Apprenticeships and T-Levels

Wednesday 20th November 2024 Westminster Hall

[Sir Christopher Chope in the Chair]

14:30

[Damian Hinds (East Hampshire) (Con)]

I beg to move,

That this House has considered apprenticeships and T Levels.

It is a pleasure to see you in the Chair, Sir Christopher.

UK productivity is well below that of the United States, Germany and France. That is not a new thing; it has been true in every year I have been alive. If we were able to fix that productivity gap, we could have higher living standards, lower tax and more tax revenue. There are multiple reasons for the gap and much academic literature has been written on it, but the level of skills in an economy is fundamental to productivity and therefore to growth. How we run our skills system is also important, because there is a cadre of young people who are less orientated towards pure academic study but have talent and flair in technical pursuits, and they deserve just the same opportunities and life chances as those who take the academic route.

In this country, although we are famous for aspects of our education system, including for our higher education—our universities—and increasingly for aspects of our school system, we are not, I am afraid, famous for technical and vocational education and training. When foreign Ministers come to Europe to look at vocational education, they tend to go to Germany, and if there is one thing we do not like in England, it is losing out to Germany.

It is right that successive Governments have been troubled by this situation and sought to fix it, but perhaps sometimes they have been a bit too quick to look for a fix. The story of our organisational infrastructure for technical and vocational provision is not one of stability. We have had industrial training boards, the Manpower Services Commission, the Training Commission, and training and enterprise councils—TECs. But those TECs were different from another TEC—the Technician Education Council, which existed alongside the Business Education Council, BEC. The two would eventually merge, of course, to give us BTECs. There were national training organisations; the Learning and Skills Council; sector skills councils; the UK Commission for Employment and Skills; the Skills Funding Agency, or SFA, which would later be the ESFA—the Education and Skills Funding Agency—and, most recently, local skills improvement plans and the Institute for Apprenticeships and Technical Education.

The infrastructure has been mirrored by a panoply of qualifications and awards. We have had traditional apprenticeships and then modern apprenticeships; the youth training scheme; the City & Guilds system; the technical and vocational education initiative; the National Council for Vocational Qualifications; NVQs, which are still in use; and GNVQs, which evolved into BTECs and diplomas. There were the 14 to 19 diplomas, which were not quite the same thing as the Tomlinson diplomas; the skills for life programme; and traineeships. Altogether, today, there are somewhere between 100 and 200 recognised awarding organisations, excluding those that only do apprenticeship end-point assessments.

Now, just at level 3—the equivalent to A-levels—we have the following qualifications: tech levels as well as T-levels; applied generals; level 3 ESOL; level 3 NVQ, and access to higher education diplomas. There is a level 3 award, a level 3 certificate and a level 3 diploma—or someone might prefer a level 3 national certificate or a level 3 national diploma. There is also an extended diploma, a subsidiary diploma, and a technical introductory diploma. There is no official count, but by the mid-2010s someone had counted up what they could find and said that, together with other, non-level 3 courses available to 16 to 18-year-olds, there were at least 13,000 possible qualifications that someone in that age group could do. It is not surprising that when the Independent Panel on Technical Education was created in 2015-16, it found that vocational education and training had become “over-complex”.

[Sarah Dyke (Glastonbury and Somerton) (LD)]

I thank the right hon. Member for securing this important debate. Some 6.9% of young people in Somerset are believed to be not in education, employment or training, which is higher than the national average of 5.5%. Does he agree that the Government should not only improve the quality of vocational education, but strengthen the careers advice and links with employers in schools and colleges, to enable more young people to get into education on the right courses?

[Damian Hinds]

Indeed—the hon. Member is absolutely right. Part of the point of careers advice is knowing which course to take and which qualification to pursue. The panel that I mentioned found that if someone was considering a career in plumbing, for example, there were 33 different qualifications that they might seek to take. It also found that in general the various qualifications were not providing the skills needed; they had become divorced from the occupations they were meant to serve, with no requirement, or only a weak requirement, to meet employers’ needs in those occupations.

The panel’s report, which came out in April 2016, became a blueprint for a major upgrade of technical and vocational education in this country. The panel was determined to address both the productivity gap and very clearly also the social justice gap, whereby some young people were being left behind. I stress that although the report was a blueprint, it was also a “redprint”: the panel was chaired by the noble Lord Sainsbury, the distinguished Labour peer. The report called for “a fundamental shift”, with

“a coherent technical education option…from levels 2…to…5”.

There would be 15 clearly defined sector routes, covering 35 different career pathways. Three of those routes would be available only through an apprenticeship; the other 12 would be available either through an apprenticeship or a college track, and there would be common standards for both. Both the apprenticeship and college-based routes would result in

“the same or equivalent technical knowledge, skills and behaviours”

to take into the workplace. The report said that this path

“needs to be clearly delineated from the academic option, as they are designed for different purposes. But, at the same time, movement between the two must be possible…in either direction”.

The report also recommended expanding the then Institute for Apprenticeships into an Institute for Apprenticeships and Technical Education, so as to cover both apprenticeship and college tracks. It added:

“Specifying the standards…is not a role for officials in central government but for professionals working in…occupations, supported by…education professionals.”

It recommended that there should be improvements to apprenticeships and a new, largely college-based qualification, which would become known as the T-level.

With T-levels, the knowledge, skills content and required behaviours are set not by somebody at the Department of Education but by employers. There is the core technical qualification, but there is also content in English, maths and digital. Crucially, there is a 45-day industrial placement. There are also more college hours than with traditional vocational qualifications and indeed more taught hours per week than for A-levels.

For the upgrade that we needed in our country, in both productivity and opportunities available to all young people, T-levels had to become the principal college-based option—not the only option, but the principal or main college-based vocational qualification. And the T-level could not be grafted on to a market that already had thousands of qualifications; there was an incumbency advantage and even commercial interests attached to some of those. It had to replace a number—a lot—of qualifications. Gordon Brown, the former Prime Minister, has been speaking about this quite recently.

The other thing that was always going to be difficult about T-levels was finding enough industry placements. Lord Sainsbury found that we might need up to 250,000 industry placements for 17-year-olds, and that, of course, is hard to achieve. We could say that it is too hard and give up, but if we did that we would be giving up on advancing our competitiveness.

The alternative is that we change culture in our country and say to companies that if they want to be a great success in their sector, and their sector to be a great success in our country, and our whole country to be a success in the world, we all have to invest both the resource and the time in the next generation.

[Melanie Onn (Great Grimsby and Cleethorpes) (Lab)]

I do not disagree with the right hon. Member on that point; I just wanted to highlight that in my constituency of Great Grimsby and Cleethorpes there is an apprenticeship provider called CATCH. Local businesses have come together to invest in a brand-new welding apprenticeship facility that will deliver 1,000 apprentices over the next few years. Is that the kind of partnership working that he envisages, which works well for local communities, young people and business?

[Damian Hinds]

I am sure it is. I will come to apprenticeships in a moment, but I was just talking about industry placements in T-levels.

From speaking to young people who are doing T-levels, colleagues will know that their most popular feature is probably the fact that young people get to do a real role in a real workplace. The placements are also popular with the employers that provide T-levels: first, the employers are investing in the next generation and helping develop all the things the lack of which they sometimes complain about—soft skills and workplace skills—and secondly, the placements are the most fantastic, longest-ever job interview, when employers get to see the people who may come and work in their company over an extended period. I appeal to Ministers to carry on the great work of shouting about T-levels and talking about these great opportunities and the upgrade they represent.

There were two big changes to apprenticeships. The first ensured that there were minimum standards. Previously, as colleagues will recall, some apprenticeships were so thin and flimsy that the apprentices did not know they were on one. After minimum standards came in, apprenticeships would last at least one year and involve at least 20% of time off the job. As with T-levels, there would be an end-point assessment, which would feature standards set by employers.

The second big change was the introduction of the apprenticeship levy. That has always been controversial with some employers, but it was there to do two things. First, it raises the funds needed to pay for a big upgrade in apprenticeship provision. Secondly, it deals with the free rider problem, with which we will all be familiar: some companies in a sector have always strongly invested in young people, but three years later those young people leave to work for another employer that can offer to pay more but has not made the investment in the first place. The apprenticeship levy deals directly with that free rider problem, as economists call it, so that every sizeable company contributes properly.

The new Government plan to change the scope of the levy and to introduce two new types of apprenticeship, which it is fair to say we do not know a huge amount about: foundation apprenticeships and shorter apprenticeships. There is an argument that we already make the word “apprenticeship” do a lot of work—it covers a wide spectrum. Arguably, there are three types of development of self and training, which have different needs: someone may be a career starter, career developer or career changer, and the specifications of the courses and qualifications are different. For example, a 50-year-old who is changing career does not need to learn as many things about what it is like to enter a workplace for the first time as an 18-year-old does. In truth, only one of those types of training is what a normal member of the public associates with the word “apprentice”: we think typically of people who are young and starting out on their working journey.

It is totally legitimate to look at changing what the levy covers, and it is good to refocus on young people—career starters. It is also reasonable to say that the levy could cover some things that are not apprenticeships, such as management development or traineeships, but there is huge value in maintaining integrity around what we mean by the word “apprenticeship”, and keeping a minimum length and quantity of college or off-work content.

Whatever the Government do with the levy, they need to find a way to deal with the free rider problem. The Government will always be lobbied by companies saying, “We should be able to use the levy for this, that and the other”, but if “this, that and the other” means training that they would have paid for anyway, then the levy will not have achieved its goal. It has to be something that creates a net increase in the amount of training and development available.

That brings me to Skills England. Now, Ministers like shiny new things, and some people will always lobby for things to change. A sweet spot is found in public policy when the two coincide: Ministers get lobbied to do something, and they think they have come up with a shiny new thing that sounds like it will achieve those ends. Skills England is one of those things; I am afraid that, without major design change, it is doomed to failure. I have no doubt that plenty of people who lobbied the Government when they were in opposition said, “We need a different approach to skills. We need to think about them across Government, take the long view, listen to employers, listen to young people and have an integrated approach.” The Government have come up with this thing called Skills England, which they think will do that.

Skills England will be the 13th new skills agency in five decades. If all it took to solve our skills and productivity problem was a change in the machinery of government, do the Government not think that one of the previous 12 might already have managed it? The instinct in difficult circumstances is to break glass and reach for a quango, but Skills England is not even a quango; it is nada—not quasi-autonomous, but a non-accountable departmental agency—and there is no reason to think it will be any better at working across Government, let alone across the economy, in solving these issues.

If the Government were serious about creating something new to join together the Home Office, the Department for Business and Trade, the DFE and everybody else, they would put it in the Treasury or perhaps the Cabinet Office. They would not just make it part of the DFE management structure. Worse than that is the loss of independence compared with the Institute for Apprenticeships and Technical Education.

There is legislation currently going through the other place that ostensibly creates Skills England, but it does no such thing. All it does is abolish the independent institute and move all of its powers into the Department for Education. The Secretary of State will now have responsibility for standards for T-levels. Imagine if that were the case for A-levels. If it is not all right for A-levels, why should it be all right for T-levels?

[Clive Jones (Wokingham) (LD)]

Will the right hon. Member give way?

[Damian Hinds]

If the hon. Member will forgive me, I will continue.

There is also no guarantee that business will continue to be involved in setting those standards. I am afraid that public and business confidence is set to be eroded—rightly, because everybody knows that the easiest way for the Government to increase the numbers of people doing anything in education is to erode standards to get more people through.

I believe the Sainsbury report was—and still is—a good blueprint. Of course, the Government are entitled to evolve it, but they should recognise that the principles remain sound. With T-levels, it was always going to be hard to get sufficient industry placements and to overcome powerful objections that we need to change the system rather than just add to it. With apprenticeships, there will always be, as there always have been, firms that try to game the system. We can argue about what the levy should or should not cover, but it is a good thing and it needs to be designed and maintained to encourage a net increase in investment in this area and to deal with the free rider problem.

There will always be some cost and downside when the bar of minimum standards is raised, as we did. We need to remember where we started, with the need to increase productivity and have higher expectations for all in the interests of social justice. We need to maintain those minimum standards to keep apprenticeships and T-levels equivalent, with the same levels of knowledge, skills and behaviours.

Finally, the independence of the body that sets the standards, working with and for business, is key. The Government will obviously keep Skills England, but I ask the Minister to build into its design proper, full independence from her Department, and a proper, full guiding role for the businesses these occupations need to serve. I want Ministers not just to say that, but to write it into the legislation.

14:49

[Sonia Kumar (Dudley) (Lab)]

It is a pleasure and an honour to serve under your chairmanship, Sir Christopher. I thank the right hon. Member for East Hampshire (Damian Hinds) for securing this important debate on the pivotal role of apprenticeships and T-levels in our national industrial strategy.

As we face a significant skills gap, particularly in science, technology, engineering and maths fields, those pathways are critical for equipping our workforce with the expertise needed to drive innovation and economic growth. T-levels and apprenticeships bridge the gap between education and the workplace, combining classroom learning and practical experience. T-levels provide substantial industrial placements, while apprenticeships enable individuals to earn while they gain real-world skills. Together they address shortages in key sectors, such as manufacturing, construction, healthcare and beauty, ensuring that students are job ready from day one.

Dudley College of Technology in my constituency exemplifies excellence in this area. The college offers a wide range of T-levels across many disciplines, blending academic and practical learning. Its commitment to apprenticeships is equally impressive, with over 4,000 apprenticeships supported through strong partnerships with local businesses. Those collaborations ensure that training meets industry needs and contributes to regional economic growth.

The STEM sector remains the heart of the industrial strategy but continues to face persistent skills shortages. Apprenticeships and T-levels are vital to addressing those challenges and building a workforce equipped for careers in science, technology, engineering and maths. Institutions such as Dudley Tech play a key role in closing the gap, but we must focus on diversity in STEM. Women make up only 27% of STEM workers, but 52% of the country’s wider workforce. Meanwhile, only 12% of STEM workers, compared with 19% in the wider workforce, come from ethnic minority backgrounds. We will not see improvement unless we address this matter head on and break down barriers to apprenticeships and T-levels.

Measures by the previous Government were ineffective, with females aged 16 to 29 making up only 29% of the STEM workforce—a mere 1% more than the generation before them. Under-representation of women, minorities and those from disadvantaged backgrounds remains a barrier to unlocking the country’s true economic and technological potential on the global stage. Making apprenticeships and T-levels more accessible will attract a broader range of talent, enriching the STEM workforce and fostering innovation.

In conclusion, we must make apprenticeships and T-levels more accessible to attract a broader range of talent, particularly in STEM, and further promote their uptake to diverse audiences. By fostering partnerships between educational institutions such as Dudley Tech and industry, we can create a more skilled environment for all.

14:52

[Luke Taylor (Sutton and Cheam) (LD)]

It is a pleasure to serve under your chairmanship, Sir Christopher. I thank the right hon. Member for East Hampshire (Damian Hinds) for securing this debate on such a critical issue for our young people. Today, I want to highlight a major concern among college staff and students: the need for certainty about the potential defunding of BTECs in favour of T-levels.

For years, BTECs have served as a trusted form of level 3 qualification, providing students with practical and theoretical skills in a format that staff are experienced in delivering. I have heard from teachers about the pride and joy they take in teaching BTECs and watching their students thrive as they apply themselves to often very practical subjects. In many cases, it is the first time that those children have ever felt passionate about learning and excited to go further. It gives them the chance to finally start down the path—a path I imagine all of us in the Chamber want young people to take—towards realising their full potential. That is why so many are concerned about the replacement of BTECs with T-levels, and why I hope that the Government address those concerns when they publish the findings of their review of the policy next month.

I have heard from teachers who say they will struggle with the suggested rapid adoption of new course structures and unfamiliar theoretical components across the whole range of non-A-level subjects. Staff at South Thames Colleges Group, which serves many of my local students, have expressed concerns about how those sweeping changes will be implemented effectively. Currently, around 58 courses are at risk of being defunded.

[Melanie Onn]

Is some of the concern coming from colleges not also about the timing of those decisions? Franklin college in my constituency has said that the earlier it knows, the better it can plan. It is already receiving parents and young people in for open days for courses next year.

[Luke Taylor]

The hon. Lady makes a point so good that I will be getting to it shortly—I completely agree.

Staff worry about having to adapt their curricula to align with the new T-levels, which will involve updating course content, revising teaching methods and redesigning assessment strategies to meet the new required standards. There is no way to do that without enormous, time-consuming upheaval, which they will need as much notice as possible to prepare for. Teachers deserve a definitive answer on what will happen next.

It is not just teaching staff; students have been left in the dark, too. Approximately 380 students planning to enrol at a college in the South Thames Colleges Group are affected by the confusion surrounding the implementation of T-levels. Those currently completing GCSEs and planning for their post-16 education face uncertainty about what their courses will look like in September 2025. They fear the removal of the element of choice in the system.

BTECs formerly offered the option of a professional placement, but T-levels are geared specifically to placements. That leaves those who may not be academically suited to A-levels but do not wish to begin a T-level course, 20% of which is effectively a job, with no real support. On a visit to Carshalton college, I was told that there were 120 applicants for a diploma in childcare but only seven for a T-level in childcare. That could create a shortage in qualified staff coming through the system. The impact is felt disproportionately by those with special educational needs and disabilities, many of whom need extra support to explore their options before entering adult life, and for whom entry into the world of work may not be the right option so early in adulthood.

Nobody is denying the merit in reviewing periodically the way we train our young people for the future, but forcing students to choose exclusively between A-levels and T-levels could represent a narrowing of their options. I fear that this is a poorly managed top-down change for teachers to implement, and a gamble with the opportunities of a generation of young people who, let us not forget, have already had their education severely disrupted by the covid pandemic. With September 2025 rapidly approaching, I urge the Government to provide clarity to all those affected so both students and staff can plan for the change ahead. The Government must also think again, and give colleges and students flexibility to choose the appropriate qualifications for them and their communities.

14:57

[Steve Yemm (Mansfield) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Christopher.

Making sure that our young people have access to a wide range of educational opportunities that can lead them on to high-quality, well-paid and secure employment is vital to the health of our economy. In fact, it is critical to towns like Mansfield, which are to some extent facing a brain drain due to poor investment in employment opportunities and a weak private sector. They also have the difficulties with productivity and gross value added highlighted by the right hon. Member for East Hampshire (Damian Hinds); those are a real challenge in constituencies like mine.

In July, I was elected with a mandate for change locally. I stood on a platform to focus on five local missions that I thought would have a significant impact. One was to do everything I could to facilitate a stable and growing local economy and good-quality jobs for everyone in my constituency. Of course, a critical part of that is ensuring that there is a wide range of high-calibre academic and vocational education opportunities. I therefore welcome the debate.

Without a highly skilled workforce, areas like mine cannot attract the investment we need, and we know that investment brings prosperity for our communities. I am delighted that the Government made additional money available in the Budget for further education and have announced reforms to the apprenticeship system, with a new growth and skills levy. I welcome the progress and know that the Government have aspirations to do more over the coming months and years. I want Mansfield to be part of that conversation.

I have had a number of discussions with West Notts college and Nottingham Trent University about their funding streams and ways they feel they can work together more effectively to bring exactly those types of opportunities in the further and higher education sector to young people and adults in my constituency. As part of that, we have seen a £6.5 million education investment from Nottingham Trent University in my constituency, which is delivering specialist teaching and learning facilities to support local people to upskill and to access and retain employment in the local area. That includes really important opportunities in nursing, aligned with the local health authority, and in engineering, business, criminal justice and sports science. I congratulate both those parties on their work to enabled all of that to come to fruition.

I see latent potential to build on that collaboration between HE and FE in my constituency, which might be called “the Mansfield model”, across further education. By cutting red tape and streamlining the effectiveness of funding, like in the West Notts college and Nottingham Trent University joint campus in my constituency, it would be possible to unleash the power of further education provision. Given the success in my local area, I recently wrote to invite the Secretary of State for Education to Mansfield. I would be delighted to host a Minister from the Department, so that they can see directly how the local model could be used as a blueprint to improve skills and attract important private sector investment into towns like mine.

15:01

[Lewis Cocking (Broxbourne) (Con)]

It is a pleasure to serve under your chairmanship, Sir Christopher. I draw Members’ attention to my entry in the register of interests.

I thank my right hon. Friend the Member for East Hampshire (Damian Hinds) for securing this important debate. While I agree with him that much more needs to be done to encourage apprenticeships and technical education, when I think back to what I was deciding to do after secondary school, I envy the choices available to young people today. I left school in the era when, under Tony Blair’s target, 50% of young people were expected to go to university. That is what I did, but it simply was not the right route for me. On-the-job training, with the promise of a full-time job at the end, is a fantastic way for many young people to kick-start their careers. I am pleased that the previous Government did so much to increase the opportunities available to young people, with 5.8 million apprenticeships created and the overwhelming majority of occupations now able to offer the apprenticeship route.

I am proud of the work taking place in my constituency of Broxbourne as part of that. Hertford Regional College offers a wide range of post-16 professional and technical programmes and apprenticeships, with nearly 3,000 young people going on to these courses and getting the skills they need for their careers. At the end of their course, they are going on to full-time employment or further education at above the national average—we are very good at getting people into full-time employment after they go to the college. I am pleased that, from September 2025, free schools in the Broxbourne constituency will offer T-level pathways, but there is still much more to do.

Too many students are embarking on low-quality university degree courses, with little prospect of finding good employment opportunities relating to their degree when they graduate. Industries from hospitality to the trades are rightly calling for greater flexibility in the delivery of apprenticeships and more freedom in how the apprenticeship levy can be spent, enabling more employers to offer better opportunities for young people. I want to see wider changes to the education system, so that it is much more geared towards preparing students for the world of work.

The Government claim to want economic growth, although their actions are not exactly matching their words at the moment. To achieve a faster-growing economy, we need to get more people into work and have a laser focus on developing the next generation of entrepreneurs. Young people need to know that there are routes other than university to success and full-time employment. I know that inspirational former apprentices are spreading the word to students across the country, but let us make it easier for them to make the case for apprenticeships. Let us make sure that every young person can choose the right path for them.

15:04

[Tom Hayes (Bournemouth East) (Lab)]

It is an honour to serve under your chairmanship, Sir Christopher. I commend the right hon. Member for East Hampshire (Damian Hinds) for securing this debate. There are no ifs or buts about it; we just have to get further education right. I want to confine my remarks to three areas. First, we need more teachers. Secondly, we need more space. Thirdly, we need reform of both T-levels and apprenticeships.

We are running out of teachers in further education. Courses are closing, waiting lists are growing and colleges cannot pay enough to attract people from industry—the Association of Colleges calculates that there is an average pay gap of £9,000. Would the Minister consider presenting a medium-term plan to improve pay and conditions to get teachers into our class spaces? Furthermore, will she extend teacher workforce planning to further education, as the previous Education Committee advised?

Colleges do not have the space to train young people, so we need sustained capital funding in skills infrastructure. I feel blessed to have been able to visit the Poole campus of Bournemouth & Poole college, where so much more could be done to teach clean energy skills if there was investment in the right space. The college knows what space it wants to build the facilities in; it just does not have the sustained capital funding to make that happen. Will the Government appraise the needs of colleges and support them to access the spaces they need to provide apprenticeships and training in the skills that will fuel the growth of our economy, given that growth is our Government’s No. 1 mission?

I look forward to the Government confirming what the qualifications landscape will look like for school leavers, following the very welcome commitment to pause and review Conservative plans to defund unpopular qualifications such as BTECs, which rival T-levels. T-level courses, particularly in education and childcare, may include a substantial work experience placement. That might be a good idea in principle—I have been very lucky to visit Bournemouth & Poole college and learn about its world-leading health T-level—but just over one in 10 construction and engineering T-level students could not complete the required work placement. Student numbers are lower than planned; drop-outs are high; announced courses have been cut or thrown into doubt before they started; courses have not been funded for young adults aged 19 to 24, when our country needs them to be educated and in training; and the Conservative Government, which this Labour Government replaced, botched the roll-out. Will the Government increase support to employers taking T-level students?

There are high hopes that the reformed growth and skills levy and the lifelong learning entitlement will give workers access to high-quality training in higher-demand sectors. I invite the Minister to visit Bournemouth & Poole college—particularly the Bournemouth campus—where we have 2,000 apprentices in training, and an outstanding achievement rate of 8.4% over the national average. Huge economic differences are being made to local employers such as Sunseeker, which, together with the college, has launched a training initiative to address a national skills shortage affecting the marine industry. Its Skills Academy provides fully paid 12-week intensive boatbuilding skills courses across five specialisms. Following training, students join colleagues at the shipyard to achieve a nationally recognised qualification over 12 months. The right hon. Member for East Hampshire asked whether we need Skills England. The example of Bournemouth & Poole college working with Sunseeker shows how an organisation can find and fill gaps at a national level, and co-ordinate the funding and frameworks to grow our economy.

Octopus Energy is ensuring that we create more than 4,000 skilled jobs, including qualified heat pump installers, by 2030 to help our Government to meet their clean energy by 2030 mission. With the launch of the first employer-provided low-carbon heating apprentice scheme, Octopus is demonstrating how employer providers can create high-quality apprentice programmes. We need to ensure that apprenticeship funding rules requirements and the accountability framework reflect the needs of employer providers, rather than focusing mostly on the needs of colleges and training providers. Will the Minister consider creating employer provider-specific funding rules in order to streamline the reporting responsibility? As part of the reform of Ofsted, which I welcome, will she support joint working between technical experts and Ofsted inspectors so that the inspectors better understand the technical requirements during inspections? That is particularly key for Octopus Energy’s pioneering approach of developing skills driven by rapidly developing technology.

For years, the same thoughts have been swirling through my mind and the minds of many of my constituents, whose doors I have been knocking on over the past two years. It all comes down to this single question: why can Bournemouth and Britain not do better? Why can we not have the things we are entitled to? Bad things are not inevitable; they are the result of political choices, such as those that have been made over the past 14 years. We want to make different choices in Bournemouth and in Britain. We want young people to get on and have decent, well-paying jobs that mean presents under the tree, a meal out with loved ones, a new home and a new car in the driveway, and a sense of purpose and mission in the careers they choose. I very much welcome the Minister coming to this debate, and I look forward to her response. I thank the right hon. Member for East Hampshire for calling this important debate. I really call for a turning of the page, because for too long, too many people have been held back.

[Sir Christopher Chope (in the Chair)]

Before I call Jim Shannon, I will just say that there are five people wishing to speak and 20 minutes, so you can do your own calculations.

15:10

[Jim Shannon (Strangford) (DUP)]

I am not a great mathematician, but I know that that means four minutes. I congratulate the right hon. Member for East Hampshire (Damian Hinds) on leading this debate. I know he undertook a lot of work on apprenticeships and T-levels in his time as Minister, and he did exceptionally well. He is in a different role now but he still shares his advice and experience.

We must do all we can to expand education and employment opportunities for young people across the United Kingdom. In every debate I give a Northern Ireland perspective and speak on the things we do well back home. The Department for the Economy has released its yearly statistics on the uptake of apprenticeships, and it is good news that there has been a rise. As of October ’24, there were 1,756 people undertaking an apprenticeship in the electrotechnical field, 500 in health and social care, and 700 in plumbing, which the right hon. Member referred to in opening the debate. In addition, 10,500 were studying for a level 2 award and 3,700 for a level 3 award.

I have spoken before about the importance of apprenticeships and the role they play in teaching young people a unique skillset after leaving school. However, it is crucial that this is properly reflected in their pay. I know this is not the Minister’s responsibility, but we have to ensure that apprenticeship pay encourages young people to stay on and finish their apprenticeships, as their colleagues and friends might be earning much more for stacking the shelves in Tesco or Asda. That is just one example. Apprenticeships are important, but young people need the time and money to get through them.

The right hon. Member for East Hampshire has spoken before about ensuring parity of esteem between academic and vocational routes. There must be an understanding that the university route does not always appeal to young people, and an option to encourage them to get out into the world of work. I believe that the Minister is committed to that, so it would be interesting to get her thoughts.

From July to September 2024, there were some 513,000 unemployed people aged 18 to 24 in the UK, which is an unemployment rate of 13.7%. Unfortunately, that is a rise on the 11.6% in the previous year. Again, apprenticeships are critical to that. Let us get young people into apprenticeships and reduce that unemployment rate.

I hear what the right hon. Member for East Hampshire said about T-levels. There is no doubt success with this option. In 2022, the first T-level results were announced. Out of 1,029, there was a 92.2% pass rate, which is excellent. As far as I am aware, the T-level system is for England and does not apply to the devolved nations, so it would be great to know what the Minister can do to exchange thoughts with the devolved Administrations and see how we can extend that success.

Apprenticeships are a fantastic way to earn while learning and they allow for people to be fast-tracked into the working world. Apprenticeships are available in numerous sectors across the UK. We must encourage young people to see them as an option after they choose to leave school. Many associate the word “apprenticeship” with male-dominant fields such as mechanics, engineering or plumbing, but there are endless opportunities out there in a large range of sectors for people of all ages and with all interests, man and woman. A lady can do a job equally as well as a man. That should never be discredited in any way.

Job creation is an important issue for the entirety of the UK. To get individuals into the job market, encouragement and prospects must be there from school age. We must do more to encourage young people to think about their careers and futures. More importantly, we must make them aware of the options for what they want to do when they leave school. I look to the Minister to see if engagement is possible on expanding T-level qualifications to Northern Ireland and Scotland. Will the Minister commit to undertaking future discussions on this with the Department for Education back home? Equal opportunities for all young people should apply across the whole of this great United Kingdom of Great Britain and Northern Ireland.

15:14

[Mr Jonathan Brash (Hartlepool) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Christopher. I congratulate the right hon. Member for East Hampshire (Damian Hinds) on securing this important debate.

Hartlepool is very lucky to be served by some outstanding providers, including Hartlepool College of Further Education, under the inspiring leadership of its principal Darren Hankey, Hartlepool Sixth Form College, where I was privileged to once chair the board of governors, and the Northern School of Art, with its international reputation. Diminished funding and demographic pressures have too often resulted in providers being in competition rather than collaboration. My first point to the Minister is that we must create an environment where providers in towns such as ours can collaborate effectively to deliver for young people.

On the 2017 reforms that were mentioned by the right hon. Member for East Hampshire, part of the issue is that the levy, and its spend-it-or-lose-it mentality, meant that there was often a rush to spend it, rather than thought being given to proper workforce development. Indeed, £700 million ended up being top-sliced by the Treasury. The Association of Employment and Learning Providers said that this was money raised for skills but not being spent on skills. I welcome the new growth and skills levy and its greater flexibility, because the money it raises has to go into developing the skills of our young people, and too often in the past it did not.

We have to think about the parity of esteem. In principle, with T-levels I genuinely support the idea of creating that parity of esteem. The problem in places such as Hartlepool, which has already been referenced and acknowledged, is that we do not currently have the economy and the industrial placements to effectively support them. In the words of the principal of Hartlepool College of Further Education, the 2017 reforms and the rush to T-levels taken together have actually resulted in fewer opportunities for younger people in constituencies like mine. Unfortunately, Hartlepool has one of the highest levels of those not in education, employment or training in the country.

Another point has to be raised, but it is a difficult one. While I absolutely understand the principle of the functional skills element in those qualifications, there is a genuine concern in industry that the element is acting as a blocker to some of our young people’s accessing the skills, training and careers that they would like to have, because they feel unable to get past that barrier. I ask the Minister to give that some consideration.

In the round, we have to think about the agenda from an immigration perspective. I marvel at the fact that the FE college in my constituency, which has seen a 10% cut in funding, trains bricklayers, and yet we are importing bricklayers from abroad. I have a constituency with one of the highest levels of unemployment in the country. It is not hard to square that circle. Let us train our own and fund our skills properly, so that we do not have to rely on immigration from abroad.

The right hon. Member for East Hampshire made the point extremely well that in this country we have been obsessed with supply-side reform for far too long, with the numerous different qualifications and the constant changing of what offer there is. We have to move to a demand-side approach. If we get industry and jobs into places such as Hartlepool to drive the industrial growth that we want to see, the skills will follow. That is the change that we have to see, and I would like to see it delivered in constituencies like mine.

15:18

[Mr Peter Bedford (Mid Leicestershire) (Con)]

It is a pleasure to serve under your chairmanship, Sir Christopher. I am immensely proud of my upbringing in a modest town in Northamptonshire. I grew up in a single-parent family with my mother, and she instilled in me the work ethic and morals to learn more, to find out more about the community, and to get a trade or skill—to give me the aspiration to succeed. That is what really interests me in this debate. I believe that apprenticeships, technical training and on-the-job training does instil the aspiration in individuals to better themselves, their community and their families. That is why I am so interested in this debate.

From personal experience, working from an early age brings countless benefits. It is a disgrace that Governments have allowed NEETs to increase to the current level. How can it be right that we have 900,000 people aged between 16 and 24 not in education, employment or training? We are watching the next generation not pursuing their next step in life, which is to aspire to something better for themselves and their families.

The default answer from Governments over the last 20 years has been to funnel young people through higher education. My right hon. Friend the Member for East Hampshire (Damian Hinds) mentioned the arbitrary targets, such as that set by the Blair Government to get 50% of school leavers to go to university. But there is another option: apprenticeships and on-the-job training. I am immensely proud of the success of the Conservative Government, who delivered 5.8 million apprenticeships across the country. Those apprenticeships offered young people opportunities for employment. Indeed, 70% of those young people were placed in occupations after training. I also agree wholeheartedly with our manifesto commitment to create 100,000 extra highly skilled apprentices every year over the next Parliament.

However, what has gone wrong? While there have been many achievements, it is disappointing that there has been stagnation in that area over the past few years. The challenges that have been outlined in concerns about the Budget will, sadly, not help the situation.

I have had representations from bodies such as EngineeringUK and Multiverse, explaining that the crux of the issue lies with the apprenticeship levy. The standards involved in setting up apprenticeships are far too cumbersome, and the funds from the levy are being redirected from employers to classroom training and assessments. It is no wonder that those bodies are moving away from that type of scheme towards academy-based training in-house, in their own companies and organisations.

What should we be doing instead? Much concern has recently been expressed, particularly by Opposition Members, about changes to national insurance contributions. I do not see those changes helping the situation. I believe we should be encouraging employers to take on more employees, including by the apprenticeship route, so that when they finish their apprenticeships they can stay within those organisations. Recently in my constituency, a number of small and medium-sized employers expressed to me concerns about the changes in employers’ national insurance contributions, saying that they would incur thousands of pounds in extra costs. They will have to consider that sort of thing when they look at their forward planning and recruitment.

[Tom Hayes]

Will the hon. Member give way?

[Mr Bedford]

No; I have limited time. I urge the Government to reconsider the proposals.

Finally, I think the tone needs to change from the top. Over many years, there has been a perception, at least, that apprenticeships and technical training have not been on a par with university education or other academic routes. I went through the academic route and my brother went through the apprenticeship, work-based training route. He is now earning far more money than I am. He left school without any qualifications, but he went to night school, trained himself, got an apprenticeship and went through the right route. He learned a skill and is now very successful.

In conclusion, I hope the Government take on board the arguments I have put forward.

15:22

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Sir Christopher, in an incredibly important debate about the future of our young people. I congratulate the right hon. Member for East Hampshire (Damian Hinds) on his tenacity on the issue. I remember his time as Secretary of State for Education in the Government of Mrs May, and he had a genuine passion for the issue. To see him still banging the drum many years later is testament to his character.

I agree with a lot of what the right hon. Gentleman has said over the many years that he has been talking about the importance of technical education—that is, about the need to understand that technical education is not the younger sister of A-levels and academic qualifications. It is not the less important member of the family of opportunities presented to young people.

I declare an interest. I am the governor of a sixth-form college in my constituency, which provides T-levels—one of the outstanding providers in the west midlands. I also have a daughter who will soon be thinking about GCSE options for next year, so where she goes and what she does is very much on my mind.

As the hon. Member for Mid Leicestershire (Mr Bedford) said, it is incumbent on us all to say to young people who are looking at their options that whatever they choose to do, the routes available will help them to be the best they can be—whether through A-levels, T-levels or the remaining applied general qualifications, once the pause and review process is finished. We sometimes find ourselves in a false dichotomy of talking about academic studies on one side and vocational and technical studies on the other. Actually, we present a breadth of opportunity to our young people, in a simplified and accessible way, which will be the determination of whether they are successful or not.

I have two colleges in my constituency—City of Stoke-on-Trent sixth-form college and Stoke-on-Trent college. Under the leadership of Mark Kent and now Lesley Morrey, City of Stoke-on-Trent sixth-form college provides region-leading qualifications, including T-levels, BTECs and A-levels. Under the former leadership of Lisa Kapper, and now interim principal Antoinette Lythgoe, Stoke-on-Trent college demonstrates what can be done at all levels of potential learning.

A city like Stoke-on-Trent—not that dissimilar to the constituency of my hon. Friend the Member for Hartlepool (Mr Brash)—is a city that has challenges. The opportunity provided to young people at FE can be the greatest social mobility driver there is—it can unlock their potential—but there is a challenge in making sure that they are on the right path.

T-levels have been excellent for my city—again, I commend the right hon. Member for East Hampshire on the programme that he brought in when he was Education Secretary. That is about not only the uplift in funding for each young person, which better reflects the necessity of the work from the excellent staff, but the capital funding available for those institutions in the first wave to take T-levels up, which has allowed us to expand our college to create new and incredible facilities that mean that the learning experience for those young people is brilliant.

I believe that the Government are right to continue looking at this breadth, but I would say to the Minister—I have written to her noble Friend in the other place, Baroness Smith of Malvern, about this—that, while the pause and review is doing a job of work in looking at what BTECs are available, the colleges in my constituency are now trying to plan what they can offer in September 2025, much as we heard from my hon. Friend the Member for Great Grimsby and Cleethorpes (Melanie Onn). They do not currently know what they can offer. They have been asked to submit their projected T-level enrolment numbers now, but they do not know whether they will be offering an equivalent BTEC for the same course. Therefore, they are having to either overinflate their numbers and worry about in-year clawback, or worry about lack of lagged funding for the AGQ. I would urge the Minister to take that back to the Department.

In the remaining time that I have left, I will say that, while this debate has been excellent for talking about young people, there is a conversation that we have to have as a nation about adult education and ensuring that people in places such as Hartlepool and Stoke-on-Trent having to change careers because of changes in the way that industries work have the same opportunities as others to retrain, get new skills, get those well-paid, secure and hopefully unionised jobs that come with that, and make a meaningful contribution to where they live and to our country.

15:26

[Tim Farron (Westmorland and Lonsdale) (LD)]

It is a pleasure to serve under your chairship this afternoon, Sir Christopher. I also pay tribute to the right hon. Member for East Hampshire (Damian Hinds), whose speech was really interesting. I also praise him for his tenacity, expertise and seriousness on this subject.

I will restrict my remarks to the issues of T-levels and apprenticeships in tourism and agriculture, which are two huge employers in my constituency and around the rest of Cumbria—some 60,000 people in Cumbria work in tourism and there are 1,500 farms in my constituency alone. Those are hugely connected, without a doubt. For example, something like 20 million people visit the lakes every year, and we know that many of them come because of the beauty of the landscape, which is maintained by our farmers.

In terms of our workforce, 80% of the entire working-age population living in the Lake district already work in hospitality and tourism. Therefore, if we do not do something to bring people in, to create more affordable homes, to build our workforce, or, specifically, to train and retrain our young people so that we do not carry on losing over a third of them every single generation, we are in serious trouble.

When it comes to T levels, there is no doubt whatever that employers in the tourism economy of Cumbria strongly believe, as I do, that T-levels are an important potential source for boosting the pipeline of skilled workers, and that offering level 3 qualifications will enhance young people’s employability and enable progression to higher education, linking, for example, with the University of Cumbria’s excellent graduate apprenticeship programme.

Those employers recognise, and strongly believe, that the previous Government delayed and took too long to introduce the T-level in catering, and are pressuring this Government on that. I met Baroness Smith of Malvern just last week to raise that point directly with her, and I ask the Minister to look at this issue again. Please will she consult employers within Cumbria to make sure that the T-level in catering, and other equivalent level 3 and level 4 qualifications, is made available so that we can qualify our children for this important area of work? Some 85% of employers who host T-level students—when that is available—report improved access to skilled talent, so I ask the Minister to take this seriously.

I will quickly switch over to apprenticeships in the agricultural sector. The total number of apprenticeship starts in agriculture in Cumbria for the year before last—the last year that we have data for—was 140. Only 70 were completed and no higher-level apprenticeships, at level 4 and above, were accomplished. We have 1,500 farms; that is far too few people coming forward as potential entrants. We have had all the discussions this week about succession, which is so very important, but the decline in new farm entrants threatens the sector’s long-term viability.

The future of the farming sector is also exacerbated by the loss of educational infrastructure. The previous Government failed to intervene to save Cumbria’s agricultural college, Newton Rigg, and although Kendal college and other FE and HE institutions around the county are doing their best to fill the gap, we still seriously feel that loss.

The UK provides 55% of its own food. Apprenticeships and succession in farming are crucial to our food security. The agricultural policies of this Government and the previous one have disincentivised farming production, which is fateful and foolish. This week we have seen the complaints, quite rightly, about the inheritance tax changes, which will lead to more farmland moving into ownership of equity and large corporations, and not being used for food production. Our failure to grow the workforce is also enormously significant.

I ask the Minister to look closely at higher-level apprenticeships in agriculture, to address the gap in advanced agricultural training at level 4 and above, and to develop leadership skills among future farmers to sustain the sector and the rural economy as a whole. Will she also introduce agricultural degree apprenticeships, in partnership with the University of Cumbria and local colleges, to create a pipeline for agricultural leadership? I will leave it there at four minutes.

15:30

[Ian Sollom (St Neots and Mid Cambridgeshire) (LD)]

It is a pleasure to serve under your chairmanship, Sir Christopher. I thank all hon. Members who have taken part in the debate, and the right hon. Member for East Hampshire (Damian Hinds) for introducing it. I am sure we all agree that we owe it to our young people to ensure that they have access to all education and training options, and that those options are of the very highest standard. That is not always the case in the present system, which is having an impact not just on young people and their futures, but, as has been said, on the country’s economic development and prospects.

Apprenticeships, vocational education and skills are all vital if the Government are serious about their growth mission and breaking down barriers to opportunity. I think we all share those ambitions, but the system needs reform across the board, starting right at the beginning by ensuring that all young people are fully aware and informed of all their options—many thousands, as it may be—post 16 and post 18. We need to see an improvement in the quality of careers education, information, advice and guidance in schools to support them making those decisions.

[Clive Jones]

Many residents in my constituency of Wokingham are concerned about the uncertainty around T-level courses and other existing level 3 qualifications. Students in Wokingham have been looking at courses and colleges to apply to, and some colleges are currently unable to confirm existing level 3 courses. Does my hon. Friend agree that the current lack of clarity about the implementation of T-level courses is causing unnecessary stress to parents, students and teachers?

[Ian Sollom]

I absolutely agree, and I will come back to that point later.

The services that inform and offer guidance need to be informed themselves about the local and national job market, which industries and sectors are growing, and which skills are in demand in order to support students into top-quality jobs. We know that there are skills shortages, and giving higher-quality, useful information will be essential to plugging that skills gap.

On apprenticeships, the Lib Dems recognise that we not only need more apprenticeships, but that they need to be more attractive to young people. Guaranteeing that an apprenticeship pays at least the national minimum wage would be a good place to start. The Chancellor announced a welcome increase in the apprenticeship wage in the Budget last month, but even after those changes, that amount is still only just over 60% of the national living wage. That is quite a disincentive for young people to take up an apprenticeship.

We have also heard today that the apprenticeship levy is not working as well as it should, and that employers often cannot get the funding they need to train staff. In 2023-24, the levy raised £3.9 billion for the Treasury, but the apprenticeship budget, which is separate, awarded only £2.7 billion. Although £500 million goes to the devolved nations under the Barnett formula, as it should, that still leaves a shortfall of £700 million, as was pointed out by the hon. Member for Hartlepool (Mr Brash). That money has been paid in through the levy, and therefore to the Treasury, but does not reach employers; as was said, it is raised for skills but not spent on skills. That is at a time when the Government say they are keen to encourage businesses to invest in skills. We need that to be directed to skills.

Furthermore, the system was designed so that levy payers do not spend all their levy funds and so that small businesses can access the levy to fund apprenticeships. That said, 98% of the apprenticeship budget was spent each year for the past three years, and if large employers spend all their levy funds, there would be no apprenticeship funding remaining for small businesses. We know that small businesses are crucial to the apprentice system. Non-levy-paying employers recruit more apprentices each year than levy-paying businesses: last year, that was 42,000 apprentices under 19 compared with 35,000 by larger recruiters—a difference of 7,000. We are waiting for more details on the Government’s new growth and skills levy, but if they are serious about pivoting the apprenticeship system towards young people, they need to sort out apprenticeship funding.

On T-levels, the Liberal Democrats welcome the ambition to achieve equal value between academic and vocational routes—that has been a common theme across many parties for a considerable time—but we do not agree with the previous Government’s decision simply to scrap dozens of BTEC courses. Those qualifications are a middle pathway that allows many students, including those who find the T-level entry requirements simply too high, to benefit from a combination of academic and applied qualifications. Research indicates that BTECs significantly improve university entry rates for both white working-class and black students.

Many parts of industry are concerned about T-levels. For example, the hospitality sector prides itself on having no barriers to entry to those with no industry experience, and opens its doors to people with low educational attainment. That encourages a more diverse, inclusive and accessible workforce. However, the hospitality T-level requires 16 to 18-year-olds to have 5 GCSEs of grade 5 and above. That excludes a whole host of young people with many non-academic skills and talents, who could make successful careers in hospitality. It is important that we keep BTEC routes for those people.

As other Members have mentioned, there have been problems with the roll-out of T-levels, and concerns have been expressed by education providers and employers about their ability to deliver industry placements. A report by the Education Policy Institute this year highlighted issues with student retention, with nearly a third of first-year health and science T-level students dropping out of their programme. Until the new T-levels are well established, understood by students and employers, and proven to be successful, rolling back BTECs, which are successful, would be a huge mistake. The Government’s decision earlier in the year to review the defunding of BTECs was welcome. Now, however, as my hon. Friend the Member for Westmorland and Lonsdale (Tim Farron) pointed out, the delay in the outcome of that review is affecting planning for the next academic year and the opportunities available to young people. So, I urge the Government to get on and publish the outcome of that review.

Finally, with a lot of issues around skills at the moment, it seems that the answer is “Skills England”. I will echo the words of the right hon. Member for East Hampshire in his opening remarks that the King’s Speech referred to a Skills England Bill, whereas the Bill that is in the other place does not refer to Skills England at all. We would welcome the opportunity to discuss Skills England when we consider the actual legislation.

15:40

[Neil O'Brien (Harborough, Oadby and Wigston) (Con)]

I am grateful for the opportunity to speak in this debate.

I congratulate my right hon. Friend the Member for East Hampshire (Damian Hinds) on securing this super-important debate. All Westminster Hall debates are equal, but some are more equal than others, and when I saw the title of this debate and that it was being led by my right hon. Friend, I knew that it would be a good one.

I have not been disappointed at all, nor have I been disappointed by the excellent speeches by the hon. Members for Dudley (Sonia Kumar), for Sutton and Cheam (Luke Taylor), and for Mansfield (Steve Yemm); by my hon. Friend the Member for Broxbourne (Lewis Cocking) and by the hon. Members for Bournemouth East (Tom Hayes) and for Hartlepool (Mr Brash); by my hon. Friend the Member for Mid Leicestershire (Mr Bedford) and by the hon. Members for Stoke-on-Trent Central (Gareth Snell), for Westmorland and Lonsdale (Tim Farron), and for St Neots and Mid Cambridgeshire (Ian Sollom). There was also a rare appearance in Westminster Hall by the hon. Member for Strangford (Jim Shannon), which I am sure we all savour. [Hon. Members: “More!”] More indeed.

My right hon. Friend the Member for East Hampshire did a superb job in giving us the fruit of his many years of experience and his multiple periods of service in public life, including two stints in the Department for Education, regarding this issue. He talked about the alphabet soup of organisations and qualifying bodies, the traineeships, the apprenticeships, the modern apprenticeships, the City & Guilds, the GNVQs, the NVQs, the Skills for Life, the diplomas, the BTECs and now the T-levels. The question now is this: will T-levels just be another element added to this alphabet soup, or will we actually realise the vision of what we have called the Sainsbury routes and rationalise the system? My right hon. Friend asked big questions about where the Government are going with traineeships, the apprenticeship levy and Skills England, and it will not surprise him that I will pick up on those questions.

I have several questions for the Minister. First, do the Government have a forecast for the number of apprenticeships that will start over the course of this Parliament? Such a forecast has certainly existed in the past; I saw one when I was in government. Do the Government have such a forecast? If so, will they publish it? What is the forecast number of apprenticeships that will start over the course of this Parliament? I ask that question because unless we know that baseline, we cannot ask sensible questions such as “What will be the impact of the growth and skills levy on the number of apprenticeships?” Without the baseline we cannot have a debate about the trade-off between one desirable thing, which is more flexibility for businesses, and another desirable thing, which is more apprenticeships.

Is it still the Government’s policy to allow 50% of levy funds, rather than a specific number, to be spent on non-apprenticeships, or will it be perhaps another percentage now? What is the impact of the national insurance increase, first, on the number of apprenticeships —that is why we want to know the baseline number of apprenticeships—and, secondly, on the FE sector more generally? The national insurance increase is focused laser-like on lower-income workers, which particularly hits apprentices and people in the FE sector, so there is every reason to think that it will be particularly impactful for those two groups. Will the FE sector be fully compensated for the national insurance increase, or not?

I echo some of the excellent questions that the hon. Member for Bournemouth East asked about college funding. As the Minister knows, colleges are now classified as part of the public sector, but unlike other parts of the public sector they are not exempt from paying VAT. Is it the Government’s intention to change that situation or not?

The other day, Baroness Smith of Malvern said that college staff were “rightly” disappointed that they were not given the same pay increase as schoolteachers. She implied that the Government would seek to close that historic gap; it has existed for many decades. I am not asking for miracles from the Government; this is a very long-standing challenge that everyone says is a problem. It has become slightly worse in the first pay round under this Government; the gap has grown a bit more. Is it the Government’s long-term aspiration to close that gap between sixth-form college teachers and teachers in schools? I am interested in whether that is the direction of travel.

Will the Minister also answer some structural questions? The Institute for Apprenticeships and Technical Education (Transfer of Functions etc) Bill is obviously going through the Lords at the moment. We have already raised the question about Skills England and—as the hon. Member for St Neots and Mid Cambridgeshire said—the powers are being taken not into a new independent body but directly into the Department. As my right hon. Friend the Member for East Hampshire said, it would be pretty extraordinary if the Ministers set their own standards for A-levels, so why do we think it would be okay in technical education? What is the Government’s game plan after the IfATE Bill? What is the plan to restore independent standards setting, rather than having it in what is only an agency of the Department?

I also want to ask a really specific question. This is a genuine question because I do not understand the decision. Why did the Department refuse to share the terms of reference for the short review of 16 to 19 qualifications with the wider world? I know that FE Week certainly put in a freedom of information request to get it, which is a pretty extraordinary thing to have to do. Normally, when there is a review, the terms of reference are published. That review is not a secret. We know what the Government are looking at—a known question about BTECs and what will happen. Why did the Government not publish it and will they now?

On one last structural question, my sympathies are entirely with the Minister and the Government as there is a big question here, and this is not a straightforward challenge. We have heard the case for BTECs from various Members—the hon. Member for Sutton and Cheam made a passionate case in favour of them. I should declare an interest as I worked on T-levels before they were called T-levels, when they were still called the Sainsbury routes. Lord Sainsbury, Gordon Brown, Nick Boles and others did a huge amount of work to bring them to that point in trying to rationalise this alphabet soup. T-levels are our best hope: they are a more demanding qualification, they have a higher level of funding and they use a lot more time in industry. They are a better qualification that is bringing parity of esteem and higher quality to the FE sector, and they are our big chance to rationalise this issue that everyone agrees is a problem. How far will the Government go towards replacing some of the existing qualifications, and what is their overall strategy and vision for how this will pan out?

15:47

[The Parliamentary Under-Secretary of State for Education (Janet Daby)]

It is a privilege to speak with you in the Chair, Sir Christopher. I congratulate the right hon. Member for East Hampshire (Damian Hinds) on securing this important debate, and I thank him for sharing his wide and comprehensive knowledge of past and present qualifications and awards. I am also grateful for the challenge that he and many other Members have brought to this debate. This Government are ambitious for young people, and we are excited and optimistic about what can be achieved.

As Members have rightly stated and spoken about, apprenticeships, BTECs and T-levels can offer incredible opportunities for young people. We have heard from many Members about the superb colleges and students in their constituencies, such as the hon. Members for Glastonbury and Somerton (Sarah Dyke) and for Sutton and Cheam (Luke Taylor), as well as my hon. Friends the Members for Great Grimsby and Cleethorpes (Melanie Onn) and for Dudley (Sonia Kumar). My hon. Friends the Members for Mansfield (Steve Yemm) and for Bournemouth East (Tom Hayes) both mentioned an invite to their respective colleges, and of course I will pass those on to my noble Friend the Minister for Skills.

[Gareth Snell]

Will the Minister also take back an invitation to Stoke-on-Trent to our noble Friend?

[Janet Daby]

Very smart and clever indeed—I will of course pass on that invitation to Stoke-on-Trent as well. We have also heard from the hon. Members for Broxbourne (Lewis Cocking), for Strangford (Jim Shannon) and for Mid Leicestershire (Mr Bedford)—it was great to hear about his brother’s achievements, so I thank him for that. There were contributions from my hon. Friends the Members for Hartlepool (Mr Brash) and for Stoke-on-Trent Central (Gareth Snell), the hon. Members for Westmorland and Lonsdale (Tim Farron), for St Neots and Mid Cambridgeshire (Ian Sollom) and for Wokingham (Clive Jones), and the shadow Minister—the hon. Member for Harborough, Oadby and Wigston (Neil O’Brien).

Members have spoken about many issues in this debate, such as greater diversity in the workforce, including both women in STEM and the representation of people from diverse backgrounds. Concerns have also been raised about BTECs, apprenticeships and T-levels—for example, the apprenticeship levy, the teaching of further education, the reform of qualifications, and colleges needing certainty in the future about specific courses. I hope to address as many of those and other remarks as time allows, including the points raised by the right hon. Member for East Hampshire.

It is this Government’s mission to drive and increase opportunity for young people across the country. Working with Skills England, it is also this Government’s mission to support employers to train people up and identify and develop the skills they need to grow, helping to kick-start economic growth. Early investment in young people pays off for employers. We want young people to be enthusiastic, energised and passionate about learning and developing in their work. That will benefit employers, industry and our wider economy, which will be galvanised by a new generation who are willing to work hard and progress in their careers.

It has been concerning in recent years that young people have seen their apprenticeship opportunities disappear. We ask ourselves, “Why is that?” It may be helpful to remind the shadow Minister that following apprenticeship reforms made by the previous Government, including the introduction of the apprenticeship levy in 2017, apprenticeship starts by young people under 25 fell by almost 40% according to the Department for Education’s published data. It is also concerning that so many workers and employers have told us that they find it difficult to access the skills they need. UK employers report that more than a third of UK vacancies in 2022 were due to skill shortages. That is what we have inherited.

According to a stark statement from the OECD, 26% of the UK workforce are underqualified for their job, compared with an OECD average of 18%. There are widespread skills shortages in areas such as construction, manufacturing and health and social care. We desperately need workers in those areas. That is why meeting the skills needs of the next decade is central to delivering our Government’s five missions, which, I remind everybody, are economic growth, opportunity for all, a stronger NHS, safer streets and clean energy.

This Government will create a clear, flexible, high-quality skills system with a culture of businesses valuing and investing in training that supports people of all ages and backgrounds, breaking down the barriers to opportunity and driving economic growth. We are bringing forward legislation to enable Skills England to work with key stakeholders. Skills England will make sure that we know where our skills gaps are to ensure that a comprehensive suite of apprenticeships, training and technical qualifications is aligned with those skills gaps and the needs of employers.

I have heard concerns that Skills England will not have the independence or authority it needs. I would like to dispel those concerns today: Skills England will have an independent board that will provide leadership and direction, as well as scrutiny to ensure that it operates effectively and within the agreed framework,

Growth and skills are essential. We have listened to employers, who have told us that the current apprenticeship system does not work. We must do more to support them in accessing the training they need to fill their skills gaps and spread opportunity. Our growth and skills offer will provide employers and learners with greater flexibility and choice and create routes into good, skilled jobs in growing industries aligned with our industrial strategy.

[Neil O’Brien]

Will the Minister give way?

[Janet Daby]

I am going to make progress, and then I will take some interventions if I can.

We are introducing new shorter-duration apprenticeships and foundation apprenticeships as a first key step towards greater flexibility that will benefit employers and, indeed, students. We recognise that some roles need less than 12 months’ training and employers are currently locked out of offering apprenticeships. We want to support sectors that make use of fixed-term contracts or have seasonal demands or specific recruitment timetables. We will engage with employers via Skills England and introduce that flexibility where the justification is clear. Our new work-based foundation apprenticeship will focus on ensuring that training is directed towards real vacancies. It will offer young people broad training with clear and seamless progression into other apprenticeships. Unlike the last Government, we will work closely with employers and providers. This Government will make sure we get it right.

[Neil O’Brien]

The Minister talked about introducing flexibility where appropriate—it sounded like perhaps only in some sectors. Is it still the intention for all employers to be able to use 50% of their apprenticeship levy for things that are not apprenticeships?

[Janet Daby]

The area the shadow Minister mentioned is currently being reviewed. As that information comes out, I am sure we will make him aware of it.

To open up the growth and skills offer and to deliver opportunity where it is most needed, we will ask more employers to step forward and fund level 7 apprenticeships themselves, outside the apprenticeship budget. Of the 2.5 million workers in critical demand occupations, the vast majority—more than 80%—require qualifications lower than degree level, so it feels right that we focus our support on those at the start of their working lives, rather than those already towards the top of the ladder.

The Government believe that all young people should have access to high-quality training that meets their needs and provides them with opportunities to thrive. That is why we are committed to making a success of T-levels and extending the opportunity they provide to as many young people as possible. We have introduced three new T-levels this year, opening up more opportunity for young people in the areas of craft and design, media, broadcast and production, and animal care. It was great to see an overall pass rate this year of nearly 90% and to learn that 83% of T-level students who applied to higher education secured a place.

At the end of the last academic year, more than 30,000 young people had taken a T-level, and we want to ensure that many more have the opportunity to study them, but we know that some changes are needed if we want to make that a reality. That is why we are looking at the delivery of current T-levels to ensure that more young people are able to enrol and succeed in them. Our review of post-16 qualifications reforms will ensure that there is a range of high-quality qualifications at level 3, alongside T-levels and A-levels, to support the skills needs of employers and the needs of learners.

[Neil O’Brien]

Will the Government agree to publish the terms of reference of that review?

[Janet Daby]

I have heard the shadow Minister mention that already, and I believe he has already received a response. [Interruption.] No, the shadow Minister has already received a response.

[Neil O’Brien]

Is that a yes? Will the Minister—

[Janet Daby]

I am sorry—I have already answered.

Last month’s Budget saw a good settlement for further education and skills, including £300 million revenue funding for further education and £300 million capital investment to support colleges to maintain, improve and secure the suitability of their estates.

Each one of us here knows the importance of high-quality skills training for young people, and I am grateful for the considered contributions of everyone who has spoken. When we look at the statistics, it is clear that for too long, young people have been locked out of the opportunities that can benefit them most. The actions I have outlined today will give us a real sense of how to make a difference for learners and employers. That is at the heart of the Government’s mission to spread opportunity and drive economic growth across all parts of our country.

15:59

[Damian Hinds]

It has been a good debate. I thank everyone who took part for bringing their own perspectives. There is just one thing I want to say. We cannot legislate for parity of esteem; we can only earn it. High-quality apprenticeships and T-levels can do that, because young people know that the standards have been set by employers, and they are right for the levels necessary for success in those sectors. Crucially, to have confidence in the integrity of qualifications, they need to be set independently and, in the case of these qualifications, they need to be set with business. The Minister has an opportunity with a Bill going through Parliament at the moment. When the IfATE transfer of powers Bill comes to Committee stage in the Commons, please will the Government table an amendment to write that independence and the involvement of business into law?

Question put and agreed to.

Resolved,

That this House has considered apprenticeships and T Levels.