Institute for Apprenticeships and Technical Education (Transfer of Functions etc) Bill [Lords]

Report stage
Monday 31st March 2025 Commons Chamber

Consideration of Bill, as amended in the Public Bill Committee

New Clause 1

Draft proposals for establishing new executive agency

“(1) Within six months of the passing of this Act, the Secretary of State must produce a report containing draft proposals for the establishment of a new executive agency, to be known as “Skills England”, responsible for the powers transferred under this Act.

(2) A copy of this Report must be laid before both Houses of Parliament.

(3) Within forty days of a Report under subsection (1) being laid, the Secretary of State must ensure resolutions are tabled, and moved, in both Houses of Parliament to approve the Government’s draft proposals.

(4) If the draft proposals are rejected by either House of Parliament, the Secretary of State must, within a period of six months, lay a report containing revised proposals before Parliament, and, within a period of forty days after laying the revised proposals, table a motion before each House of Parliament to approve the revised proposals.

(5) The Secretary of State may not establish an executive agency to carry out the functions transferred under this Act until it has secured, through a motion under subsection (3) or (4), the consent of both Houses of Parliament.

(6) If a motion under subsection (3) or (4) is approved by both Houses of Parliament, the Secretary of State must make an annual statement in each House of Parliament on the work of the agency.

(7) Within twelve months of a motion under subsection (3) or (4) being passed, the Secretary of State must lay before Parliament a report evaluating the effectiveness of the “Skills England” governance structure in delivering on the organisation's aims and objectives.”—(Ian Sollom.)

This new clause requires the Secretary of State to bring forward proposals for the executive agency, to be known as Skills England, subject to the approval of both Houses of Parliament.

Brought up, and read the First time.

00:00

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

I beg to move, That the clause be read a Second time.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

With this it will be convenient to discuss the following:

New clause 2—Report on the impact on Higher Education—

“(1) Within one year of the passing of this Act, the Secretary of State must publish a report on the impact of this Act on the provision of degree apprenticeships in England.

(2) The Report must include an impact assessment of the removal of apprenticeship levy funding for degree apprenticeships.

(3) The report under subsection (1) must be laid before both Houses of Parliament.”

New clause 3—Report on the impact on T levels—

“(1) Within one year of the passing of this Act, the Secretary of State must publish a report on the impact of this Act on T-Levels.

(2) The report under subsection (1) must include—

(a) the involvement of Skills England in the administration of T Levels, including the curriculum and assessment methods;

(b) an assessment of the independence of the accreditation of T-Levels, specifically whether there has been any involvement of the Secretary of State in this process; and

(c) an assessment of the extent to which T-Levels are meeting local demand for skills.

(3) The report under subsection (1) must be laid before both Houses of Parliament.”

New clause 4—Creation of Skills England—

“(1) A body corporate known as Skills England is established to carry out the functions transferred to the Secretary of State under this Act.

(2) At the end of a year after the passing of this Act, the Secretary of State must make regulations transferring to Skills England all the functions transferred from the Institute for Apprenticeships and Technical Education under this Act.

(3) Nothing in this section prevents the Secretary of State from transferring more functions to Skills England under other enactments.”

This new clause would put Skills England on an independent statutory footing rather than as part of the DfE. The role of IfATE would be included in that planned for Skills England.

Amendment 4, in clause 4, page 2, line 6, at end insert—

“(3B) A group of persons under subsection (3) must include a representative from an organisation that is the representative body for a sector.”

Amendment 5, page 2, line 6, at end insert—

“(3B) When approving a standard under subsection (3), the Secretary of State must have regard to the reasonable requirements of—

(a) industry, commerce, finance, professions and other employers regarding education and training, and

(b) persons who may wish to undertake education and training.”

Amendment 3, in clause 5, page 2, line 32, at end insert—

“(6B) When approving a standard under subsection (6), the Secretary of State must have regard to the reasonable requirements of—

(a) industry, commerce, finance, professions and other employers regarding education and training, and

(b) persons who may wish to undertake education and training.”

Amendment 1, in clause 9, page 4, line 13, after “England” insert

“, including the impact of removing apprenticeship level funding for degree apprenticeships”.

Amendment 2, page 4, line 13, at end insert—

“(c) the impact of the exercise of the relevant functions on the provision of level 7 apprenticeships in England”

Amendment 6, in clause 12, page 5, line 6, leave out subsections (1) and (2) and insert—

“(1) This Act comes into force at the end of the period of one year beginning on the day on which Skills England is created.”

[Ian Sollom]

In considering the transfer of functions from the Institute for Apprenticeships and Technical Education, we face fundamental questions about the Government’s accountability and the future structure of our skills system. While modest in size, the Bill has far-reaching implications for that system, and for millions of learners and apprentices. It represents a significant centralising of power in the hands of the Secretary of State, without providing proper mechanisms for parliamentary oversight or accountability.

I have sat through many hours of debate on the Bill, during which Labour Members have extolled the virtues of Skills England, but let me emphasise again that the Bill does not actually establish that body, as many assumed that it would. It simply abolishes IfATE and transfers its functions to the Secretary of State, an approach that risks creating a governance vacuum in which there is no proper scrutiny or independent oversight. It is clear from the evidence received by the Bill Committee that I am not alone in having those concerns. The Association of Colleges, the Royal Society of Chemistry, the University of Winchester and the Institute of the Motor Industry all raised similar issues relating to governance and accountability in their written evidence submissions to the Committee.

As was noted by many on Second Reading, skills policy in this country has suffered from constant reorganisation and restructuring. The right hon. Member for East Hampshire (Damian Hinds) has reminded us several times that Skills England will be the 13th skills body to be established in 50 years. Given that history, employers, providers and learners desperately need stability and clarity. In its evidence, the University of Winchester warned:

“The transfer of power from IfATE to the Secretary of State for Education raises questions about the independence of the proposed Skills England regulatory body.”

It also observed that in IfATE, at present,

“employers and academics come together to ensure that the standard is industry relevant, current, and academically rigorous.”

The Skills Federation raised similar concerns:

“The clauses in the bill which transfer powers from IFATE to the Secretary of State risk shifting the development of standards further away from employer demand.”

It also said:

“Too much centralisation leads to a lack of focus on sector needs”.

[Gideon Amos (Taunton and Wellington) (LD)]

Does my hon. Friend agree that the new clause would help colleges such as Bridgwater and Taunton college, the biggest provider of apprenticeships in England? Will he join me, and other Members, in encouraging those colleges on their path towards awarding their own degrees?

18:44

[Ian Sollom]

I entirely endorse what my hon. Friend has said, and I certainly encourage those colleges on their path. As I will explain, my new clause will enable Skills England to support them more fully.

Equally concerning is the need for effective cross-departmental co-ordination. Skills policy does not exist in isolation. Skills England needs to work with, among others, the Industrial Strategy Advisory Council on future workforce needs, the Migration Advisory Committee on reducing reliance on overseas workers, the Department for Energy Security and Net Zero on green skills, the Department for Work and Pensions on employment programmes, the Department for Science, Innovation and Technology on priority sectors, the Department of Health and Social Care on workforce planning, and, following the Chancellor’s spring statement last week, the new defence growth board on critical skills for our defence industry.

[Jim Shannon (Strangford) (DUP)]

In the past, the hon. Gentleman has mentioned the construction sector. We welcome the news that the Government will build 1.3 million houses, but that requires builders, plumbers, carpenters, electricians and plasterers, and they must be trained, so that they can do that job well. Does he feel that his new clause will enable the building of those 1.3 million houses?

[Ian Sollom]

I would hope that better scrutiny and accountability in Parliament would help with delivering what is required, and holding the Government to account when it comes to keeping their promises.

On the cross-departmental work that I mentioned, the lack of a published framework for Skills England as we consider the Bill is deeply concerning, and what we have seen so far suggests a structure that is heavily Department for Education-centric. Without statutory independence and appropriate seniority, Skills England will struggle to drive the cross-departmental co-ordination that Members on both sides of the House agree our skills system needs.

[Mr Toby Perkins (Chesterfield) (Lab)]

I am listening carefully to what the hon. Gentleman says. He is, of course, right that the measures would represent considerable centralisation, if it was not for the creation of Skills England. He has mentioned a number of Government Departments. Does he think that IfATE, a non-governmental body, has been successful in bringing all their work together, and that a Government body will not be, or is he arguing for something different?

[Ian Sollom]

I will come to my preference for an executive agency that fits what the Government want to do. That is the reason for my new clause, and I do not think that it need delay efforts. Ultimately, a statutory, departmental body would have more clout. On the basis of what we understand, at least, I think that the remit for Skills England is very different from the remit for IfATE when it comes to that cross-departmental working.

[Peter Swallow (Bracknell) (Lab)]

This Government have just taken bold action by abolishing NHS England, the largest quango in the world. Part of the motivation for doing so was the need to ensure that when something is not going right in the NHS, the buck does not stop with a quango that we Back-Bench MPs cannot question directly, but with Ministers. That is better for governance and for scrutiny; it means that when the Health Secretary says that something is not going well enough, we can question him robustly and challenge him to improve. Surely the hon. Gentleman sees that the way to push Skills England to be as robust as possible is by having strong governance.

[Ian Sollom]

There are different options, and I will come to this issue later. Given the scale of cross-departmental working required, having Skills England sit outside a single Government Department is probably more effective. Moreover, such bodies can be held accountable effectively by Parliament, as we have seen with some other quangos. Indeed, I believe the Industrial Strategy Advisory Council will be set up as a statutory independent body when time allows, and I suggest that Skills England is of the same order of magnitude.

Beyond the concerns about accountability and cross-Government authority, there are practical, operational risks to the approach laid out in the Bill. The Skills Federation warned in its evidence that

“there is a key risk that transfer of functions from IfATE will become the key focus for the set-up of Skills England and less attention (and potentially resources) placed on achieving the overarching aims.”

There is significant concern that the broader strategic purpose of Skills England could be lost in the rush to transfer operational functions. That concern was echoed by Lord Blunkett, who suggested that

“there is a real danger that IfATE will swamp Skills England at birth.”—[Official Report, House of Lords, 21 November 2024; Vol. 841, c. GC98.]

The Government’s impact assessment also acknowledges risks, noting that the transfer of functions could

“potentially cause a temporary slowdown in the growth rate of new apprenticeships and technical education courses due to potential delays in the approvals process”,

which

“may disproportionately impact disadvantaged learners.”

In Committee, the Minister emphasised the urgent need to address skills shortages and said that delay “is not an option.” Although we share the Government’s commitment to addressing skills shortages urgently, I respectfully suggest that there is wisdom in heeding the warning that the University of Warwick gave in its evidence. Getting the foundations right is more important than hasty construction.

In light of those concerns, I tabled new clause 1, which I proposed in Committee. It provides a constructive solution to many of the issues that I have outlined, and proposes a clear pathway for establishing Skills England as a dedicated executive agency within the Department for Education. As I said, my party ultimately believes that a fully independent statutory body with cross-departmental authority is the optimal approach, but we recognise the Government’s preference for the executive agency model, so new clause 1 works within that structure but provides essential safeguards. Under the new clause, the Secretary of State would produce draft proposals for establishing Skills England within six months, lay the proposals before both Houses, secure parliamentary approval before establishing the agency, provide annual statements on the agency’s work, and evaluate its effectiveness 12 months after establishment. This approach strikes the right balance between allowing the Government to implement policy at their desired speed and ensuring proper parliamentary scrutiny and meaningful stakeholder engagement.

As I said, I tabled new clause 1 in Committee because I believe that parliamentary scrutiny is essential for an organisation with such far-reaching responsibilities. The Minister argued that the standard accountability mechanisms for executive agencies are sufficient. However, I contend that Skills England is not just another executive agency; it is central to the Government’s economic growth mission and to creating opportunities for millions of people.

Standard executive agency protocols are built for “business as usual” functions, not for what should be transformative bodies at the heart of the Government’s economic strategy. Having a properly accountable Skills England, even as an executive agency, would ensure that employer voices remain central to standards development rather than being merely consultative; that technical expertise is maintained and developed across economic cycles; that Parliament maintains appropriate oversight for this critical area of policy; and, crucially, that political short-termism does not override long-term skills planning.

In Committee, the Minister argued against new clause 1 on several grounds. First, she suggested that it would cause unnecessary delay in addressing urgent skills challenges. Secondly, she pointed to the existing accountability mechanisms for executive agencies, including framework documents and reporting requirements. Thirdly, she emphasised that Skills England is already operating in shadow form and is poised to take these functions when the Bill passes. Let me address those concerns. On the issue of delay, new clause 1 would require reporting and parliamentary approval within six months—a reasonable timeframe that would not significantly impede progress. As the Skills Federation noted, proper planning for the transfer of functions is essential for success, and parliamentary scrutiny would reinforce, rather than impede, the effective delivery of Skills England.

The existing accountability mechanisms are indeed important, but they are surely insufficient for an organisation of Skills England’s significance. As the University of Winchester argued in its evidence to the Public Bill Committee, Skills England should be structured

“to ensure and protect its regulatory independence from Government and other agencies.”

The framework document and annual reports are important tools, but they are prepared by the Executive without any meaningful parliamentary input.

Skills England’s current shadow operations are welcome preparation, but operating in shadow form, without parliamentary scrutiny or approval, only underscores the need for new clause 1. Important decisions about structure, governance and priorities are being made right now, without any oversight in this place.

The Secretary of State indicated on Second Reading that the Government may review Skills England’s status in 18 to 24 months to consider whether it needs to be an independent statutory body, and the Minister confirmed that timetable in Committee. But why wait? Why create uncertainty about the future status of an organisation that needs to establish credibility with employers now? It is worth noting—as the shadow Minister, the hon. Member for Harborough, Oadby and Wigston (Neil O'Brien), did in Committee—that the Government plan to put the Industrial Strategy Advisory Council on a statutory footing “when parliamentary time allows”, according to their own documentation. This suggests that they recognise the value of key strategic bodies’ statutory independence, so why should Skills England be treated differently?

New clause 1 offers a constructive path forward, building on the debates we have already had. Personally, I was disappointed that the Government opposed it in Committee, but I believe that the case for proper parliamentary scrutiny remains compelling. Although my Liberal Democrat colleagues and I ultimately believe that a fully independent statutory body would be the ideal model for Skills England, new clause 1 would work within the Government’s executive agency framework to add essential parliamentary scrutiny and accountability.

The Minister assured us in Committee that Skills England will have robust governance arrangements and clear lines of accountability. If the Government truly believe in those principles, they should welcome rather than resist proper parliamentary oversight. If Skills England is to be the cornerstone of our skills system for years to come, even as an Executive agency with the Department for Education, we must ensure that it has the transparency, accountability and parliamentary oversight to withstand changes in political priorities and economic circumstances.

I urge Members across the House to support new clause 1, which would strengthen the Bill and help ensure that the transfer of functions leads to better outcomes for apprentices, students, employers and the economy as a whole.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call Pam Cox. Happy birthday! [Interruption.] Do you wish to contribute, or are you going to celebrate your birthday on the Back Benches?

19:00

[Pam Cox (Colchester) (Lab)]

Sorry, Madam Deputy Speaker; I was rather blown away by that. My birthday was actually on Saturday, but thank you so much.

It is a pleasure to speak in favour of this Bill, as a member of the Public Bill Committee and of the all-party parliamentary group on apprenticeships. The Bill is vital because it paves the way for the creation of Skills England, a new and ambitious body that will bring a fresh urgency to the task of upskilling our young people—and there is an urgency about this.

As the hon. Member for St Neots and Mid Cambridgeshire (Ian Sollom) said, Skills England will build on the extremely valuable work of the Institute for Apprenticeships and Technical Education, and I would like to pay tribute—

[Madam Deputy Speaker]

Order. Could you be seated for a moment? We are talking about the amendments to the Bill, not the overall Bill. The idea is to discuss the amendments and whether you disagree with them, but you need to bring your contribution in line with the debate this evening.

[Pam Cox]

Thank you, Madam Deputy Speaker. The issue is whether we should delay the introduction of this measure to allow more time to set up Skills England. A lot of preparatory work has already been done to set up Skills England, as we discussed quite fully in Committee, and we should get going on training up the carpenters, plumbers, electricians and other apprentices that we all know we need.

[Catherine Atkinson (Derby North) (Lab)]

Derby is seeing a fresh boost to its city centre with a new performance venue, a restored marketplace and the Friar Gate goods yard, which had stood derelict for 50 years, but is now being transformed into 276 new homes. What we do not want is for our ambition for our city to be held back by skills shortages. Does my hon. Friend agree that, rather than the dither and delay proposed by Conservative Members, we need to get on with this legislation so that we can train the next generation of bricklayers, roofers, plasterers, scaffolders and electricians that our country so desperately needs?

[Pam Cox]

I thank my hon. Friend for her intervention, and I agree. This morning, before I travelled to Westminster from Colchester, I visited JTL, a national organisation with a base in our city that trains thousands of apprentice electricians and plumbers, and I had similar exchanges with them. So I very much agree, because the urgency I have mentioned is about their futures—securing their futures.

We debated this in some detail in Committee, and the hon. Member for St Neots and Mid Cambridgeshire has outlined the Minister’s responses. To my mind, those responses stand. I am satisfied that we should not delay in setting up Skills England, because the young people of Colchester—and, indeed, of Derby and elsewhere —simply do not have the time to wait.

On that note, last week the Government announced plans to train 60,000 new construction workers to help build the 1.5 million homes we will see going up in the course of this Parliament. Moves such as that and many others show that we are working at pace to reverse the many years of stagnation—

[Edward Morello (West Dorset) (LD)]

Will the hon. Lady give way?

[Pam Cox]

I will not give way, if the hon. Member does not mind.

I hope we can work at pace today to pass this Bill.

[Edward Morello]

rose—

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. Is the hon. Lady taking an intervention?

[Pam Cox]

I am sitting down.

[Madam Deputy Speaker]

Has the hon. Lady concluded her speech or is she taking an intervention?

[Pam Cox]

I have concluded.

[Damian Hinds (East Hampshire) (Con)]

I want to make a short contribution to this Report stage debate, particularly in favour of new clause 4 and amendment 6. On the train coming up to Westminster, I typed into my tablet “Short IfATE speech”, and every time I did so, it kept changing it to “Short irate speech”. Unfortunately, I am not very good at irate speeches—it is not really my thing—so I will make a slightly disappointed speech, but with a hint of optimism, because I hope this Minister may take this opportunity to do something of significant benefit for the technical and vocational education and training system in this country.

I know why the Government came forward with the idea of a new quango—it is not even a quango, but a sort of semi-quango—called Skills England. They did that because they were going to have to talk to British industry about a lot of other things. They knew deep down that they would be doing things that were really very unpopular, such as the Employment Rights Bill and the massive hike in national insurance contributions and business rates, and that aspects of those things are bad for employment and unpopular with employers. With Skills England, Ministers—then campaigners, but now Ministers—had come up with something they thought business would really like and want.

In truth, however, if the Government are going to fix the two big underlying issues in our system—the productivity gap we have in this country compared with France, the United States and Germany, and the parity of esteem we all say we want, and that the Conservatives do want, between academic learning and vocational learning —we need to make technical and vocational education better. We also need to make it simpler and more appealing, but above all it needs to be made better. That is entirely what the Sainsbury review—spearheaded by the noble Lord Sainsbury, a Labour Lord—was all about. It was about giving us a simpler, more appealing system, led by business, which would deliver the highest quality of technical education.

[Edward Morello]

I take the right hon. Gentleman’s point about creating parity between academic and technical education. Would a useful step in the direction of attracting people into the apprenticeship scheme be to ensure that they are paid the national minimum wage in line with their age group?

[Damian Hinds]

The truth is that there is always a balance about apprenticeships. Of course, there can be abuses: in the past there were abuses of the apprenticeship system with the lower rate that could be paid, although many employers pay the full rate to people of whatever age who are doing apprenticeships. However, it is also true that providers are getting four days a week—not five—of work from somebody, and a form of learning is involved. It is the same, with the opposite proportions, when someone is doing a T-level, which is partly done at college and partly on an employer’s premises. There is always a risk that if we make that gap too narrow, fewer people may be afforded that opportunity in the first place. That balance has to be got right, but I take my hat off to all the many employers who have invested very strongly in their young people, particularly in the way the hon. Member outlines.

Clearly, quality cannot be guaranteed just by the structure of the Government Department or Executive agency that oversees it, but quality is less likely if we get that structure wrong. The two key things with IfATE—key to this debate and for the amendments we are considering —are, first, its independence from the Government, and secondly, that there was the guaranteed business voice. I am talking in the past tense already, but I mean that it is independent and there is a guaranteed business voice.

Which Minister is not going to say, “We’ll listen to business”? Of course, Ministers will say, “We’ll listen to business. We want business to be at the heart of our plans and designing them.” They will say that, but it is not guaranteed in what the Government plan to set up, and just saying they will listen is not enough. Such independence gives people, meaning the employers, the young learners and everybody else, the confidence of knowing that the Government—and it might not be this Government—could not erode the standards because they wanted to artificially increase the volumes of people on those courses.

It has been a feature of the broader debate to have Labour colleagues saying, “We’re going to get the numbers of people getting apprenticeships up.” Well, wahey, of course they are going to get the numbers up. That much is blindingly obvious. I am reminded of a time in the past when many apprentices did not know they were on an apprenticeship, so loose were the requirements. The Conservative Government raised the minimum length of time for an apprenticeship and raised the minimum amount of time in off-the-job training. In college-based education, the Sainsbury review reported that in many cases qualifications had become divorced from the occupations and sectors they were there to serve.

We are already seeing, with the change in the minimum length of apprenticeships from 12 months to eight months, the rowing back or erosion of that standard. There is plenty of training in industry that does not require a 12-month minimum and there always has been, but if somewhere is going to have a short course, just do not call it an apprenticeship. That training is very worth while, but that does not mean it is the same thing.

In Germany, which is the country people usually look to as the international standard on these matters, an apprenticeship typically lasts for two or three years, with two days a week—not one day a week—in college. In those two days a week, young people typically do a full timetable of what we in this country call general education or academic subjects, as well as vocational education. In Germany, people can do an apprenticeship to become a food and beverage manager, but if they want to be a bartender there is not an apprenticeship for that role, because it does not take that long to train to be a bartender—they do another kind of training.

In this country, we have come to a strange position with the apprenticeship levy. There is lots of lobbying to count more and more things as an apprenticeship, so they can be paid for out of the apprenticeship levy. That is not the right way around. Already, we ask the word “apprenticeship” to do a lot. In most countries, it means young people aged 16, 18 or 21.

[Mr Perkins]

Will the right hon. Gentleman give way?

[Damian Hinds]

I could not resist the hon. Gentleman.

[Mr Perkins]

Thank you very much—that is a niche view. The right hon. Gentleman is talking about how the apprenticeship levy creates a straitjacket whereby there is a real value to what is being offered, but it perhaps should not fit into an apprenticeship. Is that not precisely the aim of the Government’s approach? Is he not advocating for precisely what the Government are suggesting, which is, “Let’s make it more flexible. Let’s say it doesn’t have to be a year There is value to investment of a different kind to an apprenticeship.”? Is he not arguing in favour of what the Government are proposing?

[Damian Hinds]

He is not, no; he is saying something different. Of course there is value in all sorts of training. In my working career, I did various stints of training but they were not called an apprenticeship. We do not have to call something an apprenticeship for it to be a worthwhile piece of training.

Already, we ask the word “apprenticeship” to cover a lot of things. As I was saying, in most countries it typically means younger people starting their career. Here, it covers career starters, career developers and career changers. If anything, we ought to be thinking about how we can refocus and differentiate between the requirements that people have at different times of their career, and the requirements their employers have as well.

The Bill is not about to fix that or address that, but I am hopeful—this is where I started—that the Government have indicated that they have heard the message on the two key elements needed when certifying and specifying qualifications: independence and a guaranteed business voice. New clause 4 would create precisely that independence. New clause 1, which was moved by the hon. Member for St Neots and Mid Cambridgeshire (Ian Sollom), has a lot of merit. He put a great deal of thought into it in Committee, but the additional point about statutory independence is fundamental. If the Minister is minded to accept just one amendment—I hope she will accept two; what do we think?—it should be new clause 4.

19:13

I think everybody in this House wants Skills England to succeed. As with so many matters we debate, we all broadly want the same end goal. Amendment 6 is what I would call a breathing space amendment to make that success more likely. It would reinstate the one year that their noble lordships put into the Bill as it went through the other place, meaning that Skills England would be operational for a year before it had to absorb IfATE’s functions. The hon. Member for St Neots and Mid Cambridgeshire went through some of the reasons why. Absorbing IfATE’s functions is an enormous undertaking. I think the noble Lord Blunkett estimated that close to 200 people would come into the organisation. In his words from that debate, which we have already heard, IfATE could

“swamp Skills England at birth.” —[Official Report, House of Lords, 21 November 2024; Vol. 841, c. GC98.]

Skills England has a much broader function than IfATE. Its broader strategic function is incredibly important and it is not small. They are different shapes and sizes, if you like. Skills England will initially prioritise 10 sectors: the eight growth-driving sectors in the industrial strategy, as well as construction and health and social care, which are also listed as essential to the Government’s missions. So there are 10 sectors to feed into the industrial strategy planning process. The noble Baroness Smith of Malvern has said that work is under way on eight of those, which begs the question, “What about the other two?” On a bigger level, what about two of the three big volume employment sectors, hospitality and retail, which, for a broad labour market strategy that includes the skills we want in them, are essential?

[Sir Gavin Williamson (Stone, Great Wyrley and Penkridge) (Con)]

My right hon. Friend makes an important point about the exclusion of a number of sectors. There is a danger that Skills England will be very much tilted towards London and the south-east, ignoring large areas such as the midlands and the north of England, which will suffer as a result of its very prescribed focus.

[Damian Hinds]

My right hon. Friend makes a very important point, which stands on its own merits.

[Tom Hayes (Bournemouth East) (Lab)]

To refer back to the previous intervention, as the MP for Bournemouth East in the south-west, I can assure the House that we are very excited about the prospect of extra construction coming to our area. In fact, Bournemouth and Poole college tells me that it has 600 construction apprentices on its books, but that it is having to turn away hundreds more. Those are opportunities being lost. The college welcomes the abolition of IfATE and the speedy transfer of responsibilities to Skills England. Does the right hon. Gentleman not agree that we should listen to colleges such as Bournemouth and Poole college?

[Damian Hinds]

Of course we should be listening to colleges such as Bournemouth and Poole college. We heard the Government announce earlier that thousands of people were going to go into construction, but then say that they could not do anything until they created this body and subsumed the functions of IfATE into it. I do not see how all those things fit together. Yes, we want more people going into construction, and a long list of other sectors too, but that does not necessarily mean an apprenticeship in every case. There is a whole suite of existing technical and vocational courses, and T-levels are still ramping up as well.

On breadth versus depth, IfATE has a huge range, with more than 600 occupational standards for apprenticeships, T-levels and higher technical qualifications. Skills England is initially looking at a narrower set of sectors, but has a much broader remit for them, so it does more than IfATE. There are three big things on its list. The first is to identify where skills gaps exist, which is itself a very significant task. It may at first glance sound obvious, but it really is not. First, there is a question of what time horizon we are talking about. Are we talking about today, or planning five, 10 or more years into the future? More significantly, I am sure people would generally say that we could train more people to go into the social care sector. The issue is not so much whether we have the training courses available, but whether people are willing and happy to go into the sector. That is a broader question.

Secondly, Skills England has to work across Government with the Industrial Strategy Advisory Council and the Migration Advisory Committee, as well, of course, as with the Labour Market Advisory Board, under the DWP. The MAC is a well-established body, having been around for a number of years, that has a remit on immigration; it will not necessarily have the same perspective as Skills England. As the hon. Member for St Neots and Mid Cambridgeshire rightly said, the ISAC is going to be given its own statutory footing, which begs the question of where in the hierarchy Skills England will be. We want this to be a body that is able to speak authoritatively right across Government.

Thirdly, Skills England is going to identify the training that should be accessible via the growth and skills levy. That, again, is a huge task. What can be funded from the levy is a huge strategic question. What specific skills should we rightly expect a firm to provide, and what should be generalisable skills for the economy?

Even after all that, there is still the big question about supply and demand at college level—this may come back to the point the hon. Member for Bournemouth East (Tom Hayes) made about listening to colleges, on which he was absolutely right. We do not currently stop people doing courses because there is a surplus of people in such and such a sector and a shortage somewhere else, but some hard questions are going to come up around the funding formulae for these things to ensure that we do have enough people going into construction, social care and so on.

My contention is that each of those functions is enormous. Amendment 6 would, therefore, perform a useful role. It is not about dither and delay, but about allowing Skills England to establish itself and to carry out those key strategic functions that it is there to do, and then to be able to subsume the functions from IfATE.

[Andrew Pakes (Peterborough) (Lab)]

It is a pleasure to follow the contributions of the right hon. Member for East Hampshire (Damian Hinds) and the hon. Member for St Neots and Mid Cambridgeshire (Ian Sollom), who spoke powerfully to their amendments. It may disappoint them to know that I will be speaking against both new clauses, as they risk undermining the speed with which we need to effect change in the sector.

It is a privilege to speak in this debate on a subject about which I am very passionate, and as co-chair of the all-party parliamentary group on apprenticeships. The transfer of functions to the Secretary of State and the creation of Skills England is one of the most critical reforms this Government are due to bring about. It addresses one of the most damaging legacies of the previous Government: the fall in apprenticeships. This matters when we look at the structure of the Bill, which is why I am concerned about new clauses 1 and 4 in particular. It also matters in constituencies like mine in Peterborough, and in neighbouring St Neots and Mid Cambridgeshire, where we have seen falling apprenticeship starts, falling training and rising unemployment. Peterborough is a city with one of the highest levels of young people not in education, employment or training. This is not just the folly of opportunities lost and young people let down, but the story of a failed economy.

I take the opposite view to that expressed by the right hon. Member for East Hampshire, who seemed to elevate the independence of Skills England as a virtue in respect of what it could deliver; I see the independence of IfATE as one of the tools that led to its failure. The fact of its independence removed it from economic need, made it bureaucratic and meant it failed to address the needs of businesses and other providers to get the flexibility and delivery of skills that we need. Independence does not always guarantee success or the things that we need.

[Damian Hinds]

Would the hon. Gentleman extend that principle to the academic route? I have asked the Minister this question a number of times now. I do not think we would stand for anyone saying that the standard and specification for A-levels should be set in Sanctuary Buildings by the Department for Education. If we would not do it for A-levels, why would we think it is right for T-levels? What is the answer to that?

[Andrew Pakes]

I think we need a mixed economy in this area. The principles I elevate in this debate are speed, substance and bringing businesses around the table, alongside providers and colleges—such as my excellent provider in Peterborough, ARU Peterborough, with its new university campus—to deliver the goods and get the job done. My concern with new clauses 1 and 4 and amendment 6 is that they elevate a level of independence that does not address the overall issue.

In fact, many of the issues the right hon. Member for East Hampshire described in his speech were actually around delivery and political choices. Having the Secretary of State and the Department establishing Skills England will make it much more likely, in my view, that we deliver at speed on those challenges. However, I am sure scrutiny will come from all parties of this House if that is not the case.

Our No. 1 mission is economic growth, spread across all parts of the UK and built on a diverse base of industries and services. The Government have already made a powerful start, which could be undermined by these amendments if they cause further delay, with early work on the growth and skills levy to drive up standards and places, the move to functional English and maths, foundation apprenticeships providing flexibility and a route in, and a £600 million investment in construction skills. I particularly welcome the replies from my right hon. Friend the Minister for Skills, who has acknowledged in written answers the need for social mobility to be a factor that Skills England will consider, so that we can actually change people’s life opportunities. This is something I am passionate about, and which the Co-operative Group and other employers I have talked to consider to be very important. This mission will fail without the urgency needed to get the Bill passed and to get Skills England up and running.

Skills England has already been set up in shadow form. Given the urgency of the task, it provides the best of external industry leadership in its Skills England shadow board, which will move to a full board. It provides independence for the voices around the table, and therefore already meets the needs that new clauses 1 and 4 seek to address. It also focuses on delivery and the speed with which we can get going to bring jobs and opportunities to all parts of the country.

The Government had already been clear, before these new clauses and amendments were tabled, that the transfer of the institute’s statutory functions to the Secretary of State will introduce more flexibility to the skills system, which I wholeheartedly endorse. It will allow us to be more responsive to the needs of employers, learners and the economy, which I also endorse. The Secretary of State will delegate these powers to Skills England. I think new clauses 1 and 4 risk delaying and creating confusion, rather than aiding purpose and delivery of what we need. I therefore oppose the moves to create a separate Executive agency or to bind Skills England before it is even created.

We need to get going. This is not just a political slogan or the subject of debates in this House, but the message I hear from businesses, providers and schools in Peterborough. We need a genuine partnership in places such as my community between colleges and employers to ensure that we are providing leadership at all levels; we need practical action and leadership, working together to improve lives and our economy. The independence of IfATE, as I said earlier, elevates it to a level that risks undermining the ability to get going quickly.

Let me provide an example. A few weeks ago, I met MDS, a not-for-profit membership organisation in my constituency that is a pioneer in flexi-job apprenticeships and training in the food supply chain, working with some of the biggest names in the food sector to create a workforce for tomorrow. It is looking to Skills England and this Bill to create the flexibility and opportunities that businesses and learners need. It would be sorry to see any delays or confusion over structure when it knows what needs to be done to get the jobs. It wants this Bill.

Can the Minister say what additional funding and resources are available to help businesses to provide pre-apprenticeship training for individuals who have been unemployed long term? Businesses want the Government and Skills England to do that quickly. They want to understand how, with SMEs and others, the Government are supporting the growth of flexi-job apprenticeships to help industries to attract new talent into the food and fresh produce industry. That is a direct criticism of IfATE and the structures we already have, and there is concern that delay through new clauses 1 and 4 will make it more difficult. As we have heard, Skills England will identify the skills gaps in our economy and work with the Industrial Strategy Advisory Council and the Migration Advisory Committee to plug them. The direct link between the industry, the MAC and the Industrial Strategy Advisory Council will address our industrial need and purpose at the necessary speed.

The new clauses are not necessary. This is a Bill about skills and about addressing our skills shortages, and it needs to get going. I support the Bill and oppose new clauses 1 and 4 and amendment 6.

19:30

[Sarah Olney (Richmond Park) (LD)]

During their time in government, the Conservatives broke our apprenticeship system and betrayed young people. The Liberal Democrats are thus calling on the Government, if they are serious about growth, to fix the apprenticeship sector by investing in education and training, including by increasing the availability of apprenticeships and career advice for young people.

I wish to speak in support of new clause 1, tabled by my hon. Friend the Member for St Neots and Mid Cambridgeshire (Ian Sollom), which would require the Secretary of State to bring forward proposals for the Executive agency to be known as Skills England. There should be greater emphasis on developing sector-specific skills that support the natural abilities and interests of each student. I believe that we should focus on strengthening careers advice and links with employers in schools and colleges to allow students clear alternative steps into a career that does not require them to go to university if that is not the best option.

Any business will tell us that the apprenticeship levy does not work. Businesses cannot get the funding that they need to train staff, so hundreds of millions of pounds-worth of funding is returned unspent, only to disappear into the Treasury. If that money were ringfenced to boost the further education budget, it would at least benefit the employers that contribute, but it does not.

I am glad that the Government are reforming the current system, but I urge them to accept my hon. Friend’s amendment, which would require a clear plan for their new proposals. We must improve not only the quality of vocational education, including skills for entrepreneurship and self-employment, but pupils’ awareness of such skills as they make initial decisions about their further education and career.

I have spoken to young people in my constituency who are undertaking apprenticeships in the hospitality industry. They have spoken positively about the opportunities to develop their skills while earning a wage. However, I have also heard that many apprenticeship jobs do not pay enough for people to meet their living expenses. It is extremely important that young people are provided with a footing solid enough not to discourage them from pursuing apprenticeships in their field of interest. I believe that the lower minimum wage for apprentices should be scrapped. We should ensure that apprentices are paid at least the same minimum wage as other employees their age.

I constantly hear from small and medium-sized businesses across my constituency who are struggling with workforce shortages. We need to build capacity in the workforce and within the economy to drive growth and ensure that British businesses can hire people with the correct skills to allow industries to thrive. Apprenticeships have a huge role to play in upskilling. Although I am glad that the Government are taking action to reform the current system, I urge them to accept new clause 1, which would give us proper detail on what the new system will look like.

Apprenticeships could play a crucial part in addressing many of the staff shortages that businesses face, by equipping people across the country with the skills that they need to thrive. The Liberal Democrats have called on the Government to truly invest in skills. I urge the Minister to accept the new clause.

[Mr Perkins]

It is a great pleasure to speak in this debate. On new clause 1, there is merit in the points that the hon. Member for St Neots and Mid Cambridgeshire (Ian Sollom) raised. There is a legitimate question about the basis on which Skills England operates. Many people want to see it being taken seriously, but whether it will be taken more seriously as an independent body or as part of the Government is a big question on which there are different opinions.

The hon. Member for Richmond Park (Sarah Olney) said that the Government need to get serious, but adopting new clause 1 or not adopting it will not in any serious sense make the difference to whether the Bill is a transformational one. The new clause would make a very small amendment to a Bill that is fairly limited in scope, so we should be realistic about how much of a difference we are debating. There is some merit in the Government’s argument that the drafting of the amendment would cause additional delay and would prevent Skills England, which already exists, from getting on with taking the necessary powers.

The right hon. Member for East Hampshire (Damian Hinds) made some interesting points. It is always important to take seriously what he says; he is a former Education Secretary and a serious man. Having listened carefully, I have to say that many of the complaints that he rightly made about our fragmented and complicated skills system and the extent to which many employers have felt distanced from it are entirely legitimate criticisms, but are largely a commentary on the system bequeathed to us by 14 years of the previous Government.

The right hon. Gentleman considers it a criticism of this Government that they have a policy that they think will be popular with business, but I see it as a virtue. As co-chair alongside my excellent hon. Friend the Member for Peterborough (Andrew Pakes) of the all-party group on apprenticeships, I have heard from businesses how much they welcome the greater flexibility that the Government propose.

It will be important to understand how Skills England will seek to ensure that greater flexibility. There is real merit in degree apprenticeships, which my hon. Friend the Member for Stoke-on-Trent Central (Gareth Snell) raised, but I also hope that Skills England will ensure far greater provision at the bottom end of the scale—not just at levels 2 and 3, where take-up has fallen dramatically since the introduction of the apprenticeship levy, but at level 1. I would like to see the apprenticeship levy being used to support people who have come out of our school system with very few qualifications, possibly having had an education, health and care plan. They are able to access work, but will need longer to get up to speed in jobs. There are tremendous opportunities for level 1 apprenticeships to support people with special needs from traineeships into the world of work, so I hope that the Government will consider them.

The right hon. Member for East Hampshire described the merit of the German skills system, which is admired across the world, but it is important to say that it involves a far greater cultural understanding. One of the ways in which the Germans understand themselves is about their skills system and the value that they put into a craft or trade. Achieving that is not just about the structure of our skills system; it would require a complete reversal of our understanding in this country over the past 30 or 40 years. There is huge merit in much of the German system, but we cannot simply adopt it and imagine that we will somehow achieve a cultural change. It needs to be wrapped up in the industrial strategy that the Government must continue to develop.

The right hon. Gentleman is absolutely right that the Government envisage Skills England having a far wider scope than IfATE. I welcome that, because one of the great failures of the system under the previous Government was that there was an array of unconnected bodies and initiatives floating around. He referred to the skills system, but right now I do not believe that this country has a skills system. What we have is an array of initiatives without any coherence.

I very much hope that in Skills England we have a body that will start the task of bringing our very complicated and fragmented system together. I have no idea whether Skills England will be a success, but I am confident that it could be. The direction in which the Government are attempting to go, if they have the courage to follow it all the way, has the potential to bring about the change that we desperately need.

We have a basic understanding of level 2 and 3 apprenticeships in this country, but we need much more coherent pathways through levels 4 and 5. The previous Government did a tremendous amount to promote level 6 apprenticeships, which are popular in some trades, but they mean getting a degree six or seven years down the line, which is a hell of a long time. Many things could go wrong in someone’s employment in that time—they might lose their job, or the company might cease to exist—and in any case they might not want to commit to six or seven years. Having stop-off points at levels 4 and 5, so businesses understand that there is something beyond level 3 that does not necessarily look like a degree, would be tremendously valuable. I hope that the Government will look to do that.

Of course it is fundamental that we listen to employers, whether they be businesses or public sector employers, and that all of them feel that they have a stake in the skills system. I do not for a minute believe that the Government or Skills England will not want to listen to employers, who are entirely the arbiters of whether we have a successful skills system, but I do not think that a body has to be independent to listen to employers. There is a potential argument that a body within government would be better placed to take a much more strategic approach than the independent IfATE ever could. It will be useful to hear how the Minister anticipates Skills England reaching out and listening to employers and businesses, particularly about which courses will be appropriate for the growth and skills levy. They might not look like apprenticeships, but they will be crucial qualifications that people will be able to work towards.

I welcome the Government’s decision to take forward many of the construction skills bootcamps. The Government quite understandably have question about the value of bootcamps; a huge amount of the previous Government’s adult education budget went in that direction. Within the construction sector, there was real value to them, and I am pleased to hear from training providers in my constituency that they have been told that the construction bootcamps will carry on.

We often speak about the skills environment as though it were purely outside of here, but we Members of Parliament are all employers, and we are all involved in skilling up our staff. I am very pleased to say that my apprentice Ellie Chapman recently successfully completed her level 3 apprenticeship. She is not an apprentice MP but an apprentice office support worker, and she has done a tremendous amount in my office over the last 16 months. She was also top in her class at Chesterfield college. [Hon. Members: “Hear, hear.”] Thank you very much—and well done, Ellie. It is important that we walk the walk as well as talk the talk. I encourage other Members of Parliament to consider whether they have a role for an apprentice in their office.

On that happy note, I encourage the Government to keep going, and to listen to employers. It is really important that we get this right, because there is nothing more important for the success of our economy than having a more coherent skills system that enables us to make the very best of all our people.

[Anna Gelderd (South East Cornwall) (Lab)]

It is a pleasure to speak in this debate and to follow my hon. Friend. I welcome this Bill and the establishment of Skills England. I oppose new clauses 1 and 4 and amendment 6.

I do not agree with the amendments to delay, because we need action now. The Bill is a crucial step forward in addressing challenges felt across the country, particularly in south-east Cornwall. We need access to well-paid, stable employment close to home, so that people do not have to leave their community or take on debt just to access higher skills and wages. In my area, transport connectivity is a barrier to employment. Cornwall and the south-west have been overlooked and underfunded. The Bill represents Labour’s focus on cracking on and delivering real change for people who really need it. I want to ensure that the Bill delivers for south-east Cornwall, and across the duchy and the south-west.

There are already great apprenticeship schemes established, but we must make sure that more of them are viable and accessible. That is what the Bill delivers. In the most recent full academic year of 2023-24, there were 760 apprenticeships started in south-east Cornwall, but only 530 people successfully achieved their apprenticeship standards. Of those 760 who started, the majority were aged 25 or older, and the most common level of study was intermediate. I am very proud of those who achieved their apprenticeship standards, and I know there will be many more to come. However, I am concerned that our younger people have not been able to access these opportunities as readily as should have been possible, and that those who took up apprenticeships under the previous Government did not always progress to a higher level.

The 760 apprenticeships started represents a significant drop from 2018-19, when 1,070 apprenticeship schemes were started south-east Cornwall. The numbers continued to decline over the five years before the Labour Government took office, representing a 28.4% decrease in apprenticeships started over five years. The Bill is a vital opportunity to reverse this decline, which is felt really strongly in south-east Cornwall, and to bring much-needed improvements to our workplaces, our economy and local skills. We need to remove unnecessary barriers and blockages in the skills system, so that we can respond more quickly to the needs of apprentices, their employers and the economy. Skills England already existed in a shadow form, and it is time to bring it directly out into the light and make it work for those who need it most.

19:46

I know that local residents and businesses in south-east Cornwall are concerned about stability and future opportunities. The Bill, with its establishment of Skills England, is an opportunity to deliver the stability that businesses need to plan their workforce, invest in skills development, and create quality jobs for local people close to home. By making the apprenticeship levy more flexible, we can ensure that funds are used effectively, support lifelong learning and provide structured training opportunities. Through the alignment of Skills England with our national industrial strategy, we can promote co-ordinated skills planning across the country, while the focus on devolution means that local solutions can be tailored to local needs. This is vital for Cornwall. Decision-making powers must be held locally, not kept in Westminster. Cornish people know what works best for us, and it is only right that we shape our own future.

The Bill offers a chance to bring real, tangible benefits to south-east Cornwall, so that we have the skills and opportunities to thrive. I look forward to working with the Government to ensure that the Bill delivers on its promise.

[Josh Dean (Hertford and Stortford) (Lab)]

I will aim to keep my remarks brief, having spoken on Second Reading and served on the Bill Committee. Before I speak about why we should not amend the Bill to include new clauses 1 and 4 and amendment 6, I will set the scene. Madam Deputy Speaker, you will be unsurprised to hear that I warmly welcome the role that the Bill will play in paving the way for Skills England. It is right that we crack on and allow the Secretary of State to transfer to Skills England the tools to find and fill the skills gaps across the country, so that the workforce is equipped with the skills to power economic growth.

My constituency sits just next to Stansted airport, and we have many young people undergoing courses at the Stansted airport college, which I was privileged to visit last Friday. I did not take a whirl on the simulator to learn how to fly a plane; I saved that for a future visit. I was delighted to find out how the college uses our local talent in Hertford and Stortford to fill the critical, growing skills gaps in the aviation and aerospace sector, and to see the careers-focused courses that are giving young people skills for work and life.

Just this morning, I was proud to welcome the Minister for School Standards to Manor Fields primary school in Bishop’s Stortford, where we heard about the impact of the teaching assistant apprenticeship for local support staff, and met the fantastic providers of those courses. It was really moving to hear the apprentices talk about how their confidence had been built by taking those courses.

For a young person, the opportunity to find and develop a skill or something they are passionate about does not just get them into the workforce; it builds their confidence and helps them to find the path that is right for them. That is why it is so important that we get Skills England set up and do not delay getting the Bill through. I know about this from personal experience, having left school at 16. I did not follow the path of an apprenticeship. I did not know what the direction was for me. Apprenticeships are so important for young people who need to find a path and need the certainty of a career at the end of it, but perhaps do not want to stay in traditional education. It builds their confidence, and helps them find their place in the world. This is work that we simply cannot delay.

Young people are being let down by a skills system that is not working for them. One in eight young people is not in education, employment or training, which is holding them back, and the economy back, too. In 2022, more than a third of UK vacancies were due to skills shortages. We need urgent reform—we cannot afford to delay. I urge hon. Members to pass the Bill unamended this evening so that the Government can get on with reforming the skills system and delivering Skills England, to create the opportunities for young people in Hertford and Stortford and across the country that will build their confidence, help them find a path that is right for them, and make a difference to their lives.

[Peter Swallow]

I was proud to serve on the Bill Committee for this vital legislation. It is a small Bill, but, by goodness, it is mighty. I rise to speak against amendment 6. In doing so, I will highlight a local success story in recognition of the third National Supported Internship Day. It took place on 27 March, which also happens to be my birthday.

For 15 years, Bracknell and Wokingham college—my local college—and Activate Learning have been working together with over 100 employers to offer supported internship placements for learners with special educational needs. The scheme offers invaluable opportunities, and provides the skills, confidence and qualifications necessary to thrive in the workplace. Their partners include the National Grid, the Royal Berkshire hospital, Johnson & Johnson, and Sodexo. It is an excellent example of a local college working with big players in the energy, medical and food industries to provide high-quality schemes for stable, well-paid employment. It is proof that young people with special educational needs can thrive with the right support. We face one in eight young people being not in education, employment or training—the number is at an 11-year high, after 14 years of the Tories—and we need more supported internships to address the challenge.

Skills England will deliver opportunities across the country in key industries including green energy, construction and healthcare. That is vital for the Government’s five missions, and for communities like Bracknell. It is a step towards ending fragmentation. A less complex, more flexible skills system will deliver for young people, especially those with special educational needs. By bringing together the constituent parts of the skills architecture, Skills England will create a system that is fit for purpose, responsive to the needs of employers and businesses, and capable of driving economic growth in the years to come. It will lay the ground for a better system.

There is a need to move fast. As the right hon. Member for East Hampshire (Damian Hinds) pointed out, the UK’s productivity is almost 40% below that of the US, and 20% below that of other major economies, such as France and Germany. A major reason for that is a lack of appropriate skills, so the Conservatives’ amendment 6, which would delay the creation of Skills England by a year, is nothing short of irresponsible. We need to work faster, not more slowly. The amendment is indicative of their approach to government: where there was a challenge, they ducked it; where a decision was needed, they put it off; and when a broken system needed fixing, they left it for the next lot. Well, the next lot are now in government and will not put off for tomorrow what needs to be done today.

We know that skills are a crucial driver of economic growth and the key to tackling productivity gaps, but our economy is changing rapidly in ways we cannot fully anticipate, so it is crucial that our education system equips young people with a broad range of the skills necessary for success in the jobs market of tomorrow. That is exactly what the Bill and Skills England will deliver.

[Laurence Turner (Birmingham Northfield) (Lab)]

On the face of it, this is a technical Bill, but the benefits and opportunities that the transition to Skills England can create across the country, including in communities such as Birmingham Northfield, are real and tangible. The amendments would have similar effects. In terms of timing, while new clause 1 would delay the establishment of Skills England by six months, new clause 4 and amendment 6 would delay it by a year. There is a risk that by accepting such amendments we would recreate IfATE under the name of Skills England. As my hon. Friends have said, we cannot wait that long. A new approach is needed.

As the first Skills England report, which was published last September, identified, there has been a steady decline in employers’ investment in training during the past decade. Investment in real terms has fallen by about 20%, even though 90% of the roles in critical demand across the economy require training or education.

In my constituency, apprenticeship starts fell by 35% during the last Parliament, more than double the national rate. This is a social issue as well, because more than half the young people not in education, employment or training in Northfield are classed as vulnerable, and adult skills funded education is accessed particularly in the areas of my constituency with some of the highest levels of social need, including Longbridge and West Heath, Weoley and the three estates in Kings Norton. I am sure the situation is similar for other hon. Members.

According to a response to a freedom of information request in 2022, some £1 billion a year nationally in apprenticeship levy funding was unspent. At the same time, major local employers have expressed their frustration to me about skills shortages in areas from construction and home upgrades to computer science.

I have seen some of the good work already done locally to provide apprenticeships and other forms of technical education. Next month, we will witness the 20th anniversary of the closure of MG Rover in my constituency. Today, South and City College Birmingham, which is partly built on the old Austin site, is one of the largest training providers in the west midlands. A number of hon. Members have paid tribute to their local colleges, and I would like to do the same. That college offers impressive programmes, developing the technical and soft skills of students in a multitude of industries including catering, automotive and advanced manufacturing.

As manufacturing jobs start to return to Longbridge, these facilities and the experienced staff who work there will be vital to delivering economic growth and opportunities for young people, but they are attempting to fit into a system that is not fit for purpose and is not working. In other words, skills policy is essential for the Government’s plans for economic recovery and industrial strategy, and it is appropriate to place accountability for the new development directly with Ministers for this period.

We heard a lot on the Bill Committee as well as elsewhere about whether Skills England should be created as a stand-alone agency at arm’s length from the core Department. As we heard on Second Reading, the Government may review Skills England’s status after 18 months to two years, which seems like a sensible way forward. That is a legitimate debate, but we should not agree tonight to delay Skills England’s creation.

It is important to say that IfATE has not lived up to expectations and that the status quo is a barrier to the Government’s objectives. Nine years ago, the then Minister for skills, Nick Boles, told the House’s Education, Skills and the Economy sub-Committee that IfATE would

“be much more akin to the Bank of England”

in terms of its independence compared with a traditional arm’s length organisation. I think most hon. Members would agree that that has not been borne out.

During the last Parliament, I attended meetings of the UK shipbuilding skills taskforce, where there was common agreement between employers and employee representative organisations that the GCSE entry-level requirement was a barrier for employers taking on the young people who were best equipped for those apprenticeships. However, that recommendation was blocked—by DFE Ministers, we were given to understand—from the final report. Similarly, employers and people with direct knowledge of the skills system I have talked to over the last few weeks have stressed some of the frustrations that existed in the trailblazer employer organisations: within the bureaucracy of IfATE, some recommendations and expertise would be either delayed or disregarded by the route panels, some of which were made up of employers who did not necessarily have expertise in a particular industry.

It is important to reduce some of that bureaucracy so the Bill’s effect of removing a requirement for a regular review of an apprenticeship’s standard—in practice, every few years—is a sensible change. There are, at the last count, 658 live apprenticeships listed on the IfATE website. That implies 219 reviews every year or four a week; I think we are entitled to question how effective those reviews can be given IfATE’s current resources.

If I may, I will list one more example of where the current system is going wrong. The special educational needs and disabilities teaching assistant apprenticeship standard, which was discussed during the last Parliament and then formally created during this one, lists a very large number of organisations that contributed to its design. The overwhelming majority are employers, who, of course, need to be represented. Only one trade union was represented and I question why that was the case. However, not a single SEND parents’ organisation or other group that represents the needs of those young people was drawn into the creation of that standard. I think we are entitled to ask whether that is the right approach. The discussions that led up to the creation of the standard, in practice, were heavily DfE-guided, so I think we are entitled to question the independence of the current system as it exists.

20:04

We spoke at length in Committee or, at least, the right hon. Member for East Hampshire (Damian Hinds) did —I think we all enjoyed it—about the history of skills education in this country. There have been a number of attempts to create skills bodies to serve Government policy. In preparation for this debate, I was interested to note that when the Conservative Secretary of State for Employment, Maurice Macmillan, announced in 1972 the creation of one of the forerunners of the body, the Manpower Services Commission, he said that a skills training body ought to have direct responsibility to the Minister and the Department of the day. Another point is relevant to policy development in this area: in establishing that body, he sought the input and representation of employees, as well as employers, through the process.

At this point, for the avoidance of doubt, I draw attention to my declaration in the Register of Members’ Financial Interests and my membership of the GMB and Unite Construction trade unions, because I want to return to a clarification and reassurance that the Minister made in a letter to the Public Bill Committee’s members in respect of the implications of clause 10. She clarified that nothing in those powers could override the constitutions of the Construction Industry Training Board and the Engineering Construction Industry Training Board.

The industry training boards have a long history in skills training, which I hope will be revisited by this Government as they address some of the very challenging skills programmes that will be needed to deliver the energy transition. Arguably the most successful skills mass training programme in this country was the one that underpinned the transition from town gas to natural gas in the 1960s and 1970s, overseen by the Gas Industry Training Board—perhaps we could do with that body being recreated.

One of the very important points about that programme, which survived multiple changes of Government and delivered that transition before time and under budget, was that the trade unions had very heavy involvement. They included the General and Municipal Workers’ Union, the forerunner of today’s GMB, which had a formal consultative role on the curriculum that was overseen by that body. Over time, the trade unions have been squeezed off the boards of both the CITB and the ECITB, the remaining industrial training boards, which is contrary to the original intentions of Parliament in the legislation that underpins those bodies. I therefore hope that, in the course of continued policy development in this area, this Government will look at that issue because, as Ministers have rightly assured us, employee voices will be represented through Skills England. I hope that that can be the case for the remaining training boards as well.

It is vital that the next generation of workers have the necessary skills to meet the industrial challenges we face, whether it is constructing new homes, developing our infrastructure or meeting our environmental targets. Most importantly, however, we must ensure that the next generation of young people is provided with the skills and opportunities to develop their potential and pursue their ambitions. I will be glad to join my colleagues in voting against the amendments in front of us tonight.

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

If I may, I will start by joining my colleagues on the Government Benches in my opposition to new clause 1, new clause 4 and amendment 6. Well-meaning they may be, but I am impatient for change.

Stoke-on-Trent has one of the highest rates of youth disengagement in education, employment or training in the country. As always, when we look at those heat maps, we see the big yellow splodge in the middle of the midlands, which is Stoke-on-Trent, showing that we have one of the highest numbers of workers in the country with no form of formal qualification whatever. Our young people tend to find themselves unable to access any form of training or support that they need to make a future career for themselves.

I declare my interest as a governor of the City of Stoke-on-Trent Sixth Form College, as we offer T-levels. Even though I do not have an apprentice in my office like my hon. Friend the Member for Chesterfield (Mr Perkins), as of next week a T-level student will be in a placement there for the next 18 months, to help their advancement.

My impatience stems from the necessity of identifying the skills that we need in the city I represent and of making sure that the next generation of young people coming through education have them. That is the only way I can see for us to fulfil our desire and ambition to rebuild our economy and attract those higher quality, well-paid and long-term jobs into the city that will mean higher wages and the ability to dig ourselves out of our city’s economic troubles. I do not expect or hope any Government to come over the hill like a cavalry, with a big sack of cash, saying, “Here you go—here is what you need.” It is partly on us to do that, by matching up the skills that we have and the skills that we need in the city to do the jobs of today and the future jobs of tomorrow. That is really important. The local skills improvement plan put together by our chambers of commerce and colleges has gone some way to achieving that. However, as always, it is a bit like wading through treacle, because we get to where we think we are going to be and all of a sudden something appears that makes it more difficult. Then, the people who struggle with that are the young people.

I am afraid that anything that seeks to delay the advancement of this Bill, such as new clause 1, new clause 4 and amendment 6, will not get my support this evening. I do, however, wish to spend a few minutes on my own new clause 2, which is a probing amendment. It is not intended to cause any frustration or Divisions; I say to the Whip that I am not seeking to test the House’s opinion on it. However, when we consider what apprenticeships will look like in the future and what they mean for cities such as Stoke-on-Trent, it is important to understand that level 7 apprenticeships, funded by the apprenticeship levy, are a genuinely important part of the educational offer available to young people in my constituency.

The week before last, I visited DJH accountants in Stoke-on-Trent, which is a significant regional player that is training its own generation of chartered accountants at level 7 using the apprenticeship levy that would otherwise just disappear into the Treasury. People there explained to me quite succinctly, and I agreed, that through their own means they simply would not have the available capital or cash to fund the quantity of training courses that they run. The apprenticeship levy allows them to grow a group of young people into chartered accountants. The people I met were all young. They were not at the mid or tail-end of their careers looking for a final bump before they got to their pension; they were young people who had come in after GCSEs, done their basic accountancy skills and had their eyes firmly set on a chartered accountancy qualification. The levy was allowing them to do that.

I asked the young people where they were all from, expecting them to be from the city, which they were. I then asked them where they wanted to work once they had their chartered accountancy status and, wonderfully, they all wanted to stay in Stoke-on-Trent and practise the craft that they had been learning. The economic benefit of that to my city is that if it were not for the ability of that company to train to level 7 using the apprenticeship levy, it would have to import that labour from neighbouring areas. So somebody who already had the level 7 qualification, or had been trained somewhere else through a company that could afford it, would come into Stoke, do the level 7 job, attract that level 7-equivalent salary and take it back to where they actually lived. That would mean that the level 7 salaries those young people were going to earn and spend in Stoke-on-Trent would end up migrating to other, slightly more affluent places in the midlands—and, candidly, there are many more affluent places in the midlands than Stoke-on-Trent.

The economic damage done by turning off the apprenticeship levy, or even the skills and growth levy, from level 7 apprenticeships could mean that the places such as Stoke-on-Trent that already suffer from ingrained regional inequality see it further ingrained into their local economies, because the people who have those skills travel in to do the work, or work from home, and the money flows out of the city and is spent in those other local communities.

There is also the message that we are sending to young people in the city. If level 7 qualifications are not available to them, they will be unlikely to have the means to pay for a level 7 qualification themselves. Having a level 7 qualification in Stoke-on-Trent is quite a rarity. You are more likely to find somebody with no qualification than with a master’s level qualification. New clause 2 is a hook to allow the Minister to go away and consider this. I do not believe for one second that it is the determination of the Government to artificially stymie or cap the aspirations of young people in Stoke-on-Trent by suggesting to them that those level 7 qualifications are not available to them.

I appreciate that there are concerns in the system about the levy not being used for its intended purpose, but to take people through higher level qualifications who already have a career behind them. There are obviously organisations and companies that have done that because, rather than send that money to the Treasury, they have sought to upskill their own workers. I understand why the Government want to get tough on that, because it is not what the levy was intended for, but the level 7 learners that I have met are all young. They are people who have a clear idea of the path and trajectory of the career they want to take, and the levy simply makes that more viable and likely to be achieved in an economically depressed and deprived place such as Stoke-on-Trent.

The other side of the issue is that 95% of the apprenticeships at the University of Staffordshire are at level 6, and 5% are at level 7. It provides level 7 training for the Ministry of Defence and a number of public services. Some of that is funded by the apprenticeship levy. That is an invaluable income stream for the university to deliver that training for people who then go back into the public sector to make it more efficient, to crack down on waste and to deliver those skills that we as a nation determine that we need.

That will undoubtedly need to be looked at as we have more defence spending, because we will need people with those level 7 qualifications in the defence sector, in the manufacturing companies, and in the electrical and chemical engineering companies. Ordinarily, companies in places such as Stoke-on-Trent will simply not have the capital or the cash to provide that. Only by drawing down from the apprenticeship levy will they be able to train people locally to do those jobs. If we are not training people to do those jobs, the opportunity that comes from that Government investment simply will not be felt in places such as Stoke-on-Trent, and the regional inequality that is already quite clear in my city will become more entrenched.

My hon. Friend the Member for Hertford and Stortford (Josh Dean) talked about finding people finding career, and that is what all of us want for the young people in our communities. It is certainly what I want for the learners in my city, but that career should take them as far as they want to go. That career should take them, if they want, up to a level 7 qualification that allows them to build a life and a career that they enjoy and are happy doing. My concern is that the unintended consequence of the Government’s decision that level 7 qualifications will no longer be available from the apprenticeship levy will be that in cities such as mine, aspiration and ambition will be capped because the cash and the capital are simply not there to meet those young people’s demands.

I have no truck with or support for the delaying amendments of the Opposition, and I have no intention of doing anything with my new clause other than sitting down in a moment. I hope that the Minister will take back the concerns that I have raised this evening and see whether there is a way, maybe through devolution deals, through reorganisation or through the mayoral strategic authorities, in which certain areas could be able to continue with the levy funding for level 7 qualifications that we so desperately need.

[David Pinto-Duschinsky (Hendon) (Lab)]

I rise to speak against new clauses 1 and 4 and amendment 6. The simple truth is that we cannot have any more dither and delay. Our starting point in this debate must be the fact that we are in a skills crisis, and one that lies at the feet of the Conservatives. Twenty-six years ago, I worked on the new deal taskforce for the Labour Government of the time, clearing up the mess that the Major Government had left in the skills system. Fast-forward over a quarter of a century, and once again we find the Labour Government having to clear up the mess in skills left by Conservatives.

20:15

The facts are stark. Today, only 10% of all adults hold a level 4 or 5 qualification, versus 20% in Germany and 34% in Canada. Some 26% of our workforce are underqualified for their jobs, versus the OECD average of 18%. What is more, the UK has higher skills inequalities than other equivalent countries. Adults in the west midlands are three times more likely to lack basic qualifications at GCSE level than those in London. If we reached German levels, an extra 290,000 people in the west midlands would have higher level qualifications. While 71% of Londoners look set to have higher education by 2035, the figure for Hull is only 29%.

The system is not just struggling to provide our people with the skills they need; it is failing to provide employers with the skills they need to drive growth. One third of UK vacancies in 2022 were down to skills shortages. For instance, 92% of employers cite digital skills as key for their business, yet 7.5 million working-age adults lack them. The skills system that the Conservatives left behind is letting down our people and holding back our economy.

Conservative Members have talked about what is needed. Let me tell them what is needed. We need a more strategic approach, one that identifies skills gaps and flexibly co-ordinates the Government response to address them. It needs to be integrated and it needs to take a more strategic view. That is exactly what Skills England does. Skills England has already started its work and published its first report, and it will issue analysis later this year on sectors to support the industrial strategy. It will act as a key ingredient in delivering that strategy, and it will unlock the skills that employers need. It already exists in shadow form.

Skills England is ready to go and business is crying out for it, yet what we have heard today are two suggestions. The first is that, despite that, we should delay further: for six months in the case of new clause 1, and for a year, if not longer, in the case of new clause 4 and amendment 6. To those who propose this, I say simply this: enough debate. We need to get on with the job. What they are proposing is not constructive, and would simply slow down the process of turning this country’s skills gaps around.

The second thing we have heard is that Skills England and IfATE should run together for at least a year, despite their separate and in some cases conflicting remits. Let us be clear: this would only create chaos, with the different organisations stepping on each other’s feet. The different remits would, if anything, dilute the impact of an industrial strategy. The risk is that all the proposals made by the hon. Member for Harborough, Oadby and Wigston (Neil O’Brien) would lead to the recreation of the failed organisation by the back door.

It is time to put an end to this blocking and fiddling. Skills England was in the Government’s manifesto. The public voted for change and Skills England is a key part of delivering it. Let us end the delays, defeat these amendments, get Skills England set up and get on with the task of delivering for the British people.

[Madam Deputy Speaker (Caroline Nokes)]

I call the shadow Minister.

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

I find myself in complete agreement with the hon. Member for St Neots and Mid Cambridgeshire (Ian Sollom), and our amendments—new clause 4 and amendment 6—are suggested in the same spirit. There were good reasons why standard setting was put at arm’s length and closer to employers, but now the Government are bringing it into the Department. Alongside other changes, such as shortening apprenticeships and axing higher apprenticeships, that risks damaging the status of these qualifications, which we have been working to build up.

The Budget was bad for employment, and it will make it less likely that businesses will take on apprentices. Rather than addressing the problems that they are creating, the Government are reorganising. It is the umpteenth reorganisation in recent decades. The Government’s own recent impact assessment says that the reorganisation will lead to a delay and drop in apprenticeships, hence our amendments.

For decades, politicians have said that they want to make apprenticeships more prestigious. On average, twice as many people started apprenticeships each year under the last Government as under the previous Labour Government, but higher apprenticeships grew fastest of all. The number of people on higher apprenticeships went from just 3,000 in 2010 to 273,000 last year—a huge increase. We increased the quality of apprenticeships, too, which was much needed, as has already been alluded to by my right hon. Friend the Member for East Hampshire (Damian Hinds).

In 2015, a devastating Ofsted report found that some apprentices who had been on an apprenticeship for more than a year were not even aware that they were on an apprenticeship, and the skills they were learning were things like making a cup of coffee, which are not life-changing skills. Things were being funded that did not benefit young people, but did allow employers to pay a lower wage. Whereas we lengthened apprenticeships, this Government have cut the length of apprenticeships to eight months. By abolishing IfATE and bringing it in house at the DFE, they are eroding that employer ownership that we worked to build up. Whereas we grew higher apprenticeships, they are about to abolish most level 7 apprenticeships. That is a taste of what is to come if our amendments are not accepted. The Government are doing this because in opposition they promised that employers could take 50% of their levy funds and spend them on other things.

On 20 November, the Parliamentary Under-Secretary of State who will respond to this debate said that this commitment was “currently being reviewed”. But just weeks later, on 9 December, the Secretary of State said the Government were still fully committed to “50% flexibility for employers”. When I asked the Minister in Committee whether that was still the policy, she said that she would have to get back to me. As the Skills Minister said in the Financial Times, far from the 50% being a promise—as employers were led to believe—it will, in fact, all depend on the outcome of the spending review.

Businesses are starting to raise the alarm. The British Chambers of Commerce has said that a “lack of clarity” about the levy is creating “fresh uncertainty among businesses” and is “worrying and destabilising”. Employers say that this is leading to firms pausing hiring of apprentices.

Since the levy was introduced in 2017, real-terms spending on apprenticeships and work-based training have increased by about a quarter from £2 billion to £2.5 billion. Moving 50% of all that money out of apprenticeships would obviously lead to a substantial drop in the number of apprenticeships. In a written answer to me, Ministers have confirmed that the Department has an internal forecast for the number of apprenticeship starts, but they have also said that they will not publish it—I think we all know why that is.

The previous Government moved to make it more attractive for small and medium-sized enterprises to take on younger people. Since April, 16 to 21-year-olds have had 100% funding, rather than requiring the 5% employer contribution. We need to build on that and cut bureaucracy for smaller businesses, but the Government’s answer is different: they plan to abolish the highest-level apprenticeships and redistribute the money. I thought the brilliant speech by the hon. Member for Stoke-on-Trent Central (Gareth Snell) on his amendment 2 was so right. I will not be as articulate as him, but I will try to add to the points he made, and I hope the Minister will listen to her wise colleague. Employers and educators can see that this is a trial run of what it will be like as Ministers take more control with this Bill, and they are warning that it is a big mistake.

Dan Lally at Sheffield Hallam University says that level 7 cuts will

“disproportionately impact on public services…We are meeting vital skill gaps in disciplines such as advanced clinical practitioner…These are NHS workers, civil servants and local authority employees. A high number of our level 7 apprentices…come from the areas of highest deprivation.”

For example, level 7 apprenticeships are absolutely central to the NHS’s long-term workforce plan. Last year, we saw the Government’s disappointing decision to cancel the level 7 doctor apprenticeships. That means there will be a shortfall of about 2,000 medical places a year. Students who had already started on the medical doctor apprenticeship have sadly been left in limbo, and I am concerned the Government will do something similar to nurses as part of the level 7 cuts. The NHS’s workforce plan proposed an extra 50,000 nurses coming through the apprentice route. Around a quarter of them tend to be on an “Agenda for Change” band 7, which typically requires a master’s equivalent, so we would expect about 11,000 of those nurses to be coming via level 7 apprenticeships. If the Government get rid of them, that is a huge hole in the NHS plan.

As well as the NHS, local government makes huge use of level 7 apprenticeships, including the extra town planners that the Government say are needed to deliver on housing targets. Deborah Johnston at London South Bank University says:

“Over half of the employers we work with…on level 7 apprenticeships are local authorities. Our apprentices enable councils to deliver projects in the wake of…reintroduced mandatory housing targets. The suggestion that, as employers, local authorities should step in and pay for the level 7 apprenticeships themselves is fanciful.”

The professions are also worried. The Institute of Chartered Accountants has said that axing level 7 apprenticeships will lead to work leaving the UK. It says:

“removing Level 7 apprenticeship funding will mean that fewer UK training roles are created. Instead, organisations are likely to turn to offshoring to replace UK training roles”.

The hon. Member for Stoke-on-Trent Central rightly said that it would lead to people being outside Stoke-on-Trent, but in some cases it would lead to them being outside this country altogether. That is why the Campaign for Learning has called for a skills immigration worker test before defunding level 7 apprenticeships, so that we do not simply go from investing in British workers to importing workers from other countries.

Likewise, the Chartered Management Institute has said:

“cutting funding for level 7 apprenticeships would risk creating gaps in leadership…at a time when business and the public sector need them most.”

I have been contacted by several firms worried about the abolition of the solicitor apprenticeship—a way into the law for people from less privileged backgrounds. Attwells Solicitors, for example, says:

“Reducing funding to level 7 apprentices runs the risk of removing opportunities into professions”

and that

“Apprenticeships help break down barriers into not only Law but all career paths which could be inaccessible to young people without them.”

As well as hitting employers, on the other side of the ledger—this is why our amendment is important—axing level 7 will be destabilising for university providers. It will particularly hurt those institutions that have tried to do the right thing for those who traditionally do not go to university. Sixty-six universities deliver level 7 apprenticeships, and a prestigious institution such as Cranfield University, which is a postgraduate-only institution with deep industry links, will be hugely exposed if the Government wield the axe in the way they plan. York St John University has something like 100 level 7 apprentices. Other institutions such as the Open University, Manchester Met and the University of West London are all exposed, too.

Culling level 7 is a big mistake. These apprenticeships are vital across the public sector and are a way into the professions for people who might otherwise struggle to enter them. Above all, they are the capstone of a drive to make the apprenticeship system more prestigious. British Airways carried on running the Concorde even though it was a small part of its business because of what it called the halo effect. It knew that it changed the way the organisation was seen. By creating the top of that pyramid—the very top of the ladder; people can go all the way—level 7 apprenticeships create a halo effect around apprenticeships, and that is a vital part of why we should not get rid of them. Worse still, it was crystal clear from the Minister’s replies in the Bill Committee that the Government are keeping open the option to move on and take an axe to level 6 apprenticeships too, which would make that mistake even bigger and will not, in fact, drive money towards L2 and L3.

The other day we learned that the DFE is to cut the adult skills budget by 6%—something for which Ministers criticised the previous Government but are now doing themselves. Ironically, that came out at the same time as, and was overshadowed by, the welfare reform Green Paper, which mentioned training 18 times. In Committee, the Minister refused to confirm whether the Government would continue to provide the extra 10% funding to get T-levels going, even though providers are crying out for clarity on that. It is no wonder that many employers would like the certainty that comes with a degree of independence from politics.

Wise people on the Labour Benches want that, too. Lord Blunkett said in the other place:

“When two years ago I led on the learning and skills document that was a precursor to Skills England…we never envisaged that an agency inside government would have to take on the assurance and accreditation of the relevant sector standards.”

He noted:

“A Skills England that has no legislative backing and no parliamentary references but is down merely to the changing face of ministerial and departmental appointments is in danger of losing its birthright before it has got off the ground.”—[Official Report, House of Lords, 21 November 2024; Vol. 841, c. GC98.]

Even those on the Labour side who were involved in dreaming up Skills England have argued for its independence. Likewise, various employer bodies, including the Institute of the Motor Industry, the Skills Federation and the Construction Industry Training Board, have argued that it should be more independent.

As Labour peer Lord Knight has pointed out, the problem that some of us have with the Bill is that it feels as if the second half is missing, and that second half is the establishment of Skills England as a statutory body. The original draft of the Bill did not even mention Skills England. As Baroness Blower, another Labour peer, has pointed out, the appropriate move from where we are now would be to make it a statutory body. That is why our amendment would make the Bill do what the Government are pretending it does by actually setting up Skills England, which was clearly the intent of many on the Labour Benches.

Given all the problems that the Government are creating, the very act of a further reorganisation is likely to compound the effects of the Budget. The impact assessment states:

“The transfer of functions from IfATE to the DfE could potentially cause a temporary slowdown in the growth rate of new apprenticeships and technical education courses due to potential delays in the approvals process resulting from the Bill… This may disproportionately impact disadvantaged learners, who rely more heavily on these pathways”.

So there you have it, Madam Deputy Speaker. Employers and educators are criticising the uncertainty that the Government are creating; Labour peers are arguing that Skills England should be made independent, but the Government are ignoring those on their own side with experience; and employers are warning against axing valuable qualifications, but the Skills Minister is determined to end them. Yet another reorganisation, yet more centralisation, no clear vision—it is another big mess.

20:30

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

I thank hon. Members for their constructive engagement throughout the debate. However, from listening to the shadow Minister, the hon. Member for Harborough, Oadby and Wigston (Neil O’Brien), one would think that this was all doom and gloom, when it is actually a new season of growth and skills. We are springing into action, and I encourage him not to be stuck in the past.

As I have said before, including when we discussed the Bill in detail in Committee, it is wonderful to hear the passion that Members from across the House have for improving our skills system. It is clear that we all share a desire to better meet the skill needs of employers and learners. The Government are determined to unlock growth and spread opportunity, and the Bill will help us to deliver the change that we absolutely need.

I will start by speaking to new clause 1 before touching on the other new clauses and amendments.

[Graham Stuart (Beverley and Holderness) (Con)]

Can the Minister explain, in answer to the points made by the hon. Member for Stoke-on-Trent Central (Gareth Snell) and others, the rationale behind eliminating level 7 apprenticeships?

[Janet Daby]

Information on that will come out in due course, but if the right hon. Member gives me a little more time, I will be able to elaborate and respond to Members as I go.

New clauses 1 and 4 relate to the creation of Skills England and its legal status. New clause 1, tabled by the hon. Member for St Neots and Mid Cambridgeshire (Ian Sollom), would require the Secretary of State to lay draft proposals for a new Executive agency, to be known as Skills England, within six months of Royal Assent. New clause 4, tabled by the hon. Member for Harborough, Oadby and Wigston, would require the Secretary of State to establish Skills England as a statutory body.

Our position—that we establish Skills England as an Executive agency—remains extremely clear and is entirely in keeping with the usual process for establishing arm’s length bodies. The Department is complying with the robust and vigorous process for establishing Executive agencies, which applies across Government. The Executive agency model balances operational independence with proximity to Government. That is needed to inform policy and support delivery of the Government’s mission. That model enables us to move quickly, which is vital given the scale and urgency of the skills challenges that we face.

The Government have committed to reviewing Skills England between 18 and 24 months after it is set up. That will includes an assessment of whether the Executive agency model is enabling Skills England to deliver its objectives. That is consistent with good practice. Skills will power this mission-driven Government and our plan for change. Our approach means that we can get on with the job at hand: fixing the skills system and helping more people to get the training they need to build our homes, power our towns and cities with clean energy, and master new digital technologies.

[Chris Vince (Harlow) (Lab/Co-op)]

I thank the Minister for visiting the best town in England, Harlow, last week. Does she agree that this Bill will help benefit young people in my constituency and give them the skills that they need ?

[Janet Daby]

I absolutely agree with my hon. Friend that the Bill will help young people to gain the skills that they need—in his wonderful constituency and in many other wonderful constituencies as well.

Amendment 6 tabled by the hon. Member for Harborough, Oadby and Wigston would frustrate the complete establishment of Skills England by delaying the transfer for a full year of the functions as set out in the Bill. Members have heard the Government set out already that delay is not an option; that has been repeatedly said. They should not just take my word for it: technology training provider QA has said that this is a pivotal moment for shaping the skills system to meet the UK’s industrial and economic needs, and it is right. The complex and fragmented nature of the skills system is contributing to critical skills gaps in our economy today: opportunities are being missed today, growth is being held back by a lack of skills today, and we cannot afford to be sluggish in our pursuit of a more joined up, data-driven approach.

In the first set of apprenticeship statistics under the new Labour Government we saw an increase in starts, participation and achievement compared with the same period under the Tories in 2023, even in the constituency of the hon. Member for Harborough, Oadby and Wigston. When the Conservatives were in government, starts in his constituency fell by 13%; almost 100 fewer people were starting apprenticeships on their watch. This Government marked National Apprenticeship Week with a set of reforms going further and faster on growth, whereas under his Government a third of vacancies were due to the lack of skills. We will press on.

The British Chambers of Commerce has urged us to work at pace to establish Skills England, and we are doing exactly that. Since being set up in shadow form, Skills England has got to work. It has got to work by identifying skills gaps in the economy and building relationships with strategic authorities, employers and other groups. Indeed, Skills England has worked with mayoral, strategic authorities and other forms of regional government as well as regional organisations to ensure that regional and national skills needs are met in line with the forthcoming industrial strategy. Skills England will work closely with the Industrial Strategy Advisory Council so that we have the skilled workforce needed to deliver a clear long-term plan for the future economy, and with the Migration Advisory Committee to ensure that growing the domestic skills pipeline reduces our reliance on overseas workers. Our constituents will not thank us for sticking in the slow lane. There is no need to wait another year, and we are ready to go now.

New clauses 2 and 3 tabled by my hon. Friend the Member for Stoke-on-Trent Central (Gareth Snell) and the hon. Member for Harborough, Oadby and Wigston respectively would impose a duty on the Secretary of State to publish within one year of Royal Assent reports on the impact of the Act on T-levels and higher education. Members will be aware that we have already included in the Bill a duty for the Secretary of State to report on functions transferred from the Institute for Apprenticeships and Technical Education that will be exercised by Skills England, including their impact on technical education and apprenticeships. This report will need to be published not after a year but after six months, which is much sooner. We have therefore already made commitments to transparency in the Bill, and that was welcomed by stakeholders, including the Association of Colleges in its written evidence to the Bill Committee. We all agree that T-levels and higher education are central to fixing our skills challenges and, as I made clear in Committee, the Skills England six-month report will include necessary information on T-levels as well as technical education and apprenticeships delivered in higher education settings. The Conservative party has argued that we must avoid Skills England being overlooked and distracted from its important work. Surely, then, we should avoid forcing it to spend its first year producing more and more reports covering the same issues.

Amendments 1 and 2 were tabled by my hon. Friend the Member for Stoke-on-Trent Central and by the hon. Member for Harborough, Oadby and Wigston respectively. These amendments would also place additional reporting requirements on the Secretary of State, this time in relation to degree apprenticeships. As with T-levels and higher education, the report that the Government have committed to providing after six months will necessarily include information on apprenticeships, including degree apprenticeships. Amendment 1 is about funding for those apprenticeships. We are setting Skills England up to build the evidence and the partnerships needed to deliver change, but policy and funding decisions on skills provisions will not sit with Skills England; they will continue to sit with the Secretary of State. That is entirely right and appropriate, and nothing in the Bill changes that. We will set out more information on level 7 apprenticeships in due course.

[Gareth Snell]

If I have heard the Minister right, the first report that will come out will include aspects of the implications for higher-degree apprenticeships, but the funding decisions will still sit with the Department, as they should. Will the report refer to the funding decisions made by the Secretary of State, so that when it comes to the impact of the decisions made, we can see correlation and causation?

[Janet Daby]

I absolutely hear my hon. Friend and his concern for level 7. I do not want to stray too far from the Bill and what it seeks to achieve, but I am very happy to look at that further with him, and to get back to him.

On Sunday, it will be eight years since the levy was introduced, and only now, under a Labour Government, are employers getting the flexibilities they have been crying out for, including on maths and English, and on the length of apprenticeships. That is in response to industry needs, and recognises the needs of jobs, and the need to get young people a foot in the door, so that they can start good careers. After nine months in government, this Labour Government have cut through red tape and are driving the skills that our employers need, showing that Labour is the party of business. We are reforming apprenticeships, tilting the system towards young people most in need of developing skills, and ensuring that young people get a foot on the careers ladder.

Amendments 3 and 5 were again tabled by the hon. Member for Harborough, Oadby and Wigston. They would create a statutory duty on the Secretary of State to have due regard to the reasonable requirements of employers and individuals when considering whether to approve a standard or assessment plan where it has been developed by a group of persons. As I made clear in my response to the hon. Member in Committee, the Secretary of State is already subject to a general public law duty that requires them to take into account all relevant considerations when making decisions relating to the functions for which they are responsible. There is therefore already a requirement for the Secretary of State to balance the needs of users of the system when executing the functions described in the Bill. In fact, the public law duty is broader than the factors listed in the amendments and includes, for example, consideration of value for money and quality.

Turning lastly to amendment 4, tabled by the hon. Member for Harborough, Oadby and Wigston, it is critical that technical qualifications and apprenticeships reflect the needs of employers, and that they have confidence in them. Employers tell us that speed and flexibility are crucial if we are to work together more effectively to plug skills gaps. The precise make-up of “a group of persons” is not currently mandated in legislation. Flexibility is necessary to ensure that the membership of every group reflects the factors relevant to an occupation. Specifying in the Bill that a group must always include a particular voice would introduce new and unnecessary constraints on the structure of groups.

To conclude, this Government are committed to transforming the skills system so that it can deliver the highly skilled workforce that our country needs. Skills will power this Government’s relentless focus on delivering our mission. That is why this Government’s first piece of educational legislation paves the way for Skills England to identify and fill skills gaps.

Question put, That the clause be read a Second time.

20:44

Division 161

Ayes: 168

Noes: 302

New Clause 4

Creation of Skills England

“(1) A body corporate known as Skills England is established to carry out the functions transferred to the Secretary of State under this Act.

(2) At the end of a year after the passing of this Act, the Secretary of State must make regulations transferring to Skills England all the functions transferred from the Institute for Apprenticeships and Technical Education under this Act.

(3) Nothing in this section prevents the Secretary of State from transferring more functions to Skills England under other enactments.” —(Neil O’Brien.)

This new clause would put Skills England on an independent statutory footing rather than as part of the DfE. The role of IfATE would be included in that planned for Skills England.

Brought up, and read the First time.

Question put, That the clause be read a Second time.

20:58

Division 162

Ayes: 167

Noes: 306

21:10

Proceedings interrupted (Programme Order, 25 February).

The Deputy Speaker put forthwith the Question necessary for the disposal of the business to be concluded at that time (Standing Order No. 83E).

Clause 12

Commencement

Amendment proposed: 6, page 5, line 6, leave out subsections (1) and (2) and insert—

“(1) This Act comes into force at the end of the period of one year beginning on the day on which Skills England is created.”—(Neil O’Brien.)

Question put, That the amendment be made.

21:11

Division 163

Ayes: 166

Noes: 305

Third Reading

21:23

[Janet Daby]

I beg to move, That the Bill be now read the Third time.

We are on a mission to deliver strong and sustainable economic growth and to break down the barriers to opportunity. Skills will power this mission-driven Government and our plan for change.

I thank Members across the House for their contributions. I especially thank members of the Bill Committee for their scrutiny; the hon. Member for Christchurch (Sir Christopher Chope) and my hon. Friend the Member for Sheffield Brightside and Hillsborough (Gill Furniss) for chairing the Committee; and my hon. Friends the Members for Newton Aycliffe and Spennymoor (Alan Strickland) and for Lewisham North (Vicky Foxcroft) for their crucial work in guiding the Bill through Committee and the other House of Commons stages.

The Bill has benefited from scrutiny both in this House and in the other place. I welcome the broad support for the creation of Skills England and its work. It is clear that we are united in our recognition of the need to develop a world-leading approach to skills. It is vital if we are to build the highly skilled workforce that we need to meet today’s challenges and grasp tomorrow’s opportunities.

We need skills to get Britain building; we need skills to deliver energy security; and we need skills to advance AI and increase productivity. We need to improve the quality and availability of training to give people from all backgrounds from across the country the power to seize opportunities and improve their lives and their family’s lives. That is why this Labour Government’s very first piece of education legislation will pave the way for Skills England.

According to employers, over one third of vacancies in 2022 were due to skills shortages. This must change. We need to move fast to identify and plug skills gaps in the economy. The Bill is a crucial step in delivering this change. Skills England will combine for the first time insight into skills gaps with the development of technical education to meet the gaps, and the network will ensure that skills needs can be tackled across the country. Skills England is already making a difference. It is changing the way skills gaps are identified and how key organisations are working together to fill them.

This Government are ready to go. As soon as the Bill passes, Skills England stands ready to take forward its work as a strong, coherent, single organisation. Delay is not an option. We must act and we will act. We are acting now. I commend the Bill to the House.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the shadow Minister.

21:26

[Neil O'Brien]

I have already read out quotes from employers and those in education and the public service warning about the problems building up in the skills system because of the decisions the Government are making. This evening the Government have decided not to listen to some of the wise people on their own side, including a former education Minister, but I hope that they will listen to the hon. Member for Stoke-on-Trent Central (Gareth Snell), because they are on the edge of making a huge mistake by butchering higher apprenticeships —a huge mistake that they will live to regret. They are not listening to their own Members this evening, but I hope that they will in the future.

Question put, That the Bill be now read the Third time.

21:27

Division 164

Ayes: 304

Noes: 62

Bill read the Third time and passed.