Draft Liverpool City Region Combined Authority (Adult Education Functions) Order 2018
Draft Tees Valley Combined Authority (Adult Education Functions) Order 2018
(5 years, 6 months ago)
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The Minister for Apprenticeships and Skills (Anne Milton)
I beg to move,
That the Committee has considered the draft Liverpool City Region Combined Authority (Adult Education Functions) Order 2018.
The Chair
With this it will be convenient to consider the draft Tees Valley Combined Authority (Adult Education Functions) Order 2018.
Anne Milton
I apologise if I sound slightly out of breath, Mr Hanson.
The orders, if approved and made, will provide for the transfer of certain adult education functions and associated adult education budgets to the Liverpool City Region and Tees Valley combined authorities. They provide an opportunity for the authorities to help their residents fulfil their potential. Although I made many of the same comments in yesterday’s Fourth Delegated Legislation Committee sitting, I will repeat them for the record.
In 2015 and 2016, through a series of devolution deals agreed between the Government and the combined authorities, we made the commitment fully to devolve the adult education budget. The orders will deliver on that commitment. They are made under the Local Democracy, Economic Development and Construction Act 2009 and will transfer certain adult education functions set out in the Apprenticeships, Skills, Children and Learning Act 2009 from the Secretary of State to the combined authorities. Those functions will relate to the area of each specified combined authority for the academic year 2019-20 and thereafter. The transfer does not include the functions in so far as they relate to apprenticeships or those subject to adult detention.
In the 2015 spending review, the Government made £1.5 billion available annually until 2020 for the adult education budget. Across England, that support to help adults with skills and learning is vital in equipping them for work, an apprenticeship or further learning. It acts as an integral stepping-stone, particularly for many who have suffered disadvantage. In 2016-17, the adult education budget supported adults to study courses in English, maths, English for speakers of other languages, full level 2 or level 3 qualifications and a wide range of community learning provision.
Combined authorities, and indeed all local authorities, have a role to play in supporting the introduction of T-levels, including working with employers to provide high-quality industry placements. Each combined authority has its own needs and circumstances. Local authorities, including combined authorities, are fantastic enablers and facilitators. We are working with combined authorities, businesses and learning providers to establish how skills provision and reform can be best shaped to fit the needs of local areas.
The orders will transfer certain adult functions of the Secretary of State in the Apprenticeships, Skills, Children and Learning Act to the combined authority in relation to its area and enable the transfer of the relevant part of the AEB to the combined authority. In particular, the following functions will be exercisable by the combined authority in its area instead of by the Secretary of State: section 86, which relates to education and training for persons aged 19 or over; section 87, which relates to the learning aims for such persons and the provision of facilities; and section 88, which relates to the payment of tuition fees for such persons.
Conditions are set in relation to the transferred functions, in particular that the combined authority must have regard to guidance issued by the Secretary of State and must adopt eligibility rules in accordance with any direction of the Secretary of State. The Department for Education will transfer the relevant part of the AEB to the combined authority to undertake the functions. It will be the responsibility of each area to manage its overall AEB allocation effectively and efficiently, to meet the needs of its residents.
Prior to this, the Department considered business cases from the combined authorities for implementation funding in preparation for the transfer of functions. After evaluating the cases, the Department agreed to provide appropriate implementation funding to support the combined authorities’ preparations and ensure that each area was able to prepare effectively to take on the functions.
From the 2019-20 academic year, the Liverpool City Region and Tees Valley combined authorities will be responsible for providing funding for statutory entitlements for eligible learners in maths and English up to and including level 2, first full level 2 and level 3 qualifications—learners aged 19 to 23—and the forthcoming digital skills entitlement. We talk about the northern powerhouse, and I think we can agree that skills are an essential driver for economic growth in the region. I have a number of examples that I am happy to provide if hon. Members would like to hear them, but I will not detain the Committee now.
The scale of the challenges faced by the combined authorities is significant. Liverpool City Region Combined Authority has one of the highest rates of economically inactive residents of any combined authority area—that is from an Office for National Statistics source—and this is most pronounced for residents in receipt of sickness benefit. The figure is in the region of 93,720. Similarly, despite employment levels rising at a rate higher than the national average, Tees Valley Combined Authority still has claimant unemployment above the national average—4.2% compared with 2.2%. In both authorities, the proportion of residents without formal qualifications is higher than the national average of 7.7%, with Liverpool City Region at 11.3% and Tees Valley at 12.1%.
Through the orders, the combined authorities can deliver a step change, to support their residents into good jobs with opportunities to progress and develop, to improve the earnings potential of their low-paid, low-skilled workers, to deliver a thriving and productive economy and—critically for me—to harness the collective enthusiasm of business, local authorities, the third sector and the public sector. I commend the orders to the Committee.
The Chair
The Minister has moved the motion and has initiated the debate on both orders. At the end of the debate, I will ask her to move the second order formally.
Gordon Marsden (Blackpool South) (Lab)
It is a great pleasure, as always, to serve under your chairmanship, Mr Hanson, and it is a particular pleasure to see the Minister in her place, after some of the logistical issues that she must have faced this morning.
I want to take my lead, slightly, from the Minister, but I will not detain the Committee long. The Minister reminded us both—and the Whips—that we were all sitting discussing a similar, but never the same, set of issues yesterday afternoon. The Minister has laid out her stall in that respect and she will be relieved to hear that I do not propose to repeat everything I said yesterday. However, I want to pick out two or three of the issues we raised in respect of the draft orders for Greater Manchester and the West Midlands that are equally pertinent this morning.
Yesterday, I pointed out three areas in which the Opposition would like to see the Government go further and faster. There was, I hope, a broad consensus between the Government and the Opposition on the need for devolution in these areas, but we believe, as I said yesterday, that
“if we want a proper economic plan across these areas…simply looking at devolving the adult skills budget and not considering the broader issue around apprenticeships is…pretty daft in the medium to long term.”—[Official Report, Fourth Delegated Legislation Committee, 15 October 2018; c. 5.]
I will leave it at that.
Importantly, we also talked about ESOL, and the Minister responded well. I shall be careful in what I say this morning about both combined authorities. I am going to say something about their differences in a moment, but I am particularly conscious of the fact—which I think is a good thing—that we have Members on the Committee from both combined authority areas: my hon. Friends the Members for Stockton North and for Liverpool, Riverside, and the hon. Member for Middlesbrough South and East Cleveland. Perish the thought that I should attempt to second-guess their thoughts in this area—and the hon. Member for Middlesbrough South and East Cleveland will have to forgive me, as I do not have encyclopaedic knowledge of what the ESOL demands in the Tees Valley area might be—but having been born and brought up in the north-west, I have a strong knowledge of the situation in Liverpool. There, as in many of our big cities, there are major challenges in local communities. The Minister and I talked a little about that yesterday, and I was pleased that she confirmed that ESOL will be a significant part of the process of devolution.
The only other point that I touched on yesterday that bears repeating today is that as the orders—which, as I say, we wholeheartedly support—go forward, we must not be too optimistic about the time it will take to transit from the current situation to the future situation. We all sit in a Westminster bubble from time to time. We assume—no doubt this is as true of officials as it is of Members of Parliament—that the moment something is signed on the dotted line, that is the end of it, but of course it is not. The implementation process is as important as passing the orders that we are debating.
Having made those generic comments, I will make one or two comments about the impact in the two areas that we are looking at. The Liverpool City Region covers an area that is historically and geographically diverse. It contains areas that were once part of historic Lancashire and Cheshire. It is at the very cusp of identities, accents and origins in the north-west. It encompasses places like Sefton, where Anthony Gormley’s statues look out to sea; it encompasses the Beatles, and everything we owe to the rich culture of the city of Liverpool—
Gordon Marsden
Including the Chairman’s birthplace. It also encompasses the Wirral, and apart from other things, as a medievalist I have to make the observation that the Wirral is believed to have been the site of the adventures of “Sir Gawain and the Green Knight”, an important Middle English story.
To touch on Liverpool for a moment, the mixture of origins among the people who live in that city—Welsh, Irish, Scottish, Afro-Caribbean, Somali—in itself makes the point about the importance of ESOL and those skills areas. The Mayor, Steve Rotheram, has been champing at the bit on this; I know that because I shared a platform with him at our party conference, where he spoke strongly about the need to take things further forward. I know also that he has, in recent weeks, brought forward measures that will involve taking into account the work of the smaller towns in the Liverpool City Region. We touched on this yesterday, and I am sure that it is also a pertinent point for the Tees Valley: the need to recognise the diversity within city regions or combined authority areas, in terms of both geography and local economics, is paramount. Therefore, it is extremely important that the Mayor is taking such issues further forward.
With regard to the Tees Valley, the Minister has already mentioned the higher levels of unemployment. There, too, we have a pretty diverse collection of boroughs; I think it is fair to say that the mayoral elections in Tees Valley were on a knife-edge. We have five boroughs—I always forget that Redcar and Cleveland are together—that have quite different, quite distinct, profiles. The area has a proud industrial history. It has involved seafaring, rural employment, chemicals—many different things. It is therefore very important that in this process of taking these measures forward, there is strong consultation. I did not mention this specifically in our discussions yesterday about Greater Manchester and the West Midlands, but I would apply it particularly in one sense. Here I take a leaf out of the Minister’s book yesterday, when she spoke, at the end of her peroration, about the need for the Department to keep close, but not be overbearing, with the combined authorities once the orders have been put into effect. I wholeheartedly agree with that. It will be particularly important, if I may say so to the Minister—I would like her to comment on this—in the context of the dread word “Brexit”.
I mention Brexit specifically, and in relation particularly to the Tees Valley, because I have been studying the Tees Valley’s 2016 to 2026 strategic plan for the combined authority, and that plan points particularly to the amount of money that the Tees Valley has received over a long period from the European structural funds. It says:
“Without this support it will be extremely challenging to achieve economic growth”.
That goes to the heart of the process of devolving skills, whether they are adult skills or broader skills, which we would want to see devolved in this process, because, to be blunt, if what is going to be devolved is a husk, without that funding, what will the benefit of it be?
The Government have been, in my view, singularly cavalier and remiss about putting any meat on the bone of the so-called shared prosperity fund, which is supposed to come forward to deliver some of the skills and some of the funding that we will lose if we leave the EU. I am asking the Minister very specifically today about that point. I have picked it up in the particular context of Tees Valley, but it could equally apply to many of the other combined authority and mayoral areas that are getting devolved funding, and to the other two statutory instruments that I understand we shall be considering—in this room or another one—shortly. Without some pressure from the Minister and her colleagues in the Department to get something on the table about just what substitution for the European regional funding and structural funding there will be, they will be handing over a useful process of devolution but one fraught with difficulty.
I understand the difficulties for the Minister and her Department. Brexit is absorbing all, and these issues will not immediately apply between 2018 and 2021, but my goodness, if the Government do not get their act together and put the money into the national prosperity fund or shared prosperity fund—or whatever Orwellian title they choose to give it—those areas that are having this useful amount of devolution delivered today will find that they have inherited a rather moth-eaten set of strategic funding to go with it.
Having said that, I repeat what I said at the start: we welcome this amount of devolution, we think it will be useful and we wish it were more. We would like the Government to do something in the area of strategic funding, particularly as that is at the heart of delivering the skills offer.
Mr Simon Clarke (Middlesbrough South and East Cleveland) (Con)
I rise only to say how much I welcome the order. The hon. Member for Stockton North would agree that there is a huge challenge in the Tees Valley to ensure that our education system is fit for purpose. As we press ahead with probably the most ambitious regeneration project in the country, there is urgent social and economic pressure to ensure that local people benefit from the jobs that we are working so hard to create. This measure is very much of a piece with the devolution settlement—ensuring that there is a local lead on the issues that have confronted the area throughout my life.
The consequences of deindustrialisation have been hard, and in large part have derived from changes that are external to the Tees Valley, but there is a local challenge regarding education standards, particularly from secondary age upwards. That is why I was pleased by the Secretary of State for Education’s announcement of the Opportunity North East programme last week, which will be important in aligning outcomes with what we all want to see. We are the second-best region in England for primary standards but ninth out of nine for secondary standards. That has to change. This measure will take that forward for the post-18 settlement, which is equally important in terms of ensuring that people are work-ready at the end of their formal education.
Alex Cunningham (Stockton North) (Lab)
I am grateful to my fellow Tees MP for giving way. We have seen a considerable reduction in funding for further education in the Tees Valley, and a tremendous review, which was a waste of time and money because very little happened as a result. Does the hon. Gentleman agree that the Government need to let the Tees Valley get on with the job, but also ensure that the funds are there? As my hon. Friend the Member for Blackpool South said, the Government need to understand what happens in relation to European funds, which are critical in the area that the hon. Gentleman and I share.
Mr Clarke
I thank the hon. Gentleman for that intervention—that is absolutely true. As the Prime Minister emphasised in her speech in Guisborough a week before last year’s general election, as we take back control of those funding streams after Brexit, it is important that they continue to be dedicated to those areas that have benefited from them. I expect that as part of our wider commitment to ensuring that Brexit works for all UK regions, that funding will continue to go where it will make a difference.
Unquestionably, getting this right is fundamental for the life chances of a whole generation of young people in our area. I hope the money that is required goes in—I am confident that it will, and I am confident that a locally led settlement is a better way to direct that money. I commend the Government and the work of the Tees Valley Mayor, Ben Houchen, in ensuring that we achieve the outcomes that we need.
Dame Louise Ellman (Liverpool, Riverside) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Mr Hanson. I support the comments of my hon. Friend the Member for Blackpool South, who has raised the essential elements of the deal in relation to Merseyside’s needs. Liverpool and the wider Merseyside area has made great strides recently, but one aspect that holds it back is the lack of relevant skills and the underachievement of so many people in the area. I welcome the measure, which is part of the solution and an important part of the devolution deal.
I would draw attention to two key elements that need to be considered further. First, there needs to be a comprehensive approach in relation to education and skills. Although the devolution agreement is developing in this way, it must relate to Government support and encouragement of new thinking and new initiatives.
Secondly, and related to that, European funding has been absolutely key to Liverpool’s regeneration in the last 20 years, and is still highly relevant. If that funding is threatened, there needs to be a proper replacement that is focused on the needs of the Liverpool City Region, and that does not just disappear into national Government coffers to be used elsewhere. With those caveats, I welcome these measures. This is a positive way forward and part of Liverpool’s continued recovery, enabling people to have the skills to meet the needs of the economy now and for the future, and ending the dreadful underachievement of so many citizens of our area.
Anne Milton
I want to pick up on a couple of points. First, the issue of further education funding was raised; that is not for this Committee to debate or decide on, but I am sure hon. Members will use every opportunity to ensure that the Chancellor is aware of their concerns ahead of any spending decisions.
Secondly, to pick up on the issue of skills, Brexit or no Brexit—I will also mention it briefly and go on to European funding—we have a skills shortage. We have a world skills shortage; there is no doubt about that. My hon. Friend the Member for Middlesbrough South and East Cleveland raised the particular issue of the north-east. I am very pleased with what the Secretary of State is doing, but there is a particular issue in the north-east. As a former Health Minister, I must say that the correlation between educational and health outcomes is pretty shocking; if people do not achieve well educationally, their life expectancy and health chances are greatly reduced. There is more than just an educational imperative to ensure that we get this right and do not let down future generations of young people who will then live less long. It is shocking.
Thirdly, I will pick up the point that the hon. Member for Blackpool South made first about the shared prosperity fund and ESF funding. I cannot give him a definitive answer and I am sure that he would not expect me to, but he should be aware that I have had a number of discussions and am having ongoing discussions with officials about what we do when funding arrangements change because, as he rightly says, ESF money is often well spent.
Taking a broader view, the reason why I think that devolution is important and that this is a positive step is that although the Government have money, often they are not the best people to decide how that money is spent. I sincerely hope there will be no tension between the smaller local authorities within these combined areas, because it is important that they work together; the granularity of knowledge on how that money should be spent is critical to achieving good outcomes. History is littered with Governments who, with the best possible intent, have spent large sums of money and achieved very little.
Adult education is particularly challenging. The hon. Gentleman mentioned the fact that these are not all big urban conurbations. There are rural areas and different needs for different people in different areas, which must often be met with a bespoke approach. This is the opportunity to do that. I was impressed that the consultation got what I think was one of the highest numbers of responses, so there is obviously engagement in the local area. We must now ensure that it works.
The hon. Gentleman mentioned today, as he did yesterday, the issue of further devolution of skills budgets. People do not always understand, although I know he does, that we have devolved the money to the smallest possible point—to employers. Levy-paying employers have access to levy funds; from April next year, they will be able to transfer 25% of the levy-payers’ pot. On 1 May next year I would expect all levy-paying employers in every region of this country, including Liverpool and Tees Valley, to have decided who they are going to transfer that 25% to, because that money is for training young people and older people through apprenticeships. That is the way we build skills. Whatever we have done, we have not done it well enough. Employers are acutely aware of skills shortages, but now they have the power and the opportunity to ensure that their workforce builds its skills and makes them prosperous. On a personal level, this is also about providing an opportunity for individuals to have a fulfilling career.
The timing of transition and the risks involved are always difficult to manage. Even when they know that they will end up in a better place, the transition may be difficult for training providers and authorities. However, there is no question of the orders being the end of the story; I want us to continue to work closely with combined authorities. We have set up learning pilots around the country to look into the training and education of adults; along with the work of the combined authorities, they will add to our collective pool of knowledge about what works. Although for some reason we in this country find it very difficult to share best practice, I hope that that will give us the opportunity to do so.
I look forward to hearing from the Mayors and from those in combined authorities about what has worked in their areas. There will be innovative approaches designed to meet the areas’ specific needs, which will add to our understanding. The more we do to support that work and share knowledge and expertise, the better we will serve our local residents.
The orders must be introduced to allow the Liverpool City Region and Tees Valley combined authorities to work with providers to tailor adult education provision in preparation for the academic year 2019-20. They will provide a real opportunity for residents to reach their potential and for combined authorities, local authorities, businesses, the third sector, training providers and everybody in the local area to work together to ensure that they have a real impact on people’s lives. They will allow the skills system to deliver in flexible and responsive ways with the agility required to sustain a flexible economy. Once again, I commend the orders to the Committee.
Question put and agreed to.
Resolved,
That the Committee has considered the draft Liverpool City Region Combined Authority (Adult Education Functions) Order 2018.
Draft Tees Valley Combined Authority (Adult Education Functions) Order 2018
Resolved,
That the Committee has considered the draft Tees Valley Combined Authority (Adult Education Functions) Order 2018.—(Anne Milton.)