lagged behind the West Midlands on many indicators, for example when we look at transport spend per head or public investment per head of population. This will be partly remedied by the new East Midlands Combined County Authority, but many areas of the Midlands are not covered. I am concerned that the same pattern will follow with skills, so the question is: how will Skills England ensure that the approximately 6 million people in the Midlands who do not live in a combined authority area are considered?
The Minister has stated that Skills England will consult regional bodies but it would be helpful for her to clarify how that governance structure will operate; that is the subject of my amendment. Pan-regional partnerships such as the Midlands engine are set up to consider these regional issues. They would be well placed to pull together those plans and to co-ordinate combined authorities and other areas of local government in order to ensure that regional skills needs are met; they could also act as a focal point for regional skills needs in working with Skills England.
In this way, the Government can unlock the benefits of an integrated regional skills approach, flowing up from local areas to the regions and to the national view that Skills England will have, and ensure that no areas of the regions are left behind or inadequately represented. The Government could also benefit from the powerful data capabilities of pan-regional partnerships such as the Midlands Engine Observatory. This would align with the approach I set out in the previous group on regional skills hubs and the work already ongoing there. The pan-regional partnerships are helping to facilitate those regional skills efforts. It would also be a means of achieving the join-up of local skills improvement plans that the noble Lord, Lord Aberdare, referred to on the previous group.
Lord Watson of Invergowrie (Lab)
My Lords, I was just looking through my noble friend Lord Blunkett’s Amendments 28, 29 and 30, to which I added my name. I am sure noble Lords will be aware that, since Skills England was announced, the DfE has been using a pretty coloured diagram in five sections to describe the planned functions of the new executive agency. One of the sections says that Skills England
“identifies priorities for and shapes technical education to respond to skills needs”.
Having done that, it will need to update the necessary technical standards and work with sectoral industry bodies to develop them. Indeed, the Government will need to set out which functions currently with IfATE will be delegated to sectoral organisations and regional bodies. That is what Amendment 28 seeks to achieve.
My noble friend the Minister said in Committee last week that there needs to be “a sectoral approach” to the way that skills are developed across the economy. Of course, that is right. With that in mind, it is necessary that the Government’s plans for the powers that they anticipate will be required are set out, and this amendment would facilitate that.
Another of the sections in that DfE diagram says that Skills England will ensure
“national and regional systems are meeting skills needs”,
explaining that this will entail:
“Working with Mayoral Combined Authorities, Employer Representative Bodies, and other regional organisations to align national and regional systems with each other and with skills needs”.
All that seems fairly straightforward, but it is not clear how Skills England will achieve that without the necessary powers and some resources. We do not as yet know what these might be, so it is important that criteria for national skills priorities are set out and that the expectations of departments other than the DfE are made clear. My noble friend the Minister stated on several occasions how important the effect of joined-up government will be for the involvement of a wide range of stakeholders. Amendment 29 offers the opportunity for that to be spelled out.
Finally, there is more than a little uncertainty as to how the plethora of qualifications to be transferred will be subject to oversight. My noble friend Lord Blunkett has covered this, but I will simply say that qualifications at levels 3 and 4 are crucial in allowing young people the opportunity to build their skills in an environment in which they are not intimidated by unrealistic expectations or other barriers to entry, as has been the case too often with apprenticeships. The unfortunate tangle—let me put it no less kindly than that—that we currently have involving the introduction of T-levels and the consequent often rash and sometimes reckless defunding of some BTECs must not be allowed to happen with the transfer of the many essential qualifications validated by IfATE in its short lifetime.
Baroness Barran (Con)
My Lords, I will speak to my Amendment 27 and in support of Amendment 28 in the name of the noble Lord, Lord Blunkett. I start by noting that I support very much the spirit of the amendments in the name of the noble Lord, Lord Aberdare, and the aspiration of the amendment in the name of the noble Lord, Lord Addington, although I have a certain sympathy with the Minister in trying to actually deliver on that.
My Amendment 27—I thank my noble friend Lady Evans of Bowes Park for adding her name to it—aims to ensure that the Government’s strategy is up to date and relevant for local areas and that the Government do this by consulting the relevant bodies. I suggest local skills improvement partnerships and mayoral combined authorities although, in his Amendment 36B and his extremely helpful, clear and practical explanation of it, the noble Lord, Lord Ravensdale, raises the relevance of other groups and the importance of making sure that we do not miss out significant parts of the population as we try to aggregate and understand these local views.
What we are trying to do is to balance technical education qualifications that can be tailored, to a degree, and that best support the needs of a local area, with the ability to aggregate and use the data and intelligence from them to inform national policy. That needs to then feed into an ability for the Government and those to whom they devolve their powers to understand where providers are delivering efficiently on these plans and where they are not, identifying gaps and seeking to address them.
I also want to speak to the importance of the Government setting out how they intend to delegate these powers that are being centralised. As my noble friend Lady Evans said, what the Government talk about and what is actually happening in terms of centralisation rather jars, so I am glad that the noble Lord, Lord Blunkett, has brought this forward through his Amendment 28. I do not think anyone is suggesting to the Minister that this is an easy task—if it was easy, somebody would have cracked it already—but it is clearly a very important task and the more she can say about how these different groups will interact with Skills England and how there will be lines of communication from the local to the national and back again, the more confident the Committee will feel.
Baroness Smith of Malvern (Lab)
My Lords, we have had a good discussion on this group of amendments about the importance of ensuring that there is both appropriate engagement across government and improved coherence of the qualifications system, alongside the challenges of ensuring that we get appropriate local and regional input into our skills system while maintaining some coherence across it.
The noble Baroness, Lady Barran, is right that some of these issues around devolution are not neat government, as I think I said in a committee this morning, but they are nevertheless important in ensuring that local employers can contribute and there can be differentiation depending on different needs in different parts of the country. I will return to that as I address the amendments, but I wholeheartedly agree that it is very important that we are clear about the way in which a range of different stakeholders will be engaged. Some of this is already very clear; other aspects—I will be honest—will be part of the work of developing Skills England in the building of those relationships.
I turn to Amendment 19 in the name of the noble Lord, Lord Addington, and Amendment 20 in the name of the noble Lord, Lord Aberdare, regarding Skills England’s work with key bodies, in particular government departments. It is really important that we are able to work collaboratively with a whole range of different partners. Extensive work is already under way across departments to ensure that skills sit at the heart of joined-up decision-making across government.
As I probably said on the first day of Committee— I usually say it when talking about skills—Skills England and our improved skills infrastructure will play a key role in supporting the skilled workforce needed to deliver the Government’s five missions: driving economic growth, breaking down barriers to opportunity, supporting our NHS, delivering safer streets and the clean energy transition. Therefore, it is crucial that there is a cross-government approach and input into improving our skills provision.
Skills England will work closely with the industrial strategy advisory council. The chair of Skills England will sit on that council and, although I accept that that is not sufficient on its own to ensure join-up, it is an important signal. It will work closely with the Migration Advisory Committee, because it is important that we identify how to understand the analysis of where migration is needed as well as understand what more we need to do to boost the domestic pipeline of skills development. It will also work with the Department for Work and Pensions to ensure that the Government have the analysis and advice needed to inform a coherent approach to the labour market. The publication of the Get Britain Working White Paper, which we touched on, is an important example of that joint working.
In order to ensure that Skills England’s first report was informed and took in this need to look at skills needs across government, the report was informed by a skills audit across government departments. The cross-government approach will also be driven forward through the regular mission boards, which bring together Ministers from across government, helping to break down departmental silos and ensure a strategic approach to our mission priorities. Together, these connections are creating a coherent approach to skills, migration and labour market policy.
Amendment 27 was tabled by the noble Baroness, Lady Barran, and Amendment 36B was tabled by the noble Lord, Lord Ravensdale. Regarding consultation with contributors to local skills improvement plans on the introduction and number of new technical education qualifications, it is my view that local skills improvement plans are playing an important role in giving employers a voice in this area. When I was on a visit last Friday and heard from FE principals, one in particular had feared that the development of LSIPs would be just another quango, but she was actually finding it useful to have that engagement with local employers.
Mayoral combined authorities also have an important role to play, using the elements of skills funding that are devolved to them and their convening power, to bring together a clearer view of regional growth needs, through the regional growth plan, and to work alongside local skills improvement partnerships—as well as the other initiatives announced today in the Get Britain Working White Paper—to build a coherent approach to the labour market and to skills development at a regional level.
The assessment of skills needs set out in the first report by Skills England—published in September, as I said—drew strongly on evidence from LSIPs. Skills England has already begun to engage and gather evidence from mayoral combined authorities, employer representative bodies and others on skills needs. This will inform decisions on where standards and, therefore, technical qualifications or apprenticeships are required.
Several noble Lords talked about the challenges of devolution, as I suggested at the beginning. Supporting a more joined-up approach to decision-making on skills at regional and national levels will be central to Skills England’s role, putting the bits back together, as my noble friend Lord Blunkett described it. I accept that there is a challenge, as the noble Lord, Lord Ravensdale, identified. While there is a very clear remit for those areas that are mayoral combined authorities, those that are not have less devolution of skills funding. However, the Government are preparing a devolution White Paper and we will want to encourage further devolution. We will also want to support local authorities in carrying out their role to input into skills discussions in those non-mayoral combined authority areas. I share the noble Lord’s interest in this, living as I do in the Midlands, in an area without a mayoral combined authority.
Lord Aberdare (CB)
My Lords, the Minister has made many encouraging statements about how the system will work. I still do not entirely understand why none of this can be in the Bill and why we are totally reliant, it seems, on the Secretary of State for Education as the only point of accountability to Parliament or indeed anybody else. It seems that something is missing here in terms of how Parliament in particular can hold Skills England to account.
Baroness Smith of Malvern (Lab)
I went on at some length in my response to the previous set of amendments to spell out what the accountability mechanisms to both the public and Parliament will be for Skills England, both directly in its publication of an annual report and, via the sponsoring department, to Parliament. In respect of specific amendments, the concern is that what we are trying to do here is create a strategic body that brings together the data analysis and insights with the ability then to inform efficiently, effectively and agilely—if that is the proper word—the development of occupational standards, assessment plans and the technical qualifications that employers tell us they need. Creating legislative requirements in advance of it being able to do so will, the Government believe, limit that flexibility, when we really intend to improve it. That is one of the criticisms that employers have made of the current IfATE process.
Baroness Barran (Con)
I have two points. First, if I heard correctly, the noble Lord, Lord Aberdare, was asking why none of that could be in the Bill. Secondly, what the Minister just said might be a starter for 10, for the drafters, on what could go in the Bill. Of course, if you are incredibly precise about exactly what would be reported on, that limits you, but if something in the Bill says that this spirit will be aligned, it retains a degree of flexibility. With the level of flexibility that the Bill now affords the Government or any future Government, flexibility trumps accountability squarely, as the Minister has heard. I wonder whether she could reflect on that.
Baroness Smith of Malvern (Lab)
I understand why the amendments are formulated as they are, but most of them would create not just the requirement to describe but a condition that would be inserted into the process and that would therefore limit the flexibility and speed with which qualifications and occupational standards could be developed. I contend the suggestion that there is no public or parliamentary accountability in the way we are setting up Skills England. I went through at some length the routes through which both of those forms of accountability will be delivered to Parliament and, more widely, the public—while conceding the point about the requirement for an annual report, for example, and outlining the accountability through the sponsor Minister to Parliament to account for the progress and success in a whole range of areas that noble Lords have talked about.
Lord Addington (LD)
My Lords, as nobody else wants to come in, I will try to bring the discussion to a close. I think the Minister effectively just opened up what the consideration is. I remember saying, in the briefing that the Minister courteously arranged for us, that she would be testing our ability for probing amendments here. I think we have come up with a reasonable pass grade on that. We have found out that, yes, there will be some reporting, but it is complicated, we do not know exactly where to find it and somebody new coming to the field might miss it. That happens all the time. Do the right people know about it? Do you have to be an expert to find out about it? That is one of the problems we have in going through this.
Before I withdraw my amendment, I will say that, if you do not allow us to get at this information easily, certain things will be missed. That is a guarantee. It tends to be that things are missed that it may even be helpful for the Government to address and correct. I hope that, by the time we get to the next stage, the Government will have had a little more time to think about how they can start to address this, because we all wish that Skills England—or what becomes Skills England, or the dark secret that is Skills England—becomes known to the public and functions properly. We just need to know, because that is what we are here for. I beg leave to withdraw my amendment.
Baroness Barran
“Report: approval of new technical education qualifications Within six months of the day on which this Act is passed, the Secretary of State must lay before Parliament a report on mechanisms for employers to apply for the approval of new technical education qualifications and to appeal the removal of any technical education qualifications.”Member’s explanatory statement
This amendment clarifies the route employers will take to approve new technical education qualifications.
Baroness Barran (Con)
My Lords, in moving Amendment 24, I will also speak to my Amendments 25 and 26. As we heard on earlier groups, there is a lot of concern among experts in the sector about how the Government’s plans will work in practice and whether the proposed changes in the governance of the skills sector will result in confusion and delay—obviously to the detriment of the Government’s growth agenda. My amendments seek to bring clarity to this confusion.
My Amendment 24 seeks to place a duty on the Secretary of State to explain to employers the way in which they will be able to approve new technical education qualifications and appeal where qualifications are planned to lose funding. It is, obviously, essential that employers know how to get new qualifications approved so that our qualifications can remain up to date and relevant to the needs of businesses, and that the Government can receive the input from businesses on what skills our economy is lacking.
My Amendments 25 and 26 seek to address the delays that will happen when these powers are transferred from IfATE to the Secretary of State, as laid out in the impact assessment that the Government published alongside the Bill. The impact assessment lays out details of how the creation of end-point assessments and the approval of new technical education qualifications will both be delayed. In order to minimise the impact that this has on students who are seeking to undertake a technical qualification, students who are midway through their course and businesses that are seeking to introduce qualifications, I felt it necessary to encourage the Government to give details as to how long this delay will be and the steps they are taking to ensure that it is as short as possible. It is important that businesses and students have certainty about the extent to which any delays will impact them. These amendments propose a timetable, when the Bill is passed, by which the Secretary of State must report on how long these delays will last and what the Government are doing to ensure as minimum a disruption as possible to the qualifications and to the students seeking to undertake them.
I hope the Minister will agree that these amendments are not controversial and may come back on Report with government amendments that look like mine. I beg to move.
Baroness Evans of Bowes Park (Con)
My Lords, I rise briefly to support Amendments 25 and 26, tabled by my noble friend, because the policy impact assessment also notes that mature students, learners with disabilities, ethnic minority learners and disadvantaged learners are likely to be disproportionately impacted by the delays she is talking about, which is obviously of concern. I just wanted to add that, because clarity on the delays, as would be addressed by the amendments of my noble friend, would be extremely reassuring, particularly when one looks at the groups that the Government’s policy impact assessment says may be disproportionately disadvantaged.
Baroness Smith of Malvern (Lab)
My Lords, quite rightly, the noble Baronesses have raised the issue of how we can ensure continuity of provision while transferring functions under the auspices of this Bill.
I reflect that coming back 14 years—probably 16 years —after the last time when I was responsible for doing any government legislation directly, there are some important improvements in the way in which Governments are expected to lay out the impact of their legislation, with the development of impact assessments. Of course, such things also provide grist to the mill for those who look at them and say, “Well, you’ve identified that there is potential concern about delay, and that must mean that the delay is going to happen”. The point of an impact assessment is that it enables, quite rightly, the Government pre-emptively to identify potential risks that could result from the transfer of functions and property from IfATE to the Secretary of State and think about how those risks can be mitigated. We are confident that that they can be, so I hope I can provide noble Lords with some reassurance about that.
I should also like at the outset to repeat assurances that I provided to noble Lords at last week’s session. We will ensure that the practical transition of functions from IfATE to the Secretary of State will be designed so that standards or apprenticeship assessment plans that are in the process of preparation or approval at the point of transition will continue. Similarly, approval decisions for technical qualifications that are part way through the process will also continue. It is our intention that employers and other stakeholders and, as rightly identified by the noble Baronesses opposite, learners perceive no interruption. The transition scheme that is being developed will be designed to ensure the minimum possible disruption for stakeholders.
I note that Amendments 25 and 26 in the name of the noble Baroness, Lady Barran, seek to place on the Secretary of State a duty to lay before Parliament a report on the timetable for the creation of, respectively, endpoint assessment and new technical education qualifications. As the noble Baroness said, Amendment 24 seeks to place on the Secretary of State a duty to lay before Parliament, within six months of Royal Assent, a report on mechanisms for employers to apply for the approval of new technical education qualifications and to appeal the removal of approved status for existing technical qualifications.
Skills England will undertake ongoing engagement with employers and other key stakeholders to identify skills needs that are not being met through the existing suite of technical qualifications and apprenticeships. This engagement will help identify where new standards should be produced and where existing standards and/or apprenticeship assessment plans should be updated, ensuring that the system responds quickly. With that in mind, Amendment 25 in the name of the noble Baroness, Lady Barran, would, to some extent, frustrate the Bill in enabling more effective prioritisation of the preparation and updating of apprenticeship assessment plans. We intend for the functions transferred to the Secretary of State to focus on where there is greatest need for a new or updated plan, informed by feedback from employers and other key stakeholders.
We also anticipate that plans in development at the point at which the functions transfer will continue and be finalised by the Secretary of State. Standards approved by the Secretary of State will be published, as is the case in the current system, as the basis for new technical qualifications to be developed. Awarding bodies will then, as now, submit applications for new technical qualifications to be approved in line with standards and reflecting employer demand. IfATE is currently responsible for the approval of technical qualifications; its function is being transferred through this Bill. Responsibility for decisions on the withdrawal of approval from technical qualifications will also transfer through this Bill, which includes a duty to publish information about matters taken into account when deciding whether or not to withdraw approval.
We would argue that Amendment 26 is also unnecessary as it would duplicate existing transparency, which will occur as a matter of course through the Secretary of State’s routine engagement with Parliament and through the establishment of Skills England as an arm’s-length body. As I have outlined previously, Skills England will report on delivery in line with standard practice, including as set out in its framework document and in a manner consistent with other executive agencies.
I turn to Amendment 24 in the name of the noble Baroness, Lady Barran. Placing on the Secretary of State a requirement to report on mechanisms for employers to apply for the approval of new technical education qualifications and to appeal the removal of approved status for existing technical qualifications is unnecessary. It would give employers an additional role in the approval of technical qualifications, which would risk undermining their central focus on highlighting skills needs and, as appropriate, preparing standards that reflect those needs. Where there was clear evidence of continued employer demand, it would be unlikely in practice that approval status would be removed—unless, for example, other significant issues had been identified in relation to the successful delivery of the qualification.
I hope I have provided some assurance that we do not expect a delay due to the transfer of functions in this Bill. We have already put mitigations in place and we will, in relation to the approval of—and the withdrawal of approval of—technical qualifications, continue to follow the current arrangements.
Lord Hampton (CB)
Before the Minister sits down, can I ask for a bit of clarification here? The Minister has described Skills England as an arm’s-length body a couple of times today. I apologise if everybody else knows this, but can you have an arm’s-length body within a department? I thought that the definition of an arm’s-length body was that you cannot.
Baroness Smith of Malvern (Lab)
Yes, you can. There is a whole range of different types of arm’s-length bodies. Executive agencies are one such type. They are governed by a governance document—the framework document that I have previously described—and by a set of requirements and relationships that I would be happy to spell out for noble Lords.
Baroness Barran (Con)
My Lords, I thank my noble friend for highlighting the impact on the groups and communities that could be most affected by delays, as set out in the impact assessment.
I am honestly a bit puzzled by the Minister’s response. She said that my Amendment 24 is unnecessary, but employers are telling us that it is necessary. There is obviously a gap between what the Minister knows and what is being understood, so the more clarity the Government can bring to those specific points, the better.
Similarly, the Minister spoke very confidently about minimal delays—my words, not hers—in approving endpoint assessments and new qualifications. We do not want to frustrate the Government’s plans, but if it is so clear to the Minister that this is a very low-risk area then perhaps she can put that and the exact timescales she expects formally on the record on Report.
Baroness Smith of Malvern (Lab)
I commit to providing to the Committee more detail about the process for transition and some reassurance, which I suspect I have not sufficiently provided, on how that will mitigate some of the risks identified in the impact assessment.
Baroness Barran (Con)
When the Minister does that, which would be much appreciated, I request that, in addition to more detail about the process, she includes a sense of timescale, which would be most helpful. With that, I beg leave to withdraw my amendment.
The Deputy Chairman of Committees (Baroness McIntosh of Hudnall) (Lab)
My Lords, I inform the Committee that, were Amendment 37 to be agreed, I would not be able to call Amendments 38 or 39 by reason of pre-emption.
Clause 9: Power to make consequential provision
Amendment 37
Member’s explanatory statement
This amendment removes the power for consequential changes to be made by delegated legislation to Acts other than those specified in the provisions of the Act.
Baroness Garden of Frognal (LD)
My Lords, Amendment 37 in my name, which is supported by the noble Lord, Lord Aberdare, would remove the Government’s power to introduce regulations that make consequential changes to Acts beyond the scope of this Bill. Like so much in the Bill, this represents a classic Henry VIII power. As we have highlighted elsewhere in our discussions on the Bill, it facilitates an Executive power grab and gives far too much power to the Secretary of State, who, as I have said before, may be someone with no interest or understanding of colleges and further education. We are lucky in our current Minister and I hope she lasts a long time, but Ministers can be moved without rhyme or reason.
The power in this clause would undermine parliamentary scrutiny and allow significant changes to be made without proper oversight. The amendment is a small safeguard in a potentially dangerous Bill. I also support Amendments 40 and 41 in this group in the name of my noble friend Lord Addington. I beg to move.
Lord Aberdare (CB)
My Lords, I have added my name to this amendment, inspired by what might be described as the crusade of our much-missed former convener, Lord Judge, to root out unjustified Henry VIII clauses wherever possible. I considered putting down an amendment to make it clear in the Bill that the power under this clause could be exercised only where the provisions to be made by such regulations relate specifically to functions previously exercised by IfATE that are to be transferred under the Bill. However, Amendment 37 from the noble Baroness, Lady Garden, addresses this point in a more straightforward way, so I have willingly added my name to it. I look forward to hearing from the Minister why she feels the power in Clause 9 to be necessary.
Lord Addington (LD)
My Lords, I hope to be as quick as I can. My amendments suggest that everything should be under the affirmative procedure when it is reported back. That is just to make sure that Parliament gets a real look and a chance not to have those reports buried in the huge piles of SIs that are brought forward. We should guarantee that we are all looking at what happens in this new body.
Baroness Barran (Con)
My Lords, despite the Minister’s dismissal of my concerns about the Henry VIII powers at Second Reading, I have brought two amendments in this group to make sure that the scope of those powers is less broad.
Amendment 38 seeks to restrict the Secretary of State’s powers to amend only the Acts that are already listed in Schedule 3, so that both Houses can appropriately scrutinise the way in which these powers are being used. Surely it is the job of the Government and the department to identify all the Acts to which these powers apply. I cannot see the need for such a clause, unless the Bill has been rushed and the Government are worried that they have failed to capture all the legislation that requires amending with the abolition of IfATE. If this is indeed the case, perhaps there is more redrafting to do than we have already attempted.
My Amendment 39 is focused on the same issue but, rather than restricting the Secretary of State’s powers specifically, it simply removes the power to amend future legislation. Again, I note that all Bills which name IfATE as the body for apprenticeships and technical education have already been passed, so there should be no need to amend future legislation, unless the Government have plans to refer to IfATE in any future legislation that they intend to draft. Given that this seems unlikely, I am once again left with the question as to why this is necessary. I urge the Minister to reconsider this.
Baroness Smith of Malvern (Lab)
My Lords, I begin on this group of amendments by reassuring the Committee that the department recognises and takes very seriously the important role that Parliament has in scrutinising consequential amendments. For this reason, we have made every effort to identify all the consequential amendments to primary legislation that are necessary, and to include them as Schedules 1 and 3 to the Bill.
Despite those extensive efforts, there is a risk that in the future we may uncover Acts which need amending because of provisions in this Bill. I reassure the Committee that this is a very limited and narrow power and that any use would be subject to parliamentary scrutiny. We have carefully considered the power and believe that it is entirely justified in this case. In fact, the inclusion of similar powers as a safeguard is well precedented in legislation. Our delegated powers memorandum has been considered by the Delegated Powers and Regulatory Reform Committee, which has confirmed that there is nothing in the Bill which it would wish to highlight to the House.
Therefore, the amendment, and Amendments 38 and 39 in the name of the noble Baronesses, Lady Barran and Lady Garden, would remove the delegated power to make consequential amendments to primary legislation. If this were accepted, it would be unnecessarily burdensome on Parliament and require greater amounts of parliamentary time should we uncover Acts that needed minor and genuinely consequential amendments to be made as a result of the Bill. It would, of course, require all those changes then to be made through primary legislation.
Depending on the nature of the issue, and to go back to the previous group of amendments, we might see an increased risk of disruption in the functioning of the skills system for learners and employers. I hope it might provide some reassurance to the noble Baroness, Lady Barran, although perhaps not to the noble Baroness, Lady Garden, that previous legislation, including legislation passed by the previous Government, has included a power such as this because it provides that important safety net should future amendments be identified.
The power is limited to consequential amendments to previous Acts and Acts passed later in the same parliamentary Session. It does not encompass all future legislation, as the noble Baroness, Lady Barran, seemed to suggest. The amendments would limit consequential amendments to those Acts specified in Schedules 1 and 3 to the Bill, but our approach in relation to amending Acts passed later in the same Session is not unusual, notwithstanding the challenge from the noble Baroness, Lady Barran. We have reviewed legislation and identified that including a power to amend primary legislation passed in the same parliamentary Session has been done in at least 20 other Acts since 2020. It may well be that the noble Baroness has now seen the light, but I suspect it is more likely that this is a sensible, narrow and reasonable provision to put into this legislation. That was why the previous Government decided to do it at least 20 times.
Amendments 40 and 41, tabled by the noble Lord, Lord Addington, would require regulations making consequential provisions that are subject to the negative procedure by virtue of Clause 9(5) to instead be subject to the affirmative procedure for a period of six months. As is customary, any consequential amendments to legislation other than primary legislation, which would be subject to the affirmative procedure, will be subject to the negative procedure. The limited and uncontroversial nature of such changes means that this procedure provides sufficient parliamentary oversight while enabling changes to be made without unduly taking up parliamentary time.
Consequential amendments to secondary legislation are not included in the Bill as the power to make or amend such legislation is held by the Secretary of State by virtue of the passing of that legislation previously. We have already identified the amendments to secondary legislation that are needed; these are of a similar nature to those included in Schedules 1 and 3 to the Bill. There is a strong precedent for delegated legislation under the negative procedure to be used to make consequential amendments to delegated legislation. Therefore, the amendment seeking affirmative resolution is not necessary.
I have set out in a letter to the noble Baroness, Lady Drake, the chair of the Constitution Committee, how the clause is inherently narrow in scope as it is limited to making amendments that are genuinely consequential on the provisions in the Bill.
Therefore, for the reasons that I have outlined, I hope that the noble Baroness, Lady Garden, will feel able to withdraw her amendment.
Baroness Garden of Frognal (LD)
My Lords, the noble Baroness is doing a mighty job in trying to convince us that this is a helpful Bill. Sadly, some of us still have concerns but, for now, I beg leave to withdraw my amendment.
Institute for Apprenticeships and Technical Education (Transfer of Functions etc) Bill [HL]
Wednesday 5th February 2025
(1 month, 2 weeks ago)
Lords ChamberInstitute for Apprenticeships and Technical Education (Transfer of Functions etc) Bill [HL] 2024-26 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 38-R-I Marshalled list for Report - (3 Feb 2025)
20:01 - Division on Amendment 15 - Ayes: 183 / Noes: 127 - Amendment 15 agreed.
Baroness Barran
“(3B) A group of persons under subsection (3) must include a representative from an organisation that is the representative body for a sector.”
Baroness Barran (Con)
My Lords, in moving Amendment 1 I will speak also to Amendments 2, 4 and 5 standing in my name. Amendments 1 and 4 in my name and that of the noble Lord, Lord Aberdare, mirror the amendment put down by the noble Lord, Lord Blunkett, in Committee, which I also put my name to. They seek to bring the expertise of sector representative bodies to the preparation of standards and assessment plans and distribute the workload so that Skills England is not drowned in the preparation and updating of standards.
I note that there is a reference to employer representative bodies in the section of the draft framework document that covers the purposes of Skills England, although it is used merely as an example. Can the Minister articulate what the block is to the Government committing to work with employer representative bodies? The Government stress the breadth of their ambition for their industrial strategy and for Skills England’s part in delivering this, so why not bring in the wider expertise capacity of employer representative bodies, both in more traditional and more modern sectors?
I turn to Amendments 2 and 5, to which the noble Lord, Lord Hampton, has also given his support. These amendments seek to give the Government one last chance to be absolutely explicit in their commitment to employers and to those undertaking training. The text of the amendment comes from the original IfATE legislation and so has been thoroughly tested not just in debate in both Houses but also in real life.
I am told by those who have been involved in the governance of IfATE that the duty to
“have regard to the reasonable requirements of … industry, commerce, finance, professions and other employers regarding education and training, and … persons who …. wish to undertake education and training”
has been a very serious duty in relation to the approval of a standard under new subsections (3) or (6).
The Minister will understand very well the influence that government policy has on employers. Recently, the Government announced that level 7 apprenticeships would no longer be eligible for the levy and there are question marks over the funding of some level 6 apprenticeships. This policy had been trailed for some time. If we look at the impact on recent apprenticeship starts, levels 6 and 7 saw starts rise by 10.9% as employers scramble to lock in funding ahead of the proposed changes. However, starts at levels 2 and 3 and the absolute level of under-19s participating in apprenticeships declined. So, while the Secretary of State celebrated the overall increase in apprenticeship starts of 1.3%, the building blocks of this rise are exactly the ones that the Government are removing. There is a real risk that the changes they propose, with the move to a growth and skills levy, will result in a drop in the number of people undertaking these qualifications, as funding for existing high-quality qualifications is removed and newer ones are perhaps not made the immediate priority for employers, particularly given the likely impact of employers’ national insurance contribution increases on recruitment into lower-paid roles.
All of this matters because the framework document is, at best, vague and, at worst, silent on the involvement of employers. There are some statements in the section on aims, saying that employers will be engaged in the preparation of occupational standards, but it does not say how. The rest of the document, particularly the section on the responsibilities of the chief executive, does not refer to this. It focuses rather on their role as accounting officer in relation to the board and the department, with no mention of employers.
There are broad references in the section on the purposes of the new agency and the reference I mentioned earlier in brackets to employer representative bodies but, if I were an employer, I would be concerned and would want an explicit reassurance from the Minister about my role going forward. I urge the Minister either to explain why employers are so much less visible in the framework document or to agree that this amendment would fit best within the Bill or, at the very least, in the next draft of the framework document. I hope that she can commit to that today. If I may, I will speak to her Amendments 3 and 6 after she has spoken to them. I beg to move.
Lord Aberdare (CB)
My Lords, I have added my name to Amendments 1 and 4 in the name of the noble Baroness, Lady Barran. Before speaking to them, I thank the Minister for her very positive engagement with those of us involved with the Bill. That includes several meetings and her letter last week describing the three amendments that she has tabled—all of which represent welcome improvements, even if they do not go quite as far as I might like—and including a draft of the proposed framework document for Skills England. Having said that, I remain concerned about what impact the transfer of IfATE into the DfE will have on the vital engagement of employers in standards and assessment processes, and about the proposed status of Skills England as an executive agency, albeit an arm’s-length body within the DfE.
Amendments 1 and 2 relate to the organisations which should be involved or taken into account by the Secretary of State when preparing apprenticeship standards. Amendment 1 requires that a group of persons preparing such standards should include a person from the representative body for the relevant sector; it would be even better to spell out that this should be the representative skills body. Many industry sector skills bodies have played a crucial and leading role in working with IfATE to prepare standards and assessment plans for their sectors. It will be important to continue this under the new regime, not least because of the positive effect it could have in leveraging valuable support for Skills England from such bodies.
Recognised sector skills bodies, such as Energy & Utility Skills for the energy and utilities sector, already work closely with employers in their sectors to identify needs and translate them into standards and training pathways in England and across the devolved Administrations, ensuring UK-wide consistency. Through their links with employers, they can respond with speed and agility to the developing skills needs of their sectors, while ensuring consistency with existing qualifications and apprenticeships across the whole UK. They work closely and effectively with IfATE, thereby ensuring that employer views are properly represented in standards and assessment plans approved by IfATE while minimising its workload.
I also support Amendment 2, which broadens the range of bodies to whose interests the Secretary of State must have regard. Both amendments seek to ensure that the central role of employers and other relevant bodies is properly and fully reflected in the Bill.
Amendment 3 in the Minister’s name—I will speak to it briefly now rather than standing up again later—addresses the issue that I and others raised in Committee about spelling out the circumstances in which the Secretary of State might herself prepare a standard, rather than a group of persons. The amendment requires the publication only of matters to be taken into account in deciding whether to make such a decision rather than specific criteria, but I welcome it as far as it goes.
Amendments 4 to 6 raise essentially—almost exactly—the same issues as the previous three but in relation to the preparation of apprenticeship assessment plans rather than occupational standards. All I will say is: ditto. Again, I support all three of them, particularly Amendment 4, which requires a person from the representative skills body for a sector to be included in the group of persons developing a standard for that sector, for the same reasons as I have given for Amendments 1 to 3.
Lord Hampton (CB)
My Lords, I will speak briefly to Amendments 2 and 5, to which I have added my name. I declare the fact that I am a teacher. I join other noble Lords in thanking the Minister and her team very much for our collegiate and friendly meetings and for their letters on the draft framework. They have gone a long way in calming a lot of the fears that I had about this Bill and about the lack of information. There is still a lot that has not been said, but I am an optimist. I genuinely believe that the Government are going in the right direction but, rather like the noble Baroness, Lady Barran, I would like to hear a little more.
Lord Addington (LD)
My Lords, when a framework Bill comes before the House, you expect to have a series of amendments such as these, asking for more information. I thank the Minister for answering some of those questions, but the fact of the matter is that this is still a framework Bill. I hope that we will get a little more detail when she responds to this group, but we really need a bit more information before we assess a piece of legislation. I thank her for what she has done, but I hope she will take back to her department that the original approach on this really was not good enough.
Baroness Wolf of Dulwich (CB)
My Lords, I echo much of what has been said already, including appreciating everything the Minister has done to meet some of the points and criticisms raised in Committee. However, Amendments 1, 2, 4 and 5 are important because it is very important to have employers and representative bodies in the Bill.
I would like to look back in history to the period in the 1980s, 1990s and early 2000s, when apprenticeships in this country were in raging decline and the quality of much of what was being called an apprenticeship was very low. All three major parties have been involved in turning that around, and we are in a much better place than we were in the early 2000s, let alone the 1990s.
The Minister of State, Department for Education (Baroness Smith of Malvern) (Lab)
My Lords, I thank all Members who have been involved in the consideration of this Bill for being willing to meet with me and share concerns. I am glad that people have recognised that we have made progress as a result of that process.
I think that we all agree that effective skills provision is critical to boosting growth and spreading opportunity to all parts of the country. Through this Bill, the Government are taking steps to enable the rapid development and delivery of high-quality training aligned to current and future skills needs. For this to be possible, we need to ensure that the processes for developing and approving training are sufficiently flexible to respond to diverse and changing skills needs across the economy and the wide range of different occupational specialisms. This Bill, therefore, introduces specific flexibilities intended to make the system more responsive and more focused on the needs of employers and other key stakeholders.
For those who argue, quite rightly, that we should listen to employers, I say that it is precisely because of what employers have told us about the need for speed and flexibility that we have introduced the provisions in this Bill. As I tried to do in Committee, I also reassure noble Lords about the absolutely central role that employers will play in the work of Skills England. Building on the work of IfATE, employers will continue to play a critical role in the design and delivery of apprenticeships and technical education. It is crucial that those reflect the needs of employers and that employers have confidence in them. Skills England will ensure that there is a comprehensive suite of apprenticeships, training and technical qualifications for individuals and employers to access, all of which will be informed by what employers and other partners tell us that they need.
As I have said on several occasions about the functions that are being transferred, and in response to the points made by the noble Baroness, Lady Wolf, the default position will continue to be that groups of persons, including employers, are responsible for preparing standards and apprenticeship assessment plans. In other words, what is proposed in this Bill maintains the same focus on employers as in the original Act setting up IfATE.
What is more, we have the experience of how Skills England has been operating in shadow form. We have Skills England’s first report, which provided a very important springboard for Skills England to engage in further dialogue between employers, unions, providers, experts, regional bodies and the Government to interrogate, corroborate and build our shared understanding of what skills the economy needs. The assessment of skills needs, including the needs of employers in different sectors, will be continued in Skills England’s second report, which is due in early 2025. In every case that noble Lords have talked about, I am absolutely clear—and we have already seen evidence from Skills England—that employers, representatives of sector skills groups and employer representative bodies should be, will be, and are already being, engaged by Skills England.
The question is whether these amendments act against the wish of the Government, and, I believe, of other noble Lords, to ensure that we are doing this in the most speedy and appropriate way. It is vital that the Bill does not lose its ability to deliver this change—the change to be more responsive and more focused on the needs of employers and key stakeholders—by taking on amendments which will slow down Skills England and, in some cases, make it slower and more cumbersome, with more prior requirements than IfATE’s current processes. Any such burden would impact the wider skills system and hinder its contribution to the growth and opportunity missions that are important to this Government.
In Committee, during the debates on Clauses 4 and 5, noble Lords raised concerns about the membership of groups of persons formed to create standards and assessment plans, as has been repeated today. I outlined how, at present, there are no statutory criteria that prescribe the make-up of these groups. In other words, it is not the case that IfATE already has in legislation specific named representatives that need to form these groups. However, IfATE is under a duty to publish information about matters it will consider when deciding whether to approve groups of persons to develop occupational standards and apprenticeship assessment plans. In this legislation, that duty is being transferred to the Secretary of State unchanged. That level of transparency, because of this Bill and the transfer of functions, will be part of the functioning of Skills England.
Amendments 1 and 2 would, however, prescribe in legislation that a group of persons that prepares an occupational standard or an assessment plan must include a representative from an organisation that is the representative body for a sector. I spoke in Committee about the risks of introducing new constraints on the structure of these groups with criteria in primary legislation. They would make the process for forming groups slower and more onerous. I do not think it is in anyone’s interest—not least learners or employers—to incur such delays. They could prevent the membership of the group reflecting specific factors important for its work. To specify sector representative bodies or any specific member of the group of persons would prioritise certain people or bodies over the expertise of others.
Clauses 4 and 5 create a power for the Secretary of State to prepare a standard or an apprenticeship assessment plan themselves, where satisfied that it would be more appropriate for them to do so than a group of persons. In Committee, noble Lords expressed concerns about this new power and how it will operate—understandably, given the arguments that have been made. In previous exchanges, I set out why it is important that this additional flexibility is built into the system: to respond to the particular skills needs of different occupations. I also set out that, in practice, it will remain the default for groups of persons to prepare standards and apprenticeship assessment plans.
However, I recognise that this flexibility must also be balanced against transparency. In Committee and today, the noble Baronesses, Lady Barran, Lady Garden and Lady McGregor-Smith, and the noble Lords, Lord Aberdare, Lord Hampton and Lord Addington, all spoke on the clauses about the power for the Secretary of State to prepare a standard or an assessment plan. I listened carefully to the points made. As such, and in recognition of arguments put forward by noble Lords during the passage of the Bill to date, government Amendments 3 and 6 will be proposed today.
The amendments will create new duties on the Secretary of State to publish information about matters they will take into account when deciding whether it would be more appropriate for them, rather than a group of persons, to prepare occupational standards and assessment plans. These amendments will result in powers in the Bill being subject to equivalent transparency as powers being transferred to the Secretary of State from IfATE. To reiterate the point I made earlier, there will not be less statutory requirement for employer engagement in the Bill, but the equivalent to what is in the legislation governing IfATE.
The amended Bill therefore provides for consistent transparency throughout. It will mean that the Secretary of State will be under a duty to publish information on the matters that will be taken into account when making decisions in three areas: first, on whether to approve a group of persons to prepare a standard or assessment plan; secondly, on whether to approve a standard or assessment plan; and, thirdly, as a result of government Amendments 3 and 6, on whether it is more appropriate for the Secretary of State to prepare a standard or assessment plan, rather than a group of persons.
Amendments 4 and 5 would create that statutory duty on the Secretary of State to have due regard to the reasonable requirements of employers and those who may wish to undertake training when considering whether to approve occupational standards and assessment plans, where they have been developed by a group of persons. The Secretary of State is already subject to a general public law duty, which requires them to take into account all relevant considerations before taking decisions relating to the functions for which they are responsible. There is therefore already a requirement that, when executing the functions described in the Bill, the Secretary of State considers and balances factors such as those outlined in the noble Baroness’s amendment. In fact, the public law duty includes, but is broader than, the factors listed in the proposed amendment.
I recognised the concerns of noble Lords that we were more explicit about the aims, objectives and governance of Skills England. That is why I reference again to noble Lords Skills England’s first published report, the documents published and the exchanges made during the passage of the Bill, including the draft framework document that I shared with Members of the Committee who had particularly focused on this. The noble Baroness, Lady Barran, says that it is just a draft; it is, because the framework document itself needs to be approved by the board of Skills England, but it is a pretty full draft and very much aimed at reassuring noble Lords about the approach Skills England will take and the nature of the organisation, which is what I was asked for more information about. We have also been clear that a fundamental part of Skills England’s role is to ensure that technical qualifications and apprenticeships meet the needs of both employers and learners.
The amendments proposed by the noble Baroness, Lady Barran, are therefore well considered but, we would argue, duplicative of existing duties on the Secretary of State, commitments made about the purpose of Skills England, and the further evidence in additional information I have provided for noble Lords. The existing duty to take into account all relevant considerations will be fulfilled by Skills England and through the considered approach to create Skills England as an executive agency, which we will return to in the next group of amendments, when I hope I will be able to respond to some of the points made by the noble Lord, Lord Aberdare, as well.
I therefore hope that the noble Baroness, Lady Barran, and other noble Lords are reassured that her concerns are already addressed. I hope she agrees not to press her amendments, so that we can ensure that flexibility and speed of response to the skills challenges that our country faces and enable Skills England to start doing that as quickly as possible.
Baroness Barran (Con)
I thank Minister for her remarks and thank all noble Lords who spoke in this short debate. I followed some of her argument but not all of it, so I will ask for a little clarification. First, on my comments about the framework being a draft, it is clearly a long document, and thought has gone into it. I was just trying to make the point that, when you look at the CEO responsibilities, it talks about responsibilities to other groups but not employers. The fact that it is a draft—I hope the Minister might give a little here—is also an opportunity to use some of these amendments, which could be woven into a final draft.
Baroness Smith of Malvern (Lab)
If I remember rightly from my previous reading of the framework document, the first or second page of the current draft explicitly mentions employers. Although the noble Baroness is right that that is not necessarily reiterated in the formal functions of the chief executive, their role is of course running the organisation and delivering the aims and objectives. Obviously, there will be reiterations in the framework document. I am sure that Skills England itself, and the board when it is set up, will want to ensure, as will those with whom they are agreeing the nature of the framework document, that the explicit role of employers is properly demonstrated within that. The framework document will then be a public document that people will be able to look at and hold Skills England to account on—through myself as the Minister and through the CEO and others—in its delivery and its relationship with employers.
On the point about the other amendments, my argument was that they duplicate in a narrower way duties that already lie with the Secretary of State by virtue of her public law duty, and therefore there is already a requirement that those functions would be executed and that the Secretary of State would need to consider and balance those factors in making decisions. I hope that the noble Baroness feels that that is sufficient assurance and feels able to withdraw her amendment.
Baroness Barran (Con)
I feel a bit reassured, but not entirely clear. To the extent that the framework document is a public document, it is much easier for anybody reading it, rather than talking about public law duties, to talk about having due regard to employers and people who undertake the training, et cetera. The Minister is nodding, so I am going to take that as an encouraging sign that, when we see the next draft of the document, it will be a bit more explicit on that point. With that reassurance from her, I beg leave to withdraw the amendment.
Baroness Smith of Malvern
“(4A) In subsection (7), after paragraph (a) insert—“(aa) information about matters that the Secretary of State takes into account in deciding whether it would be more appropriate for a standard to be prepared by the Secretary of State than by a group of persons for the purposes of subsection (3A);”Member's explanatory statement
This amendment requires the Secretary of State to publish information about the matters that will be taken into account in deciding whether it would be more appropriate for a standard to be prepared by the Secretary of State than by a group of persons.
Baroness Smith of Malvern
“(5) In subsection (10), after paragraph (a) insert—“(aa) information about matters that the Secretary of State takes into account in deciding whether it would be more appropriate for an apprenticeship assessment plan to be prepared by the Secretary of State than by a group of persons for the purposes of subsection (6A);”Member's explanatory statement
This amendment requires the Secretary of State to publish information about the matters that will be taken into account in deciding whether it would be more appropriate for an apprenticeship assessment plan to be prepared by the Secretary of State than by a group of persons.
Baroness Smith of Malvern
“Report on exercise of the Secretary of State’s functions(1) Within the period of six months beginning with the day on which section 3 comes into force, the Secretary of State must lay before Parliament and publish a report about the exercise of the relevant functions.(2) The report must include information about—(a) which of the relevant functions are being exercised through an executive agency known as Skills England, and(b) the impact of the exercise of the relevant functions on apprenticeships and technical education in England.(3) In this section “the relevant functions” means the functions conferred or imposed on the Secretary of State by sections 1 and 4 to 7 and Schedule 1.”Member's explanatory statement
This amendment requires the Secretary of State to lay before Parliament and publish a report about the exercise of functions conferred or imposed on the Secretary of State by this Bill. The report must be laid and published within six months of the abolition of the Institute for Apprenticeships and Technical Education.
Baroness Smith of Malvern (Lab)
My Lords, I start our consideration of this group of amendments by re-emphasising, as I did in the first group, the urgency with which we need to tackle the skills gaps in our economy. They are holding back growth and opportunity, which is why we intend, as a priority, to establish Skills England as an executive agency of the Department for Education.
I know that, quite legitimately, in Committee there was a challenge about the nature of the executive agency, questions about whether that was an appropriate form for Skills England, and concern about the fact that the nature of the Bill meant that there was no mention of Skills England. I hope that, in the amendments that I propose and through some of the other reassurance that I have provided to noble Lords, I have addressed those issues.
The executive agency is a widely used model of arm’s-length body, of which there are many examples which play important roles, including the Met Office, the DVLA, and the Standards and Testing Agency. I provided more information about the functioning of executive agencies in the letter that I circulated. It is certainly not the case, as was suggested at Second Reading or at some point in Committee, that somehow Skills England would be in some cupboard in the Department for Education. This is a serious and well-used way in which to create an arm’s-length agency in government, which has been used by Governments of all persuasions in recent years.
Executive agencies have clearly defined status and must be established and governed in line with official Cabinet Office guidance. To summarise, the guidance states that executive agencies are identified as appropriate for the delivery of specialised functions, separate from a primarily policy-focused department but within a policy and resources framework set by that department, and the delivery of services to other parts of central government using specialist skills. The executive agency model therefore provides a strong fit for Skills England.
As I have emphasised, it is imperative that Skills England is fully operational as quickly as possible, designing and delivering high-quality training that reflects employers’ needs. Compared with a non-departmental body, for example, the executive agency model can be up and running much more quickly.
Following what I hope is the successful passing of this Bill, Skills England can quickly take on functions from IfATE, alongside those it has already begun to deliver while in shadow form. The executive agency model provides Skills England with the independence to focus on the delivery of its functions at arm’s length from the Department for Education, while ensuring sufficient proximity to the department, so that Skills England can quickly and efficiently inform decisions on skills policy and delivery.
Noble Lords have expressed concerns that pursuing this model will mean that there is insufficient transparency around exactly which functions are being transferred to the Secretary of State from IfATE and those which are to be executed by Skills England, as well as around the impact that Skills England’s responsibility for and execution of its functions will have in practice on our apprenticeships, technical education and the objectives that I know noble Lords share to improve our skills system.
Similarly, noble Lords have queried what the executive agency model means for how Ministers will be held to account for their decisions as related to these functions, and how Skills England will be held accountable for its performance. I assure noble Lords that, as with other executive agencies, Skills England will be required to have robust governance arrangements and clear lines of accountability, including to Parliament. Ministers, the principal accounting officer and the chief executive will be accountable to Parliament, and are usually those who, for example, appear before Select Committees as required.
Skills England will be overseen by a board, headed by a non-executive chair. As I said in Committee, I assure noble Lords that we have borne in mind the necessity to have strong credibility with employers in choosing who the non-executive chair will be. I hope that we can soon introduce them not only to noble Lords in this House but more widely to employers and others engaged in this activity. This board and chair reflect Cabinet Office guidance that executive agencies should be led by a board where there is a need for a significant level of independence from a department to carry out its functions effectively, or where they are of sufficient size and importance to require independent assurance. The board will advise on strategy and deliverability, maintain high standards of corporate governance, ensure that controls are in place to manage risk and scrutinise performance. Working with the board, the chair will provide the strong and independent leadership, support and challenge needed for Skills England to deliver its objectives.
The broader governance arrangements for Skills England, as we touched on in the previous group, will be set out in a framework document. This is a core constitutional document that must be produced in line with guidance from the Treasury. Skills England’s framework document will be agreed between its board and Ministers, as I have already suggested. Once finalised, it will be published online, and I will deposit a copy in both Houses. I have written to noble Lords with more information on what the framework document will likely set out, including the detailed sponsor relationship between Skills England and the Department for Education, lines of accountability to Parliament, and Skills England’s purpose, aims and duties. Noble Lords can see examples of such documents for other arm’s-length bodies online, as all are published by the Treasury.
Noble Lords have expressed an interest in understanding more about Skills England’s future reporting arrangements. I can provide assurance that the reporting arrangements of executive agencies are clearly defined. They must produce an annual corporate plan and an annual report, both of which will be published in respect of Skills England, subject to any commercial considerations in the corporate plan. These will, together, support Skills England’s accountability, including to Parliament, by providing transparency over its strategic priorities and performance. Again, my recent letter to noble Lords sets out more detail on what guidance dictates that corporate plans should include, such as—I know noble Lords have raised this point—key objectives and performance targets, and assessment of current and recent performance against those targets.
Taken together, I hope that the steps I have described here—namely, compliance with clear and detailed Cabinet Office guidance on the role and purpose of executive agencies; appointment of an independent board; and publication of a framework document, annual corporate plan and annual report—demonstrate that Skills England is being set up in a way that ensures transparency about its work and accountability for its performance.
Lord Storey (LD)
My Lords, the Minister makes very strongly the case for skills, in terms of the Government’s agenda for growth, which is something we all support. As a nation, we have been slow on the uptake in realising that we owe it not just to our nation but to our young people in particular to ensure that they have the skills and the opportunities to contribute, including to their own well-being.
At the beginning, people were disappointed when this much-heralded Bill arrived. We all thought it was going to be a skills Bill, as the name on the jar suggested, so we were quite shocked. I think that the best description of the Bill came from the noble Lord, Lord Blunkett— I cannot possibly repeat it, so I will leave Members to look at Hansard to see what he said. My view was that if we want to provide what the Government want, we have to be open and flexible. We cannot just leave it all to the department to get it right or wrong. It was very difficult to look at ways to contribute, to be quite honest. You would go to the Legislation Office, which would say, “Oh, this is not in scope; that is not in scope”, so you had to look for mechanisms to actually make a positive contribution and to hopefully make a success of this. My amendment was to say that the Secretary of State should report to Parliament within 12 months of the passage of the Act to address the skills gaps, et cetera. I am extremely grateful to the Minister for reaching out and having a number of conversations about the Bill. I have to say that it is not perfect—we are not in a perfect world—but she did that and I am very grateful to her for it.
Much has been made of the draft framework for Skills England. I ask noble Lords to put their hands up if they have read it from cover to cover—I am sorry; that is teacher mode. Well, I found it quite depressing at times. Let me just read some, on a very minor point. By the way, this wins the “Yes Minister” prize:
“Any disputes between the department and Skills England will be resolved in as timely a manner as possible. The department and Skills England will seek to resolve any disputes through an informal process in the first instance. If this is not possible, then a formal process, overseen by the senior sponsor, will be used to resolve the issue. Failing this, the senior sponsor will ask the relevant policy director-general to oversee the dispute. They may then choose to ask the Permanent Secretary to nominate a non-executive member of the department’s board to review the dispute, mediate with both sides and reach an outcome, in consultation with the Secretary of State”.
My goodness me. If that is how we operate, I really worry about our ability to develop the skills we need.
Joking apart, I think the draft skills document needs to reflect a few other things, which I could not see in it. Perhaps the Minister can reassure me. Wearing my local government hat, I am conscious that our 34 combined authorities have responsibilities in terms of developing skills and have put together skills programmes. I wonder how that will be addressed by the Minister. When she responds, perhaps she can home in on that for me. I will deal with the other issues when we come to them.
Lord Blunkett (Lab)
I am not sure whether this is an appropriate moment for me to join in but, as I have been mentioned twice this evening, I thought I had better put on record where I stand. First, I thank my noble friend for the substantial consultation and listening exercise, which has already been mentioned on all the Benches opposite. I think we are all extremely grateful that she has been prepared to do that and to reflect those representations, including those made in Committee. Committee was not entertaining, because I do not think the Bill is entertaining in any way, shape or form, but it was thorough. There is nobody taking part tonight, or who took part in Committee or at that very brief Second Reading at about this time of night, who has not got a real commitment, interest and dedication to getting this right. I commend my noble friend because she is totally committed to making this work.
I have not changed my mind: I think this is a mouse of a Bill. We have to elevate Skills England into a lion of an organisation, and I look forward very shortly to the announcement of the substantive chair of Skills England and to the framework document that my noble friend has published in draft becoming a substantive document, taking into account the comments that have been made by Members on all sides this evening. The review that my noble friend referred to will be important and I think that the amendments she has agreed to and moved tonight will make a difference.
I may have said it before, but I am going to say it again: it is not just my dog that has had to get used to being on the other side of the Chamber—the government side. I am adjusting, as well as the dog, to making my way up these Benches. One of the consequences is to cut your own Government a bit of slack and, when they have listened to you, to take that on board and to ride with their assurances. That is what I intend to do tonight, and I ask Members opposite not to push anything to a vote because we need to move on rapidly from this transfer of IfATE.
We need to be very wary that that transfer does not swamp the work of Skills England and its much broader task, as exemplified by the somewhat belated publication of Mark Farmer’s review of construction and engineering and the substantial challenge that it outlines. The Government responded, and I was tickled a bit because it took me back all those years to when the Government declined to comment on or to endorse recommendations that were “not in scope”. Honestly, we have to try to govern in a way that relates to what is happening in the world outside, not by going through the processes that, I am afraid, Ministers are so often presented with. We have a massive challenge in this country to get it right, and we have to use the growth and skills levy—all of it—effectively and in tune with, but not completely run by, the business community, which, frankly, also needs to step up to the mark. If we had the same number of training days that we had 15 years ago then 20 million more training days would be delivered in this country. It is a combined effort between employers, big and small, and those of us, in Parliament and outside, who are committed to making it work, in conjunction with government and now with Skills England.
I hope we can go forward from tonight with the kind of ambition that I know my noble friend and the Secretary of State have to make this work. I am sorry that Skills England is not going to be a statutory body, but it is not make or break and it is not an issue over which I would want the House to divide. I hope, with the review that has been mentioned already, that we will be able to accelerate progress in making this work for the country.
Lord Aberdare (CB)
My Lords, it is a great pleasure to follow the noble Lord, Lord Blunkett. A significant number of the amendments discussed in Committee related to reporting requirements. If Skills England is to be an executive agency within the Department for Education, which still seems less than ideal—I will come to that later—arrangements for transparency and accountability, especially through reporting, become all the more critical. So, I welcome the Minister’s Amendment 7 requiring the Secretary of State to publish a report six months after the abolition of IfATE on how she has exercised the functions transferred from IfATE. However, I feel that this does not go far enough in spelling out what should be covered by the report.
The draft framework document, as we have heard, requires the publication of an annual report and accounts, and indeed a corporate plan, but I am not clear whether that will really cover the breadth of information needed. Surely Skills England will need to publish, at least every year, a report on progress across the whole of the Government’s promised post-16 education and skills strategy, of which Skills England will be at the heart. What we need is not so much a corporate plan as a sort of state of the nation report: where are we with the skills objectives that Skills England is all about promoting? For that reason, I added my name to Amendment 8 from the noble Lord, Lord Storey, which is more specific about the issues covered in the report. We have covered that.
I also feel that it is particularly important to ensure that the local skills improvement plans developed across the country by employer representative bodies, as the noble Baroness, Lady Barran, mentioned, and the plans of the mayoral combined authorities are covered as part of the state of the nation report. That is one reason why it is very important that Skills England should be a lion, to use the word used by the noble Lord, Lord Blunkett, rather than a mouse. At the moment, it is somewhere between the two but moving in the right direction.
I also added my name to Amendment 10 from the noble Baroness, Lady Barran, which spells out a number of matters relating to quality, value for money, efficiency and effectiveness in Skills England’s performance of its functions, and specifies some content of the annual report. I hope the Minister will give us further reassurance on how the Government will ensure that the report lives up to what I see as the requirements of a state of the nation report. Failing that, if the noble Baroness, Lady Barran, decides to test the opinion of the House, I will dutifully march in behind her.
Lord Hampton (CB)
My Lords, I shall speak briefly to Amendment 10, to which I have added my name. With due respect to the noble Lord, Lord Blunkett, the whole point of being a Cross-Bencher is that you do not have to cut any Government any slack.
The thing I really like about Amendment 10, to take up the point from the noble Lord, Lord Storey, is that while I find the language in the framework document very iffy at times, Amendment 10 has
“ensure that education and training is of an appropriate quality … represents good value … ensure that Skills England performs its functions efficiently and effectively”.
I really like that.
We talk about annual reports. The Government have already committed to putting out a report after six months. I really like annual reports.
The Minister talked about Skills England already having experience in shadow form. Perhaps she could comment a little more about that as well.
Baroness Barran (Con)
My Lords, I rise to speak to Amendment 7 in the name of the Minister, Amendment 8 in the names of the noble Lords, Lord Storey and Lord Aberdare, and my Amendment 10. It feels a bit churlish not to welcome a report on how Skills England is discharging its functions, and it is even more troubling to disagree with the noble Lord, Lord Blunkett, since I have obviously made it a policy always to agree with him. However, I genuinely think that this amendment is rather odd.
The first thing is the timescale. The amendment says that the report
“must be laid and published within six months of the abolition of”
IfATE, which means the department will need to start writing it within a few weeks of the Bill passing, since I imagine that the sign-off process is similar to the example the noble Lord, Lord Storey, read out, in terms of complaints. What will it be able to say at that point about the exercise of its functions—that it has just got started? What impact will a few weeks of work have on apprenticeships and technical education in England, particularly given how many other moving parts there are in the system, with the proposed introduction of the growth and skills levy? I genuinely worry that, with the best will in the world, the report risks being rather thin and without any real substance, and that it will not be the kind of state of the nation report the noble Lord, Lord Aberdare, suggests is appropriate.
In contrast, Amendment 8 sets a more realistic timescale. It is much more tailored to the specific points the Minister has heard repeatedly across the House, which relate to skills and technical education policy and strategy. I guess that it is a backdoor way of trying to get a bit more policy into the Bill. The serious point, which so many of our debates have centred on, is that the Bill is not clear on the Government’s specific policy approach. I urge the Minister to consider Amendment 8 as a helpful way of starting to sketch this out and perhaps to commit in her closing remarks to including at least parts of it in the next draft of the framework document.
I draw attention to two particular points in the document—which I am so glad that I read, otherwise I would have been found out by the noble Lord, Lord Storey. At 26.2, where the document refers to the annual report and accounts, it says that it will include the main activities and performance during the previous financial year. The Minister has obviously memorised it—we could have “Mastermind” on this. At 26.3, the document says there will information on the financial performance of Skills England. So, some of the points in the amendment of the noble Lord, Lord Storey, could be used to flesh out those statements.
I am very grateful to the noble Lords, Lord Aberdare and Lord Hampton, for their support for my Amendment 10. We have already debated the point of principle that the framework principles for the new executive agency should be in the Bill, and my amendment does this in a way I had hoped would not be controversial for the Government—although I am not terribly encouraged by the Minister’s opening remarks. I would be very grateful if, when she winds up, she could be absolutely clear on whether the public law duties which she says cover all the points in my earlier amendments and this amendment apply to IfATE. If they did apply to IfATE, why was that original drafting chosen and why was it part of the legislation passed by both Houses?
Like Amendments 2 and 5, this amendment takes the text from the original legislation, puts it in the Bill and applies it to Skills England. It is clear that Skills England will need to have regard to the quality of education and training, and the Minister said that that was in the aims. She can put me right if I have missed it, but I have to say that I cannot see it anywhere in the aims, so maybe she could commit to including that. It is also clear that it must represent good value in relation to funding and be efficient and effective, and it needs to prepare an annual report and lay it before Parliament. Paragraph (c) makes it clear that the Secretary of State can write to Skills England setting out
“other matters to which it must have regard when performing its functions”.
It gives the Secretary of State the flexibility for the focus of Skills England to evolve over time, which I am sure it will, naturally and rightly. The aim of this is not a straitjacket for government; it is just trying to get a balance between transparency, focus and flexibility.
I laid my amendment before the Minister shared the draft framework document and her letter, and I have a couple of concerns arising from those. Of course, if these principles are not in the Bill, Ministers can change at will the focus of the agency. I know that is not the Minister’s nor the Secretary of State’s intent—or I assume it is not—but the Minister’s letter to your Lordships says that there will be a review in the 18 to 24 months from inception, and a very wide range of options will be looked at, which seem to run from creating a different body to putting Skills England on a statutory footing. I know that this is not the Minister’s intention today, but it is what the letter says, and it underlines the point that a number of noble Lords have tried to make on more than one occasion.
Secondly, as I have said already, there is a lot of detail on page 7 of the document—it is page 7 of my printed version, although the printer of the noble Lord, Lord Aberdare, obviously uses different page numbers. It is the section on aims. It is not explicit in the same way about the importance of quality, it does not talk directly about the need for education and training to represent good value, and it does not talk about efficiency and effectiveness. I appreciate that there are generic references—boilerplate text—in the document, but it would be helpful if the Minister committed to amending this to reflect those three principles, which she confirmed in her opening remarks she definitely accepts.
The list on page 7 risks highlighting some of the issues we have debated at length, with specific government policies included in it, such as the Government’s mission to become a clean energy superpower. Of course, those priorities could change, and it would be entirely appropriate to put them in an annual letter from the Secretary of State to the agency. I am just surprised they are in the framework document. Perhaps I am being overly picky, and the Minister can correct me if I am, but it feels odd for an independent agency to use the term “superpower”—it does not feel quite right.
I very much hope that when she sums up, the Minister will be able to say how much of the text and the spirit of my amendment she will be able to put into the next draft of the framework document. It is more workable and much clearer than the current text in the section covering purposes and aims, and it is obviously more rigorous to have those principles in the Bill, but if the Minister commits to using that text in the framework document itself, I absolutely trust her. It is a workable, albeit less satisfactory option. If she cannot do that, when we come to call this amendment, I will test the opinion of the House.
Baroness Smith of Malvern (Lab)
I thank noble Lords once again for their interest and probing. As my noble friend Lord Blunkett said, there is a shared commitment to ensuring that Skills England lives up to the challenge of improving our skills system in the way in which this Government have set out.
As I commented in Committee, considering that noble Lords spent a fair amount of time then—as did the noble Lord, Lord Storey, today—complaining that the Bill did not enable them to talk about Skills England, they nevertheless managed to talk about it. We have continued that discussion today, which I am pleased about. I understand the frustration of noble Lords who have not had the benefit, as I have, of seeing the development of Skills England and of knowing the plans for its future, and their fear that the legislation does not, in its scope and interest, live up to the ambition that the Government have for Skills England. However, the proof of legislation is not in the words on the page; it is in the action, ambition and impact that Skills England will have.
Lord Blunkett (Lab)
I congratulate my noble friend. I have taken part in “Mastermind”, and I lost.
Baroness Smith of Malvern (Lab)
I do not think that any of us here will make any further appearances on “Mastermind” with our specialist subject as the framework document for Skills England.
Nevertheless, it is more interesting than some have suggested, particularly its purposes, aims and duties. I will undertake to reflect very carefully on the points that have been made by noble Lords about what more should be included in the draft, while trying to resist the idea that this document will be written by committee in this Chamber. However, some strong points have been made by noble Lords about what could be included in the next draft, including the point about the role of local government, which we will come to in a later group of amendments.
The noble Baroness, Lady Barran, raised a point about public law. It was necessary to give general duties to IfATE in statute because it was a statutory body, and therefore all its functions needed to be laid out in statute. Skills England is not a statutory body, as we have discussed at length, so the Secretary of State carries out the relevant functions and is already subject to the broader public duties. Because of those functions being carried out by the Secretary of State, the public law issue arises in this case.
In finishing, I hope that noble Lords feel that we have responded to concerns around the scope and narrowness of the legislation; the fact that we did not describe Skills England in the legislation; and the understandable requirement for accountability and reporting, which I hope I have described clearly. I absolutely share my noble friend Lord Blunkett’s view that, while the legislation may be mouse-like but important, the actions of Skills England will roar like a lion.
Baroness Barran (Con)
Before the Minister sits down, I wonder whether she can clarify something. She said that she would think about putting references to local government in the framework document. Can she commit to making explicit reference to quality, value for money, efficiency and effectiveness in the early pages —the purposes and aims section that she referred to? Some of it may be implicit in her mind, but can it be explicit?
Baroness Smith of Malvern (Lab)
That is a fair suggestion. With the proviso that this is a draft that will have to be agreed to by Skills England’s board with Ministers, I nevertheless share her view that Skills England will need to be focused on those things. I think that we could make progress on that in the next iteration of the framework document.
Baroness Barran
“Creation of Skills England(1) A body corporate known as Skills England is established to carry out the functions transferred to the Secretary of State under this Act. (2) At the end of the period of one year beginning with the day on which this Act is passed, the Secretary of State must transfer to Skills England all the functions transferred from the Institute for Apprenticeships and Technical Education under this Act.(3) Nothing in this section prevents the Secretary of State from transferring more functions to Skills England under other enactments.”Member's explanatory statement
This amendment would put Skills England on an independent statutory footing rather than as part of the DfE. The role of IfATE would be included in that planned for Skills England.
Baroness Barran (Con)
My Lords, in moving Amendment 9, I will also speak to Amendment 15.
As noble Lords know all too well, we have had considerable concerns about two elements of the set-up of Skills England: first, the independence of the body; and, secondly, its ability to respond to the needs of employers and learners. The second area concerns the space that Skills England needs to deliver its priorities before absorbing, or indeed being absorbed by, IfATE. The Minister spoke, I think for the for the first time, about the more elongated process of that.
We believe that the first risk remains that Skills England could be buffeted by changing political priorities, and that that remains a greater risk while it is in the department. However, we recognise the lengths to which the Minister has gone to reassure noble Lords of its relative independence.
Indeed, in her recent letter she stressed the balance between securing
“external technical expertise and political impartiality”
while
“ensuring close policy alignment”.
She went so far as to commit to a review of Skills England. Her letter states that the review will ensure that Skills England’s functions remain useful and necessary, and
“will also assess whether there are more efficient and effective alternatives to deliver the government’s objectives including consideration of alternative types of ALB. This will include an assessment of whether SE should be brought onto a statutory basis”.
I referred in my earlier remarks to finding that slightly ironic, given the length of time we have spent debating that. I had mixed feelings about that paragraph. It seems extraordinary that, within two years, given all the time the Government have had to plan for the change, they might decide that Skills England is not the right vehicle to deliver their skills strategy. As I said earlier, I find it highly unlikely that the Government would then decide at that point to put Skills England on a statutory footing, so maybe the noble Baroness could just explain what was behind the thinking in that paragraph.
In relation to Amendment 9, I will take the noble Baroness’s letter at face value. Although we remain concerned at the potential for political interference with the independence of Skills England, we welcome the openness of the Government to review the position in future.
Amendment 15 aims to pick up the second set of concerns articulated by several noble Lords in our previous debates, but perhaps most eloquently by the noble Lord, Lord Blunkett, in his speech in Committee. He said:
“My fear, which I expressed briefly … at Second Reading, is that given the number of people currently transferable from IfATE, full- and part-time, which nudges 200, given the macro job that Skills England will need to do and given the way in which the policy framework was at least touched on on 24 September … there is a real danger that IfATE will swamp Skills England at birth”.
He went on to say that, when he led on another learning and skills document,
“we never envisaged that an agency inside government would have to take on the assurance and accreditation of the relevant sector standards”.—[Official Report, 21/11/24; col. GC 98.]
So, Amendment 15 aims to address, at least partially, the risk that Skills England is diverted from its central strategic task and buried under the weight of the accreditation and assurance process. It creates a one-year delay between the establishment of Skills England and the commencement of this legislation, so that Skills England has a better chance of getting up and running as effectively as possible before absorbing the IfATE functions.
The Minister has told us that the recruitment for the role of CEO of Skills England is going well, and similarly for the board, but these things take a moment to bed in. It takes time to recruit the wider team and to build the culture within Skills England. So, none of this in any way seeks to impede the Government’s ambitions; it just wants to give them a bit more opportunity to set up the structures for success.
As the noble Baroness noted, there is a lot of good will towards Skills England across the House, and we have heard that again today. But I just feel that, if we were privy to the risk register—which I am guessing that the noble Baroness is not planning to publish in draft—there would be a few risks marked in red, which would say something like, “Insufficient resources to deliver on the strategy”, “Time pressure to build effective relationships with other government departments”, or, “The ability to hire a high-quality team at speed”. The amendment in my name and the name of the noble Baroness, Lady Wolf, gives the Government breathing space to implement this well. All of us who have been involved in government know that writing a policy is not the difficult bit; implementing it and making sure that it is executed effectively is at least 10 times as hard. I look forward to the noble Baroness’s remarks.
Baroness Wolf of Dulwich (CB)
My Lords, I will speak to Amendment 15, to which I have put my name, and in support of Amendment 9.
Everybody here is agreed that apprenticeship is hugely important for productivity and growth, and in offering young people a valuable and valued route into skilled employment and adult life. When IfATE—it started off as the IfA—was created, it was seen as a major step in the ongoing recreation and revalidation of apprenticeship and was praised as such by all major parties. It was thought that it could be an independent structure with the convening power that is critical to that mission.
I certainly hope that we might be creating something like the BIBB—the German Federal Institute for Vocational Education and Training—which is a wonderful institution that convenes employers, unions, government officials at all levels and researchers, all of whom have an established and major role, and one which everyone in Germany knows about. That did not happen overnight; it was built up over the years. None the less, it has been absolutely critical to the huge role that apprenticeship has played in German life and in the German economy, in its ability to change and develop when economic circumstances change, and, most dramatically, to recreate and revitalise apprenticeship in what was East Germany.
I know that the Government agree about the importance of apprenticeship and that Skills England is designed to support apprenticeship as well as to signal the importance of skills more generally. But there is a cost associated with the reassertion of a habitual and deeply ingrained pattern in this country of constantly reinventing institutions and public and quasi-public bodies, especially in the skills area. It is a real problem because, although skills professionals can just about keep up, most of the people who are actually involved in delivering skills—employers and people on the shop floor, in local government, in colleges and in unions: people who are not professionally engaged in following skills policy—find this very difficult.
Although I hanker after a statutory body, because it has the visibility and the power to convene people in a way that something inside the Department for Education never can, what worries me most is the fact that we have reintroduced instability and uncertainty into the skills world at a time when we are also really aware of the huge importance of developing our skills policy and continuing to grow apprenticeships. Like the noble Baroness, Lady Barran, I am very concerned by the fact that we have this drop-off in level 2 and 3 and with young people. So I feel that Amendment 15 offers a clear signal to people about when change is coming, which could be extraordinarily helpful to those who are actually involved in developing, amending and delivering standards, and in planning apprenticeships.
Obviously, I was reassured to hear from the Minister that it was unlikely that IfATE powers would be moved immediately, but I have to say that, although that and the direction that Skills England is going in may be clear to her, out there it really is not clear. People are in a complete fog. They are going, “Yes, I’m sure it’s a great idea. What is it? What is happening?” If it could be made really clear to people that there will be a year’s delay before IfATE powers are transferred, at which point Skills England will be in much better shape, everything will be much clearer, and lots of the other things that have to be done will be done, I think that would be really helpful to everybody concerned.
This is not about having something that you put on the statute book but it never happens—which does occur: quite a major clause in the last piece of skills legislation has never been activated. It is not about that. The transfer of functions will be on the statute book, and it will be very clear that this is going to happen, but it will also be clear to people when it is going to happen, and I think that would be enormously helpful.
Lord Storey (LD)
It always concerns me that when new Governments come in, they invariably get rid of particular bodies and create their own. For example, the previous Labour Government set up the regional development agencies, which were hugely successful and built up expertise, et cetera. The coalition Government came in, abolished them and set up a different type of organisation, which took literally years to get going and to be as successful as the regional development agencies.
I do not like the phrase “to delay”; I much prefer “to hand over”. When you hand over, the organisation you are handing over to needs time to embed itself, to understand the situation and to work properly. I am not particularly happy about it, but I will live with Skills England being in the department. We are where we are, and if the Government want to do that, they will.
What is important is that, wherever Skills England is, it is successful and works, because we all want that. It will be successful, to my mind, for three reasons: first, its direction, which the Government set; secondly, who is appointed as chair, and the quality of the board; and—probably—thirdly, the opportunity for the various bodies, be they trade unions, the employers or the combined authorities, to give their information, views and thoughts. To use a strange word, I am quite smitten with this proposal, because it works and helps to enhance the Bill, so I will be interested to hear what the Minister says.
Lord Aberdare (CB)
My Lords, I support both the amendments in the name of the noble Baroness. Lady Barran. I will try to keep my remarks brief about Skills England, the aims of which I think we all support, and which are crucial to the Government’s growth strategy and missions, the industrial strategy and all the things we would like to happen. Above all, it must pull together. The Government have talked about a post-16 education and skills strategy, and I assume that Skills England will be at the heart of that.
In order for that to work, Skills England will need to be co-ordinating skills policies and activities across government departments, because every government department needs skills and has shortages; across regions, local areas and nationally, including the devolved nations; across industry sectors; and across policy priorities. The “state of the nation” was probably the wrong phrase: what I am really looking for is, “What difference have we actually made at Skills England in tackling the very real problems that we all recognise in the skills area?” That will happen only if someone is ensuring consistency and synergy between all the complex elements involved—no doubt with a strong need for consensus-building, if not actual knocking of heads together. This lion needs not just to roar, but to have a few teeth. Whether or not it is a statutory body, it should at least have the right authority and powers, and the right chair and CEO. It is disappointing that we do not know who the chair is going to be, although I know the Minister was hoping to be able to let us know before Report.
The Minister mentioned some of the other executive agencies, and it seems to me that none of those—the Met Office or the DVLA—has the breadth of roles, responsibilities and relationships that this body needs to have. Of course, while it is doing that, it has to undertake the practical functions, transferred from IfATE, of preparing standards and apprenticeship assessment plans. It would help if the Government had some time to concentrate on getting Skills England up to speed in all those areas, so that it can build on its encouraging first report and get on with sorting those things out before the IfATE transfer completely overwhelms its capacity. For those reasons, I support Amendment 15, in particular, and will support the noble Baroness if she decides to push it to a vote.
Baroness Smith of Malvern (Lab)
My Lords, establishing Skills England is a manifesto commitment. The Prime Minister announced the creation of Skills England in July last year. He set out the Government’s approach to delivering our growth and opportunity missions in the Plan for Change. This change is already under way, and Skills England’s creation is a key part of that change. I set out in the second group of amendments the need for the Government to respond urgently to critical issues within the skills system by establishing Skills England.
For too long, the skills system has not provided enough young people with the right pathways through education and into employment; it has not responded to some of the issues outlined by the noble Baroness, Lady Wolf; and it has not provided sufficient roaring or teeth, in order to make sure that we are addressing the need for our skills structures to boost skills, productivity and opportunity. That is why, in Skills England, we are bringing coherence to the skills system, combining new functions with improvements to existing ones.
On the points made about the delay in bringing IfATE’s functions into Skills England, the point of Skills England is that it will enable us to build on the work of IfATE, which, during Committee, I have commended. I have said that I think that really important work has been done there, as outlined by the noble Baroness, Lady Wolf, bringing employers into the heart of developing standards and apprenticeships. Nevertheless, the function of IfATE has been narrower than the challenge of skills development now needs. We will be building on the work of IfATE, but putting it in the context of a much larger and more significant organisation that will be able to identify where the gaps are in our skills system; that will be able to work alongside employers, trade unions, providers, local government, the mayoral authorities and others to identify where those gaps are; but that will look to where those gaps will be in the future, and use the functions transferred from IfATE to develop the technical education and apprenticeships to help fill those gaps. It is really important that those two functions operate together.
With Skills England, we are not starting from scratch here, as I have frequently emphasised: Skills England is already operational in shadow form and doing that important work to identify skills gaps. As I spoke about at some length in the previous group, our belief is that the executive agency model for Skills England is the best fit to enable it to get fully operational as soon as possible.
The amendments in this group would, I am afraid, delay the establishment of Skills England. I understand the points being made, but I am more confident about and more ambitious for the speed with which we can move than other noble Lords. On the point made by the noble Baroness, Lady Barran, this is not simply a policy statement; Skills England already exists in shadow form and is engaging with employers. It is already advising the Government and publishing its state of the nation analysis, and it will be facilitated to do that through the bringing across of the functions currently vested in IfATE.
Amendment 9 would impose a requirement on the Secretary of State to establish Skills England as a statutory body with a separate legal identity. I might be being picky but, to come back to the description by the noble Lord, Lord Storey, and others of Skills England being absorbed within the department, I have gone to some lengths to explain the nature of the arm’s-length body that we are setting up in Skills England as an executive agency and the way it will operate, appropriately independently from the department while still being close enough to feed into important policy developments.
Baroness Barran (Con)
I thank the Minister for her remarks and all noble Lords who have contributed. I was struck, listening to the noble Baroness, Lady Wolf, by the length of time it takes to bed in a new agency and the time it took with IfATE. I was reminded of the remarks in Committee of my noble friend Lady McGregor-Smith, who quoted one of her colleagues as saying that it was five years before IfATE was taken seriously.
The noble Baroness, Lady Wolf, also talked about sending a clear signal on timings. It sends a clear signal not just on timings but on how seriously the Government take the strategic side of Skills England’s role. The noble Lord, Lord Aberdare, was clear about the complexity of the task that Skills England has to undertake and deliver on. The contrast was fair. It is a very different role from that of the Met Office or the DVLA. I hope I would never accuse the Minister of anything bad; of course it is good practice to review a body, and there are Cabinet Office guidelines on that. She will also understand that it felt odd to read in her letter that one of the options under consideration was to put the agency on a statutory footing, given all the reasons we have heard as to why that is not an option.
I also push back on her criticism that my amendment sets an arbitrary date. She knows much better than I that the Government can redraft my amendment and remove an arbitrary date but keep its spirit. I hope she acknowledges that. The main point she was making was that this amendment will create a delay. There is nothing in it that slows the Government down. In fact, we keep hearing about how Skills England is already operational without any legislation or a CEO, although I suggest that some of the work it has done was picking up on the work of the Unit for Future Skills, which already existed in the department.
The amendment gives the Government space to do a fantastic job in incredibly important policy areas. There are two elements within Skills England. There are some major strategic objectives that it needs to deliver on and some operational functions which today are delivered by IfATE. My amendment gives the Government a year, but if they chose to adopt it they could redraft it. The spirit of this is to give Skills England and its leadership time to get into the detail to prepare the plans and implement them as this country deserves. Therefore, when we get to Amendment 15, I will test the opinion of the House.
I beg leave to withdraw Amendment 9.
Baroness Barran
“Framework for Skills EnglandThe Secretary of State must—(a) ensure that in performing its functions, Skills England has regard to—(i) the need to ensure that education and training is of an appropriate quality;(ii) the need to ensure that education and training within the remit of Skills England represents good value in relation to financial resources provided out of public funds;(b) ensure that Skills England performs its functions efficiently and effectively;(c) give notice in writing to Skills England when setting out other matters to which it must have regard when performing its functions;(d) publish, in such a manner as they think fit, any notice under paragraph (c), and lay a copy of it before Parliament;(e) require Skills England to prepare, as soon as reasonably practicable after the end of each financial year, an annual report which includes—(i) a description of what Skills England has done during the year, including a description of what Skills England has done as a result of any notice given by the Secretary of State under paragraph (c);(ii) such other provision as the Secretary of State may direct;(f) lay a copy of the annual report under paragraph (e) before Parliament.”
Baroness Barran (Con)
I have had reassurance from the Minister that she will accept the three points that I raised around quality, value for money, and efficiency and effectiveness—or whatever were the words that we used. On that basis, I committed earlier that I would not move Amendment 10.
Lord Ravensdale
“Report on green skillsSix months after the day on which this Act is passed, the Secretary of State must lay before Parliament a report assessing how they plan to carry out the functions transferred to them under this Act to support development of medium- and long-term green skills needed in order contribute to—(a) the achievement of the targets set under Part 1 of the Climate Change Act 2008,(b) the achievement of the targets set under Sections 1 to 3 of the Environment Act 2021, and(c) the adaptation to current or predicted impacts of climate change identified in the most recent report under section 56 of the Climate Change Act 2008.”
Lord Ravensdale (CB)
My Lords, I declare my interest as a chief engineer for AtkinsRéalis and as a director of Peers for the Planet.
My two amendments in this group address the two issues I raised in Committee. I will first cover the need for a duty on Skills England regarding the critical area of green skills, which is covered by Amendment 11. Given the scale of the skills needed to address the challenge of turning the UK into a clean energy superpower, and the challenging targets that we have—the national strategic goals of climate mitigation and adaptation—many Peers have been pressing for a long time to put in place a national strategy for responding to these skills needs. We had some welcome progress with the Skills and Post-16 Education Act 2022, when the noble Baroness, Lady Hayman, agreed an amendment with the Government for a climate duty on the development of local skills improvement plans.
What was missing was that overarching strategy. We all welcomed the formation of Skills England to begin plugging those gaps. I am very grateful to the Minister and her team for their collaborative approach in response to this amendment, which we raised in Committee, to include the delivery of our climate and nature targets within Skills England’s remit. Having this in the framework document for Skills England, given the constraints of the legislation, will ensure that this national strategic goal is woven into Skills England’s approach and that the good work already going on at local level through the LSIPs can be knitted together. We have had some really good feedback on the LSIPs and how they are working, but the missing piece is that integration. What the Government are doing with the framework document will help to address that. It will take things to that next step of integration, so I am very grateful to the Minister.
Amendment 12 is based on an amendment tabled by the noble Lord, Lord Blunkett, in Committee. I recall the noble Lord saying that we all support devolution and its goals but that we start to create joins that did not exist previously and that we have somehow to find a way of joining those bits back together, whether with a regional or sectoral approach.
The key point of the amendment is to ensure that Skills England delivers for areas without a devolution deal. This is based on my experience in the Midlands, which I set out in detail in Committee and will not repeat here. I thank the Minister and her team for committing to include within the framework document that Skills England will address those regional skills gaps. This is important for ensuring that Skills England delivers for all areas across the UK. I look forward to further detail on how that will be implemented. As the noble Baroness, Lady Barran, said, the policy is the easy bit; the implementation is the challenge.
On a related point, this highlights the importance of a regional view for skills to ensure that there is that coherent delivery of skills for key priorities. The regions are the right level to do that. In my industry, the nuclear industry, we could in the Midlands consider, for example, just what Derby needs for submarine nuclear reactors and small modular reactors. We could consider separately what West Burton needs for STEP fusion and what Birmingham needs for nuclear components. However, we can do so much more with a regionally integrated skills picture to avoid that duplication and to ensure that we share that knowledge and expertise on skills development. That is why we have set up Midlands Nuclear and the Midlands hub for nuclear skills to take that regional view.
Lord Storey (LD)
I support and echo what the noble Lord, Lord Ravensdale, said, particularly on local and regional skills. It is important that our growth strategy is linked to the skills that we need in that growth and to existing provision.
I was quite worried about the Chancellor’s recent announcement about growth, and it makes my point. It very much centred on the south-east. Merseyside has a thriving pharmaceutical industry, and some of our focus on skills is directed towards that industry. We also have the Liverpool School of Tropical Medicine, which is funded quite considerably by Bill Gates. Suddenly, we hear that AstraZeneca, on which we have an Urgent Question tomorrow, is pulling out because there is insufficient money. The Government need to be sensitive to requirements not just for growth across the whole nation but for how we can use the importance of particular sectors in our regions and localities.
Baroness Barran (Con)
My Lords, I very much support Amendments 11 and 12, tabled by the noble Lord, Lord Ravensdale, and welcome the approach that he has taken. It feels so practical and so grounded in his own experience, with that focus on planning and implementation, as he mentioned. It also highlights the sophisticated choices that need to be made in skills policy between what is needed locally, regionally and nationally. It sounds as though the Minister has already been listening, but I hope that she can give the House further reassurance that she will take these amendments very seriously.
Baroness Smith of Malvern (Lab)
My Lords, I thank the noble Lord, Lord Ravensdale, for his amendments and for the conversations we have had about the reasoning behind them, which I accept. We had a meeting with the noble Baroness, Lady Hayman, on this issue as well. He is right to draw attention to these two very important issues, namely the crucial need to boost the availability of green skills and the need to ensure that high-quality training is available to—and designed in line with the needs of—all parts of the country.
As set out in the Invest 2035 Green Paper, published ahead of the forthcoming industrial strategy, delivering long-term sustainable growth is inextricably linked to our mission to make Britain a clean energy superpower. It is critical that the skills system is set up in the right way to deliver on this mission. I will return to that in a moment. Meanwhile, our English Devolution White Paper makes clear the Government’s commitment to spread growth and opportunity to all parts of the country and sets out the route to delivering much-needed change. It will not be possible to deliver on these priorities without building the evidence on the scale and nature of green skills needs in the economy and ensuring that there is a comprehensive suite of training that aligns with the identified needs and is available for people to access up and down the country. Therefore, Skills England must have a central role in driving the change that is needed on both issues the noble Lord, Lord Ravensdale, has highlighted. I am very pleased to have the opportunity to set out in more detail the work that Skills England will do—and indeed has already begun—in this space, and hope that this will be sufficient to persuade the noble Lord not to press his amendments.
Amendment 12 would create a duty on the Secretary of State to lay before Parliament, within six months of the passing of the Act, a report which assesses the co-ordination of local skills improvement plans, assesses the impact of the functions transferred to the Secretary of State on those parts of the country without a devolution deal and determines the scope and level of investment of the growth and skills offer in meeting national, regional and local priorities.
As set out in Skills England’s first report, working together with partners on the ground to ensure that regional and national skills needs are met is a central function of Skills England. While in shadow form, Skills England is already working closely with a range of key organisations at local and regional level to ensure that we are laying the foundations for joined-up decision-making and information sharing, which will ensure that we develop the highly skilled workforce that our economy needs in all parts of the country.
Skills England is collaborating with mayoral strategic authorities, as well as local government in areas which do not yet have devolution arrangements, to shape the delivery of skills provision. It is also working with a wide range of regional organisations, such as employer representative bodies, to help them contribute to the construction of skills systems that reflect and feed into both local and national priorities. As noble Lords have mentioned, local skills improvement plans support this objective by providing an ongoing mechanism through which local employers, strategic authorities, providers and other stakeholders come together to identify and resolve skills needs and issues. LSIPs will be overseen by Skills England, helping to ensure that all parties play their part and take action where needed, such as increased support through dedicated relationship managers.
I take the point made by both the noble Baroness, Lady Barran, and the noble Lord, Lord Ravensdale, that there is a complexity in the relationship between the national priority setting and action, and the regional and local environment. We have already worked on this and I commit to ensure that we work further. Skills England is clear about the way in which it will create co-ordination between those levels, particularly with respect to those areas which do not have some of the devolved arrangements that, for example, the mayoral areas have.
Our reformed growth and skills offer will enable employers to fund training that meets priority skills needs identified by Skills England, in addition to apprenticeships, recognising the importance that high-quality work-based learning has in our skills system. The new offer will be aligned with the industrial strategy, creating routes into good, skilled jobs in growing industries, such as construction, digital and green skills.
It is by drawing on evidence from, and working with partners across, the system that Skills England is developing—and will continue to develop and publish—authoritative analyses of national and local skills needs. In its first report, Driving Growth and Widening Opportunities, published last September, it provides an assessment of the key skills challenges that limit growth and opportunity, and an initial assessment of the skills needs in the economy. Building on that, Skills England will publish a further report in early 2025, providing more detailed sector-specific skills assessments and analysis of the agreed set of priority sectors defined by the industrial strategy.
Given the centrality of the local and regional dimension to Skills England’s work, the public reporting and governance arrangements I have described previously—those being a published framework document, the annual report and corporate plan—would include an assessment of its impact on delivery against these aims, including in respect of LSIPs, areas not yet covered by devolution deals and the growth and skills offer. It is for this reason that I hope that the noble Lord will feel that his amendment would duplicate the existing reporting requirements that I have outlined and is therefore unnecessary in light of those requirements.
Amendment 11 would place a duty on the Secretary of State to report on how, in their use of functions transferred to them, they are supporting the development of green skills. Extensive work to identify and address current and future green skills needs is being prioritised under this Government to ensure that the UK workforce is prepared to deliver the clean energy superpower mission. Reporting on green skills has already started, ahead of Skills England being fully established. Skills England published an initial assessment in its first report in September of last year, which included a description of the scale of the challenge and some of the key skills needs of the green economy, as well as those specific to clean energy. Skills England will build on this in its second report, which will provide sector-specific skills assessment of priority sectors, including the eight growth-driving sectors identified in the Government’s industrial strategy and those pivotal to delivering the Government’s missions, notably net zero and clean energy.
In recognition of the issues raised by the noble Lord, Lord Ravensdale, and acknowledging the importance of green skills and meeting necessary climate targets, I will ensure that the Skills England framework document includes specific reference to Skills England’s role in developing green skills. The noble Baroness, Lady Barran, has already noted that we have included that in the framework document—albeit not quite in the terminology that the noble Baroness would have wanted to see. In respect of Skills England’s local and regional work, I would also expect information on its work on green skills to be included in the annual report and corporate plan that Skills England will be required to publish, given its vital importance. The Department for Education is already required by the Environment Act 2021 to report on progress on green skills through the annual carbon budgets delivery audit.
As such, I hope the existing requirements and the commitments I have made here in respect of green skills will be sufficient to deliver on the aims of the amendments tabled by the noble Lord, Lord Ravensdale, which I do support and have been pleased to engage with him on. For the reasons I have outlined, I hope that the noble Lord will be assured of the Government’s commitment to these vital issues and that he will therefore see fit to withdraw his amendment.
Lord Ravensdale (CB)
My Lords, I listened very carefully to what the Minister had to say, and I am very pleased with what she said. There was a lot of reassurance on areas without a devolution deal, particularly within the reporting requirements for Skills England and how it will engage with regional and local bodies, which answered the original intent of my amendment.
We have reached an excellent compromise on green skills as well. Having the detail in the framework document —the way it has been mapped out, particularly in referencing our targets—is a really important step forward to properly integrate it with the delivery of green skills and our climate and environment targets.
I thank the Minister again for her approach and collaboration in the meetings she has undertaken with us to get to this position. I beg leave to withdraw my amendment.
Lord Addington
Member’s explanatory statement
This amendment and another in the name of Lord Addington ensures that all new statutory instruments made in the six months following the passing of the Act must follow affirmative procedures.
Lord Addington (LD)
My Lords, I have realised that both amendments in my name have been covered by previous discussions. On those grounds, I will not move them.
Baroness Barran
Institute for Apprenticeships and Technical Education (Transfer of Functions etc) Bill [HL]
Tuesday 11th February 2025
(1 month, 1 week ago)
Lords ChamberInstitute for Apprenticeships and Technical Education (Transfer of Functions etc) Bill [HL] 2024-26 Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: HL Bill 38-R-I Marshalled list for Report - (3 Feb 2025)
The Minister of State, Department for Education (Baroness Smith of Malvern) (Lab)
My Lords, noble Lords will be aware that this is National Apprenticeship Week. There is much to celebrate and much to build on. It is therefore fitting that this Bill leaves this House this week. It paves the way for an ambitious new body in the skills landscape, Skills England, to build an apprenticeship and training offer that is fit for the future.
The Bill has benefited significantly from the scrutiny of this House, and I thank all who engaged with and supported it. I am particularly grateful to Peers from across the House who shared their insight into the skills system and underscored the importance of skills to growth and opportunity. I thank my noble friend Lord Blunkett, my first ministerial boss, for his advice and the wealth of experience that he brings to this House. I thank the noble Baroness, Lady McGregor-Smith, for her contributions to debate, but more importantly, for her invaluable work as the chair of IfATE in preparing for the smooth transition of its work and people into Skills England. I thank the Constitution Committee and the Delegated Powers and Regulatory Reform Committee.
The Government have a strong democratic mandate for reforming the skills system and establishing Skills England. It is heartening that, while we might not have agreed on everything, there is deep support for Skills England and its vital work from across the House, and I am grateful to noble Lords for their engagement in helping us to get the details right. I appreciated the considered amendments from the noble Baroness, Lady Barran, and the noble Lords, Lord Storey, Lord Ravensdale and Lord Addington, and our engagement with these Lords, as well as with the noble Baronesses, Lady Wolf and Lady Garden, and the noble Lords, Lord Aberdare and Lord Hampton. I am pleased that this House has recognised that the Bill is a crucial step towards a skills system fit for the future that delivers for our growth and opportunity missions.
As noble Lords are only too aware, significant skills gaps limit business growth and individual opportunity. Skills England must tackle these gaps and develop the skills we need for our future economy too. To do this, it will need to work with industry, employers and other key partners across the economy. I am delighted that the leadership of Skills England has been confirmed today, with Phil Smith appointed as chair alongside Sir David Bell as vice-chair. As the former CEO and chair of Cisco, Phil Smith will ensure that Skills England benefits from his experience and leadership in industry, particularly within a sector—digital and technology—identified as a priority for the Government’s industrial strategy.
Appointing this team shows how serious we are about the full and rapid establishment of Skills England. It has been operating in shadow form since July last year, and preparations for full transition are well advanced. I must be clear that delay, which this House considered on Report, would create additional uncertainty for employers, learners and IfATE staff, undermining the ongoing preparation for their transfer. Crucially, a delay to the full formation of Skills England would limit progress in tackling skills gaps to drive growth and promote opportunity; this is my prime concern.
Finally, I record my thanks to officials at the Department for Education, including the Bill team, policy leads, government lawyers and my private secretary, all of whom have worked incredibly hard to support me through the passage of the Bill. I beg to move.
Lord Storey (LD)
My Lords, it is appropriate that during National Apprenticeship Week we are coming to the end of the first part of this Bill. It was one of those few Bills where it was a pleasure and a joy to be involved. Everybody wants the same thing—we have a few little differences but we all work together. I am particularly grateful to the Minister, who gave of her time enormously, which is much appreciated. Colleagues right across the House have all worked together in the interests of young people and the skills agenda.
On this side, I particularly thank my small but perfectly well-formed education team of my noble friends Lord Addington and Lady Garden, and Adam Bull in our Whips’ Office, who did incredible work. I do not particularly know the Bill team, but I am sure it did fantastic work. I thank everybody. We will come back to this, but I think the work that has been agreed will do a considerable amount to develop the whole skills agenda and the growth agenda in our country.
Baroness Barran (Con)
My Lords, I thank the Minister for her engagement throughout the passage of the Bill and her willingness to meet and discuss different aspects of the legislation. I am also grateful to all noble Lords who brought their expertise to our detailed deliberations and to those across the House who supported each other’s amendments in a truly collaborative way. My special thanks go to my noble friend Lord Effingham, who has given me great support throughout the passage of the Bill, and to Beatrice Hughes in our research team.
During the Bill’s passage we secured several important concessions from the Government, including a commitment to include wording that focuses on quality, value for money, efficiency and effectiveness in the framework document, mirroring the original IfATE legislation. We very much welcomed the amendments the Government brought forward on transparency and reporting.
Our concerns remain about the practical implementation of Skills England. We very much welcome the appointment of Phil Smith as chair of the agency and wish him every success. He clearly brings enormous experience and expertise to the board, but across the House we have flagged concerns about ensuring that the voice of employers remains central to the work of Skills England. I know the Minister has sought to reassure us on that point. We have also had very constructive conversations about the regional coherence of the proposed plans and, of course, the scale of the task that faces Skills England in co-ordinating work across Whitehall.
We very much hope that the Government will think hard about our amendment to delay the abolition of IfATE to give Skills England the time to set itself up for success. We also hope that the Bill will be accepted in its current form in the other place so that, in the nicest possible way, we do not see it again in your Lordships’ House.
Baroness Smith of Malvern (Lab)
My Lords, I thank the noble Lord, Lord Storey, and the noble Baroness, Lady Barran, for their responses. I certainly undertake to engage with the noble Baroness and others on concerns around delay. I am pleased that the Bill has the support of so many noble Lords.
As I said in my opening remarks, the Bill has hugely benefited from robust review and revision in this House, as have I. If there were an apprenticeship for being a Lords Minister, this would definitely have been a key element. I hope I have learned things that will help me as we come to the next Bill we will have the pleasure of taking through this House, which I suspect might take us slightly longer.
I hope that this Bill will have a swift passage through the House of Commons, and I thank noble Lords for their engagement.
Bill passed and sent to the Commons.
Institute for Apprenticeships and Technical Education (Transfer of Functions etc) Bill [Lords]
Tuesday 25th February 2025
(3 weeks, 6 days ago)
Commons ChamberInstitute for Apprenticeships and Technical Education (Transfer of Functions etc) Bill [HL] 2024-26 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 38-R-I Marshalled list for Report - (3 Feb 2025)
18:58 - The House divided: - Ayes: 70 / Noes: 312 - Question accordingly negatived.
19:12 - The House divided: - Ayes: 317 / Noes: 55 - Question accordingly agreed to.
Madam Deputy Speaker (Ms Nusrat Ghani)
The reasoned amendment in the name of Ian Sollom has been selected.
The Secretary of State for Education (Bridget Phillipson)
I beg to move, That the Bill be now read a Second time.
We are a country of incredible talent and enterprise; a country of industry and invention. Our universities lead the world. Our colleges deliver excellence to hundreds of thousands up and down the country. British companies founded on great ideas export their products across the globe. Our strengths range from research to manufacturing and from professional services to creative industries, yet there remains a wide and growing gap between where we are now and what I know our great country is capable of, because, despite our many strengths, there are skills missing from our workforce.
There are skills missed by people who want to get on in life, get better training to land that great job and earn a decent living; skills missed by our employers, with businesses, hospitals, labs and factories held back; skills missed by so many of our communities, with towns and cities left behind as industry has moved on; and skills missed by our country. Those skills are vital to the security and growth that this Labour Government are so determined to deliver.
Our latest data shows us that half a million vacancies sit empty simply because employers struggle to find the right staff with the right skills: the most since we started collecting the data in 2011. That is half a million jobs not filled, half a million careers not boosted and half a million opportunities not taken—a tragic waste that this country simply cannot afford. But I am sorry to say that this is not surprising. We have fallen behind our neighbours on higher technical qualifications—the ones that sit just below degree level, but which can lead to well-paid, fulfilling careers for software developers, civil engineering technicians or construction site supervisors.
Over 90% of employers value basic digital skills in their job candidates, but more than 7 million adults lack them. Our skills gaps deal our people and our country a double blow. They hold back the economic growth we need to invest in our public services and drive national prosperity, and they hold back the ambitions of working people who deserve the chance not just to get by but to get on. They deny them the opportunity, the power and the freedom to choose the life they want to live.
Sir Ashley Fox (Bridgwater) (Con)
Would the Secretary of State agree that one of the difficulties is that employers cannot spend the money from the apprenticeship levy easily, and that too much of that money is retained by the Treasury? Will she undertake to speak to the Chancellor to see whether she could make it easier for employers to spend that money on training?
Bridget Phillipson
I can assure the hon. Gentleman that the Chancellor is as committed as I am to ensuring that we have the right skills within the economy, because without them we will not be able to deliver the economic growth that is the No. 1 mission of this Labour Government. But we are committed to reforming the failing apprenticeship levy, reforming the system and converting it into a growth and skills levy with more flexibility for employers. As a first step, this will include shorter-duration and foundation apprenticeships in targeted sectors, making sure that we are working more effectively with employers in order for our economy to grow.
Sir John Hayes (South Holland and The Deepings) (Con)
I welcome the commitment to skills that the Secretary of State is articulating, but will she recognise that too often the advice given to young people, particularly from schools, is to pursue an academic career—I use the word “academic” in the loosest possible sense—rather than to engage in practical learning? That means that while the shortages she describes are profound, there are also many people who are graduates in non-graduate jobs owing a lot of money and with pretty useless degrees.
Bridget Phillipson
I was almost on the point of saying that I agreed with much of what the right hon. Gentleman had to say, but unfortunately he went and ruined it at the end with that comment about the value of university education and of having the chance to gain a degree. Where I do share common cause with him is that I want to make sure that all young people have a range of pathways available to them, including fantastic technical training routes, including through apprenticeships, but I also want to make sure that young people with talent and ability are able to take up a university course if that is the right path and the right choice for them.
As we were recently celebrating National Apprenticeship Week, I took the opportunity to see across the country some of the fantastic routes that are available in areas such as construction and nuclear, with really wonderful job opportunities and careers where young people are able to make fantastic progress.
Chris Vince (Harlow) (Lab/Co-op)
I had the opportunity to visit Harlow College during National Apprenticeship Week, and I really agree with the points that my right hon. Friend is making. Does she agree that if we are to achieve the new homes targets that we really want to achieve and get people off the streets and into those homes, we need to train those apprentices now and that Skills England can be part of that future?
Bridget Phillipson
I agree with my hon. Friend, and I know how much he champions, in his constituency and in the House, opportunities for young people to have the chance to take on new skills, including through apprenticeship routes. Where it comes to construction, he is right to say that there are fantastic opportunities out there. It was heartening, during some of my visits during National Apprenticeship Week, to see the fantastic contribution that women play in construction, breaking down some of the stereotypes that exist about the right opportunities, and to meet some amazing engineering apprentices and bricklaying apprentices. Those women are really trailblazing in an industry that is often very male-dominated.
Mr Toby Perkins (Chesterfield) (Lab)
On the subject of construction, does my right hon. Friend agree that a huge amount of the construction industry is made up of small employers and that one of the biggest failings of the apprenticeship levy approach has been that small and medium-sized enterprises have been shut out? We have had a 50% reduction in the number of SMEs offering apprenticeships since the introduction of the levy. How will she increase the number of SMEs that are able to offer apprenticeships? If the major employers are the ones that have all the budget, how do we ensure that we increase the number of SME apprenticeships?
Bridget Phillipson
My hon. Friend has a long-standing interest in this area and has consistently raised not only the challenges faced by small businesses but the opportunities to create more apprenticeship starts and more training routes for people across our country. One of the changes that we set out during National Apprenticeship Week was to the maths and English requirements for adult apprentices, which will make a big difference to employers large and small and was welcomed by business, but he is right to say that much more is needed to help smaller employers and small contractors to take on apprentices. That is the work that Skills England will drive forward and that is why this Bill is such a crucial development.
The skills gaps that we face in our country deny people the opportunity, the power and the freedom to choose the life that they want to live. But it is not just today that we count the cost; those gaps limit our power to shape the careers, the economy and the society of tomorrow as well. Only with the right skills can people take control of their future, and only with the right skills system can we drive the growth that this country needs. It is time this country took skills seriously again: no longer an afterthought, but now at the centre of change; no longer a nice to have, but now a driving force for opportunity; no longer neglected, but now a national strength.
There is much to celebrate. Plenty of colleges go above and beyond, plenty of employers are ready to contribute and plenty of people are eager to upskill, but our system needs reform. Too many people have been sidelined and left without the skills to seize opportunity. One in eight young people are not in employment, education or training. We can, and we must, do more to break down the barriers to learning that too many people still face. We need a system that is firing on all cylinders.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
The figure in Stoke-on-Trent is even more stark, with 22% of young people not in education, employment or training. We have a wonderful ecosystem of colleges, with Stoke sixth form college, Stoke-on-Trent college and the University of Staffordshire, but as my hon. Friend the Member for Chesterfield (Mr Perkins) said, we also have small and medium-sized organisations. Can the Secretary of State set out how this Bill will help an organisation such as the Spark Group, run by Dan Canavan, to tap into opportunities in order to spread his ability to help those young people into well-paid jobs in my community?
Bridget Phillipson
My hon. Friend names a fantastic business in his constituency and the contribution that it makes. There is a lot more that we need to do to support smaller employers to be in a stronger position to benefit from apprenticeships.
This Bill will bring together the many disparate parts of a very fragmented system, which employers, particularly smaller employers, often find hard to navigate the right way through, and are not always clear about the best training and qualification routes in order to find the people that they need. Also, the changes we have made to English and maths in particular will support employers to create 10,000 additional apprenticeships every single year. This was a call that we heard loud and clear from employers, and it is a simple, straightforward change that will open up opportunities for people across our country. They will still have the English and maths standards as part of their apprenticeship, but they will no longer be held back by some of the red tape that has denied them the chance to get on in life.
The skills system that we have right now is too fragmented, too confusing and too tangled up across too many organisations. There is no single source of truth, no single organisation able to zoom out and see the big problems and no single authority able to bring the sector together to solve them. The result is a system that amounts to less than the sum of its parts. For young people, it can be hard to know where the opportunities lie. Adults looking to upskill or reskill and working people hoping for a fresh start are too often met with confusion, not clarity. They are presented with a muddling mix of options when they need clear pathways to great careers.
It is no better for employers. They tell us that the system is difficult to navigate and slow to respond. They tell us that they are too often shut out of course design and that their voices are too often not heard. The result is frustration. Learners and employers are frustrated, and they are right to be frustrated. Many businesses do a good job of investing in the skills of their workforce, but others simply are not spending enough.
Investment is at its lowest since 2011 at just half the EU average. We must empower businesses to reverse the trend by investing in their employees, and for that, we need to move forward. There will always remain a strong and galvanising role for competition, but where it is harmful, adds complexity, duplicates efforts or twists incentives, we will balance it with supportive co-ordination to ensure that all parts of the system are pulling in the right direction.
Here is our vision and the change we need. From sidelined to supported, we need a system that helps everyone so that businesses can secure the skilled workforce they need. From fragmented to coherent, we need a system defined by clear and powerful pathways to success and towards effective co-ordination. We also need a system of partnership with everyone pulling together towards the same goals. That is the change that Skills England will oversee.
This Labour Government are a mission-led Government with a plan for change, and skills are essential to Labour’s missions to drive economic growth and break down the barriers to opportunity. In fact, skills go way beyond that. Skills training contributes across our society, and great skills training driven by Skills England, supported by my Department, guided by the wisdom of colleges, universities, businesses, mayors and trade unions, and directed by national priorities and local communities is the skills system we need. It is a system that will drive forward all our missions. It will help us fix our NHS, create clean energy and deliver safer streets.
Skills are the fuel that will drive a decade of national renewal, which is vital for our plan for change. That is why earlier this month we unveiled our plans to help thousands more apprentices to qualify every year. That means more people with the right skills in high-demand sectors from social care to construction and beyond. We have listened to what businesses have told us. We will shorten the minimum length of apprenticeships and put employers in charge of decisions on English and maths requirements for adults.
Last November, the Government announced £140 million of investment in homebuilding skills hubs. Once fully up to speed, the hubs will deliver more than 5,000 fast-track apprenticeships a year, helping to build the extra homes that the people of this country desperately need. We are driving change for our skills system, and Skills England is leading the charge. It will assess the skills needed on the ground regionally and nationally now and in the years to come. Where skills evolve rapidly and where new and exciting technologies are accelerating from AI to clean energy, Skills England will be ready to give employers the fast and flexible support they need.
Tom Hayes (Bournemouth East) (Lab)
I represent a coastal community. Coastal communities have been forgotten over the past 14 years almost as much as the skills agenda. In my constituency, Bournemouth and Poole college led by Phil Sayles, who is doing incredible work, is about to open the green energy construction campus in April, which will enable solar, heat pump and rainwater capture skills to be taught to apprentices and trainees. Will my right hon. Friend join me in congratulating the college, and does she agree that colleges like that one are critical to achieving clean power by 2030?
Bridget Phillipson
I am delighted to hear my hon. Friend’s experience from Bournemouth. Our colleges are a crucial part of how we ensure that we have the skills we need in our economy, but also how we will drive forward our agenda on clean energy. He is also right to identify the enormous opportunities for jobs, growth and training, as well as, crucially, the imperative of ensuring that we have stability and security in our energy supply, so that never again are we so exposed to the fluctuations of energy markets that happened because of the invasion of Ukraine.
Luke Taylor (Sutton and Cheam) (LD)
I want to amplify the valuable skills that our colleges are teaching in renewable technologies. I recently visited South Thames college in Wandsworth, where I saw the labs it has set up to teach the installation of heat pumps and other renewable technologies. The main challenge that the college faces is finding staff to teach the classes and to take on the apprentices and all the other learners. What support will the Government give to colleges to ensure that they can recruit experienced individuals to pass on those skills to the apprentices, so that we can provide the workforces that we dearly need?
Bridget Phillipson
The hon. Gentleman is right about the challenges across the further education sector. Sadly, we know those challenges all too well after 14 years of failure under the Conservatives. We recognise the enormous opportunity that comes from investing in our fantastic colleges. That is why at the Budget we announced an extra £300 million of additional revenue for further education and £300 million of new capital investment. That also builds on our investment to extend targeted retention incentive payments of up to £6,000 after tax to eligible early career FE teachers in key subject areas. Our FE sector will have a crucial role to play in our mission for growth and opportunity, and he is right to draw attention to that.
Skills England will be ready to give employers the fast and flexible support they need. While updates to courses in the past have been sluggish and left behind by new technology, the Bill will help us keep up with the pace of change. Skills England will draw on high-quality data. It will design courses that are demand-led and shaped from the ground up by employers. Employers should be in no doubt that they will have a critical role in course design and delivery. That is why I have appointed Phil Smith to chair Skills England. Phil brings a wealth of business expertise from his two decades leading Cisco and will ensure that employers are at the heart of Skills England. I have appointed Sir David Bell as vice-chair, drawing on his wealth of experience across education and Whitehall. I have also appointed Tessa Griffiths and Sarah Maclean as chief executive on a job-share basis, with Gemma Marsh as deputy chief executive. They will provide strong, independent leadership to move the skills system forward. Skills England will be held accountable by an independent board, and the Bill requires a report to be published and laid before Parliament, setting out the impact on technical education and apprenticeships of the exercise of the functions in the measure.
The clear relationship between the Department and Skills England is governed by a public framework document, which will be published for all to see. It will be a core constitutional document produced in line with guidance from the Treasury, making clear the different roles of my Department and Skills England. Skills England will reach across the country. It will not be trapped in Whitehall but spread to every town and city, because growth and employment must benefit every part of the country, not just where it is easy to drive growth. That means being ambitious, especially in areas that have been overlooked for decades, because talent and aspiration are no less present in those places.
Skills England will drive co-ordinated action to meet regional and national skills needs at all levels and in all places. It will work closely with mayoral strategic authorities and local and regional organisations, and it will connect with counterparts in Scotland, Wales and Northern Ireland. Skills England will simplify the system by combining functions within one powerful body and pulling together the disparate strands of Departments, local leaders, colleges, universities and training providers and weaving them into a coherent offer for businesses and learners alike.
To see why the skills revolution is so important for growth and why we must take skills seriously again, we should look no further than the UK’s stalling productivity over the last decade and a half, dragging down our economy and cutting off hopes of higher incomes for workers. The skills system is central because, despite all its problems, the expansion of workforce skills drove a third of average annual productivity growth between 2001 and 2019. Here we have a chance. Here we see what is at stake. If we get this right by investing in our people and backing Skills England, we can drive productivity and get economic growth back on track. At the same time, we can give working people power and choice because that is what good skills can offer: the chance for them to take control of their careers and take advantage of the opportunities that our economy will create. That is why Skills England will work to support the forthcoming industrial strategy unveiled by the Chancellor last November. The next phase of its work will provide further evidence on the strategy’s eight growth-driving sectors: advanced manufacturing, clean energy, the creative industries, defence, digital, financial services, life sciences, and professional and business services. Added to those are two more: construction and healthcare.
Skills England will work closely with the Industrial Strategy Council, which will monitor the strategy’s progress against clear objectives.
Mr Perkins
I am grateful to the Secretary of State for giving way again. She is speaking incredibly powerfully and passionately about the role of Skills England, and I share her commitment and excitement about it, but as she knows, this IfATE Bill abolishes IfATE rather than creating Skills England. There were those who believed that putting Skills England on a statutory footing as an independent body, rather than keeping it in the Department, might have been the way to go. Will she explain to the House why she has taken this approach, and why she believes that Skills England will, as a body in her Department rather than as a truly independent body, have the strength and respect in the sector that it so badly needs?
Bridget Phillipson
I will set out the reason primarily and then say a little about the way in which Skills England will operate. First, the need to do it in this way is one of time and speed. As I hope I have set out to the House, the need to act is urgent; we must get on with this and ensure that we tackle the chronic skills shortages right across our country—there is no time to waste. The Government are determined to drive opportunity and growth in every corner of our country. Further delays to that will hold back not just growth but opportunities.
When it comes to the function of Skills England and how it will operate, it will be an Executive agency of the Department for Education. It will have the independence that it needs to perform its role effectively, with a robust governance and accountability framework and a chair who brings an enormous wealth of experience from business. A strong, independent board, chaired by Phil Smith, will balance operational independence with proximity to Government. It will operate in the same way that many Executive agencies, such as the Driver and Vehicle Licensing Agency, already operate.
As with any new arm’s length body, in the next 18 to 24 months we will review how Skills England is functioning, to consider whether it still exists within the best model. [Interruption.] That is entirely in keeping with the way in which arm’s length bodies are routinely considered by the Government. I am surprised that Conservative Members are surprised, because that is simply how these things are done, as they know all too well. If they are content to allow drift and delay, they will hold back opportunity for people across our country; they will hold back the demand that businesses rightly lay at our door to get on with the job of creating the conditions in which they can deliver more apprenticeship starts, more opportunities, and more chances to learn and upskill.
Skills England will work closely with the Industrial Strategy Council, which will monitor the strategy’s progress against clear objectives. The Skills England chair will have a permanent seat on the council—that really matters. By 2035 there will be at least 1.4 million new jobs. Our clean energy mission will rely on talented people with the expertise to power our greener future. The pace of technological change, including artificial intelligence, is accelerating, and it brings huge opportunities for our economy. However, to seize those opportunities, firms need a ready supply of people with the right skills. We will nurture home-grown talent in all regions so that people have the skills they need for those exciting jobs of the future.
Skills England will work with the Migration Advisory Committee to ensure that training in England accounts for the overall need of the labour market and to reduce the reliance of some sectors on labour from abroad.
Gareth Snell
I thank the Secretary of State for being so generous with her time. I absolutely support her ambition of ensuring that we have the skills for the jobs of the future. Will she say a little about how Skills England will support foundational manufacturing industries, such as ceramics in Stoke-on-Trent, which will not be prioritised in the industrial strategy but still have a lot to offer our economy and are crying out for skills from local people? If we can get that right, we can grow our own economy, and that is true levelling up in my opinion.
Bridget Phillipson
My hon. Friend always champions the ceramics industry in his constituency. We have had many conversations on that topic, and he is absolutely right to put it into context. Skills England will benefit the ceramics industry and his constituents because we will be able to move much more rapidly to make changes to qualifications and training requirements in order to meet the needs of employers, with further flexibility, shorter courses, and foundation apprenticeships for young people for the chance to get on, including in long-standing traditional industries as well as in future jobs and opportunities.
The Bill is a crucial leap forward, bringing the different parts of the skills system closer together, and it paves the way for Skills England. It transfers the current functions of the Institute for Apprenticeships and Technical Education to the Secretary of State, not to exercise power from Westminster, but to empower the expert leadership of Skills England to drive the change we need. Bringing those functions to Skills England will place the content and design of technical qualifications at the heart of our skills system, where they belong.
Skills England has existed in shadow form since Labour took power and began the work of change in July. It set out its first “state of the nation” report into skills gaps in our economy in September. Skills England is moving ahead. The leadership is in place, and by laying the groundwork for a swift transition to Skills England, we are moving a step closer towards a joined-up skills system.
At its heart, this Bill is about growth and opportunity—growth for our economy, and opportunity for our people—and there is no time to waste. We need action, not delay. The people of this country need better jobs, higher wages and brighter futures; no more vacancies unfilled due to a lack of skills, no more chances missed and no more growth lost. We need change now, not change pushed back to some foggy future, so we are pushing ahead.
This is legislation that builds on what has come before but demands more—more cohesion, more dynamism and more ambition. That is how we break down the barriers to opportunity, that is how we fire up the engines of economic growth, and that is how we deliver the future that this country deserves—the bright hope that our best days lie ahead of us. I commend this Bill to the House.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the shadow Secretary of State.
Laura Trott (Sevenoaks) (Con)
I rise to speak on a piece of legislation that poses more risks than benefits and proves that there is not parity of esteem for technical and academic qualifications within the Government. The Secretary of State is putting forward a Bill that allows her personally to write each apprenticeship assessment. Just in case you think I am exaggerating, Madam Deputy Speaker, we can see it in the explanatory notes. The Bill provides
“the option for each standard and apprenticeship assessment plan to be prepared by the Secretary of State”.
Madam Deputy Speaker, can you imagine the outcry if this was done with history GCSEs? If it were a Conservative Government taking these powers, there would be howls of outrage from the Labour party. It is extraordinary that the Government are, contrary to the words of the Secretary of State today, cutting out employers and giving sole discretion to the Secretary of State. They would not allow it with academic qualifications; we must not allow it with vocational ones.
I acknowledge the statement made in the other place about clarifying the situations when the Government envisage the Secretary of State intervening, but the specific criteria for using this power should be on the face of the Bill. At the moment, the Secretary of State has carte blanche to do whatever she likes, and we know from the Children’s Wellbeing and Schools Bill that that is a very bad idea. Can the Minister confirm that there will be some restrictions, and will the Government put those on the face of the Bill?
The Bill is another manifestation of the Department for Education’s centralisation spree. As with the Children’s Wellbeing and Schools Bill, everything must be controlled by the Secretary of State, and no innovation is allowed. The Bill abolishes the Institute for Apprenticeships and Technical Education—shortened to IfATE—and transfers its functions to the Secretary of State, in effect absorbing them into the Department for Education. The Government say that they will set up Skills England, but there are no details on the plans for Skills England in the Bill, or on how the Government’s proposed changes to the funding of skills-based qualifications will work in practice.
Simply creating a new agency will not address any of the issues that we need to address within the skills system. Even putting aside my severe doubts about the wisdom of progressing down this road in the first place, the very least the Government could provide the House with is some information on Skills England itself in the Bill. The only thing we know from debates in the other place—the Secretary of State has confirmed it today—is that Skills England will not be on a statutory footing and therefore will unquestionably be less independent than IfATE. Can the Secretary of State explain why this is an improvement?
This matters because the framework document published in the autumn is, at best, vague and, at worst, silent on the role of employers. There are some statements in the section on aims saying that employers will be engaged in the preparation of occupational standards, but it does not say how. Does the Secretary of State think that she knows better than employers? I urge her to explain why employers are so much less visible in the framework document, or to agree to amend the Bill. Reducing the role of employers will harm the apprenticeship system.
The change will also create unnecessary turmoil in the skills system. A cross-party amendment was passed in the other place to try to minimise the impact that this uncertain upheaval will have. The amendment will delay the provisions of the Bill to ensure that Skills England has time to set up before taking on its role and to ensure that the administrative duties do not get in the way of providing quality apprenticeships. That seems the bare minimum of what we would expect, and I hope the Government will not oppose that amendment, because to do so would be absurd.
The skills system needs a stable landscape, but the Bill presents real risks with no obvious benefits: risks that the Government will erode standards in our skills system by removing the relationship with the employer and replacing it with diktat from the Secretary of State; risks of poor leadership by replacing a good organisation, which is liked by employers and apprentices, with an unknown and undefined body.
Mr Perkins
I am listening carefully to the right hon. Lady. She seems to be evangelising the role of IfATE, but I have heard far stronger criticisms of it than she appears to make. Is her position that IfATE does not have many faults and should carry on the way it is, or does she think that the organisation’s remit has grown and is vague, and most employers feel that it is a block to getting the standards they need, rather than the vehicle for that, as she seems to suggest?
Laura Trott
I have huge respect for the hon. Gentleman and thought his earlier question was spot on. There is much that needs to be improved, but that is much less vague than Skills England, which is what we have in front of us at the moment. There are risks of distraction, with the time and cost involved in creating a new agency in the Department for Education. If the Government were serious about progressing quickly with the urgent strategic issues that I accept are needed in skills reform, the most effective step would be to build on the success of IfATE, rather than dismantling it. Instead, the Bill threatens to undo much of the progress made under successive Conservative Governments in building a world-class apprenticeships and technical education system. It is fiddling for no reason, change for no purpose and, as is so often the case with this Government, the opposite of what is required.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the Chair of the Education Committee.
Helen Hayes (Dulwich and West Norwood) (Lab)
The further education and skills sector is of strategic importance, and equipping our workforce with the skills that employers need is critical for economic growth. Ensuring that there are opportunities for young people and those mid-career to access high-quality training in order to enhance and develop their skills is vital for breaking down the barriers to opportunity that hold back far too many people. For far too long, the further education and skills sector has been the Cinderella service of our education system, patronised with lip service about how important it is, always regarded as second best, and never allocated the level of funding needed to really deliver.
Despite the fact that at the very peak only around one third of 18-year-olds go on to university, our school system is overwhelmingly orientated to communicate to young people that university is the option they should all aim for, rather than supporting a plurality of education options post-18, all of which can equip them well for a successful career. That has created a postcode lottery in which the high-quality further education and training opportunities that are available in some parts of the country are not available everywhere.
Sir John Hayes
The hon. Lady is making a profoundly important point that reinforces what I said earlier about careers advice and guidance. When I was skills Minister, I introduced a statutory duty on providers to make available free and independent advice. The problem is that that is often done by means of the internet. Schools will refer students to the internet, rather than bring people such as independent advisers into the school to guide them. She is right that the best solution to the problem she sets out is exactly that kind of involvement from careers advisers with students.
Helen Hayes
I thank the right hon. Member for his intervention. I was delighted recently to visit a school in my constituency, and a careers fair that gave young people the opportunity to meet many employers and providers of further education face to face, in order to give real meaning and reality to what such opportunities might provide in the future. It is important that young people have those opportunities.
Recently, I was delighted to visit the Lambeth college campus in Vauxhall, which is part of the Southbank University group, with my hon. Friend the Member for Vauxhall and Camberwell Green (Florence Eshalomi). We met young people engaged in cutting-edge training in robotics, renewable energy installation, dental technology and game design and production. They were being equipped with valuable skills to help them to access high-quality jobs, with the possibility, in some cases, of progressing their training all the way to degree level at the university.
The college is a good example of a strategic vision being applied to skills at a local level to ensure that employers’ needs are being met, and that the best possible opportunities are made available to young people, but not everywhere can benefit from such a strategic approach at present. I therefore welcome the Bill, which will formally establish Skills England. It is encouraging that this Government are giving further education and skills the strategic prominence they need, and seeking to establish an effective national agency to deliver a step change in the strategy that underpins our approach to skills and the quality and availability of training opportunities.
Skills England has been operating in shadow form within the Department for Education since July last year. Following the passage of the Bill, it will become an executive agency. This important Bill will work to underpin many of the strategic aims of the Government, including the delivery of economic growth, the skills to provide the additional 1.5 million homes that need to be built, and the skills to drive the urgently needed transition of our energy sector to achieve net zero, and the much-needed improvements in our national health service and in social care.
As the first Skills England report highlights, we currently have a fragmented and confusing landscape that lets down learners, frustrates businesses and holds back growth. The current system that the Government inherited has been badly neglected and urgent action is needed to deliver the change and scale of ambition required.
While I welcome the Bill, there are a number of issues on which I would be grateful for further clarity from the Government. The Bill does not provide a statutory underpinning for Skills England, meaning that the Secretary of State and future Secretaries of State can make fundamental changes to Skills England or close it down without the consent of Parliament. That calls into question the ability of Skills England to deliver a stable long-term underpinning of the skills system over a period of time. I understand the Government’s urgency, but it is important that in delivering this change Skills England is placed on a really solid foundation.
In order to be effective in delivering the skills system that our country needs, Skills England will need to have leverage with a number of different Government Departments beyond the Department for Education, yet the chief executive of Skills England is the equivalent of a director-level post in the civil service, not a director general, calling into question the extent to which appropriately senior people from across Government will be required to act on its recommendations and work in effective partnership. As the Bill progresses, the Government should consider the seniority of the CEO in that light.
Partnership working with key stakeholders outside Government, including training providers, trade unions, employers and devolved authorities will also be critical to the success of Skills England, but none of that is written into the Bill, and the ways in which Skills England will be held accountable for effective partnership working are unclear. Will the Secretary of State take further action to address that?
The impact statement for the Bill states that there may be a drop in apprenticeship starts while the Institute for Apprenticeships and Technical Education’s functions are transferred to the Secretary of State and then to Skills England, with a disproportionate impact on adult apprenticeships, disadvantaged learners and disadvantaged regions. Will the Secretary of State explain what steps she will take to minimise and mitigate that potential short-term drop?
The success of Skills England will depend on a series of wider factors that should be considered at the point at which it is being established. There is a significant issue with the funding of sixth form colleges, particularly around inequities in pay between teachers in schools and colleges, exacerbated by the failure to extend the recent pay increase to teachers to those employed by colleges. It cannot be right that a teacher in a college can be paid less than a teacher in a school sixth form for teaching exactly the same subject.
To drive parity of esteem between pupils following an academic route and those following a vocational route, it is important that sixth form colleges are able to both recruit and retain teachers. That means addressing the lower pay in sixth form colleges compared with schools, and the gap between teacher salaries and the salaries that teachers could receive in industry. It is a real problem for colleges seeking to recruit teachers of vocational subjects that those who have the skills to teach trade can often earn far more by practising that trade in the private sector. There is currently very little obligation on industry to release staff to deliver vocational education or to help to secure the pipeline of vocational teachers, including through post-retirement options. The Government should give further consideration to the recruitment and retention of high-quality teachers in the further education sector.
For some students in the further education sector, their school days have not been the happiest days of their lives. College or an apprenticeship should be the place where they start to find the things that they can excel at and where their confidence is built because they start to succeed. The importance of a functional level of English and maths is universally accepted and understood, so something is badly wrong in our education system when 38% of students do not achieve a grade 3 or above in English and maths at GCSE. The cycle of failure ends up continuing in the FE sector, which requires them to resit again and again. There must be a better way to ensure the functional skills in these subjects that employers need within further education, while enabling young people genuinely to succeed, build their confidence and thrive.
Finally, I will raise the issue of the huge differential in the information provided to sixth form students as they decide on their next steps after school or college—a point made by the right hon. Member for South Holland and The Deepings (Sir John Hayes) earlier in the debate. When meeting with skills providers and school leaders in my constituency recently, many participants highlighted how a move to university was often presented as a natural, secure step, with multiple options and a well-trodden path through the UCAS process, while vocational options, including apprenticeships and degree apprenticeships, were not presented with the same clarity or coherence, or even within the same timeframe. That makes it harder for teachers to advise their students and for parents to have confidence in pathways that may appear less predictable and secure. If we want to see true parity of esteem between academic and vocational routes, that needs to change, and I hope that it will be a priority for the newly established Skills England.
The Education Committee recognises the strategic importance of further education and skills, and we have recently launched a substantial inquiry that aims to understand how the further education system can better equip young people with skills and qualifications for a range of sectors experiencing labour shortages while opening up a wider range of opportunities to young people and mid-career switchers. We will make our recommendations to the Government in due course, and we look forward to playing our part in scrutinising the work of Skills England.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the Liberal Democrat spokesperson.
Ian Sollom (St Neots and Mid Cambridgeshire) (LD)
I beg to move an amendment, to leave out from “That” to the end of the Question and add:
“this House declines to give a Second Reading to the Institute for Apprenticeships and Technical Education (Transfer of Functions etc) Bill because, while acknowledging the importance of reforming the delivery of skills and technical education, it fails to establish Skills England as a statutory independent body; because it centralises decision-making power in the hands of the Secretary of State; because it provides for the abolition of the Institute for Apprenticeships and Technical Education without ensuring a legally defined replacement; and because it lacks provisions to ensure that Skills England is directly accountable to Parliament.”
The Government are right that our skills system needs reform. The Liberal Democrats agree with the Secretary of State that our current fragmented and confusing skills landscape lets down learners, frustrates businesses and holds back growth, as she made clear in her foreword to Skills England’s first report in the autumn.
I and my hon. Friends on the Liberal Democrat Benches share the ambition to build a high-skill, high-productivity workforce that can meet our economy’s needs, and reform is essential for that ambition to be realised. Like many in the sector, we were encouraged to hear the Government prioritising that last July in the King’s Speech, with the statement:
“My Government will establish Skills England which will have a new partnership with employers at its heart”,
but the Bill before us does not establish Skills England at all; it simply abolishes the Institute for Apprenticeships and Technical Education and transfers the functions directly to the Secretary of State. We need a strong, independent skills body with proper parliamentary oversight and genuine employer engagement, but this Bill delivers a centralisation of power in the hands of Ministers.
There are examples of bodies that combine independence and strong democratic accountability for the most critical policy areas. The Office for Budget Responsibility has statutory independence while being directly accountable to Parliament through the Treasury Committee. Its leadership is subject to parliamentary approval, its reports must be laid before Parliament and it has clear statutory duties to ensure transparency. The Climate Change Committee similarly has a clear statutory basis that ensures it can provide independent advice while being properly scrutinised by Parliament, yet the framework proposed for Skills England—or at least the draft framework for illustrative purposes, which is all that we have seen so far—falls far short of those models. Despite promises about working across Government, its governance structure is heavily Department for Education-centric. There are no formal mechanisms for co-ordination with other key Departments; there is no cross-departmental board representation; and there is no clear structure for aligning with bodies such as the Migration Advisory Committee, just aspiration. Are we to assume that the Government think that skills policy is not so critical to their mission that it warrants a stronger framework than the one we have seen?
This matters profoundly when we consider the scale of cross-Government co-ordination required. Skills England must work with the Industrial Strategy Advisory Council on future workforce needs; with the Migration Advisory Committee on reducing reliance on overseas workers; with the Department for Energy Security and Net Zero on green skills; with the Department for Work and Pensions on employment programmes; with the Department for Science, Innovation and Technology on priority sectors; and with the Department of Health and Social Care on workforce planning. Particularly in light of recent developments, Skills England must also support the Government’s strategy for defence and the critical industries and skills that we will need for our defence. As proposed, though, it will lack even director general status, meaning that it will struggle to drive the co-ordination of skills that the system so desperately needs.
Sir John Hayes
The hon. Gentleman is making a powerful case for the independence of Skills England. He will know that Government Departments resist independence like most people resist disease, but his point is important because to get the kind of lateral action he describes in respect of the nuclear industry or other industries, it will be necessary for the body created to have a reach that Government Departments do not tend to have.
Ian Sollom
I agree. That cross-departmental and cross-industry working is a critical reason for the need for a truly independent body.
The implication for standards development is also concerning. Where we have had employer-led trailblazer groups setting standards, the Secretary of State can now bypass employers entirely. In limited circumstances and for minor changes, that will have the benefit of speeding up the review process, which has been frustrating for employers. There are, however, no safeguards to prevent ministerial control becoming the default approach. Instead of giving businesses a structural role, maximising responsiveness, the Bill makes engagement merely consultative. That speaks to a broader point: Skills England’s credibility with employers will be key if those employers are to buy into the Government’s skills vision for the country. Has the Secretary of State not at least considered the possibility that the proposed structure, whereby programmes can be driven at her whim or those of her successors, undermines that much-needed credibility from the start?
The Government’s own impact assessment worries that there will be a
“slowdown in the growth rate of new apprenticeships and technical education courses due to potential delays in the approvals process”
caused by this new approach, and it reveals who will pay the price. It is adult learners, who make up 48% of apprentices and often face the greatest barriers to retraining; learners from our most deprived communities, whose achievement rates are already eight percentage points lower than those from affluent areas; and learners in regions such as the north-east, where apprenticeship starts are already lower and where every reduction in opportunity has a disproportionate effect.
Mr Perkins
I see that the hon. Gentleman has received the briefing from the Association of Employment and Learning Providers. He appears to be reading it virtually word for word; I do not know whether he contributed anything to the speech, but it has been very interesting to hear what he has said.
With the Bill having been through the House of Lords, the hon. Gentleman is proposing a wrecking amendment that would kill it. Although I sympathise with some of the points in his amendment, does he not think that with the reassurances that we have heard from the Secretary of State—which can be scrutinised over the course of this Bill’s progress—we can at least get Skills England set up at speed, so that it can take on the shape he is suggesting in future? The hon. Gentleman’s proposed approach would cancel all this reform. It would go right back to square one and stop reform dead in its tracks.
Ian Sollom
I have looked beyond the AELP briefing, thank you very much. This is a critical area of Government policy, and it is important to get it right from the start. That is just a difference of approach.
As my noble Friend Baroness Garden said in the other place, this looks like an innocuous little Bill, but there is so much more to it than meets the eye. It represents a fundamental shift away from employer leadership in our skills system towards ministerial whim, a shift away from statutory independence towards departmental convenience, and a shift away from proper parliamentary accountability towards rule by regulation. The Government may argue that this is just an enabling Bill to pave the way for Skills England, but that is precisely the problem. It enables the wrong thing—it enables centralisation when we need independence, it enables ministerial control when we need employer leadership, and it enables opacity when we need accountability.
Andrew Pakes (Peterborough) (Lab)
The hon. Member and I share a county, and he will be aware that in a place such as mine, we have seen the decimation of level 2 and 3 apprenticeships. Does he not recognise that the biggest concern I hear from employers is that the current system is centralised and letting down working-class families in seats like mine? What they want is Skills England. No employer has been to see me to speak against Skills England, but many have been to speak to me against the current system, because it does not give us flexibility. What might be all right for academic policy in Cambridge will not be all right in Peterborough. We need the change delivered now.
Ian Sollom
I point out that I represent St Neots, which is not Cambridge, and many employers have spoken to me about their concerns about Skills England and the lack of clarity on its future.
We cannot support this Bill. That is not because we oppose reform—we desperately need it—but because centralising power in the hands of Ministers, removing proper scrutiny and weakening employer involvement in our skills system will make things worse, ultimately. Learners, employers and our economy deserve better than this overcentralisation of power.
Ian Sollom
I am going to finish now.
Learners and employers deserve a properly independent Skills England with the authority and accountability to drive real change. I urge the Government to think again and bring forward legislation that delivers the genuine reform that our skills system needs.
Lee Barron (Corby and East Northamptonshire) (Lab)
I speak today in support of this much-needed Bill, and I ask Members to do the same. This Bill is not just a piece of legislation, but the foundation for an English skills revolution. It will give our workforce the right tools to boost our economy, fix the skills shortages and provide real opportunities for millions across the country.
I started off as an apprentice when I left school at 16. The academic school did not work for me as far as my education was concerned, but the apprenticeship gave me opportunities that I could not have otherwise reached. It got me into the world of work. It got me active and away from a desk, and it led me on to a path that, frankly, the classroom could not provide. For too long—this has already been said today—vocational qualifications have been looked down on and seen as second-rate, but they allow people to reach their full potential in a way that fits in with them.
This Bill is a crucial step in delivering the Government’s manifesto promise to set up Skills England, which will take a smart, joined-up approach to ensuring our workforce has the skills our economy needs. By bringing businesses, training providers, unions and local leaders together under one roof, we can finally build a system that works for everybody. Skills England will map out where we are falling short, make sure training fits with what businesses actually need, and oversee the new growth and skills levy, which will replace the existing apprenticeship levy. This means that businesses can put money into the right training at the right time, leaving both workers and employers with more.
Let us be honest: we are in a skills crisis. In construction, health and social care, engineering and digital industries, we simply do not have enough trained workers, which is why we have to move so speedily. According to the 2022 employer skills survey, more than a third of job vacancies are a result of people not having the right skills—the skills that we need—and that is not acceptable. We cannot allow a lack of training to hold our economy back, which is exactly what is happening at the moment. The Bill will ensure that apprenticeships, T-levels and technical qualifications match what employers need. Whether those involved are young people starting out or adults reskilling, they will know that they are on the path to a stable, well-paid job.
We must not ignore the damage done by those who look down on vocational training. We need to change the way in which we talk about skills, apprenticeships and lifelong learning, because those careers are not a back-up plan but a first-class route to success. The Bill represents a move to challenge the idea that the only way to get ahead is through university. It shows that we are serious about supporting technical skills so that no matter what path people choose, they have what they need to thrive in life and in work. I say to Members, “Ask yourselves this: do you want a skills system that actually works? Do you want to help build a workforce that is properly trained, valued and paid?” This Bill is our chance to fix skills training in England. It will give apprenticeships and technical education the attention, funding, and respect that they deserve. It will bring order, clarity and proper co-ordination, elements that our system has been lacking for too long.
In September I visited Corby technical school in my constituency, which is led by Shona Lomas. I was told about its approved partners scheme, a leading scheme in the area, which brings in business partners who support children through school, offer work experience and provide apprenticeships. When that school opened, it was looked down upon. It was talked down. People talked as though the kids who were not bright enough went to that school. That is wrong, because the kids who go to that school are well supported, getting on with partnerships and getting on in life through apprenticeships. The CTS scheme has now grown to 119 partners, including local schools, colleges and major local employers, and it has seen a rise in awareness and interest since the recent National Apprenticeship Week. Opportunities such as those give young people the skills and confidence that they need to get on in life.
We have more brilliant apprenticeships schemes throughout my constituency—some of which I visited recently—including those at 7formation, Asda, Carmack Engineering, Weetabix and RS Components, which was ranked 82nd in last year’s list of the top apprenticeship employers in the country. Those businesses are delivering what they can, but the Bill gives them the freedom and flexibility to deliver more. Most important, it provides the links that will enable us to build the future and the growth that our economy needs. These are the kinds of opportunities that we can grow and spread through Skills England and the powers in the Bill. Let us get our system in step with an industrial strategy, joined with local economies, to bring the skills revolution that our country so desperately needs. We can do that with the Bill.
Sir Ashley Fox (Bridgwater) (Con)
This Bill is important for the future of technical education and apprenticeships in our country, and I accept that the Government’s intention is to streamline the governance and management of skills. However, I believe that, in its current form, the Bill threatens to centralise the system to such an extent that it may undermine the independence and effectiveness of our skills system.
The Institute for Apprenticeships and Technical Education was established with the clear purpose of ensuring that apprenticeship standards and assessments were determined with the input of employers, education providers and industry experts. I fear that by abolishing this body in favour of a group of civil servants appointed by the Secretary of State, the Government will make technical education less responsive to the needs of the labour market. The Bill removes the requirement to publish regular reviews of occupational standards and apprenticeship assessment plans. The Government say that removing this duty allows for much greater flexibility, but they are doing so without ensuring that the views of employers, educators and other relevant bodies will continue to be heard and considered.
The Bill grants the Secretary of State power to determine the standards and assessments that will be used to measure progress in technical education. No longer will these decisions be made by a broad group of stakeholders, including employers and sector specialists. What does all this mean for our workforce, and what does it mean for learners? It means that we are at risk of creating a system that is more distant, less responsive and potentially less effective. When decisions are made by civil servants without the input of those on the ground—those directly impacted by these decisions—we risk losing touch with the realities of the skills landscape.
Luke Murphy (Basingstoke) (Lab)
I am afraid the hon. Member and the shadow Secretary of State speak as if the Institute for Apprenticeships and Technical Education was an unblemished success. Between 2018-19 and 2023-24, apprenticeship starts in England per capita dropped by 16%, so how is it a responsive system? I think the House would be better served if Opposition Members acknowledged that. I understand why he is focused on structures, because that is in part what the Bill focuses on, but surely we should also be focused on outcomes, on which the previous Government were not delivering.
Sir Ashley Fox
The pandemic clearly had something to do with that reduction. I would not say the system is perfect, but I fear that replacing it with a committee of civil servants appointed by the Secretary of State is likely to be less successful still.
Amendments have been made in the other place to address some of these concerns. Specifically, a one-year delay was added between the establishment of Skills England and the commencement of the Bill, which would allow for a more effective transition and give Skills England a better chance of getting up and running. It is crucial that we do not damage the very real progress that was made on technical education under the last Government. During the general election, my party pledged to raise the number of people in high-skilled apprenticeships by 100,000 per year, representing a 30% rise. This was to recognise that, for many young people, apprenticeships represent a better way to enter the workplace than some university degrees.
Bridgwater and Taunton College, based in my constituency, is the UK’s largest provider of apprenticeships, supporting thousands of learners in achieving their career ambitions. With over 120 apprenticeship programmes, the college offers exceptional opportunities for individuals to gain hands-on experience and develop the skills needed for today’s competitive job market. BTC’s success is reflected in its recent achievements, such as its registered nurse degree apprenticeship, which recruited 53 apprentices in the 2023-24 academic year alone. The college’s commitment to employer engagement and industry-aligned training is at the heart of its success. It has strong partnerships with employers of all sizes, ensuring that its apprenticeship programmes meet local and national skill needs.
While BTC welcomes the streamlining of the management of apprenticeships, it is clear that these changes must not reduce the quality of education and support provided to apprentices. As it rightly points out, it is crucial that these changes do not compromise the wellbeing of students or the high standards of education they have come to expect. I hope that the new framework will continue to uphold these standards and ensure that the needs of both students and employers are met effectively. It is this type of local, industry-focused and employer-engaged approach to skills training that we should be fostering.
In conclusion, while I understand the desire to create a streamlined, more efficient system, the Government must be careful not to sacrifice the effectiveness and independence that have been the hallmark of our apprenticeship and technical education system. This Bill, in its current form, grants perhaps too much power to the Secretary of State with too little accountability. It risks diminishing the role of employers and learners, and weakening the checks and balances that have served us well, so I will continue to scrutinise this Bill as it proceeds through Parliament.
Gurinder Singh Josan (Smethwick) (Lab)
I am pleased to speak on Second Reading of this Bill, which I welcome for its focus on overhauling the skills system in England, particularly in relation to apprenticeships and technical education.
The creation of the Institute for Apprenticeships in 2017, with the subsequent addition of oversight for technical education, undoubtedly helped to create a system that increasingly includes higher-quality apprenticeships and increases the accessibility of these pathways to all. However, there are still too many in our country for whom unlocking their full potential remains a distant dream, which is fundamental to everything this Government have set out to achieve and to the future of our country.
The missions driving this Government—the incredible plan for change, the drive to become self-sufficient as a nation on energy, defence and security, the need to increase growth in our economy, and the drive to improve the lives of all our citizens—all require a comprehensive plan for improving skills. The basic provisions of the Bill will abolish the Institute for Apprenticeships and Technical Education and transfer its functions ultimately to Skills England; there are also proposed changes to the functions undertaken by Skills England. I believe these changes are important and will help to ensure a more simplified system with built-in flexibility, which will enable the skills system to take account of changing circumstances.
Conservative Members have spoken about the powers being taken up by the Secretary of State and the Department. I think building in accountability is important, so that we know that this Parliament can come back to Ministers and hold them to account on that. All this, I think, will help to ensure that our skills system is truly responsive to the needs of users, employers and our economy.
This matter is incredibly important to my constituents. Smethwick has a rich industrial heritage, and, while there have been significant changes over the years, the need for high-quality skills, education and training remains key. In Smethwick, significantly more people than the national average have no qualifications, significantly fewer have a level 4 qualification, and fewer than the national average take part in apprenticeships. Too often, structural inconsistencies hold back our businesses and our people from flourishing. The lack of skills essential for work, the lack of specific skills required by employers in the place they are needed and the lack of options available to many for achieving these skills are just some of those issues. The Bill will help to streamline the skills system and ensure it is able to identify gaps, respond to changing circumstances and provide the skills needed for our businesses to flourish.
Last week, I met Robert Powell, the head of resource development at Keltruck Limited, which is the largest independently owned Scania distributor globally involved in the sale of new and used trucks, and is based in my constituency. Keltruck is a significant business, with 461 employees, including 51 apprentices—that is more than 10% of its employees. I was also informed that pretty much all the senior staff in the organisation have come up through the apprenticeship route—this is a business that really values apprenticeships. Many of its apprentices go on to great jobs in industry, for example, one went on to become chief mechanic at a top Formula 1 racing team. That is something to aspire to, and a story for somebody from Smethwick that is quite inspirational.
Being more responsive means listening to businesses. While Keltruck welcomes the recent announcement that English and maths qualifications will not be a requirement for apprenticeships, it is concerned that this requirement still applies to 16 to 18-year-olds beginning an apprenticeship. The story that was told to me was that some of their senior staff would not be in that position if they were required to have an English or maths qualification at age 16 or 18. I hope the Government can therefore look at that too to ensure that all our young people have access to the best quality apprenticeships.
In an illustration of the flexibility and freedom that can be brought to bear, I congratulate Richard Parker, the Mayor of the West Midlands, and the West Midlands combined authority on launching a scheme last year to enable bigger businesses with an unspent apprenticeship levy to donate that to the West Midlands combined authority rather than returning it to His Majesty’s Revenue and Customs. That has allowed the West Midlands combined authority to receive nearly £3 million to support 176 small and medium-sized enterprises and 411 apprentices through fully funded apprenticeships. That is an indication of how the freedoms brought about by the Bill could be utilised.
The two examples I have outlined show what can be achieved through a skills system that is more flexible and responsive, as well as being focused on excellence. That is incredibly important to my constituency and I therefore have no hesitation in supporting the Bill.
Damian Hinds (East Hampshire) (Con)
We cannot just wish it into being, we cannot assume it or assert it, and we cannot legislate for it: esteem is in the eye of the esteemer and parity of esteem is earned. In technical and vocational education and training, that requires a clear and understandable set of qualifications with high standards and specifications that people know cannot be fiddled because they have been set independently. It also requires equipping the individual with what they need to know and what they need to be able to do to succeed in a trade, craft or sector because those standards have been set by employers in that trade, craft or sector.
Those things were at the heart of the blueprint set out for technical and vocational education in this country, which has been followed for the last number of years. I say the blueprint, but it was also a red print, because it was the vision of Lord Sainsbury, a Labour peer. In his landmark report, he set out that we needed to reform the system so that we had a streamlined set of qualifications with clear paths to vocations. His recommendations included: a minimum length of time for apprenticeships, along with a minimum length of time off the job; for T-levels, a minimum length, which was much longer than usual for industrial placements; and standards set by employers. There was also the expansion of the remit of what was then the Institute for Apprenticeships to become the broader Institute for Apprenticeships and Technical Education, linking apprenticeships and T-levels. Lord Sainsbury was also absolutely clear that specifying standards was not a job for Ministers in the Department for Education. It was a job for employers in the industries that would employ those apprentices.
We thought that those principles had become a matter of cross-party consensus. I am sorry to say that we were wrong. We have already had from this new Government a rowing back on the streamlining of qualifications. They have said that they will have shorter apprenticeships but still call them apprenticeships. Now, in the Bill, they will abolish—not reform or evolve—the body that is independent of Government, which sets the standards and ensures the integrity of the system.
Over 50 years in this country, we have had industrial training boards, the Manpower Services Commission, the Training Commission, training and enterprise councils—TECs—which were different from another TEC, the Technician Education Council, which existed alongside the Business Education Council, or BEC. BEC and TEC would eventually get together to give us the Business and Technology Education Council, or BTEC. There were national training organisations, the Learning and Skills Council, sector skills councils, the UK Commission for Employment and Skills and the Skills Funding Agency, or SFA, which would later become the Education and Skills Funding Agency, or ESFA. Lately, we have had local skills improvement plans and IfATE.
Now we will have Skills England, which will be the 13th skills agency in 50 years. I say to Ministers that if all it takes to solve our skills challenges is a new body, a machinery of Government change, do they not think that one of the previous 12 would have managed that already? Ministers, especially those in new Governments, like to create something new, and, in this case, they think that they have something new that business wants, which is a quango—except Skills England is not even a quango. I am grateful to you, Madam Deputy Speaker, for indulging me thus far in talking about all these things, because none of them is in the Bill. This Bill is not about Skills England. There are, I think, two mentions of Skills England in the text of the Bill and I think that they were both inserted by the House of Lords.
This Bill is about abolishing the independent institute that sets standards and passing those powers not to Skills England but to the Secretary of State. That is what Skills England is. Ministers are bandying about all these fancy terms about agency this, and agency that, but it is part of the Department for Education. When it comes to working across Government, I have no reason to believe that this new part of the DFE will be any more equipped to work across Government, let alone across the whole economy, in solving some of these issues.
I love the Department for Education deeply, but, honestly, to operate across Government, to exert leverage and to get things done, I am afraid that the new body has to be in the Treasury or possibly in the Cabinet Office—not in the Education Department, the Business and Trade Department, or some of the others that could have been picked. Therefore, far from reflecting what business needs, what this legislation does is remove the requirement for business to set the standards for what their future employees will learn.
Following the vote in the House of Lords, the Government say that they will amend the Bill to be clear that they will still listen to business. I have the amendment here. What it says is that they will be clear about the times when they will listen to business and when they will not, which is not quite the same thing. In any case, if we are to make use of that business voice—if it is really going to mean something—it has to go hand in hand with the independence of the body. As things stand, even if the DFE is listening to business, it will still be the convenor. There will be no other body. Therefore, it will be the Government who are setting the standards for T-levels and for apprenticeships. I have asked the Minister this question twice already. We would not allow the Department for Education to set the standards for A-levels. We would always have that independently done and verified. Therefore if we would not let it happen for A-levels, how can it be right for T-levels? That is a rhetorical question, but it is a rhetorical question that Ministers should try to answer.
Baroness Smith of Malvern set out all the things that were being done to make Skills England something other than just another unit—a mini department—within the DFE. Today, the Secretary of State has set out some of her appointments, which sound like good appointments, to that body. But none of that is in legislation. That was all news to us. News of this set-up and the appointments of these individuals has come out since the announcement of Skills England. We are voting over the course of the next few weeks, as the Bill passes through its stages, on what will be an Act of Parliament. All that Act of Parliament will say is that those powers are coming to the office of the Secretary of State for Education, and it will be for them to decide in the future how to use them. It may well be that this team of Ministers is in power for 25 to 30 years, or it may not. I encourage all colleagues to think about that. When we legislate, we do so not just for the next 12 months, or even for the next four or five years; we legislate the law of the land, which, all other things being equal, stays in place.
I have some good news. I confidently predict that the Government will hit all their targets on the numbers of young people going through technical vocational education and training and attaining. That is because I think back to the 2000s, and the key target of more children getting five or more GCSEs at grade C or above, including in English and maths. Year after year they made that happen, even though, as we knew subsequently, we were tumbling down the international comparison tables. About a dozen different ruses made those figures look better every year, and that was achieved even without having final control over the specification and what counted as passing or getting a particular grade. Let us imagine what the Government could achieve now.
The Government want a new body—fine. But to give it a chance to succeed for our economy and, crucially, for the young people who this ultimately is about, that body must be independent. I call on Ministers to take the opportunity, as this legislation goes through the House, to write that on the face of the Bill. We were encouraged by the Secretary of State saying earlier that, in any case, within two years they will review the status of Skills England with a view to perhaps making it a statutorily independent body. I encourage Ministers to take the opportunity in Committee to write that into the legislation.
Anna Gelderd (South East Cornwall) (Lab)
I welcome the Bill’s commitment to broadening educational opportunities and skills training, which is so urgently needed. As one of those young people who undertook my qualifications in the early 2000s, I assure the right hon. Member for East Hampshire (Damian Hinds) that they were rigorous and got me where I am today.
Areas such as South East Cornwall have felt forgotten and left behind, cut off from the opportunities of economic growth in other parts of the UK. Labour understands the link between an individual’s education and training and the wider economic prosperity of our country. The Bill is an example of how we are rebuilding the country from the ground up, focusing on our young people. Where university or academic routes are not the right fit, apprenticeships offer vital, valuable alternatives not only for those enrolled, but for training providers, local businesses and the economy.
Where someone is born and the circumstances in which they grow up should not limit where they go or what they achieve. This mission-driven Labour Government are making education a priority. It is a far cry from the previous Government, which saw apprenticeships collapsing, businesses pleading for change and our young people paying the price. In South East Cornwall, local businesses lead by example. Wildanet, a home-grown company from Liskeard, is doing fantastic work to improve digital connectivity across Cornwall. It is investing in more than just cables and infrastructure. It is investing in our local people through training schemes that create meaningful opportunities for local residents and build the skills that directly benefit my community.
During National Apprenticeship Week last week, I had the privilege of attending Wildanet’s apprenticeship graduation ceremony. Celebrating the achievements of our young people was a reminder of what is possible when we support them through businesses such as Wildanet and through the Bill. Working in partnership with Truro and Penwith College, Wildanet’s ground-breaking apprenticeship scheme is a key part of the company’s DNA, creating new jobs and training people locally. It is vital that such opportunities in rural communities continue to build momentum, and that is what the Bill will deliver.
The Bill is a step in the right direction. I want to highlight the brilliant work of Truro and Penwith College, Cornwall’s only expert apprenticeship provider and one of just five further education colleges in the UK that have been awarded this status by the Department for Education. The college’s staff, many of whom are resident in South East Cornwall, play a crucial role in shaping our local workforce and improving opportunities. Apprenticeship courses aligned with the Government’s mission and key industries will help people secure reliable, high-quality employment after completing their training.
In Cornwall, where incomes remain about 20% below the national average, this investment in skills and future-proofed jobs is essential. By strengthening our apprenticeships system, we can equip the next generation while also supporting local businesses such as Wildanet.
Cornwall was a driving force in Britain’s first industrial revolution. With the right foundations, we can once again lead the industries of the future, whether in renewable energy, marine technology or digital infrastructure. The first step is building those foundations.
Sir John Hayes (South Holland and The Deepings) (Con)
Much of this debate has been about the purpose of learning—the Secretary of State began in that spirit—and I think we can all agree that the purpose of learning is both to deliver personal fulfilment, through the acquisition of understanding and competencies, and to fulfil a social purpose by providing for economic needs. John Ruskin said:
“The first condition of education is being able to put someone to wholesome and meaningful work.”
Apprenticeships embody—indeed, they epitomise—that purpose. A trainee learns from a mentor a skill that has use in a workplace.
The value of apprenticeships is why, when I was shadow Minister for universities, further education and skills, and subsequently the Minister in 2010, I set about revitalising the apprenticeships system. I knew that apprenticeships were well understood by employers, were widely recognised by the public and could be attractive to trainees.
I will make a point on adult learning, provoked by the excellent contribution by the Liberal Democrat spokesman, the hon. Member for St Neots and Mid Cambridgeshire (Ian Sollom). It is vitally important to understand that in order to skill our workforce and provide it with the necessary competencies to meet the Government’s economic ambitions, we really do have to reskill existing workers as well as making practical and vocational education attractive to new entrants to the workplace. Simply as a matter of numbers, if we train more young people but do not retrain the existing workforce, we will never deliver the capacity needed to fill the skills gaps and deal with the skills shortages that, as has been said repeatedly, inhibit our ability to drive the economy forward.
The Bill is about the management and maintenance of standards of apprenticeships. I understood why that mattered so much, which is why I set about elevating the practical, the vocational and the technical. I believe that practical, vocational and technical learning is as important as academic accomplishment. It has been a myth perpetuated by the establishment—I am inclined to say “the liberal establishment,” but I do not want to damn the hon. Member for St Neots and Mid Cambridgeshire, having praised him so nicely—that the only form of prowess that counts comes through academic learning. That myth has been so pervasive that a former Prime Minister, Tony Blair, set out the extraordinary, bizarre ambition that 50% of people should go to university.
The number of people who go to university should be about their tastes, talents, aptitudes and abilities. We should not set a target and then shoehorn people into a system in order to meet it; we should allow a system to reflect those aptitudes, tastes and talents. Many people’s abilities rightly lead them not to an academic education but to a practical one, yet we have underpowered and undervalued practical learning for so long in this country, and we continue to do so.
Deep at the heart of that fault has been the careers service. As hon. Members have mentioned, the careers advice and guidance that people have got has guided them—even when it did not suit them—into an academic route that has ill-served them. Even though it has landed them with immense debts, it has rendered them unable to get the job that would allow them to pay off those debts readily. So it is really important that we look again at that advice and guidance.
As I have mentioned, when I was the Minister I created a statutory duty on schools to offer independent advice and guidance, but I should have insisted that it was to be given face to face, with a careers adviser visiting a careers fair or holding personal interviews with students to set out the various options available. Unfortunately, teachers, who have typically been to university themselves, know that route well, and they are inclined to say to young people, “Why don’t you do what I did, and follow the route that I took?” They are often less well informed about the practical and vocational routes that would lead people to acquire the kinds of skills that, as we have all said, are vitally important.
I should, at the outset of my remarks, have referred Members to my entry in the Register of Members’ Financial Interests, because I am associated with universities. Indeed, I ought also to say that my background is entirely academic. I studied at two universities, Nottingham and Cambridge, and I have taught in two as well, so I do not really have any practical skills myself, unlike my dear father, who could turn his hand to almost anything—there was nothing he could not do, practically. I have to send out for a man in the village if I want anything done. So my case is not born of any personal prejudice. Indeed, maybe it is born of a certain envy of those that can make and do things in the way that Ruskin described.
Mrs Sureena Brackenridge (Wolverhampton North East) (Lab)
Will the right hon. Gentleman give way?
Sir John Hayes
I will happily give way. The hon. Lady is now going to test me on my practical incompetence.
Mrs Brackenridge
I have a couple of points to make. Does the right hon. Member acknowledge the important role that universities play in supporting technical advanced education? Does he also agree that, under the stewardship of the last Government, we saw a decimation of specialist careers guidance in schools?
Sir John Hayes
Yes, of course I acknowledge that role. It is important to point out that many of the universities do great work. I would not want to disparage that work, and the hon. Lady is right to draw the House’s attention to it.
The point I was really making is that, sadly, many people are driven down a pathway that is just not right for them. That is because of the underestimation of the significance of practical accomplishment, both at an intellectual level—the unwillingness to recognise that practical accomplishment is of a high order—and at a practical level in terms of the advice that people are often given and may later regret. It is not easy for a young person to know quite what path to take, and if the advice they get skews them towards one route or another, it is fairly likely that they will be ill equipped to make a considered judgment. I am simply making the argument for, at the very least, a degree of equality about the advice we give to people.
This Bill is questionable in a number of respects, and in particular, as has been highlighted by my right hon. Friend the Member for East Hampshire (Damian Hinds) and others, in the way that it presents the future management and control of apprenticeships and the standards associated with them. It is right that employers play a key role in that process, but the Bill is silent on the role of employers.
I am not an unbridled admirer of the Institute for Apprenticeships. I did not create it. In my time as Minister, and indeed as shadow Minister, the standards were guaranteed by sector skills councils. I would have gone for a sector-based approach myself. Had I stayed in office, I would probably have developed that further and emulated the German approach by establishing guilds. I began to lay some of the foundations for that as Minister, and I would have gone for such an approach rather than where we ended up. Having said that, what is critical about either that kind of sectoral approach or the apprenticeship institute being abolished by the Bill is the role of employers in ensuring that what is taught and tested meets a real economic need. We cannot detach that economic need from the structure by which we guarantee the quality of apprenticeships.
So, there is the issue of quality, and again the Bill is unconvincing in that respect. My right hon. Friend drew attention to the fact that if quality is lowered, the numbers can be increased. Indeed, the Labour Government prior to 2010 introduced programme-led apprenticeships, which were taught entirely outside of the workplace. They were still called apprenticeships but were unrelated to any particular employer or sector. That is not the way forward, and any diminution of standards will further undermine the status of practical learning. I simply say to the Minister that if the Secretary of State is going to take back control—to borrow a popular phrase—it is vital that simultaneously we hear more during the passage of the legislation about how standards will be maintained, because at the moment we have few assurances to that effect.
I will say a word on numbers, partly to advertise my own effectiveness in government. When I became the Minister of State for Further Education, Skills and Lifelong Learning, I was able, due to the promotion of apprenticeships, to drive their number to the highest level in modern times. I became the Minister in 2010. By 2011/12, we achieved 521,000 apprenticeships. That has never been equalled since, and we are now down to about 340,000. To say a word about previous Labour Governments, I inherited 280,000 apprenticeships, and the average number of apprenticeship completions from 2000 to 2009-10 was less than 100,000 a year.
As we debate these matters going forward, it is vital that the Government commit to the apprenticeship as a key determiner of their skills policy. The number of apprenticeships and their quality will allow the Government to drive up skills levels and, therefore, to meet economic need.
Andrew Pakes (Peterborough) (Lab)
Will the right hon. Gentleman give way?
Sir John Hayes
I am grateful to the hon. Gentleman, who has been listening attentively to my speech so far.
Andrew Pakes
I am worried that I might damn the right hon. Gentleman with faint praise because when he cited the numbers from when he was the Minister, one of the determinants of his success was the involvement of trade unions in the sector skills council and the partnership. While we have talked lots about employers, he was an advocate in his party of involving trade unions. Unfortunately, Ministers after him excluded trade unions from that involvement. Is he advocating that trade unions should be involved in the new system?
Sir John Hayes
I am immensely flattered that the hon. Gentleman has followed my career with such assiduity. He is right: I defended Unionlearn and would continue to do so. Trade unions can play a vital part in ensuring the outcomes that the Government say that they seek and that I certainly believe in. Indeed, I went on a delegation to Germany—this is a minor digression, Madam Deputy Speaker—to look at their apprenticeship system with employers and trade unions, because I know that the combination of trade unions and employers was critical to driving the skills agenda. Again, it would be useful to hear from the Government what they think about that. How will they engage with the trade unions? Because trade unions are not mentioned in the Bill at all, we are left to wonder what will happen, as my right hon. Friend the Member for East Hampshire said in his excellent speech, when the Secretary of State seizes control of apprenticeships from the current structure.
There are a number of other questions to be put. The hon. Member for Chesterfield (Mr Perkins) made a very good point about SMEs. One challenge when I was a Minister, and for subsequent Ministers and this Government, was in engaging more SMEs. I am not sure that we were successful in that. I launched a review of how we might do that; it was typically by making the system regulatory and trying to review some of the paperwork. Again, as the Bill moves forward, what more will we hear about how to engage more SMEs? If we say to someone in my constituency that there are really good engineering apprenticeships in Derby, which I am told is in the same part of the country—or in the same region at least, whatever that means—we might as well be saying that there are apprenticeships on Mars, because they will not be able to get to Derby to study. We really need the spread of apprenticeship accessibility, which SME involvement provides. It is the only way of creating the reach that is necessary to engage more young people and adult learners in acquiring those skills.
I have one or two further questions, with which I hope the Minister can deal. I have already spoken about employers. On the status of the new body, is it the Government’s intention, as the Secretary of State implied— but no more than that—for it to become a non-departmental body in the end, or will it always be an in-house body? Anyone who has been close to government will know the significance of those two options. It needs at the very least to be a non-departmental body if it is to have the necessary freedom and independence to respond to employer need and changing economic circumstances. The Secretary of State hinted that that might be the direction of travel, but we do need to know more when the Minister sums up.
Luke Murphy
Conservative Members are making quite the noise about IfATE’s independence, but I remind the House that this is a precedented move. The Conservative Government established the Standards and Testing Agency, which is currently the Executive agency and was formerly a non-departmental body. That is exactly the same status as IfATE, which performed very similar functions for many other kinds of qualifications and tests. Why was it okay for the right hon. Gentleman’s Government to do that in 2011? It seems that the Conservatives are more focused on the process point—a process similar to that undertaken by their Government—and not on the outcomes that will deliver for working-class kids interested in learning a trade.
Sir John Hayes
As I say, I am not an unbridled advocate of the Institute for Apprenticeships and Technical Education, which the Bill abolishes. I did not set it up during my stewardship. As I have already described, I would have preferred a different, guild-based model. Guilds would, by their nature, have been independent from Government. If we look at the German model, the guilds are sovereign, and they are closely tied, by the way, to the trade unions of the particular sectors for which they are responsible. I am simply saying to the Government, “Here is the chance to do something better.” One learns from experience and one learns from government experience, to be honest and straightforward about that.
Certainly, there is the issue of standards. How will standards be determined and delivered? Will that be done by an independent body or a series of independent bodies, perhaps in different parts of the business community, or will it be done directly by the Department? What about the figures in the impact assessment, which says that there would be a reduction in the number of apprenticeships? We are already at a pretty pitifully low level. As I described earlier, the number of apprenticeship starts in 2023-34 stood at 340,000. We can do much better than that, but the Government have certainly suggested in their impact assessment that they expect that number to fall, at least in the interim. By how much do we expect it to fall—5%, 10%, or 25%? We really need to know a little more about that.
The Secretary of State spoke about, as the Labour manifesto detailed, work with the Migration Advisory Committee and others. Can we hear a little more about the detail of that? Certainly, it will be required before we vote on Third Reading, because it is inconceivable that the Government would not want to be more straightforward about how those structural links will work and what role those other bodies will play in helping the Government to deliver their objectives.
Practical accomplishment is something dear to my heart. William Morris—rarely quoted in this House except by me, which is a sad indictment of the modern Labour party—said:
“a man at work, making something which he feels will exist because he is working at it and wills it, is exercising the energies of his mind and soul as well as of his body.”
Morris understood what I know many, from their contributions to this debate, understand too: that it is time to again elevate the practical. This is, of course, about our ambitions for the economy, but it is also about the people who acquire those skills—the way their lives are changed because their life chances are changed.
I started by speaking about John Ruskin and his view of these things. Ruskin said:
“The highest reward for a person’s toil is not what they get for it, but what they become by it.”
Yes, this is about the economy, but it is also about the difference we make to individuals who, through gaining new skills, grow and develop and become proud of what they can do for themselves, their family, their community and their nation.
Several hon. Members rose—
Madam Deputy Speaker (Caroline Nokes)
I had not been planning to introduce a formal time limit, but Members might reflect on how many are still standing and perhaps restrain themselves to five minutes or so.
Darren Paffey (Southampton Itchen) (Lab)
In rising to support the Bill, I want to say, without heaping too much praise on the right hon. Member for South Holland and The Deepings (Sir John Hayes), that it is a pleasure to follow him and many of the comments he made. Like him, I have arrived at this place through the academic route, and perhaps precisely because of that, I, like him, am incredibly aware of the value of the vocational, practical and apprenticeship route. It is in that value that the power of what the Bill is seeking to achieve lies, and I hope to return to that point. I thank the Secretary of State, who is no longer in her place, for bringing forward the Bill, because seven months ago this country voted for change, and what we see today is another building block of that very necessary change.
On a recent visit to Southampton college’s marine skills centre in my constituency for National Apprenticeship Week last week, when it seems we were all busy making visits, I met some apprentices learning a whole range of skills, from engineering to electronics, to carpentry and yacht making. It was truly impressive, mostly because I would be entirely useless at all those skills. It reminded me that investing in apprenticeships is one of the most effective ways that we can equip the next generation with the skills they need. I am pleased to see that, with this Bill, the Government are taking action to ensure we get the right framework in place to shape our apprenticeship system. What apprentices want and what employers need is a system that offers routes into those meaningful, secure jobs, full of the dignity of work, that will bring them success as well as grow the economy.
I am not particularly obsessive about the structure of things or the way in which Government Departments organise themselves to implement policy. Like most people, I want what works, and I want what works best. The truth is that what we have at the moment, however much Opposition Members try to dress it up, is simply not working for too many people. I am pleased that the focus of the Bill is on how we create an agency that will reduce the number of hoops to jump through and will, as my hon. Friend the Member for Basingstoke (Luke Murphy) said, focus on outcomes, what happens at the end of these training courses, and opportunities.
Damian Hinds
Which hoops is the hon. Gentleman looking forward to the removal of?
Darren Paffey
I think the best people to answer that would be the employers who, time and again, have been telling us—and, I am pretty sure, telling the right hon. Gentleman and his colleagues—about the pure bureaucracy and complexity of the system that has been set up. They are the best advocates of the need for change. By setting up Skills England we can give apprenticeships the flexibility and durability that we need, and that those training will need. Importantly, we can take the interests of employers and young people into account.
If the years since 2010 have taught us anything, it is that poor policy has consequences. Sadly, the IfATE structure set up by the previous Tory Government has failed to deliver and, alongside a lack of investment, that has left the UK with stubbornly high numbers of vacancies due to skills shortages and too many young people who are not in education, employment or training. I would welcome reflections from the Minister on how, at the same time as setting out the new framework and strategy for skills development, we can deal specifically with those not in education, employment or training, and whether a strategy specifically on that would be another jigsaw piece in resolving this picture.
Employers in Southampton Itchen are crying out for new trainees and employees, especially those with crucial, basic digital skills, but even today in this country about 7.5 million working-age adults lack those skills. Is that the golden Tory legacy that we keep being reminded of by Members on the Opposition Benches? All of that is changing with the structures that the Bill sets up, paving the way for Skills England. That will meet the skills challenges of today and empower all training providers and employers, including the excellent Kiwi Education and the South Coast Institute of Technology, to drive maritime, engineering, hospitality and digital opportunities in and around Southampton. It will also ensure that we reset the prestige of apprentices and the apprenticeship route, and elevate them once again to a place of real value.
I associate myself with comments from Members on both sides of the Chamber about the value of apprenticeship skills. I say that as someone who has paid my bills by being a university lecturer for a number for years, yet throughout my time in politics I have championed apprenticeship routes. A piece of paper at the end of something is pretty incidental, to be frank, because its real power is what it empowers someone to do and which doors it opens up. To return to the point made by the right hon. Member for South Holland and The Deepings, it is about what skills enable someone to be, and what they become through those skills. That is where the real value and prestige of apprenticeships lies, and that is why we are resetting the value of them.
If we want growth and a well-trained workforce, the Bill is a route to delivering that. With this Bill, and with action that I know Ministers will be taking in future, this Labour Government are widening options and breaking down barriers to opportunity for people in Southampton and beyond. That is why I will be proud to walk through the Lobby and vote for the Bill later today.
Leigh Ingham (Stafford) (Lab)
The Bill is a crucial first step in the reform of the Government’s skills system. This Government are changing the narrative around skills. When I was younger, apprenticeships were often seen as something for working-class kids and a route into traditional trades such as plumbing, bricklaying—like my dad—hairdressing or being an electrician. Although those trades remain vital—indeed, our ambitious house building targets rely on them—skills today can be about so much more. They are the foundations of our economy, our technological progress and our ability to compete on the global stage.
The Bill underpins the Government’s aim for apprenticeships not to be just for 18-year-olds fresh out of college. In my constituency of Stafford, Eccleshall and the villages, many apprentices are over the age of 25. In fact, the majority of apprenticeships being taken up are advanced qualifications. Those people know what they want to do, may already have years of experience and are looking to upskill, retrain and take their career to the next level. We need exactly that kind of dynamic, lifelong learning.
We cannot just talk about improving skills—we need real, structural reforms to make that happen. That is why the Bill is so important. In October last year, the Government carried out a detailed impact assessment, looking at how it will affect learners, training providers, businesses and staff. The conclusion was clear: the Bill is essential to deliver the manifesto commitment to establish Skills England on which I and many of my hon. Friends stood.
We cannot continue to make the same mistakes made by last Government by keeping the fragmented approach of a slow, inefficient skills system. We do not have time for that. We need a joined-up approach that delivers for people who are trying to build their future, and for employers who are trying to build their business. For that reason, I was concerned about amendment 15 tabled to clause 11 in the other place, which introduced a one-year delay between the establishment of Skills England and the commencement of the Bill. I worry that that will delay the establishment of Skills England, and negatively impact employers, learners and the economy. I hope that the Government can minimise the impact of that amendment in Committee.
Hon. Members will often hear me champion Newcastle and Stafford college, based in my constituency, one of a small number of colleges nationally to twice achieve an Ofsted outstanding rating in all areas, including apprenticeships. It was recently praised for its “strong contribution” to meeting local skills needs, which is incredibly impactful on our local economy. The Bill will only help to increase that impact.
More widely, Skills England will work hand in hand with industry, employees and training providers to ensure we are not just reacting to skills shortages, but proactively identifying them. For too long, we have had a sticking-plaster approach to skills—and, let us be honest, to everything else—but that must change. We need to be strategic, focused and ambitious in developing a workforce who are prepared for the future. The Bill recognises those needs and confirms the manifesto commitment that I proudly stood on. I am delighted to see it progress, so that people in Stafford, Eccleshall and the villages can better access training and, ultimately, better jobs. I urge all colleagues to vote for the Bill.
Lee Pitcher (Doncaster East and the Isle of Axholme) (Lab)
I and all my hon. Friends were elected last year on a simple promise: change. It was a promise to rebuild our country, economy, health service and infrastructure, and to lay the foundations for a brighter future where we will overcome the challenges of climate change, see the benefits of a green economy and lead the world in new technology. It will be a future of prosperity and opportunity for all. All of that—every mission the Government have set out—depends on a skilled workforce.
I have recently seen the diversity of apprenticeships in my local area, from the National Horseracing College in Rossington, to the SSE business in Keadby, to Jack who cuts my hair, who I am sure hon. Members will agree is supremely talented—a phenomenon. I just ruined his career, I think—sorry, Jack! Everything this Government have promised can be created only by having the right people, with the right skills, in the right place, at the right time.
Whether they are in the NHS, energy, house building or security, apprenticeships have been part of the fabric of British society for hundreds of years. They have made us the country that we are today. In the past, modern apprenticeships were met with great enthusiasm by both leaders and businesses. They represented a different way of learning and had great promise, but in recent years that promise has been unfulfilled. Both apprenticeship starts and, crucially, apprenticeship completions have fallen off dramatically. The current system is not working for learners, employers or our country.
We need a targeted and strategic system that works for everyone. The system must work with local leaders and businesses to be relevant to the skills gaps that are holding our economy back. We need partnership, but most importantly we need a system that inspires and empowers our teens and young people.
Both before and since becoming an MP, I have had the privilege to meet many of the young people in schools in my constituency. Their talent and ambition are outstanding. So many of them are raring to change the world to tackle the climate crisis, harness artificial intelligence and be part of a brighter future. All they need is the opportunity to succeed, and they will make us proud. That is what the Government have promised, and the establishment and progression of Skills England is at the heart of that promise.
Creating Skills England was one of this Government’s first acts, and it is already doing important work. This Bill is an important step towards fully empowering Skills England, reshaping the skills landscape and getting our economy growing. This Government’s No. 1 priority is growth and to get the economy working again not just in some places and for some people, but everywhere for everyone—for north and south, urban and rural and all backgrounds and abilities. The fragmented approach we have seen over the last decade has never been so evident in the lack of pipeline for skills that we need right now and in the future.
Skills and apprenticeships must be at the heart of that strategy. Too many industries are held back from their potential because of the skills shortages we see. So many of the challenges that this country faces are rooted in the skills gap. Our housing crisis is built on a huge deficit in skilled construction workers, our hospitals and care homes cannot get the staff they need to do much more than hold together a system on the verge of collapse, and our economic productivity crisis is rooted in far too many people who miss out on the opportunity to fulfil their potential, so they neither thrive themselves nor contribute to our thriving economy.
I have spent my life working with water and the land. Blue-green infrastructure is absolutely vital, and new, smarter ways to work with nature are developing constantly. As we transition to net zero and sustainable development and growth and develop green energy solutions, we open up a whole sector of future jobs. In the coming decades, jobs and the blue-green economy will be as important as factories and coal mines were in the industrial revolution. We must embrace that opportunity now and use Skills England and the apprenticeship system to get our people ready for jobs in an industry in which we lead the world once again.
Britain has never had the biggest population, the most land or the greatest supply of natural resources, but we have been able to lead the world for centuries because of the skill of British people. We lead through technology, innovation and craftsmanship and through our wonderful natural talent. Britain sparked the industrial revolution and became the workshop of the world because of the skill of its workers, and that is why I am really happy to support this Bill.
Tom Collins (Worcester) (Lab)
I am pleased to see that we have some young people observing us today. Before coming to this place, I worked in research and development, leading a team of talented young engineers who were creating and realising new technologies to tackle the climate crisis. Some of those team members were apprentices, and some had been apprentices earlier in their careers. We faced many challenges, not least from a regulatory environment that struggled to move quickly in innovation and in finding relevant qualifications for new and emerging fields. Some of those challenges are inherent in doing something for the first time, but they were also the result of a UK engineering and industrial sector that had been neglected and, in some places, allowed to stagnate by political leaders who simply did not get it.
I am pleased that this new Government have embraced the values of purposeful, mission-led goal setting alongside agility, partnership and a willingness to act and learn fast. Just like our regulatory environment, our education ecosystem, which delivers skills and qualifications, needs to become more agile and responsive, and this Bill is an early step in that transformation and in reviving the symbiosis of academia and industry in our nations.
Anyone who works in engineering knows that there is no employee quite like an apprentice. Apprentices embody some of the most valuable skills needed in the workplace, such as social competencies that fuel teamwork, empathy, excellent communication, shared purpose, critical thinking and problem-solving skills built on perseverance, experimentation and pragmatism and a can-do attitude backed by hard skills honed in the real world. I have had numerous meetings with our local colleges in Worcester, and they are champing at the bit to deliver the technical and vocational skills needed for the big transformations that our country faces in digital, clean energy and public services. They welcome our changes to reduce bureaucracy and lift demotivating and burdensome requirements for English and maths GCSEs, as well as the changes that we are beginning to make regarding shorter placements and funding bands. They want us to keep going; I have been asked whether we could look at industry-specific flexibility around English and maths for 16 to 18-year-olds, with requirements integrated into standards. I have also been asked about further reviews of apprenticeship standards and funding bands in a wider range of areas, such as hospitality and customer service, and they would like us to keep building on our partnership with the sector, providing clarity about future levy changes and level 7 so that they can plan more effectively.
I am pleased that this Government are making changes that provide the agility and freedom to act quickly and responsively. Innovations in our economy will be founded on innovations in our ecosystem of education and skills. We can see a creative, industrial and innovative renaissance in the UK, and I believe that apprentices will be in the thick of it, delivering the true power of a thriving economy: skills and passionate people. As such, I urge the Secretary of State and our Ministers in the Department for Education to continue this work at pace, and I would like to express the appetite and ambition that is present in Worcester to play our part in delivering the technical and vocational skills of tomorrow through apprenticeships. The people of Worcester are ready to back the Secretary of State’s mission and work in partnership with the Government to break down the barriers to opportunity and see our country—and every single person who makes it—thrive.
Andrew Pakes (Peterborough) (Lab)
It is an honour to follow such a passionate speech about apprenticeships from my hon. Friend the Member for Worcester (Tom Collins). I was going to thank the right hon. Member for South Holland and The Deepings (Sir John Hayes) for raising John Ruskin and William Morris in the Chamber—I certainly think they should be mentioned more often—but I will amend my comments to say that it would be nice to have some Opposition Members in the Chamber for this important debate.
Andrew Pakes
It is nice to have some—to have some more would be quite good.
Whereas we have had William Morris and John Ruskin, some colleagues seem to have been getting speechwriting advice from Lewis Carroll, because some of the speeches from Opposition Members have been through the looking glass in their description of the problems and what is happening. We are lost in a debate where people are stuck on the function of a body, rather than the purpose we are trying to achieve, which is to change and enhance people’s lives.
Before I continue, I must declare my interest. Alongside my hon. Friend the Member for Chesterfield (Mr Perkins), I am co-chair of the all-party parliamentary group on apprenticeships. Apprenticeships are my passion in this House and in life, so I certainly believe that the transfer of functions and assets from the Institute for Apprenticeships and Technical Education to the new Skills England body is an overwhelmingly positive move. It was a proposal made in our manifesto—another promise made and kept by this Government.
The rationale underpinning this Bill is simple enough: the scope of the institute was too limited, and it is letting too many people down. Vitally, Skills England will work with young workers on their learning journey, signposting them through the maze of qualifications and apprenticeship opportunities. More than that, it will identify the skills gaps in our economy and work with the Industrial Strategy Council and the Migration Advisory Committee to plug those gaps. This matters to me, because in Peterborough, we have some of the highest levels of youth unemployment in the country. Apprenticeship starts are down, and unemployment is up.
It is clear to me that the work of Skills England must be aligned with the new industrial strategy, something we heard too little about from Opposition Members in their discussions of this issue. It does not matter what structure we have if we do not have industrial purpose, which this Government will bring to our growth mission, but also to our mission to remove barriers and transform lives. We must have cross-departmental, cross-agency, joined-up working to deliver the skills revolution and take us out of the old silos. When the Minister replies to the debate, I encourage her to detail how the industrial strategy and new Skills England bodies will work together to create those transformational opportunities. I also invite her to talk about how the growth and skills levy will fit together with Skills England, enabling us to deliver on those ambitions.
Our No. 1 mission is economic growth, spread to every part of the UK and built on a diverse base of industries and services. That mission will be hamstrung unless we unleash a skills revolution. The first report of Skills England made that clear, and it shows the scale of the challenge. Employer investment in training has been in steady decline over the past decade, with training expenditure at its lowest level since records began in 2011. Investment per employee is down 19% in real terms. I know from talking to business leaders in my constituency that they find the qualifications landscape and the institute bewildering. They tell me that skills supply is often mismatched against demand and that there are insufficient ways to encourage employers to invest in skills. I know from talking to learners in my constituency that the journeys into careers are poorly signposted and often blocked. Learners too often lack the essential literacy, numeracy and digital skills they need prior to apprenticeships to get the jobs they need.
In short, we do not have the skilled workers to do the future jobs that will drive growth. This Bill goes a long way to addressing that by setting up the institution and the purpose to get us there. Apprenticeships are the golden thread that run through this Government’s ambitions for growth. The new Skills England must recognise the centrality of apprenticeships to that and bring them centre stage into our economy.
As so many others in the Chamber have discussed today, the breadth, talent and determination of the apprentices I have met has been humbling, whether that is the butchers’ apprentices in Newborough, construction apprentices at Laing O’Rourke building a new Olympia or creative learners at the Fashion Retail Academy. Recently, I was delighted to welcome engineering apprentices from Caterpillar in my constituency to talk to us.
These apprenticeships will give young people a clearer route into careers where the nation has skills gaps. The new levy we are talking about will fund short apprenticeships, giving learners and employers greater flexibility. Overall, we must elevate the status of apprenticeships in our society and culture. I am not decrying our universities, but we must end the snobbery that says an apprenticeship is second-best to a degree. We must tackle the outmoded idea that learning and earning is a lesser option for young people. We do not hear that lazy trope in Sweden or Germany, and we should never hear it here in the UK. My third question to the Minister is: how will Skills England work through this legislation to elevate the role of apprenticeships in our society?
Skills and apprenticeships are not only the engine of growth, but the ladder of opportunity. The Minister will have seen the excellent briefings on this Bill from the Co-operative Group, of which I am a member, and one of its central challenges is that we should not just be creating more apprenticeships, but ensuring that Skills England has a responsibility to improve outcomes for those from lower socioeconomic backgrounds, including working-class kids in my constituency. That will ensure that the new body has social mobility baked into it from its inception. That will not only deliver better outcomes for those from working-class backgrounds, but will encourage Skills England to thoroughly measure the impact. When the Minister responds to the debate, will she talk about how we will measure the impact in cities such as mine, as well as the country as a whole?
This is a wonderful Bill, and I am pleased to support it. I am pleased to put on record my support to the ministerial team, particularly Baroness Smith of Malvern in the other House, who has been kind with her time and brilliant with this Bill.
Josh Dean (Hertford and Stortford) (Lab)
My driving focus as the MP for Hertford and Stortford is to make our community an even better place to live, work and learn. I am delighted to speak in this debate today, and I have no doubt that the Bill will allow us to harness the talents of our young people through ambitious skills reform that will drive growth and unlock opportunity.
Our young people in Hertford and Stortford are keen to take advantage of these opportunities, and the confidence that apprenticeships instil in our young people cannot be overstated. Earlier this month, I had the pleasure of visiting the Hertford regional college’s Ware campus to mark National Apprenticeship Week. It was great to meet some of its talented hairdressing apprentices and hear how they are starting to fill jobs at small and medium-sized businesses in our local area and to learn more about HRC’s apprenticeship offer for my constituents.
In our community, we can see how apprenticeships are helping young people to find the path that is right for them, develop skills for life and drive the local economy, but for too long, those opportunities have been out of reach for too many young people in our area, leaving those for whom traditional education does not work, who want to pursue an apprenticeship or another form of education, to slip through the cracks. Apprenticeship starts crashed under the watch of the previous Government. A broken apprenticeships levy let down businesses and young people alike, and both are now crying out for change.
I am pleased that this Government will introduce a new growth and skills levy, enabling employers to access a broader range of higher quality training offers, providing them with more flexibility and helping learners to access opportunities that will improve their lives.
The Department for Education’s employer skills survey showed that about 36% of all UK vacancies in 2022 were skills shortage vacancies—a huge increase from 22% in 2017, and a clear indicator of the damage done to the economy by the lack of a strong skills offer. This Labour Government will tackle the critical skills shortages that have hamstrung our economy, and apprenticeships will power this mission-driven Government and our Plan for Change.
We know that the skills needed for economic growth come from the community up. The Bill will pave the way for Skills England to find and fill skills gaps, ensuring that our skills and apprenticeship offer can harness the talent of young people in communities such as mine and deliver the growth that our country needs. It will allow us to build a skills system that empowers our young people, caters to their diverse talents, and once again restores skills as a national priority. Most important, it will provide the tools for young people in Hertford and Stortford to break down the barriers to opportunity, find the path that is right for them, and reach their full potential. I will proudly vote for it this evening.
Dan Aldridge (Weston-super-Mare) (Lab)
The Bill constitutes a significant step towards streamlining and strengthening our technical education and apprenticeship system, and, as someone who worked in the apprenticeships sector in different roles, I am a big fan. So many of us have seen at first hand how apprenticeships transform lives—how they build dignity in young people’s work, and help them to establish fulfilling careers. Joy at all this unlocked potential has, however, been continually frustrated by the decline in apprenticeships that we have seen over the past decade. This decline must be reversed, and that, surely, is an aim that can unite the House. It is what this Bill is about: delivering the step change in skills that we so desperately need if we are to rebuild our communities and our country.
My constituents must be able to earn, learn and thrive because of what we do in this place, not in spite of it. In towns such as Weston-super-Mare and Worle, technical education and apprenticeships are fundamental to enterprise, prosperity and economic independence for our young people. Sadly, however, towns like mine have never been able to take full advantage of those benefits, because of red tape and because of the hoops that providers and small and medium-sized enterprises have had to jump through. For too long we have seen a fragmented technical education system plagued by that red tape and by inefficiencies.
Given the huge responsibility and expectation on this Government to deliver significantly improved life chances for communities, we must break down barriers and blocks to progress everywhere, and we must be bold in the way in which we restructure the state to make it deliver. Our employers, our training providers and, most important, our apprentices deserve a system that is responsive, transparent, and aligned with the needs of our economy and our society. The young people of Weston-super-Mare are bursting with potential and ambition, but they have often been let down by needless bureaucracy and a lack of the right opportunities and resources—and the right information, advice and guidance—to enable them to develop the skills that are needed by today’s employers. Communities like mine have been left behind by successive skills strategies that have overlooked the nuances in our local economies, especially when it comes to supporting the needs of the SMEs that provide the overwhelming majority of private sector employment in towns such as mine—whether we are talking about Weston-super-Mare association football club, the Ascot Group or our beloved grand pier.
This Bill removes bureaucracy, and will make the system work better. It allows the Secretary of State to act swiftly when necessary, to respond to industry’s needs and to deliver the flexibility that is crucial in a job market where skills requirements are constantly evolving and moving on at an unprecedented pace. If we are serious about providing high-quality technical education, closing the skills gap and developing our workforce, we must structure our institutions to achieve those goals. We must also ensure that towns up and down the country that sit outside cities and, currently, outside combined authority areas—such as Weston-super-Mare—are fully considered, are not left behind in any reforms of skills and apprenticeships, and have a seat at the table when it comes to skills and growth plans. The Bill is a huge step in the right direction, and I urge all my colleagues on both sides of the House to support it.
Luke Murphy (Basingstoke) (Lab)
For too long, our skills system has not delivered due to policies that simply have not worked. Businesses have struggled to recruit the skilled workers they need, young people do not have the opportunities they deserve and investment in training has gone backwards. The previous Government talked a good game and introduced measures such as the apprenticeship levy with big promises, but in reality their approach was slow, bureaucratic and failed to deliver.
It is worth noting, as I said in my interventions on Conservative Members, that I feel their criticism of the Bill today has focused far too much on structures, not outcomes, but since they have done that, I think it is worth reiterating this point. The Standards and Testing Agency sets the statutory assessments for school pupils, and it develops professional skills tests for trainee teachers. It is an Executive agency, just as Skills England will be, and it was formally a non-departmental public body, just as IfATE was. However, the Standards and Testing Agency was set up in October 2011, so I am not sure that criticisms of structures actually hold any merit; rather, they are a distraction from the record of the Conservative party. On its watch, investment in skills fell and apprenticeship starts dropped. Critical sectors are still facing chronic skills shortages, and employers up and down the country have been left navigating a system that just does not work for them. That is why this Bill is so important. It is about fixing what is broken and making sure that our skills system actually works for workers, businesses and the wider economy.
To celebrate National Apprenticeship Week, I visited Basingstoke College of Technology to talk to its current class of carpentry and joinery apprentices, and to speak to college leaders. It was a particular privilege for me because my dad was a carpenter. He left school at 15 with no qualifications, but in the trade that he learned on the job he had skill and pride in his craft. He did not have the opportunity that many young people I met last week in Basingstoke have, with the fantastic support structures around apprentices today and more that we are going to build, as well as all the brilliant ways in which apprenticeships can help turbocharge the careers of so many talented and skilled young people.
One thing that was made very clear to me from my visit to BCOT alone is that it is massively oversubscribed for many of the apprenticeships it offers. That worries me, because it shows that too many young people are not getting access to the resources they need to learn a trade and are being left behind by more than a decade of failure to deliver. So I am pleased that this Government, through this Bill, are working harder and faster—with their very first education Bill to be introduced—to cut red tape and give people greater opportunities to start apprenticeships.
With 1,250 apprentices currently training in Basingstoke, 310 just starting and 110 having just completed their courses, the Labour Government are already making progress, but there is much more to do. I want Basingstoke to be the best place for someone to learn a trade, start a career and build a life for themselves, and I believe this Bill will help to deliver just that, laying the groundwork to establish Skills England and taking a step towards a more joined-up and responsive approach.
Skills England will replace the current fragmented system with one that properly assesses national and regional skills needs, which will be absolutely crucial if we are to meet the challenges of the future. That will ensure we are training people for the jobs that actually exist in the places where they are actually needed. This is not just about cutting red tape; it is about making sure that our approach to apprenticeships and technical education is fit for the modern economy. For years, the system has been tied up in rigid, outdated rules that make it harder to respond to the fast-changing needs of industries such as digital, green energy and advanced manufacturing. The changes in this Bill will allow for a more flexible, forward-thinking approach that actually meets the needs of employers and workers alike. A big part of that is replacing the old apprenticeship levy, which has been too restrictive, with a new growth and skills levy, which will give employers the freedom to invest in a wider range of training opportunities.
As other Members have said, we must put an end to the snobbery around skills and apprenticeships. For too long, highly skilled and essential trades have not been given the recognition they deserve. Too often they have been seen as somehow less valuable than the careers that require a university degree, despite being just as vital, just as skilled and just as valuable to our economy and society. I am proud that this Government are changing that narrative. We need these skills to drive growth, build the homes and infrastructure that we need and deliver energy security. We have the opportunity here to fix the mistakes of the past and to build something better. I urge colleagues to support the Bill, because a strong skills system is not just good for business and the economy, but good for everyone.
Mr Toby Perkins (Chesterfield) (Lab)
As co-chair of the all-party parliamentary group on apprenticeships, alongside my hon. Friend the Member for Peterborough (Andrew Pakes), I welcome the Government’s focus on this crucial aspect of skills policy. They have inherited a wildly diverse and dysfunctional skills landscape. I would not go so far as to describe what we have as a skills system, which would seem to suggest something far more considered and structured than what currently exists. This Bill is the Government’s first very small legislative step towards addressing the skills crisis that is one of our nation’s biggest barriers to growth and productivity.
It is almost impossible to have a meeting with an employer—private or public sector—without the issue of the UK’s skills deficit arising. Apprenticeships are a crucial but criminally underutilised dimension of providing Britain’s learners with an opportunity to earn while they learn, and provide our employers with skilled and qualified workers who contribute in the workplace as they develop the skills they will need. Indeed, the Government’s ambitious aspirations for growth will remain purely aspirations if the current failure in our skills approach is not rectified.
The right hon. Member for Sevenoaks (Laura Trott) suggested that the previous Conservative Government’s record on apprenticeships was world class, but I beg to differ. In discussing apprenticeships, it is worth first identifying what is wrong with the current system before considering the extent to which the Bill moves us towards resolution of those issues.
First, it is estimated that around £480 million will be left unspent in the major employers’ apprenticeship levy pot this year. FE News reported in February 2024 that SME apprenticeship starts had fallen by 49% since the introduction of the apprenticeship levy, with the cost, rigidity and bureaucracy of the current system all cited as reasons why SMEs do not take on apprentices. Level 2 and 3 apprenticeships, in particular, have suffered, with a 53% reduction since the introduction of the levy, while a growing portion of the levy pot is being spent on degree-level courses.
Degree-level apprenticeships should be a huge social mobility tool, with learners from poorer backgrounds who might be dissuaded from attending university relishing the opportunity to secure a degree while working and without accruing debt. However, recent research has shown, shockingly, that degree apprenticeships are being swept up by the wealthier students, with free school meals pupils less likely to get a degree apprenticeship than to get a place at Oxbridge.
Finally, the completion rate of apprenticeships is worryingly low, at just 54.3% of all students, compared with 97% of A-level students passing across all subjects. This is due to many causes; the Government have set about addressing one by removing the need to pass functional maths and English in order to complete an apprenticeship for under-19s. However, there also needs to be a much greater link between the completion of the apprenticeship and the fitness-to-practise requirements. Many learners do not complete the apprenticeship, but not because they have failed—they may well have secured the skills they needed to start work, and do not see the apprenticeship as being relevant once the job has been secured. There is, therefore, a great deal for the noble Baroness Smith, in the other place, to sink her teeth into.
This Bill is the Skills England Bill that dare not speak its name. By abolishing IfATE, it lays the groundwork for the creation of Skills England. There are important questions for the Government to answer, and I hope that when my hon. Friend the Minister responds to the debate, she will be able to enlighten us on a number of them. First, is she concerned that Skills England will have the necessary weight and independence to bring about the scale of change that its own report acknowledged was necessary? What will the extended scope of Skills England be, beyond the identification of standards and the potential alternative use of the Government’s new growth and skills levy?
If the Minister is not clear about what shape Skills England will take post IfATE, is she concerned about abolishing IfATE without being clear on what will replace it and where the responsibility for those functions will fall? Can she say any more about how the voice of employers will be heard when the powers are centralised with the Secretary of State? There may be huge enthusiasm for the Secretary of State taking a more streamlined approach, on occasions, to the process of creating new standards, as IfATE is seen as too cumbersome. However, does she agree that that must be the exception rather than the rule? How will she ensure that employers’ voices are still heard? Can she also confirm that the powers to approve standards will indeed pass to Skills England once that has been created, and can she say any more about the role of Skills England with regard to the growth and skills levy?
I very much welcome Baroness Smith’s announcement about removing the need for passing maths and English for students who are over 19, but has the Minister done any assessment of the merits of that for students under the age of 19? I am interested in understanding the arguments in favour of that change for over 19s that do not apply to students who are under 19.
I hugely welcome the Government’s commitment to this area of policy and the positive initial steps. I suspect that it will not be news to my hon. Friend that I think that far greater systemic change is needed if we are to deliver the more transformational change that our employers, our learners and, indeed, our nation desperately need.
Lauren Edwards (Rochester and Strood) (Lab)
I do not support the amendment but will speak in favour of the Bill.
As many have highlighted, there is a gap between the skills needed by employers and the skills held by the UK workforce. Skills shortage vacancies have been on the rise year after year, and the latest data shows that a third of all vacancies are due to skills shortages. It is holding our country back and, therefore, the system needs to change. The immediate skills gaps need to be addressed urgently, but just as pressing is the need to have a single body that considers the skills that our businesses will need 10, 20 or 30 years from now, with 1.4 million new jobs predicted by 2035 alone. Many of those new jobs will need technical green skills, digital skills and understanding of artificial intelligence.
If our Government are to achieve the changes in this country that so many people voted for—more homes, green energy and economic growth that puts money back into people’s pockets—skills are the key ingredient. The importance of apprenticeships and technical qualifications to that mission cannot be underestimated. Indeed, I was immensely proud when the Prime Minister and the Education Secretary visited MidKent College in my constituency before the election to set out their ambition to put vocational education on the same footing as academic university education.
If Skills England is to achieve its aims and help us to meet the skills challenges our country faces, it must cover all areas. I therefore welcome the Bill, which folds IfATE into Skills England to enable that integrated approach to support our labour market and economy.
As others have mentioned, the Bill will make Skills England an Executive agency of the Department for Education. I am pleased that Ministers amended the Bill in the other place to require the Secretary of State to lay a report before Parliament detailing the exercise of functions conferred on her by the Bill. I understand that will also make clear the functions that Skills England will take on and the expected effects of those functions. I likewise welcome the commitment to publishing details of the framework that will be used to hold Skills England to account for its delivery and its relationship with employers. The clarity those documents will provide is most welcome.
I will also take this opportunity briefly to welcome the reforms announced by the Government during National Apprenticeship Week. The apprenticeship levy under the former Government, well meaning though it was, was too cumbersome and restrictive for too many employers and learners. As a result, apprenticeship starts fell off a cliff, and the latest data on apprenticeship completion shows a rate of just 55% in England. I am therefore pleased that the Government have listened to employers and training providers and committed to making the new growth and skills levy, which will replace the apprenticeship levy, simpler, more flexible and employer-led. I note that Skills England will be tasked with carrying out analysis of the broader types of training that will be eligible under the new levy and I look forward to seeing the outcome of that work, which will be hugely beneficial to employers and apprentices.
A common issue with the current apprenticeship schemes in this country, as others have mentioned, is that it does not work for small and medium-sized enterprises, which do not have large human resources departments to help navigate the often complex skills landscape. Nowhere is this more apparent than in my local authority area of Medway where 90% of all businesses are SMEs. Can the Minister set out how the Government will ensure that the voices of SMEs will be heard, so that we get an apprenticeship framework that works for all types of businesses? That is particularly important if we are to drive growth across all parts of the country. I know, for instance, that there are some larger businesses looking at how they can provide practical apprenticeship support to SMEs in their supply chain, so it would be good to know whether the Government are considering how they can best incentivise approaches such as this, which will help hugely by “de-risking” apprenticeships for SMEs.
Likewise, I know that there are some amazing smaller training providers. I have a fantastic women-led one in my constituency called Umbrella Training. It is equally important that these providers’ experiences and needs are reflected in the new apprenticeship system.
There are always risks associated with change; that is unavoidable. There is obviously some concern that the transfer of IfATE to Skills England may lead to a level of disruption, so it would be helpful if the Minister provided details of the main risks identified by her Department for the transition and how they will be managed and mitigated. Doing so would help to provide assurance to those currently undertaking apprenticeships and other technical qualifications, as well as to employers. It will be particularly important to ensure that the knowledge and expertise of staff at IfATE—no doubt built up over many years—is not lost during this process.
It will also be helpful for Skills England to set out a number of other issues in due course, such as what changes may be proposed to the local skills improvement plan framework, and assurance that local areas will be able to prioritise sectors or industries that are key to driving their local economy that may not feature in the Government’s industrial strategy, as mentioned by my hon. Friend the Member for Stoke-on-Trent Central (Gareth Snell) earlier in the debate. Anything further that the Minister can say on these points at this stage would be welcome.
Finally, clause 6 removes the requirement to review technical educational qualifications at regular intervals. Instead, the Secretary of State will have the flexibility to focus on reviews based on need. It would be helpful if, in her response, the Minister outlined what steps will be taken to ensure that the quality and relevance of qualifications is maintained under the new framework.
Madam Deputy Speaker (Judith Cummins)
Before I call the next speaker, may I gently remind Members that their speeches should be no longer than five minutes?
Maya Ellis (Ribble Valley) (Lab)
Like many of my colleagues, I found that this year’s National Apprenticeship Week really brought to life the amazing work being done by businesses, organisations and students across my constituency. Listening to many of the comments from across the House about how we need to improve the culture and perception around technical education, I am minded to reflect on the experience that I had when I was in year 9 and getting quite high results in my electronics exams. I had an amazing teacher, Miss Robinson, who asked me one day whether I would consider doing a BTEC in engineering. I did not end up following that technical route, but I do wonder what our productivity would be today if, back then, our culture had promoted it more prominently, particularly for people who were very academic.
I am really excited at the prospect of the Bill laying the groundwork for the new body, Skills England, to realise our ambitious missions for opportunity and growth. One of the best commitments in this Government’s manifesto was to link immigration and skills policy in an effort to tackle the UK’s reliance on international recruitment. Indeed, during the general election campaign, I was on a panel with fellow candidates in Lancashire and explained our commitment, and a fellow candidate standing for Reform remarked that he actually really liked that idea. I will be interested to see whether his colleagues agree today.
Skills England will work closely with the Migration Advisory Committee and Industrial Strategy Council to develop an evidence-based approach to the labour market, with the committee set to monitor sectors where skill shortages are leading to increases in overseas recruitment. Importantly, this will mean that there will be a focus on sectors reliant on overseas workers to ensure that they are addressing their failure to invest in skills in the UK. To support British workers as best we can, it is promising to hear that international recruitment will not be the standard choice for employers filling skill shortages. Although migration can play a strategic role in supporting our economy, it must not be utilised as a means to address skills or training shortages in the UK over supporting British workers here. In general, we are far too familiar with pressing skills gaps negatively affecting our economy. Some 20% of our UK workforce may be significantly under-skilled for their jobs by 2030, and 1.5 million jobs in England are at risk of at least some of their tasks being automated in future.
There are businesses and organisations leading the charge in tackling this. In my previous life away from this place, I was privileged to work alongside the Lancashire skills and employment hub and the Lancashire digital skills partnership, which have long been pioneers for developing our skills landscape in this country. I would like to put on record my thanks to Michele Lawty-Jones and Kerry Harrison, who lead those services, piloting programmes such as the skills bootcamps, which they made such a success of in Lancashire that the previous Government rolled them out nationally.
Their hard work also secured the Lancashire and Cumbria institute of technology, which I was delighted to visit last week at the Preston college base in my constituency. Its principal, Simon Nixon, and many students spoke to me about the technical training that they receive in health and social care, construction, counselling and engineering. Vitally, Preston college collaborates closely with industry experts and businesses to ensure that its curriculum is up to date and reflects the needs of the economy. It is working with around 950 employers who help design the curriculum, support assessments and offer mentoring and industry placements for its IoT students. A great example of that is its work with Leyland Trucks, which reported a need for electric vehicle training for its apprentices. The college embedded a new module into its institute of technology course.
A key need that Preston college meets is providing increased adult education opportunities. The upcoming devolution deal in Lancashire will undoubtedly allow organisations to have an increased say in adult education budgets, to boost local productivity and foster the right opportunities for the north-west. However, the college is concerned about the reported 2% to 3% reduction in adult skills budgets. For colleges that have little adult work or that have struggled to deliver against contract, that might be less of a problem, but Preston college gets around 20% of its income from adult provision and has been able to over-deliver for the past few years. Any reduction applied across the board would hit Preston college’s delivery, particularly in key areas such as construction and English for speakers of other languages, and is likely to add to cost pressures already felt.
Undoubtedly, we are under severe financial pressure at the moment, but we need to be careful that short-term savings do not impact the long-term skills development that we desperately need to lead us to a better financial outlook. I welcome the Minister’s comments on that. What really blew me away at Preston college was the feel of the place. It felt inspiring, modern and a place to really grow. I heard from students who had had negative experiences elsewhere but felt truly at home there. That is what Government investment can do for the wellbeing of areas in need of growth. That is the opportunity we have with this Bill.
BAE Systems is another business operating in my constituency that offers fantastic training and skills opportunities, particularly through apprenticeships. I was moved on a recent visit, on which I was delighted to be joined by the Minister for Skills, Baroness Smith, by a young person who had tried a few times to get a role at BAE Systems. Because of the multitude of inclusive routes that BAE provides young people to end up on one of its apprenticeships, he eventually found a route that allowed his strengths and potential to shine, enabling him to secure a role.
I know from having worked in economic development in Lancashire that many local SMEs have benefited from BAE Systems over-training on its apprenticeship programmes, so that there is a supply of apprentices who can flow into the surrounding SME chain. As many Members have noted, a big challenge is how we encourage SMEs to support apprenticeships when they may need only one or two apprentices. The route that BAE went down came from targeted Government funding. I would welcome the Government’s considering something similar. BAE had the training infrastructure to provide the support much more efficiently than most SMEs would be able to do themselves. We should maximise our productivity in how we train people by making the most of the successful structures that we already have.
I am delighted that almost half of people starting apprenticeships in Ribble Valley in the past year were aged over 25, showing that people in my constituency are ambitious and committed to lifelong learning. I fully support the Bill and I cannot wait to see Skills England established, to support those looking to improve their skills by bringing about a more data-driven and joined-up skills system for all of us.
Steve Yemm (Mansfield) (Lab)
It is often said that the UK is increasingly a knowledge economy; a place where our growth and jobs come both from trading ideas and information as well as physical goods. This Government’s plan for growth clearly recognises that and plays to our strengths, which is why we are now the second most attractive country to invest in globally, according to a recent PWC report. However, it is vital that the benefits are felt equally across our country.
Areas with a proud industrial heritage like my constituency of Mansfield did not get the investment and training programmes they needed under previous Governments, and our young people have suffered the consequences of that. Many of them face an unenviable choice between staying trapped in unstable and low-quality employment or leaving their home towns to seek opportunity elsewhere in the country. My election in July was a resounding vote for change in Mansfield, and my first mission for the constituency was to fight for a growing economy with good-quality jobs for everyone. For that reason, I will be pleased to vote for the Bill, which is a major step of progress in the Government’s reform of the skills and apprenticeships system.
Apprenticeships are a critical component for high-quality jobs in Mansfield. On my visits to businesses around my constituency, I have been fortunate enough to see the great work already being done by some of our employers, working in partnership with West Notts college and Nottingham Trent University. That includes: local aerospace and nuclear electronics company Glenair, which recently took on 60 apprentices; Power Saving Solutions in Warsop; and Capita in Mansfield, which is doing particularly good work to support people with disabilities to access and sustain employment through apprenticeships. They are providing opportunities not just for school leavers but for those who are retraining and getting back into the world of work. We must not underestimate the importance of that for those individuals, the local economy or for productivity and growth nationally. We need to be doing more to encourage that type of opportunity in my constituency and across the country.
I therefore welcome the changes that we will vote on today. In particular, the transfer of powers from the old Institute for Apprenticeships and Technical Education to the new Skills England body and the reform of the apprenticeship levy are two measures that will help bring together under one roof the patchwork of schemes and organisations that currently exists and result in a more flexible system that will give our local training pioneers the support they need.
Britain needs to begin the process of reskilling workers. I draw attention to the work that Nottingham Trent is doing with West Notts to encourage adult learners, facilitating direct entry into the renewables workforce, which is another great example. I expect the impacts to be transformative for Mansfield in the long term. For that reason, I end by inviting the Minister to visit my constituency, where she will be able to see for herself the start made in upskilling our young people and adults as well as how far these changes will go in delivering secure, fulfilling, well-paid employment.
Mansfield is a place with significant latent potential. I believe that a keen-eyed collaboration between local businesses, further and higher education and the Government will support our formerly neglected area to realise the potential that we have.
Kirith Entwistle (Bolton North East) (Lab)
Too many young people are being let down by a skills and training system that does not work for them. For too long, Britain has been a country where technical education has been treated as second class, skills shortages stifled success and talent went untapped. Let us be clear: the Conservatives’ legacy has failed our young people and they cannot keep using the pandemic as an excuse. Between October 2023 and September 2024, 41% of people aged 16 to 24 were economically inactive in the north-west; nationally, that number was 11.4%. I would be really interested to hear what Conservative Members have to say to young people in the north-west.
In the last two years, skills shortages have left more than a third of UK vacancies unfilled while the number of 16 to 24-year-olds looking for work has doubled. That is over 420,000 young people wanting to work and to contribute to our economy, but, without the right training, they cannot get those jobs that need filling—jobs that they could thrive in if we had the right skills system.
Our young people are not lazy. Rather, it is the system the Conservatives left behind that has failed them. Visiting businesses in Bolton, I know that employers are desperate for skilled workers and that they recognise skills training and apprenticeships as a way forward. The young apprentices I have met in Bolton are thriving. They have security, skills and a clear path ahead, and that confidence is transforming lives and livelihoods. That is why am proud that, through this Bill, this Labour Government are establishing Skills England. Skills are not second class; they are the backbone of Britain. Skills England will break barriers that have left entire regions such as mine behind.
In Bolton, have already seen what works. Bolton Lads and Girls Club, part of the outstanding youth charity OnSide, has achieved remarkable success with its On Track initiative. This programme provides one-to-one support for young people who are not in education, employment or training, offering practical help with CV building, interview preparation and visits to businesses. But more than that, it broadens their horizons, showing them the many promising alternatives to the traditional university route and pathways that may better suit their skills and ambitions.
I recently visited Bolton college during National Apprenticeship Week. Its apprenticeship programme is another shining example of how investment in skills transforms lives. From health and early years education to engineering, digital skills and low-carbon construction, Bolton college is equipping young people with the expertise that businesses urgently need. During my visit, it was clear that the apprenticeship levy’s rigid restrictions —allowing funds to cover training but not wages—were directly preventing businesses from hiring more apprentices, so I sincerely hope that Skills England will review the levy so that more young people can earn while they learn and employers can fill those critical skills gaps.
The successes of OnSide and Bolton college provide proof of what happens when we invest in skills and opportunities. Now we must take those lessons and scale them up nationally. This Bill and Skills England are not just about educational reform; they are an economic necessity and critical for growth, because Britain cannot build, grow or lead without a workforce that is skilled for the future.
But let us also be clear about what Skills England is not. It is not another quango, it is not more red tape, and it is not just another Government agency. Skills England is a promise to young people that their future does not have to follow a single path, a promise to businesses that they will have the workforce that they need to thrive, and a promise to this country that Britain’s best days are ahead, not behind us. We need more builders, engineers, coders, carers and welders—the people who power this country—and I am proud that this Labour Government are ending the snobbery around skills and finally putting apprenticeships on an equal footing with academia. I wholeheartedly support this Bill and the opportunities that Skills England will create for my constituents, not least young people.
Amanda Martin (Portsmouth North) (Lab)
I have been proudly championing the very neglected skills and trades sector since arriving in this place because, unfortunately, one of the most toxic legacies of the previous Government is a crisis in education and training, with overwhelming barriers to opportunity for far too many young people and a real downplaying of practical vocational skills in the eyes not only of students but often of their parents and the wider community. This is in stark contrast to what we see across Europe, Australia and the USA.
Apprenticeships offer young people an alternative pathway to success and one that is not only vital for our communities but practical, hands-on and deeply connected to the industries that drive our economy. We must start by ensuring that we value all pathways and people if we are to move towards a productive, highly skilled population and achieve our growth targets. Vocational training is hugely important. However, in 2022, we had nearly 340,000 apprenticeship starts, compared with 520,000 11 years before that. Young people in my city of Portsmouth are not always able to access the well-paid jobs, despite there being many opportunities on our doorstep in the defence, maritime, space, science and trade sectors, to name a few.
We must improve and promote vocational pathways by increasing the number of apprenticeships available, improving apprenticeship completion rates, increasing financial support and increasing the flexibility of courses. This Bill establishing Skills England is the first step to achieving some of the much-need elevation of our skills sector.
Only a third of apprenticeships are completed. That is a shockingly low statistic, and it could be improved by increasing financial support. It is therefore welcome to see the 18% increase in apprenticeship rate pay from April to help make apprenticeships more attractive. It would be good to see more targeted support made available to those who have dependants and other financial responsibilities.
I welcome the Government’s commitment to look again at the levy and the length of apprenticeships. Adopting a modular structure and increasing flexibility could significantly boost competition rates by providing a more adaptable learning experience. Increasing the flexibility of apprenticeships also accommodates diverse learning needs and life circumstances, making it easier for apprentices to balance work and training alongside personal and financial commitments. I look forward to Skills England examining those issues in a new chapter for innovative thinking on apprenticeships.
In my constituency of Portsmouth North, the City of Portsmouth college is a centre of excellence for apprenticeship training, especially in the areas of gas engineering and refrigeration, air conditioning and heat pump engineering. The college plays a vital role in equipping young people with the skills they need and we need as a city and a country. The college’s gas assessment centre is now the leading provider of gas assessment training in Portsmouth, Hampshire and West Sussex, ensuring that our region remains at the forefront of those essential industries. From skilled trades, such as bricklaying, electrical engineering, carpentry and plastering, to professional careers in business administration, accounting and early years education, the range of courses reflects the diverse needs of our local workforce.
Crucially, the programmes are supported by strong partnerships with major employers, including BAE, Airbus, Queen Alexandra hospital, the NHS and of course the Royal Navy. The partnerships not only ensure that apprentices receive a direct link to potential careers, but mean that students can feel the value of training and future opportunities. The success of that approach is evident, and I am particularly proud to mention James Rowland, an apprentice in refrigeration, air conditioning and heat pump engineering who won silver in the WorldSkills UK RACHP competition in December —an incredible achievement that showcases the high calibre of training and people in my city.
We must recognise the importance of sustainability in our skills development. Earlier this year, the City of Portsmouth college facilitated access to green skills funding, enabling local plumbing and heating businesses, particularly small and medium-sized enterprises, to train apprentices in sustainability. That is precisely the kind of forward-thinking initiative that ensures our workforce remain prepared for the challenges of the future, and I am proud that my city is embracing those opportunities and looking forward to extending them with Skills England.
Peter Swallow (Bracknell) (Lab)
A Government who are ambitious about growth need to be serious about skills, because without the workforce trained to build and insulate the homes we need, to install the next generation of electric vehicle charging infrastructure, to deliver excellent health and social care and to deliver high-quality early years education, none of the Government’s missions are achievable. Better skills mean good, often well-paid jobs. Apprenticeships are a driver of social mobility, and I am determined that my constituents feel the benefit of those opportunities. Skills England will have much to do to pull together a fractured skills landscape and deliver real change, but the Bill will enable it to make a solid start.
My constituency is home to the excellent further education college Bracknell and Wokingham college, which already does so much to offer young people the chance to deliver the skills of the future in everything from social care to sustainable technologies, from pharmaceuticals to construction. The college trains over 100 electrical installation apprentices, providing them with hands-on training in state-of-the-art electrical installation workshops, which were recently renovated with more than £200,000 of investment. The facility ensures that learners gain practical experience with the latest industry-standard equipment, preparing them for high-demand roles in electrical engineering, construction and sustainable technologies.
Last week, I visited the Bracknell Forest skills hub, led by Nikki Burns, a small business owner with years of experience. The hub is proactively identifying with employers where the skills gaps are, working with potential and existing employees to address those gaps, and teaming up with education providers, including my local college, to design bespoke courses to plug the gap, all backed with support from local and national Government. Since launching in September, the skills hub has already engaged with over 40 businesses, offered tailored support for over 50 jobseekers, trained 300 employees and built two bespoke courses. That is a system working as it should, but we need more collaboration, and Skills England will have a huge role to play in identifying skills gaps at both national and local levels, and in ensuring that businesses and Government are talking to each other.
Businesses understand the value of good skills and apprenticeships for their workforce. Waitrose, whose head office is in my constituency, is just one example. It currently has 1,200 partners on live apprenticeships across 30 schemes. When I visited Waitrose last year to meet some of its apprentices, I saw the true range of opportunities available, from people training up to look after Waitrose’s delivery fleet and maintain its bodywork to apprentices studying for a T-level in finance, in partnership with Bracknell and Wokingham college. Smaller-scale schemes also offer routes into employment. Waitrose’s “Building Happier Futures” programme is designed to support care-experienced young people—including those who have been in kinship care—into work.
When I have spoken to Waitrose and other businesses in my constituency, they have told me that among the barriers they face to offering more apprenticeships are the inflexibility of the apprenticeship levy and the overly burdensome requirements needed to run and recruit to an apprenticeship. That is why the reforms to apprenticeships that the Government announced two weeks ago are so very welcome. They will provide more flexibility for employers and those who want to take up these opportunities, shorten the length of some apprenticeships, and scrap the need for adult apprentices to pass English and maths GCSE. Those are common-sense changes backed by business. To be successful, Skills England will also need to get a grip on the lengthy time that it takes to update frameworks, to ensure that apprenticeships always remain at the cutting edge.
It is also vital that opportunities be genuinely open to all, including those with additional needs. Data from the Office for National Statistics shows that only 29% of autistic people are in paid employment—that is not good enough. More targeted support is needed at local and national level to ensure that more autistic people can better access apprenticeships and other skills. Bracknell Forest council is currently looking at how to address that autism employment gap, particularly through more support into apprenticeships and other forms of work experience.
Skills England has a huge job ahead of it. Our country has too often relied on importing skills rather than nurturing our own talent, which is not progressive, and too many young people have missed out on valuable opportunities. Skills gaps are preventing us from building, growing and thriving. Skills England will be at the vanguard of the Government’s work to fix all that—no small task, but one for which the reward is great.
Catherine Atkinson (Derby North) (Lab)
I am proud to be a Derby MP and to represent a city with incredible engineering, manufacturing and technological expertise and skills. We make things in Derby. Yes, we have industrial giants such as Rolls-Royce, Alstom and Toyota, but we also have the brilliant small and medium-sized companies in their supply chains and more broadly, from a wide range of industries including rail, defence, nuclear energy, food production, aviation and digital technology.
What attracts so many businesses to Derby is our skilled workforce, but I know that even our city feels this country’s skills shortages. Under the previous Government, a third of UK job vacancies were a result of skills shortages, and the uptake of level 4 and 5 technical training in England fell to historically low levels. I warmly welcome the Bill, which lays the groundwork for the establishment of Skills England to assess and help to address our skills shortages.
Larger companies in Derby have been investing in skills and apprenticeships. The Rolls-Royce nuclear skills academy, for example, offers 200 apprenticeships a year, working with the University of Derby and Derby college. The Toyota academy provides skills not just for its own apprentices but for partner companies too. Many of our small and medium-sized employers are investing in their future by investing in skills, such as tech company Barron McCann, which I recently visited, and engineering firm Tidyco, which supports apprentices but also goes into local schools to teach young people the metalwork skills they need to make metal toolboxes. However, I have met many businesses that say that finding skilled workers is one of the greatest challenges they face and that under the last Government, they found apprenticeships too difficult and too inflexible to access.
We are fortunate in Derby to have Derby College, which is one of the largest FE colleges in the UK, and University Technical College Derby, which both work closely with employers to ensure they are providing the skills needed. One of the students told me that what he loved about learning at the UTC was that he felt he was learning something real. We have more than 3,000 apprentices in Derby, but I know that we need many, many more, and it is not just people starting out who need careers; we also need to reskill our workforce and allow those in mid-career to move into new roles and new industries.
I want to raise skills shortages in a sector close to my heart. Last week, my hon. Friend the Member for Derby South (Baggy Shanker) and I held a meeting organised for us by the Rail Forum with the rail sector about skills. I often meet people in rail who talk about the sector as Britain’s best kept secret, with people sometimes joining by accident but staying because of the range of opportunities it offers, from engineering to customer services, project management to catering, digital roles, technicians and many more.
The Rail Delivery Group identifies that rail adds some £98 billion annually to local economies and £26 billion in environmental and social benefits, but the National Skills Academy for Rail reports that a third of the rail workforce are 50 or over and estimates that some 75,000 people will leave the industry by 2030 through retirement or other forms of attrition. This year is the 200th anniversary of the modern railway, which we as a country pioneered, and its future is crucial for growth and decarbonisation. I invite the Minister to encourage Skills England to work with the National Skills Academy for Rail and Great British Railways, which will have its headquarters in Derby, to address the skills shortages we face in rail.
I am really excited that under this Government, we are going to have a proper industrial strategy, and it is essential that we have the right skills and the right infrastructure to get the people and the goods where they need to be. I echo the call from my hon. Friend the Member for Peterborough (Andrew Pakes) for Ministers to set out how Skills England will work across Departments to support our industrial strategy. I urge all Members across the House to support this Bill. I look forward to working with Skills England to ensure that we have the skills we need, that we have opportunities for all and that we keep our economy on track.
Mrs Sureena Brackenridge (Wolverhampton North East) (Lab)
I start with a fundamental point, which is that education does not always have to happen in a classroom. That is essentially what the Bill is about. Under the last Government, we saw a failure to tackle deep-rooted skills mismatches, a stubbornly high proportion of working-age people lacking essential skills and a severe shortage of higher technical training. As a result, our workforce struggled to meet the demands of a technology-driven economy, while employers faced persistent skills shortages.
This Bill is different. It abolishes the outdated Institute for Apprenticeships and Technical Education and transfers its functions to Skills England. This is a monumental shift that creates a unified, agile and responsive skills system. Can the Minister assure us that the Bill will underpin what good government is about—listening to the needs of businesses, workers and learners; that it will allow more people, young and old, to earn while they learn and develop skills that will serve them well for life; and that by improving access to these opportunities up and down the country, we will drive growth, reduce youth unemployment and improve life chances for so many people?
Antonia Bance (Tipton and Wednesbury) (Lab)
My hon. Friend is eloquent in setting out the skills challenges of the Black Country. My constituency neighbours hers, and locally 40% of jobs need level 4 skills, but only 16% of people have those skills. That is the challenge we face locally. Does she agree that Skills England should be set up and based in an area of the country that desperately needs a skills upgrade, such as the Black Country?
Mrs Brackenridge
I absolutely welcome that intervention and support it wholeheartedly. Communities such as ours have felt and seen the decline, and the Government are laser focused on reversing that to unlock talent and opportunities, and to give our residents a better chance to get their futures back.
In the past few weeks I have been honoured to meet many impressive apprentices, from those at Wolverhampton Homes, who are ensuring that residents’ council housing is safe and well maintained, to Evie and Jake at Collins Aerospace, who are working on the future of flight and defence, as well as apprentices from Jaguar Land Rover, Halfords, BMW, Enterprise Mobility and Caterpillar. We have seen the consequences of a fragmented, outdated skills system, but with the Bill we now have a bold new direction that will empower workers, support businesses and drive economic growth across our country. The Bill will support apprenticeships now and into the future, and I urge the House to support it.
Adam Thompson (Erewash) (Lab)
I am pleased to speak in support of the Bill, unamended, which I believe is crucial to delivering growth and ensuring that we have a highly trained workforce that is fit for the future. As some in the Chamber will know, my job before coming to this place was teaching degree-level apprenticeships in electro-mechanical engineering. I saw at first hand the transformative power of apprenticeships in delivering high quality education while providing real world experience.
Like all apprenticeships, degree-level apprenticeships are a tripartite partnership between apprentice, university and employer—a model that has proved highly effective. Our employers frequently reported back to us that apprentices were better prepared for their professional roles than their counterparts with traditional degrees, and degree-level apprenticeship programmes have widened participation, attracting more students from deprived backgrounds, and more students with learning differences who may have struggled within the traditional university system.
As a Member of Parliament, I weave my background in education, advanced manufacturing, and apprenticeships into everything I do in this role. I recently visited WEBS Furniture Training, which trains apprentices in bespoke furniture manufacturing—a proper, old-school, artisan skill that they can carry with them and make a career from all their lives. Long Eaton and Ilkeston, the principal towns in my constituency, have a long and proud history of furniture manufacturing and lace making respectively. Both towns are what they are today firmly as products of the industrial revolution, and although the economy has changed since the Victorian era, bespoke furniture manufacturing, done by highly skilled, irreplaceable artisans, survives.
IKEA, robots, and giant factories in China cannot replicate the product of the honed, learned artistry that remains the backbone of our British manufacturing, and to survive now in this changing world, those are the kinds of skills that Britain must foster. Such skills are also an incredible means of spurring economic growth and resilience outside London and the greater south-east, and indeed outside the great cities of the north and midlands. Ilkeston and Long Eaton are post-industrial towns in the east midlands, and if we get this right, we can protect and enhance their world-beating lace making and furniture manufacturing industries long into the future.
If we are to build the 1.5 million homes that the Government have promised in the next five years, and hopefully many more long after that, and if we are to build the new towns, railway lines, reservoirs, prisons—all the things that this country has failed to invest in for so long—we will need the electricians, carpenters, joiners, builders, welders and plumbers that apprenticeship providers are training across our country.
I would like to present a case study about my good friend and colleague, Councillor Harry Atkinson. Harry was one of the many new young councillors elected in Erewash when Labour took control of the borough council in 2023. Next year, he will be Erewash’s youngest ever mayor, aged 25. Harry is also a highly skilled engineer. Leaving school at a time when about half of his cohort were going to university, Harry instead got an apprenticeship at Ratcliffe-on-Soar power station, which looms across the skyline of my constituency. Until last autumn, it was the last operational coal-fired power station in Britain. Harry has worked at Ratcliffe for nearly a decade. He has become so skilled that he has been promoted to managerial level and he is now a key trouble-shooter when things go wrong. While Ratcliffe is now in its decommissioning phase, Harry can be assured in his future because there is ample demand for the skills he learned in his apprenticeship, both locally and across the country.
Harry’s story represents the power of an apprenticeship —the conversion of hard work into real skills, an assured career and good pay. It is those kinds of jobs that we need to create for our young people. It is on us—this Government—to build a future where this kind of apprenticeship success story is the norm, not the exception, and where an apprenticeship holds every bit as much value as a degree, is every bit as desirable for children and parents, and is every bit as much a cornerstone of our growing economy.
Alison Hume (Scarborough and Whitby) (Lab)
I warmly welcome the Bill. It clearly demonstrates the Government’s ambitious commitment to training and apprenticeships. I will concentrate on the role that Skills England will play in aligning apprenticeship opportunities with the needs of local economies.
Scarborough and Whitby are beautiful places to live and to visit, but the levels of low-paid employment are not so appealing. According to the latest ONS figures, 26% of all jobs in my constituency were paid below the real living wage. On closer examination, the figures are even more alarming. For example, some 52% of part-time jobs done by women in my constituency were paid below the real living wage, while that figure for England was 32% and for Yorkshire and Humber it was 35%. The disparity between the figures for Scarborough and Whitby and the surrounding region should give us pause when we refer to local economies, because coastal communities can differ markedly from their hinterland.
Skills England’s work in assessing local needs and opportunities must anticipate what those needs and opportunities may be in future, as well as now. Well-paid jobs and careers are the goal for young people in my constituency. It is a crucial time for the green transition that we need to reach net zero and to create the urgently needed skilled jobs in the renewables sector. Scarborough is one of closest harbours to the offshore wind farm sites in the North sea, especially Hornsea Four, making it a prime location for the transportation of equipment and personnel, as well as for service vessels.
The Government rightly see the potential of the creative industries to create growth, but we know that young people from disadvantaged backgrounds or those who do not live in metropolitan areas are often denied such opportunities. In the past year, the Stephen Joseph Theatre in Scarborough has created two full-time trainee posts, with partners at Coventry University. It will deliver a degree course in acting and has a programme for young people pursuing a career in the performing arts. I want us to build on that to provide far more opportunities for talented young people in Scarborough and Whitby to train locally in the creative industries, especially to bridge the skills gap in practical trades, such as lighting, sound and camera operation.
As in so many areas, construction trainees are urgently needed now, and will be in the future. I am excited by the Government’s support for a new development planned south of Scarborough, in Cayton, that will start as soon as possible and provide 2,500 new homes. The people building those homes and that infrastructure should be trained locally as far as possible.
I am pleased to tell the House that the construction skills village in Scarborough is already doing an incredible job of providing training for construction apprentices. It currently has 140 apprentices on its books, providing training in plastering, carpentry, bricklaying and electrical work. It has also just run its first solar panel installation course. Some 60% of its learners come from an area that is among the most deprived in the country, and a high number have additional educational needs, yet the record of its apprentices exceeds national outcomes. I ask the Minister to confirm that existing centres of excellence can be funded to provide more of what they already do so well.
In conclusion, I look forward to a future in which organisations such as the construction skills village are part of the Government’s plan to boost apprenticeships and build a better kind of local economy.
Amanda Hack (North West Leicestershire) (Lab)
I welcome the introduction of this Bill as a clear indication that we are giving apprenticeships the support and recognition they deserve. I started my professional career at a training and enterprise council—a TEC—and, once upon a time, I used to sign off training contracts for apprenticeships. It was always a pleasure to speak to young people at the start of their future, so I know at first hand how needed the Bill is for the FE sector, employers and young people, and it is incredibly exciting to have this back on the agenda.
For the last 14 years, there has simply been no strategic direction. The partnership between Jobcentre Plus, FE colleges, employers and the workforce has been slowly eroded, and it is clear that we need a reset. The one in eight young people currently not in training, education or employment need that reset, and apprenticeships are a part of that agenda. This Bill paves the way for the establishment of Skills England, giving it the tools to perform its new role and delivering on our commitment to assess and address the existing skills gap and identify where training can be utilised for new growth.
Since the apprenticeship levy was first introduced by the Conservatives in 2017, we have had a decline in the growth of training in all areas where we actually need it. The new growth and skills levy being introduced will replace the old system and include a new foundation apprenticeship that gives young people a route to careers in critical sectors, enabling them to earn a wage while developing their skills. It will also allow funding for shorter apprenticeships, giving learners and employers greater flexibility over their training than under the existing system. I have honestly lost count of the amount of employers who have asked for changes to the apprenticeship levy, and, under Labour, we will deliver.
We are clear about our strategy and that it must be cross-departmental. We are already opening homebuilding skills hubs to deliver fast-track training to apprentices so that we can meet our target of 1.5 million new homes being built. It is clear that Labour has done this before, and we will do it again. More than two decades ago, the regional development agencies understood the challenges in their regions and funded training for sectors where there were skills shortages. I was proud of the very small role I played in setting up a construction academy and providing a boost to HGV driver training in partnership with leaders in FE, the private sector and local authorities, all funded by the East Midlands Development Agency.
Stephenson College in my constituency is a key organisation locally that serves my community. It has a strong role as an anchor organisation, and we should not forget that. It has fantastic facilities for learning and has created an environment for young people to grow and thrive, but it has not been easy. Like so many FE colleges, it has been put under huge financial pressure in recent years. We have to ensure that our colleges are financially sustainable in the long term, and I welcome the recent additional funding for the sector while recognising that there is so much more to do.
There is also a role for Skills England to support constituencies in areas that do not yet have devolved powers. My constituency of North West Leicestershire does not have a devolution deal, but we have just as much potential to grow as everywhere else, and key engagement with local authorities, the chambers of commerce and local employers, as well as the FE and HE sector, will be key in delivering that growth.
Within our approach, we must ensure that we are putting a lot of thought into how regions can work together, so that if we move across boundary lines, we are still met with the same funding and unconditional support. We will drive that ambition as a Government to meet our targets—to go bigger and better than before, ensuring that our legislation has the greatest impact possible. I look forward to the continued conversations on the shaping of Skills England, enabling our young people to develop the skills they need for the future.
Neil O’Brien (Harborough, Oadby and Wigston) (Con)
I start by paying tribute to the work of Mr Speaker and the Deputy Speakers in driving up the number of apprenticeships in this House. Not only is that creating brilliant opportunities, but it is setting a brilliant example, so I pay tribute to them for the work they are doing.
We have heard some brilliant speeches today, and not just from right hon. and hon. Friends on the Conservative Benches. We have heard really important questions from the Chair of the Select Committee, the hon. Member for Dulwich and West Norwood (Helen Hayes); from the chair of the APPG, the hon. Member for Chesterfield (Mr Perkins); and from the hon. Member for Ribble Valley (Maya Ellis). We also heard a great speech from the hon. Member for St Neots and Mid Cambridgeshire (Ian Sollom). We do not always agree with the Liberal Democrats about everything, but a strength of the liberal tradition is suspicion of centralisation, which is what is in front of us today.
We have three main concerns about this Bill. First, there were good reasons why standard setting was put at arm’s length and closer to employers. As we have heard from Members across this House and in the Lords, this is centralisation, and alongside the other changes that the Government are making, it will risk directly damaging the status of these qualifications.
Secondly, the Government are doing several things that will make it less likely that businesses will take on apprentices, but rather than fixing those problems, the Government are reorganising. Skills England will be the 13th skills body in 50 years—it is yet more reorganisation, rather than a focus on the real issues, and from the Secretary of State’s comments earlier, it sounded as if there might be a further reorganisation later to boot.
Thirdly, we have real concerns that this reorganisation of the machinery of Government will lead to harmful delays in addressing some of the most important strategic issues that we face. Those concerns are borne out by the Government’s own impact assessment. As with the schools Bill, this Bill is highly centralising and does not address the real issues. There are multiple things in the skills system that we need to address, but I am slightly baffled as to why the Government are starting by creating a new agency within the DFE and abolishing IfATE.
It is worth explaining how we got to IfATE in the first place. For decades, people said that they wanted to make apprenticeships more prestigious, and part of the answer was growing higher apprenticeships. The number of people on higher apprenticeships went up from just over 3,000 in 2010 to over 273,000 last year—a huge increase—and the hon. Member for Erewash (Adam Thompson) was absolutely right to talk about how good those degree apprenticeships are. They are great routes into good jobs. Indeed, the latest data shows that the median first degree graduate earned £29,900 five years after graduation, whereas a level 4 apprentice earned more—£33,800 on average.
As well as creating and boosting those higher apprenticeships, the other big change was a shift from a frameworks-based approach to a standards-based approach, and those standards meant a shift to a higher quality. They were led by employers, they had a longer duration—at least a year—and they had more off-the-job training and rigorous final assessments. That was much needed. In 2015, an Ofsted report found that even though some apprentices had been on the job for more than a year, they were not even aware that they were on an apprenticeship, such was the problem of quality. Things were being funded that did not ultimately benefit young people, but did allow employers to pay a lower wage, which was obviously concerning.
The apprenticeship levy was designed to give employers much more ownership of the skills system, and making IfATE independent of Government was a big part of that, creating a properly employer-led system. I pay tribute to the work of IfATE—the Secretary of State did not thank it for its work, but I will do so. IfATE has created and maintained around 690 apprenticeships, supporting around 750,000 people on apprenticeships last year. It created 21 T-levels and 174 higher technical qualifications and enabled employer leaders to set a strategic direction for schools in their sector, and its website is an amazing resource.
However, we now see the Government completely reversing the direction of policy. While we lengthened apprenticeships, they have cut the length of an apprenticeship to eight months. While we grew higher apprenticeships, they are abolishing most level 7 apprenticeships, and by abolishing IfATE and bringing it in-house at the DFE, they are eroding independence and employer ownership. Why are the Government suddenly moving in a reverse direction?
Peter Swallow
Does the hon. Gentleman not see that the Government are doing so because this is precisely what businesses are calling for?
Neil O’Brien
I will come on to what businesses are saying in one second. The Government are doing two things that are going to be very bad for apprenticeship numbers. First, while apprentices are exempt from national insurance, the Budget—particularly its £25 billion increase in national insurance contributions—is cutting hiring and leading to job losses across the board. What employer groups are saying about that is pretty damning; be it the Institute of Directors, the Federation of Small Businesses or the Chartered Institute of Personnel and Development, they are warning of serious job losses as a result of the Budget. That tax increase, and the damage it is doing, is focused on exactly the type of jobs that apprentices might traditionally get, so apprenticeships are being hit by the backwash from the Budget.
Secondly, the Government are planning to move funding from apprenticeships to other areas. In opposition, Labour talked about allowing employers to spend 50% of their apprenticeship levy funds on other things. As the election drew nearer, that commitment seemed to be disappearing. On 20 November, the Minister said that the commitment to 15% was “currently being reviewed”, but just weeks later, on 9 December, the Secretary of State said that the Government were still committed to “50% flexibility for employers”. It would be interesting to hear from Ministers whether that 50% still stands now.
Given that the levy funds £2.5 billion of spending, 50% is a lot of money to potentially move out of apprenticeships. We can argue about whether that is desirable, but all things being equal, it will certainly cut funding for apprenticeships. We might also be wary that it will undercut the purposes of the levy and have high dead-weight. In fact, the Institute for Fiscal Studies has pointed out:
“In principle, this could help employers to pay for other forms of training that they and their employees would find valuable. But the history of these wider training subsidies, such as the former Train to Gain programme”—
a programme under the last Labour Government—
“suggests that the result is often that much of the spending goes on training that firms would have provided—and paid for—even without the subsidy.”
The apprenticeship levy, whatever its flaws, did at least attempt to address this problem of dead-weight and discouraged freeriding by large firms, so that firms that invested in their workers did not lose out to those that did not. Since the levy was introduced in 2017, real-terms spending on apprenticeships and work-based training has increased in real terms by about a quarter, from £2 billion to £2.5 billion.
In a written answer to me, Ministers have confirmed that the Department has a forecast for the number of apprenticeship starts, but they have also said that they will not publish it. If it was published, it would surely show that removing possibly half of the funding would lead to a substantial drop in the number of apprenticeships. Perhaps that is why we are not allowed to see it. Those same reasons are why the Government are going back to shorter apprenticeships and away from the higher level, reducing quality and cutting length to try to offset the hit to numbers from other Government policies.
There are bits of this agenda where we share the same goals. We all want to see more SMEs offering apprenticeships and more young people getting apprenticeships. Although on average twice as many people started apprenticeships each year under the last Government as under the previous Labour Government, we still wanted that to be much higher. Although we are interested in the same questions, we have quite different ideas for how we address them. Part of the Government’s answer is to abolish the highest level of apprenticeships in order to redistribute the money.
The level 7 apprenticeships that the Government are axing currently account for just 9% of apprenticeship spending, but a lot of good things will potentially be lost by abolishing them. I have been contacted by firms worried about the abolition of the solicitors apprenticeship, which is a great way into the law for people from less privileged backgrounds. One firm worried about that is Bolt Burdon Kemp, which told me:
“This will really impact social mobility into sectors like law, accountancy, and consulting. The traditional route into law is expensive and therefore without the apprenticeship scheme many would not be able to afford to do so. We also believe it will have a wider detrimental impact on the reputation of apprenticeships.”
It has taken such a lot of effort to get that route going, and it would be a huge shame to lose it.
Likewise, level 7 apprenticeships are opening up great jobs and leadership roles in the public sector, too. Some 56,000 people started apprenticeships in the public sector last year. More than half of management apprenticeships at level 7 are in health and education. In fact, they were identified as having a key role in the NHS’s own long-term workforce plan. Public services will lose out, as will ambitious apprentices.
Because level 7 apprenticeships are a small part of funding, I am worried that the Government will now go after level 6 apprenticeships, which is a much bigger share of spending. A lot of employers are worried about that, too. [Interruption.] The Secretary of State sighs as I say that. Presumably when the Minister gets to her feet, she will promise that they will not do to level 6 what they will do to level 7. It sounds like Ministers will be clear when they stand up, will they not, that they definitely will not do that to level 6 apprenticeships.
The last Government moved to make it more attractive for SMEs to take on younger people. From April, 16 to 21-year-olds have had 100% funding, rather than requiring the 5% employer contribution. We need to build on that by cutting bureaucracy and making it easier and more attractive to take on young people. Building on that would be more sensible than reorganisation, centralisation and the defunding of higher apprenticeships. This Bill abolishes IfATE and gives the Secretary of State significant powers as a result, but it says nothing at all about the new body, Skills England, which is intended to be at the centre of the skills landscape under this Government. That has been a pretty unwelcome surprise to some in industry.
In its briefing on the Bill, the Construction Industry Training Board noted that this was
“contrary to the previous characterisation of Skills England that was outlined in the…King’s Speech…and contrary to the vision for Skills England to be an independent body, established in law, with a cross-governmental role”.
The CITB makes an important point. IfATE existed to serve all employers—public and private—and across every Department. In contrast, Skills England will be a part of the DFE. The CEO of Skills England will be a job share between two civil servants who are currently running post-16 skills at the Department. I am told by former Ministers that they are good officials, but this is a recentralisation into the Department—as was pointed out by both the Chair of the Select Committee, the hon. Member for Dulwich and West Norwood), and the Liberal Democrat spokesperson, the hon. Member for St Neots and Mid Cambridgeshire.
Luke Murphy
May I ask the hon. Gentleman a question that I asked some of his colleagues earlier? In 2011 the last Government set up the Standards and Testing Agency, whose predecessor was a non-departmental public body that became an Executive agency, like IfATE. It sets statutory assessments for school pupils and develops professional skills tests for trainee teachers. The last Government did something very similar to this. Why was it okay then, but is not okay now?
Neil O’Brien
That is an important question. The hon. Gentleman is tempting me to go into the history of apprenticeship regulation in England, which dates back to 1536. I will not detain the House with all the details, but suffice it to say that that was a move from one arms-length body to another, so it was different from this. None the less, IfATE was better than either of those things, which is why we ended up there.
The very act of a further reorganisation is likely to compound the effects of the Budget and the decision to move apprenticeships money into other projects. Indeed, according to the Government’s own impact assessment, there may be a drop in apprenticeship starts while IfATE’s functions are transferred to the Secretary of State. It says:
“The transfer of function from IfATE to the DfE could potentially cause a temporary slowdown in the growth rate of new apprenticeships and technical education courses due to potential delays in the approvals process resulting from the bill.”
It also says:
“This may disproportionately impact disadvantaged learners, who rely more heavily on these pathways for career advancement.”
So there you have it, Madam Deputy Speaker. The Government are moving money out of apprenticeships, and the Budget will also hit numbers, but instead of focused action to boost numbers for young people, the Government’s response has been to reduce quality, cut length and axe level 7 apprenticeships to try to prop up overall numbers. Now we have yet another reorganisation —one that takes us away from an independent, employer-led system, and one that will risk, in the Government’s own words, cutting apprenticeship numbers and hitting the most disadvantaged. Oh dear, oh dear, oh dear.
The Parliamentary Under-Secretary of State for Education (Janet Daby)
It is a pleasure to close the debate. I am grateful for the contributions of Members on both sides of the House; we have heard some excellent speeches. I welcome the points and questions that have been raised, and I will go through as many as time allows.
As my right hon. Friend the Secretary of State said in her opening speech, skills are essential to our missions to drive economic growth and create opportunity. To achieve that, we need a skills system that is fit for the future. In every region, it should provide training options that lead to skilled work and give businesses the skilled workers whom they need in order to grow. I was pleased to hear from Members about the apprenticeships and vocational courses in their constituencies which have led to jobs, but most Members have also referred to significant challenges in our skills system.
Acute skills shortages are a particular issue in some areas. Skills supply does not match demand, and there is not enough business investment in skills. That, however, is what this Government inherited from the previous Conservative Government. We urgently need larger volumes of higher-quality training that meets employer needs, particularly in key sectors. For example, as we have already heard, there is an urgent need to build more homes, but a third of construction employers report finding suitable skilled staff a key challenge.
My hon. Friend the Member for Tipton and Wednesbury (Antonia Bance) mentioned levels 4 and 5 qualifications. In the UK, about 10% of adults hold them as their highest qualifications, as opposed to—shockingly—20% in Germany and 34% in Canada. We must, and this Government will, do better. Skills England, which has been delivering in shadow form since last year, is our new national body for meeting skills needs. It will simplify the skills system now and in the future, combining new functions with improvements in existing ones, within one dynamic body. In its first report, “Driving growth, widening opportunities”, Skills England highlighted the critical skills gaps that currently face the country. Across the UK, more than 2.5 million roles—almost one in 10—are in critical demand. The last Conservative Government seemed content with this, but putting it simply, this Government are not. As my hon. Friend the Member for Basingstoke (Luke Murphy) stated so well, this is about what the Bill will achieve for everyone: it is about growth.
Skills England’s initial assessment of the skills challenges in the economy, together with the “Invest 2035” Green Paper published last year and ahead of the forthcoming industrial strategy, set out how the in-demand occupations of today are also expected to grow in the future. As noted by the Secretary of State, these growth-driving sectors include the life sciences, clean energy, digital and technology, and creative industries. By addressing our skills needs, the UK has a real chance of being a world leader in these fields, but we must do this now: we must not delay. We must build a skills system that looks ahead, and we must anticipate for the future. As was put so eloquently by my hon. Friends the Members for Rochester and Strood (Lauren Edwards) and for Scarborough and Whitby (Alison Hume), Skills England will enable employers to fill our current skills gaps and the likely ones of the future. Excellently, they recognise the need to anticipate our future skills needs.
To respond directly to the points raised by the right hon. Member for East Hampshire (Damian Hinds) and the hon. Member for St Neots and Mid Cambridgeshire (Ian Sollom), users of apprenticeships, employers, providers and assessment organisations regularly complain about the time it takes to update standards and assessment plans. It will remain the default position that a group of people will prepare standards and assessment plans, but removing the requirement to use a group to prepare standards in every instance will speed up the process and reduce administrative burdens. In line with IfATE’s current processes, all new standards and those that have undergone significant revision following review will, prior to being approved, be published online to give interested parties an opportunity to comment. It will only be in the minority of cases where simple and straightforward changes are proposed that these will not be published online for comment prior to approval. However, there will still be mechanisms for users of the system to challenge where a standard or assessment plan is not working in practice and needs revising.
Sir John Hayes
I appreciate what the hon. Lady is saying about that, but will she in quick order set out how that will be directed either by the Secretary of State or by Skills England? We need to know not just the detail at the point of publication, but the structural needs in advance of that, so how will that be set out? Will it be set out in guidance—statutory guidance perhaps?
Janet Daby
The right hon. Member is absolutely right that these things need to be set out, and they will be set out. This Bill is about transferring the role of IfATE to the Secretary of State and enabling the delivery of Skills England.
Skills England will work with key partners, including employers, training providers, mayoral strategic authorities and unions to form a national picture of where skills gaps exist and how they can be addressed. It will ensure employers have the skills they need to drive economic growth while creating opportunities across the country and building a highly skilled workforce.
During this debate, I have heard Members question the need to close IfATE and establish Skills England. This Government have committed to delivering for the skills sector, and we are listening to the needs of employers. This can be seen in our reformed growth and skills offer, but we must go further to address the fragmentation of our skills system so that we can close the most persistent skills gaps. The Bill paves the way for the full establishment of Skills England by enabling the new body to take on and build out from IfATE’s work to shape apprenticeships and technical qualifications to meet the needs of employers and the economy as a whole.
The scale and urgency of the skills challenge that we face means we are setting Skills England up to have a broader strategic purpose than IfATE, including but stretching beyond the work previously undertaken by IfATE. Skills England will, for instance, provide an ongoing authoritative assessment of local, regional and national skills needs, which is absolutely needed. It will combine the best statistical data with insights from employers and other key stakeholders, and will use these insights to ensure the design of technical education and apprenticeships reflects the skill needs that have been identified, so that we can truly build a workforce fit for the future.
Labour markets and the skills required to increase productivity and economic growth vary considerably by region, and we have already heard from many Members about the different skills that are needed in their regions. Skills England will therefore also have a strong regional footprint, working closely with local skills systems so that they can tap into the comprehensive suite of training offers that it will build across the country. Skills England will also ensure that skills sit at the heart of joined-up decision making across Government. It will work closely with the Industrial Strategy Council, so that we have the skilled workforce needed to deliver a clear, long-term plan for the future economy, and with the Migration Advisory Committee, because growing the domestic skills pipeline will reduce our reliance on overseas workers.
While Skills England will have a broad and ambitious strategic agreement, it will not be able to deliver the scale of change that we need without its taking on IfATE’s important work, so the transfer of functions through the Bill is vital. The Bill does not, however, simply aim to transfer functions. It also includes a number of targeted changes intended to allow the system for designing and approving technical qualifications and apprenticeships to become more agile and responsive; we have been listening to employers, who have told us this is crucial if we are to work together to plug the skills gaps at the pace required. The Bill will provide greater flexibility when designing standards and apprenticeships plans and make processes easier to engage with, allowing experts to invest their time and expertise at the right point.
There is so much I would like to say in response to the many points that Members have made, and I apologise now for not being able to respond to the many excellent points and comments. However, there are a few very pivotal points that I do need to mention.
The Bill was amended in the House of Lords to delay its commencement by a year. It is disappointing that peers voted for a delay to the full establishment of Skills England, despite many Members of the other place supporting its aims. This Government are clear that employers need a fully functional Skills England now—as I have said, they cannot wait. The skills gaps in our economy are holding back growth and opportunity, and we need this Bill to give Skills England the key tools to tackle those gaps without delay. I cannot say that enough.
Skills England is in shadow form, and has already engaged widely, with more than 700 different partners representing thousands of individual organisations through roundtables, cross-section webinars and network events, including the Confederation of British Industry, the Federation of Small Businesses and the Institute of Directors, as well as a range of employers and representative bodies from priority sectors, including digital, life sciences, green, construction and healthcare, and we will continue to listen to the voices of experts to shape what we do.
Question put, That the amendment be made.
Institute for Apprenticeships and Technical Education (Transfer of Functions etc) Bill [ Lords ] (First sitting)
Thursday 13th March 2025
(1 week, 4 days ago)
Public Bill CommitteesInstitute for Apprenticeships and Technical Education (Transfer of Functions etc) Bill [HL] 2024-26 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 13 March 2025 - (13 Mar 2025)
The Committee divided: - Ayes: 11 / Noes: 4 - Question accordingly agreed to.
The Chair
Welcome, everybody. I call the Minister to move the resolution of the Programming Sub-Committee.
The Parliamentary Under-Secretary of State for Education (Janet Daby)
It is a pleasure to serve under your chairmanship, Sir Christopher. I welcome the opportunity to further discuss and scrutinise the Bill following Second Reading, and I thank the Committee for its time and expertise. I am also grateful to Members of the other place, who have already provided considerable scrutiny while also supporting the Bill.
I rise to speak to clauses 1 to 3. Clause 1 introduces schedule 1, which transfers statutory functions from the Institute for Apprenticeships—
The Chair
Order. I think the hon. Lady has got the wrong end of the stick on this one. She just needs to move the resolution of the Programming Sub-Committee.
Ordered,
That—
(1) the Committee shall (in addition to its first meeting at 11.30 am on Thursday 13 March meet—
(a) at 2.00 pm on Thursday 13 March;
(b) at 11.30 am and 2.00 pm on Thursday 20 March;
(2) the proceedings shall be taken in the following order: Clause 1; Schedule 1; Clause 2; Schedule 2; Clause 3; Schedule 3; Clauses 4 to 14; new Clauses; new Schedules; remaining proceedings on the Bill;
(3) the proceedings shall (so far as not previously concluded) be brought to a conclusion at 5.00 pm on Thursday 20 March. — (Janet Daby.)
Resolved,
That, subject to the discretion of the Chair, any written evidence received by the Committee shall be reported to the House for publication.—(Janet Daby.)
Clause 1
Transfer of functions
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Schedule 1.
Clause 2 stand part.
Schedule 2.
Clause 3 stand part.
Schedule 3.
Janet Daby
I will begin again, Sir Christopher. I rise to speak to clauses 1 to 3. Clause 1 introduces schedule 1, which transfers statutory functions from the Institute for Apprenticeships and Technical Education to the Secretary of State and makes minor and consequential amendments. It is our intention that functions currently delivered by IfATE will largely be exercised by Skills England on behalf of the Secretary of State. The functions are in chapter A1 of the Apprenticeships, Skills, Children and Learning Act 2009, and include the duty to map occupational groups, and the duty to approve and publish standards and apprenticeship assessment plans.
Under the terms of the 2009 Act, the Secretary of State will also have the power to delegate functions to other persons. We intend to establish Skills England as an executive agency of the Department for Education. Despite IfATE’s success in embedding employees in the processes for designing technical qualifications and apprenticeships, the wider skills system remains too fragmented and complex. It is insufficiently responsive to the present and future skill needs of the economy, and we have major skill gaps. Employers report that more than one third of UK vacancies in 2022 were due to skills shortages. To address this, and unlock the potential for skills that drive growth and widen opportunity, we will create a new and more ambitious organisation: Skills England.
Clause 1 will enable Skills England to take on and deliver functions currently delivered by IfATE, giving it some of the key tools it needs to tackle these challenges as part of its wider remit. Skills England will provide an authoritative assessment of skills needed in the economy, and use those data and insights to develop and maintain a comprehensive suite of technical qualifications and apprenticeships, as a result of some of the functions transferred by the Bill. It will then work with key stakeholders to ensure that the identified needs for available training are reflected in regions across the country. That will ensure that the system becomes more responsive and better able to quickly and efficiently supply the skills most needed by the economy.
Skills England will work closely with the Industrial Strategy Council, so that we have the skilled workforce needed to deliver a clear, long-term plan for the future economy. It will also work with the Migration Advisory Committee to ensure that growing the domestic skills pipeline reduces our reliance on overseas workers.
To summarise, clause 1 will enable Skills England to take on and deliver the functions currently held by IfATE, where appropriate, alongside other functions. That will address the fragmentation that is holding the skills system back and restricting improved workforce development and productivity gains. Without this clause, it would not be possible to transfer functions from IfATE to the Secretary of State so that they can be exercised broadly by Skills England in the service of employers, learners and others.
Clause 2 introduces schedule 2, which makes provision for the transfer of IfATE’s property, rights and liabilities to the Secretary of State. It will ensure the functional continuity of property, rights and liabilities, including the many contracts that are critical to the operation of the skills system. The transfer scheme that the clause makes possible will mitigate the risk of delay and a lack of service continuity, which is essential for a smooth transfer from IfATE to the Secretary of State and the subsequent creation of Skills England.
Without this clause, the co-ordination of the transfer of IfATE’s property, rights and liabilities to the Secretary of State would be less straightforward and more burdensome. Without a transfer scheme, each matter, including contracts and licences, would have to be considered and transferred individually, which would be more time-consuming and could have an impact on value for money, the continuity of services and the delivery of skills products. That could mean the reduction in the quality of service received by employers, learners and others with an interest in the skills system. The transfer scheme that the clause makes possible will mitigate the risk of delay and a lack of service continuity, creating the minimum possible disruption for system users.
Clause 3 abolishes IfATE and introduces schedule 3, which makes consequential amendments to existing primary legislation that are required as a consequence of abolishing IfATE. It essentially closes IfATE so that the Government can establish and empower Skills England. Skills England will build on IfATE’s work with employers in all sectors to shape technical education and apprenticeships.
Josh Dean (Hertford and Stortford) (Lab)
I recently had the pleasure of visiting some fantastic apprentices at Hertford Regional college’s campus in Ware. I know that the college will be excited about the prospect of Skills England. Can the Minister say more about how soon we can expect it to come forward?
Janet Daby
It sounds as though that college is doing excellent work. The Bill is part of the process of delivering Skills England. It is our intention, following the Bill’s Royal Assent, to make commencement regulations promptly to bring into force the provisions that transfer IfATE’s functions, as well as the powers to transfer its assets and liabilities to the Secretary of State and to deliver those services through Skills England.
Skills England will be very different from IfATE, as I have mentioned. It will bring IfATE’s functions together with others that are not currently in statute to identify skills needs and to work with regional partners to ensure that they are being met. By bringing together those different functions in a single organisation, we can make a more responsive skills system that acts fast on the evidence to address skills gaps, uninterrupted by organisational boundaries, administrative hurdles and imperfect data flows. That would not be possible if the key functions were split across Skills England and IfATE. Clauses 1 to 3 are essential to achieving that transformation, so I commend them to the Committee.
Neil O’Brien (Harborough, Oadby and Wigston) (Con)
It is a pleasure to serve under your chairmanship, Sir Christopher. The Opposition have three main concerns about the Bill, which are all relevant to this group. First, there were good reasons why standards setting was put at arm’s length and closer to employers. As we heard from Members on both sides of the House of Lords, this Bill is a centralisation. Alongside other changes that the Government are making, it risks directly damaging the status of the qualifications.
Secondly, the Government are doing several things that will make it less likely that businesses will take on apprenticeships. Rather than fixing the problems, the Government are reorganising. Skills England will be the 13th skills body in 50 years. The Government are abolishing IfATE, which was created only seven years ago. This is yet more reorganisation, rather than focusing on the real issues. IfATE will now follow a long list of predecessors, including the Manpower Services Commission, the Learning and Skills Council, the Skills Funding Agency, skills advisory panels, the UK Commission for Employment and Skills, training and enterprise councils and more, into the lengthening history of skills acronyms. We have a bad history of institutional churn in this country generally, and particularly in this area.
Thirdly, we have real concerns that this reorganisation of the machinery of government will lead to harmful delays in addressing some of the most important strategic issues that we face. Those concerns are in fact borne out by the Government’s impact assessment.
As the Minister just said, the first three clauses are all about abolishing IfATE. Clause 1 introduces schedule 1, which transfers functions from IfATE to the Secretary of State. It does not transfer them to Skills England, but to the Secretary of State.
The words “Secretary of State” appear, amazingly, 90 times in this short Bill. That is one reason why the Bill has come in for criticism from a number of different sides of politics. Instead of setting up Skills England as an independent body, which is what a lot of people—including many in the Labour party—assumed it would be, it is going to be part of the Department for Education.
In its briefing on the Bill, the Construction Industry Training Board noted that this was
“contrary to the previous characterisation of Skills England that was outlined in the…King’s Speech…and contrary to the vision for Skills England to be an independent body, established in law, with a cross-governmental role”.
Obviously, those two points are linked. If it is going to be cross-government, it is easier for it to be independent of the DFE rather than part of one Department.
The CITB makes an important point. IfATE existed to serve all employers, both public and private, and across every Department. In contrast, Skills England will be firmly part of the DFE. The chief executive officer of Skills England will be a job share between the two civil servants who currently run the post-16 skills bit of the DFE.
Likewise, the Institute of the Motor Industry, representing employers and professionals across the UK automotive sector, says in its evidence to this Committee that it has
“significant concerns about the abolition of the Institute for Apprenticeships and Technical Education…and the transfer of its functions to Skills England.”
Pam Cox (Colchester) (Lab)
Did the shadow Minister note the submission from the Association of Colleges, which offered very strong support for the Bill? As it represents a large proportion of providers of this education, its views should be taken into account.
Neil O’Brien
I saw that, and I wonder whether the hon. Lady noted in that submission the organisation’s pretty strong criticisms of the Government’s decision to cut adult skills spending. That is an example of what I was just talking about. Instead of addressing the real issues, we have reorganisation. I was not going to bring up the document from the Association of Colleges, but I am glad that the hon. Lady has.
Let me return to the Institute of the Motor Industry. Its evidence states:
“Without dedicated attention to the unique challenges faced by the automotive industry, Skills England risks creating further disconnection between education policy and real-world workforce demands.”
It talks about the risk of losing employer-led standards:
“Transitioning to Skills England could introduce additional confusion and delays, undermining apprenticeship approvals and disrupting funding streams critical to maintaining employer confidence.”
In fairness, that is what the Government’s impact assessment said. It stated that the issues around transition are likely to lead to delays, which will have a real-world impact. I will come back to that point in a second.
The criticisms from different people in industry of the move away from independence and employer ownership —those two things go hand in hand—take us back to the origin of IfATE. It was set up alongside the introduction of the apprenticeship levy. It was, in a sense, a quid pro quo. There was employers’ money and, in return, employer ownership of the system, for the first time. The move away from this being something independent and properly arm’s length to it being run by a bit of the DFE, by just some DFE officials, is a move away from that sense of employer ownership.
Melanie Onn (Great Grimsby and Cleethorpes) (Lab)
Will the shadow Minister explain why he does not think that the rationalisation of unelected and largely unaccountable arm’s length bodies—quangos—is a bad thing? Why should the Secretary of State not be the person who is held accountable for post-16 skills education?
Neil O’Brien
That is a perfectly good question. Of course, this Government are a big fan of quangos and have, I think, created—net—28 more quangos since it came to office. Some can be the right thing to do, so I am not necessarily criticising the Government for that. In this case—I cannot remember if the hon. Lady was around when we were creating the apprenticeship levy—the reason why it was made independent of Government and an employer-owned body was that we were, for the first time, creating something that is quite common in the rest of Europe, the apprenticeship levy.
The levy is intended to stop—to be blunt—good employers who invest in their workforce and the skills of their workforce being taken advantage of by those who do not. That meant doing something controversial, which in effect was requiring them to pay into the levy—in many ways, it is like a tax—but they could get their money back through the apprenticeship levy. However, in return for that big change, requiring larger employers to put their own money into skills, we wanted to ensure that the whole thing would be truly employer-led, rather than politician-led.
Of course, current Ministers are brilliant—this is not any criticism of them—but we legislate for the ages, not for whoever is currently the Minister. Ministers change, and sometimes there have been instances—I am horrified to tell the Committee—where politicians have foibles or funny ideas of their own, which are not necessarily reflected in the wishes of employers and what they want from the skills system. That was why we put the system more into the hands of employers.
Peter Swallow (Bracknell) (Lab)
It is interesting to hear the shadow Minister speak about business’s view of the apprenticeship levy. When I speak to businesses in my constituency, they tell me that the apprenticeship levy was not flexible enough and was not working, and it was preventing them giving opportunities to young people. That is exactly why so many businesses have welcomed the changes that this Government are bringing in. Has he not heard the exact same from businesses in his constituency?
Neil O’Brien
Even before we set up the levy, I always heard employers expressing concerns about the idea of a levy of any kind. In many instances, they would prefer just to keep their money and not spend it on skills at all. The fact that they were not spending on skills is the reason why we brought in a levy—it was quite a contentious thing, and quite a centrist thing in lots of ways.
As the Institute for Fiscal Studies pointed out in its recent paper on the Government’s proposals to change the levy, the danger, if we start to make these things too open-ended, is that we completely collapse the concept. It notes what happened with things before, such as Train to Gain, where what we end up with is pure dead-weight—we get zero additionality.
To reduce the idea to absurdity, if we were to say that employers can spend the apprenticeship levy on whatever they like, there is no point in having a levy, is there? That is because we would have just gone around in a circle. There is no point taking money off people and saying, “You can do whatever you want.” The whole point of containing that expenditure to apprenticeships was, as well as wanting to prioritise apprenticeships, to avoid the very real problems that the Institute for Fiscal Studies pointed out with previous schemes such as Train to Gain, where we ended up with huge amounts of dead-weight. It did not work, and the amount of money spent by employers on such things went down.
I am absolutely ready to hear criticisms of, and improvements to, the idea of the levy. In a moment, I will talk about some of the challenges that will be thrown up by the Government’s proposals to move large amounts of money out of apprenticeships through the reforms to the levy.
Leigh Ingham (Stafford) (Lab)
On the shadow Minister’s previous point, I spoke to businesses in my constituency of Stafford, Eccleshall and the villages, and one pointed out to me that 90 pieces of paperwork were required, with multiple contract stages, just to get, for example, a plumber apprentice to take part in any scheme. The college in my constituency, which is outstanding and has a 72% completion rate compared with the national average of 58%, is doing strong work, but the businesses, in particular the small and medium-sized enterprises, are saying that the apprenticeship levy does not work for them and has excluded them from skills development. I am interested to hear what the shadow Minister has to say about that.
Neil O’Brien
As I said, I am absolutely ready to hear detailed thoughts and to have the detailed discussion about how one improves all these different things, and I am pleased that the hon. Lady’s local college seems to be highly successful in delivering these things. Every year, on average, twice as many people started apprenticeships under the last Government as started them under the previous Labour Government, so we did get a lot more of them, as well as higher quality. I do not know what the 90 bits of paper are, but I am absolutely ready to hear and to talk about ways we could improve those matters.
On the point about SMEs that the hon. Lady raised, that is exactly why last March we moved to 100% funding for SMEs—to make things easier for them. I agree with the hon. Lady: there is a lot to do to make it easier for SMEs to participate in the levy-led system. I am just not convinced that any of the concerns she raises will be addressed by shutting down IfATE or setting up Skills England. She might hope that they will be—I hope that they will be—but I do not see anything in this legislation that will fix any of the problems that she complains about. Obviously, we hope that collectively we will solve the problems in the system.
There are quite a lot of concerns—including concerns among those on the Labour Benches, which I will come on to—about the transfer of IfATE’s powers to the Secretary of State compromising the independence with which apprenticeships and wider technical qualifications, such as T-levels, are accredited, and diluting the voice of employers. As numerous people have pointed out, we would not and do not accept that on the academic side, where we have both independent exam boards and Ofqual creating and monitoring specifications and exams. This is yet another example of our treating the academic side—the route that most of us went down—differently from the technical side. As the Labour peer Lord Knight has pointed out:
“The problem that some of us have with the Bill is that it feels like the second half is missing. The second half is the establishment of Skills England as a statutory body…Being subsumed within a division of the Department for Education…is problematic. The Minister needs to reflect on it.”—[Official Report, House of Lords, 21 November 2024; Vol. 841, c. GC87.]
As another Labour peer, Baroness Blower, pointed out,
“the appropriate move from where we are would be to a statutory body”.—[Official Report, House of Lords, 21 November 2024; Vol. 841, c. GC90.]
Stephen Evans, chief executive of the Learning and Work Institute, said that giving Skills England legislative backing
“would…cement the body’s independence.”
In contrast, the Bill originally introduced by the Government did not even include the words “Skills England”. The very act of a further reorganisation, even if one thinks it is a good idea, is likely to further compound the effects of the Budget and the decision to move apprenticeships money to other things. I will just rehearse that for a moment. Obviously, the Budget saw a £40 billion overall tax increase and the largest part of that is a £25 billion increase in national insurance, which is squarely targeted on part-time and lower-income workers. It hits exactly the tier of the workforce that is typically the apprenticeship kind of tier. Of course, apprenticeships do not require payment of national insurance, but when we see lots of employers, as we do now, shedding jobs in that tier, that is inevitably bad for the number of apprenticeships.
That is compounded by what the Government want to do in terms of taking money out of apprenticeships. There has been some confusion about that, because safely before the election, Labour in opposition had the idea that it was going to let employers take 50% of the money from the levy and spend it on things that were not apprenticeships. Then, as the election drew nearer, that idea seemed to disappear and did not feature any more. Lots of people assumed that it was gone. Then I assumed it was definitely gone, because I asked the current Minister—whom we have here today—in Westminster Hall whether the 50% target still stood, and the Minister said that the policy was under review. Then a couple of weeks later, in oral questions, when we asked the Secretary of State whether the 50% target still stood, she said that it did, even though lots of people in industry think that that is not the plan.
This whole question about how much of the money will be taken out of apprenticeships and put elsewhere is shrouded in confusion. I would love it—I would be delighted—if the Minister could talk about that point today and tell us whether it is still 50%. It is a binary thing: it either is 50% or is not. I would love the Minister to tell us the answer one way or another. At the moment, the levy raises about £2 billion a year. If the Government take 50% of that money out, they might think that is a good thing. They might say, “Yes, we want employers to be able to spend a billion quid on other stuff.” But if they take all that money out of apprenticeships, one thing they will definitely have is fewer apprenticeships. They could say it is fine—
Melanie Onn
The shadow Minister references the number of apprentices, and he pointed to the previous Government’s record on that, but, in my constituency, apprenticeship starts fell year on year under the previous Government. Lots of young people have been completely disenfranchised, having had their apprenticeships end early without getting to completion. There has to be some kind of change so that we are not failing young people. There has to be a review of the levy, which employers have said is far too restrictive. The hon. Member’s points do not actually bear scrutiny when we get down to constituency-level data, do they?
Neil O’Brien
I give the hon. Lady the national-level data—I think I did already—because I do not have in my head the data for every constituency. At the national level, we had twice as many apprenticeship starts every year under the last Conservative Government as we did under the previous Labour Government. The hon. Lady might say, “That’s not enough; it should’ve been even higher,” and I would perhaps even agree with her. I would have liked the number to be even higher as well.
The hon. Lady said that numbers fell. What we saw was that, even though the overall number of starts was twice as high under the Conservatives as it had been under Labour, absolutely, the shift from frameworks to standards and to a higher quality of apprenticeships did reduce numbers. It did not take them down to where they had been under Labour, but it did reduce them. However, that shift was essential, and I do not think that anyone wants to go back from standards to frameworks.
There was a damning 2015 Ofsted report, which the hon. Lady will remember well, that found that quite a lot of people—a lot of learners—had been on an apprenticeship for more than a year and did not even know they were on an apprenticeship.
Neil O’Brien
Such was the low level of quality—such was the total absence of any training or meaningful content in the apprenticeship. What we had was an abuse. What we had was employers being able to pay below the national minimum wage—below the rates even for young people—and, at the same time, not providing meaningful training and what all of us want, which is proper, high-quality apprenticeships. I do not think the hon. Lady is really going to argue for a move back to those previous frameworks—
Neil O’Brien
But, as she rises to her feet, perhaps she will tell me if she does want to go backwards to frameworks.
Melanie Onn
That is not what I am rising to my feet to say. It is interesting that the shadow Minister points out the differential rates of pay between young people and older people, because we have just had the Employment Rights Bill going through Parliament, during which Conservative Members were absolutely incandescent that we might seek to raise the pay of young people, equalise it and recognise fair rates of pay regardless of age.
I am interested in that 2015 report. The hon. Gentleman said “a lot of people”; was that the actual wording in the report?
Neil O’Brien
I am not sure what the question is. Is the hon. Lady asking whether what I said about the 2015 report was correct?
Melanie Onn
I was asking the shadow Minister to clarify the numbers. He refers to the report and makes a sweeping generalisation about it, so what exactly were the numbers? What is the accuracy of the report?
Neil O’Brien
Just to reassure the lady, the numbers are correct. Although I do not encourage people to use mobile phones in Committee, Sir Christopher, the hon. Lady can google her way to the 2015 Ofsted report. She can read it for herself and be chilled, as I was, by its description of the pre-reform system and the low level of quality that was being provided in it.
The hon. Lady tempts us off the topic to talk about wider issues. On those different rates, I would say that most systems around the world, including ours, have different rates of minimum wage by age. That is about making the so-called “bite” of the minimum wage similar for different ages. Different groups of people at different ages have different productivity levels and different typical rates of pay. Therefore, if a Government do not want to create large rates of youth unemployment—and most systems around the OECD do not—they end up with different minimum wage rates for different ages. That system has been there since the start; it was there when Labour created these things, and it was still there when we turned it into the national living wage, so none of that is novel.
I will say one thing about the Employment Rights Bill, since it has been brought up. We do not have the skills Minister herself with us, because, of course, she is in the other place, but I do just note that the Government have created a situation in which a lot of universities are facing industrial action—because the national insurance increase has wiped out all of the increases in fees, and one broken promise on fees is now being used to pay for another broken promise on tax. The Employment Rights Bill makes it easier to take industrial action. I think that a lot of universities, as employers, are dreading the impact. Having addressed that point, I will get back on topic.
Neil O’Brien
Sure. A shadow form exists at the moment, but that does not change the longer-term point that if we do not give it its own legislative basis and make it independent of the Department, all the criticisms and concerns about the dilution of the employer voice and so on still stand. I am not having a go at those who are setting up Skills England.
Leigh Ingham
On the point about independence, the chair has been announced as Phil Smith, the former CEO of Cisco. Surely that in itself is a sign of significant independence.
Neil O’Brien
A fantastic person—all good. It is like having NEDs—non-executive directors—in a Department; it is good to have external people. As I noted, however, the CEO of the organisation is literally not a civil servant; it is a job-share civil servant. They are people who currently work in the Department doing post-16 skills, so I am not sure about idea that this is an independent body. Can the hon. Lady tell me where Skills England is based? Physically, where is it located? Perhaps the Minister will tell us. Is it in Sanctuary Buildings, by any chance? Sanctuary Buildings is none other than the headquarters of the DFE. Is this, in fact a desk in an open plan office that is part of the DFE?
The Government can bring in good people. It is good to bring in good people. The DFE has some good NEDs, by the way, but that is not the same as having an independent institution. That is why Lord Blunkett and other Labour peers are warning that the Government are making a mistake. Those are their words, not ours. Lord Blunkett has a lot more experience of those things than me.
All I would say to the Minister and to hon. Members on the Government Benches is, instead of overturning what peers have put into the Bill, this might be one of those times when it is more sensible to listen to people on their own side, people with some serious grey hairs and a lot of experience, people in their own party, who are advising them that they are making a mistake here. Instead of overturning what they have done, the Government should allow it to stand. The criticisms being made by people in the industry and people with experience in education and skills are serious. I hope that the Government will listen to them, rather than simply overturning what they have done and ignoring them.
Damian Hinds (East Hampshire) (Con)
We are debating clauses 1 to 3 stand part and schedules 1 to 3. The Minister, in her opening remarks, talked a lot about the intention to create Skills England, how it will operate and so on. That is not in clauses 1 to 3.
The Bill is all about transferring functions from the independent Institute for Apprenticeships and Technical Education to the Secretary of State in central Government. Colleagues may have seen the, as ever, helpful and pithy descriptive notes from the House of Commons Library. Clause 1 introduces schedule 1, which will transfer statutory functions from the institute to the Secretary of State. Clause 2 introduces schedule 2, which will allow the Secretary of State to make schemes for the transfer of property rights and liabilities from the institute. Clause 3 will abolish the institute and introduce a schedule 3, which makes consequential amendments to the 2009 Act and other Acts.
The history of this sector is the history of many changes in the machinery of government and the creation of many quangos. There have been 12 in the past five decades. This one will be lucky—no doubt—13. My hon. Friend the shadow Minister helped us with some of the history and some of those previous bodies. I have a slightly longer list.
We have had industrial training boards, the Manpower Services Commission, the Training Commission, and the training and enterprise councils known as TECs—but those TECs were not the same as another type of TEC, the Technical Education Council, which existed alongside the Business Education Council or BEC in the 1970s. The two would merge in the 1980s to give us, of course, BTEC, the Business and Technology Education Council. There were national training organisations, the Learning and Skills Council, sector skills councils, the UK Commission for Employment and Skills, the Skills Funding Agency or SFA, which would later become the ESFA, or Education and Skills Funding Agency, and most recently LSIPs—local skills improvement partnerships—and IfATE.
Pam Cox
The right hon. Member has missed one: the Statute of Artificers 1563, known as the Statute of Apprenticeships. We have been trying to do this for many centuries, and it is only right that each generation tries to do so. We are still not getting it right for our young people, hence the need for speed.
Damian Hinds
I am very grateful; who knows where this conversation might take us? Last time I looked, 1563 was not in the past five decades. The hon. Lady says that every generation should try to reform, and that may well be true. I do not know how many generations she calculates there are in a 50-year period, but as sure as anything, there are not 12, let alone 13.
Those many bodies over the years have been mirrored by a true panoply of qualifications and awards: traditional apprenticeships; modern apprenticeships; the YOP or youth opportunities programme; the YTS, or youth training scheme; City and Guilds; the TVEI, or training and vocational education initiative; the NCVQ or National Council for Vocational Qualifications; NVQs or national vocational qualifications, which are still in use; GNVQs, or general national vocational qualifications, which became BTECs and diplomas; the 14-to-19 diplomas, which are not quite the same thing as the Tomlinson diplomas; Skills for Life; traineeships; and all together between 100 and 200 recognised awards and organisations, excluding those that do only end-point assessments.
Peter Swallow
I simply wish to say to the right hon. Member that it was not too long ago when he was on the Government Benches and presiding over the very system in question. As he has helpfully elucidated for everyone, we are dealing with an incredibly fractured landscape, which is precisely the challenge that the Bill proposes to address. In all frankness, given the fractured nature of the landscape, which he eloquently identified, should he not support any attempt to bring it together?
Damian Hinds
Yes, but the Bill does not do that, and if the hon. Member thinks it does, I am afraid he is mistaken.
Some years ago, I used to sit on the Government Benches and was a Minister at the Department for Education, as the hon. Member said, and on many occasions I have had a close interest in these areas. There was a cross-party coming together in the early to mid-2010s, which resulted in the Sainsbury report. The noble Lord Sainsbury, as the hon. Member may know, is a Labour peer who devoted a great deal of his life and the work of his foundation, the Gatsby Foundation, to trying to improve something that in this country, historically and by international comparison, we have not been tremendously good at: technical and vocational education and training. The Independent Panel on Technical Education, which convened in 2015 to 2016, took a broad overview of exactly the fractured landscape that the hon. Member talked about. By the way, I have missed out the page of my notes where I was going to go through all the qualifications that someone could do at level 3 to age 18, which is a similarly sized list.
Laurence Turner (Birmingham Northfield) (Lab)
Will the right hon. Member give way?
Damian Hinds
I had probably better go on a little, but I would love to hear from the hon. Gentleman. I promise that the Committee will have a chance so to do.
Unsurprisingly, that panel found that the technical and vocational education and training landscape in this country was over-complex. The example of plumbing was given, with 33 different qualifications that a young person could decide to do. Moreover, the panel found that the system was not providing for the skills that the country needed and that the technical and vocational education and training had become “divorced” from the occupations that they were there to serve, with no or weak requirements to meet employers’ actual needs.
The Sainsbury report, published in April 2016, set out a blueprint for what would be a major upgrade and simplification of technical and vocational education and training, to address the productivity gap in this country—we talk about this sometimes; there has been a productivity gap every year I have been alive, and I am in my mid-50s today—and indeed a major social justice gap. Although it was a blueprint, it was also a redprint because it had cross-party support. It called for a fundamental shift in how we did technical and vocational education, with coherent routeways from level 2 through to level 5 along 15 different sector routes, three of which would be apprenticeship only, through to 35 different pathways mapped as specific occupations—specific needs of the economy and companies.
Neil O’Brien
I, too, pay tribute to the work of Lord Sainsbury. Those points, which were inserted into what were then called the Sainsbury routes, drew on the experience of the best technical systems in the world, particularly those in Germany and Switzerland. What characterises those systems is the unbelievable level of employer ownership and the incredible constancy of the organisations, which are external to Government, that run them. The Bundesinstitut für Berufsbildung has been around for, I think, 50 or 60 years. Are those not the characteristics of a good system—employer ownership and independence—and the things that Lord Sainsbury was talking about?
Damian Hinds
My hon. Friend is right. If we take the full etymology, we can go back a lot further, to the creation of guilds centuries ago, which evolved into the modern system.
Laurence Turner
I have enjoyed the right hon. Gentleman’s recapitulation of the history. In the last Parliament, I attended meetings of the UK shipbuilding skills taskforce, which was sponsored by the Department for Education, and considered these matters in respect of that industry quite closely. Employers and employee representatives were unanimous that the GCSE entry standard requirements should be removed in that industry, but the inclusion of that recommendation was blocked because, we were given to understand, it would not be supported by DFE Ministers. Does he share my concern that the independence of the current system is more claimed than real?
Damian Hinds
No, I do not, but there is a definition of what an apprenticeship is. There are perfectly good reasons to have all manner of training courses, including entry-level ones, that do important things, but they are not apprenticeships. The shadow Minister talked about Germany. In our country, the minimum length of an apprenticeship is shorter than the typical length of one in Germany. The time off the job—the time in college—is shorter. As I say, we can add on other things, but we cannot stretch the definition of what an apprenticeship is indefinitely. I may come back to that later.
On the face of it, this is a simple Bill—it has 13 pages and is on a simple subject—so it should be fairly easy for a Committee to dispatch in a couple of Thursdays. I have no doubt that Government Members will take the opportunity to make speeches on this subject, and I am sure those will be rather good. Members may make what could be described as great speeches and what they say will be largely unarguable. I fancy that we may hear the word “mission” from them, perhaps even more than once. They will talk about the importance of skills in our economy, investing in the next generation, valuing every single person for what they can do and the value of joining-up across Government Departments.
That will all be correct, but it will be largely beside the point. To turn a great speech that includes those things into a truly outstanding speech in this Committee, they would have to explain why taking away the independence of the body overseeing the system that upholds the standards would make those entirely laudable and shared goals more likely to come about. I know of no reason to believe that it will, but I am keen to hear from anybody who has such an idea.
In the Labour manifesto, there were some very laudable aims. It said that it wanted to empower
“local communities to develop the skills people need”
and to
“put employers at the heart of our skills system.”
Labour said that it would
“establish Skills England to bring together business, training providers and unions with national and local government”,
in order to deliver its industrial strategy. The manifesto said:
“Skills England will formally work with the Migration Advisory Committee to make sure training in England accounts for the overall needs of the labour market”.
It mentioned a commitment to
“devolving adult skills funding to Combined Authorities…alongside a greater role in supporting people into work”,
and Labour will
“transform Further Education colleges into specialist Technical Excellence Colleges.”
There are different ways that those aims could be achieved, and I would argue that there are better ways. The Government could, for example, keep IfATE as the standard-setting and upholding body, and create a new, small body, possibly inside the Treasury, to assess the needs of the economy and allocate funds accordingly. They could also strengthen the powers of local skills improvement partnerships, working closely with devolved authorities and mayors, to ensure that what is delivered at a local level in individual colleges matches what the local economy needs. I would have probably chosen that architecture, but plenty of other variations are possible.
To be clear, the Bill does not do any of those things. It simply abolishes the independent body that convenes employers to set the standards and then uphold them, and it hands those powers to the Secretary of State. It does nothing else—I say that, but it is not totally clear to me what it does to Ofqual, and we may debate that when we get to clause 8. I suggest that the Bill presents two fundamental questions: first, about independence; and secondly, about who should set the expectations and standards in any given sector of work—should it be the employers in that sector or somebody else? We will come to that debate when we reach clauses 4 and 5.
Ultimately, this is about whether we believe enough in the phrase “parity of esteem” to do the things necessary to achieve it. As I said in the House the other day, parity of esteem is not something one can just “assert”, and it cannot be legislated for. We cannot pass a law to give something greater esteem. Esteem is in the eye of the esteemer and it can only be earned. In part, that comes from knowing that the qualifications of the technical and vocational strand in our country are just as rigorous and have the same integrity as the academic strand.
By the way, independence is not totally a left/right issue. There are plenty of people on the right of politics who share the Minister’s desire not to have independent bodies. There is a general “anti the quangos” strand, and I have some sympathy for that. By the way, a debate is going on at the moment about removing the independence of the national health service and bringing it into the Department of Health and Social Care. That can be argued both ways. On the one hand, it will be harder for the NHS to do some things, particularly what they call reconfigurations, when they become subject to political pressure. On the other hand, it can be argued that there should of course be direct control from a democratically elected Government over the most important institution in our country. However, I think an independent body for upholding standards in education is in a separate bracket.
Neil O’Brien
Does my right hon. Friend agree that the context in which this is happening matters? We are talking about getting rid of a prestigious and independent institution, and at the same time, T-levels will not do what Lord Sainsbury hoped they will do. They were supposed to replace the existing standards but, in fact, they will be just another thing in the alphabet soup. We are seeing apprenticeships being made shorter again, and we are going back towards shelf-stacking types of apprenticeships. The mood music is already pretty ominous, and that is against the backdrop of Ministers getting more power by taking this back into the Department and abolishing independence. Does my right hon. Friend agree that that is an issue?
Damian Hinds
I do. Funnily enough, my hon. Friend anticipates my next paragraph. Any Government rightly want more young people to pass their GCSEs, get good A-levels, or start and complete apprenticeships. The truth is that the quickest way to have more people getting any qualification is to make it a bit easier, and there is plenty of history of that, I am afraid. The entry requirements or length could be reduced, the pass mark could be made lower, or the credits that count towards the outcome could be changed. One of the reasons we have independent bodies setting standards is so that that temptation cannot be succumbed to, and crucially, everybody can see that it cannot, so they can have total faith in the standards being upheld.
Essentially, the rationale for why there is an independent Institute for Apprenticeships and Technical Education is the same one as why the Chancellor sets fiscal rules, or why Gordon Brown made the Bank of England independent: it is specifically for the Government to keep themselves within certain tram lines. We do this for academic qualifications. I have asked the Minister this question I think three times, and I will ask it again today: it would not be acceptable, would it, to say, “I’m going to put the pass mark, standards and specification for A-levels in the hands of a Government Minister”? If that is not acceptable for A-levels, how can it possibly be acceptable for T-levels? And we still say that we believe in parity of esteem.
In the good, possibly great, speeches that we will hear from Government Members, one other thing they might say—in fact, they have already started to say it; they pre-empted me—is that apprenticeship starts have fallen since the peak, but that under this Government, they will rise. Well, of course they will rise. If we look at the time series over the last decade of apprenticeship starts, we are not comparing apples with apples; we are comparing apples with oranges, because we had major changes in what counts as an apprenticeship, with the move from frameworks to standards as well as the minimum duration and minimum time off the job.
In discussing the overall numbers, we should also mention that the falls were in the intermediate level and that there were rises in the advanced level, and especially in higher-level apprenticeships. If the specification is reduced, of course that will increase the numbers. To be fair, the Government are not waiting for Skills England. They have already been doing this, by bringing the minimum length down from 12 months to eight months. They have also announced what they are calling foundation apprenticeships, and I hope the Minister will be able to tell us exactly what those are—they sound a bit like traineeships, but let us hear it—and crucially, whether they will count towards the number of apprenticeships that are being undertaken in the country.
Janet Daby
Hon. Members have given me much to think about and feed back. I remind Opposition Members that one in eight young people are not in education, employment or training, a third of vacancies in our country are due to a lack of skills, and many people are in jobs for which they are underqualified. Young people need to know that when they undertake skills training, there will be a guaranteed job at the end of the process. We are committed to ensuring growth in this country. We want to get young people into work to ensure that they succeed and progress in life. We absolutely know that what we are trying to achieve with Skills England is the right thing to do.
I will attempt to respond to the various points that hon. Members have made. There have been previous arm’s length bodies with functions partially linked to those intended for Skills England, but none provides a direct comparison, given Skills England’s distinct remit.
Establishing Skills England is a manifesto commitment, and will support the delivery of the Government’s missions. As an Executive agency, Skills England will be subject to clear requirements on governance, transparency and accountability, and Ministers will be accountable to Parliament. The Government have put in the Bill a duty for the Secretary of State to publish information about matters they will take into account in deciding whether to prepare a standard or apprenticeship assessment plan without a group of persons. This new power will therefore be subject to the same level of transparency as existing powers being transferred from IfATE.
An Executive agency is a widely used model of arm’s length body. It has a clearly defined status and must be established and governed in line with official Cabinet Office guidance. Executive agencies are appropriate for the delivery of specialised functions separate from a primarily policy-focused Department, but within a policy and resources framework set by the Department, and for delivery of services to other parts of central Government using specialist skills. The Executive agency model will give Skills England the independence to focus on the delivery of its functions at arm’s length from the Department for Education, while ensuring sufficient proximity to the Department that Skills England can quickly and efficiently inform decisions on skills policy and delivery.
Skills England is operating in shadow form and is working extremely closely with IfATE, which also currently has a base in Sanctuary Buildings—the Department for Education. Following a vigorous recruitment process, in line with civil service guidance, we have appointed Skills England’s chief executive officers. Tessa Griffiths and Sarah Maclean have been appointed co-CEOs. They are senior leaders with long-standing experience in the public sector. Tessa and Sarah have been leading Skills England while it has been in shadow form, since last summer. They have driven the rapid progress that has seen Skills England start to deliver its important work ahead of the passing of this Bill. We do not believe in delay; we want to get on with establishing Skills England as an arm’s length body.
Skills England’s being run by CEOs at civil service director level is consistent with the approach taken by IfATE and other Executive agencies of the Department for Education. It is really important that I make those points so that there is a clear understanding of what is happening.
We considered, but ultimately decided against, expanding or otherwise retaining IfATE. We want to set Skills England up to build on IfATE’s work with employers, and to shape technical education and apprenticeships, but it will be very different from IfATE. It will have a much broader remit and will be more ambitious. It will bring IfATE’s functions together with others that are not currently in statute. We need to go further and do more to identify skills needs and work with regional partners to ensure they are being met. By bringing together those different functions into a single organisation, we will really be able to accelerate change. That will help the skills system to be more responsive to emerging skills needs. We need a flexible system that acts fast on the best available evidence to address the skills gaps that threaten to hold back our country. I am sure none of us wants to do that.
IfATE has worked with employers to design over 700 occupational standards. Skills England will build on that important work and retain a strong role for employers. But the skills system in England has matured since IfATE was created in 2017, and the scale and urgency of the skills challenge that we face means we need a new approach.
The Government are committed to delivering skills for the sector, as I have already pointed out, and we are listening to the needs of employers. This can be seen in our reform, growth and skills offer. Skills England will build on the work of IfATE and employers will continue to play a critical role in the design and delivery of apprenticeships and technical education. Indeed, that is already happening. The changes being brought about through the Bill have been designed in response to employer feedback and will simply mean that employers are not overburdened by repetitive and drawn-out processes, which we know can lead to disengagement.
I welcome the written submissions from the Institute of the Motor Industry, the Association of Colleges, JTL Training and the Royal Society of Chemistry. I thank those organisations for contributing to this important debate. I completely agree with the Institute of the Motor Industry’s view that Skills England must maintain an “employer-led ethos” with “strong industry collaboration”. That is why Skills England is already working, and will continue to work, closely with industry, while also building a clear picture of the challenges facing employers, including regional skills gaps, in order to support growth in our skills sector.
It is pleasing to hear the Association of Colleges, which represents more than 98% of further education colleges, express strong support for plans to establish Skills England and recognise the critical role that Skills England will play in the Government’s broader post-16 education and skills agenda.
Although many Members of the other place support the aims of Skills England, it is disappointing that peers voted for an amendment that would delay its full establishment. The Government are clear that employers need a fully formed Skills England now; they cannot wait. That is why we have tabled amendment 1 to overturn that amendment made in the other place.
Gaps in our economy are holding back growth and opportunity. We need the Bill to give Skills England the key tools that it needs to tackle them now, and not in 12 months’ time. Skills England has been operating in shadow form since July. Due to extensive transition planning over several months, it is ready to move fast to deliver the functions made possible by the Bill. Delay simply is not an option.
With regard to whether employers can spend up to 50% of levy funds on non-apprenticeship training, I do not want to put a target or limit on flexibility. It will be led by what employers need and driven by Skills England analysis. We have already introduced flexibility through new foundation and shorter apprenticeships, and we will continue to work with employers to understand where future flexibility will be most helpful.
Neil O’Brien
The Minister says she does not want to set a limit, but there was a commitment from the Secretary of State that employers would be able to spend up to 50% of their funds on non-apprenticeships. That was a Labour commitment. If I understand her, it will no longer be up to 50%; it will be some other number. Or is she saying that it will be up to 100%? Which of those things is she saying?
Janet Daby
What I am saying is that we have already introduced flexibility and we will continue to work with employers to understand where future flexibility will be most helpful. That will be worked through with Skills England. I am happy to get the hon. Member some further information.
The Chair
Order. The Minister is not giving way. As the shadow Minister knows, in Committee people may speak more than once in a debate, so if he wishes to come back after the Minister has sat down, he is free to do so.
Janet Daby
We are not centralising regulation of technical qualifications akin to IfATE. Skills England will operate independently of the Department for Education and will continue to work with IfATE to develop occupational standards. Skills England will have a new and transformative role in the skills system and will work closely with, but not duplicate, the role of the Department or regulators such as Ofqual or the Office for Students.
Neil O’Brien
We have mysteries wrapped in mysteries here. As well as the lack of clarity about the future caused by the Bill, even in this debate on one group of clauses, we have had an extraordinary statement by the Minister. Businesses would like to know how, in just a few months’ time—next year—they will be able to spend a couple of billion pounds of their own money. This is employers’ money. Labour have oscillated between, “We will let 50% of this go on other things”, “No, we will not” and, since being in government, “We are reviewing this. This is not our policy any more.” On the Floor of the House, the Secretary of State has been saying, “No, it is absolutely our policy—50%. That is the number.” That is what she has told the House. Now we have another position—a fifth—on the spending of this money: “No, that is not the number any more.”
Employers will be jaw-to-the-floor agog at what is going on in the DFE. What is the policy? This is billions of pounds of employers’ money, in a difficult economic situation, being spent imminently, and yet the DFE cannot say—the Minister literally would not take a further question on it—what the policy is. What an extraordinary situation. What a shameful situation. Unbelievable.
We have been saying that, down the line, there might be some things to worry about in this transfer of power away from an employer-led and independent system towards the tender mercies of the DFE, but employers have got something to worry about right now. The Government do not seem to know what their own policies are. On that basis, I really do want to press clause 1 to a vote, and we will vote against it.
Janet Daby
We have been listening to businesses and employers, and they are absolutely telling us that they want greater flexibility in our apprenticeship systems and in how employers can spend their levy funds. We are reforming apprenticeships to deliver greater flexibility for learners and employers, including through shorter and foundation apprenticeships. I have attempted to answer the shadow Minister’s questions, but he is not satisfied. I have also offered to ensure that we get some more information. I want to make one more point: we are not putting a target or limit on flexibility; this will be led by what employers need.
Neil O’Brien
I am not asking for a target; that is a complete mischaracterisation. I am asking for clarity on the Government’s own policy. The Government said that that they would allow employers to take up to 50% of the money and spend it on things that were not apprenticeships. Either that is still the policy or it is no longer the policy. Which of those two things is the truth?
Janet Daby
I will get back to the hon. Gentleman. I will make sure there is a written response.
Neil O’Brien
Absolutely unreal.
Question put, That the clause stand part of the Bill.
Institute for Apprenticeships and Technical Education (Transfer of Functions etc) Bill [ Lords ] (Third sitting)
Thursday 20th March 2025
(4 days, 16 hours ago)
Public Bill CommitteesInstitute for Apprenticeships and Technical Education (Transfer of Functions etc) Bill [HL] 2024-26 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 20 March 2025 - (20 Mar 2025)
The Committee divided: - Ayes: 11 / Noes: 4 - Question accordingly agreed to.
The Committee divided: - Ayes: 4 / Noes: 11 - Question accordingly negatived.
The Chair
With this it will be convenient to discuss the following:
Government amendment 1.
Clause 12 stand part.
Government amendment 2.
Clause 14 stand part.
The Parliamentary Under-Secretary of State for Education (Janet Daby)
Government amendment 1 lets the Secretary of State make regulations that determine the date, or dates, when clauses 1 to 8 and schedules 1 to 3 come into force. The other provisions of the Bill in clauses 9 to 14 come into force on the day on which the Bill is passed.
This amendment seeks to overturn the amendment passed in the other place that places a 12-month delay between the creation of Skills England and commencement of key parts of the Bill, including the clauses that transfer functions from the Institute for Apprenticeships and Technical Education to be exercised by Skills England. It was hugely disappointing that, despite broad support for the urgent need for reform, peers in the other place voted for that delay. Reform is exactly what the Bill and Skills England will deliver. After 14 long years of complacency and neglect, this Government are driving high standards, and we have a plan for change. A delay will benefit no one.
Skills England is already operating in shadow form and, once the Bill is passed, it stands ready to become a fully operational arm’s length body. The leadership is already in place, with the chair, the vice-chair, the chief executive officer, the deputy CEO and a full team of senior civil servants already working as one. The work is well under way; Skills England reported on skill gaps in September last year. It is connecting decision making across regional and national Government, as well as working closely with training providers, trade unions and employers. It is collaborating with businesses to develop sector plans for the forthcoming industrial strategy.
Skills England is working with closely with the Migration Advisory Committee to access skills needs to identify shortages in occupations. That will help to identify and grow our domestic skills pipeline over time, which will reduce our reliance on overseas workers. We need to build our own skilled workforce, and Skills England is moving ahead. The Bill gives it some of its key tools, but there is no case for delay, and I commend Government amendment 1 to the Committee.
Government amendment 2 would remove clause 14(2) of the Bill. It is normal procedure for Bills originating in the House of Lords to require the insertion of a standard privilege amendment such as subsection (2). This formally recognises the privilege of this House to control charges on people and public funds. Therefore, in accordance with normal procedure, we now remove the privilege amendment so that any such charge is imposed by this House, rather than the House of Lords. I commend Government amendment 2 to the Committee.
Clause 11 sets out the territorial extent of the provisions contained within the Bill. This is a standard clause for all legislation. Clauses 1 to 7, clause 9 and schedule 2 extend to England and Wales. Clause 8 extends to England, Wales and Northern Ireland. Clauses 10 to 14 and schedules 1 and 3 extend to England and Wales, Scotland and Northern Ireland.
I have already touched upon clause 12 as part of Government amendment 1, which states when the provisions of the Bill will come into effect. Clause 12 should stand part of the Bill, as amended by Government amendment 1. Furthermore, as is standard practice, clause 14 gives the Bill a short title by which it may be known once it becomes an Act. The short title given is the
“Institute for Apprenticeships and Technical Education (Transfer of Functions etc) Act 2025.”
I commend clauses 11, 12 and 14 to the Committee.
Neil O’Brien (Harborough, Oadby and Wigston) (Con)
Clause 11 talks about the geographical extent of the Bill, which it says is England and Wales. This is a very small point, but it is worth noting that the Bill and decisions under it will actually affect other parts of the UK as well, not least because they affect degree apprenticeships and higher education. For example, the University of Strathclyde is a leading provider of graduate apprenticeships and degree apprenticeships across Scotland and England; I will return to that overlap later on.
On a more substantive note, Government amendment 1 seeks to overturn the one-year pause inserted in the House of Lords. Why did peers insert that? Why was there so much debate, and such wariness about this Bill? First, because there were good reasons that standard setting was put at arm’s length and closer to employers. We heard from all parts of the House of Lords that this Bill is a centralisation and, alongside other changes the Government are making, it will risk directly damaging the status of these qualifications.
Secondly, the Government are doing several things that will make it less likely that businesses will take on apprenticeships, starting with the Budget. Rather than fixing those problems, the Government are reorganising. Skills England will be the 13th skills body in 50 years. It is abolishing IfATE, which was created only seven years ago—yet more reorganisation, rather than a focus on the real issues.
Thirdly, peers had—and we have—real concerns that the reorganisation of the machinery of Government will lead to harmful delays in addressing some of the most important strategic issues we face. Those concerns are borne out by the Government’s impact assessment, which states that there may be a drop in apprenticeship starts while IfATE’s functions are transferred to the Secretary of State. It says:
“The transfer of function from IfATE to the DfE could potentially cause a temporary slowdown in the growth rate of new apprenticeships and technical education courses due to potential delays in the approvals process resulting from the Bill…This may disproportionately impact disadvantaged learners, who rely more heavily on these pathways for career advancement.”
Fourthly, peers inserted the delay because of concerns about what will happen as DFE tries to absorb all the staff of IfATE. Lord Blunkett, who was one of the most interesting speakers in the Lords, said:
“My fear…is that given the number of people currently transferable from IfATE, full- and part-time, which nudges 200…there is a real danger that IfATE will swamp Skills England at birth.
When two years ago I led on the learning and skills document that was a precursor to Skills England…we never envisaged that an agency inside government would have to take on the assurance and accreditation of the relevant sector standards.”
He continued:
“A Skills England that has no legislative backing and no parliamentary references but is down merely to the changing face of ministerial and departmental appointments is in danger of losing its birthright before it has got off the ground.” —[Official Report, House of Lords, 21 November 2024; Vol. 841, c. GC98.]
That argument is somewhat different from the others. His argument, as somebody sympathetic to the creation of a body like Skills England, albeit outside the Department, is that it needs time to establish its own culture and balance, and to grow and develop some roots, before the IfATE elephant steps into the Skills England rowing boat.
Since we last met as a Committee, we have received further written evidence from the Skills Federation, which brings together 18 employer-led sector skills bodies, representing more than 150,000 employers. They add their voices to the concerns. The organisation warns:
“Transfer of IfATE functions risks disruption and a focus on operational rather than strategic priorities…The movement of functions and the people that carry them out will always be challenging. It is important that the transfer is planned effectively, and the time taken to think through the implications for IfATE staff, but also the impact on the system. Compromises will no doubt have to be made to balance the need for pace with the requirement to retain operational continuity.
However, there is a key risk that transfer of functions from IfATE will become the key focus for the set-up of Skills England and less attention (and potentially resources) placed on achieving the overarching aims.”
That is a direct reinforcement of the argument that Lord Blunkett made in the Lords. It is very sensible advice to take our time.
In contrast to employers’ groups, Ministers say there is no time to wait. In truth, there is no great obstacle to the Department doing all the things it might want to do, and establishing Skills England a little bit more before that big transfer of staff, but Ministers want to take this one-year pause out of the Bill with their Government amendment 1. They would be wiser to listen to the grey-haired people in their own party, such as Lord Blunkett, but it seems they are not minded to do that.
This group also includes Government amendment 2 to remove the Lords’ privilege amendment. For the benefit of those following the proceedings, as the Minister said, the Lords automatically insert these amendments when there is legislation starting in the Lords that involves levies and taxpayers’ money, to avoid formal infringement of the Commons’ privileges over those things.
There is nothing unusual about that, but the privilege amendment is put in as a deliberate reminder that the Bill has a significant impact on spending of both levy and taxpayers’ money. The sums involved here are non-trivial—it is billions of pounds of spending, governed by IfATE today and by the Department for Education in future. The ongoing chronic uncertainty about the Government’s plans to allow employers to take money out of apprenticeships is not just damaging for business—it is damaging on a significant scale.
In the last Bill Committee sitting, the Minister promised to write to me to set out the Government’s position on the 50% flexibility. I hope she will tell me today when that letter is likely to appear, because businesses are starting to raise the alarm ever louder.
Since the Committee last met, even more businesses have come out with criticisms. Jane Gratton, the deputy director of public policy at the British Chambers of Commerce has said that the lack of clarity about the future of the growth and skills levy was creating “fresh uncertainty among businesses.” She said that some employers had told the BCC that they had put training plans on hold until they heard what alternatives would be funded in future. She called on the Government to lay out a clear timeline for reform and said that threats to cut the levy before it had even been established are “worrying and destabilising”.
Likewise, Simon Ashworth, the deputy chief executive and director of policy at the Association of Employment and Learning Providers, said:
“there’s little room for manoeuvre—scrapping level 7 apprenticeships won’t yield savings for years…Until the programme budget more closely matches the levy take, it’s imperative funding priorities are aimed at maintaining the sustainability of apprenticeship standards, rather than introducing further non-apprenticeship flexibilities.”
That is a very important warning.
This is all happening against a backdrop where other types of technical education covered by IfATE are shrinking too. I am old enough to remember when Labour MPs spent years saying that adult skills spending was not generous enough—yet yesterday we learned that the DFE is to cut adult skills budgets by 6%. Amazingly, that came out at the same time as the welfare reform Green Paper, which overshadowed it and mentioned training 18 times. In the Chamber the other day, the Secretary of State for Work and Pensions made an argument—a good argument—that it is better to get people into training rather than parking them on benefits; yet elsewhere, at the very same moment, DFE Ministers were cutting the training budget.
Skills England was supposed to bring a joined-up approach to policymaking. There is not much sign of that here. Instead, it will reinforce the concerns of those who want technical education to be more independent and employer-led.
I ask the Minister a specific question on the funding that IfATE regulates. Yesterday, we got an announcement on schools funding. The Association of School and College Leaders and the Confederation of School Trusts are warning that the funding only covers part of the costs of the national insurance increase and is leaving schools with a funding gap ranging from 10% to 35%—but at least schools are getting the funding announcement before the start of the financial year, albeit only days before.
Technical education is not so lucky. Colleges and 16-19 institutions will have to wait. They will be told their allocations this May and will be paid in September, even though they will have to start making the increased tax payments from the start of the new financial year in just a few days’ time. As James Kewin, deputy chief executive of the Sixth Form Colleges’ Association points out:
“16 to 19 funding is uncertain at the best of times, but this year colleges are also waiting for their post-16 budget grant allocations (scheduled for May) and a decision on the 10 per cent T-level uplift…This is all very late in the day”.
He is right. Once again, technical education is being treated as the poor relation.
We already know that independent training providers and specialist colleges will not get any compensation, and it is unclear how much of next month’s national insurance rise will be covered by the grant. Can the Minister stand up and reassure the sector today that all the additional costs, including those for indirectly employed staff, will be covered by the grant? Or will they, like schools, find that they have been short-changed?
I will not labour the point, but many people, including employer groups and very experienced people on the Labour side, have warned about the rush to bring these powers and functions into the Department and the effect that that will have on the Government’s own plans for Skills England. Ministers would be sensible to listen.
Damian Hinds (East Hampshire) (Con)
It is good to see you in the Chair, Ms Furniss, for these proceedings today. I rise to speak against Government amendment 1 and, by extension, in defence of clause 12 as it came out of the other place.
To be clear, we want Skills England to succeed, and clause 12 as drafted will help Skills England to succeed. It is a breathing space clause, allowing Skills England to operate for a year before it has to absorb IfATE’s functions. The Minister just described it as disappointing that this clause was inserted by the other place. I do not think it is disappointing at all. It is a very good thing. It is not anti-Skills England. It is a pro-Skills England clause to give the new body its best chance of success.
My hon. Friend the Member for Harborough, Oadby and Wigston and I did not confer in preparing our notes for this morning, but I, like him, was very struck by what another former Sheffield MP, the noble Lord Blunkett, said in the other place. He noted that with the transfer of functions, close to 200 people would transfer from IfATE over to Skills England and, in his words,
“there is a real danger that IfATE will swamp Skills England at birth.”—[Official Report, House of Lords, 21 November 2024; Vol. 841, c. GC98.]
Skills England has a really important function to perform. Were it to be hampered in that because of operational complexities and difficulties, that would be deeply regrettable. To understand why this is significant, it is important to note that Skills England and IfATE have different shapes—as an analogy, think about different depths and breadths. Skills England will, at least initially, prioritise 10 sectors: the eight sectors identified as growth-driving sectors in the industrial strategy. Added to those we have construction and health and care, which are also essential to some of the Government’s other missions—so eight plus two makes 10. It will develop skills needs assessments for each of those 10 priority sectors to feed into the industrial strategy planning process.
In the noble Baroness Smith’s very helpful letter to peers on 18 March, she says that work is under way on the eight growth-driving sectors identified in the industrial strategy. That begs the question: what about the other two? They are also identified as being crucial to Government missions. Another question: what about the other volume sectors of employment in the economy? I worked in hospitality for almost 20 years before coming to this place. Hospitality is a fundamental part of our economy; hospitality and retail along with care form the biggest employers in our country. There is sometimes a danger with being mission-led that, if something falls slightly outside the scope of the mission, it gets slightly overlooked. I know that many in those sectors would be keen to hear more about that.
On top of the three big volume sectors of hospitality, retail and care, we could also add admin and support—four sectors that collectively historically have accounted for about a quarter of gross value added in this country, but account for about three quarters of the people in the country who are low paid. For many social justice and equality reasons, those sectors need to have proper focus.
That is what Skills England is currently planning to do. IfATE does something rather different and is on a different scale. That goes back to what I was saying about the difference between depth and breadth. IfATE creates and maintains over 600 occupational standards for apprenticeships, T-levels and higher technical qualifications. It works with employers to develop, approve and review occupational standards. It creates and maintains the occupational maps, which group together occupations into 15 routes. It approves, reviews and ensures the quality of approved technical qualifications and their alignment with the occupational standards, and it develops, reviews and approves apprenticeship standards.
Skills England is initially looking at a narrower set of sectors, but with a much broader remit for those sectors; that is what I mean about the difference between breadth and depth. It does more than IfATE, and each of the additional things will, in its own right, take a lot of work to properly establish. That is why I say that clause 12 as currently drafted is a pro-Skills England clause: it seeks to give Skills England the best opportunity to achieve those ends.
Each of the three elements of Skills England’s remit is big. It will, first, identify where skills gaps exist and, secondly, work with the Industrial Strategy Council and the Migration Advisory Committee to address them. Those are the two bodies that have typically been mentioned in the Government documentation, although recently Ministers have also started mentioning, importantly—it should not be overlooked—the Labour Market Advisory Board, which the noble Baroness Smith spoke about in the House of Lords recently. Thirdly, Skills England is to identify the training that is accessible via the growth and skills levy. Each of those is a very large undertaking that will take time to establish.
Let us take them in turn. First, Skills England will identify skills gaps. On the face of it, that might sound straightforward, but it is not. The first question is: what constitutes a skills gap, and what level of detail are we talking about? Are these individual job roles, groups of job roles or industries? It is also necessary to distinguish between skills that need to be provided systemically, in our education and training system, and skills that firms themselves should be able to train for.
We all know that filling vacancies can be difficult. In my constituency, which has had very low levels of unemployment over the past 10 years or so, it is the No. 1 thing that businesses talk about. It is obviously related to skills gaps, but it is not necessarily the same thing as skills being absent. The Minister talked about the need to home-grow our labour, but a key question for firms that are importing labour—this is relevant to some of the sectors I mentioned—is whether they can be persuaded to make the investment and take on, in some cases, the risks involved in not bringing in labour from abroad. That is a question for individual firms. It is also a question for some whole sectors or sub-sectors.
A real example is social care. Most people would say that it is perfectly possible to train people up to work in social care, but for a potentially complex set of reasons—I do not intend to go into it today, and we do not have time for it—people do not want to go into social care. When business leaders complain to us about the lack of skills, they are typically not talking about the sorts of things that can be certificated. They do not say, “Not enough people have grade C or above GCSE maths,” and they do not say that not enough people have a BTec in such and such or an apprenticeship in something else. They mostly talk about soft skills, or what are called soft skills—some soft skills really are soft skills, but some of them are what in business terms are more properly called behaviours: self-discipline, turning up to work on time and so on. It is not clear to me how that set of soft skills—in my experience, the No. 1 thing that businesses talk about—relates to the work of Skills England.
To come back to the specific questions about the skills required for particular sectors or individual job roles, there is also the question of how far into the future Skills England is looking. Is it talking about how we fill the skills gaps we have today, or about the future effect of artificial intelligence on the labour market, and what we should be planning for 10 or 15 years hence?
There is also a question about the level of ambition. There is a certain set of skills required—craft skills and so on—to fill the vacancies we have today, as jobs exist today. But it is also true that this country has a productivity gap against the United States, Germany, France and others. By the way, that has been true every year since I have been alive—I think I said that last Thursday as well. I am 55 today—I do not mean it is my birthday today, but I am 55 now—so that is quite a long time. If we were being really ambitious, we would not ask what skills we need to fill the jobs that we have today, but what we need to do to make up that skills gap, and what skills are needed to fulfil that.
In identifying where skills gaps exist, Skills England will also have to deal with localities, because jobs exist in certain places. It will have to work with devolved Administrations and with mayors, and mayors will have their own views about the skills gaps in their areas. Will there be a hierarchy of analysis? At what level is Skills England going to identify gaps, and to what extent will that fall to the local area? I will come back to that later. It is also true—I have experienced this myself when talking about the adult education budget, for example, with mayors and local authorities—that, quite rightly and understandably, local governance structures and leaders often want more power to be devolved to their local area. Skills England will have to find its place in what can be a tense area.
There is also the question of LSIPs—local skills improvement plans and local skills improvement partnerships. In the debate on this subject in the other place, Lord Lucas said:
“The word I hear is that LSIPs have been a real success, as they are effective and flexible. It takes a couple of years for the DfE to evolve a qualification but LSIPs can do it in weeks, because they are so focused on the actual local employer need and work closely with a provider.”—[Official Report, House of Lords, 21 November 2024; Vol. 841, c. GC125.]
The Liberal Democrat, Baroness Garden, said:
“I think it is important that the Secretary of State must set the priorities for LSIPs and review them regularly to ensure that their priorities are reflected in national strategies for the creation of standards”.—[Official Report, House of Lords, 21 November 2024; Vol. 841, c. GC106.]
The Minister herself, Baroness Smith, said:
“LSIPs and the employer representative bodies that develop them will also provide important intelligence to Skills England to inform its assessment of national and regional skills, both now and in future. They will work with Skills England to resolve skills gaps.”—[Official Report, House of Lords, 21 November 2024; Vol. 841, c. GC128.]
However, in her letter to peers two days ago, she wrote that Skills England is now—already—responsible for oversight of LSIPs and relationship management for all 38 of the designated employer representative bodies, but also that LSIPs will be a joint responsibility between mayoral authorities and those employer representative bodies.
Devolution is increasing, so the other part of the background is the English Devolution White Paper. At the same time as we are creating Skills England to be the uber skills authority in the land, the foreword to the White Paper, in the hand of none other than the Deputy Prime Minister herself, says:
“We will give Mayors strong new powers over...skills, employment support and more”.
The White Paper states:
“The majority of the Adult Skills Fund is devolved…but we need to go further”,
continuing:
“Strategic Authorities will take on joint ownership of the Local Skills Improvement Plan model, alongside Employer Representative Bodies, which set out the strategic direction for skills provision in an area.”
The question for Skills England, therefore, is how that will work in practice. Clearly, it will take a lot of time and work to make the new structures operational, at a time when the structures themselves are changing in so many areas, with the devolution White Paper being implemented. This is complicated architecture anyway, but potentially something is still missing: ultimately, how we match up demand and supply.
The Chair
Order. The right hon. Gentleman is slightly out of scope. I would be very grateful if he would just stick to the different clauses that we are debating today.
Damian Hinds
I am very grateful for your guidance, Ms Furniss, and of course I will ensure I do. In my defence —obviously I am not arguing with your judgment— I am trying to illustrate the large number of things that this new body will have to figure out. As Lord Blunkett said, if, at the same time, it is taking on the enormous existing role of the Institute for Apprenticeships and Technical Education, with 200 people coming on board, that makes it harder to figure all these things out, with which I think we all wish the new body and its leadership the very best. But of course I take your judgment.
The Chair
Order. I am sure the right hon. Member wishes to hear the Minister fairly soon in response to his comments.
Damian Hinds
Of course I do, Ms Furniss. The different parts of Government that the new body will deal with include the Migration Advisory Committee, which is a well-established part of the machinery of Government but takes its commissions from the Home Secretary. This is a quote from gov.uk:
“The MAC bases all recommendations on what it sees as being in the interests of the resident population, taking account that migration has different effects on different groups.”
There will be conflicts between that aim and the aims of Skills England, and who will resolve those conflicts?
The new body will also work with the Industrial Strategy Advisory Council, which is an expert committee reporting to the Business Secretary and the Chancellor of the Exchequer; it is made up of experts, as the name suggests. Interestingly—we will perhaps come on to this in relation to some of the new clauses—the Government will legislate to establish that body
“in statute when Parliamentary time allows”,
which raises the question of why they will do so for that one and not Skills England. It suggests that there is perhaps a hierarchy of these bodies.
There is also the Labour Market Advisory Board. It reports to the DWP’s Secretary of State and its aim is to support the DWP
“to better understand the current state of the labour market, to help design policies and strategies to address key challenges”.
I will not go through all the things that it is supposed to do—[Interruption.] The Government Whip encourages me, but I would not risk your wrath, Ms Furniss, despite her best efforts.
Suffice it to say that there is again a cut-across, because of course, in terms of getting people back into work, which the DWP is focused on, there is some tension. Will Skills England be able to ask, for example, for changes in the conditionality regime operated by the DWP and the jobcentre network, to improve skill matching? Will there be better join-up between DWP work coaches and the National Careers Service?
Finally, the third thing the new body is to be responsible for is potentially the biggest and most controversial of all. In the rubric that the Government put forward, they said the new body would “identify the training” that is accessible via the growth and skills levy. I do not think they actually mean “identify”; I think they mean it will specify what is available to be paid for through the growth and skills levy. I will not go through all the arguments about the levy, but the new body will have to, and the 12 months envisaged under clause 12 would be a good time to do that. It will have to think about the levy’s real purpose and the distinction between firm-specific skills and training, sector-specific skills and training, and generic transferable skills and training. The levy’s purpose was to increase the total amount of investment in human capital in this country, to help our productivity gap and fill job vacancies, and the new body will need carry on with that purpose.
I hope I have given us a flavour—there is more—of the enormous strategic challenges and the enormous job of work for these very good people. There are some very encouraging signs in the appointments the Secretary of State has made, but what these people have to take on is enormous, and we want and need them to succeed in this endeavour. It would be far better to stage the approach, so that Skills England is established first, then takes on the great strategic roles working across Government and throughout the economy, and then, 12 months later, subsumes IfATE.
Janet Daby
The right hon. Member speaks of the enormous challenges; might I point out that the enormous challenges were left by the previous Government, which he was part of? The right hon. Gentleman and the hon. Member for Harborough, Oadby and Wigston were both previously in the Government, so it is only right that I set the context of the failings of the previous Government before I attempt to respond to the many, many points, views, opinions and ideas that were offered.
To put it into context, the previous Government had 14 years to deal with the skills problems and the crisis we are facing today. UK employers reported that more than a third of UK vacancies in 2022 were due to skills shortages. Would Members from the previous Government like to respond?
Damian Hinds
That is not really the way we do it in Parliament. You respond for the Government.
Neil O’Brien
We ask you a bunch of questions. I do not know whether you have noticed, but you are the Minister.
Janet Daby
Across the UK, almost one in 10 of more than 2.5 million roles in critical demand—
Janet Daby
More than 90% of those roles require periods of work-related training or education.
Janet Daby
The point I am making is that the last Government did not solve the skills shortages. The last Government held back growth and opportunity. This Government are moving forward. We want to boost skills through Skills England. The last Government prolonged uncertainty.
Neil O’Brien
The Minister encouraged us to intervene. One of the things Labour complained about a lot in opposition was what happened to the adult skills budget. Can the Minister confirm that the Government have just announced a 6% cut in the adult skills budget? Can she explain how that fits with the Government’s constant rhetoric—as in the welfare cuts debate just the other day—about getting people out of unemployment and into training? How will a 6% cut help to move people from welfare into training?
Janet Daby
Ms Furniss, I fear we are straying far away from the purpose of the Bill and what needs to be achieved.
Janet Daby
I will continue to respond. Skills will power this mission-driven Government.
Janet Daby
This mission-driven Government have a plan for change. The need to boost Britain’s skill is crucial. We need skills to drive growth, to build homes, to deliver energy security and to build an NHS fit for the future. We want to move forward and make sure—
Janet Daby
I am sorry, Ms Furniss. This is very flustering.
As I said, we have had 14 years of complacency and neglect from the previous Government. Following the reforms they introduced, including the apprenticeship levy, apprenticeship starts have fallen by more than 30%. It is concerning that fewer young people are benefiting from apprenticeships. Apprenticeship starts for those under 25 are down by almost 40%. That is why, since the Prime Minister announced it in July 2024, Skills England has been operating in shadow form in preparation for full establishment.
The teams responsible for Skills England’s broader strategic functions are already operational and are establishing links with their counterparts in IfATE. By combining the analytical and regional functions, it is already delivering in shadow form. Detailed transitional planning has taken place to ensure that the functions moving to Skills England from IfATE will transition smoothly with no break in service. The planned continuity in staffing and team structures will ensure that occupational standards, apprenticeships and wider technical qualifications will continue to be approved, and T-level contracts will continue to be delivered, supported and monitored.
This approach will also ensure that Skills England maintains the vital links with employers and other partners that IfATE teams have previously established. The Minister for Skills in the other place recently met many peers and went through many of the processes and functions under the Bill. He has outlined that in a letter that is available for the Committee.
The Government are focused on establishing a coherent skills system with more flexible training options to support employers to fill skills gaps while driving growth and spreading opportunity. Businesses are backing the Government’s mission to grow the economy by breaking down barriers to opportunity for young people through our planned reforms.
Neil O’Brien
Speaking of gaps, I wonder whether the Minister will answer my question. Will she stand up and reassure the sector that all the additional costs, including those for indirectly employed staff, will be covered by the forthcoming national insurance contributions grant?
Janet Daby
I ask the hon. Gentleman to allow me to proceed further, because there is so much to say.
We have announced £300 million of additional revenue for further education, with £50 million available to sixth-form and further education colleges from April, to help to respond to priorities including workforce, recruitment and retention. We are offering up to £6,000 annually through the targeted retention incentive to attract and retain new teachers in critical subjects. We continue to support recruitment and retention through teacher training bursaries worth up to £31,000, tax free, in certain key subject areas. We are providing support for industry professionals to enter the FE teaching workforce through our Taking Teaching Further programme.
On Skills England’s relationship with the devolved Governments in the UK, its territorial scope is England only. The devolved authorities will be essential partners for it to ensure that our skill systems meet the skills needs of the whole UK labour market. It will be vital for us to work together openly and collaboratively. The Department for Education and shadow Skills England have engaged with the devolved Governments and the territorial offices, and there will be regular meetings.
In devolved areas, strategic authorities will play a stronger role in local skills improvement plans, working with a designated employer representative body. We are currently in the process of reviewing the geographies of LSIPs to ensure that, where possible, they align with the boundaries of devolved areas.
Damian Hinds
The Minister may be about to come to this, but what will be the relationship between LSIPs, and whatever strategies they draw up, and Skills England?
Janet Daby
As I have already said, the devolved areas will work on LSIPs with ERBs and maintain a close and strong relationship with Skills England.
LSIPs provide ongoing mechanisms through which local employers, strategic authorities, providers and other stakeholders come together to identify and address skills needs and issues. This supports Skills England’s aim to have the skilled workforce the economy needs at a national, regional and local level.
In response to the question about the impact of national insurance costs on skills and education, the Government have agreed that public sector employers will receive support in recognition of the increase in their national insurance contributions from April 2025. We are also providing £155 million for post-16 schools, academies and further education colleges. That is an increase of over £1 billion in the financial year 2025-26 for the education sector.
Neil O’Brien
Will the Minister promise to publish the methodology of how the figure of £155 million was arrived at? Can she reassure the sector that that sum is enough to cover all the costs of the national insurance increase, including the costs for indirectly employed staff?
Janet Daby
I hear what the shadow Minister is saying and will endeavour to get more information to him on those points. He asked about the flexibility of apprenticeships and levies. I wrote to the Chairs of the Committee yesterday addressing his question, but I understand that that was only yesterday.
Janet Daby
Government amendment 1 is crucial to ensure that Skills England is not unnecessarily held back. Transformation is under way—businesses and employers cannot afford to wait. Government amendment 2 is a normal procedure for Bills originating in the House of Lords. I urge the Committee to support the Government amendments and clauses 11, 12 and 14.
Neil O’Brien
I meant no disrespect, Ms Furniss, but the Minister promised in the previous sitting that she would write to me. She may say that the letter has been sent, but it has not arrived. It is telling that the things we are debating will be written into law and I have still not—
The Chair
Order. My point was that you were talking from a sedentary position. You had sat down and should have asked to intervene again.
Neil O’Brien
I take your point, Ms Furniss. We are keen to move on to a vote on Government amendment 1, which we think is a big mistake. We have already explained why—I will not recapitulate that.
Question put and agreed to.
Clause 11 accordingly ordered to stand part of the Bill.
Clause 12
Commencement
Amendment proposed: 1, in clause 12, page 5, line 6, leave out from “force” to end of line 7 and insert
“on such day as the Secretary of State may by regulations appoint”. —(Janet Daby.)
This amendment provides for the substantive provisions of the Bill to be brought into force by regulations made by the Secretary of State.
Janet Daby
Clause 13 contains provisions to ensure continuity and consistency of functions that are transferred from IfATE to the Secretary of State. This will allow functions already performed by IfATE to be treated as having been done by the Secretary of State. It includes a provision enabling the Secretary of State to continue things that are in the process of being done in relation to IfATE, immediately before the function was transferred. These will also ensure smooth commencement of the new legislation and transition from existing legislation. These functions may only become clear closer to when the functions are transferred.
Therefore, clause 13 includes a power to address this by way of regulations. Without this clause, there will be no statutory way of ensuring the smooth transition of the functions carried out by IfATE under the current legislation, to the Secretary of State under the new legislation.
Neil O’Brien
This clause is just a reminder that we are trying to make major changes to the engine of our skills system, while the engine is still running. I have already quoted from the Government impact assessment, pointing out that the impact of transition will be to slow down apprenticeship approval numbers—I will not recapitulate that. I will come back later to the challenges these changes to the engine while the engine is still running will cause.
Question put and agreed to.
Clause 13 accordingly ordered to stand part of the Bill.
Clause 14
Short title
Amendment made: 2, in clause 14, page 6, line 4, leave out subsection (2).—(Janet Daby.)
This amendment removes the Lords’ privilege amendment.
Clause 14 ordered to stand part of the Bill.
New Clause 1
Draft proposals for establishing new executive agency
“(1) Within six months of the passing of this Act, the Secretary of State must produce a report containing draft proposals for the establishment of a new executive agency, to be known as “Skills England”, responsible for the powers transferred under this Act.
(2) A copy of this Report must be laid before both Houses of Parliament.
(3) Within forty days of a Report under subsection (1) being laid, the Secretary of State must ensure resolutions are tabled, and moved, in both Houses of Parliament to approve the Government’s draft proposals.
(4) If the draft proposals are rejected by either House of Parliament, the Secretary of State must, within a period of six months, lay a report containing revised proposals before Parliament, and, within a period of forty days after laying the revised proposals, table a motion before each House of Parliament to approve the revised proposals.
(5) The Secretary of State may not establish an executive agency to carry out the functions transferred under this Act until it has secured, through a motion under subsection (3) or (4), the consent of both Houses of Parliament.
(6) If a motion under subsection (3) or (4) is approved by both Houses of Parliament, the Secretary of State must make an annual statement in each House of Parliament on the work of the agency.
(7) Within twelve months of a motion under subsection (3) or (4) being passed, the Secretary of State must lay before Parliament a report evaluating the effectiveness of the “Skills England” governance structure in delivering on the organisation's aims and objectives.”—(Ian Sollom.)
This new clause requires the Secretary of State to bring forward proposals for the executive agency, to be known as Skills England, subject to the approval of both Houses of Parliament.
Brought up, and read the First time.
Ian Sollom (St Neots and Mid Cambridgeshire) (LD)
I beg to move, That the clause be read a Second time.
It is a pleasure to serve under you in the Chair, Ms Furniss. I rise to move new clause 1, which addresses fundamental concerns about the governance and accountability of Skills England. While the Bill as amended in the Lords does now make reference to Skills England, which the original Bill presented to the Lords did not, it still does not establish it properly as an organisation, define its powers, or provide robust mechanisms for parliamentary scrutiny of its work.
The Bill, as we know, simply abolishes the Institute for Apprenticeships and Technical Education and transfers its functions directly to the Secretary of State, with only limited reporting requirements. The most recent evidence provided to the Committee reinforces those concerns, particularly the evidence from the Skills Federation, as was highlighted by the shadow Minister.
New clause 1 remedies that by requiring comprehensive proposals for Skills England to be laid before Parliament for proper scrutiny and approval. It would ensure that both Houses have a meaningful say in how the organisation is structured and operates. It would establish ongoing accountability through annual statements to Parliament and formal evaluation of its governance structure within the first year.
The Government have positioned Skills England as transformative, and the Minister’s letter to peers, which was also shared with the Committee early this week, outlines hugely impressive ambitions for Skills England. I welcome those, as I think we all do. But the governance framework described in that letter is largely discretionary. The framework document that the Minister references in that letter, which has still not formally been published, will be finalised by agreement between the Department and Skills England, with no formal parliamentary input at all.
We are being asked to approve a fundamental restructuring of the skills system without proper guarantees about how the body will operate or be held accountable. The skills system is simply too critical to proceed just on faith. I think Members on the Government Benches would be making the same arguments if they were in our position. I want to stress that the new clause is not about preventing the creation of Skills England; it is about ensuring it is established with the proper scrutiny and accountability that an organisation of such importance deserves. If the Government truly believe in Skills England as the vehicle to address our skills challenges, they should welcome the provisions for proper accountability in new clause 1.
Neil O’Brien
I rise only to support the hon. Member for St Neots and Mid Cambridgeshire. I shall speak to new clauses 2 and 3 later, but I do not want the hon. Member to feel that that is because I do not support new clause 1. I absolutely do. I think it is entirely sensible, and if the Government had sense then they would listen to him and include the new clause in the Bill.
Janet Daby
I thank the hon. Member for St Neots and Mid Cambridgeshire for tabling new clause 1, which would require the Secretary of State to lay draft proposals for a new executive agency, to be known as Skills England, before Parliament within six months of the Bill gaining Royal Assent.
Complexity and fragmentation within the skills systems are contributing to critical skill gaps in our economy. We need to urgently reform the delivery of skills and technical education without delay—I cannot stress that enough. After 14 years of inaction, we really need to get on with the job and build back the foundations. We plan to establish Skills England as an executive agency requiring a robust and rigorous process. That process applies across Government for all executive agencies. As with all new executive agencies, the approval of the creation of Skills England will be announced to Parliament in a written ministerial statement to both Houses. In line with other executive agencies, Skills England will be required to have robust governance arrangements and clear lines of accountability, including to Parliament. Ministers, the principal accounting officer and the chief executive will all be accountable to Parliament, and could appear before Select Committees if invited.
The broader governance and accountability framework in which Skills England will operate will be set out in the framework document. All arm’s length bodies have such a core constitutional document, which must be approved by the Treasury. The framework document will detail how Skills England will regularly report on its functions and performance, including by publishing a corporate plan and annual report.
There is a high level of interest among Skills England’s stakeholders, such as the Association of Colleges, which has expressed strong support for the plans to establish Skills England, recognising the critical role it will play in the Government’s broader post-16 education and skills agenda. We have listened to and acted on the contributions of peers in the other place, which is why we have provided even greater transparency about what Skills England will do. The Bill already requires the Secretary of State to report within six months of IfATE’s closure. The report will detail which functions are being exercised by Skills England and the impact on apprenticeships and technical education in England. The new clause is therefore not necessary.
We need to address the urgent skills challenges in our economy. There is already a robust approach to establishing and running an executive agency, and the Government have included in the Bill a legislative commitment to a report on Skills England’s functions. On that basis, I ask the hon. Member for St Neots and Mid Cambridgeshire to reconsider.
Ian Sollom
I thank the Minister for her response. In the interests of time—and lunch—I will not go into detail. I wish to press the new clause to a vote.
Question put, That the clause be read a Second time.
Institute for Apprenticeships and Technical Education (Transfer of Functions etc) Bill [ Lords ] (Fourth sitting)
Thursday 20th March 2025
(4 days, 16 hours ago)
Public Bill CommitteesInstitute for Apprenticeships and Technical Education (Transfer of Functions etc) Bill [HL] 2024-26 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 20 March 2025 - (20 Mar 2025)
Neil O’Brien (Harborough, Oadby and Wigston) (Con)
I beg to move, That the clause be read a Second time.
The Chair
With this it will be convenient to discuss
New clause 3—Framework for Skills England—
“The Secretary of State must—
(a) ensure that in performing its functions, Skills England has regard to—
(i) the need to ensure that education and training is of an appropriate quality;
(ii) the need to ensure that education and training within the remit of Skills England represents good value in relation to financial resources provided out of public funds;
(b) ensure that Skills England performs its functions efficiently and effectively;
(c) give notice in writing to Skills England when setting out other matters to which it must have regard when performing its functions;
(d) publish, in such a manner as they think fit, any notice under paragraph (c), and lay a copy of it before both Houses of Parliament;
(e) require Skills England to prepare, as soon as reasonably practicable after the end of each financial year, an annual report which includes—
(i) a description of what Skills England has done during the year, including a description of what Skills England has done as a result of any notice given by the Secretary of State under paragraph (c);
(ii) such other provision as the Secretary of State may direct;
(f) lay a copy of the annual report under paragraph (e) before both Houses of Parliament.”
Neil O’Brien
Clearly, the hon. Member for St Neots and Mid Cambridgeshire has had precisely the same thought that we have, and indeed as many other educators, peers and businesses have had, namely that we should make the Bill actually do what the Government try to pretend that it does: set up Skills England.
As I said in the last sitting, the Bill, as introduced, did not even mention Skills England, the reason for which is that it is part of the Department for Education—in fact, its chief executive officer is a pair of DFE civil servants. Ministers have made their case for this in-sourcing, as they think it will make things faster, and we have made our case for using independents, but so have lots of others. For example, as the Labour peer Baroness Blower pointed out,
“the appropriate move from where we are would be to a statutory body”.—[Official Report, House of Lords, 21 November 2024; Vol. 841, c. GC90.]
That is the effect of new clause 2; the powers that would be transferred to the Secretary of State would instead be vested in Skills England. The Labour peer Lord Knight has pointed out:
“The problem that some of us have with the Bill is that it feels like the second half is missing. The second half is the establishment of Skills England as a statutory body.”—[Official Report, House of Lords, 21 November 2024; Vol. 841, c. GC87.]
That is effectively what new clause 3 would do.
In the previous sitting, I quoted from various industry bodies that are making the case for independence, including the Institute of the Motor Industry and the Construction Industry Training Board. Since then, further evidence has been submitted to the Committee by those on the education side. The University of Winchester, in its submission to the Committee, highlights “four core concerns”, one of which is about independence. It says:
“The transfer of power from IfATE to the Secretary of State for Education raises questions about the independence of the proposed Skills England regulatory body. We believe that the integration within the Department for Education (DfE) is a significant risk, with the current regulatory body being completely independent of external leverage. The current IfATE structure includes a regulatory board which is independent from the DfE, ensuring that outside influence is minimised within the decision-making process. We are, therefore, recommending that Skills England is structured to ensure and protect their regulatory independence from Government and other agencies”.
That is the spirit of our new clauses.
The University of Winchester also worries that in IfATE, at present,
“employers and academics come together to ensure that the standard is industry relevant, current, and academically rigorous. Within the current proposed bill, we believe this breadth will be at risk given the transfer of power from IfATE to an individual in the Secretary of State for Education. This transfer has the potential to lead to situations where ministers can create and/or change standards and assessment plans without consultation with the relevant stakeholders, resulting in apprenticeships which are not fit for purpose or academically appropriate.”
It also notes:
“Currently, IfATE as a regulatory body highlights the importance of technical education, through both its name and its work. The proposed legislation will effectively remove the prominence of this important aspect of industry, undermining its activities and relegating it to the background.”
The university is completely right. Setting up an institute was a core part of the drive to create greater prestige and esteem for technical education, and our new clauses aim to restore that degree of independence from the Secretary of State.
New clause 3(c) and (e)(i) also try to highlight, via an annual report, how the Secretary of State is steering Skills England, and how the body is responding to that. I mentioned earlier the Skills Federation’s submission to the Committee, which brings together 18 employer-led skills bodies and 150,000 employers. Its submission notes:
“The clauses in the bill which transfer powers from IFATE to the Secretary of State risk shifting the development of standards further away from employer demand…Too much centralisation leads to a lack of focus on sector needs.”
Surely that is right, which is why we propose a degree of decentralisation with these new clauses.
In a previous sitting, the Minister made the argument that the Secretary of State might need to write standards directly without external input from a group of people in fast-moving and technology sectors. We argued, in contrast, that those are precisely the kind of exciting sectors where industry input, rather than just ministerial enthusiasm, is most needed. That same argument was made to the Committee by the International Information System Security Certification Consortium—the international professional body for cybersecurity—which wrote:
“While ISC2 understands that Government is seeking to introduce flexibility and agility in the way apprenticeship standards are developed, we contend that without industry involvement in the development of standards, there is a risk that apprenticeships may not adequately reflect the evolving needs of certain sectors. This is especially true for cybersecurity where a changing threat landscape and dramatic shifts brought about by emerging technologies means that apprenticeship standards must stay relevant. It is essential that the voice of professionals and industry, as well as those directly involved in delivering educational provision, be heard whenever the Secretary of State exercises these new powers. Any decision to intervene and directly develop or approve apprenticeship standards or assessment plans should take into account the perspectives of those with hands-on expertise in the sector.”
That is surely right.
We have already voted on a very similar new clause to this—new clause 1, tabled by the hon. Member for St Neots and Mid Cambridgeshire—so we will not press this to a vote. But I want to log the concerns that are being raised by professionals and those in industry about the lack of independence, and I do hope—even though I suspect that the Government will not change their mind about bringing this into the Department—that they can at least find ways in its operating procedures and the way it evolves to try to create that sense of independence, and reassure all those who are worried about the idea of the Secretary of State taking the powers in this Bill to go it alone and write things without the input of those who are actually working in the sector.
Damian Hinds (East Hampshire) (Con)
I rise to speak in favour of the new clause in the name of my hon. Friend the shadow Minister. He is right; of course, we have just voted on something quite similar, and that vote was lost by the classic 11 to four margin, with which we have become familiar. But that does not mean the Government cannot do this, and indeed there have been some signs and indications that they might make Skills England a fully independent body on a statutory footing. Most people talk about Skills England in their speeches, but that is not what the Bill, as introduced, does; it abolishes something without actually creating something else, and hands the powers to the Secretary of State, in whose gift it is to hand on.
There was also the question that came up last Thursday about Ofqual, and what the Bill does to that, which I do not think we were 100% clear about. I think the Minister was going to write, but I do not think I have seen that letter—that is not to say it has not come, or been sent, but I am wondering if when the Minister comes to speak, if she could confirm whether that letter has come.
There have always been two fundamental questions about the Bill and the creation of Skills England: the first is about independence, and the second is about who should set the expectations and standards for various occupations—should it be the employers in those organisations or somebody else? There is also a third point, which is relevant to independence, about the heft of this body, putting skills right at the heart of cross-departmental work, and what statutory independence would do to the status of this body.
Particularly in education and training, one of the reasons that we have independent bodies is so that everybody knows that the standards are robust, they cannot be subject to political pressure, and there cannot be a temptation to make it a bit easier to get over a hurdle to make the numbers look better. We have had that system of independence for a very long time, and do to this day, and still will in the future for academic qualifications. As I said the other day, I think independence of this body is important to underpinning parity of esteem. IfATE is legally established as a non-departmental public body, whereas Skills England will be, as things stand, an executive agency. As a non-departmental public body, IfATE does therefore have some independence from the Department for Education because its functions and responsibilities are set out in legislation approved by this Parliament, whereas Skills England, as things stand, will simply be an integral part or unit within DFE.
When Skills England was first talked about in the King’s Speech, it seemed that it would be established as an independent body. As well as my question on Ofqual, the first of my other questions to the Minister is, what has changed? If that was the intent—perhaps we have all just misread the text—what is different now, that it should not be? Finally, if it is right for the Industrial Strategy Advisory Council to be put on a statutory footing, why is it not for Skills England?
The Parliamentary Under-Secretary of State for Education (Janet Daby)
New clause 2 would impose a requirement on the Secretary of State to establish Skills England as a statutory body with a separate legal identity. It would transfer the functions the Secretary of State takes on under the Bill to a new body within 12 months.
The new clause would undo significant progress already made by the Government to establish Skills England. It has been operating in shadow form since July of last year. It is ready to take on the functions conferred by the Bill. I reassure Members that we considered different options for the model of arm’s length body for Skills England. It being an executive agency allows us to move fast, much faster than the previous Government did for 14 years. Skills England can take immediate action to plug the skills gaps that this Government have inherited, and we are focused on economic growth. An executive agency balances the independent Skills England’s need to deliver its functions at arm’s length from the Department with being close enough to inform decisions on skills, policy and delivery. That is good practice for all new arm’s length bodies.
The Department for Education will undertake a review of Skills England. The review will take place about 18 to 24 months after it is fully established, and that will align with the requirements of any future Cabinet Office review programme. It will consider how far Skills England is delivering its functions in the way intended; whether its mix of functions is still aligned to Government priorities; and whether there are alternative ways to deliver the Government’s objectives, including a different model of arm’s length body.
Delay, however, is not an option. We need to respond urgently to critical issues in the skills system to drive growth and spread opportunity. To encourage this Committee, in the first set of apprenticeship statistics under the new Labour Government, we saw an increase in starts, participation and achievements compared with the same period under the Tories in 2023. We remain an ambitious Labour Government. We do not dither or delay, and we urgently need reform to deliver the skills and technical education that is needed. That is what the Bill and Skills England will enable us to do.
New clause 3 would create a duty on the Secretary of State to publish an annual report setting out Skills England’s activities in the preceding year. It would also require Skills England to have regard to matters such as the quality of training and education, and value for money when performing its duties.
Well-established requirements are already placed on executive agencies for a high level of transparency and accountability in how they operate. That includes the publication of a framework document which, as I have mentioned, is a core constitutional document. It will be agreed between the Department for Education and Skills England in accordance with HM Treasury’s handbook “Managing public money”. Once finalised, it will be published online and a copy deposited in both Houses.
The Secretary of State, and Skills England acting on their behalf, is already obliged under general public law to take into account all relevant matters when exercising their functions. Those relevant matters are likely to include the ones in new clause 3. While the Bill was scrutinised in the other place, as I have said, my right hon. Friend the Baroness Smith of Malvern, shared a draft copy of the Skills England framework document with peers. She committed to include references to the need for Skills England to deliver its functions efficiently and effectively, and to ensure that training is high quality and provides good value for money.
In response to the right hon. Member for East Hampshire on Ofqual, the letter concerning Ofqual has been sent to the Chair of the Committee, and also addresses other issues raised by the hon. Member for Harborough, Oadby and Wigston last Thursday.
I am happy to repeat the commitments that I have already mentioned, but finally, I would like to say there is precedent for non-departmental public bodies being closed and their functions being reassigned to newly formed executive bodies. For example, under the previous Government in 2011, the Standards and Testing Agency was established as an executive agency taking on functions from the Qualifications and Curriculum Development Agency, a non-departmental public body, which was later closed.
Neil O’Brien
I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 4
Report on the impact on T levels
“(1) Within one year of the passing of this Act, the Secretary of State must publish a report on the impact of this Act on T-Levels.
(2) The report under subsection (1) must include—
(a) the involvement of Skills England in the administration of T Levels, including the curriculum and assessment methods;
(b) an assessment of the independence of the accreditation of T-Levels, specifically whether there has been any involvement of the Secretary of State in this process; and
(c) an assessment of the extent to which T-Levels are meeting local demand for skills.
(3) The report under subsection (1) must be laid before both Houses of Parliament.”—(Neil O’Brien.)
Brought up, and read the First time.
The Chair
With this it will be convenient to discuss new clause 5—Report on the impact on Higher Education—
“(1) Within one year of the passing of this Act, the Secretary of State must publish a report on the impact of this Act on the higher education sector in England.
(2) The report under subsection (1) must be laid before both Houses of Parliament.”
Neil O’Brien
New clause 4 would require a report on the impact of the Bill on T-levels. We talked before about the measure in clause 8 to bring Ofqual into the regulation of technical qualifications, and the implication that that is focused on T-levels. I was going to say this anyway, but let me pause for a moment on that point about clause 8 and Ofqual—I have not seen from the Clerks to this Committee the letter that the Minister just referred to. I do not know whether you are about to guide us, Ms Furniss, about whether that letter has been made available to Committee members, but I may simply have missed it.
Neil O’Brien
The Minister said that the letter has been sent to the Chair, but the Chair says that she has not seen it.
Janet Daby
The letter addressing the issues that the hon. Member for Harborough, Oadby and Wigston and the right hon. Member for East Hampshire have raised has been sent to Sir Christopher, your co-Chair, Ms Furniss, and I am sure it will be shared in due course.
Neil O’Brien
It is a shame, as this is the last day of this Bill Committee. I do not know whether the letter could be produced before we finish today, but otherwise, those questions will effectively go unanswered because they have not made their way to Committee members. But this was a minor point about the interaction with clause 8 and the decision to bring Ofqual in potentially for T-levels, so I will turn squarely to T-levels now.
I was encouraged by the positive words about T-levels in the curriculum review, but it is very difficult to get a new qualification going, never mind a whole new system, which is what T-levels were intended to be in their initiation by Lord Sainsbury. After the big long debate on BTecs, Ministers in the end decided to add T-levels into the existing alphabet soup of qualifications rather than use them to replace and rationalise that system, which was the original goal of Lord Sainsbury’s project. I should declare an interest in so far as I worked on T-levels back when they were still known as Sainsbury routes. None the less it would still, despite the Ministers’ decision, be possible for them to grow and become a leading part of the system, but that would require a huge push from Ministers. It is difficult to get a new qualification going, never mind a whole new system, and it is much more likely that in the absence of a big push from Ministers that they will stagnate as an interesting, well-regarded and quality niche, but ultimately a small part of the system, which was really not what was intended.
For several years, the DFE has provided a 10% uplift to the funding rates for T-levels as a new qualification, but a couple of weeks ago the Government implied that they would stop doing that this year. They have not made a decision, and providers are now desperate for certainty on that issue. I ask the Minister directly to respond to this: will the 10% uplift be continued or not after this academic year? The sector is now making decisions about this, and urgently needs certainty. The Minister keeps saying that she wants to move fast: the providers, and I am asking her to move fast to give them the certainty on what the funding rate will be, and whether the 10% will continue, because if not, my strong sense is that many providers will conclude that it is not really a priority any more, and not worth the investment of time and resources, which are significant to get these things going. I hope the Minister can address that point, and I give her a bit of notice: will the 10% continue or not—yes or no?
The Government are notionally in a one-year “pause” on the move to replace BTecs, which should give the Government time at least to make up their mind on how they see the future of T-levels. If they want to preserve the option to be ambitious for T-levels, however, they need to keep supporting them now. Those of us who worked on their development and who still support them are not blind to the challenges. Although drop-out rates fell sharply in the last year, they are still high. Even though T-levels are meant to be a demanding qualification, we want young people to get to the end of them.
Although the huge element of work experience is a key advantage and attraction of T-levels to learners, it is expensive and hard to deliver, particularly in a way that is slick and gives clarity to students up front, rather than gives stress. I do not say this every day, but Gordon Brown was right to press the Government to be more ambitious here—
Neil O’Brien
We do not always cheer Gordon Brown on the Conservative Benches, but on that occasion he was absolutely right. Lord Sainsbury, too, is right to want to be ambitious. A huge amount of thought went into T-levels over a long period and on a cross-party basis. They have great potential to rationalise the system and to do what politicians have said for decades they want to do, which is to create a prestigious and clear alternative to the academic A-level route. At the moment, however, T-levels are still a fledgling qualification. They have great potential, but they are in need of a lot of care and attention.
My worry is that, amid all the commotion and disruption caused by the transfer of IfATE staff into the Department, that attention will be lost at the critical moment in the development of T-levels. The looming withdrawal of the 10% compounds my worries that attention will be lost at this critical moment. Our new clause therefore aims to ensure that the spotlight stays on T-levels, so that they do not get lost in all the reorganisation, that we preserve at least the option for them to become a widespread and leading qualification on the technical side, and that we achieve Lord Sainsbury’s vision of a more prestigious and higher-funded set of qualifications, more intelligible to employers, and with simpler routes and much more work experience. There is so much potential in T-levels that it would be a tragedy if they got lost in this reorganisation. That is why we are moving the new clause: to ensure that we continue to closely monitor everything going on with them.
New clause 5 concerns higher education. The Government talk about Skills England bringing everything together, but as my right hon. Friend the Member for East Hampshire has pointed out, we can never quite do that—there are always other bodies and overlaps. In this case, for starters, we will have two continuing levy training bodies, the Construction Industry Training Board, or CITB, and the Engineering Industry Training Board, or EITB, as well as the many other bodies that my right hon. Friend mentioned—I am thinking about those involved in skills and supply, which includes the Migration Advisory Committee, as well as the workforce strategies of other Departments, such as the NHS long-term workforce plan, which spans technical education, higher education and apprenticeships.
The other big case in point, of course, is the overlap between the work of IfATE and the future Skills England, and the regulators of higher education. In our previous sitting, we talked about the welcome growth of higher apprenticeships and the Government’s imminent plans to axe them, which we are concerned about, particularly after so much work has gone into them. That is why new clause 5 would require a report on the impact of the Bill on higher education.
The Bill is about apprenticeships and technical education rather than higher education, but the two have become increasingly overlapping. The number of people on higher apprenticeships went up from a little over 3,000 in 2010 to 273,000 last year—a huge increase. For some universities, providing degree apprenticeships has become a very important part of their work.
I will not recapitulate the things I talked about in the previous sitting, but level 7 apprenticeships are a powerful tool to enable people to earn while they learn, and to allow employers the freedom to shape higher education to their needs. Employers are choosing—with their own money—to invest in level 7 skills. It would be false to assume that a reduction in funding here would lead to an increase in the lower levels. Contrary to the claims that are sometimes made, level 7 apprenticeships do not cater primarily to major corporations. Less than 10% of level 7 apprentices are in FTSE 350 companies. Level 7 apprenticeships in health and care are a hugely important part of the NHS workforce pipeline. In a previous sitting, I talked about how axing those apprenticeships would blow a hole in the NHS plan over the long term, equivalent to 11,000 senior nursing posts, but that would start right now, as there were 2,040 level 7 apprenticeships starts in health, public services and care in 2023-24.
The creation of the apprenticeship levy had two purposes: to stop employers that do the right thing and invest in their people from being exploited by employers that do not, and instead just wait to poach their staff once they are trained; and to make sure that employers drove and owned the system. Now that they do drive and own the system, we see that their revealed preference is to spend their money on higher and degree apprenticeships.
The growth has been spectacular. Between 2018-19 and 2023-24, higher and degree apprenticeship starts grew by 63%, while the growth in level 7 apprenticeship starts was even higher, at 105%. That growth was even faster in some critical sectors. Level 7 apprenticeships in health, public services and care grew 716%. Significant extensions occurred in construction, planning and environment, where they went up by more than 700%, and in digital technology, where they went up nearly 600%. Both are key skills areas for our economy and both are supposed to be key parts of the Government’s industrial strategy.
The Bill changes the balance between the voices of employers and the voices of Ministers. Degree and level 7 apprenticeships are a good example of how ministerial priorities can be very different from employer priorities. I will not repeat the criticisms from lots of employers that I read out in a previous sitting—I quoted the Institute of Chartered Accountants, the Chartered Management Institute, several solicitors’ firms and those providing higher apprenticeships into local government and the NHS. In this sitting, I want to look at the other side of the ledger and consider the impact on universities, which is the purpose of new clause 5.
I have said before that we would never accept the lack of independence for the academic side that the Bill proposes for technical education. We would not have Ministers setting the curriculums, specifications and exams for GCSEs and then taking on the role of Ofqual and marking their own homework. We would not allow the same for higher education either, in general, but there is a growing overlap between IfATE, which is to be centralised into the DFE, and higher education, which has all kinds of implications.
The context for higher education is a challenging one. The Government have increased fees, but wiped out the gains from that by increasing national insurance, meaning a real-terms cut in resources for universities this year. With widespread industrial action in the sector looming, the Government have also chosen this moment to dramatically lower the threshold for strike action with the Employment Rights Bill. To now axe level 7 apprenticeships, and potentially also level 6, would be very destabilising for universities and could whack institutions that have tried to do the right thing for their community and for those who do not traditionally go to university.
Sixty-six universities now deliver level 7 apprenticeship standards, and some have got really into it. Prestigious institutions such as Cranfield, a postgrad-only institution with deep industry links, will be hugely exposed if the Government wield the axe in the way they are planning—I suspect that level 7 accounts for a very large part of Cranfield’s UK students. Likewise, York St John University has something in the order of 100 level 7 apprenticeships. Other institutions that are heavily involved include the Open University, Manchester Metropolitan and the University of West London. Given the challenging context for higher education, which is partly a result of Ministers’ own decisions, axing these apprenticeships, which have become quite a big part of their work, could be very damaging.
Given that their action on fees, national insurance and strike action has been a connoisseur-level example of un-joined-up Government, I am not reassured that Ministers have thought through the implications of axing level 7 for higher education.
Pam Cox (Colchester) (Lab)
It is my understanding that the Bill, as unamended, does not preclude the continuation of level 6 and 7 degree apprenticeships. I speak as somebody who worked in the higher education sector before coming here and sees the value of them. It is my understanding that nothing in the Bill rules them out at this point.
Neil O’Brien
The hon. Lady is completely correct; this is not the Bill that abolishes level 7 apprenticeships. However, according to Ministers, the Government are planning to abolish those apprenticeships, which I think is a shame. I think I detected a note of regret in the hon. Lady’s intervention, which I certainly share.
New clause 5 would require a report on the impact of the Bill and the actions of Ministers, through their centralisation of power, on higher education, given that there is now this overlap. Someone might think, “They’re looking at a Bill on technical education and apprenticeships. What’s that got to do with universities?” The truth is that it has quite a lot to do with universities, for the reasons that I have just set out. I worry that the Bill’s implications have not been well thought through.
Can the Minister assure us that she has thought this through? For example, can she tell us how much income universities would lose if the level 7 levy funding really is axed, as Ministers plan to do? How much would universities lose if level 6 levy funding is also axed, an option that Ministers are keeping open? I would love answers from the Minister on those questions today. If she does not feel able to give them, I would be very happy for her to write to me. We have tabled new clause 5 to ensure transparency, so that it is at the back of Minister’s minds that, as they take greater control of everything to do with technical education and apprenticeships, they are not just thinking about those things in their own right, although they are very important.
Damian Hinds
In encouraging the Minister to write to him about the effect of the level 6 and level 7 restrictions, will my hon. Friend also ask her to comment on the potential effect of those restrictions on schools—the sector for which the DFE is responsible—and in particular on the postgraduate teaching apprenticeship?
Neil O’Brien
My right hon. Friend is completely correct. He will remember from the last sitting that I tried to lay out the incredibly damaging direct effect on our public services that the decision to axe level 7 apprenticeships would have. The most notable effect is on the NHS, where the doctor apprenticeship has already been axed—that is tragic and has left various people who were on it stranded. It will have a particular effect on advanced nursing, which is a critical part of the NHS long-term workforce plan, as well as management throughout the public services, including local government and the town planning skills that the Government claim are desperately needed.
Exactly as my right hon. Friend said, the implications are severe right across the public services, including teaching, where the DFE is the biggest user of this apprenticeship and the biggest beneficiary in the end, which is a terrible irony. That is why we bring have tabled new clause 5, so that we at least have transparency about the effects of Ministers’ actions, and we have it in the back of Ministers’ minds that they will have to explain their decisions, including not just their direct effect on technical education and apprenticeship funding, but their effects on the wider education system.
The Chair
We have located the missing letter, which Members should all now have on their desks. I will suspend the sitting for five minutes while we try to digest it. If the shadow Minister, or anyone else, wants to come back in with something, they are free to do so.
The Chair
I am told by the Clerks that this is an unusual situation. I have to say at the moment that the letter refers to clauses that have previously been debated, so I will not be allowing a debate about it. That is for your information, which you could use on Report, if you chose, to raise the matter again. I do not want you not to have the opportunity to probe further. I call the Minister to respond.
Janet Daby
I thank the hon. Member for Harborough, Oadby and Wigston for tabling new clauses 4 and 5 and his discussion of them. New clause 4 would impose a duty on the Secretary of State to publish a report within one year of Royal Assent, setting out the impact of the Act on T-levels. Specifically, the report would have to include information on the administration and accreditation of T-levels, and whether T-levels were meeting local demand in schools.
T-levels are indeed an excellent technical qualification for students after GCSEs; I concur with the hon. Member on that. On his question about whether the 10% uplift will be continued after this academic year, we will confirm that position in due course, and I will write to him on that point.
Thousands of T-level students have already gone on to jobs, apprenticeships and further study related to the subjects of their T-levels, and we continue to support the qualification’s growth and uptake. Indeed, three new T-levels were launched in September 2024. A new T-level in marketing will be available from September, and we will continue to support providers to deliver and upscale their T-level offers. T-levels are designed by employers based on occupational standards, and Skills England will continue the work that IfATE has been doing to set and maintain the high-quality occupational standards on which T-levels are built. Curriculum content and assessment methods are set by awarding organisations in line with these standards.
The Bill already contains a duty for the Secretary to State to publish a report setting out which of the functions being transferred are to be undertaken by Skills England and the impact on technical education and apprenticeships. The report will provide information on T-levels, given that they are an important form of technical education qualification. Ofqual is an independent regulator for technical qualifications, and is the only body with the power to accredit the qualifications. Through the Bill, we are reintroducing the potential for Ofqual to apply its accreditation power to technical qualifications, when the Secretary of State considers it to be appropriate. That will reopen the door so that the full range of regulatory options is available for technical education qualifications. That will help to ensure their quality and enhance confidence in them.
Damian Hinds
Fortuitously, Ms Furniss, we do now have an opportunity to ask about something in the letter, which the Minister is going through now. I am struggling a bit with this thing about, “If the Secretary of State deems it appropriate.” That is not because I question that judgment, but because I do not really understand what the intent is. What does the Minister believe will be the practical change that comes about as a result? For example, is it about more new qualifications coming in? Is it changing the balance between T-levels and other TVET qualifications?
Janet Daby
My understanding is that there needs to be the option for Ofqual to decide whether to inspect certain technical qualifications and whether they should be accredited. That option needs to be available. At present, it has not been happening since 2002. We continue to support the growth and uptake of T-levels, in line with identifying skill needs in the economy. Skills England will gather and publish information about local skill needs. Skills England will also assess how far available provision, including T-levels, is meeting those needs.
I turn to new clause 5, which would impose a duty on the Secretary of State to publish, within one year of Royal Assent, a report on the impact of the Act on the higher education sector in England. Higher education providers play an essential role in meeting the nation’s skill needs and supporting the growth mission. Many of the jobs and sectors that drive economic growth rely on the skills delivered by higher education providers. It is therefore vital that Skills England works closely with and supports the higher education sector as it delivers each of its three key functions. Higher education providers have a deep understanding of local skill needs and growth opportunities. That provides a rich resource for Skills England to draw on, and it builds its authoritative assessment of skills needs in the economy.
Neil O’Brien
I am hugely encouraged by the Minister’s recognition of the importance of these higher degree-level apprenticeships to the higher education sector. Will she undertake to write to me setting out what the impact on universities of ending level 7 apprenticeships would be? I mean primarily the financial impact, but also the impact on numbers of students. The information available in the public domain is somewhat patchy, so it would be incredibly helpful to have that at either the point the Government make a decision on level 7 apprenticeships or—even better—before. Will she write to me, so that we are at least on the same page about what the impact on universities of changes to level 7 would be?
Janet Daby
I think the shadow Minister is well aware, having asked similar questions many times, that more information will be coming out from the Government.
Staying on level 7 apprenticeships, we are reforming apprenticeships, tilting the system towards young people in most need of developing skills and getting a foot on the career ladder. We are cutting through the red tape by removing the 12-month requirement, to support shorter-duration apprenticeships in key sectors. That flexibility will support apprentices in areas such as the creative industries, where training does not need to take 12 months and is currently putting barriers in the way of getting apprentices into key jobs. The Prime Minister also announced the development of new foundation apprenticeships, which will align to entry-level roles in key sectors and help to bridge the gap between employees, skills, staffing shortages and young people ready to begin their careers.
Neil O’Brien
I was a bit disappointed that the Minister would not undertake to write or set out the financial impact on universities of ending level 7 apprenticeships. When I speak to people in higher education, they are extremely worried about that. For some institutions, it will be a damaging blow.
Numerous people, including those I have already quoted, have pointed out that although the Government hope that all this money will flow straight from level 7 to level 2 and 3 apprenticeships, that is very unlikely to happen; it is more likely that it will flow to level 6. It is clear from the Minister’s comments that they are keeping that in crosshairs too, and that they might axe it at some point. That would compound the damage in higher education and our skills system more broadly. I was disappointed that the Government do not want to set out that detail, but I am not surprised.
I was also disappointed that the Minister could not give us any clarity on the 10% uplift for T-levels. People in the sector who are delivering these great qualifications—the Government agree that they are great qualifications—are crying out for clarity. They are making decisions right now. The Government keep talking about how they want to move fast—“We are very dynamic and ambitious”—yet on the things on which the sector wants them to move fast, they are not moving at the pace that people on the frontline would like. That is a great shame.
Likewise, we see with the funding decisions on national insurance that technical education is once again being treated as a bit second class. Schools get a funding decision at least slightly before the start of the financial year—during which the national insurance increase will hit them—whereas those in technical education will have to wait a long way into the academic year, when they will already be paying out significant sums in increased national insurance, to find out whether there will be compensation and how much will be covered. As schools are discovering, that is often a bitter experience, because they find that they have been short-changed by the Treasury.
We will not press the new clause to a vote. We have had a good debate in Committee, and we have set out our concerns, which are pretty serious. I hope that, even if the Government do not change their mind today, we will at least have given Ministers cause to think about how Skills England will operate. If they do not listen to us, I hope that they will at least listen to some of the criticisms, which we have been reading out, from stakeholders in industry and education about the decisions that they are about to make. I hope that they will act on those concerns. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
Bill, as amended, to be reported.