Draft Liverpool City Region Combined Authority (Adult Education Functions) Order 2018
Draft Tees Valley Combined Authority (Adult Education Functions) Order 2018
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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.
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.)