Technical and Further Education Bill (Fifth sitting)

Committee Debate: 5th sitting: House of Commons
Tuesday 29th November 2016 Public Bill Committees

The Committee consisted of the following Members:

Chairs: Mr Adrian Bailey, † Nadine Dorries

† Argar, Edward (Charnwood) (Con)

† Brabin, Tracy (Batley and Spen) (Lab)

† Donelan, Michelle (Chippenham) (Con)

† Evennett, David (Lord Commissioner of Her Majesty’s Treasury)

† Halfon, Robert (Minister for Apprenticeships and Skills)

† Hopkins, Kelvin (Luton North) (Lab)

† Jayawardena, Mr Ranil (North East Hampshire) (Con)

† Kane, Mike (Wythenshawe and Sale East) (Lab)

† Mak, Mr Alan (Havant) (Con)

† Marsden, Gordon (Blackpool South) (Lab)

† Rutley, David (Macclesfield) (Con)

† Shah, Naz (Bradford West) (Lab)

† Smith, Henry (Crawley) (Con)

† Tomlinson, Justin (North Swindon) (Con)

† Turner, Karl (Kingston upon Hull East) (Lab)

† Vara, Mr Shailesh (North West Cambridgeshire) (Con)

Kenneth Fox, Marek Kubala, Committee Clerks

† attended the Committee

Public Bill Committee

Tuesday 29 November 2016

(Morning)

[Nadine Dorries in the Chair]

Technical and Further Education Bill

00:00

[The Chair]

Members may remove their jackets during the sitting. Would everyone ensure that all electronic devices are turned off or switched to silent? The selection list for today’s sittings is available in the room. I have used my discretion to select amendments that were tabled only on Friday, for which the usual period of notice has therefore not been given, as I am satisfied that it was not practicable for Committee members to consider fully the policy statement supplied by the Government on Wednesday in time to table amendments before the deadline. I remind Members that we will consider the clauses and schedules in the order set out in the programme motion that was agreed last Tuesday, which is set out at the end of the amendment paper. We will now resume consideration of schedule 1.

Schedule 1

The Institute for Apprenticeships and Technical Education

[Gordon Marsden (Blackpool South) (Lab)]

I beg to move amendment 12, in schedule 1, page 23, line 6, at end insert—

‘(4A) The Institute must, in approving the group of persons specified in subsection (3), have regard to the desirability of the group’s members between them having experience of—

(a) representing or promoting the interests of individual students and apprentices, or students and apprentices generally;

(b) providing technical and further education;

(c) providing apprenticeships;

(d) at least one relevant trade union official;

(e) employing those who have completed technical and further education courses or apprenticeships; and

(f) any additional knowledge or profession that the Institute considers relevant.”

This amendment would ensure that the groups formed to set standards for the “routes” in technical and further education have relevant experience and include students in the process.

[The Chair]

With this it will be convenient to discuss the following:

Amendment 28, in schedule 1, page 23, line 6, at end insert—

‘(4A) The Institute, in carrying out its functions under this section, must show due regard for broad representation and diversity amongst the group of persons preparing each standard, including—

(a) gender and

(b) the representation of both large and small employers.”

Amendment 13, in schedule 1, page 23, line 20, at end insert—

(c) information about matters that it takes into account when deciding whether or not to convene a group of persons to prepare a standard for the purposes of subsection (6).”

This amendment would require the Institute to publish information about its reasons for convening, or choosing not to convene, a group of persons to prepare a standard for an occupation.

[Gordon Marsden]

It is a great pleasure to serve under your chairmanship, Ms Dorries. I express our thanks for the latitude given with regard to the amendments tabled on Friday, which is very welcome.

The commonality in these amendments is that they are designed to ensure that those who are involved in setting the standards for routes in technical and further education have relevant experience and that, where possible, students are included in the process. Amendment 13 would require the Institute for Apprenticeships and Technical Education to publish information about its reasons for convening or choosing not to convene a group of persons to prepare a standard for an occupation.

The skills plan consistently talks about the institute being employer-led, with college-based learning being decided by employer groups. That is precisely why further education colleges, other training providers and learners are an essential component of the roll-out and delivery of standards and assessments. I cannot emphasise enough how essential it is for the groups formed to set standards for the routes in technical and further education to have wide-ranging representation, including all key components of apprenticeship creation and delivery. The Minister will no doubt have heard several times—if he has not, I am sure he will in future—the term “co-creation” or “co-production”, which has come from many of the people in those groups.

Our vision for apprenticeships, which I hope the Government share, requires input from further education providers and colleges, and especially universities, given the crucial role of higher skills and degree apprenticeships. I will not labour the point that I made previously about how important it is, particularly in the context of higher skills and degree apprenticeships, that there is good read-across and co-operation between the office for students and the new institute, as well as the relevant trade unions, which have key experience, to ensure a broad outlook on new frameworks and accreditations. We believe that including apprentices and learners in that process is vital.

A representative of the National Society of Apprentices, which Members will know is associated with the National Union of Students, was scheduled to give evidence to the Committee last Tuesday, but unfortunately she was unable to attend because of illness. However, the National Society of Apprentices has said:

“At the moment, apprentices have no real opportunities to improve their education. Although most students going through the ‘traditional’ education system at college or university are able to give feedback through their class representative system, similar structures do not exist for apprentices.”

There is also the Industry Apprentice Council—I referred to it in a previous sitting—which is strongly supported by EAL and the Science, Engineering, Manufacturing and Technologies Alliance. Of course, there are other groups, such as the valuable group that Lindsay McCurdy and her colleagues convene, particularly around Apprenticeship Week, which involves a large number of different sorts of apprentices. Apprentices should be able to influence the way in which their training is developed and carried out. After all, they know from the frontline what has been helpful and successful for them and what has not. I hope that the Minister, who has been very passionate in his support of both apprenticeships and apprentices, appreciates that point.

It is also quite unclear what role there will be in the institute for workforce representatives and trade unions. I think it is appropriate to talk about that on a day when the Government, and particularly the Prime Minister, have again signalled their strong interest in making sure that, in some shape or form—the details will obviously have to be hammered out—there should be more workforce representatives involved in companies.

The TUC has said that it is crucial that

“Trade unions must be given a central role in setting and monitoring quality standards”

for technical education. After all, that is common practice in leading European economies with high-quality skill systems in place. Those systems are largely based on a social partnership model, which involves employers and unions agreeing standards and best practice at both national and sectoral level. Social partnerships have been key to the success of high-quality vocational routes in other countries, so I suggest that we would do well to take that lesson into account for our reforms of technical education. With particular regard to amendment 12, we might make a start in considering the composition of the groups formed to set standards for the routes. That is why I think it is important to give some form of direction to the new institute and its board of directors on that matter.

All the issues involved in getting the right sort of broad-based input are extremely important, because we have to get the routes right. We welcome the detailed and thoughtful proposals of the Sainsbury group. The Government are now, after some dithering, taking a new approach to the wilderness that has so far characterised aspects of skills policy, particularly in the technical and vocational areas. However, the devil is in the detail, and a number of stakeholders believe that the skills plan is not without fault. I mentioned in a previous sitting that the Opposition share the concerns of groups such as the Association of Employment and Learning Providers, and various others that we have quoted, about the potentially limited scope of the routes. I also spoke about the crucial role of the service sector, which will potentially provide huge numbers of apprentices with jobs and make sure that they are not left out of the process.

The Sainsbury review was clear that only jobs with technical aspects will be included within the 15 routes. I do not know whether the Minister was present at the recent Association of Colleges conference, as I was—I was not actually there when Lord Sainsbury spoke, but I read his remarks. I think there was some concern that he was—dismissive is perhaps the wrong word—too light on the importance of a significant number of jobs that are non-technical occupations, which currently lie outside the scope of these routes. I want to make it clear that we are not criticising the initial number of 15, and we are not necessarily arguing for the creation of lots more routes, but we are saying that, as this process develops, it is important that the Government generally, and the new institute in particular, pay attention to those jobs and to that training. We have to consider carefully the impact of workforce development in those sectors.

That brings me to amendment 13, which would

“require the Institute to publish information about its reasons for convening, or choosing not to convene, a group of persons to prepare a standard”.

The amendment’s underlying principle is transparency, because it is important to be able to monitor who is preparing the standards, in order to ensure that those standards will meet all of the requirements. However, it is also important as a signal of confidence to the broad range of stakeholders, who will not necessarily be directly involved in preparing the standards. The setting up of the new institute will be a busy period. With so many organisations involved in the process, transparency is crucial to provide students with the best available standards and to keep the rest of the stakeholders well informed.

I must again raise the vexed issue of capacity: the capacity of employers to put what they need to into the process, but also the capacity of the institute for oversight of quality assessment. We will move on to that when considering another aspect of the Bill. I just observe for the moment that the phraseology used in the guidance to the Green Paper is that there will be other options available, including Ofqual, professional bodies and others, and that some or all of those bodies may charge for doing it—or presumably not charge.

With those variables and parameters, there is inevitably some doubt about capacity, elasticity and the unpredictability of delivery from the new institute, certainly in the first couple of years, because other providers and options might have been taken up in the process of preparing standards. That inevitably raises concerns about whether the numbers for the new institute, as provisionally set out by Peter Lauener and confirmed by the Minister, will be adequate or what process there will be for boosting them if this somewhat variable geometry about who might take up the institute, as opposed to Ofqual and others, comes to pass.

Those are important issues and, again, a number of different agencies have commented on them. I draw the Minister’s attention to the written evidence submitted by the Association of Employment and Learning Providers, which states:

“Through its proposed funding mechanisms, the Government is encouraging employers and providers to move from Apprenticeship frameworks to standards by reducing the prices payable for frameworks, even though many standards are not yet in place. This makes it very difficult for providers to judge and therefore plan whether future provision will be viable. As has been reported in the sector press, apprentices have also started on Apprenticeships under a new standard without an EPA being in place, which means they have no means to complete it.”

That is the AELP’s view. I am not necessarily saying that I share it; I am just saying that this is one of the issues out there. It continues:

“The situation is exacerbated by the Government’s insistence that employers can negotiate with providers on the price of training and assessment.”

I would not necessarily agree with the AELP on that point—not in every detail—but the essence of what it says is this:

“Reform proposals may not currently be giving sufficient weight to the input of stakeholders and the concerns of and about learners, which must be rectified by the inclusion of stakeholder representatives on the Board of the Institute. We are therefore supportive in principle of the amendments to Schedule 1 of the Bill which have been tabled jointly by Gordon Marsden MP and Mike Kane MP.”

The AELP makes the strong point that the number of standards being developed, and the investment in time and resource required to develop them, could be leading to

“‘employer fatigue’ and a drop in employer engagement.”

We have also had written evidence from the Centre for Vocational Education Research. I know that the Government Whip is deeply interested in the bona fides of people who submit evidence to Committees.

[The Lord Commissioner of Her Majesty’s Treasury (David Evennett)]

Absolutely.

[Gordon Marsden]

We had a lively exchange on the issue when the Higher Education and Research Bill was in Committee. For the sake of the Whip, and indeed the whole Committee, let me explain that this evidence was prepared by the Centre for Vocational Education Research, whose people are stuffed full of qualifications from the London School of Economics. Even better—we cannot get much better than this—the Centre for Vocational Education Research is funded by the Department for Education and was launched in 2015. It states in its written evidence:

“An employer-led body as proposed by the Bill, in particular in the more competitive labour market of the UK, which does not engage with all relevant stakeholders, will not be able to achieve similar outcomes”

as they do in

“coordinated market economies…in Scandinavian and Western European countries”.

It states that the institute needs to

“bring together all relevant actors beyond the Department for Education and employers.”

It references unions,

“because of their role in life-long learning in the workplace”.

It also states:

“Associations of colleges and learning providers need a clear role in the Institute, and student associations and associations concerned with the interests of particular groups”—

I will not dwell on this now, Ms Dorries, because this will come up with one of our later amendments—

“also need to be involved from the start.”

It suggests that:

“Careers advice and…employment services…essential to balance short and long-term supply and demand in the labour market, need to be similarly engaged.”

That is the view of the Centre for Vocational Education Research, which touches on the three amendments.

I again underline a point made in the evidence submitted by the TUC, which specifically referred to the important role of the union learning fund. This year is the 10th anniversary of the official establishment of the union learning fund. The TUC commissioned an evaluation by academics at Leeds University Business School and the University of Exeter, based on surveys of employees engaged in training through the ULF and their employers. I will refer to two or three of the key findings. Over two thirds of learners with no previous qualification attained their first qualification as a result of engaging in union-led training. Four in five employees said that they had developed skills that they could transfer to a new job. And two in three said that those made them more effective in their current job.

Equally importantly, half of the employers said that

“their staff were more committed as a result of unions facilitating training and development opportunities.”

Separate analysis showed:

“Union-led training delivers an estimated net contribution to the economy of more than £1.4 billion as a result of a boost to jobs, wages and productivity.”

Those are also cogent points for broadening representation.

Finally, amendment 28 asked for the institute to show

“due regard for broad representation and diversity amongst the group of persons preparing each standard, including—

(a) gender and

(b) the representation of both large and small employers.”

For both your information, Ms Dorries, and the information of the Minister, this is a probing amendment, so we did not intend to include a list of all the potential groups that might be included; that would not have been appropriate at this stage. The reasons why we have highlighted those two are fairly obvious, I hope. First, the gender issue has already bulked large in our conversations in Committee. Secondly, because of the key role of large and, in particular, small employers—the Minister will know about the discussions on the delivery of the apprenticeship levy—it is crucial that those groups are involved.

The Minister sang the praises of the Apprenticeship Delivery Board the other day. It may be a fine body, but it was actually made up of members drawn from a relatively narrow section of business and, incidentally, had only one woman among its number. There was no role for others, such as further education providers, universities, trade unions and local authorities. There has been some progress with the number of women on the ADB—it has increased to three—but it is important that those lessons are taken on to a broad representation and diversity being found among the group of persons preparing each standard.

09:45

Without wishing to stereotype, it is a fact that in areas where we need to have a great degree of training and apprenticeships—the service sector, healthcare and social care—there will be a large number of women. It is really important to get a strong degree of gender diversity in those groups preparing those standards.

Keith Smith, the director of funding and programmes at the Skills Funding Agency, said recently that, although 20,000 employers were expected to fall within the scope of the levy when it launches in April 2017, just 400 employers, or 2%, will cover about half the entire levy. He said:

“That top 400 will carry a big load. Some of those bigger employers will be paying over £30 million a year in terms of the apprenticeship levy.”

I am not dissing the role of large employers, and I agree with Keith Smith that it is critically important that they bulk large in the deliberation and consideration process for preparation of the standards.

I speak from my experience as a constituency MP, as BAE Systems is just down the road in Warton. As many know, BAE Systems is a key part of the aerospace and defence industry and a great trainer and supporter of apprenticeships and degrees taken by its workforce. It is less well known that, on the whole, for every one job that is directly created and maintained by a company such as BAE Systems, up to two or three additional jobs are created and dependent on them in the supply chain of much smaller companies. That supply chain in different parts of the industry can be very sector-based and geographically diverse, or it can be geographically focused in a strong area, as is the case with BAE Systems at Warton—in that case in and around west Lancashire.

I only labour that point to indicate the strong and important connection of co-operation and collaboration between large and small employers. That is organically delivered with a company such as BAE Systems or ADS or a range of other large companies where the same applies. However, when small employers, which are not in that position, are to be involved in this process, it is crucial that they have a role in preparing standards. Funding for employers that do not pay the levy, as well as all the top-ups and additional payments, will come from the money that levy-paying companies do not spend from the overall pot.

Revised Government estimates in the autumn statement show that the expected yield from the levy has dropped from £3 billion to around £2.8 billion over the next five years. I think those figures of £3 billion to £2.8 billion encompass the whole yield of the levy, but I am sure the Minister will correct me if I am wrong.

The original statement on the levy, made by the Minister’s predecessor, the hon. Member for Grantham and Stamford (Nick Boles), indicated that £2.5 billion of that £3 billion roughly related to England, and I assume that proportion is maintained in the revised estimate. It would be helpful if the Minister could provide the new estimate of the expected yield from the levy in respect of England only, which is the basis on which we are discussing the institute today.

As the Minister will know, the AELP has already voiced its disappointment that the Government have not given assurances of a minimum fixed budget to be allocated to non-levy payers for the next five years, irrespective of how much money is left for them in the levy pot. The association is concerned that the impact of the shortfall may be felt disproportionately by smaller business:

“The announcement of the levy over 12 months ago has resulted in an increased commitment from large employers to offer more apprenticeship opportunities but uncertainty has surrounded the level of government funding that will be available for apprenticeships in non-levy paying smaller employers. Currently SMEs provide more than half of the 905,000 apprenticeships in the country.”

The Minister and I are both on the record praising the abilities and support that small and medium-sized enterprises give their apprentices once they have them on board and have dealt with some of the back office issues. The AELP goes on to say:

“We need to ensure that much needed apprenticeship places will be available to young people in towns and rural areas where large levy paying employers aren’t operating.”

To finish on the point about small employers, I will quote an article that appeared yesterday in FE Week, which should raise some concerns and show that it is all the more important that small employers are well included in the process, as we envisage in the amendment. The new register of apprenticeship training providers closed its applications last Friday, and FE Week states:

“A quarter of apprenticeship providers have declined the opportunity to compete for an SFA contract to deliver training to small and medium sized businesses from next May.”

I know, as I am sure the Minister does, that that does not directly connect with a huge problem for small and medium-sized employers, but it is indicative of the concerns in the sector that a quarter of providers did not want to compete for an SFA contract to deliver training to small and medium-sized businesses. At the risk of overstating the point, that is the reason why amendment 28 has a particular emphasis on gender issues, the importance of large employers and, in particular, the need to ensure that small employers are strongly represented in the groups of people preparing the standards. I do not suggest that this would be a deliberate policy or outcome of the institute but, given the concerns I have expressed, the Government would do very well to ponder that and, from that point of view, it might be helpful to place those priorities in the Bill.

[Kelvin Hopkins (Luton North) (Lab)]

It is a pleasure to see you chairing our proceedings again this morning, Ms Dorries. I support the amendments tabled by my hon. Friend the Member for Blackpool South.

I do not want to be immodest, but I do have considerable experience in this field. I spent four years as the chair of governors at Luton College of Higher Education, which had welcomed thousands of apprentices through its doors. I have spent a total of 30 years on post-16 education governing bodies so I have very definite views. I have worked in the trade union movement; I was at the TUC for five years and I taught on trade union courses, so I have seen the involvement of the TUC and the trade unions in education. I spent 18 years working for NALGO and then Unison, which had a large department of education and undertook correspondence courses for local government officers.

I have seen a whole range of activities that are relevant to apprenticeships and post-16 education in the broadest sense, and I have definite views on what governing bodies should be like. They should not be too small or too large; they can become ungainly and unco-ordinated if they are too large. Equally, if they are too small and narrow in experience, they do not do a good job. I have seen both.

There is an optimum size for governing bodies, but I am talking about educational institutes, rather than the board of the institute. That board, however, will need the same kind of representation and a range of skills, and I have spoken in previous sittings about the importance of not having too narrow a field. If one has only a particular kind of business-led model, with small numbers of businesspeople of the same mindset and no challenge to that view, they will not necessarily pick up all the important issues that need to be discussed and considered when the board makes decisions and recommendations. Having a small body from a narrow field is not right.

The 1993 incorporation of post-16 education bodies—further education and sixth-form colleges—came from the then Government insisting on small, business-led governing bodies, which was a mistake. The governing body of which I was a member did not follow that model; we had a range of people with educational skills, a good degree of gender balance, and people from the community who were skilled in their fields and visibly representative of the very diverse community in which I live and which I represent. That is important as well. We also had skilled people with legal and financial qualifications. All that is so important in having a successful governing body.

One has to submit oneself to challenge if one is leading an important body, and intelligent, competent people have to be on board who have a range of views and will challenge things from time to time, but who will work positively and be supportive. The body should not go off in one direction, not be challenged and make mistakes. Mistakes have been made.

Even back in the 1990s, there were mistakes and some principals and leaders of educational institutions got out of control. They started paying themselves vast salaries and travelling abroad—ostensibly to recruit students, but actually they were just on jollies and looking after themselves. The Conservative Government of the time realised they had made a mistake and in the end came round to the kind of governing body that we had in the sixth-form college. It was a body of about 14 or 15 people, with a range of skills and representation. It is very important for the Government to recognise this point and to recommend, either in the Bill or through secondary legislation, what governing bodies and the board of the institute should look like. In particular, there should be representation from women, minority communities and trade unions, all of whom have expertise that will make the board function much better than if it was just led by a small group of businessmen.

As we know, the Confederation of British Industry and the Federation of Small Businesses often have different perspectives on business representation. The CBI typically represents global corporations, big business, banks and so on, whereas the FSB has an understanding of what it is like to be a small businessperson and of the needs of small companies. As my hon. Friend the Member for Blackpool South said, it is very important that small companies are represented, as well as large companies, and that we have those different perspectives.

I have probably said enough to reinforce my hon. Friend’s points and to try to persuade the Minister and the Government that what we are saying is sensible. It should be recognised and, at some point, included either in the legislation or recommendations by the Government. With those few words, I shall conclude.

09:59

[The Minister for Apprenticeships and Skills (Robert Halfon)]

I am grateful to the hon. Member for Blackpool South for tabling the amendment, and to him and the hon. Member for Luton North for what they have just said. I fully understand the concerns regarding the group of persons convened by the Institute for Apprenticeships and Technical Education to develop the standards, and I agree that the reforms to technical education should be informed by a balanced and diverse range of industry professionals. I also share the view that the institute should have a clear and transparent rationale for bringing together groups of persons to develop the standards.

I wish to comment on some of the issues raised by the hon. Member for Blackpool South. On apprentices and education, he will know that, as part of the reforms we have introduced, apprentices have not only to do the full-time, on-the-job training that is their apprenticeship, but to spend a significant amount of time at an educational institution, whether a private provider or an FE college. That offers them the education they need while they are earning.

Apprentices are able to give feedback to the employer and the provider. At the beginning of the apprenticeship, all parties have to sign a commitment setting out the roles and responsibilities, which include the giving and receiving of feedback. The apprentice is also able to give feedback during the review of the standard and assessment plans, and we can include that in terms of the guidance note from the Secretary of State.

[Gordon Marsden]

That is very encouraging. I know that that feedback process takes place; as I say, it has been welcomed by the various groups. I do not want to make things over-bureaucratic, but is there going to be a formal, or at least easily understandable, mechanism whereby apprentices can feed in—either as a group or as individuals?

[The Chair]

Order. Mr Marsden, could you rise when you speak?

[Gordon Marsden]

I am sorry, Ms Dorries. If the Minister is not in a position to say anything more on that today, I would welcome a note to the Committee at some point.

[Robert Halfon]

I will provide one, but I am always against very formulaic structures; things need to be flexible. The fact is that we give the opportunity for the apprentice to feed back at every step of the way, and the agreement has to be signed by the employer and the apprentice when the latter starts.

On the representation of small businesses, the hon. Gentleman will know that the trailblazer groups—there are roughly 10 employer organisations altogether—have to have a minimum of two businesses with fewer than 50 employers. We envisage that the employer panels will be the same. I am happy to reflect on that being included in the remit letter for the institute. We are also investing taxpayers’ money in huge incentives to encourage small businesses to hire apprentices and to encourage providers to take people on. We are doing everything possible to use taxpayer investment to ensure that small businesses hire apprentices and that providers do provide.

I would like as much as possible to be done by FE colleges, and I would be delighted if they took on more apprenticeship training. That is happening slowly, but I think they would be very willing. I have seen it happening in my own constituency of Harlow: whenever there is an issue to do with a company wanting an apprentice, Harlow College will be there, ready to advise the employer on what should be done and to offer training if it is required.

On the wider issue of the technical routes, I disagree with the hon. Gentleman. I shall set out the context of the problems we face. I have been quite open in admitting that we have a huge skills deficit in this country. The OECD said in 2012 that 20% of young people lacked basic skills. By 2020, the UK is set to be 28th out of 33 OECD countries for intermediate and technical skills. We are way behind.

The whole purpose of the reforms and the legislation—this is why Lord Sainsbury has supported them—is to ensure that we have state-of-the-art technical education for young people that transforms our skills deficit. People who do not want to do one of those 15 state-of-the-art routes, for technical and professional education, will have different options through other applied general qualifications and the academic route. The reforms focus on occupations that require the acquisition of a substantial body of technical knowledge and a set of practical skills that are valued by industry and that address employers’ needs and our huge skills deficit. I am glad that the hon. Member for Blackpool South quoted the Centre for Vocational Education Research, which my Whip guarantees is a blue-chip organisation.

[David Evennett]

The best!

[Robert Halfon]

Indeed. The centre says:

“We welcome the Report…led by Lord Sainsbury…the subsequent Post-16 Skills Plan”—

by the Government—

“and the measures contained in this Bill. The recommendations are consistent with our findings”.

It continues, and this is the whole point of the argument:

“Part of the problem is undoubtedly the confusing array of options, with uncertain pathways, that are on offer for young people after age 16. There must be a system that students, teachers, parents and employers…understand. Otherwise it is difficult for young people to be matched up with courses that are suitable for them and for employers to understand what qualifications actually mean.”

[Gordon Marsden]

I understand the Minister’s points, and I tried to make it clear that I am not asking for a huge response—we do not want to end up like the wax in a lava lamp, which starts off as a great base and goes up to the top before, after some time, becoming big again. I understand the need not to have duplication, but the AELP and others made a particular point about the service sector. Is the Minister not concerned that, if the Government are not careful, they will be, by excluding a large part of the service sector, in danger of sending out a binary message that certain sorts of occupations are valued and others are not?

[Robert Halfon]

No, because this is about technical and professional education. There are 15 routes, and people have many other ways of doing the vital training for the other areas that the hon. Gentleman mentions. People can do an individual apprenticeship, they can do part of the Government’s training scheme or they can do work experience. This is about addressing our skills deficit and, similar to what happens in other countries, ensuring that we have the technical education that our country needs.

On capacity, the institute will ensure that arrangements are in place for evaluating assessments. There are different options for employers and others to develop the standards. We will discuss the assessments later, but I will set out the current figures on apprenticeship assessment. On standards, some 61% of all apprentice starts have an end-point assessment organisation available to them, whether or not they are close to needing an end-point assessment. That figure rises to 94% for all apprentice starts, including those who are expected to reach the gateway—the end of their apprenticeship—within the next 12 months, where an organisation is close to being put on the register. We are considering a number of options and we will discuss them later, but the situation is not as bleak as has been said in respect of the assessment organisations and what is being planned and done.

The hon. Gentleman addressed the levy and the autumn statement, and I am pleased to say that we will still have £2.5 billion available for the levy, regardless of the announcements in the autumn statement. The Government are determined to create an apprenticeship nation, and by 2020 the spending will have doubled to £2.5 billion. We have discussed the providers, but I am happy to reflect on action that could be taken to ensure that SMEs are offering training that is relevant to their apprentices. I am pleased by the response from the providers so far.

The amendment raises other issues of concern. We need to learn from previous models, but there is a risk that requiring specific representation on the panels may not always be appropriate and may result in standards that do not have labour market currency. The purpose of the reform is quality, not quantity. If the panels try to do too much to please too many different groups, ultimately they might not support young people and adults in getting high-quality technical education to progress into skilled employment. The problem is that there is a proliferation of qualifications.

I agree that the groups should be as representative as possible, however. The Sainsbury report makes it clear that the institute will be best placed to ensure that the right people are brought together to develop the standards. Institute staff with expertise in specific occupational areas will know which employers and other stakeholders are suitable to develop standards that are representative of the occupations within the specific routes. The institute is independent. It should be for the institute to manage the composition of groups, and we should not constrain that process.

As for the approval of the groups that are not convened, it is for the groups to come together to put proposals to the institute. That has been the hallmark of the employer-led reforms, which, again, have been based on best practice in other countries. The groups should be flexible enough to reflect the requirements of specific occupations. In some occupations, such as blacksmithing, there are few large employers, while there may be other occupations in which there are no smaller employers or in which there is a bias towards a particular gender. On that point, I remind the Committee that 53% of apprentices are women, which shows that we are making significant progress, although of course we need to do a lot more to get women into STEM—science, technology, engineering and maths—and other key areas.

There are other ways in which views can be taken into account through the institute’s wider structure. Crucially, each route will have its own panel making decisions about the provision within that route. Standards will also be subject to peer review, the purpose of which is to ensure that the proposals meet wider needs. The institute’s board is open to applicants with a wide variety of interests. We hope to announce the composition of the board—genuinely—in the very near future. I firmly believe that once that announcement has been made, the hon. Member for Blackpool South will agree that there is important representation.

[Kelvin Hopkins]

Does the Minister agree that it is important to appoint the right person as chair of the board of the institute? We have had big, forceful characters in the field of public education, and sometimes they get it right and sometimes they get it wrong, but choosing the right person with the right skills and the right character to lead is crucial.

[Robert Halfon]

The hon. Gentleman is absolutely right. The board and the chairman are both incredibly important. The person has to have incredible knowledge of the field, as well as the charisma, connections and ability to drive the institute forward so that it can transform technical education in the way that we hope it will.

The Secretary of State will provide advice to the institute once a year on how it should carry out its functions, and the institute will have to have regard to that advice. As I have often mentioned, we will consult on the draft of the first guidance letter and provide advice on who the group of persons should be. We plan to encourage the institute to ensure that others with relevant knowledge and experience are included, as well as employers, professional bodies, sector experts, providers and assessment organisations—the more FE representation the better. The institute will need to explain in its annual report how it has taken that advice into account or, if it has not done so, explain why. I hope that that provides reassurance.

On amendment 13, the decisions to convene the panels will be driven by a robust evidence base. If the evidence shows that there is a need for a standard to be developed, the institute will be able to convene a group of persons if the trailblazer group has not already come forward. The need for the standard to be developed will be driven by the relevant occupational map. There will be an occupational map for each category of occupations or route. The maps will be underpinned by analysis of the labour market information and will illustrate how occupations are grouped together according to their shared requirements for skills and knowledge. The occupational maps will therefore provide the evidence base for all the provision within the route.

10:15

We hope the employers will continue to come together—and many have—as trailblazers to develop the new standards. If that does not happen, as I say, the institute will be able to convene the most appropriate and representative group of persons, as I described in relation to the previous two amendments. As it is the occupational map, and not other factors, that determines whether a group of persons is convened, there is no additional information to be published. However, the occupational maps and the approved standards will be published.

[Gordon Marsden]

Good.

[Robert Halfon]

Absolutely. They will be available on the institute’s website. The institute will publish information so that employers and others know what is required to gain approval to become a trailblazer group. Amendment 13 is therefore unnecessary, because the need for a standard in the absence of a trailblazer group should be the only trigger for the institute to convene a panel. Where the institute convenes a group to develop a standard, its approval of that group is implicit.

In light of that information, I hope that hon. Members agree with this approach. Designing the system around clearly identifiable occupations, and bringing together employers and others to identify the skills, knowledge and behaviours needed for those occupations, will ensure the new system genuinely meets the needs of employers and technical education. I hope the hon. Member will feel reassured enough to withdraw the amendment.

[Gordon Marsden]

I am very grateful to the Minister for going into detail and for the thoughtful and measured way in which he responded on the three amendments. It is a very techie but extraordinarily important area to get right. The intervention by my hon. Friend the Member for Luton North about the chair was particularly apt in that respect, and I am glad the Minister recognises those points.

I am interested to hear the Minister say that £2.5 billion will still be made available for England. Presumably, that means there will be less available for Scotland, Wales and Northern Ireland. If I am wrong on that matter, I ask him please to come back to me. It was quite clear in the autumn statement that the figure was £2.8 billion, so I just assumed that it would go down to £2.3 billion. If the Minister assures me that it is £2.5 billion, that is obviously good news for England.

We share a view on the direction of travel with the routes, but I am not as sanguine about what the Minister said about the technical side. We will reflect on that. I am pleased that he has given more detail on the occupational standards and that he has addressed the SME and gender issues. Again, we may have a further discussion at some point about the mechanisms in that respect. On the whole, he has given a positive and reasonable response. We can always come back to these issues on Report, if necessary. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Gordon Marsden]

I beg to move amendment 14, in schedule 1, page 24, line 6, leave out “as it considers appropriate”.

This amendment would require the Institute to publish apprenticeship assessment plans for all standards.

The Minister may want to say the same sorts of things on amendment 14 as he touched on under amendment 13. Nevertheless, I rise to move the amendment because it would require the institute to publish apprenticeship assessment plans for all standards. I hear what the Minister says about numbers and everything else. I shall reflect on that and drill down into the detail. However, recent analysis shows—this, of course, is real-time experience—that there are no approved awarding organisations for over 40% of learner starts on the new apprentice standards. Number crunching on the Government data that were published in October suggests that that applied to 1,790 or 42% of the total number of starts so far on the employer-developed programmes.

I accept, as I am sure will the Minister—it must make him tear his hair out at times—that because moving from frameworks to standards is an iterative process, there will be complications. There will be stats that do not appear to fit, and all the rest of it. I am not criticising the fact that there will be an element of confusion. However, those apprentices on the standards will have to pass end-point assessments for the first time, so those assessments have to be carried out by organisations that have been cleared for the task by Government or the Skills Funding Agency-registered apprentice assessment organisations.

I come back to my opening remarks on the previous group of amendments about the degree of uncertainty that still exists about how this will settle down in terms of what the institute does as opposed to other well established bodies such as Ofqual. Because of that, it is important that we have transparency on who is being cleared and who is doing the clearing.

The Minister may be familiar with the observations of Dr Susan Pember, who stood down as the civil service head of further education and skills investment in February 2013. I am very familiar with Dr Pember. On one famous occasion, when we had challenged the Government on various things, she said that we had been challenging them too much. The Minster’s predecessor, the right hon. Member for South Holland and The Deepings (Mr Hayes), said that we were absolutely right and that that was the role of the Opposition. Dr Pember has said:

“It is diabolical to let an apprentice start a programme without explaining not only what the end test will contain, but where it will be, what shape it will take and who will be the organisation—

that is the key point—

“to oversee and manage the process.”

We are told that the Department for Education—the Minister can contradict this if he wishes and it would be very pleasant were he able to do so accurately—is still struggling to recruit enough of those assessment organisations. Indeed, one of its spokespersons said:

“We know there is more work to be done to ensure we have the range and breadth of high quality assessment organisations we need.”

We are also concerned that the slowness with which this process has been taken forward has meant that students have not started on some apprenticeship standards for two years after they were launched. I appreciate that this refers to matters that took place not on the Minister’s watch, but it will colour and inform what people think about what the new institute does and what guidance the new institute is given in this respect by Ministers. The backstory, as it were, is an important one.

FE Week has looked at the latest Skills Funding Agency data, specifically the first standards that were given Government sign-off in 2014. It found that there were no starts at all in that academic year, or in 2015, while low numbers of students were recorded in several others. There may be an element here of what I described in a previous sitting as the very slow process of taking these trailblazers though. On that occasion, I alluded to the issues raised by the Transport Committee about the time it had taken to passport various standards that were developed in the maritime sector into the required frameworks for the SFA.

The National Skills Academy for Food & Drink took a lead role in developing one of the apprenticeships that ended up having no learners for food and drink maintenance engineers. Its chief executive frankly blamed the Government. She said that employers involved with the trailblazer group led by the NSAFD, which developed the standard, had been

“frustrated by the evolutionary nature of the government’s decision making process for approval. We were advised at the start that this new and innovative approach was called ‘open policy-making’… Unfortunately policy implementation does not lend itself well to this approach and valuable employer time and effort has been spent unpicking decisions made as policy decisions have firmed up. This has led to redrafting, reworking and lost time, such that the industry has written to the new skills minister, requesting that the Department for Education implements a far more structured and clear process for the future.”

That refers to things that have happened historically in the last couple of years, but the Minister will understand why, on the basis of that, we are keen to make sure that the institute publishes all of its apprenticeship assessment plans for such standards in a timely fashion. Will the Minister, if he is able to, tell us what is the status of his response to the NSAFD on that issue? Its chief executive, Justine Fosh, said that the standard had not been ready for apprenticeship starts until the beginning of this academic year, but that

“at least 60 students I know of”

have started since September.

That is only one example, but as this process strengthens and multiplies, as it needs to do to meet all the Government targets, the Government will have to pay close attention to this issue of capacity and this iterative process, otherwise they will find themselves in a logjam of standards approvals as early as the middle of next year. That is the point at which any Government of any political persuasion, when they have the Opposition or other stakeholders bearing down on them, might be tempted to cut corners. We do not want to see corners cut, but we, like the stakeholders, want to see what progress is taking place in real time. That is why we have put amendment 14 before the Committee today.

[Robert Halfon]

The hon. Gentleman said that there was a slow process in taking the trailblazers through. We have committed to carrying out all Government checks and approval processes within six weeks. The average development time is one year. The policy has changed over time and the employer groups have had to make amendments at times.

Under previous amendments, I set out the position on the 61% of all apprentice starting standards. That rises to 94% of apprentice starts, including those that are expected to reach their gateway. We have had some difficulties relating to low volume apprenticeship standards and we are considering recommending a targeted procurement organisation for a bundle of these standards. We are doing everything possible to make sure that the proper assessment organisation is in place.

The amendment recommends that all published standards must be accompanied by an assessment plan. The legislation already allows for the institute to publish assessment plans for standards as it considers appropriate. The flexibility on this is intentional. Our objective is that the Institute for Apprenticeships will assume responsibility for college-based technical education. At that point, standards will apply to both apprenticeships and the college-based routes, but assessment plans will still only apply to apprenticeships. College-based technical education will be tested in a different way because it is taught in a different way, even though it may be testing similar outcomes. It will be up to the panels to decide how each college-based course should be tested, but the proposals have to be scrutinised and approved by the institute. There will be some standards that are not appropriate for apprenticeships and that will be used only for the college-based routes; it is therefore unnecessary to develop and publish a plan for those standards. I hope the hon. Gentleman is reassured enough to withdraw the amendment.

10:30

[Gordon Marsden]

I am grateful to the Minister for his explanation and for his candour in admitting that there is still some way to go on the issue of capacity. I welcome what he said about procurement organisation. I am prepared to withdraw the amendment, although I would like to reflect on the Minister’s point about college-based technical education being best tested in a different way. A different way may be appropriate, but one would not want it to be seen as different in terms of quality. Is he able to say today—if not, perhaps he can write a note—whether more details of how that process will operate will be published? I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Gordon Marsden]

I beg to move amendment 15, in schedule 1, page 24, line 20, at end insert

“and must include the following representatives—

(a) a number of employers which, taken together, comprise a broad range of employer within the given occupation;

(b) at least one relevant trade union official;

(c) at least one person engaged in delivering relevant education at the level of the standard being assessed; and

(d) at least one person who can represent or promote the interests of students.”

This amendment would ensure that groups developing apprenticeship assessment plans include adequate representation of all relevant stakeholders.

[The Chair]

With this it will be convenient to discuss amendment 16, in schedule 1, page 24, line 37, at end insert—

(c) information about matters that it takes into account when deciding whether or not to convene a group of persons to prepare an apprenticeship assessment plan for the purposes of subsection (9)”

This amendment ensures the Institute must publish information about its reasons for convening, or choosing not to convene, a group of persons to prepare an apprenticeship assessment plan in respect of a standard.

[Gordon Marsden]

The amendments take us back to the heart of the principle that we think should be guiding the establishment of this institute. There is no broad difference between the intentions of the Minister and indeed the Government about the need to involve a broad range of stakeholders. The issue is perhaps—though I hope not—how we create mechanisms that effectively deliver that process. The Minister and you, Ms Dorries, will be familiar with the proverb, “If wishes were horses, beggars would ride.” I am not suggesting that the Government want to put in place a beggarly structure for the institute, although some of the issues around capacity still need to be resolved. It is fundamental to make sure that groups developing apprenticeship assessments have adequate representatives of all relevant stakeholders. I do not think we can simply do that by saying, “We can leave it up to the individual groups.”

I have served on enough Committees in this House to know the danger of prescribing particular quotas for people from certain areas. I am not going to take us too far down memory lane, but in the early 2000s, when the then Government were developing policies on further education, we had lively debates on some of the new structures and whether, for example, there should be a trade union person on every area council. I am acutely conscious of the dangers of tokenism in quotas.

[Kelvin Hopkins]

I understand the point my hon. Friend is making, but surely the sensible way forward is to have broad guidance, either in the Bill or in subsequent secondary legislation.

[Gordon Marsden]

My hon. Friend is absolutely right. He has huge experience in this area and in the structures that have come and gone. It is about getting the balance right. I come back to something I said on Second Reading: when one is establishing new institutions, it is important not just to set frameworks and assessments but to set the tone. It is the tone that will determine whether the Government, or in this instance the institute, get the buy-in and involvement that will make that institute a success.

When we discussed the issue of capacity, the Minister was absolutely right to say, “Well, it’s not simply a question of who’s on the board. It’s all the various other groups of people who are involved on the various sub-groups, and all the rest of it.” However, the buy-in will depend upon those groups feeling that it is made very clear in the Bill that there is a place for them. As I say, it does not have to be a sort of automatic quota-type thing, but it has to reflect something solid and positive.

We had a relatively lengthy discussion of this principle under the Higher Education and Research Bill, in relation to the office for students and who in that new office should be involved from the student body. The thing that got the headlines was about putting students on the office for students board, but the amendments that were tabled during discussion of that Bill referred to other bodies as well, such as the assessment groups.

That discussion is relevant to the present one because the issues are broadly similar, with the exception that in the higher education world the principles and the organisations that allow involvement by other stakeholders have been far more developed than they have been in the technical education world. Therefore, we think it is very important that matters such as the contribution of other stakeholders to the assessment process, as well as trade unions, colleges and providers, should be put in the Bill. In the Higher Education and Research Bill Committee, the Minister’s colleague said, “Well, yes, it’s really important that all these things happen,” but they had to happen miraculously, without being put in that Bill. The Committee divided and the Government had their way, but I am glad to say that the Universities Minister went away, reflected, and tabled an amendment on Report which, although it did not give us everything that we and other stakeholders might have wanted, established the broad principle that students should be involved on the board.

I ask the Minister today to think carefully about this issue in the context of other advice that he might have received from elsewhere. I also say to him that it is much better at this stage to send that signal to stakeholders, some of whom are already concerned about whether they are part of this great step forward, than it is to shelter behind the idea of, “Well, we don’t want quotas, so we don’t want to have at least one person who comes from a broad range of employers in a given occupation, or at least one relevant person from the trade unions, or at least one person who can represent or promote the interests of students.”

Getting the tone right at the beginning is absolutely crucial to get the buy-in that everyone who wants this institute to be a success needs. If the institute is going to be accretive in its first year, when it will deal principally with apprenticeships, and in the second year it will take on the elements for technical education, then the Government have time to put the practical implications of this amendment into practice. There does not have to be a big bang, and then officials will say, “Well, how do we identify these people? How do we do it?” That is the point of amendment 15.

As with amendments 16 and 14, we still regard it as imperative to see who is assembled to prepare an apprenticeship assessment plan. It is also valuable to be able to experience that process in real time and to see what it takes to introduce and check assessment plans. Those are the principles underlying an addition to the Bill that is modest, but extremely important in setting the tone and sending the message about all the good and generous things that the Minister talked about only a few minutes ago such as inclusion and ensuring that all talents are taken on board. If faces are set against the measure, there will be much disappointment among stakeholders.

We and the Government want the institute to start off with that broad co-operation—not co-operation through gritted teeth, with people saying, “This is what you’re doing as a Government, so we’d better knuckle down and get on with it.” We want people to say, “Yes, they’ve got it right. We want them to go forward with this.” Amendment 15, which is a modest proposal, would be a great benefit in that respect. That is why we are moving these amendments.

[Kelvin Hopkins]

I will speak briefly in support of my hon. Friend. The reality is that those who have become chief executives and chairs of organisations—those with leading roles—are frequently strong characters who want their own way. Some will not want to include in their organisations and structures people who are likely to challenge them. I have seen at least one notorious leader—he has now left, I am pleased to say—who wanted his own way. He would have liked acquiescent, docile and amenable people in his organisation, not people who put alternative points of view, which is actually often a healthy thing. In this place, we want people to put forward alternative points of view and have a range of opinions, even within parties, so that we get things right. We can make mistakes if we allow a wilful leader to have their own way without ever being questioned, let alone challenged.

My hon. Friend is right. We do not want to cause problems within these bodies, but it is important that a range of insights into what is being done is represented within them. I have concerns about giving too much power and freedom to wilful individuals who may not wish to be constrained by having, for example, a trade unionist on the board. Indeed, there are those who will not want a trade unionist on a body, whether that body is a board or a committee deciding on apprenticeships. I strongly support my hon. Friend and hope that the Minister can be persuaded.

[Robert Halfon]

This discussion is incredibly important. I understand that the hon. Members for Blackpool South and for Wythenshawe and Sale East who tabled the amendments want a quality, fair, open and genuinely representative institute at all levels. For me, this is not an argument about quotas. There are three issues: that the institute gives us high-quality technical education that meets our skills deficit; that the institute is independent, but employer-led because, as the Sainsbury report argued, that is how we will achieve that goal; and the question of the best way to achieve representation.

I welcome the intention behind amendment 15, which is to ensure that the groups who develop assessment plans are representative of the sector and others with an interest in ensuring high-quality assessment that really tests the achievement of the standard. That is what we want to do. The experience of the past few years from running our own trailblazer process is that the vast majority of groups that have come together to develop the standards and plans have been representative of the sector. Like the hon. Member for Luton North, I am not opposed to trade unions. I am a union member and very strongly support Unionlearn, which the hon. Member for Blackpool South mentioned. I hope very much that the trade unions will be involved in some way or another.

10:45

[Kelvin Hopkins]

I know very well the Minister’s record and admire the fact that he is a trade unionist, but not all politicians in this place are quite so at ease with trade unionism. Indeed, in the world outside not all are as admirable as the Minister in his support of trade unions.

[Robert Halfon]

I thank the hon. Gentleman for his comment but I think the issue is about how to create that representation. That will be the point of discussion between us.

In the institute, we have designed an organisation that will be able to carry out apprenticeship functions independent of Government, so that the decisions have credibility with employers. The Enterprise Act 2016 gave it autonomy in determining who should be approved to develop each standard and related assessment plan. The idea was to ensure that it had the flexibility to respond differently to different sectors and ensure that the groups are representative. Although it is right that the institute is independent and can make its own choices about how it operates, it is incredibly important that the Secretary of State is still able to give it guidance through a written statutory notice. The institute must have regard to the statutory notice and must justify its actions if it chooses to disregard the advice.

We will shortly consult on the draft of that guidance and that will provide advice on who the group of persons should be. I very much want to encourage the institute to ensure that others, beyond employers, with relevant knowledge and experience are included. As I said in the previous debate, that would be professional bodies, other sector experts, FE providers, other providers and assessment organisations. I strongly encourage hon. Members of all parties to engage in the consultation and give their views.

On amendment 16, I appreciate the interest in ensuring that the institute must be transparent in why it convenes groups and develops an assessment plan. It is essential that we avoid the proliferation of new standards and assessment plans, learning from the experience of previous apprenticeship frameworks. The whole purpose of the reforms is to ensure quality over quantity.

I am sure that hon. Members are aware that in formal technical education, standards form the basis of both apprenticeships and college-based technical education courses. With reference to the previous debate, the quality will the same whether it is the assessment of an apprenticeship or classroom-based education. It just reflects the nature of the different delivery between apprenticeships and college-based courses. Quality is everything; it is the whole purpose of the reforms.

In addition to employer demand, the need for the standard will be informed by the occupational maps. There will be an occupational map for each category, and the maps will be underpinned by labour market information. That is the best way to provide an evidence-based road map for all the provision within each route. The institute must ensure that standards exist for all skilled occupations that need them. Where an approved group of employers and other persons is not available, the institute will be able to convene a group to develop a standard and an assessment plan where necessary, but the occupational map must be the primary factor for determining whether a group of employers is convened. The occupational maps, as well as the approved standards, will be available on the website. The institute can convene a group to develop a standard only if one has not come forward organically, motivated by employer demand. The only other criterion that the institute will use to convene a panel itself is the occupational map, which is publicly available. Therefore, the information that the amendment requests is unnecessary.

The amendment could also have the effect of requiring the institute to publish its set of criteria for who should form the group of persons who will develop the assessment plan. As I said response to amendment 15, it is up to the institute as an independent organisation to decide the detail of how it carries out its functions, but I will reflect seriously on what has been said. I believe in strong representation in all parts of the institute, and we can suggest that it be part of the Secretary of State’s guidance to the institute. For that reason, I hope that hon. Members will feel reassured enough to withdraw the amendment.

[Gordon Marsden]

The Minister, with thoughtfulness and detail, has taken much the same view on amendment 16 as he took on amendment 15, and I will do the same. I heard what he had to say. It is one of those issues on which we agree to disagree, but as he said, we will have the opportunity to pursue it when the guidance is issued. On that basis, I am content to withdraw amendment 16.

On amendment 15, I have listened carefully to the Minister’s measured and thoughtful response. We are not disputing that the process must be employer-led. That is why we particularly say in the amendment

“a number of employers which, taken together, comprise a broad range of employer within the given occupation”.

That is the issue: there must be somebody in that group who knows their stuff.

This might be a fundamental philosophical difference between us. I find it odd that the Government should so set their face against putting in the Bill the principle that there should be a trade union representative, or indeed someone who could represent the interests of students or apprentices. I was tempted on that basis to press the amendment to a vote, but I will not. I have heard what the Minister said. We will wait to see the guidance, and we will want to contribute to it. As I said, we can always return to the matter on Report. With some reluctance, but recognising his bona fides in the matter, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Gordon Marsden]

I beg to move amendment 29, in schedule 1, page 25, line 17, at end insert—

‘(5) Regulations under subsection (4) shall be laid before Parliament and shall be subject to the affirmative resolution procedure.”

Heaven forfend that I should criticise groupings, but what I have to say to amendment 29 is probably very similar to what I will say to amendments 31 and 33. It is an important principle when setting up a new organisation that, at least during the first year or couple of years, it should make the process of regulation as transparent and open as possible. I say this with no disparagement or criticism of the Minister and the current Administration, but Governments of all descriptions have an enormous tendency not to do so when they set up new things.

To return to the point made by my hon. Friend the Member for Luton North about the need to have people testing and refining the arguments, it is easy to say, “Let’s have it done according to the negative procedure. After all, this legislation is only delegated and passported in, mainly from the Apprenticeships, Skills, Children and Learning Act 2009.” Before anybody says, “That was done under a Labour Government,” I will say yes, it was done under a Labour Government, and when I sat on Committees under that Labour Government, I regularly criticised the Government’s use of the negative procedure, especially when we set up new institutions. Famously, I and colleagues demanded that the Labour Government did not use that procedure for the casino in Blackpool, and we had to have a full hour and a half of debate on the Floor of the House. I think that, in those circumstances, I did my duty to both my constituency and parliamentary transparency. That is the principle behind why we are saying in amendments 29, 31 and 33 that regulation should be subject to the affirmative procedure.

The affirmative procedure, as you well know, Ms Dorries, is not the most onerous of burdens on Ministers and civil servants. It merely guarantees that there will be often quite limited discussion among a group like this one in a Committee Room. As the Minister will recognise, in those proceedings, even if the measures are not pushed to a vote, sometimes things are said and done that cause Ministers to reflect, to go away and to improve legislation, and, in this case, to improve the directions. The other point to be made—

[The Chair]

Mr Marsden, I did not want to disturb you in full flow, but it has just been pointed out to me that the grouping of these amendments is provisional. Would it be convenient for you, while you are in full flow, to speak also to amendments 31 and 33 to save time later? Then I will not call them.

[Gordon Marsden]

Absolutely. Ms Dorries, you make the point that all three amendments are designed to respond to that proposal. Having sweated blood over getting it, I want to refer to the famous policy statement for clause 1. From page 5, that gives the justifications for the Government’s proposals to treat these three areas according to the negative procedure. I am looking carefully at what is said about section A2B on page 7, section A3A on page 8 and paragraph 33 on page 8; those three sections relate to the three amendments we have tabled to change to the affirmative procedure.

In the commentary on paragraph 33, the policy statement says:

“Justification for procedure: this is essentially an administrative transitional provision to allow for the work…to continue by the Institute.”

On section A3A, it says:

“This is consistent with the existing power in relation to apprenticeships…and for which regulations have already been made and laid using the negative procedure”.

On section A2B, which relates to the first of our amendments, it also says:

“It is considered that a regulation making power subject to Parliamentary scrutiny is appropriate and provides flexibility…when new functions and procedures are being used for the first time.”

It talks about the amount of the fees chargeable in relation to particular assessments, what an appropriate fee is and all the rest.

Ms Dorries, we would be mad—I certainly would be—to want to have a major debate on, or to put in the Bill, what should or should not be prescribed for fee charges, in terms of the new evaluation of apprenticeship assessments. People would think we were bonkers. However, the principle of how to administer that, and particularly whether there should be charges or not—a live issue at the moment, being represented to us in briefing documents from various sectors—is quite important.

It is important that there is a set formula saying that this will be debated in a Delegated Legislation Committee, on a statutory instrument of some description, on the affirmative principle. Again, that gives support and value, and sends out that signal of inclusion to the stakeholders who will be significantly affected by the results of those affirmative resolutions or the negative procedures. That particularly applies to training organisations, which will be significantly affected and challenged by the changes—at least, that is what they have all said in their representations to us. That is to say not that the changes are bad or wrong, but simply that they are significant enough to be carried out through the affirmative rather than negative procedure.

11:01

There is another point, for which we must go back to what the beginning of the policy statement says about the importance of the inclusion of technical education. In responding to the earlier discussion about college-based technical education, we heard the Minister say, perfectly reasonably, if I remember correctly—Hansard will no doubt show if I do not—that college-based technical education would be tested in a different way. I responded by saying that that was interesting, and that I would be interested to see further detail when it is published. That rather makes the point that technical education is now being included, absolutely rightly, in the institute’s remit.

From the example that the Minister gave this morning, we know that some of the assessment and judging will proceed in a way that is different from that for apprenticeships. Ministers may say, “Some of these things have already been looked at under the Enterprise Bill”—I think one of its sets of regulations was subject to the negative procedure—but it is not unreasonable for us to say that this is a big new step, with big new things being introduced for technical education.

I am not suggesting that this should be the case all the time, but the passporting of these particular things into the Apprenticeships, Skills, Children and Learning Act 2009 will significantly change the meaning and operation of that Act, so should proceed on the basis of an affirmative resolution. If that happens, it will be a lot easier for interested organisations and stakeholders to get their representations in, because they will be aware right from the beginning and will not be dependent on an early-day motion being tabled within 40 days or 25 days—I cannot remember which it is, but whatever the period of time is that means it can be changed into an affirmative resolution. That would also give the Government early notice of what the concerns are.

If we proceed under an affirmative resolution, we will then have a Committee in this House; sometimes, those Committees can be relatively short and painless. The Minister will have had the chance to consider some of the representations and will know that a piece of delegated legislation is coming along. His officials will know that a del leg or statutory instrument is coming along. The Government will then have the opportunity to respond in Committee, on the Floor of the House, with the weight of authority that then gives to the Act—as Members know, what a Minister says in Committee is relevant in that respect—and everything can be done relatively smoothly and in good order.

That is in contrast to using a negative resolution, which might make people suspicious. They might think, “Why aren’t they prepared to have it discussed properly in an SI or del leg for however short a time?” That would not be terribly helpful and is not in the spirit of what the Minister has said. Indeed, it is not in the spirit of what we are doing with the Bill in including technical education in the institute’s remit along with apprenticeships.

For all those reasons, through amendments 29, 31 and 33 we are arguing strongly that regulations should be subject to the affirmative procedure, rather than the negative procedure listed in the policy document.

[Robert Halfon]

I thank the hon. Gentleman for his scrutiny. I need to explain the context of why we have chosen to go down this route. We have had a lot of discussion about the quality and evaluation of apprenticeship assessments. Ensuring consistency between assessments will mean that an apprentice can be sure that, wherever they obtain their apprenticeship, they are being judged on a fair and equal basis.

Our aim is that the institute should work to ensure that an apprentice in Hull and an engineering apprentice in Blackpool both have consistent and high-quality assessment. The power that allows the institute to charge for its role in reviewing assessments is critical to enabling it to discharge its function of evaluating assessments effectively.

Other organisations approved by the institute to carry out a quality assurance role in relation to apprenticeship assessments, such as professional bodies, are likely to charge. If the institute were unable to charge, there would be an increased incentive for employers to use the institute instead of the other options, and the extra running costs would ultimately fall on the taxpayer. It follows that, like other organisations, the institute should be able to charge for its work and to recover all its costs.

Importantly, the specific fee is likely to be adjusted over time for a range of reasons, such as to reflect any changes in the institute’s approach to carrying out evaluations and as assessments are updated and altered. Additionally, as the Committee will appreciate, the institute is still finalising the operational detail on how it will carry out some of its functions, including the evaluation of assessments, which we have just debated.

The actual amount that the institute will need to charge is not known. It is conceivable, although it has not been decided, that there could be different fees in different cases to take into account the cost of evaluation in different sectors. I reassure the Committee that the policy is that organisations should be able to charge only to cover their costs. We will make that clear to the institute in the guidance letter. Of course, the institute will be able to charge only if authorised to do so, and subject to the restrictions set out in the regulations.

It is likely that the fees would need to be reviewed quite frequently to ensure that they were appropriate, which is why hon. Members will welcome the provision to allow for the introduction of a statutory instrument without requiring Parliament to debate the matter each time a fee changes. The negative procedure ensures that the fee levels can be updated relatively quickly, if necessary, thus protecting the taxpayer from unwanted financial risk. The procedure is consistent with the Secretary of State’s approach to charging fees for certificating framework-based apprenticeships and, more recently, for English apprenticeship certificates—we are doing that in parallel. Even so, as the hon. Member for Blackpool South pointed out, regulations tabled under the negative procedure can still be debated in Parliament. If there were real demand, scrutiny could still be achieved.

Amendment 31 raises the same issue. I agree that any matter left to secondary legislation requires scrutiny, but the negative procedure provides for sufficient parliamentary scrutiny and would enable debate if the secondary legislation was prayed against. In the event that the institute wishes to introduce an application or process, or to update the fee levels, the negative procedure allows for that to be done as quickly as possible, which is consistent with the Secretary of State’s approach to apprenticeships.

As the institute is not yet established, flexibility is needed to prescribe the most appropriate method. We may also wish to seek advice from the institute and others on what those measures should be. I confirm that, at most, the fees should cover all the costs connected with carrying out the function.

I turn to amendment 33. The Secretary of State has powers to make arrangements to develop new technical education provision. The Bill would allow the Secretary of State to transfer those powers to the institute to ensure continuity. I hope it will reassure the hon. Member for Blackpool South and his colleagues if I give a broad overview. We are progressing the arrangements that we are putting in place before the institute takes on its wider responsibility.

The hon. Gentleman will know that creating this new technical education provision is a complex process. Although we are committed to taking through the reforms quickly, and particularly to establishing all 15 technical education routes as soon as possible, we recognise that certain lead-in times are required for reform. The Government plan to phase the reforms in progressively; development will commence before the institute remit is expanded in April 2018.

We have already talked about the occupational maps and the routes to identify occupations. We know that employers will play an especially important role in assessing the standards, including articulating the knowledge, skills and behaviours needed. I assure hon. Members that the negative procedure provides sufficient parliamentary scrutiny. We have thought carefully about the right balance of primary and secondary legislation and about which procedure to use for secondary legislation. We have set out the rationale in the delegated powers memo for the Delegated Powers and Regulatory Reform Committee in the other place and I look forward to reflecting on that Committee’s response. I hope that the hon. Member for Blackpool South will feel reassured enough to withdraw the amendment.

[Gordon Marsden]

Again, I am grateful to the Minister for the thoughtful and measured way in which he has put his point of view. I entirely accept everything he has said about the need to move carefully and about the fact that there may be variations in charges and that we may have to return to them frequently.

However, none of that undermines the essential argument that this is a new Bill that is taking on new stuff. We believe—I am afraid that history teaches us lessons in this respect—that it is far safer for the Bill to specify the affirmative procedure than the negative procedure. Although I appreciate the Minister’s remarks, I regret to say that we wish to press the amendment to a vote.

Question put, That the amendment be made.

Division 1

Ayes: 5

---

Labour: 5

Noes: 8

---

Conservative: 7

[Gordon Marsden]

I beg to move amendment 30, page 27, line 3, at end insert—

“A2DD Directions: consultation

Directions given to the Institute by the Secretary of State under this Act shall be subject to—

(a) periodic review, and

(b) consultation by the Institute with—

(i) organisations representing the teaching professions,

(ii) further education bodies and provider organisations,

(iii) employers and employers’ organisations,

(iv) awarding bodies, and

(v) organisations representing students and apprentices.”

Broadly speaking, amendment 30 continues the theme of our other amendments this morning. It is interesting to move the amendment after the Minister’s useful exegesis of the role of the Secretary of State and of the relationship between the Secretary of State and the institute, because it is that relationship that the amendment seeks to probe further. The Government’s policy statement gives those further powers to the Secretary of State, in particular in relation to matters concerning technical education.

11:15

It is important to emphasise, and I say this in the light of the conversation we have just had about delegated legislation, that these powers are

“to be exercised by direction with no Parliamentary procedure. Directions could include the approval of a qualification, entering into arrangements to ensure a qualification is available for approval (a contract with an organisation), the withdrawal of a qualification and their publication requirements.”

We, like many stakeholders—and I will quote some of the observations they have made—are concerned that some of these changes to technical education could be seen as being rushed, to put it kindly. There is therefore a real need for regular consultation with stakeholders to ensure a successful transition. We are not attempting to launch a lightning attack on the powers of the Secretary of State to do these things, but because of the relative speed with which matters have been taken forward and because we need to get them right, we want to see, first, provision for periodic review and, secondly, some indication of the range of organisations that will be consulted in that process.

Several stakeholders in this area have written to Committee members and submitted written evidence with their concerns. The Committee will be relieved to learn that I will not read great chunks of all of them, but they form a significant part of the written evidence we have had so far.

The Association of Employers and Learning Providers said in its written evidence that it believes reform proposals may not currently

“be giving sufficient weight to the input of stakeholders and the concerns of, and about, learners”,

and this is relevant across the board in setting up the institute. Stakeholders should be required, and be able, to give their input on directions given by the Secretary of State.

The awarding organisation, City & Guilds—a very distinguished organisation, which from memory is probably the oldest awarding organisation in the country—has commented that it would

“caution against the speed of transition of duties given that the IATE is not yet operational and will have much work to cover embedding Apprenticeship reform… It appears that 2018 is an ambitious timetable to assume full responsibility for all Technical Education as well as Apprenticeships at a time of significant change within both.”

This view was also echoed in the written evidence submitted by the TUC. There are uncanny parallels between some of the issues on the Higher Education and Research Bill—between the establishment of the office for students and the changes taking place in awarding organisations and in qualification assessment—and the concern that trying to do two lots of things simultaneously in a relatively short period of time risks causing some problems. The TUC says this is being implemented in a timeframe

“when major changes to the apprenticeship is taking place, including the rollout of the…levy and related reforms designed to drive up the number of high quality apprenticeships…reform of technical education will need to be phased in over a number of years and this means that a strategy needs to be in place to meet short-term skills pressures… However…there is an urgent need to accelerate measures to build our national skills base”—

because, and I think this is the first reference to Brexit so far in this Committee—

“the economy and labour market faces major challenges as a result of the decision to leave the European Union.”

It goes on to talk about concerns regarding the move to simplify technical qualifications by granting exclusive licences.

Other organisations have commented on this as well. The Association of School and College Leaders

“is concerned about the transfer of responsibility for regulating the validity of vocational qualifications throughout their lifecycle from Ofqual to the newly formed Institute for Apprenticeships and Technical Education.”

City & Guilds has said:

“The Bill is unclear about the future role of Ofqual. If its current major role in the regulation of AOs”—

awarding organisations—

“and qualifications is to be diminished then this should be done properly, openly and with full transitional provisions.”

City & Guilds has talked about the issues of overlap, as indeed has the Association of Colleges in its submission on Second Reading. City & Guilds goes on to talk about its concern

“about creating the apparently stark binary system of education under two governing agencies (Ofqual and the IATE…).”

I do not want to go on about what the various organisations have said, but I will draw out a point that relates to the amendment. What all that is telling me, and possibly a number of members of the Committee and certainly the outside world, is that there is significant concern about the pace of change and acceleration in the Bill. It is not part of my role here today to judge whether the process is too fast, too slow or just right. As I have said on other occasions, although it is nice for Ministers to be able to convince the Opposition, it is even nicer when they can convince the stakeholders with whom they need to work to ensure that the Bill is effective. That is the point we are making with the amendment.

As it stands, the discussion process appears to be two-way, between the Secretary of State and the institute. All those things are of course tied up. If, for the sake of argument, we had had agreement earlier from the Government to place in the Bill more stuff about which stakeholders would be involved in consultation and everything else, I might be less concerned about this appearing to be a two-way process that does not involve many other stakeholders in key areas, which will affect not only their viability but that of the delivery of some of the new technical and apprenticeship qualifications that the Government quite rightly want to progress.

It is a fairly modest thing, therefore, to say that the directions given to the institute by the Secretary of State under the Act should be subject to periodic review. The Minister has already said, perfectly reasonably, that the Secretary of State wishes to reserve to herself certain powers in that respect. That is an entirely proper and right thing for her to do. The institute is therefore not a completely free agent. Equally, however, if that is to be the case, in order to reassure and involve the other stakeholders who need to participate, a process needs to be indicated in the Bill, which is why we have talked about it being subject to periodic review and to consultation by the institute with a number of representative organisations. We have talked about organisations representing the teaching professions, FE bodies, FE provider organisations, employers and employers organisations, awarding bodies and, crucially, organisations representing students and apprentices. Those groups have been chosen specifically because they have raised in their written evidence concerns about how the process will be taken forward.

There is a secondary point, which I do not want to dwell on because I do not want to be curmudgeonly or critical of either the original Sainsbury review, which included my own head of Blackpool and The Fylde College, Bev Robinson, and which did an excellent job, or the skills plan. Nevertheless, various stakeholders have said that some of the proposals in the schedule—for example, paragraph 11 on the apprenticeship standards and assessment plans—were not fully canvassed in the skills plan. There remain concerns out there about some of those issues, which is yet another reason why we should try to reassure the stakeholders by putting a moderate proposal in the Bill. A periodic review can be whatever the Secretary of State, or Parliament if it comes to that, decides it should be. But the principles of consultation and periodic review, particularly in technical education, which is the new area that will come under the remit of the institute, are important, and that is why we are pressing the point today.

11:25

The Chair adjourned the Committee without Question put (Standing Order No. 88).

Adjourned till this day at Two o’clock.

Technical and Further Education Bill (Sixth sitting)

Committee Debate: 6th sitting: House of Commons
Tuesday 29th November 2016 Public Bill Committees

The Committee consisted of the following Members:

Chairs: Mr Adrian Bailey, † Nadine Dorries

† Argar, Edward (Charnwood) (Con)

† Brabin, Tracy (Batley and Spen) (Lab)

† Donelan, Michelle (Chippenham) (Con)

† Evennett, David (Lord Commissioner of Her Majesty’s Treasury)

† Halfon, Robert (Minister for Apprenticeships and Skills)

† Hopkins, Kelvin (Luton North) (Lab)

† Jayawardena, Mr Ranil (North East Hampshire) (Con)

† Kane, Mike (Wythenshawe and Sale East) (Lab)

† Mak, Mr Alan (Havant) (Con)

† Marsden, Gordon (Blackpool South) (Lab)

† Rutley, David (Macclesfield) (Con)

Shah, Naz (Bradford West) (Lab)

† Smith, Henry (Crawley) (Con)

† Tomlinson, Justin (North Swindon) (Con)

† Turner, Karl (Kingston upon Hull East) (Lab)

† Vara, Mr Shailesh (North West Cambridgeshire) (Con)

Kenneth Fox, Marek Kubala, Committee Clerks

† attended the Committee

Public Bill Committee

Tuesday 29 November 2016

(Afternoon)

[Nadine Dorries in the Chair]

Technical and Further Education Bill

Schedule 1

The Institute for Apprenticeships and Technical Education

Amendment proposed (this day): 30, in schedule 1, page 27, line 3, at end insert—

“A2DD Directions: consultation

Directions given to the Institute by the Secretary of State under this Act shall be subject to—

(a) periodic review, and

(b) consultation by the Institute with—

(i) organisations representing the teaching professions,

(ii) further education bodies and provider organisations,

(iii) employers and employers’ organisations,

(iv) awarding bodies, and

(v) organisations representing students and apprentices.”—(Gordon Marsden.)

14:00

Question again proposed, That the amendment be made.

[The Chair]

I remind the Committee that with this we are discussing the following:

Amendment 31, in schedule 1, page 28, line 32, at end insert—

“(3) Regulations under this section shall be laid before Parliament and shall be subject to the affirmative resolution procedure.”.

Amendment 33, in schedule 1, page 30, line 17, leave out “negative” and insert “affirmative”.

[The Minister for Apprenticeships and Skills (Robert Halfon)]

I will pick up on a number of points that have been raised before talking about the main substance of the amendment. A key recommendation of the Sainsbury report, No. 8, stated:

“While it is right for the Institute for Apprenticeships to be delegated wide-ranging autonomy across its operational brief, responsibility for key strategic decisions must be reserved for the Secretary of State. Crucially these decisions include those relating to the shape of the overall national system of technical education”.

The Secretary of State will obviously consult when making her decision, and she needs to ensure that any directions are reasonable and include all relevant factors, which means that the Government consult and listen where appropriate. Under public law duties, a Secretary of State has to act reasonably and fairly.

The hon. Member for Blackpool South mentioned City & Guilds, which stated:

“The City & Guilds Group fully supports the Government’s policy drive to improve the skills of the UK workforce and improve the transition for those entering employment from education and training. We see much merit in the Post-16 Skills Plan, and look forward to continuing to work with the Government and the new IATE to improve the quality and esteem of vocational and technical education in the UK.”

The hon. Gentleman also talked about the timescales. We will publish an implementation plan in due course—a real “due course”—which will set out the timeline for delivering the technical education reform set out in Lord Sainsbury’s independent plan and the Government’s post-16 plan. It will demonstrate firmly how we are to ensure that the institute will be able to deliver its functions according to the plan’s timescales.

As I said all the way through this morning’s sitting, the whole purpose of establishing the Institute for Apprenticeships—now to be the Institute for Apprenticeships and Technical Education—is to give employers a clear and independent voice. I understand that it must be strange at first sight that the Bill gives the Secretary of State powers to issue directions to the institute in respect of its responsibilities for technical education qualifications and the steps towards occupational competence, but the limitation in the amendment is neither necessary nor desirable, and I want to set out why.

I have mentioned Lord Sainsbury, who touched on this again in oral evidence to the Committee. We are including the direction provision in the Bill because it ensures that although the institute has real responsibility for developing and operating the technical education system flexibly, that will be in an overall strategic context guided by the Secretary of State. The Committee might be concerned that we did not include a similar power in respect of apprenticeships and the institute, but the two cases differ substantially. There is a stronger relationship between technical education and the education system as a whole—apprenticeships form part of that—particularly as it relates to young people, than is the case with apprenticeships individually.

To make it clearer, let me describe the circumstances in which we envisage that the direction power may be used. They could include a national requirement for all qualifications taken by 16 to 18-year-old students to include a specific core skill or knowledge. Or they could reflect reforms to other parts of the system, such as a change in the structure of A-levels or in the length of the academic year, which might have a strong impact on the shape of technical education provision. Many issues covered by the directions are likely already to be subject to specific consultation before they are put in place, such as the consultations that take place on A-level subject content. The direction power simply enables the Secretary of State to ensure that her wider policy responsibilities are given effect throughout the system.

[Gordon Marsden (Blackpool South) (Lab)]

I intervene on the Minister at this point to clarify that the point of the amendment, and the argument I made, was not to question in any way the ability, legality or desirability of the Secretary of State having an ongoing, one-to-one relationship with the institute. The point was that the aggregate of those instructions, if they are not tempered—that is the way I want to look at it—by a periodic review or consultation with the sorts of organisations that we have talked about, could cause not a chasm but a gap between what one set of people know and what another set know. I entirely understand the Minister’s point about making these decisions based on technical things, but that is the purpose of the amendment. The purpose was not to question in any way the desirability of the Secretary of State having that one-to-one relationship.

[Robert Halfon]

As I mentioned previously, it is highly likely that the Secretary of State, when issuing a strategic direction, will have a full and thorough consultation. We want to make sure that the Government are able to exercise overall strategic control where necessary and without delay.

The amendment relates to additional consultation on, and review of, directions issued to the institute, rather than the principle of the direction-making power itself. We have just agreed that those directions are likely to deal with changes to the education system as a whole, for which consistency of implementation is of primary importance. Consultation and review relating to only part of the system—the institute’s responsibilities for technical education—seems to have little practical value and, we think, might cause considerable delay, which could put coherent and consistent implementation of strategic measures in peril.

There might be other cases in which the Secretary of State would need to intervene quickly, for example before arrangements for particular qualifications are finalised. We therefore believe that the Secretary of State should be able to exercise a direction power of the kind the Sainsbury panel had in mind, without a specific requirement for additional consultation and review, even though it is unlikely that there would be no consultation when that directional power was given. I therefore hope that the hon. Gentleman will agree to withdraw the amendment.

[Gordon Marsden]

I have heard what the Minister has to say on this matter. Again, I make the point that we are concerned about the aggregate process, and it is that process that prompted this probing amendment. The Minister mentioned the implementation plan, which raises another issue that was brought to us by a number of different people. The Minister and I swapped quotes from City & Guilds, but the original comment I made was what City & Guilds said about the timetable. The implementation plan, which he says will give the timeline in due course, is welcome, and may well allay some of the concerns that others have had and which we have tried to reflect in the amendment. If that is the case—in due course—we will be satisfied. I therefore beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[The Chair]

Mr Marsden, do you wish to move amendment 31 formally?

[Gordon Marsden]

Ms Dorries, we do not intend to move either amendment 31 or amendment 33. We have established the principle with the first vote, and I do not see the need to detain the Committee any longer on that.

[The Chair]

Thank you.

[Gordon Marsden]

I beg to move amendment 17, in schedule 1, page 29, line 34, at end insert—

“(1A) In paragraph 2(1) of (membership of the Institute), after subparagraph (c) insert—

“(d) but at least one of the members appointed under paragraph 2(1)(c) must have recent experience of undertaking an apprenticeship, or of representing or promoting the interests of apprentices; and

(e) at least one of the members appointed under paragraph 2(1)(c) must have recent experience of undertaking a technical and further education course, or of representing or promoting the interests of students undertaking a technical and further education course.””.

This amendment would ensure that apprentices and learners are represented on the board of the Institute for Apprenticeships and Technical Education.

[The Chair]

With this it will be convenient to discuss amendment 32, in schedule 1, page 29, line 34, at end add—

“(1A) In paragraph 2, after subsection (2) insert—

“(3) The appointment of the Chair and Chief Executive shall be subject to a confirmation hearing by the appropriate select committee or committees of the House of Commons.””.

[Gordon Marsden]

We now come to what is essentially the last of the amendments to schedule 1 that we will pursue. It has been designed to broaden both the prospective and the actual membership of the Institute for Apprenticeships and Technical Education. Although we have dealt in earlier amendments with how apprentices, and indeed students, get represented, amendment 17 is the most specific.

The Minister will understand that we wish to insert sub-paragraphs (d) and (e) precisely to reflect what he and I have been talking about, which is that the situation of people undertaking FE and technical courses can be somewhat different in outcome and process from that of apprentices. It is important to make that distinction. There is a certain element of déjà vu here, because we discussed the same issue at the start of the year. I will not repeat the whole saga, but before the Government drafted the provision this was very similar wording to that in our model for the new institute. As my hon. Friend the Member for Cardiff West (Kevin Brennan) noted during the passage of the Enterprise Bill 2016, on which he led for the Opposition in Committee, the Institute for Apprenticeships did not—and for that matter does not—have any clear mechanisms for ensuring that apprentices and learners are able to contribute their experiences via the board, or the institute, to inform the work of their new regulator.

In this morning’s sitting the Minister and I discussed the nature of feedback, and it seemed that he thought it was more rigorous than I did, but we will let that pass. However, this is a question not so much of feedback—which is important—as of sending out a sign that there is proper representation. The institute must be broadly based. It cannot simply be employer-led, however important that may be; it should be guided and structured by them, and we will see in due course what the appointments to the board reflect. The idea that there is a board with no apprentice presence on it is as daft as it would have been in the Higher Education and Research Bill to have the office for students without a student representative. In one way, although we can gloss it, it is as simple as that.

From what Peter Lauener said in his oral evidence, and indeed from what the Minister himself has said, appointments to the institute’s board may or may not be imminent, happening in due course, at hand or whatever phraseology we want to use, but I do not think that I can overemphasise how essential it is for it to have wide-ranging representation, to include all the key components of apprenticeship creation and delivery.

I have referred, in relation to previous amendments, to the active participation of various groups of apprentices and their willingness to take up the challenge. These include the National Union of Students, with its own National Society of Apprentices, the Industry Apprentice Council, from whose excellent survey I quoted last week, and other groups such as that of Lindsay McCurdy. After all, in National Apprenticeship Week every year—an offshoot, of course, of the creation of the National Apprenticeship Service under the previous Labour Government—we all go around, as Members of Parliament, shaking hands, having photographs taken and saying how marvellous it is to hear apprentices’ life stories and initiatives. Next year the board will be established and the institute will take a legal rather than shadow form. It would seem odd then to go out and talk to apprentices and students at FE and technical colleges and have them say, “It’s nice that you have come to see us, hear my life story and take my photograph, but why have we got no representation on the board of the institute?” Perhaps the Minister would like to think about that for a moment.

14:15

The vision for apprenticeships has become particularly pressing because of the Government’s announcement about including technical education in the institute’s remit. It is important to include the experience of those apprentices and FE students. Perhaps in future—not now, because I appreciate that we are not yet in that situation—it might be appropriate, although for a shorter period, to include the experiences of people undertaking traineeships. Traineeships are an important part of getting people, particularly young people, to the starting post. That is what we strongly believe needs to be done in this context with amendment 17.

Amendment 32 addresses a slightly different aspect, although it has the same element of transparency. It proposes that the appointments of the chair and the chief executive should be subject to a confirmation hearing by the appropriate Select Committee or Committees of the House of Commons, although there is still some settling down to be done. The Minister will know that in recent years Select Committees have increasingly exercised their powers to interview and have quasi-confirmatory hearings for applicants to key posts in bodies outside Government, such as Ofsted. I say powers, but the situation in this Parliament is not the same as the situation in the US Congress, where there are Senate hearings to confirm the appointment of various key officials, and where the officials, if they are turned down, are not appointed. I will not digress, Ms Dorries, but it will be interesting to see what congressional committees might make of the new President’s cabinet appointments.

[The Chair]

That is enough now, Mr Marsden.

[Gordon Marsden]

We have a weaker version of that. The Education Committee interviewed the chief inspector-designate of Ofsted and was not satisfied, but the Secretary of State was satisfied and that process went ahead. Amendment 17 is not proposing some form of constitutional innovation; it is something that goes on already.

Sometimes the Minister or the Secretary of State agrees with the view of the Select Committee and sometimes, if the Select Committee has said no, they do not. I do not have a problem with that. In terms of raising the profile of the institute, which is surely what we all want to do in the run-up to its formal launch in the spring, this would be a very useful measure for the Government to agree, which would send out a signal.

As I said, this is a probing amendment. If the Minister were to say, “It is probably more appropriate for just one of them—the chair or the chief executive—to have it,” we would not argue with that. Agreeing to this measure would send out an important signal about how important the Government consider this issue to be. The Select Committees have already shown interest in apprenticeships, technical education legislation and the apprenticeships levy, as the Minister well knows because he has been before them, so I cannot believe that they would not be happy to perform this duty. That is the basis on which we tabled the amendment.

[Kelvin Hopkins (Luton North) (Lab)]

I support what my hon. Friend says about amendment 17. It is very important to have representation by an apprentice or someone who has recently been an apprentice, so the board gets feedback from someone who has been on the receiving end of the experience, rather than just from people who think they know about it, but may not know it all. An apprentice who has spent considerable time going through the system will have a lot to offer to the board, so that is very important.

It is important to have members of the board who are different from the rest of the board. In the past, having one woman on a board—nowadays, we have many more than that, I am glad to say—made a difference to the nature of the discussions. Having representatives from minority communities on boards makes a difference by broadening the discussions and making them better. Assumptions that might have been made if the board were made up of small “c” conservatives and middle-aged white men in suits—I am one of them—can be challenged. We see too many people like me, and not enough of other people—[Interruption.] I said people like me, not necessarily me personally. It is important to recognise that there are other voices and other views, and the way to get those views represented is to have such people on the boards. Having at least one apprentice on a board is a good idea, although it should be someone who is experienced—someone who is coming to the end of their course or has just completed it, not someone who is at the beginning of their course. I strongly support what my hon. Friend said, and I hope the Government take cognisance of his views.

Turning to amendment 32, I have chaired two confirmation hearings and I sat on a committee interviewing an appointee before they went for their confirmation hearing. I think it is an extremely good exercise that has improved the quality of the appointments in recent years, so I very much welcome it. Occasionally, the people have not been ideal for the job and have chosen to stand down before going right through the process; I think that shows wisdom. Sometimes the Government and Ministers have been reluctant to let go of appointments, but they have now done so, and I think they are pleased with the job that Select Committees have done on confirmation hearings. I really do think that this would be a very good idea.

It is particularly important to have confirmation hearings for the chair, although perhaps the chair should deal with the chief executive. The confirmation hearings I chaired were to do with that role. It might not have been a chair—it might have been a director or something—but we were essentially interviewing for the chair role. It was extremely interesting and very useful, and I think that in each of those hearings we got the right result. I support amendment 32 in principle, even if my hon. Friend does not press it to a vote.

[Robert Halfon]

Let me begin by saying that if there were more people like the hon. Member for Luton North in education and skills, we would be in a very good place indeed—whatever their age may be.

[Kelvin Hopkins]

I should correct myself. I said “middle aged”; I think that is rather beyond me. [Laughter.]

[Robert Halfon]

I thank the hon. Member for Blackpool South for tabling these amendments, particularly amendment 17, which is a very thoughtful amendment. He may be interested to know that even before they were tabled, when we were discussing these matters, I made some of the points that he just made.

Regarding advertising and interviewing for the board members, we have had 281 applications to the board, representing a wide spectrum of apprenticeship experience. I believe that once the board is finalised the hon. Gentleman will be happy with the membership—we have a few rubber stamps to go yet, but I think he will be happy. He will know that the board is responsible for ensuring that the interests of apprentices and students of technical education are well represented.

I have thought about this issue very seriously—long before we discussed it in Committee—but I cannot go so far as to say there should definitely be apprentices on the board. In part that is because board members need to have experience and they carry a great deal of governance responsibility; they also come under press scrutiny, which is not easy. In addition, the board needs to represent the interests of all apprentices of varying levels, ages and sectors, so a single recent apprentice would be unlikely to speak for all apprentices. We do not think that the amendment offers the best way to represent the interests of apprentices and those in technical education.

I think we can square the circle by agreeing that the institute should draw on the experiences of apprentices, so I am pleased to announce that we expect the institute to invite apprentices to establish an apprentice panel, which would report directly to the board. The panel would be made up of apprentices from different occupations and experiences. The panel would decide for itself which issues to focus on, and it will challenge and make recommendations to the board. That squares the difficult circle of wanting experience but also having the vital input from apprentices up and down the country. The Institute for Apprenticeships and Technical Education will ensure that the first panel is in place before the institute goes live in April 2017. The institute will consider how best to engage with apprentices on an ongoing basis and how best to represent technical education students ahead of it taking on that responsibility in April 2018.

I am also pleased to report that there are plans to recruit three apprentices to work at the institute, which will review that number periodically. While I am in this post, I will certainly look at this issue with an eye to expanding the number of apprentices who work for the new institute.

Regarding amendment 32, I understand that it is looking for scrutiny of these crucial appointments—the hon. Member for Luton North spoke about how important these appointments are. However, given the size and scope of the institute, and even after the addition of the new functions in the Bill, I do not agree that the amendment is necessary. Generally, appointments that are subject to confirmation hearings by Select Committees are to much larger organisations. Furthermore, the appointment of the chair is subject to a code of practice set out by the Office of the Commissioner for Public Appointments, as the hon. Gentleman no doubt knows, and is already subject to a high degree of scrutiny.

In line with requirements, the Secretary of State has approved the launch of a recruitment campaign for the chair and the public appointment selection panel. The panel is chaired by a public appointments assessor, and as the appointing Minister I am kept informed every step of the way. A shadow chief executive is in post; the recruitment of the permanent chief executive will follow established civil service rules, with fair and open competition. Also, the Enterprise Act 2016 is clear that the chief executive will first be appointed by the Secretary of State in consultation with the chair and thereafter by the institute itself. The chair and chief executive can of course be called on by the relevant Select Committees to give evidence to Parliament and account for their actions

I do not think the amendment is necessary as I believe that the appointments will be subject to appropriate scrutiny, consistent with established public appointment rules. I hope that the Committee agrees on the need for the institute’s leadership to be established without delay, especially given questions posed by the hon. Member for Blackpool South about the institute’s capacity, whether it will be set up in time, and so on. I hope that the Opposition are sufficiently reassured by that information to withdraw the amendment.

14:30

[Gordon Marsden]

I will treat the Minister’s two responses separately. On amendment 32, which deals with the appointment of the chair and chief executive, yes, there is always the argument that because we are speeding towards setting the institute up—I do not criticise that—there is not time for a confirmation process. I hope that I do not misrepresent him, but I think that is the gist of what he said.

All these things are contextualised. I do not want to open old wounds, but the Institute for Apprenticeships has not had a great record with shadow chief executives—not because of their calibre, but simply because of the time for which the first stayed and the fact that the second, Peter Lauener, is doing the job two days a week. To be blunt, that has aroused scepticism—or to put it positively, a wish to be reassured—among stakeholders across the board about whoever the new chief executive is. It seems to me that an appointment hearing would be neither inappropriate nor unreasonable.

The Minister cannot have it both ways. He tried to persuade me the other day that I did not need to worry too much about the institute having only 60 employees because an enormous number of other people were doing things, but if that is the case, it is a rather more significant organisation than the Minister’s bald figures and comments suggest. To be frank, I am not sure that is the strongest of arguments.

[Kelvin Hopkins]

There is not necessarily a correlation between the importance of an institution and the number of people involved. Some institutions may be quite small but extremely important. As my hon. Friend says, size is not so significant.

[Gordon Marsden]

My hon. Friend may well be right. Significance is the important thing, and I just think a confirmation hearing would be appropriate for a new organisation such as this. As the Minister said, such a hearing may well take place in some shape or form with a Select Committee anyway, but we will see. We will not press amendment 32 to a vote at this point, but we reserve the right to return to it on Report.

Let me turn to amendment 17. I listened carefully to what the Minister said in addition to his point about the proposed apprentice panel to report directly to the board, and I am bound to say—this is an instant comment, not a considered reflection—that I think that is a positive and enlightened approach. It addresses many of the issues that concern us and I think will concern apprentices, and although the devil is always in the detail, it could be an elegant way of squaring the circle, to use the Minister’s phrase. We will see how things go and wait to see the list of appointments.

Incidentally, our proposed amendments are not comments on individuals. I always take the view that we are making legislation for a generation and we have to make it for all individuals. Having said that, I am particularly encouraged and pleased with the Minister’s response. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the schedule be the First schedule to the Bill.

[The Chair]

With this it will be convenient to discuss the following:

New clause 3—Report on quality outcomes of completed apprenticeships—

“(1) The Institute for Apprenticeships and Technical Education shall report on an annual basis to the Secretary of State on quality outcomes of completed apprenticeships.

(2) The report under subsection (1) shall include information on—

(a) job outcomes of individuals who have completed an apprenticeship,

(b) average annualised earnings of individuals one year after completing an apprenticeship,

(c) numbers of individuals who have completed an apprenticeship who progress to higher stages of education,

(d) satisfaction rates of individuals who complete an apprenticeship on the quality of that apprenticeship, and

(e) satisfaction rates of employers who hire individuals who complete an apprenticeship with the outcome of that apprenticeship.

(3) The Secretary of State shall lay a copy of the report before Parliament.”.

This new clause would require the Secretary of State to report to Parliament annually on specified quality outcomes of completed apprenticeships.

New clause 4—Institute for Apprenticeships and Technical Education: duty to promote awareness—

“(1) It shall be a duty of the Institute to promote awareness of—

(a) occupations, and

(b) steps by which people may become competent to work in occupations.

(2) In promoting awareness under subsection (1)(b), the Institute shall give due weight to—

(a) apprenticeships, and

(b) technical education qualifications.”.

New clause 5—The Institute: duty to consult—

“(1) The Institute shall consult on a regular basis on—

(a) the development and progress of standards and assessment plans, and

(b) the delivery of apprentice end point assessments.

(2) Consultation under subsection (1) shall be carried out with—

(a) further education bodies and provider organisations

(b) awarding bodies

(c) organisations representing employers, and

(d) organisations representing students and apprentices.”.

Ms Brabin, as you tabled a new clause in this group, it would be nice if you were to lead the debate.

[Tracy Brabin (Batley and Spen) (Lab)]

Thank you, Ms Dorries. I will speak to new clause 4 on careers advice and the duty to promote awareness of occupations.

We all remember the careers advice we received at school. I remember the suggested career given to me very clearly: as a young women with 11 GCSEs and four A-levels, I was advised to become an air hostess, because of my bubbly personality. I did not follow the careers advice that I was given because I had a dream that I was determined to follow: to become an actor. It is not lost on me how enormously lucky I am to have enjoyed the career that I have and therein lies an important point—careers advice has not improved in the way that we wish it had.

Even with the enormous amount of data and emerging opportunities open to us, some young people leave education, ready and able to start on their career paths, with hardly any guidance, never mind a plan to follow. That is why new clause 4 is so important. I was genuinely surprised to learn that its provisions were not already in the Bill. Surely any education Bill should at its very inception promote careers and give guidance on how people can work in occupations? I hope the whole Committee can agree that our young people deserve to be given the time and resources to plan their careers and to have all the information in front of them as they set out gaining qualifications and making educational decisions based on the goals they wish to achieve.

In private meetings, real concerns have been raised with me about the lack of careers provision in our colleges right now. It has been stressed that there is such a lack of advice available at the moment that without explicit legislation on careers guidance, it will be nudged even further towards the back of the priorities queue. With overstretched resources in colleges an ever-growing theme, I was not surprised to hear that at least one institution a receptionist at had been asked to carry out careers guidance, despite having no specialist qualifications or training in how to do that well. Although I was not surprised, I was ashamed that we had allowed our young people to be treated in such a way. I hope Members will join me in seeing the opportunities for the Institute for Apprenticeships and Technical Education to use its national role and unique connection between educators, institutions, learners and businesses to create a leading occupation awareness service.

Just this week, I had the pleasure of presenting an award to a company for its excellent apprenticeship programme. I heard testimony from the apprentices that showed that the employer was a great example of how employers can take the lead in careers advice, but we all know that, sadly, not every apprenticeship provider is the same. The company in question gives its new recruits a few weeks at a time on each aspect of its business, working out where the recruits’ skills lie before setting them on a course to earn qualifications and begin a career in a place where they will flourish.

The time and investment an employer puts into an apprentice differs enormously. Not every employer is as good as the next, so the advice learners get from college is essential, hence the importance of new clause 4. I suggest that, as part of its duty, the Institute for Apprenticeships and Technical Education seeks examples of good practice from employers and promotes them among their connections and levy payers. Careers advice should not be confined to the classroom or to one-on-one meetings, but should be practical and hands-on in the workplace as well.

It is important to mention that I was encouraged during the Committee’s first sitting last week by the warm words from the Minister on careers advice. I appreciate his genuine intentions to improve careers advice, but at a time when the co-Chairs of the Sub-Committee on Education, Skills and the Economy accuse the Government of appearing

“to be burying their heads in the sand while careers guidance fails young people, especially those from disadvantaged backgrounds, and exacerbates the country’s skills gap”,

I do not feel we can rely on warm words alone. We must have provisions in writing—in legislation—because we have an obligation to learners.

If anyone has yet to be convinced that there is a problem, a simple google of the words “careers advice apprenticeships” is illuminating. The first two links are aimed at parents; then there is a link to the Government website that no longer works, a link to a newspaper article lamenting the woeful careers advice for apprenticeships, and a link to careers advice in Nottinghamshire. I am glad that Nottinghamshire seems well cared for, but it is worrying that no obvious official advice is immediately available. While I am sure there is official advice somewhere, should it not be obviously available to the young people who seek it? I hope that the institute becomes the known home for information where anyone who is interested in careers or a new career can access information easily. From where we are now, that would be an obvious and basic improvement.

The Bill is designed to harness the talents of our young people and unlock the potential of the country. Those are worthy aims—we can all agree on that—but I cannot see how we can do that without an explicit commitment to promote awareness of occupations and advise young people on how to get a job in the area they wish. The opportunities that the institute provides are enormous. I hope we seize the opportunity presented in the clause to build a top-quality advice service for apprenticeships and technical educational qualifications.

[The Chair]

Mr Marsden, would you like to speak?

[Gordon Marsden]

On a point of order, Ms Dorries. May I clarify that we are having a debate on all three new clauses and schedule 1 stand part, so it would be appropriate for me to speak to all of those?

[The Chair]

It would now, yes. I called Ms Brabin first because I thought it would be nice, for a change.

[Tracy Brabin]

Thank you, Ms Dorries—a female voice in the room.

[Gordon Marsden]

Yes, I thought so, too. May I congratulate my hon. Friend—I think it is the first time she has spoken in Committee—on a lively and inspiring presentation? The issue of careers guidance is not new, but I will not go through its whole history. She was right to make those points, and the examples she gave of what appears to be there in principle but is not in practice were all too symptomatic of the difficulties the Government have had until relatively recently—I will be fair—in addressing the problem.

We had a lengthy period under the coalition Government and even at the start of this one where they were running rapidly to catch up with what had become a disastrous position in careers advice and guidance in schools, with work experience no longer required in the curriculum at key stage 4. An array of organisations—everyone from the CBI to the Federation of Small Businesses—complained and continue to complain. When the Government attempted to respond to some of the many cuts that virtually dismantled much careers advice in local authorities and schools—the Connexions programme was maimed beyond repair—to be fair, for post-24s they did do quite a lot in terms of online guidance and so on, but for under-24s they had done precious little, and my hon. Friend’s investigations suggest that even that is not in the best of nick at the moment, if I can put it that way.

We still await a formal strategy from the Government on careers advice and further reports on how the money allocated to the Careers & Enterprise Company will be spent and distributed. To be fair, as I have said previously, the Careers & Enterprise Company is beginning to do some useful work, but it is hampered by the sheer volume of stuff that needs to be done. The Industry Apprentice Council report to which I have referred previously makes that point as well. My hon. Friend the Member for Batley and Spen is right to raise the issue with the Minister in this way and at this time. As I said, I accept the Minister’s bona fides in this area and his wish to do something about it, but we need to see it taken forward.

14:45

New clause 3, in essence, develops some of the issues that we talked about this morning: how we concern ourselves with not only the input to, but the outcomes of, apprenticeships. Historically, a tradition in Governments of all parties has been to put great emphasis on input, but not always—certainly from a central position—on output. That has been remedied in recent years, and we sometimes have a lot more on output, but output and outcome are not necessarily the same thing. That is one of the things that we want to stress with the new clause.

In broad terms, the Labour party—my Front-Bench and Back-Bench colleagues and I—supports the objective of a major expansion of apprenticeship starts, which the Government have decided to deal with through the target of 3 million starts by 2020. As the Minister rightly said, apprenticeships are vital to bridge the growing skills gap, and the potential expansion might fuel some of the cohorts needed to fill the gaps in technical and professional staff, although other mechanisms can be considered too, as the Minister has observed. The new clause is timely, given the list of the sorts of things —it is not an exhaustive list—we believe would demonstrate the desirable outcomes of apprenticeships.

Despite some progress in recent years, the situation of those young people who remain not in employment, education or training is fragile. The most recent official figures show an increase in the number of 16 to 24-year-olds classed as economically inactive over July to December. That has lifted the number of NEETs to 857,000, an increase of 14,000 on the previous three months and up 3,000 from a year earlier, so we cannot be complacent about the job that still needs to be done to deal with many of the 16 to 24-year-old young people who come into the NEET category. That is one of the reasons why I am encouraged by what the Minister said about how traineeships might be used.

As I said, many commentators, businesses, sector skills people, providers, universities, the public sector, and college heads and staff whom I meet continue to put question marks over the quality of the 3 million new apprenticeships. We have to ensure that the focus for the Government’s potential 3 million starts is high standards, not simply a concentration on meeting target numbers. As the Minister will appreciate, to some extent he is in a no-win situation, because although he can say, “We will do this,” in order to back it up we need robust and developing statistics on outcomes. Only then when the Minister says, “We will do this,” or, “We will improve this,” will people have some facts and figures to signpost the way forward.

Young people themselves are very keen to ensure that their apprenticeships are ones of quality. In the recent Industry Apprentice Council survey, their top ask was to protect quality, because industry apprentices rightly see their apprenticeships as badges of honour, as do their employers. Anyone who participates in any of the events in National Apprenticeship Week will get that sense of pride, even more so if they visit the events related to EuroSkills or WorldSkills, some of which involve apprentices and some of which involve other young people. That sense of pride in quality is really important.

The level of satisfaction with apprenticeships has been high and 2015 showed no change from previous years. Nearly nine in 10 level 2 and 3 apprentices were satisfied with apprenticeships. However, with such an increase in apprenticeships planned, it is extremely important that we monitor that satisfaction rate to ensure that it is not being lost as the Government chase targets.

We also have to be watchful of the fragility of apprenticeship success rates. Those have fallen from 76.4% in 2010-11 to 71.7% in 2014-15. It is reasonable to look at the Government’s own apprenticeship evaluation document in 2015, which shows that eight out of 10 apprentices received formal training either from an external provider or in the workplace. The proportion of higher apprentices receiving formal training had fallen from 84% in 2014 to 79% in 2015. That might appear to be a modest fall, but it is a warning sign, not least because, quite rightly, the Government are putting a lot of emphasis on increasing the number of higher apprentices, with the focus on degree apprenticeships and so on.

Now that we have the new routes and standards for technical education and apprenticeship expansion, I believe it is vital to track the outcomes for each group. As I said, last year’s apprenticeship evaluation showed a slight increase in the proportion that had completed their apprenticeship who were in work compared with 2014. There tend to be higher levels of unemployment among completed apprenticeships in newer frameworks such as ICT, which had 9% unemployment, and arts and media, which had 11% unemployment. Those aspects need to be looked at.

Among the other elements we would like to see in the report, monitoring progression and pay is very important. We had an encouraging announcement in an otherwise fairly arid autumn statement about the rise in the apprenticeship rate. Apprentices have talked about a number of positive impacts in the workplace, but that does not always translate into pay or promotion benefits. Some 46% of apprentices had received a pay rise since completing their apprenticeship and 30% had been promoted. That compared favourably with 2014, when 38% had received a pay rise and 23% had been promoted.

As I have said, there are other things that show how important it is to monitor each of these different areas: appetite for further training; the number of apprenticeships at levels 2 and 3, on which there continues to be a vigorous debate; and the numbers who complete a higher apprenticeship.

The Minister might respond that the Government are already doing some of those things. I accept that they are being done, but only partially. There is no guarantee or obligation yet to say that they are critical to the success of policy. I know that the Minister is concerned to get a step change in the diversity of traineeships, so it would make sense if traineeships were included in that basket of outcomes.

We have touched on a number of the issues raised by new clause 5 under previous amendments. In a sense, it is a further iteration of those. I want to say something about the delivery and progress of standards and the end points. I have raised with the Minister the number of people who currently issue apprenticeship frameworks. I appreciate that that is a process that will ultimately disappear, but it would be helpful to hear from the Minister what the relationship will be between those apprenticeship frameworks and the issuing authorities that take them forward, and the development of new structures of standards at the new institute itself. As I have said, I think there is also significant overlap between what may be done by the institute and what may be done by Ofqual. That is another reason behind new clause 5.

Finally, I will say a few words about some of the issues with the schedule that have been raised with us. The first relates to copyright. Other than having a minor interest as someone who has written one or two things over the years for which my copyright earns me a few pennies a year from the Authors’ Licensing and Collecting Society, I do not have any specific knowledge or concerns about copyright. However, it is clear from the written submissions that we have received from the Federation of Awarding Bodies, City & Guilds and a number of other organisations that there is a concern.

The Federation of Awarding Bodies is concerned not about the institute approving technical education qualifications, but about the phrase:

“The right or interest in any copyright in a relevant course document is…transferred from the person to the Institute at the time the approval is given.”

It makes the following point:

“There is no mention in either the Sainsbury Report or the Skills Plan of the handing over of copyright to the IATE in documents related to qualifications. The only reference to this requirement is in the Bill.”

It goes on to say:

“We are further concerned that the Bill seeks to give IATE the power to assign or grant a licence of the copyright to any person.”

Without being an expert on copyright, that seems to me to be a pretty sweeping power, and possibly a worrying one. I therefore think it would be appropriate for the Minister—if not this afternoon, perhaps by providing a further note to the Committee—to explain the rationale for granting such a sweeping transfer of copyright when that does not appear to have been an issue in either the Sainsbury report or the skills plan.

The second issue is the restriction of competition between awarding bodies. I say straightforwardly that I entirely accept that the multiplication of awards and standards has been a problem. I think most people understand that. However, the Centre for the Study of Market Reform of Education, City & Guilds and others question whether the proposals go too far.

The NCFE said:

“we have identified a number of issues in the bill which may have unintended negative consequences around a risk of market failure… We also believe, that as currently set out, the bill will restrict opportunities for learners and employers to become involved in providing”.

It is also concerned that each technical level will have only one awarding organisation. It believes, and there is perhaps some reason for saying this, that to have only one awarding organisation offering each technical level qualification occupational route would be unfortunate, but to have two—to adapt the Oscar Wilde saying—would be beneficial, as that would provide competition and enable providers to switch quickly in the event of problems, without having the multiplication issues that have caused problems and difficulties elsewhere. The NCFE also said:

“The current proposals do not seem to recognise the great expertise in designing and assessing Technical and Professional Education qualifications that already exists within Awarding Organisations.”

15:00

I am not saying that I necessarily agree with all the points made by the bodies to which I have referred, but I think it would be wise of the Minister to address those issues in some way, shape or form.

The final point, on which I will be brief, is one that we have touched on already, but which I think is still hazy. What will the relationship be between Ofqual and the new institute? Again, I simply refer to what City & Guilds said in its Second Reading briefing and what the Association of Colleges said. The Association of Colleges made the point that paragraph 27 of schedule 1 gives four agencies—IFATE, Ofsted, Ofqual and the office for students—the power to share information with one another, but that raises the issue of the crossover between the agencies. For example, Ofqual, which is very important and has been the subject of great discussion and controversy in recent weeks, regulates English and maths qualifications that will form an important part of technical education programmes regulated by IFATE. The roles of IFATE and the OFS will overlap when it comes to degree apprenticeships. IFATE and Ofsted both have a responsibility for the oversight of apprenticeship training quality.

I am not saying that that is automatically a recipe for confusion, but the Minister will understand that, given those potential overlaps and the potential for choice that that offers people in those areas, in terms of providers or employers—I referred to that earlier as one of the factors that worries me about the capacity issues not being easily determined for the new institute—it would not be unreasonable for him to say a little more about how he and his Department envisage the overlaps being creative rather than chaotic. It would be helpful if the Minister touched on that in his response.

[Kelvin Hopkins]

I will not speak for long, but I want to support the three new clauses.

I feel very strongly about new clause 3, because there has been a lot of talk in recent years about apprenticeships that do not really deserve the name—the quality of them was so poor that they were really forms of cheap employment and nothing more. Quality is important. Apprenticeships have to have a high reputation so that when people are offered an apprenticeship, they know that they will get something of real value from the experience. Therefore, reporting back information about apprenticeships—about how individuals are doing and about the quality of apprenticeships—is very important. We have to raise the status of apprenticeships and not allow that to diminish.

On new clause 5, which is about consultation, we want feedback from everyone concerned with apprenticeships to ensure that the institute and, indirectly, the Government have proper information about what is going on on the ground. We want to know what is actually happening and to be able to say that we are making progress and having success.

On new clause 4, I congratulate my hon. Friend the Member for Batley and Spen on her excellent speech; it was first class. Nothing more needs to be said, but I just want to reinforce what she said about the lack of careers advice.

When I was at school, there were two courses: either we were going to stagger on towards university and higher education or we were told, “Go and work in a bank.” That was all that was given. Indeed, an extraordinary number of my school friends ended up working in banks. Whatever their talents, many of them finished in a bank. I had friends who had superb writing skills or were natural cartographers and could have done all sorts of different things, but they finished up working in banks because that is where they were guided to by our school. They were almost dismissed. The school was really interested in those going on to higher education, and so to anyone else it said, “Go and work in a bank.” It really was not good enough. I was one of those who eventually staggered through higher education, otherwise I would have no doubt finished up in a bank—[Laughter.]—not as a senior banker, but just a clerk.

Over the past 10 or 20 years, I have seen a wonderful careers service in my town of Luton, where I knew most of the careers advisers as personal friends, being dissolved. It has been dismantled bit by bit, and the advisers have ended up doing other things. One has become a headteacher of a school, which is fine. She went on to retrain as a teacher after the careers service disappeared. That means young people are not getting the advice they need.

We are talking about apprenticeships and post-16, but lower down, in schools, we want children to be aware of the immense possibilities and tremendous variety of work, so that they can match their skills. If someone can write, they can then get into something that involves writing. If someone is naturally mathematical, they can move into that area. If someone is naturally bent towards engineering and mechanical things, they can be guided into all sorts of interesting jobs. However, if there is no advice, they might finish up doing the wrong thing and spending their lives being a bit frustrated because they really wanted to do something else. That is a very important point.

My two granddaughters are only eight and nine, but they are already talking about what they are going to do when they are adults. They fortunately come from a background where their parents talk incessantly about all sorts of interesting things and what they can do in life, but not everybody has that opportunity. Many children have parents who are not so well informed and cannot give advice, so they depend upon professionals giving advice.

Advice should cover the whole range of abilities, not only highly skilled jobs and professions. There are millions of jobs that are much more basic, but that are equally valuable to society. We depend on everybody and every type of skill, and we should present all our children and young people with a full understanding of the possibilities of life, so that they can not only enjoy life and fulfil themselves, but make the most effective contribution to the economy and to our world. What my hon. Friend the Member for Batley and Spen said was first class, and I hope that the Minister will accept it.

[The Chair]

Before I call the Minister to respond, I remind Committee members that any decisions on new clauses are taken at the end of the Bill.

[Robert Halfon]

I will start with new clause 4 and then go on to the other provisions before answering the general queries of the hon. Member for Blackpool South.

I congratulate the hon. Member for Batley and Spen on a really important contribution to the debate; I mean that genuinely. She knows from the brief conversation we had that I completely agree with much of what she says. I agree that we have a problem with careers in our country. I agree that for so long, careers guidance has pushed people towards universities. Having said that, I can imagine a lot of things, but I could never imagine the hon. Member for Luton North as a banker—I have a broad mind, but it is not that broad.

One reason why we have those problems is that wherever I go around the country, whatever institutes I visit and whatever kids I speak to, it is exactly the same: the chances are, they will not have been given advice on apprenticeships or technical education. It is university, university, university. We need to change that. I would be pleased to have the hon. Lady’s input. Careers guidance used to be fragmented and covered by two Departments, but we have moved it wholly to the Department for Education.

When I was appointed Minister for Apprenticeships and Skills, I realised that the title should have been Minister for apprenticeships, skills and careers guidance because careers guidance is perhaps the most important part of everything we are trying to achieve in the Bill. It is the first rung on the ladder of opportunity because without the right careers guidance we will not succeed in what we want to do. That goes back to the arguments of the hon. Member for Luton North on prestige and other things.

The hon. Lady said—this is important—that we need more than just warm words. I accept that and I am looking at the whole issue from the beginning: what we can do in careers guidance, whether it is possible to gear it much more towards skills and starting not in secondary school, but primary school and going all the way through. To be fair, the Government have done substantive work. First, it is now a legislative requirement that schools must give careers advice on apprenticeships. With reference to what the hon. Member for Luton North said, we have also tightened up in legislation the definition of “apprenticeship”.

When I spoke at an hotel recently, I asked someone whether they realised they would be paying the levy and whether they were going to have apprentices. The reply was, “We’ve already got some in the kitchen.” When I said, “You already have apprentices?” they replied, “No, they are interns, or whatever.” We have changed the definition to make sure that an apprenticeship is what it says on the tin.

We have also created the Careers & Enterprise Company, to which the hon. Member for Luton North kindly referred, and again I have been around the country to see it working in practice. I have been to east London and the north-east. Of course there is much more to do. Some £90 million, which is a serious amount of money and not just warm words, is being invested over the Parliament not just in the Careers & Enterprise Company, but in careers generally: 1,190 enterprise advisers and 78 enterprise co-ordinators. They have connected 900 schools in about 37 of the 38 local enterprise partnerships, the whole purpose being to build careers links with students and to get them to do work experience.

There is a £5 million careers and enterprise fund to boost provision for nearly 250,000 young people across England in 75% of the areas the Careers & Enterprise Company identified as cold spots. There is a £12 million mentoring fund, because mentoring is incredibly important. This year, £75 million is being spent on the National Careers Service to help its work and £24 million on web kits to support more than 650 people with face-to-face advice. We have started the work.

[David Rutley (Macclesfield) (Con)]

My hon. Friend is setting out some important things the Government are doing and no doubt he will explain what more is to be done. Does he agree with Lord Heseltine who said recently in a Select Committee that industrial policy for the benefit of the country starts in primary school classes if we are to achieve the productivity gains we want?

[Robert Halfon]

My hon. Friend is exactly right. I was in a primary school—it might have been in the constituency of the hon. Member for Blackpool South—where the kids had to guess the career of the individuals there. They included a fire officer, a business person and a pilot, who then went out and returned with their uniforms on. Careers guidance must start in school. We will not achieve what we want unless it starts in primary schools.

I am looking at the matter and there are substantive funds, but we must change the whole argument and gear careers advice towards skills and apprenticeships, although we have no problem with people going to university. I have held roundtables, not just with the great and the good, but with people from up and down the country, to get ideas for how to form our careers strategy. The hon. Member for Batley and Spen is very welcome to take part in them when they carry on next year.

15:15

It will be essential for IFATE to have a clear understanding of the real world impact of the functions that it will carry out. The collection of the kinds of outcome data that the new clause proposes would help it and others to do exactly that. The institute will be required to report on its activities annually under the Enterprise Act 2016. That report must include a description of what the institute has done that year, including how it has taken account of the statutory guidance it has received from the Secretary of State, and it must be placed before Parliament. The Enterprise Act will also allow the Secretary of State to ask the institute to report on anything else she thinks appropriate. Therefore, a legal provision already exists to allow the Secretary of State to ask the institute to report on the specific outcomes included in the new clause.

In requiring the institute to publish that information, the new clause might suggest that the institute is directly responsible for all those outcomes. Its role is not that broad. The institute’s core role is to oversee and quality assure the development of standards and assessment plans for use in delivering apprenticeships and, from 2018, college-based technical education. It cannot be held wholly responsible for job outcomes and wage rates of apprentices once they complete their apprenticeship. The outcomes are the responsibility of several different organisations, as the shadow Minister acknowledged, from the Government to non-departmental public bodies, all the way to employers.

However, we expect the institute to make good use of the data on outcomes made available to it through those public data sources and surveys, and to explain in its annual report how it has deployed those data.

[Gordon Marsden]

I understand the Minister’s point, and I, likewise, would not want to lumber the institute with the responsibility for all those things. Will he give us an assurance, because he said these things occur from time to time, that there will be, at some point during an annual cycle, what I can only describe as a “state of the nation” report? That report could actually bring these various things—not necessarily all of them—together, so that not only stakeholders but Parliament will have a clear picture of what has happened over the past year.

[Robert Halfon]

I will reflect on what the hon. Gentleman has said. I reiterate the point that a lot of that is done already. We have monthly and annual announcements of all kinds of data to do with apprenticeships and skills. I always ask about destinations because I think they are incredibly important. I am glad that surveys show, for example, that more than 90% of apprentices get into work afterwards, either by staying in place or entering other employment. That is an incredibly important destination statistic.

On new clause 5, the principle of consultation, which we have mentioned quite a lot today, is already a key feature of the current Institute for Apprenticeships. The institute has a statutory duty under the Enterprise Act 2016 to undertake its functions with regard to industry, commerce, finance, the professions and other employers regarding education and training within the institute’s remit. Even more importantly, the institute must also undertake its functions with regard to those who may wish to undertake education and training that is within the institute’s remit—the apprentices themselves.

More specifically, the institute also already has a statutory responsibility to ensure that all draft standards and assessment plans are subject to third-party scrutiny before they can be considered for approval, and it must take account of the findings and conclusions of those carrying out that independent review. The bodies and organisations listed in the new clause are already covered by that existing legislation, and the institute must have regard to them in all functions, not only the specific function set out in the new clause. That approach will also apply to the functions that the Bill plans to give to the expanded IFATE.

The consultative principles that will underpin the institute have already been evidenced. Antony Jenkins, the shadow chair, has held a series of roundtables with a wide range of external organisations to hear how they think the institute should operate. Later this year the shadow institute will publish a full consultation on the operational plan for the institute, setting out its core functions and proposals for how it will deliver them.

The Department also plans to publish a draft for the consultation of a statutory strategic guidance document, which it will issue to the institute next year. That will include the steers that the Government expect the institute to have regard to. It will ensure that the institute consults all those with an interest when carrying out its functions. I therefore hope that the hon. Members will be reassured and will not press the new clauses.

I will come to an overview of schedule 1 but will begin by answering some of the key questions the hon. Member for Blackpool South asked. Although the 19 to 24-year-old NEET figure increased by 0.8% in July to September, he will know that the overall trend has been down over the years. The figure for 16 to 18-year-olds fell by 1.5% compared with the same quarter in 2015.

The hon. Gentleman also asked about the clarity of a single awarding body—the Wolf report body. Of course, we looked at that but the Wolf report, as the hon. Gentleman will know, identified that a large proportion of vocational qualifications offered very little value to employers, young people and adult learners. The whole purpose is to remove thousands of poor-quality qualifications that were not valued by employers.

The proliferation of qualifications was partly down to the awarding organisations’ competition for market share within the existing system. Following Lord Sainsbury’s recommendations, we are bringing the system into line with the best in the world to ensure excellence in technical education provision and having a single awarding body per qualification model. It is strange that the hon. Gentleman should argue for competition while I am doing the opposite but we live in a topsy-turvy world. We are not being driven by competition in the market, with the adverse effects that that brought. Innovation will be driven by the awarding body competition for the market through winning exclusive licences.

[Gordon Marsden]

We may live in a topsy-turvy world but, on balance, we are a little less gung-ho about competition than the Minister’s colleague, the Minister for Universities, Science, Research and Innovation, was on the Higher Education and Research Bill Committee. However, that was not the point I was going to make.

The point I want to make is that there is a distinction. I made it clear that I was putting forward the concerns of a number of the awarding organisations that they put to us in evidence. There is a clear difference between letting 1,000 flowers wither because they are of poor quality, and coming down to a single qualification point. I made the observation in one of the papers that the suggestion had been made that there might be two or three. There was no suggestion that there should be no dilution; simply that a monopoly position was possibly unwise, not least because one of the awarding companies might one day go bust.

[Robert Halfon]

I will reflect on that but the whole purpose is to ensure quality and simplification. Once it is agreed to have another one, then there is another and another and so on. I think we are right to follow the recommendations of Lord Sainsbury and Baroness Wolf.

[Tracy Brabin]

I appreciate the amount of money given to careers advice; it sounds substantial. I have just googled the Careers & Enterprise Company and discovered that in my region of Leeds city only 5.6% of young people are in apprenticeships; 33% of 16-year-olds and 30% of 17 to 18-year-olds are poorly prepared for work. That is on the Government website. That suggests to me that they have not had brilliant careers advice, even given the extra money that is available, so maybe that message is not coming through.

[Robert Halfon]

I will find out what the Careers & Enterprise Company is doing in Leeds and in the hon. Lady’s constituency. It will be involved with the LEP, but it has not been there for a long time; it is a recent creation. It has been working to identify the spots where we need help the most. I will look into what is happening and write to the hon. Lady.

On the copyright issue, the content of qualifications will be determined by employers, with the support of the institute. That is very different from the current system, where awarding organisations develop qualifications in subjects or sectors of their choosing. In some cases that is with the involvement of employers, but not always. The new technical qualification will be based on the skills, knowledge and behaviours that employers have identified as requirements for particular occupations. As the content of the qualifications will be determined with the institute’s oversight, it is perfectly reasonable and appropriate that copyright for relevant course documents should rest with the institute.

On the relationship between the framework and the new standards, the same organisations can deliver assessments for frameworks and new standards as long as they meet the criteria for assessment organisations for standards and are admitted on to the register of assessment organisations. The same position exists for training. Providers can offer training for both but need to meet the criteria and get on to the provider register.

When I was talking about careers, I forgot to talk about the investment we are putting into training, which the hon. Member for Blackpool South mentioned. The hon. Member for Batley and Spen gave examples of constituents who are not getting apprenticeships and described the low take-up. For those people, we potentially offer traineeships. We have spent £50 million on that. Many of those people—over 19%—are people with learning difficulties and disabilities.

In terms of Ofqual and Ofsted, I see it not as a problem but as a bonus that there are all these qualification organisations out there, maintaining the quality of apprenticeships and technical education. As the hon. Member for Blackpool South knows, Ofqual and Ofsted are responsible for different elements of the system; Ofqual regulates qualifications and Ofsted regulates the trainers and providers. The institute will regulate the quality of standards and assessment plans. I do not think that is a problem. It is a good thing that all those bodies are there, to ensure we get the quality technical education and apprenticeships we need.

[Gordon Marsden]

I will reflect on what the Minister said. Even if it is a good thing that there is a plurality of opportunities, I will reiterate two points. First, it does not make the judgment of what capacity the institute may need when competing in this marketplace any easier. Secondly, I hope the Minister will understand and accept that there are enough difficult organograms out there already in further and technical education without creating one with lots of little dotted lines here, there and everywhere. If he is going to maintain that position, it is important that lines of responsibility and why they work are clearly explained to stakeholders and employers.

[Robert Halfon]

The hon. Gentleman makes a fair point and I will reflect on what he has said, but I think it will be set out clearly. We are considering how the new technical education qualification should be regulated. The regulatory approach will need to be designed specifically for new qualifications and in the light of the institute’s contract management function. Ofqual remains the qualifications regulator.

I am pleased to turn now to the schedule and give an overview of what the Bill seeks to do. We have discussed much of it today. The schedule seeks to extend the remit of the Institute for Apprenticeships to give it responsibility for implementing reforms that we believe will raise the quality of college-based technical education. The reforms will result in technical education courses that are designed around employers’ needs, support young people and adults to secure sustained employment and meet the needs of our economy.

15:30

Our country faces a pressing need for highly skilled people, but the current system, with its bewildering array of overlapping qualifications with similar aims, often results in low-value qualifications that lead to low-skilled, low-paid employment. The schedule will extend many of the powers that already exist for apprenticeships to cover wider technical education courses. Giving the institute responsibility for both modes of learning, and basing apprenticeships and taught courses on the same employer-led standards, will ensure that all technical education provision is closely aligned and of the same high quality.

I passionately believe that the Institute for Apprenticeships and Technical Education is the right body to be at the heart of the reforms for improving skills in our country, and ensuring alignment of all technical education with apprenticeships. The Government are committed to ensuring that the institute can deliver the role, and that there is a clear road map for its establishment. On that basis, I hope that the Committee will agree that schedule 1 should stand part of the Bill.

Question put and agreed to.

Schedule 1 accordingly agreed to.

Clause 2

Overview

Question proposed, That the clause stand part of the Bill.

[Gordon Marsden]

I rise to speak to clause 2 in particular, and to comment on the subsequent clauses that are also a statement of where this is going. It is important, in this context, to reflect—this will be very important when we come to the next part of the Bill—on why this clause is in the Bill in the first place.

[The Chair]

Mr Marsden, may I make it clear that, if you are speaking to clauses subsequent to clause 2, no amendments have been tabled for clauses 3 to 12 either? We understand that neither the Opposition Front-Bench team, nor the Minister, wish to speak to these clauses. Is that correct?

[Robert Halfon]

Except for clause 2.

[The Chair]

So do we have the leave of the Committee to put the question—after the Minister has spoken—and we have dealt with clause 2, that clauses 3 to 12 stand part of the Bill?

[Hon. Members]

Aye.

[Gordon Marsden]

As I was saying, on clauses 2 to 12—we will obviously proceed to the second part of the Bill, which deals, in schedule 3, with the important issue of the innovation of education administrators—it is important to understand why the Government have to address these issues at this time. The reality is that these insolvency rules are important to protect, above all, students and those in colleges. Colleges are crucial for providing further education nationally and have an important local presence. When colleges have financial difficulties, that can affect many stakeholders, including students, employers, lenders, the funding and oversight bodies and the local communities in which they are situated. Colleges are, quintessentially, locally based and respond to local employment and skill needs. That is why they have been successful over the years in being able to adapt, sometimes in a rather more nimble fashion than universities—although there are community-based universities that resemble FE colleges in their output and remit more than they do traditional universities.

The reality is that the FE sector has experienced a prolonged period of funding cuts. The House of Commons Library briefing shows the scale of the reduction in funding: in adult further education and skills, funding fell from a 2010 baseline of

“£3.18 billion to £2.94 billion in 2015-16, a reduction of 8% in cash terms or 14% in real terms.”

The financial health of the FE college sector has been declining since 2010-11. There was a deficit in the sector in 2013 for the first time, and 110 colleges recorded an operating deficit. The number of colleges assessed by the Skills Funding Agency as having inadequate financial health rose from 12 to 29 in the same period. That decline in the sector’s financial health is one of the things that has fuelled what the Government have said here today.

We have already referred to the searing report produced by the National Audit Office in 2015, and I do not intend to go into detail on that again. It is obvious, and not an open secret, that the Treasury has insisted on a robust insolvency scheme as part of the quid pro quo for the additional funding that has gone into the sector. That is the reason for the profusion of these clauses in the Bill.

[Mr Ranil Jayawardena (North East Hampshire) (Con)]

Is it not also true that, from the evidence received, banks would welcome this certainty? The position for them is currently unclear, and that could help them lend more to the sector, which is invaluable in helping our students.

[Gordon Marsden]

I thank the hon. Gentleman for his intervention, and for the penetrating questions he put to the witnesses. Hopefully that will be a by-product of the process, and that is entirely right. I am also bound to observe that there are other factors pushing it down this route. One of those other factors is the underlying financial weakness of the sector. When the further education commissioner gave evidence—he talked of 82 or 84 colleges in a merger position—he was, to be blunt, far more optimistic and gung-ho about the outcome of those mergers than I would be. From memory, some other members of the Committee expressed a different point of view. The truth of mergers is that they do not always work out well, and this was commented on by Mr Pretty from the Collab Group. He made those observations based on his own experience. There are a number of factors here. Changing priorities in public funding is a reduction, it is how some colleges have struggled with large debts or partially completed capital investment projects. The latter partly reflects weaknesses in the planning and financing of capital projects under the former Learning and Skills Council.

[Kelvin Hopkins]

Two or three points were made about mergers during our evidence sessions. One was that it is not just a question of scale. Sometimes colleges are not enormous, but they still work well separately. Sometimes mergers take place where a weak college is merged with a strong college, which turns them into a joint weak college, not a joint strong college. So there are all sorts of possibilities, probabilities and problems with mergers, and they should be judged carefully on their own merits.

[Gordon Marsden]

My hon. Friend is right, and what he says is underpinned by his great experience in this area. I am not saying that every area review that produces merger proposals will automatically result in colleges finding themselves in a financially weaker position and therefore more in need of the insolvency clauses in the Bill than otherwise, but it is part and parcel of that aspect.

It is not just FE colleges feeling the strain. It was helpful to have the presence of the Sixth Form Colleges Association in the evidence session. It, too, mentioned courses having to be dropped as a result of funding pressures. Three quarters of colleges have limited the size of their study programmes and more than a third do not believe that next year’s funding will be sufficient to provide the support for educationally or economically disadvantaged students.

In my neck of the woods, as well as the excellent FE college, Blackpool and the Fylde College, which the Minister visited, is Blackpool Sixth Form College, which is also an excellent college that has, over the years, done splendid work on the vocational side, in traditional qualifications and with the previous Aiming Higher programmes. Although the college is outside of my constituency—it is just in the constituency of the hon. Member for Wyre and Preston North (Mr Wallace)—it takes students from three or four constituencies. It has done splendid work, but the previous principal and the current principal have had to juggle the finances very carefully indeed to complete some of the programmes they wanted to do for the college and for the physical infrastructure. Sometimes the physical infrastructure of such colleges is 30 or 40 years old, and needs renewing.

I am reflecting on the various factors that give rise to the clauses we are passing into legislation. I want to focus us on the detailed conversations we will have when we move on. The picture of fragility that I described makes it even more important that the insolvency clauses and the position of the educational administrator, which we will talk about in considerable detail in due course, are a real answer to this problem, rather than something that sounds good on paper but does not do the business in practice.

[Kelvin Hopkins]

I have some experience in these matters. There have been funding pressures in all spheres of post-16 education, although not necessarily in universities, which seem to be well funded compared with other areas. In spite of the fact that there are advantages of scale in producing wide ranges of subjects in whatever qualification one is taking, some of the smaller subjects are, even now, dying. We are getting to a point where subjects such as modern European languages are being lost entirely from an area because no college or school will teach them any more. That is tragic. We should be creating more variety of opportunity in technical and academic education, not less.

My second major speech when I first came into this place was about funding for sixth-form colleges and the fact that they did a superb job. I said that funding constraints were in danger of killing the goose that lays the golden eggs: the sixth-form college sector. They do a fabulous job and I know from experience that we should have created more of them. Sadly, a view was held that we should create lots of schools with small, less efficient sixth forms with much narrower subject ranges, instead of sixth-form colleges. I think that went in entirely the wrong direction. I hope that I can persuade the Minister and others that we ought to look more favourably on sixth-form colleges and FE colleges if we are to make serious advances in educating and training our young people better than we have done in the recent past.

[Robert Halfon]

May I put some things in context for the hon. Member for Blackpool South before I speak directly on the clause? No one denies that there have been funding pressures, as the hon. Member for Luton North pointed out, but, even with such pressures, 80% of colleges are either good or outstanding, and 79% of adult FE students get jobs, move to apprenticeships or progress to university. Some 59% of institutions are in good financial health and 52% are operating with a surplus. That does not mean everything is rosy, but it puts things into context.

15:45

Despite the funding pressures, we have protected the base rate of funding at £4,000 per student for all types of providers until 2020. We know that the proportion of 16 to 18-year-olds in education or work-based learning is at a record high. We have maintained the funding for core adult skills participation budgets in cash terms at £1.5 billion. If you include the advanced learner loans and the apprenticeships, the adult education budget will have increased in real terms by 30% by 2020.

[Gordon Marsden]

I have two observations: first, “protecting” is an interesting word when we are talking cash terms as they are not real terms. By 2020 inflation may have eaten into that figure. Secondly, the hon. Gentleman mentions the advanced learning loans, but are they not sums of money out there to be offered—and at the moment, only 50% of them have been taken up?

[Robert Halfon]

Yes, but it is still a Government expenditure item and its aim is to help more people take part in education.

Overall, the Department for Education plans to invest £7 billion in 2016-17 to fund education and training places for 16 to 19-year-olds. The area reviews will support those colleges that want to merge—no one is being forced to merge—and we will provide financial support where appropriate to help them do so. We are confident about the programme and we will deliver strong, sustainable colleges for the future. Mergers do not necessarily mean that provision in a local area will end. It will be up to the colleges to decide whether to keep a campus or site open.

The clause is probably the least technical of the Bill’s insolvency-related clauses. It explains that part 2 is about the insolvency of further education bodies and, in summarising what is covered by chapters 2 to 7, sets the scene for what we will debate over the coming sittings. Underneath the simple clause is the Government’s commitment to ensuring that every young person has the opportunity to achieve their full potential and to succeed.

The Secretary of State talked about the Government’s commitment to building a further education sector capable of delivering these skills and that is why we are supporting colleges through the area review to take whatever steps are needed to transform themselves into providers of the highest quality teaching. We are providing them with the opportunity to ensure they are in a strong and sustainable financial position for the future.

Once the area review recommendations have been implemented, the Government has been clear that we will no longer provide exceptional financial support to colleges that find themselves in financial difficulties. We will draw a line under what has become an implicit understanding among creditors and some educational institutions that those who fall into extreme financial difficulty will be able to rely on the taxpayer to make good the shortfall.

The provisions in the Bill will send a clear message to colleges that, to deliver excellence in teaching and leadership, they need to ensure that they have strong and robust financial controls in place. The commissioner who gave evidence said that, where there had been significant problems, much had been down to leadership and financial management. Why is it that so many colleges are doing extremely well, the college of the hon. Member for Blackpool South being an example?

Any college or creditor in extreme financial difficulties cannot look to the Government as the bank of mum and dad for a bail-out. The bank of mum and dad—the taxpayer—will be shut, because we have a duty to give taxpayer value.

Although we expect a college insolvency to be a rare thing, we cannot say it will never happen. That is why the measures the Bill introduces will ensure existing insolvency procedures apply to further education bodies, whereas ordinary insolvency procedures would offer protection only to creditors.

If I summed up this part of the Bill in a few words, it would be about protection, insurance, prudence and caution. Through the Bill we will introduce a special administration regime for the sector that ensures that, in the unlikely event that a college become insolvent, the Secretary of State or Welsh Ministers will be able to take action to protect the interests of the learners.

That is at the heart of the Bill: protecting learners and ensuring that colleges are cautious about borrowing and banks are cautious and prudent about lending. Young people entering a college expect to complete their studies, leaving with the skills that they need to move forward in their lives. That is the purpose of the SAR and I urge that the clause stand part of the Bill.

Question put and agreed to.

Clause 2 accordingly ordered to stand part of the Bill.

Clauses 3 to 12 ordered to stand part of the Bill.

Ordered, That further consideration be now adjourned. —(David Evennett.)

15:51

Adjourned till Thursday 1 December at half-past Eleven o’clock.

Written evidence reported to the House

TFEB 07 Association of Employment and Learning Providers

TFEB 08 Federation of Awarding Bodies

TFEB 09 Association of School and College Leaders

TFEB 10 TUC

TFEB 11 Centre for the Study of Market Reform of Education