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

Baroness Finn Excerpts

2nd reading
Tuesday 22nd October 2024 Lords Chamber

[Baroness Finn (Con)]

My Lords, I congratulate the noble Lord, Lord Beamish, on an excellent maiden speech, which was both informative and entertaining, and I thank the Minister for her exposition of the rationale for this Bill. While I applaud the ambitions for Skills England—our country must obviously have the right skills to meet the challenges of modernity— I wish to provide some gentle warnings of the risks that I fear will inevitably arise with the Government’s approach.

First, I readily accept that, despite the previous Government’s best efforts, skills shortages remain a challenge for the UK, as for most developed economies. Despite record participation rates in higher education, a generously funded apprenticeship scheme and soaring levels of net migration, skills shortages remain. I sympathise entirely with the Government’s desire to act to shore up skills gaps.

The last Government had considerable success with their reforms to apprenticeships, and the Institute for Apprentices and Technical Education—IFATE—was set up as part of those reforms. Its purpose was to be independent of Government and to represent employers in setting standards for technical qualifications. It succeeded through instilling confidence in the integrity of apprenticeship standards. Employers are fundamental to the input of the qualifications they need in the workplace.

I pay tribute to the chair, the noble Baroness, Lady McGregor-Smith, and her team for the work of IfATE. It has, among other successes, created and maintained around 690 apprenticeships, which supported around 750,000 people on apprenticeships last year. It created 21 T-levels and 174 higher technical qualifications, and enabled 120 employer leaders to set strategic direction for skills in their sector. Perhaps the best assessment of IfATE comes from apprentices themselves. A national survey found a 90% satisfaction rate with IfATE from apprentices who had completed their apprenticeships—what other part of government can report a 90% satisfaction rate?

Established in statute, IfATE has an independent chair and a board that afford a certain distance from the Department for Education. The chair of IfATE is independent of the department, while ultimately remaining accountable to the Secretary of State. This governance arrangement has been key to instilling confidence among employers and being able to galvanise others in support of the standards that IfATE sets. However, Skills England is to be an executive agency of the Department for Education. Under the Government’s proposals, Skills England will report to a senior official in the DfE. In my view, this change in status is both critical and presents significant risks.

In all so-called arm’s-length bodies, there is a hand at the end of the arm. This hand exercises a certain amount of control depending on how the body is set up. The Bill will place far greater control in the hands of officials, rather than employers, in setting and ensuring the rigour of future standards.

This concern is borne out in Clause 4, which gives the Secretary of State, or the officials reporting directly to her, the power to prepare apprenticeship standards herself or to commission others to do so. David Kernohan, in a recent article, highlighted the issue thus:

“This tweak makes it technically possible for an apprenticeship standard to be prepared without the input of employers, providers, industry groups or indeed anyone. The Secretary of State could knock out an apprenticeship standard while bored on a train provided she is ‘satisfied that it would be more appropriate for the standard to be prepared by the Secretary of State than by a group of persons’”.


Such wide-ranging powers lead to genuine concerns that the Bill could decrease the standards of technical qualifications.

Clause 6 removes the IfATE requirement that reviews of approved technical qualifications should happen at regular intervals. The reason given in the Explanatory Notes is that this is

“to enable flexibility to review standards according to priorities and employers’ needs”.

Can the Minister explain why a statutory requirement for regular reviews of the suitability of qualifications is to be replaced by such a broad discretion? Would she also be able to provide some clarity on who will decide these priorities and how the decision-maker will determine “employers’ needs”?

As my noble friend Lord Effingham highlighted, the new skills foundation will give increased influence to trade unions, with Sue Ferns, senior deputy general secretary of the union Prospect, arguing that:

“Skills England … won’t achieve its objectives without engaging and involving trade unions at every level”.


Although trade unions play an important part in the workplace, they should not be allowed to push out employers and exercise a disproportionate influence on the standards and formation of qualifications. There is a very real danger that a successful organisation such as IfATE could be subsumed in a new Skills England and become merely a convening body for interested parties.

On the levy, Ms Ferns has called for flexibility and argued that it

“must extend beyond a demand-led model”.

While I appreciate that she does not speak for the Government, I wish to express my alarm that anything other than a demand-led model is appropriate for solving a skills shortage. Such an approach would imply that Skills England is at risk of taking on the role of a central planner for skills—an approach that Governments long ago experimented with and which I hoped had been consigned to the dustbin of history.

I close by acknowledging the scale of the challenge facing the Government. Skills shortages arise in almost every advanced economy and there is a wide variety of tools by which government can contribute to meeting this unmet demand for skilled workers. My fear is that Skills England assumes, philosophically, that the state knows best. One need look only at the alarming number of skilled vacancies within the National Health Service and the startling paucity of specialist skills within the Civil Service to recognise that the Government are not best placed to fill skills shortages among those they directly employ, let alone those they do not.

IfATE may not be perfect, but it has gone a long way towards remedying many of the underlying problems. I urge the Minister to give careful thought to whether a governance arrangement that places so much discretion in the hands of civil servants is one that is likely to best meet the needs of our economy.