Technical and Further Education Bill

Kelvin Hopkins Excerpts

Ping Pong: House of Commons
Wednesday 19th April 2017 Commons Chamber

[Robert Halfon]

This Bill was introduced to transform the prestige and culture of technical education, providing young people with the skills that they, and our country, need. It provides necessary protection for students should colleges get into financial difficulty, and ensures that the most disadvantaged are able to climb the ladder of opportunity. It left this House after thoughtful scrutiny and, after similar diligence in the other place, I am delighted that it returns for consideration here today.

I ask hon. Members to support the Government on all amendments made to the Bill in the other place except amendments 1 and 6, where we have tabled an amendment in lieu. Amendment 1 impinges on the financial privilege of this House. I urge the House to disagree to that amendment and will ask the Reasons Committee to ascribe financial privilege as the reason.

The amendment, costing more than £200 million per year by financial year 2020-21, would mean that the parents of apprentices aged under 20 would continue to be eligible for child benefit for those young people as if they were in approved education and training. It is an issue in which I have a great interest. Apprenticeships provide a ladder of opportunity, and we should seek to remove obstacles to social mobility wherever we can.

A young person’s first full-time job is a big change for them and for their family, and it marks a move into financial independence that should be celebrated. I know that the adjustment can be challenging for the young person learning how to manage a starting wage and new outgoings and for parents who may experience a fall in income from the benefits they previously received for that dependent child. One of the core principles of an apprenticeship is that it is a job, and it is treated accordingly in the benefit system. It is a job that offers high-quality training and that widens opportunities. Moreover, more than 90% of apprentices continue into another job on completion. Most apprentices are paid above the minimum wage. The 2016 apprenticeship pay survey showed that the average wage for all level 2 and 3 apprentices was £6.70.

[Kelvin Hopkins (Luton North) (Lab)]

Although what the Minister is saying is correct, in that those apprentices will be paid, taking child benefit away from low-income families will be a disincentive for them to take up apprenticeships. Those families will be pressed to stay in education so that they can continue to get child benefit. Is that not the case?

[Robert Halfon]

The crucial point is that the vast majority of level 2 and 3 apprentices are paid more than £6.30 an hour, and 90% of them go on to jobs or additional education afterwards.

The apprenticeship programme already supports low-income groups. The funding system gives targeted support to the participation of care leavers, and this year we are making £60 million available to training providers to support take-up by individuals from disadvantaged areas. We are committed to ensuring that high-quality apprenticeships are as accessible as possible to people from all backgrounds. We will take forward the Maynard recommendations for people with learning difficulties and our participation target for black and minority ethnic groups.

With regard to the amendment’s suggestion of a bursary for care leavers, I understand that some young people have greater challenges to overcome. That is why we are providing £1,000 to employers and training providers when they take on care leavers who are under 25. We will also pay 100% of the cost of training for small employers who employ care leavers. There is scope for apprenticeships to benefit social mobility even more. We are working across Government to use the apprenticeship programme to extend opportunities.

I am grateful to Lord Storey for tabling Lords amendment 6, which introduces a new clause into the Bill to require Ofsted to take into account the quality of the careers offer when conducting standard inspections of further education colleges. I welcome the work that Ofsted has already done to sharpen its approach. Matters relating to careers provision feature in all the graded judgments made by Ofsted when inspecting FE and skills providers. Destination data—published in 16 to 18 performance tables for the first time this year—are also becoming an established part of college accountability. Those are important steps.

I pay tribute to the good work that is already being done throughout the FE sector to prepare students for the workplace. Ofsted’s annual report for 2015-16 cites the excellent work of Derby College, which has set up employer academies so that learners benefit throughout their course from a range of activities, including workplace visits, talks from specialist speakers, masterclasses and enterprise activities. However, Ofsted noted in the same report that the quality of information, advice and guidance in FE providers can vary and does not always meet the full range of students’ needs. That is why I want us to take this opportunity to go further.

Lords amendment 6 signals our determination to ensure that every FE student has access to good-quality, dedicated careers advice, which I know this House supports. That is vital if we are to tackle the skills gap and ensure that we make opportunities accessible to everyone. We have proposed some drafting changes to the amendment to ensure that it achieves its intended effect. The amendment makes it clear that in its inspection report Ofsted must comment on the quality of a college’s careers provision. I urge hon. Members to accept the amendment. FE colleges are engines of social mobility, and this is our chance to ensure that students from all backgrounds can access the support they need to get on the ladder of opportunity and to benefit from the best skills education and training.

I will now turn to the amendments that the Government are asking the House to accept without any further amendment. The Government support Lords amendment 2, which requires schools to give education and training providers the opportunity to talk directly to pupils about the approved technical education qualifications and apprenticeships they offer. I would like to place on the record my significant gratitude to Lord Baker of Dorking for tabling the amendment, and for his unstinting support for the Government’s technical education reforms. As I have explained, high-quality careers advice is the first rung on the ladder of opportunity and will play a key part in realising our ambition for high-quality skills education and training. The amendment will strengthen the Bill by ensuring that young people hear much more consistently about the merits of technical education routes and recognise them as worthy career paths. I urge the House to agree to it. I hope that never again when I go around the country will I meet an apprentice who was refused access to the school they were taught in to talk about apprenticeships.

Apprentices: Financial Support

Kelvin Hopkins Excerpts

Wednesday 8th March 2017 Westminster Hall

[Kelvin Hopkins (Luton North) (Lab)]

I beg to move,

That this House has considered financial support for apprentices.

It is a great pleasure to serve under your chairmanship, Ms Ryan, and to introduce this important debate about apprenticeships and funding for apprentices.

Well-trained and highly skilled workers are vital for our economy, and for too long the apprenticeship route has been neglected. For years—decades even—apprenticeships and apprentices have been underfunded and poorly paid. That must change if we are to provide our economy with the skills that it needs and young workers with the opportunities and rewards that they deserve.

The Government have made some moves to boost apprenticeships, but those are too little and inadequate. Not only are apprenticeships under-resourced, but businesses, those with sector skills, universities and colleges have raised real questions about the potential quality of the new apprenticeships. Young people will be doubly disincentivised if both the incomes that they receive and the quality of their courses and experience are not sufficient.

The Government have set an arbitrary target of 3 million apprenticeship starts by 2020 and have introduced a 0.5% apprenticeship levy for any company with a payroll of more than £3 million a year. There has seemingly been little focus on the quality or content of those apprenticeships, potentially leaving young people without the high-calibre skills that they should be able to expect.

I have personally been concerned about the skills deficit in British industry since the 1980s and wrote much about the problem in those days. Research in the 1980s and 1990s by the National Institute of Economic and Social Research, led by Professor Sig Prais and others, drew comparisons with workers in continental Europe, notably Germany, and found Britain wanting. Maths skills were especially poor in Britain, and that remains a problem today.

In more recent times, the proprietor of an engineering company in Bedfordshire—my own county—has complained that he cannot find the employees he needs, despite repeatedly advertising. A motor industry supply chain manufacturer in my constituency could not find a single toolmaker in a town that used to be dominated by manufacturing, which employed many tens of thousands. We need to do better across all fields, not just in manufacturing.

Some comparisons are especially significant. Research by the National Union of Students and The Times Educational Supplement suggests that, in contrast to the benefits and finances available to higher education students, apprentices are being hung out to dry and treated like “second-class citizens”. Some apprentices earn as little as £3.40 an hour. They are also excluded from a number of means of support available to their counterparts studying in further education institutions.

[David Simpson (Upper Bann) (DUP)]

One issue that we face in Northern Ireland on apprenticeships is that 20 young people might start a course, but less than one third will finish it, whether they be electricians, joiners or plumbers. In the hon. Gentleman’s opinion, is that down purely to finances, or do we have to find another way of incentivising young people to finish their courses?

[Kelvin Hopkins]

I thank the hon. Gentleman for his intervention. I will touch on the issue of drop-outs later, but he is right that finances are a significant problem.

The research shows that a college student with one child could be eligible for more than £10,000 a year in financial support, and the families of such students could receive thousands more, but apprentices, including those on the minimum wage, earning as little as £7,000 a year, are not entitled to any of that. The Department for Work and Pensions does not class apprenticeships as “approved education and training”, and that affects the benefits that apprentices can receive. Specifically, when a young person takes up an apprenticeship, their family will become ineligible to claim child benefit and child tax credit. Further education students between the ages of 16 and 19 could be eligible for either a £1,200 a year vulnerable student bursary or a discretionary bursary. No bursaries are available for apprentices.

In many areas, students enjoy concessionary or discounted travel to college or university. For apprentices, there are some discounts, but only for the first 12 months of an apprenticeship and only for those apprenticeships leading to a serious qualification.

[Dr Daniel Poulter (Central Suffolk and North Ipswich) (Con)]

I congratulate the hon. Gentleman on securing the debate. He will be aware that, in the east of England, many apprentices work in farming or in the land economy and often have to travel long distances to work and to the agricultural colleges that provide some of the additional training for apprenticeships. Does he agree that that group might be deterred by the additional travel costs, because the car is the only option for those apprentices?

[Kelvin Hopkins]

I thank the hon. Gentleman for his intervention; that is the point I am making. According to the NUS, the average apprentice spends £24 a week on travel.

Parents of students are eligible for child benefit of up to £1,066 a year for the oldest child, but parents of apprentices are not eligible for child benefit. Parents of students are also eligible for child tax credit of £2,750 a year and up to £3,324.90 a year for the first child under universal credit. Parents of apprentices are not eligible for either child tax credit or universal credit for them. Care to learn grants are available to student parents but not apprentice parents. Those amount to £160 per child per week. Students are often offered bank accounts with such benefits as an interest-free overdraft; those are not available to apprentices. Finally, students are entitled to either a full exemption from, or a discounted rate of, council tax. That is available only to some very low-paid apprentices taking a course leading to a recognised qualification.

One effect of the travel costs is that some young people do apprenticeships that involve shorter travelling distances, in preference to the apprenticeships that they really wanted to do. With all the comparative financial disadvantages, it must be the case that some young people for whom an apprenticeship might be appropriate and the best route to qualifications and skilled employment are persuaded to take other courses of study, as students rather than apprentices. There may even be pressure from their families to do so. That is more likely in less affluent families.

Then there is the question of diversity. The Learning and Work Institute points out that people from black, Asian and minority ethnic backgrounds are half as likely as other young people to secure access to apprenticeships. Women, too, are more likely to be apprentices in low-paid sectors, entrenching the gender pay gap, and young people eligible for free school meals are up to half as likely to undertake advanced apprenticeships. Those significant equality issues must be addressed. There is also a regional dimension: 40% of the firms that will pay the apprenticeship levy are based in London and the south-east.

Colleges play a major part both in educating young people and in supporting apprentices, but the Association of Colleges is concerned that the Government’s 3 million target could drive quantity over quality, and the Government’s existing approach to financial support means that many young people from disadvantaged backgrounds face barriers to accessing apprenticeships, with a key reason for students dropping out being the lack of financial assistance.

I have laid out some of the significant problems holding back apprenticeships, most of which are financial. I could spend much longer dwelling on some of the other disadvantages, but other hon. Members will wish to add to what I have said, so I shall soon conclude. The Opposition sought to make changes to the Technical and Further Education Bill in Committee and on Report, and I had the pleasure of serving on the Committee and making a contribution there, too. However, it is now in the Government’s hands to address all the problems, to make better financial provision for apprenticeships, to better fund our colleges and to incentivise employers to sustain apprentices and apprenticeships. That is vital for our young people and vital for our economy, and I ask the Minister to respond positively to what I have said.

--- Later in debate ---

[Marion Fellows]

To that end, a lot of money from the Scottish Government is going to local colleges that are mandated to work with local employers. As I said, I have previous experience of this area. Now the focus has moved from being on when a large company goes bust and people need retraining, to getting business owners and companies in and saying, “What is it that you need?” and then planning courses around that.

[Kelvin Hopkins]

It is not for me to praise the Scottish National party or the Scottish Government, but is it possible that the British Government serving England and Wales could learn something from Scotland?

[Marion Fellows]

Of course I agree with that. In this case, there is a lot to be learnt because of the positive way forward and how the Scottish Government understand and realise the necessity of training a highly skilled workforce to move us forward with lots of economic opportunity. We have a different agenda—I will not go into that now—but it is important for economic growth that every country looks at how it best trains and prepares.

As a former further education lecturer, I understand only too well the difficulties young people have when they are in any kind of education, and how important it is that they are properly resourced. It is also true in Scotland that apprentices do not fare quite as well as others. Although the rates are higher, they have the same issues and do not qualify for some things—again, that is a DWP issue to do with child benefit and so on. I would like the Minister to look at that because it is important.

I am the product of an academic route, as are many people in this room. I know the academic route does not suit everyone, and even if someone goes down the academic route, it does not always guarantee them a job. In Scotland we have the graduate apprenticeship scheme, which is proving really useful because it gives people real, hands-on experience and makes them much more employable. The whole idea of apprentices being cheap labour, serving their time and then being paid off has to end.

[Kelvin Hopkins]

I thank the hon. Lady for giving way again and apologise for interrupting her speech. Like her, I used to teach in further education and one of the problems that occurred was young people being pressurised by parents to stay in inappropriate education courses because it was financially advantageous for them to do so. Such students were not only in the wrong courses, but unhappy in the courses and sometimes disruptive in class because they were not meant to be there. Will the hon. Lady comment on that problem?

[Marion Fellows]

I also have experience of that. For funding, the students had to be kept in colleges, but I used to do a lot of student counselling and I would counsel them to finish the course, even if they did not like or enjoy it, so that they could then move on to other employment and say, “Look, I hated this. I absolutely hated it, but I got there.” That shows proof of purpose and the fact that they can learn.

It is vital that across the UK we look at apprenticeships in a totally different light. This goes back to what I said earlier. Apprenticeships should not be cheap labour, but should be seen as a progressive and forward-looking thing for parents to consider. From my experience on the Education Committee, I know that there is often a real dearth of good careers advice for young people in schools; students are channelled into the academic route and schools want to promote that, and there is not enough good careers advice to show that some young people, especially those who are less academic, would benefit from a career starting at 16, 17 or 18.

Some of the young people I spoke to yesterday were highly qualified and had very good A-levels, but their peers and some of their families were horrified that they had not gone to university. They had chosen that route within the building and architecture sectors; it is an interesting and wide-ranging course, and those young people saw it as what they wanted to do. We need more of that across the UK.

When I studied to be a further education lecturer, I did a comparative education course. I looked at Germany, which the hon. Gentleman referred to, where there is true parity of esteem between the academic and non-academic routes, and that is reflected in the funding as well. We really need to promote that view across the entire UK. Apprenticeship is not a second chance or second choice, but is something we should actively encourage our young people to do because it will lead to good, well paying jobs that benefit the economy.

--- Later in debate ---

[Gordon Marsden (Blackpool South) (Lab)]

It is a great pleasure to serve under your chairmanship, Ms Ryan, and to speak in this debate in the middle of National Apprenticeship Week. I begin by paying warm tribute to my hon. Friend the Member for Luton North (Kelvin Hopkins) and congratulating him on securing the debate. He has modestly mentioned before, and again today, his experience in this area. Colleagues who served with him on the Public Bill Committee for the Technical and Further Education Bill—new colleagues in particular— will have recognised his breadth, depth and wealth of experience in this area, having been an FE tutor, a governor, and a chair of the all-party group on further education and lifelong learning. Latterly, as the Minister and I know, his contributions in that Bill Committee were excellent.

I am delighted to take part in the debate. This week is an opportunity for all MPs, regardless of party, to celebrate the tens of thousands of individual successes—from young beginners to older workers acquiring new skills, and the successes of the colleges, training providers and employers who inspire them. I was privileged to speak yesterday at the celebration of apprenticeships conference, which was organised by Lindsay McCurdy and her team from Apprenticeships 4 England to pay tribute to the huge number of talented and hard-working apprentices up and down the country.

[Kelvin Hopkins]

I thank my hon. Friend for his kind words. When apprenticeships are successful, many apprentices go on to have highly skilled jobs, overtaking even those who have been to university, including graduates, and they are ahead both in promotions and earnings by the time university students get started.

[Gordon Marsden]

My hon. Friend makes an excellent point, which could reverberate usefully around the Chambers of this place thanks to individual MPs and Ministers—I know that the Minister who is here today talks about that frequently. Those who pursue that route of learning while they are earning, to use that phrase, can be enormously successful.

As Members know—including those of us who have sat on Select Committees, where we listen to hours and hours of discussion, debate and evidence—sometimes little things stick with us. I remember well something that happened 10 years ago, although the illustration is still relevant. I worked on a Select Committee inquiry comparing apprenticeships with higher education. We heard from a young man who worked at BAE Systems. He was not my constituent but came from a neighbouring constituency. I will not mention his school—it was outside Preston—but he said, “When I was at my secondary school, most of my mates ended up going to university and I did not feel that I either could or would. They used to say that I was a bit of thicko, but I got this apprenticeship with BAE Systems.” He spoke about where he was in the process, and of course BAE Systems supported him through his degree. He also said, “I will have the last laugh on them, because I will come out with a very skilled job and a degree, and no student debt.”

Today is not the day for me to engage in discussing spiralling student debt, least of all with a Minister who is not responsible for it, but that point is important. The more that the costs of higher education rise, the more important it is to get the message across to people that it is not a question of having apprenticeships or higher education. The two can dovetail extremely well, but to do so, people need the financial support and encouragement that we are debating today.

I was very happy to speak at the celebration of apprenticeships conference. On Monday I also met people from the motor industry, which has been effective and successful in this regard. We talked about the sector skills council that is associated with it—the Institute of the Motor Industry—and the Society of Motor Manufacturers and Traders. The industry has been very successful in supporting Government programmes such as the apprenticeship trailblazers, and in giving apprentices support—sometimes financial support and sometimes information, advice and guidance. There are some very bright sparks in a number of different sectors.

[Kelvin Hopkins]

My hon. Friend mentions the motor industry. Vauxhall is a leader in that industry, and I know Vauxhall well, being from Luton. In recent years it has encouraged young people from local schools and colleges to tour the factory to see what life is like in manufacturing, and it has recruited new apprentices. Vauxhall found that its workforce was ageing, but now it is getting younger again, because it is taking in many more young apprentices and is showing the way forward for positive companies. If other companies were as positive as Vauxhall, we might do rather better.

[Gordon Marsden]

My hon. Friend makes an excellent point. It is about the process involved, and I will talk later about the barriers to doing that sort of thing that young people experience in schools, for instance. It is important that various sectors act.

I have talked about the importance of the motor industry, but there is also the service industry. That raises questions not only about support but about the many opportunities available. I mentioned Apprenticeships 4 England and Lindsay McCurdy. Last year she brought a great bunch of apprentices, including a talented group of young apprentice hairdressers from Michaeljohn Training in Manchester, to a meeting that I sponsored in one of the Select Committee rooms. As an apprenticeship week present, they presented me with a very lifelike model head—I still have it on my office shelf—to demonstrate their skills in colouring and styling. One of these days, if I am feeling mischievous, I suppose I might ginger up the occasional official or other policy maker who seems to think that the route to successful jobs and apprenticeships is simply through higher-level manufacturing, digital or technical areas. The truth is that if we are to achieve the 3 million target, which the Minister and his colleagues are so keen to hit, and really expand the opportunities for young people, we will need the service sectors just as much as we need manufacturing and other sectors.

Oppositions do not get much opportunity to blow their own trumpet about success stories, so I shall. I am very proud of the fact that the last Labour Government introduced the National Apprenticeship Service and, indeed, National Apprenticeship Week in 2008. They also revived apprenticeships, taking them from 65,000 starts in 1996-97 to 279,700 by 2009-10. Those increases have continued under successive Governments.

The last Labour Government also linked the creation of apprenticeship placements to public sector contracts across a range of Departments and projects, including Crossrail. Such infrastructure projects will remain a crucial conduit for apprenticeship expansion, as I have said. As well as financial support, informal encouragement is extremely important for widening the diversity of the apprentices who take part in those great projects. I was fortunate enough to see that two years ago when I went down the construction tunnel at Farringdon and saw some of the people working on it. They were young Londoners, including a couple of young women and a young man from a BME community who had started off selling ad space and was now proud of his tunnelling qualifications. It is worth remembering that 60% of the construction work on Crossrail is outside London, so there is a lot of scope in the supply chain for many more opportunities for young people. Projects such as Crossrail and its commitment need to become a vital part of our regeneration and productivity across the UK.

[Gordon Marsden]

My hon. Friend makes an excellent and highly relevant comment. I remember having the same experience many years ago when I served on the Advisory Committee on Works of Art, looking into the repair of stuff in this place. The project is important because a lot of bespoke skills will be needed, not least those relating to architecture. There are some very challenging issues—logistics, wiring and God knows what else—that will potentially engage a whole gamut of people.

That is what it is all about; it is about economic impact, but it is also about improving the careers and life chances of hundreds of thousands of young people—and, indeed, older people. We talk a lot about apprenticeships, but we have not always talked enough about apprentices and their individual issues and challenges. The need to increase the focus on improving access and social mobility, which I know the Minister feels strongly about, as I do, is a crucial part of the equation.

My hon. Friend the Member for Luton North has already referred to the Government’s continuing failure to address or understand apprenticeships. The fact that the Department for Work and Pensions does not class apprenticeships as approved education or training is leaving many individuals and families thousands of pounds worse off. I pay tribute to a survey that appeared in The Times Educational Supplement on 10 February under the headline “Apprentices ‘treated like second-class citizens’”. It was carried out by the National Union of Students, via the National Society of Apprenticeships, which it sponsors.

My hon. Friend read an important but slightly dispiriting list of the ways in which apprentices are financially disadvantaged in comparison with students. If the Government hope to reduce the growing skills gap in this country with a push to create 3 million apprenticeships, why are apprentices and apprenticeships not included as approved education or training? There has been spirited discussion about that in the House of Lords recently, which I will come on to shortly. The Government need to make progress on this.

The Times Educational Supplement article states:

“Research by the NUS and TES has revealed that…some apprentices earn as little as £3.40 an hour”.

That figure will rise to £3.50 in April. There is a separate issue, which we probably do not have time to discuss in detail today, about how many more employers could go the extra mile, over and above the existing rate. That rate can sometimes be particularly difficult for younger apprentices to exist on, given their personal family circumstances.

[Kelvin Hopkins]

I hope my hon. Friend does not mind my interrupting his flow. He talks about companies; one of the problems with companies, particularly small companies, is that they sometimes have short lifespans and then apprentices are lost. The great advantage of big projects such as Crossrail—which I, too, have visited and been impressed by—is that they give long-term certainty to apprentices, who spend a long time doing a job and then come out with a lot of experience and with high skills that set them up for the future. We have to try to focus apprenticeships on those areas in particular, so that apprentices do not lose out and suddenly find themselves unemployed and having to get a job without skills.

[Gordon Marsden]

I hear what my hon. Friend says. He is absolutely right about the contribution that larger employers and large long-term projects can make. However, we are all products of our individual constituency circumstances and experiences. My experience as a Member of Parliament in Blackpool is that, although a lot of people go and work for large organisations outside Blackpool, such as BAE Systems, there are also a huge number of very small businesses and microbusinesses. In my experience, if we can engage small and medium-sized employers, particularly in areas where there is a close-knit SME community—there are obstacles to doing so, such as hiding the wiring for them and ensuring that there is back-office support, but they are outwith the debate—those SMEs are sometimes the best advocates for other colleagues and small businesses taking them on board. I think it is about both, not either/or, but my hon. Friend is absolutely right to point out the importance of the support that can be given by those organisations and the supply chains that contribute to them.

The article about NUS research states:

“Disadvantaged apprentices are missing out on thousands of pounds in support available to students”.

The National Society of Apprentices took up that point in its written evidence to the Technical and Further Education Bill, which stated that

“upon taking up an apprenticeship, a young person’s family will become ineligible to claim child benefit and child tax credits. This will inevitably have a negative impact on that family’s household budget, which is not covered by the earnings made by an apprentice’s salary given the apprentice minimum wage is barely over £3 per hour”,

as it was at the time.

Shakira Martin, the extremely active and feisty—I say that with approval—NUS vice-president for further education, has elaborated on that point. The article quotes her as saying that

“the idea that apprenticeships were a desirable way to ‘earn while you learn’ was ‘far from the truth’”.

She said:

“Apprentices are treated like second-class citizens, as workers and as learners. Financial support like Care to Learn [for apprentice parents], and Child Tax Credits for parents of apprentices, is not available…If apprenticeships are going to be the silver bullet to create a high-skilled economy for the future, the government has to…support apprentices financially to succeed.”

Otherwise, we will fail to capitalise on the benefit of expansion.

In the update that it circulated to Members today before the debate, the NUS elaborated on that point: “Apprentices are not necessarily eligible for council tax exemptions in the same way as other students. While those paid under £195 a week are exempt, many are unaware of this. Often councils do not advertise this discount on their website, and we are increasingly becoming aware of apprentices being wrongly charged council tax. Additionally, one of the implications of the apprenticeship reforms is that fewer apprentices will be eligible for this discount, not because they are being paid more, but rather”—this is a really important point that I would like the Minister to grasp—“because apprenticeships are no longer required to include a qualification which is necessary for the exemption. Apprentices earning over this amount are obliged to pay council tax.”

I referred earlier to the fact I had spoken at an event on Monday organised by the Society of Motor Manufacturers and Traders, the Sector Skills Council for Science, Engineering and Manufacturing Technologies, and the Institute of the Motor Industry. That event was preceded by a seminar in which there was discussion of all aspects of the apprenticeship levy, the introduction of the Institute for Apprenticeships and so on. One thing that came out, both in informal conversations and in the speeches that were made at that event, was how worried and concerned a body of employers remain about the issue of qualifications not being properly included, from their perspective, in the new standards that have come out of the skills plan and the Sainsbury review. That is a vexed issue, and I would not expect the Minister to want to dilate in detail on it today, but if he has not heard about it already from people in the industry, I am sure that he will hear about it presently.

I do not want to go on too long about this particular aspect, but it is crucial. I refer again to the debate held in the Lords on 27 February as part of the proceedings in Grand Committee on the Technical and Further Education Bill. My colleague, Lord Watson of Invergowrie, pressed the Government on this issue and tabled an amendment. Baroness Buscombe, the Front-Bench spokesperson who spoke on behalf of the Minister in the other place, said that some of the issues that had been raised were outwith the scope of the Department for Education. She was right; they are, because they are Department for Work and Pensions issues, and indeed the issues around council tax are for the Department for Communities and Local Government. Of course, that does not stop Ministers in either House having discussions with their colleagues in other Departments.

Baroness Buscombe also said that she could not change the definition of apprentices. As one or two Members of the Lords asked, if the Government cannot change it, who can? Perhaps the Minister could change it. If he cannot do so, or does not feel that it is his role to do so, powers could be given to the Institute for Apprenticeships so that it could change the definition, either by an amendment in the Lords, or in the Commons if any amendments come back from the Lords for us to discuss further on the Floor of the House. Or, I would argue, that could be done by delegated legislation. I will leave it at that, but I would like the Minister to consider some of those issues, because they are quite significant.

The Association of Colleges is also concerned about the discrepancy between the current national minimum hourly wage rates of £7.20 for those aged 25 and over and only £3.40 an hour for apprentices. Someone aged 22 in the first year of an apprenticeship is entitled only to that apprenticeship rate, whereas in any other area they would be entitled to the minimum hourly rate of £6.95 for 21 to 24-year-olds. That is a disincentive, which is an issue we really need to take on board. I think the Minister and I share common ground on this, but I believe that attracting more 19 to 24-year-olds into apprenticeships is extremely important, because many of them have life skills that 16 to 19-year-olds do not possess. However, many of them have had difficult circumstances that have meant they have not been potential apprentices. If they come from that sort of background, the financial disincentive—the disparity that I have set out—is really significant.

The National Society of Apprentices has said that the existence of a low apprenticeship national minimum wage is unnecessary and complicated for both apprentice and employer. It says that it is possible for someone to be on three different minimum rates during a four-year apprenticeship. That increases the risk of accidental underpayment of apprentices—that is a concern for employers—and apprentices have said that it demeans the value of the work that they contribute.

The Minister will be relieved to know that I am coming to the end of my section on finance issues. Of course, this is a good day to discuss finance, because we have the Budget coming up later. There may be nothing in the Budget about these issues—I am not expecting a last-minute conversion between now and half-past 1—but in all seriousness, they will continue to concern people, and I hope that he, his colleagues and indeed all of us will continue to press the Treasury hard on them.

As I said, the Government have talked about their apprenticeship programme being as inclusive as possible, which means that we must ensure that the most disadvantaged young people are not put off becoming apprentices. However, a report published by the Learning and Work Institute this week says issues to do with that expansion are not being addressed as strongly as they need to be. Particularly in respect of black and minority ethnic young people and care leavers, we tabled amendments to both the Higher Education Bill—that is outwith this morning’s discussion—and the Technical and Further Education Bill. Those amendments would have ensured that the new Institute for Apprenticeships set targets for improving access to apprenticeships and progression within them. After all, the Office for Students has a mandated responsibility for addressing access issues under the Higher Education Bill, so why does the Institute for Apprenticeships not have a similar responsibility? The Learning and Work Institute has called for the new Institute for Apprenticeships to have that responsibility, and we wholeheartedly agree.

There is also the issue of how people are put off becoming apprentices because of their low-income background. Teach First said in its progress report in 2016 that in every region in England, young people from a low-income background were less likely than their wealthier peers to become apprentices, and it suggested that financial barriers for those from low-income backgrounds were part of that. That is consistent with the finding reported by the Social Mobility Commission that youngsters from poor families took up only 10% of apprenticeships even though they accounted for 13% of those completing GCSEs.

In its briefing for this debate, the AOC said that it fears that the Government’s existing approach to financial support means that many young people from disadvantaged backgrounds face barriers to accessing apprenticeships, which is a disincentive for them in applying for apprenticeships in the first place.

I want to touch on gender issues, which is appropriate on International Women’s Day. The AOC has said that women continue to struggle financially on apprenticeships. A recent report by the Young Women’s Trust showed that women receive an average of £4.82 an hour compared with the male average of £5.85. According to a survey by the Association of Employment and Learning Providers, the proportion of apprentices reporting an increase in pay continues to be dominated by men. Unsurprisingly, therefore, the Young Women’s Trust was concerned by the fact that 16% of women were out of work after their apprenticeship compared with 6% of men. It said that the differences in occupational segregation by gender have hardly changed in more than a decade. For example, the proportion of construction apprentices who are female has only risen from 1% to 2%.

[Kelvin Hopkins]

Of course, one of the problems is that some of the apprenticeships leading on to higher-paid work tend to be dominated by men. However, as my hon. Friend may know, there has been a campaign recently, including a meeting last week, to promote the idea of women in engineering. Does he agree that the Government ought to encourage more women to go into such areas, where they can develop skills and earn much more money?

[Gordon Marsden]

I absolutely agree. To be fair to the Government, I think they have said that on a number of occasions. Nevertheless, if the perception of a pay gap continues, with associated career blockages, into the 2020s, that will play havoc with our aspirations to get far more women into those careers in the first place. That is why in the last apprenticeships debate I asked the Minister about the Government’s equality analysis of the funding changes to apprenticeships last autumn and how we will track improvements in apprenticeships.

People from black, Asian and minority ethnic backgrounds are also under-represented. I know that the recent McGregor-Smith review underlined that point. However, I would like the Minister to say whether it is still the Government’s target to increase BAME apprenticeships by 20%, which was the target set by the previous Government. That is important given the issues we are discussing today.

I do not have time to deal with care leavers in great detail, but when care leavers move into independent living, they often begin to manage their own budget fully for the first time. There are concerns that because of a lack of financial education and financial support, those young care leavers are frequently falling into debt and financial difficulty.

The Minister and I have both talked about the importance of traineeships, but the Government have been silent so far on what we can do to look at the negatives that still exist in the system. We need to know what progress the Department is making on the issue with the Department for Work and Pensions. A major stumbling block for the Minister’s predecessors has been the brokering of a cross-departmental deal that would enable traineeships to be more accessible and inviting for young people and employers. That goes to issues around clawback and jobseeker’s allowance, which I do not intend to talk in detail about today.

Finally, I want briefly to address travel costs. My hon. Friend the Member for Luton North touched on the issue significantly in his speech. The hon. Member for Central Suffolk and North Ipswich (Dr Poulter) made excellent points about the particular problems in rural areas, and our colleagues from the Democratic Unionist party made some good points on that as well. There are two or three areas where financial support is most at risk. We have heard the statistics about £24 a week being spent on travel, which is about a quarter of the salary of an apprentice, if they are earning the national minimum wage.

In the light of the area review process and the creation of the so-called fewer, more resilient colleges, the National Society of Apprentices is concerned that travel time will be too much for some apprentices, which will impede access to certain roles. That echoes some of the issues that the hon. Gentleman and others have talked about. That is why we tried to make changes to the Technical and Further Education Bill in Committee and on Report to enable the institute to take on board the need to improve travel concessions. We have pledged to restore the principles of the education maintenance allowance, which provided so much support for young people’s travel costs in pursuing their studies. Apprentices remain a significant proportion of those affected, with approximately 360,000 at colleges being in that category.

There are other issues and scenarios to consider. What will happen if colleges become insolvent or training providers go bust? The insolvency issue has been an important part of the Technical and Further Education Bill. Where the challenge of college insolvency occurs—hopefully it will be infrequent—that could pile up extra travel time costs for apprentices who have to change their place of study as a result. More recently, the Minister and I attended the session organised by FE Week, so he will know that there have been concerns about large providers going out of business, leaving apprentices with huge loan debts to pay and no qualifications. How do the Government plan to compensate them? I have raised those issues with the Government and the Minister, and he is aware of them.

Careers advice has been touched on, and it is an important issue. It is not directly important for financial support, but young people who get the best careers advice in college or school are more likely to be able to seek out the better apprenticeships, with better support and everything that goes with it.

[Kelvin Hopkins]

The problem with careers advice has been significant for many years. Does my hon. Friend agree that just making young people aware of the possibilities when they are very young—possibly at primary school, but certainly at secondary school—is very important?

[Gordon Marsden]

I absolutely agree. That is why I warmly welcome Lord Baker’s amendment to the Technical and Further Education Bill, which would ensure that schools have to give access to advice about apprenticeships. I also fully support the ten-minute rule Bill tabled by my hon. Friend the Member for Scunthorpe (Nic Dakin)—he was with us briefly at the start of the debate—which would allow businesses and FE providers to go into schools and let students know about the opportunities. I am encouraged by the fact that the new Ofsted chief inspector, Amanda Spielman, who I have spoken to recently, is sympathetic to Ofsted making a much stronger case in ensuring that apprenticeships rate higher in the information given in schools.

Why does that matter for financial support? It matters because in general, knowledge is power. Advance knowledge enables those who have it to be a step ahead in getting better apprenticeships. There will always be excellent employers and sharp would-be apprentices who will be able to access some of the funding, but if we want to make a step change, we have to have major change across Government in how apprenticeships are treated legally and financially. All of us want to make that progress, but it is time to tackle the shortcomings that put so many off apprenticeships or cause them to be dispirited or in trouble and therefore drop out. That must surely be a good thing to do, not simply for National Apprenticeship Week, but for all the year round.

[The Minister for Apprenticeships and Skills (Robert Halfon)]

I congratulate the hon. Member for Luton North (Kelvin Hopkins) on securing this debate. I met him briefly in passing in the corridors of the House last week, and I said I was pleased that he had put in for and got this debate in National Apprenticeship Week. He has an unrivalled knowledge of apprenticeships, skills and further education, and he made a significant contribution to the Technical and Further Education Bill as it went through the House.

I will come on to the issues that the hon. Gentleman raised, but he will know that in his constituency, apprenticeship starts increased by 19% over the course of the previous Parliament, which I am sure he welcomed. Overall, apprenticeships have increased to 900,000, which I think is the highest number on record. He raised a number of issues that I would like to touch on, including resource, equality, the skills deficit, wages, the cost of living—the shadow Minister also touched on that—social mobility and social justice.

Before I start on all those things, the shadow Minister mentioned some of the things he has been doing in National Apprenticeship Week, which is a wonderful week to celebrate apprenticeships. It is very important as one of the rungs on the ladder of opportunity is increasing the prestige of apprenticeships and skills. It goes back to what the hon. Member for Motherwell and Wishaw (Marion Fellows) was saying: unless we increase the prestige of skills, we will have the situations she described.

I met incredible apprentices and young people learning skills at Bridgwater and Taunton College. One was learning to be a luthier to fix violins. EDF apprentices are helping to build Hinkley C. I met older apprentices, including a 47-year-old apprentice who was working for EDF. I met lab technicians doing apprenticeships. I asked to meet the Premier Inn apprentices in the hotel where I was staying in the first two days of my travels around the south and south-west. They were young 23-year-olds doing level 3 or level 4. One was very young and had already become an operations manager. I pay tribute to all those organisations, including the excellent college, the Premier Inn, Sunseeker—I went to visit its apprentices in Poole—EDF Energy and Hinkley Point, and I pay tribute to all the other apprentices I have met so far during National Apprenticeship Week. They show the best of apprenticeships.

The shadow Minister is right that we need to make the distinction between apprenticeships and apprentices. I often get told off for using the word “apprentices” rather than “apprenticeships”. He is looking at the individual, and that is very important. I am glad to see that almost everyone in the Chamber is wearing the new apprentices badge, which we have launched as part of the ladder of opportunity. We believe that apprenticeships offer young people that ladder of opportunity to increase the prestige, to meet our skills needs and to help those with social disadvantage to ensure that we get the jobs, security and prosperity that we need.

[Official Report, 20 March 2017, Vol. 623, c. 9-10MC.]The hon. Member for Luton North said we were not resourcing apprenticeships, but I take issue with him on that. By 2020 apprenticeship spending will have increased to £2.5 billion, almost double what it was in 2010. We have introduced a levy not only to change behaviours but to make sure we have funding for big businesses and small businesses to have apprentices.

[Kelvin Hopkins]

I thank the Minister for giving way. It is a pleasure to listen to him speaking. I said in my speech that the Government have made some moves but not enough. The outcome will be successful if we achieve the number of apprenticeships, trained apprentices and skills that we require for our economy. If that works, what has happened will be enough, but I suspect it is not yet really enough.

[Robert Halfon]

The hon. Gentleman is absolutely right. One of the rungs on the ladder of opportunity is widespread quality provision, which I will come on to. Although we have a huge amount of work to do—and the work is never done—statistics show that roughly 90% of apprentices get a good job afterwards, often in the place where they did their apprenticeship, or go on to additional education, which they may not otherwise have thought of. That is a pretty good sign of the way things are going, but I do not deny there is a lot of work to do.

Within the funding framework, millions of pounds go to employers—I could list them all here—and providers. Special help ensures we do everything possible to incentivise SMEs to take on 16 to 18-year-olds, and they pay no training costs if they have fewer than 50 employees. Huge amounts of money are spent on trying to encourage businesses, employers and other organisations to take on apprentices with learning difficulties and disabilities. Amazingly, in the construction industry, 10% of apprentices have disabilities. I was astonished when I first saw that statistic, which is a credit to the construction industry and shows that the things we are trying to do in terms of incentives for the trainer, provider and employer are having an effect. Given the funding pressures that the country faces, the money that is going into apprenticeships is a significant amount and it is something I strongly support.

The hon. Member for Motherwell and Wishaw said the Select Committee went to Gateshead College, which is an incredible and outstanding place. I went there a few weeks ago as part of the industrial strategy launch. The college embeds careers advice in every single part of the course. It does huge amounts of work for LDD apprentices and huge amounts of work to encourage people into apprenticeships. It is an outstanding college that does a lot of work on mental health. I am glad the Select Committee visited, and our job is to find out how to replicate what the college does across the country.

--- Later in debate ---

[Robert Halfon]

The hon. Lady spoke thoughtfully in a previous debate on apprenticeships in this Chamber. She is completely right. I ask every single apprentice I meet—I have met a few thousand since being in post—“Did you get any apprenticeship or skills advice in your school?” and nine times out of 10 they did not. If they say yes it is usually because they have been to a university technical college or a place that specialises in technical work. That is depressing. I have mentioned before the story that Gateshead College told me about its own degree apprentice students and how the college was not allowed to talk to them about apprenticeships in their schools. It was the same with Heathrow airport and other apprentices I have met. That is shocking. We are reviewing our careers strategy and hope to publish a serious careers strategy in the coming months. We want it to be more focused on schools, and we are looking at the best way to incentivise schools to teach students about apprenticeships and skills, as not enough are doing that.

Women apprentices have been mentioned: 53% of apprentices are female. A survey showed that female apprentices earn more than men, so I do not accept the wage disparity point. However, very few do STEM subjects. If I go to a college that teaches healthcare, the room will be filled with mostly females and there might be one or two men, which of course is fantastic. If the subject is engineering or electrical, it is all men, and that has got to change.

There are enlightened employers. Among the Jaguar apprentices at Warwickshire College, 20% are women. There are lots of other examples of good employers and we need to encourage them, but a lot of that comes from careers advice in schools. I was told by one student yesterday that when they were given careers advice they were shown pictures. All the pictures of engineering jobs showed men and the nursing picture had a woman. That is why we face a problem. It is a cultural problem in our country, and schools need to do a huge amount more to promote apprenticeships. We are doing an enormous amount of work on that. We strongly welcome the Baker amendment, which the hon. Member for Blackpool South (Gordon Marsden) highlighted, because that will make it law that schools have to accept careers advice from further education and apprenticeship providers.

The hon. Gentleman said we were not doing enough on quality. Again, I take issue with that, although we have had a problem in the past. There were too many qualifications and an apprenticeship could mean anything. I remember speaking to people at a hotel. I said, “Have you got apprentices?” and they said, “Yes, we have got apprentices. In fact, we have a few in the kitchen who are here for a few weeks.” They were perfectly lovely people who genuinely believed they had apprentices. We have changed the situation and changed the legislation on apprenticeships. An apprenticeship has to be for a minimum of a year. Apprentices I met yesterday were doing two, three and four-year apprenticeships. They have to spend 20% of their time in training.

We have moved from frameworks to standards—we have had many discussions about that—because of the spaghetti junction of frameworks and qualifications. We have moved to standards that are primarily employer-led. From the beginning of April, subject to progress on the Bill in the Lords, the new Institute for Apprenticeships and Technical Education will design the new standards and training for apprentices so that employers will be given what they need, which has not necessarily happened in the past. Degree apprenticeships are not only about prestige, but quality. The Premier Inn apprentice I met yesterday is 23 years old. Having done levels 2 and 3 with the company, they were going on to do a level 4 and level 5 degree apprenticeship. That will transform the quality and prestige because it shows that apprenticeships are really serious and go up to different levels. They will offer students—again, as the hon. Gentleman rightly pointed out—an amazing chance to get a degree and earn while they learn. They will have no student debt and will be virtually guaranteed a job at the end of it. That is the future. That is what we need to encourage our young people to do.

When I visited Tyneside, I spoke to Accenture, which has degree apprentices, some of whom do not even have their GCSEs yet, doing coding. I said to Accenture, “How do you choose the people?” and it said, “It is attitude, attitude, attitude.” It offers people from disadvantaged backgrounds a chance to get a serious degree apprenticeship.

The hon. Member for Luton North rightly talked about the skills deficit. I have acknowledged countless times that we are way behind other OECD countries. Our skills deficit is a long-standing problem, and we highlighted it in the industrial strategy we announced a few weeks ago. That is why we put money into STEM apprenticeships and increased the frameworks by between 40% and 80%. We pledged £170 million to create the new institute of technology colleges and £80 million to set up national colleges focusing on nuclear, digital and the creative industries to try to change the skills base. We created an employer-led qualification to ensure that apprentice standards provide the skills that employers need. Through the Sainsbury reforms, which will be rolled out from 2019, every student aged 16 will be able either to continue with a traditional academic education, or to go down a state-of-the-art, prestigious technical and professional educational route. We are doing everything we can to address the skills deficit that the hon. Gentleman rightly highlights.

[Kelvin Hopkins]

I agree absolutely with what the Minister says about the importance of raising skills in STEM subjects in particular, but is it not the case that the failures are lower down in the school system, rather than at the further education or apprenticeship level? Is he saying to his colleagues in education that we have to do as much as possible to ensure that when youngsters reach the age of 16, their mathematics skills in particular are sufficiently good to make them useful apprentices and eventually good employees?

[Robert Halfon]

The hon. Gentleman is right, and he has highlighted that issue previously. My right hon. Friend the Minister for School Standards is resolute on high standards. They are his passion. I work with him and I know he is doing everything possible to ensure that students have the right qualifications in maths and English by the time they leave school. We are looking at things such as improving functional skills post-16. As I say, we are putting our money where our mouth is. We are investing in the new institute of technology and the national colleges. The Sainsbury reforms are being rolled out, and we are investing in STEM apprenticeships. We are trying to undo a 20 or 30-year skills deficit caused by Governments of all persuasions and employers not investing in training and producing the skills that our country needs.

It is important to highlight a few points about wages. The apprentice wage is £3.40 and will go up to £3.50 in April, but 82% of apprentices are paid more than the national minimum wage or the national living wage, according to data from 2016: apprentices earn £6.31 per hour on average. Wherever I go, I ask every apprentice I meet how much they get paid—I do not just look at the surveys—and most of them tell me that they get way above the apprentice minimum wage.

I want to make a wider point about the wage issue. It is important to note that apprentices are earning while they are learning. I want to do everything I can to help disadvantaged apprentices—I am going to come on to that point in a minute—but if those apprentices were in higher education or studying at further education colleges, they would not be earning while they are learning. Apprentices are earning while they are learning, and 82% of them get more than the national minimum wage or the national living wage. When we consider the benefits and that kind of thing, we need to reflect carefully on the fact that apprentices are earning money. Many of my constituents who are not apprentices—no doubt this is also true of other hon. Members’ constituents—earn the national minimum wage, but apprentices get training and education in the knowledge that 90% of them will get jobs at the end. That does not mean that there is not a problem. Some apprentices come from very low-income backgrounds—I think 25% of them come from the poorest fifth of areas in the country. It is important to put that fact on the record. I will come on to child benefit in a minute.

[Kelvin Hopkins]

The Minister is making a fair point about apprentices earning a wage, but families—particularly those on modest incomes—are acutely aware of the tipping point where the benefits that those people might get if they were in education outweigh the wage they might get if they were in an apprenticeship. When incomes are tight, such marginal differences make a difference to the choices families make.

[Robert Halfon]

I am acutely aware—I see the pressures on my constituents—of the pressures that families face, and I do not want to create disincentives for families who are working but struggling. Often, one member of the family works in the day, one works at night and the son or daughter does an apprenticeship, yet the family are struggling to keep their heads above water. I accept that. We announced that we will be doing a serious, committed review—this relates to the question that my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter) asked—of how to get more apprentices from disadvantaged backgrounds. We have a £60 million fund to incentivise providers to take apprentices from the most deprived backgrounds, and FE colleges can use some of their bursary money to help apprentices with travel and overcome some of the other obstacles that have been raised.

--- Later in debate ---

[Kelvin Hopkins]

It has been a great pleasure to lead in this debate. I thank all those who have spoken: the hon. Member for Motherwell and Wishaw (Marion Fellows); the hon. Member for Central Suffolk and North Ipswich (Dr Poulter) who made some useful interventions; and of course my hon. Friend the Member for Blackpool South (Gordon Marsden), the shadow Minister, who made a very useful and thorough speech.

I also thank the Minister for his response. We spent some years enjoying each other’s company—I hope—on a Select Committee, and I applaud his genuine enthusiasm for his job and for apprenticeships. I hope that some of the issues that have been raised today can be advanced by him within his Department. There are still problems of finance, expressed by a number of institutions, but we have touched on them, drawing them to the Minister’s attention, and I hope for progress in future. It is very important for our future that we train our young people in the appropriate skills. We live in a highly competitive world and we have to have a properly skilled and educated workforce. I like to think that the Minister will make a contribution to the success of that in future.

Question put and agreed to.

Resolved,

That this House has considered financial support for apprentices.

Oral Answers to Questions

Kelvin Hopkins Excerpts

Monday 6th February 2017 Commons Chamber

[Mr Speaker]

One last question—the voice of Luton North, Mr Kelvin Hopkins.

[Kelvin Hopkins (Luton North) (Lab)]

14. What comparative assessment she has made of the sixth-form education system in England and education systems in other countries.

[The Minister for Apprenticeships and Skills (Robert Halfon)]

Education and training in England are widely respected, but we are determined to make further improvements to make sure that 16 to 19-year-olds are ready for the demands of the workplace. We are reforming academic and technical education for over-16s, and we are learning from the best of international systems.

[Kelvin Hopkins]

Why are sixth-formers in England funded to receive only half the tuition time and support provided to sixth-formers in Shanghai, Singapore and other leading education systems?

[Robert Halfon]

I am proud that we have equalised funding between sixth-form colleges and further education colleges, and that we have protected the base rate of spending for FE students and will be spending £7 billion this year on further education. We have funding pressures, as the hon. Gentleman knows, but we are doing everything we can to invest in our skills and education.

Oral Answers to Questions

Kelvin Hopkins Excerpts

Thursday 2nd February 2017 Commons Chamber

[Justine Greening]

It remains, as my hon. Friend suggests, a work in progress, but it will be published very shortly.

[Kelvin Hopkins (Luton North) (Lab)]

According to a report by the Trades Union Congress, between January and March 2014, following the introduction of tribunal fees, just 1,222 sexual discrimination claims were made to an employment tribunal, compared with 6,017 in the same quarter a year earlier. Does that not make a nonsense of the Government’s supposed concern for gender equality?

Technical and Further Education Bill

Kelvin Hopkins Excerpts

3rd reading: House of Commons & Legislative Grand Committee: House of Commons & Report stage: House of Commons
Monday 9th January 2017 Commons Chamber

[Gordon Marsden]

Possibly a full meal, for those of a vegetarian instinct.

[Kelvin Hopkins (Luton North) (Lab)]

My hon. Friend and I, and indeed other Members, tabled a number of amendments in Committee that the Government do not appear to have taken on board. They were not pressed at the time, but we had hoped that the Government would bring some of them forward as their own amendments. Is he somewhat disappointed by that?

[Gordon Marsden]

I am always slightly disappointed when intimations of progress in Committee are not met with specifics on Report. Of course, the Government have the opportunity this evening, in commenting on our amendments, to do something about it, and indeed to accept some of them in principle. If they think that the amendments are defective but the basic principle is fine, they should take them on board.

--- Later in debate ---

Figures have been bandied about, and I do not know the exact figure—perhaps other right hon. or hon. Members do—on the proportion of NHS employees who were trained abroad. I think we would all concede that it is quite a high proportion. Those people often, though not always, come from countries that can ill afford to lose them. The United Kingdom as a rich country ends up, because we have not got our technical education and apprenticeships architecture correct, poaching skilled labour from countries that desperately need that labour to build their own economies.

[Kelvin Hopkins]

My hon. Friend is making very thoughtful points. He may be aware that there is now a fairly successful political party in Lithuania that is against emigration, not immigration, for that very reason.

[Rob Marris]

I am not surprised about that. In the last Parliament but one, I had the joy of visiting Lithuania with what was then the Trade and Industry Committee, and that was the sort of issue we talked about. In those days, Lithuania was already starting to import labour from Moldova—outside the European Union—because so many Lithuanians had come with their skills particularly to the United Kingdom and Ireland to ply their respective trades, and I specifically mean trades.

What my hon. Friend the Member for Blackpool South (Gordon Marsden) has sought to do from the Labour Front Bench is to beef up the Bill in two ways. One is to introduce even greater confidence in the new system that we will have, and part of that confidence building means moving towards national standards. This partly addresses the issue raised by my hon. Friend the Member for Gedling (Vernon Coaker) about parity of esteem. We talked earlier this afternoon about parity between mental and physical health, but in this case, we are talking about parity of esteem between the vocational and the academic.

Having been a semi-skilled worker for a number of years as a professional driver and a bus driver, I faced a fork in the road. Was I going to go down the vocational route—I had my eye on being a plumber—or was I going to go down the academic route with an eye to being a lawyer? I went down the academic route and I became a lawyer. I do not regret that at all. One reason I did so related to esteem or lack thereof, and another reason was that lawyers get to work indoors whereas plumbers sometimes have to work on building sites outdoors—and I do not like the cold. I am talking about quite a while ago, and the money was better in law than it was in plumbing. I am not sure whether that remains the case nowadays.

We live in a capitalist society. Part of what needs to be done to move towards parity of esteem in a cultural sense is the sort of thing that the Minister has attempted to do during his tenure of office and through this Bill; and, frankly, in a capitalist society, part of it is about paying people more. If we want parity of esteem, we should start paying people equal amounts of money—and pay plumbers as much as lawyers. Given that we live under capitalism, we are moving towards that because of skills shortages.

On new clause 1, I quite understand the Minister’s point that some of the information is already published as a result of the Enterprise Act 2016, but I believe that building this into the Bill as my hon. Friend the Member for Blackpool South has proposed, would be helpful for sending out the right message about confidence. It is the same with new clause 2, so that the representative panels can become more representative when they are put in place. I welcome the Minister’s assurance this afternoon that those panels will be in place by April, and I hope they will have a breadth of representation that should, I think, be built into the Bill. I asked the Minister a similar question in a slightly different context about the involvement of trade unions. This is not just a tit-for-tat along the lines of “You have the bosses there, so we have to have the workers there,” although that is important; it more about getting buy-in to the new regime from all sections of our society to build towards addressing the skills shortages that we will face, as I have said, under Brexit.

Under Brexit, there is no mistake about it: the price for staying in the single market would be free movement of labour and people; and the UK population has said that it is not up for that and does not want free movement of people or labour. We will therefore not be in the single market, but we will not have free movement either, because there will be restrictions—whether Members like it or not. We should use these circumstances in a positive way, so that local people can train up for jobs and so that we do not keep poaching skilled people from abroad—whether from Lithuania, as my hon. Friend the Member for Luton North (Kelvin Hopkins) mentioned, or elsewhere. For that, we need national standards.

When it comes to confidence, we need proper advice. Careers advice in England has certainly been, to say the least, patchy over the years. I remember when my Government set up Connexions, which was not exactly a resounding success—certainly not in the west midlands. I urge the Minister to think again about new clause 4, which is all to do with building confidence. That is particularly clear in paragraphs (b) and (d) of new clause 4(3). These highlight the fact that the Secretary of State should seek to

“ensure that such information, advice and guidance may be taken into account by relevant authorities and partners to meet the needs of local or combined authority areas”

and to

“monitor the outcomes of such information, advice and guidance for recipients.”

It is part of confidence building that we have a regime that is sensitive to local labour markets, which will change greatly from April 2019 when we are out of the European Union.

This Bill is part of the Government—surprisingly, given what is not happening in other areas—showing a bit of foresight, on which I congratulate the Minister. If only we had such foresight about Brexit ramifications for other areas of public endeavour; we do not, but this Bill is a step forward and part of that jigsaw. I am not saying that this is why the Minister has sought to introduce the Bill, but I do think we should look on it positively in that way, and I think that new clause 4 would help to build confidence in the new system, by ensuring that it would be reflective and flexible.

In referring to amendment 9 and others that my hon. Friend the Member for Blackpool South said were in a sense under its umbrella—amendments 10 to 16—the Minister talked about employers having freedom and flexibility. Amendment 9 deals with “recognised technical qualifications” and these are connected, certainly for England as I said, with national standards. We need those standards as part of the confidence-building measures, but also to make sure that we get the right people with the right skills—in a sense, workforce planning.

This country is pretty poor at workforce planning. The one area where we could have excellent workforce planning because the number of employees is so enormous and they almost all work for the state is in healthcare delivery, yet it is absolutely appalling. We do not have enough doctors trained here; we do not have enough dentists trained here; we certainly do not have enough nurses trained here; we do not have enough professions allied to medicine—whether radiographers or phlebotomists and so forth—trained here. Yet this is the one area of workforce planning that the Government could get right. I do not mean that only this Government have singularly failed. Under the coalition Government, things went backwards when some nurse training places were shut down. Figures on the number of employees working in the NHS in England alone are so huge that we could take social trends into account and do some pretty good workforce planning on the kind of skills that will be needed in five years or the 10 years that it takes to train a doctor, and so forth.

Arguably, we have been absolute rubbish at this since 1948. Having national standards is important not just for confidence, but for workforce planning. That is why I again urge the Minister to have another think about the import of amendment 9, if not its wording. It is all very well having flexibility and freedom for employers. These were the sort of words that the Minister used—he will correct me if I am wrong—when he explained why he thought amendment 9 was unnecessary and invited my hon. Friend the Member for Blackpool South to withdraw it. In my view, however, the Minister should have another think about that, because I believe that national standards are important. Again, I draw on my own experience. When I qualified as a lawyer, I took a national exam that had to be taken by all those seeking to become solicitors in England and Wales. For most of us, if we passed, that led to what was, in a sense, the equivalent of an apprenticeship. It was called “articles of clerkship”, and it involved two years in a solicitor’s office. What had been a national exam taken by everyone who wished to be a solicitor in England and Wales then became a moderated Law Society final exam. My hon. Friend the Member for Cardiff Central (Jo Stevens) will remind me what it was called. [Hon. Members: “Legal practice course.”] Yes. It became a legal practice course, and standards went down. I say that having talked to people in post-secondary institutions at the time and having trained articled clerks who had experienced the later system when national standards no longer existed.

National standards are not, of course, a guarantee of quality output, but they can be used by any Government, legitimately and properly, to ensure that we have confidence in the system and to ensure that those who undergo an apprenticeship process and emerge from it fully qualified have a qualification that is worth their having as individuals, and worth our society having.

--- Later in debate ---

[Justin Tomlinson]

Absolutely. That is at the heart of the points that I am going to make. People need time to develop the necessary skills, and employers need to be able to provide suitable opportunities for individuals with learning disabilities. All Governments, in all generations, have tried their best to give opportunities to people with learning disabilities. The proportion has stayed rigidly at about 6%, which is the worst percentage involved in any disability and therefore presents us with the largest challenge.

When I was Minister for disabled people, I visited Foxes working hotel in Bridgwater. I was incredibly impressed by the fact that it had managed to get 80% of its young students into work. Its three-year course involved two years in a working hotel, where the students learned how to acquire independent living skills and how to work towards obtaining jobs once they had finished. They were acquiring skills that were needed for their local towns, involving restaurants, hotels and care homes. We all have our own skills gaps in our constituencies, so the skills would be adapted accordingly.

The students spent their final year continuing their learning directly in the workplace. My hon. Friend the Member for High Peak (Andrew Bingham) mentioned employers. That final year gave employers an opportunity to receive support. Foxes academy provided training and advice for employers, and for the staff with whom they would be working. Young lads and ladies were able to learn their skills patiently over the year, which seemed to me to constitute an apprenticeship: they were learning skills on the job.

I invited the team to my Department. I said, “This is amazing: why can we not increase numbers?” I was told, “We could increase numbers, but that final year is so expensive, because we have to support the employer, that we have to cap them.” I think that if we could rebadge the system as an apprenticeship, we could access the funding that is being created through the apprenticeship levy, and bring about a huge number of additional opportunities. I met the then Minister for Skills, my hon. Friend the Member for Grantham and Stamford (Nick Boles), who agreed with me, and we set up the Maynard review. I am delighted that the Government have accepted every one of its recommendations, and I pay tribute to both Mencap and Scope for the huge amount of proactive work that they did, as part of the review, in helping to shape real, tangible opportunities.

Having spoken personally to the Minister, I know of his passionate desire to see all that through. We touched on the issue in the Bill Committee, but let me urge him now to crack on with those pilots. Every young adult will seize the opportunities which—as I know, having met hundreds of young people with learning disabilities—they are desperate to be offered. I ask the Minister to continue to make this a priority, and, in his summing-up, to explain where we are, what is the timetable, and what more we can all do to raise the issue with local employers.

[Kelvin Hopkins]

It is a great pleasure to speak in this important debate. I, too, was a member of the Bill Committee, and I am somewhat disappointed that Government amendments have not been introduced at this stage reflecting some of the points made in Committee, especially as they seemed to be accepted at the time, in broad terms, by the Minister. I therefore hope that amendments will even now be brought forward in another place to reflect some of the discussions we had in Committee, and, indeed, some of the points made this evening, particularly by my hon. Friend the Member for Blackpool South (Gordon Marsden) on the Front Bench, who made a tour de force speech introducing all his amendments. It is surprising that there are no Government amendments or new clauses on Report; that is very unusual.

All the amendments and new clauses have been introduced by my hon. Friend on behalf of the Labour Opposition—and they are all splendid and I support them all. The lack of Government amendments is disappointing, even though there is a degree of agreement on the value of this legislation, and we all know we have to do something about improving apprenticeships and training our young people for the future. As my hon. Friend the Member for Wolverhampton South West (Rob Marris) said, we have to train our own rather than just poach people from abroad.

New clause 1, requiring the Institute for Apprenticeships and Technical Education to report annually, is specifically about the outcomes of completed apprenticeships; it is about the quality of apprenticeships, not just other, broader measures of success. The quality of apprenticeships is vital, to ensure that they lead to the development of skills for quality, long-term jobs after their completion. Young people who complete their apprenticeships must be desirable to their own and to other employers; they must be able to command good jobs for the long term and to look forward to relatively high pay and advancement in those jobs. It is very important to make sure that apprenticeships are high quality not just in words, and that apprentices can do the things they are required to do after they have qualified.

I remember the days, many decades ago now, when we had full employment. I taught in further education during that era, and in many ways it was a better and happier period than we are in now. Everybody who wanted a job got a job, and teaching in further education was a sheer joy. It has been more painful and stressful since then, I have to say, and less well paid, and the conditions of employment are less good than when I was teaching. But that was several decades ago, back in the early 1970s. We also had large companies, mainly in the manufacturing sector, and the giant public utilities, which were then in public ownership, employing thousands of apprentices every year. They had to train their own and they wanted to make sure they were good. Some of those they trained moved off to other jobs, of course, but it was nevertheless beneficial to those doing the apprenticeships and to wider society.

Our society did well because we were training our own, but we have failed to do that in recent times; we have left things to the market, and the market does not always work well in these matters. A degree of Government intervention is required, and it is significant that the Prime Minister has used a phrase not used by any Government for a long time: she has talked about the need for an industrial strategy. I absolutely support that, and we had a debate on industrial strategy just a few weeks ago, which the hon. Member for Warwick and Leamington (Chris White) led very well.

The subject we are discussing now is part of that industrial strategy. We have to train these people, to make sure we rebuild industry. We do not produce enough any longer, particularly in the manufacturing sector; we do well in services, but not in manufacturing. We have a gigantic trade deficit because we cannot produce enough and we have to buy in from abroad. We must rebuild the manufacturing sector, not so that it becomes the dominant force necessarily, but at least so that it produces sufficient to have a sensible trade balance, which we do not have at present.

Apprenticeships have always been insecure in recent times because companies are much smaller now than they were and they are less secure because of economic crises. I have many anecdotes from my own experience. Just after the 2008 crisis, I was being driven to Heathrow for a parliamentary visit and the driver had an apprenticeship in the construction sector, but the company he had been with had collapsed and he finished up being a cab driver, which he could have done without doing an apprenticeship.

I have heard of fears, too, such as small companies training apprentices who are then poached by larger, more financially lucrative companies. That is particularly the case in the motor trade, where there are skilled small companies training their own people who are then poached by large companies that do lucrative insurance repair work, which can pay a lot more.

[Robert Halfon]

I thank the hon. Gentleman for, yet again, making a thoughtful speech. I do not have the figures to hand, but the evidence suggests that apprentices in companies are more loyal to that company than those on any other training scheme or in work experience or doing early-career jobs, and that they tend to stay with the companies they do their apprenticeships in.

[Kelvin Hopkins]

I am sure the Minister is right in the majority of cases, but for some there is pressure to move on—for instance as a result of what is happening with house prices at the moment, as one can imagine. Certainly in Luton I know of companies, such as small motor repair firms, that employ apprentices who are under pressure to get a home, and if they can earn a few thousand pounds more at a larger company nearby to help them get on the housing ladder, they will do that. I agree that loyalty is important and many of them want to be loyal, but if the financial pressures on their lives are such that they have to move, they will in the end move.

I particularly want to support the point made by my hon. Friend the Member for Blackpool South about the need for a strategy for improving career education and new clause 4. We must ensure that when young people are at school or in further education they are aware of the enormous range of opportunities out there and they do not just look at a narrow field. In Luton too high a proportion of students want to get into the legal profession, for example; they want to be professionals and do not appreciate that there are highly paid, highly skilled jobs in manufacturing industry.

Vauxhall Motors still has a plant in Luton, and almost all its senior executives started as apprentices, leaving school, doing apprenticeships and going up the ladder, eventually doing higher qualifications such as higher national certificates and higher national diplomas and becoming highly paid senior executives in the company. Those opportunities are out there, and young people must be made aware of them. We must have a careers strategy making sure that every young person knows about all the thousands of different roles they could assume in life, rather than just going into the professions, or, indeed, just going into a local company; there are lots of things young people can do.

Life can be very exciting, and it is important that all of us do something we enjoy. I am very fortunate in that I was fascinated by politics in my early life and I finished up in Parliament where I wanted to be; I do not regret a moment of it. But sometimes people are not aware of the enormous range of possibilities in life. Having a powerful careers advice strategy is vital not just for young people’s lives, but for the economy. If people are happy in their work, they will work better and the economy will work better, and the world will be a much better place.

I have one more story that explains something tragic that has happened in Luton. We were a town that trained thousands of apprentices, and I know many of them personally. Recently I visited a small manufacturing company that makes components for Formula 1 and Jaguar. It could not find one toolmaker; it wanted one toolmaker from a town of over 200,000 people that used to be dominated by manufacturing, but could not find one. It is a disgrace that we have failed to train sufficient numbers of people in these areas.

There are many other things I would like to say—I could speak for an hour unaided, I am sure—but as others want to contribute, I will leave it there. I hope the points I have made are of interest.

[Vernon Coaker]

I was not a member of the Committee, but I know that the Technical and Further Education Bill has generated a lot of really good debate and positive views on how we might achieve what we all want, which is an improvement in the technical and vocational education in this country and in apprenticeships. The fact that there is no division between us on that was illustrated by the contributions from the Minister and my hon. Friend the Member for Blackpool South (Gordon Marsden), among others.

--- Later in debate ---

[Robert Halfon]

My hon. Friend, whom I thank for his work on the Committee, is absolutely right. We introduced the apprenticeship levy to change behaviour and involve businesses in supporting apprenticeships, we have created the institute and the employer panels, and we are giving huge financial incentives to businesses, especially small businesses, to ensure that they hire apprentices.

The Bill also introduces an insolvency regime for the further education sector that will, in the unlikely event of a college insolvency, provide clear-cut protections for learners to minimise disruption to their studies as far as possible, while offering certainty to creditors. During oral evidence, we heard from representatives of the Association of Colleges, Collab and others, who supported the insolvency regime and the protections that it includes for learners. Although there were issues about which the banks had questions, many spoke in support of the clarity provided by the proposed measures. Santander told us that it was keen to lend more to the further education sector, and said:

“On the Bill and the proposed insolvency regime, we are actually supportive of the clarity that they provide.”––[Official Report, Technical and Further Education Public Bill Committee, 22 November 2016; c. 38, Q41.]

[Kelvin Hopkins]

As the Minister will remember, I suggested in Committee that all colleges should have professionally qualified members with financial skills in both management and governorship, so that skilled eyes would be trained on the finances to ensure that at least mistakes were not made internally.

Sixth-form Education: International Comparisons

Kelvin Hopkins Excerpts

Monday 9th January 2017 Commons Chamber

[Kelvin Hopkins (Luton North) (Lab)]

Does my hon. Friend accept the remarkable statistic that sixth-form colleges outperform all other 16 to 19 forms of institution across the country, as has been recorded by the Sixth Form Colleges Association in its wonderful manifesto?

[Nic Dakin]

I thank my hon. Friend for rightly highlighting the high level of performance that sixth-form colleges deliver. He does a fantastic job as a governor of Luton Sixth-Form College and as chair of the all-party group on sixth-form colleges.

There is now a significant gap between the funding made available to educate sixth formers and the actual cost of delivering the rounded, high-quality curriculum we would all want to see well into the future.

Oral Answers to Questions

Kelvin Hopkins Excerpts

Monday 19th December 2016 Commons Chamber

[Robert Halfon]

Leaving the European Union will mean that we will want to take our own decisions on how to deliver the policy objectives previously targeted by EU funding. The Government are consulting closely with stakeholders to review all EU funding schemes in the round, to ensure that any ongoing funding commitments best serve the UK’s national interest while ensuring appropriate certainty.

[Kelvin Hopkins (Luton North) (Lab)]

Given that all EU spending in Britain is simply returning part of our gross contribution to the EU budget, would it not be sensible for the Government simply to commit now to replacing EU funding with UK Exchequer funding, thereby keeping everyone happy?

[Robert Halfon]

The hon. Gentleman makes an important point. As I have just said, the fact that the British people voted to leave the EU means that the United Kingdom Government will decide how best to spend the money that was previously going to the European Union.

Technical and Further Education Bill (Eighth sitting)

Kelvin Hopkins Excerpts

Committee Debate: 8th sitting: House of Commons
Thursday 1st December 2016 Public Bill Committees

[Gordon Marsden]

I beg to move amendment 5, in clause 22, page 10, line 7, at end insert—

“(2A) The education administrator may, in performing his or her functions for the purpose of achieving the objective of the education administration, request information, advice or guidance from practitioners with an understanding of education regarding the management of a further education body.”.

This amendment would allow an education administrator who, under the eligibility outlined in clause 15, might not necessarily be an education specialist to supplement his or her knowledge.

The amendment pursues an issue that we have already discussed, but in the context of the experience or knowledge of higher education that the education administrator will need. The Minister and I had a useful exchange about the capacity of the education administrator to reach out, either within an organisation or peripherally to it. The amendment would allow an education administrator who meets the eligibility guidelines outlined in clause 15, but might not necessarily be an education specialist, to supplement his or her knowledge.

Our friends in the National Union of Students were particularly anxious for the amendment to be tabled, and we have taken their points on board. As the Minister will know, the NUS has welcomed the provisions that relate to insolvency, but it, too, is nervous—well, “nervous” is perhaps the wrong word, but it is certainly concerned. It believes that the process should be underlined as strongly as possible and that, in the twists and turns of what will inevitably be a fraught and taut process for all concerned, the administrator should be able to take further advice, even if he or she has some past experience. The amendment would make it clear that the educational administrator may seek that advice.

The Bill does not require the person appointed to deal with the college’s insolvency to know anything about colleges or the FE sector; under clause 15, they need only be an insolvency practitioner. We do not dissent from that, because we have already had a conversation about it and we are entirely reassured by the points that the Minister has made. However, the education administrator will have substantial powers over the future of an education body and its students, and indeed over the education body’s management, as clause 22(1) sets out.

Bearing in mind that the period of time for which they might have to manage the FE body’s affairs will be somewhat elastic, it would seem sensible to ensure that the administrator can get advice from people who actually know how to run an FE body. Better still, obviously, would be to have an administrator who was either very close to or within the FE sector. That was the intention behind amendment 34. After all, the Bill is designed to recognise that context, which is why it includes the education objective and entitles learners to continue their studies. Amendment 5 would just ensure that the Bill makes that provision and allows the education administrator access to whatever information and advice they may need to fulfil their duties. I am sure that the Minister wishes that to be the case. We suggest that it is a fairly obvious point—the Association of Colleges and the NUS think so—but it is not obvious in the Bill currently.

Without straying beyond the narrow lines of the amendment, I merely say to the Minister that there are many options for practitioners who could be called upon with an understanding of further education management. That could include chairmen or governors of FE bodies, former FE commissioners, or perhaps even retired people from those areas or from awarding bodies. Will the Minister give us some further details about whom he imagines an education administrator might wish to consult? Whatever avenue he wants to go down to assure us in that respect, it is important that the administrator has the advice of experts to make the correct call.

[Kelvin Hopkins (Luton North) (Lab)]

I will be very brief. I support my hon. Friend. One of the problems for the FE sector and, even more, for sixth-form colleges is that the whole sector has been bedevilled by decisions being made by people who are unfamiliar with those sectors. Many people involved in politics have come through a school or university environment; they have not been through further education. Many areas do not have sixth-form colleges, so people are not quite sure what they are. It is important that we have people with knowledge of the sector—educationally and organisationally —to make judgments on these matters. I just wanted to support my hon. Friend with those few words.

[Robert Halfon]

I appreciate the amendment. I raised these issues in the previous sitting. I go back to the quotation from Stephen Harris, the insolvency expert, who said that

“it is worth standing back and recognising that insolvency practitioners are not train drivers, or people who spend their life in the railway or the London Underground”––[Official Report, Technical and Further Education Bill Public Bill Committee, 22 November 2016; c. 46, Q60.]

Those people are expert insolvency practitioners, but many have some kind of educational link or work for a company that has a good link with and expertise in education.

It would be inconceivable that any education administrator would not consult—I strongly expect them to—key stakeholders, particularly the FE commissioner, student bodies, governors, parents and any relevant sponsor or other stakeholder involved with an insolvent college. That is expected as a matter of course, but I will reflect on what the hon. Member for Blackpool South said. On those grounds, I hope that he is happy to withdraw the amendment.

--- Later in debate ---

[Gordon Marsden]

I beg to move amendment 6, in clause 22, page 10, line 10, leave out “have special educational needs” and insert—

“(a) have special educational needs;

(b) are care leavers;

(c) are parents;

(d) are carers, carers of children, or young carers, as defined by the Care Act 2014; and,

(e) have other particular needs that may be determined by the appropriate national authority.”

This amendment would make provisions for the particular needs of additional groups of existing students to be considered by an education administrator in pursuing the objective of an education administration.

Having touched on the issues of special needs, we want to probe a little further and more broadly beyond what has been said. The Minister has already given strong assurances on the general issue of special educational needs, but he will be aware of particular circumstances affecting some categories of people who take the big step, given their experiences, of engaging with further education. I am sure that everyone would agree that we do not want those groups of people, in particular, to be disadvantaged, and we certainly do not want them to suffer more disadvantage than students ordinarily would in the circumstances.

I accept that lists can be invidious, but we feel that care leavers, parents, and

“carers, carers of children, or young carers, as defined by the Care Act 2014”

are three groups that may be particularly vulnerable to disruption in their studies, as we have discussed. The amendment is designed to signal to the administrator the importance of taking those groups into account.

[Kelvin Hopkins]

Earlier my hon. Friend made a point about distance of travel. Groups such as parents and those with caring responsibilities will definitely be affected by travel over longer distances. I am sure that he has that in mind.

[Gordon Marsden]

My hon. Friend is right. He has read not only my mind, but my postbag. Only half an hour before coming here I received an email from Unison, which raised some of those issues with respect to its members who fit into one or two of the categories in question. It made precisely that point about distance, which I was anxious to make in my exchange with the Minister about the education maintenance allowance. It was not simply about cost; it was also about time.

--- Later in debate ---

[Gordon Marsden]

I beg to move amendment 7, in clause 23, page 10, line 31, at end insert—

“(2) The education administrator may not transfer assets of any further education body to a private company where he or she considers that more than half of the funding of the acquisition of the asset came from public funds.”.

This amendment would ensure further education bodies with a track record of accruing assets publicly, could not be transferred to a private company.

We come to an amendment that is longer than the clause it seeks to amend. That might suggest that the amendment is otiose, but I do not think it is; I think the clause ought to have been expanded a little more— but then I would say that. I want to focus some attention, at a certain length, on this issue. On our side of the Committee, that raises some really big issues about what would happen to the transfer of assets from a further education body to a private company.

Information produced by the Department for Business, Innovation and Skills on the dissolution of an FE corporation specified that assets should be transferred only to charitable bodies:

“The Secretary of State and the CESF are concerned with the appropriate use of those capital assets that have been acquired/developed/redeveloped with public funding and the conditions for their transfer and usage…FE corporations are advised to undertake early discussions with the Skills Funding Agency to identify the relevant assets and any potential repayment of some, or all of the associated grant or proceeds of sale…The regulations include a requirement that the FE Corporation publish the proposed arrangements for the transfer of the property, rights and liabilities of the FE Corporation…The Dissolution of Further Education Corporations and Sixth Form Colleges Corporations (Prescribed Bodies) Regulations 2012”—

that would have been an interesting secondary legislation Committee to sit on—

“lists the bodies to which an FE Corporation can transfer its property rights and liabilities upon its dissolution. It is expected that all transfers should be made to charitable bodies, and for the purpose of education.”

It is on that point that I want to focus my remarks on the amendment. The document continues:

“Where the bodies are not charities then it must be transferred in accordance with the charitable purposes of the trust.”

It then links to a whole list of prescribed bodies to which assets could be transferred, including sixth-form colleges and governing bodies.

The point I start from is that to say it is “expected” that all transfers should be made to charitable bodies is not the same as saying it is “required”.

[Kelvin Hopkins]

My hon. Friend makes a good point. Is the stronger case not that such properties should be transferred back to local authorities? That is where the property came from in the first place.

[Gordon Marsden]

My hon. Friend makes an interesting point, and possibly opens up a new area for policy discussion in certain political parties. The reality of the situation is that in practical terms most local authorities would struggle to take on those responsibilities at the moment, but he is absolutely right to make the point—I will expand on it—on the genesis of the assets.

Given the genesis of those assets and their development over the years, we need to look with extraordinary care at any circumstances in which they might go into the private sector. Incidentally, that does not necessarily mean that we are saying that the bona fides of the private sector potential acquirers are bad. We simply recognise the fact that it would be the transfer of something that is largely of public value into the private sector without taking any account of the genesis and development.

I want to explain why I think this issue is so important. When colleges were incorporated in 1992, it took them formally outside the aegis of local authorities, as my hon. Friend the Member for Luton North said, but we have to take into account that that asset base of building in many cases was built up with local authority support and funding over a 20 or 30-year period.

The Minister has visited my local college, Blackpool and The Fylde College. I think he went to the Bispham campus, which is right at the other end of town and not in my constituency. When he arrived, the Bispham campus no doubt looked nice and shiny and new, but it did incorporate—I am not sure how much it still incorporates—buildings and elements that go right back to the 1950s and 1960s. Indeed, when the Building Colleges for the Future process was taking place in the 2000s, that was one of the arguments for demolishing that building and relocating it in the centre of town. It did not happen for a variety of reasons. At the time I was rather annoyed that it did not happen, but nevertheless I am just illustrating the point that many of the buildings that we are talking about have accreted their estate either on an active financial basis or by the ceding of lands by local authorities and other organisations.

Apart from that, over the years since then large sums of public money have often gone directly to support and build the estates of FE colleges. In the 2000s, the then Labour Government brought forward the major programme of Building Colleges for the Future. Despite the fact that the programme was curtailed and certain places, including my own, missed out on the final stages, it was a commitment of literally hundreds of millions of pounds—other Members in the House got their completely new college and everything that went with it—and that is without taking account of the other areas of non-private sector funding. Sometimes that was through very complex relationships that might involve lottery-associated bids. Sometimes it was through the significant sums of money put in under the old regional development agencies. As I know well, having shadowed the regional growth funds in my previous portfolio, sometimes it was through regional growth fund developments, and sometimes there are offshoots of European structural funds. It is important to remember all of that.

--- Later in debate ---

I want to leave the Minister in no doubt that the point we are making is based on what has happened in the past. There is an old saying, “once bitten, twice shy,” and in this instance we should be very shy of allowing private providers simply to come in and acquire a significant amount of publicly acquired assets in a case of insolvency without us looking carefully and extracting some price in return.

[Kelvin Hopkins]

I strongly support my hon. Friend’s case. This is something that I am alarmed about. The reality was that, at incorporation, hundreds of thousands of acres and hundreds of buildings were transferred without charge from the local authority and incorporated in bodies that still seemed to be essentially in the public sector and were still largely funded by it—sixth-form colleges are entirely funded by the public sector. The idea that they could be sold off to speculators for profit, with development value acquired and millions of pounds made, is completely unacceptable. If anyone ought to have that asset, it is the public sector: either local authorities or a central Government Department. If they so choose to sell land off, at an appropriate value—if it has planning permission for housing or whatever—that development value should accrue to the public purse as well.

I have some experience and, as always, knowledge of what has been happening recently. Indeed, one college had a large area of land associated with it that had been a sports field that was still used for sports but was also a local leisure amenity. The principal wanted to sell that land off for housing development, making a vast amount of profit, and the implication was that he might have benefited personally. He was known to be assiduous in making sure his pocket was well filled. I think he managed to pay himself the highest salary of any college principal in the country even though his was not one of the largest colleges. Be that as it may, he eventually left in some disgrace and the college is now recovering, but selling off land for personal profit was a temptation that clearly affected him.

The principal was also building an academy chain by getting schools to become academies and then trying to get them into his ambit. It is interesting that two of the schools had land attached, and when, some way through the deal, it was decided that he could have the schools but not the associated land, he lost interest in getting them into his academy chain. It was clear that he was interested in the land associated with those schools, not in the education of the children, the success of schools or whatever. When big money is involved, college principals and others involved in college life can be tempted by the prospect of substantial personal financial gain. That has to be guarded against, and the way we do that is by ensuring that the assets stay in the public sector and that any benefit, financial or otherwise, accrues to the public sector.

The amendment therefore goes some way towards what I would like to see, and I will certainly support it should my hon. Friend the Member for Blackpool South press it to a vote, but I think we ought to go further and ensure that those kinds of practices cannot happen. We are talking about public assets, built up by the public sector over decades, if not scores of years or generations, and to see them simply handed over to private speculators without any benefit to the public sector is absolutely unacceptable.

We have to separate out capital assets from revenue costs. Revenue costs become too great if students disappear or the college is not being run efficiently and so on. We can deal with that. Capital assets, on the other hand, should be treated as precious and retained for the public sector and for public benefit; they should not be for the benefit of property speculators who could make millions, if not billions, out of such assets across the country, if allowed to do so.

With those few words, I express my strong support for the amendment. I hope that at some point the Government will recognise this issue so that we can go further and make the principles behind the amendment even stronger in legislation, whether in this Bill or in others.

[Robert Halfon]

I thank the Opposition for the amendment and the hon. Member for Luton North for his contribution. I will make a couple of general points before I go on to the specifics.

As has been observed, and I repeat, without the Bill there is no protection for students or from the seizure of college assets. The hon. Gentleman talked about hundreds of millions in government funding, but the general point is that college insolvency is likely to be a very rare event, so the portion of government assets that might transfer to a private sector company is likely to be small. The priority, as I say, has to be protecting students. Such a transfer is right if the education administrator is fulfilling his special objective and believes that it protects the students if he has the ability to do so.

On solvent dissolution, assets must go to a charity that has educational purposes. In insolvency in a special administrative regime, transfers go to bodies prescribed in regulations, all educational, which can include private education providers, or, as the hon. Gentlemen will be pleased to know, local authorities. As the FE Minister, I always have colleagues coming to me with suggestions about how the local authority might be involved with the FE college.

The Bill is not about private providers; it is about statutory bodies and companies that run designated FE institutions—that is, designated by the Secretary of State. For independent training providers offering provision to those with advanced learner loans, there must be a register of training organisations, they must have at least satisfactory financial health, they must pass capacity and capability requirements, and they have to have evidence of, and a track record in, education and skills delivery.

To go back to the question asked by the hon. Member for Batley and Spen, transfer schemes are a feature of other special administrative regimes. They allow for assets to be transferred to another body without the agreement of a third party which would otherwise be necessary—for example, leases without the consent of the landlord. That means that the scheme can be used to prevent a third party from blocking a transfer that is intended to facilitate the achievement of the special objective. The special administration regime’s delivery of the public policy objective—in this case the protection of students—should not be subject to third-party agreement. The education administrator will use a transfer scheme only if that is necessary to achieve the special objective.

It is important to note that the Secretary of State must approve any such scheme before it is used. Even if the education administrator does not use a transfer scheme, it is open to the Secretary of State to challenge the administrator if he or she feels that the administrator is not performing his or her duty to protect students.

[Kelvin Hopkins]

A thought occurs to me. If charitable organisations were brought into play, would it not be possible for assets to remain publicly owned but be allocated to such organisations on a rental basis rather than an ownership basis?

[Robert Halfon]

We are looking at cases of insolvency. We have the protection of students at heart, but we also want to be fair to creditors. I am passionate about the Bill because I believe it assures the protection of students, but I acknowledge that we have to be fair to creditors as well, and I do not think that would be the case if we did what the hon. Gentleman suggests, although in an ideal world that would of course be a lovely thing to be able to do.

The FE body itself cannot be sold. It is a statutory body. If it is insolvent and must therefore close, the protection of students must come first; the sale of the asset would be to protect students first and creditors second.

--- Later in debate ---

[Gordon Marsden]

The Minister has been characteristically courteous. If I were able to take his reassurance as the end of the matter, I would, but unfortunately it is not the end of the matter. I will make a few brief points.

The Minister says that the proportion of public assets that might be disposed of to the private sector in the event of a college insolvency as a total is very small, percentage-wise. We could trade figures on what that percentage might be, but none of us knows. The fact of the matter is that it is about the area where that happens and the impact there. A college that has tens of millions of pounds’ worth of assets built up in a particular area and is crucial to the local community may be basically forwarded on to a private provider.

I accept what the Minister said; we are not saying that all private providers are bad or are leeches, but that is not the issue at stake. The issue at stake is whether private providers should be allowed automatically to take on valuable assets that have been accrued via the public sector in the event of an insolvency. The Minister said himself that it is not about private providers, but he also said that transfers could include private education providers.

In terms of real-life events, private providers are well equipped normally with lawyers and accountants. Who will monitor the detail of this? Will it be a slightly harassed education administrator? Will it be officials in the Minister’s Department? I doubt it.

[Kelvin Hopkins]

As a member of a local authority many years ago, I saw the representatives of a town shopping centre—an asset that was owned by the council but rented on a long-term basis—who were skilled financial advisers, run rings around the local authority treasurers, who just could not cope with the power ranged against them. We have to be very careful, because when big money is involved, companies will get the best brains to ensure they win.

[Gordon Marsden]

My hon. Friend is absolutely right. If it were not for the track record of problems in the FE sector over the past three to four years that I have described, we might be more sanguine, but this is a really important principle that should be established on the face of the Bill. I am afraid that on this occasion, I will not withdraw the amendment and will press it to a vote.

Question put, That the amendment be made.

--- Later in debate ---

[Gordon Marsden]

I entirely understand that. I was not suggesting that people are slothing on the job; I was merely making the reasonable point that the Bill necessarily involves a lot of administrative time—I put it no stronger than that—and that raises in my mind some ongoing concerns about the capacity, either of the Department or of some of its institutions, to take some of these things forward. I will leave it at that.

[Kelvin Hopkins]

I just want to say that I am deeply disappointed that we cannot discuss the regulations in detail. Perhaps I am alone in that.

[Gordon Marsden]

All I can say is that my hon. Friend is a shining example to us all. He shames us deeply.

Let me make my own brief and pathetic response to clause 30, in the context of the Stakhanovite task that my hon. Friend has just suggested we undertake. I have a practical question for the Minister. On clause 31, the policy note talks about the way in which the power will be used to make decisions. For simplicity, I say to the Minister that although I am making this point specifically about clause 30—it affects chapter 4, which is very important because it is the special administration chapter —my question is generic and may be relevant to other clauses as well. It is very straightforward. When these revised instruments and regulation-making powers are brought forward, will there be consultation in any shape or form with the various stakeholders—FE bodies, the Association of Colleges, the Collab Group and others?

That is not for the sake of consultation itself. There have been occasions in the past, although I am not suggesting in this particular Department or area, when the lack of such consultation on detailed regulations between representative bodies—it normally has to be done at that level—and officials from the Department has produced anomalies that subsequently have to be rectified. It would be interesting to hear if the Minister can offer any reassurance on that.

[Gordon Marsden]

I beg to move amendment 8, in clause 37, page 18, line 14, at end insert—

‘(1A) The Secretary of State must ensure the list of disqualified officers is made publicly available.”

This amendment would ensure that a list of disqualified officers was publicly available.

The amendment is fairly straightforward, so I will not detain the Committee long. Again, we hope that these situations will be very rare, and we certainly hope it will be very rare that people are disqualified as a result of them. However, if disqualified people are involved, the principle of transparency is extremely important. This is a probing amendment, to find out how this might be effective.

Perhaps it is worth mentioning what the explanatory notes say about clause 37:

“This clause gives the Secretary of State the power, in relation to further education corporations and sixth form college corporations, to make regulations that have the same or similar effect to the Company Directors Disqualification Act 1986. This will mean that, like company directors, members (i.e. governors) of those corporations can be disqualified from acting as such in the future and the power allows the Secretary of State to make provision so that when a person is disqualified as a director of a company they can also be prohibited from acting as a member of a further education corporation or sixth form college corporation.”

I repeat that we all hope and assume that these occurrences will be irregular. However, would it not be logical for the list of disqualified officers to be made publicly available, to ensure transparency and to allow colleges to easily assess applicants to their own corporations in the future?

[Kelvin Hopkins]

I support the amendment. In my experience of life, it is often the rogues who are most plausible and we have to have lists of people to make sure that people do not get through the net, move to a different part of the country and take up a job, before we find out that they have twice been a rogue, not just once.

[Robert Halfon]

The disqualified officers to whom the amendment refers are those members of an FE body that is a statutory corporation who have been disqualified by the court on the grounds that they have been found liable by the court of wrongful or fraudulent trading or other similar offences under the Insolvency Act 1986 as applied by the Bill. Wrongful and fraudulent trading are provisions of insolvency law that will be applied to governors and others involved in running FE bodies that are statutory corporations in the same way as they apply to directors of, and those who run, companies. That is the purpose of the amendment.

It is right that a list is kept of those individuals who have been disqualified and that such a list is available to the public, so that it is evident which individuals should not be appointed as governors of colleges in the future. However, there is no need to provide for that specifically in the Bill. There is provision in the Company Directors Disqualification Act 1986 for a register of disqualification orders to be kept by the Secretary of State and for that register to be open to inspection—as we continue to refer to that Act, I propose that we use its acronym, the CDDA.

Clause 37 will allow us to replicate provisions of the CDDA; therefore it already allows us to achieve what hon. Members seek with the amendment. I have made it clear that I intend to consult on secondary legislation made under the Bill. That includes regulations made under clause 37, so it will be transparent that we will include a provision in regulations that is the same as, or similar to, the provision that exists in the CDDA, modifying it as necessary to make it work effectively for disqualified members of college corporations. On those grounds, I hope that the hon. Member for Blackpool South will feel able to withdraw the amendment.

--- Later in debate ---

[Gordon Marsden]

I thank the Minister for that explanation, in particular on subsection (2), which I had circled and was going to ask him about. He has now answered the question, so we have no problems with the clause. Indeed, it is very important, at a time when the Government continue to embark on devolution initiatives in this area, that a national database should be maintained.

The only observation that I would make—I think this view would be shared by a number of my colleagues—is that the process that is going ahead is somewhat piecemeal and somewhat curious in its restrictions. Some of us might like to see rather more rapid action, and rather broader and more ambitious ways of ensuring that, in the future, not simply adult skills but a much broader range of issues are devolved. However, that is outside the scope of the Government’s amendment and the clause, which we are very happy to support.

Amendment 18 agreed to.

Amendment made: 19, in clause 38, page 19, line 9, leave out “(4)” and insert “(3)”.—(Robert Halfon.)

This amendment is consequential on amendment 18.

Clause 38, as amended, ordered to stand part of the Bill.

Clauses 39 to 45 ordered to stand part of the Bill.

New Clause 1

Further education bodies: senior management

“A further education body shall be required to include in its senior management team a person or persons with professional financial qualifications having specific responsibility for oversight of financial management in the body.”—(Kelvin Hopkins.)

Brought up, and read the First time.

[Kelvin Hopkins]

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

[The Chair]

With this it will be convenient to discuss new clause 2—Further education bodies: governing bodies—

“A further education body shall seek to ensure that its governing body includes a minimum of two members with professional financial qualifications.”

[Kelvin Hopkins]

It is a pleasure to rise to speak to these new clauses, which I drafted myself and are borne of my own experience in college governance and teaching. That is particularly the case for new clause 1, which is about having internal experts with professional qualifications who would suffer severe reputational damage if they did not make sure that the college accounts and financial matters were all in order.

When I was chair of governors of what was then Luton College of Higher Education—it became the University of Luton and then the University of Bedfordshire —the principal decided that the accounts were not really up to scratch, and so spent a summer going through every detail of the college’s finances. He found many thousands of pounds unaccounted for, which he was then able to use to the benefit of the college. He happened to be a graduate in mathematics, which meant that he was at least numerate and could deal with accountancy, but accountancy is a specific skill.

As a student, I was taught economics by a former Treasury official whose next-door neighbour was an elderly lady who wanted him to deal with her accounts. He had to explain that an economist is not an accountant; it is a very precise skill and not something that one can just pick up at will. My closest university friend was a professor of accountancy. I know only too well that accountancy is a professional skill that needs great minds. I also understand that some of the people with the highest IQs in our country are accountants. Clearly accountants are important people, and it is important to have them involved.

At Luton Sixth-Form College, one of the deputy principals is a qualified chartered accountant. She is a superb member of staff who makes absolutely sure that all the forecasts and all the financial details are under control. We have been guided by her for many years now. It makes us feel at ease. We know that the finances are well under control, well understood and thoroughly explained to us on all occasions. Many years ago, before she was employed, I was on the finance and general purposes committee, and I remember the problems I had just getting to grips with it, and I am a numerate person with a degree that includes economics and maths. It was difficult stuff, but we had some good accountants on the governing body.

This is an important issue. If one wants to avoid insolvency, the best thing to do is ensure that one has someone with the skills to ensure one does not get into that situation in the first place, and that alarm bells are rung. As governors and politicians and Government Members, we are all well aware of what the problems are. If a principal is wilful and wants to do things beyond what they should be doing, and they have a weak financial adviser without professional qualifications, they will get away with it. There is also the question of competence; a principal may not be competent at dealing with accountancy.

Accountancy is extremely important. It sounds very boring, but I am glad that accountants are there. I would not want to have the responsibility of making decisions on financial matters without the advice of serious professionals. I have no doubt that some members of the Committee are qualified in accountancy. I am not asking Members to put their hands up, but they are about.

I have been a governor of Luton Sixth-Form College for 23 years continuously. I was also a governor there for two years in a previous period. I have been comforted by the fact that we have always had at least two qualified accountants on the governing body who can question and check the accounts and assure us that they are right, that we are not making mistakes, and that the college is in good financial order, especially when we are under pressure. We are under financial pressure; there has been the VAT issue, which I will not go into now, but we have debated it on many occasions. It is a great comfort and reassurance that we have professionals sitting on the governing body who can look at an account, make sense of it, and ensure that we are doing the right thing. It is not just a question of numeracy, which I have; it is about the specific skill of accountancy.

New clauses 1 and 2 would make a very valuable addition to the Bill. I hope that the Government will accept them or build requirements of that kind into the Bill to ensure that colleges are well governed and well managed in financial matters.

[Gordon Marsden]

I congratulate my hon. Friend on speaking to the new clause with his customary insight and from past experience, which are powerful advocates for the mechanisms he proposes. There are not many vehicles in the House for the regular praising of accountants. I am tempted to say that if we were in the middle ages and my hon. Friend, with the passing of years, were to pass away, he might be subject to a posthumous cult of the patron saint of accountants. The serious point is that everything my hon. Friend said is valid. Whether what he proposes is done in a formal way, as he suggests, or by strong direction, the Government would do well to take on board his proposals.

[Robert Halfon]

I thank the hon. Member for Luton North for the new clauses and for his wise contributions throughout the Committee. Rather than the role of banker, I think he has taken on the role of the Gandalf of the technical education and further education sector. There will therefore be no danger of his passing as the hon. Member for Blackpool South described.

The hon. Member for Luton North has tabled two important new clauses. In an ideal world it would be a good thing if all or even some members of governing bodies had important financial qualifications, but I remind him that the head of Blackpool and The Fylde College, when asked about that, said:

“I am thinking of the unintended consequences. It is very easy to say that we can dictate exactly the constitution of a governing body, but if we are looking at further education corporations across the country, some of them are very different. My own, for example, is an outstanding college.”—

I have seen it for myself, and it certainly is—

“We are very strong financially…we benefit from the mix and balance that we have on the board: we benefit from our business community and from two very able students on the board. I am hesitant about mandating exactly what that board would look like, because it varies by college. If, for example, I were a land-based college, I might want a slightly different mix, so I am hesitant about fully supporting that.”––[Official Report, Technical and Further Education Public Bill Committee, 22 November 2016; c. 60, Q80.]

When I asked her about the best way to achieve what she had done, she said what is needed is an expert to manage finances: not necessarily, dare I say it, someone with an educational background—we were talking about the education administrator earlier—but someone with a good understanding of finances. Where colleges are doing better even with all the financial pressures, I suspect that is because they have brilliant financial teams as well as the brilliant leadership of the principals and the advice of the governing body.

It is the governing body of the college that is best placed to ensure that effective management is in place that meets the needs of the college, but it must be the principal who puts her team in who has the day-to-day responsibilities. When colleges fail, as the hon. Gentleman will know, the proper intervention system is in place, with the education commissioner and suchlike.

The introduction of the insolvency regime will change a lot of this anyway, and it will serve to emphasise the importance of sound financial management. Although the Government are committed to the protection of learners, corporations are ultimately responsible for ensuring the financial health of their institutions.

I am wary of imposing such a measure, but I have a lot of genuine sympathy with the hon. Gentleman’s intentions. I commit to continue working with the sector to strengthen the financial acumen of governing bodies and the capability of financial directors. That will protect the interests of not only the colleges, learners and employers in the local communities but the taxpayer, which is incredibly important. On that basis, I hope the hon. Gentleman will withdraw the motion.

[Kelvin Hopkins]

I thank the Minister for his assurances and for his acceptance of the points I have made, if not of the new clauses. Even if nothing arrives in the Bill, I hope that guidance to colleges will, in one form or another, make sure that proper financial governance and financial management takes place so that insolvency is avoided at all possible costs.

[Robert Halfon]

I should have said that we are lucky in the sense that we have the Association of Colleges, the Collab Group and the Education and Training Foundation, and all those organisations are doing everything they can to improve financial leadership in colleges up and down the country.

[Kelvin Hopkins]

I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

Technical and Further Education Bill (Seventh sitting)

Kelvin Hopkins Excerpts

Committee Debate: 7th sitting: House of Commons
Thursday 1st December 2016 Public Bill Committees

[Gordon Marsden]

Good morning, Mr Bailey. It is a great pleasure to serve under your chairmanship. The Minister is right to say that we welcome the concept of the insolvency regime. We think it is necessary in the context that I talked about at the end of the last session, so we do not intend to oppose the principle of it in any shape or form. However, as the Minister has observed, we intend to probe—more sharply on some aspects than others.

If I may, Mr Bailey, I will speak to the two amendments we have tabled separately; although they are linked, they have rather different focuses and emphases. Amendment 1 aims to ensure that an appropriate assessment is made of any potential impacts on students and their education if an education administrator puts a further education body into special administration and takes action such as transferring students to another institution, or keeps an insolvent institution open for existing students. We recognise that the decision whether to transfer students to another institution or to keep an insolvent institution open for existing students is fraught with potential difficulty and will certainly demand great skill and finesse on the part of the education administrator. The Minister may wish to bear that in mind when we consider later Opposition amendments, which will probe him a little more on the nature, experience and qualifications of the education administrator.

The crux of the amendment relates to some of the matters we discussed when considering similar provisions in the Higher Education and Research Bill. The amendment would ensure that the entitlement that the Bill gives students to continue their education works in practice. We know that cases of colleges failing or other crises have arisen both in FE and in HE. I do not want to exaggerate those issues, because I take on board the points made by the Association of Colleges and other college organisations that the vast majority of FE colleges conduct their affairs in a very wholesome and satisfactory fashion, as my hon. Friend the Member for Luton North has mentioned previously.

[Kelvin Hopkins (Luton North) (Lab)]

Amendment 1 is very simple and I hope the Government will be minded to accept it in some form. Have we had any response, contribution or advice from the Association of Colleges or the Sixth Form Colleges Association? Do they broadly agree with the Government’s proposals? Are they agreeable to our amendment?

[Gordon Marsden]

My hon. Friend is right that we need to get support from those organisations. The AOC has raised particular issues relating to later Opposition amendments, such as amendment 34 to clause 15. Some of those concerns will be explored when we consider those amendments.

The ambitions of the special administration provisions are noble, but amendment 1 is intended to serve as a safeguard against any unintended consequences. As we know, even isolated incidents of colleges that hit the headlines can have a deleterious effect on the sector. The sector is in a delicate state at the moment—I will not put it any stronger than that—so if this provision is needed, we should do what we can to avoid problems with the impact on students and education.

As far as I understand it—I say that with due modesty, because some of this is quite technical—the education administrator will be given four options for supporting students to continue their education if their college becomes insolvent: selling assets to keep a college afloat; bringing in another body to take on functions of the college; transferring students to another college; and keeping the college

“going until existing students have completed their studies”.

That last phrase is rather ambiguous, and it would be good to hear the Minister’s thoughts on it. Whether in his response to the amendment or later this morning, it would be useful to hear whether there are any thoughts on the timeframe of that option.

All the options are sensible. I do not think that any member of the Committee would suggest that they should not be pursued by the education administrator if students’ education were put in jeopardy by insolvency, but there are questions about the finessing of those options, about which option the administrator thinks it best to pursue, and about the timeframes. Again, the Minister may want to say something about potential timeframes as we go along. Sometimes the education administrator might need to use more than one of those four options, perhaps at different points in the process. Our amendment addresses what that will mean for students in those different circumstances. To do that, we propose that an assessment be made of the impact of the administrator’s decision on students and the local community, enabling any negative impacts to be appropriately mitigated.

We are realistic. We know that sometimes difficult situations bubble up over a long period of time and there are amber warnings, but sometimes, because some of the problems have been concealed, they blow up very rapidly and hit the headlines. Ministers, the new institute or, indeed, the Skills Funding Agency may have to move swiftly in such circumstances. We understand that. We do not want this to become an over-bureaucratic, long-winded, time-consuming process, but we believe that a definitive assessment is needed somewhere in the process.

We have several concerns. If an administrator keeps a college going so that existing students can finish, for example, one can see the potential benefits for the students. While it will depend on the nature of their contract—the University and College Union and others have previously raised concerns that the FE sector is becoming a mélange of shorter term contracts—there will be lecturers and staff on contracts of significant duration, and it would be understandable, perhaps highly probable, that they would seek to leave. After all, the involvement of an education administrator is essentially a sign of a potentially failed college and that their employer, at least in the way that he, she or it employs them, will either close or change in the near future. Any exodus of staff in such circumstances could have untold impacts on the quality of education that students receive. We, and I am sure the students at such colleges, want to know what transitional measures are envisaged to maintain the delicate balance needed to protect the quality of education that students receive at a college that is being kept open on life support. That is option 1.

Option 2 is an administrator deciding to begin selling off college assets to address the insolvency issues, or just to keep the college afloat. What protections will there be so that resources that are integral to a learner’s studies will not be sold off? I understand that it is impossible to make an absolute judgment in every case on whether an administrator should do one or the other. It will obviously depend on the individual circumstances and assets and so on, but computers and ICT—I think “digital services” is the more up-to-date term—spring to mind. Often worth a significant sum, they may be an attractive asset that is easy to sell quickly for a good taking; on the other hand, selling them off could leave less equipment to share between the college’s remaining students, which would have a negative impact on their learning experience.

Additionally, the area reviews and mergers need to be thought about in great detail. In our evidence session I traded questions with the FE commissioner on the impact of that. He takes a more sanguine view of that process than the Committee and I do, but time will tell. What we know is that in circumstances where learners need to be transferred to another college—that does not necessarily mean that the whole body will close, as someone suggested—the college building could continue but, for whatever reason, the students in a particular department or area are transferred to another college, possibly for economies of scale. It is not necessarily that one particular college is closed and absorbed into another.

[Kelvin Hopkins]

These events would be of great concern to students and staff alike if they happened, but we hope they will not and we will try to ensure that they do not. However, if there are to be changes, would it not be wise—or essential—to make sure they take place during the long summer vacation, so that they do not disrupt students in the middle of courses during in the academic year?

[Gordon Marsden]

My hon. Friend, as always, makes a good and practical point. I have two observations. One is that crises cannot always be managed and sometimes they blow up from nowhere. My other observation is that among the pressures on FE colleges these days is the fact that the long summer break is becoming less long. That is true for FE students as well as other students. However, my hon. Friend’s general point is absolutely right and needs to be taken into account.

There are plenty of questions to be answered for students. How close to their home and their old college would the new college or facility—it may not be a completely new college—be? How much more expensive and time consuming would it be to get there? We know that college students have to spend a considerable amount of money on travel and we know that the mechanisms for supporting them are highly variable, particularly with local authorities’ discretionary spending being cut to the bone in a range of areas. There is already a risk of making some education and courses inaccessible for the less well-off.

What financial support does the Minister envisage might be available to help such students to access education at a new institution if it turns out that the challenges are considerably greater? For example, would the new college have the capacity to respond to any influx of new students? As I have indicated, insolvency might result in some students finding themselves forced to travel longer distances to continue their studies, but there is no reference in the Bill to mechanisms by which they might be supported or compensated. I understand that that is not something that should necessarily go into the Bill, but while I appreciate that a lot of things must be worked out, it is a bit worrying that it seems that, even at this stage, not much thought is being given to some of these issues. If it is, I apologise.

Mergers between colleges can be harmful to the social fabric and social mobility, particularly for young people in rural and suburban areas, and might force them to travel 30 or 40 miles to college. I raised this point in Westminster Hall about a year ago with the Minister’s predecessor, who seemed to be somewhat miffed that I referred to his predecessor, the right hon. Member for South Holland and The Deepings (Mr Hayes), being decidedly agnostic about the prospect of mergers. That was the case, however, and it was because the right hon. Gentleman’s constituency is very rural, so he has a lot of knowledge and concern about the issue.

We must make a distinction between the geographical situation when there is insolvency and the mechanisms to deal with it. For example, when two colleges merge in a suburban or rural setting, the implications for the ability to maintain courses, and thus viability, will be significant if issues such as travel loom large and make it impossible for existing students to go there or for future students to want to go there. Even in urban areas—parts of Greater Manchester, for example—public transport is not necessarily good. In my constituency, travelling west to east or east to west on public transport tends to be more difficult than going north to south. There is a range of concerns.

We have seen during the ongoing area review process that the Government have encouraged colleges either to merge or to close. The new FE commissioner said in evidence that provision at levels 1 and 2 in particular needs to be as local as possible to learners, whether in an urban or a rural area, but he accepted that if people do not have the wherewithal to travel, they will not be able to do so. Shakira Martin of the NUS said in the evidence session:

“It is also not clear how the Government will make sure that the education the student receives in the college is kept open and to a high-quality standard. For example, the area review process may have unintended impacts. There will be fewer colleges, further apart. How will travel costs and access”—

time is an issue as well, not simply cost—

“be addressed?”––[Official Report, Technical and Further Education Public Bill Committee, 22 November 2016; c. 51, Q69.]

In evidence, Bev Robinson, the principal and chief executive of Blackpool and The Fylde College, who was a member of—[Interruption.]

--- Later in debate ---

[Gordon Marsden]

I was talking about how travel costs and access would be dealt with and I was about to quote the comments of a witness, Bev Robinson, the principal and chief executive of Blackpool and The Fylde College. She said:

“I would wish to make sure that learning within a reasonable travel-to-learn pattern was protected as well as students.”––[Official Report, Technical and Further Education Public Bill Committee, 22 November 2016; c. 51, Q70.]

I see nothing in the Bill about where the funding to support this process will come from, and Ministers have not said a great deal about it.

Research released in 2015 by the National Union of Students and the AOC showed that only 49% of further education students can always afford their travel costs. The average travel time for those surveyed was two hours and 48 minutes a day, for an average distance of 11 miles. Many young people—about 40%—rely on financial support from parents or guardians for travel costs. The problem is of course exacerbated by the lack of national funding schemes to get young people to college. Even the minority of councils that offered discounted travel for young people on a discretionary basis are now less likely to do so, following major Government cuts. The amendment would require those matters to be considered so that appropriate measures could be put in place, although such issues are difficult to legislate for and there are unknown consequential effects. Invoking education administration powers may affect students, but that is precisely the point of the amendment: it would ensure that whatever impacts the powers have in practice, they are assessed within the local circumstances of the college in which the powers are needed. That is an important part of the education administrator’s responsibilities.

If students have to travel longer distances to college, incurring higher costs, it strengthens our argument that education maintenance allowance should be reintroduced to help cover those expenses.

[Kelvin Hopkins]

My hon. Friend makes a very strong point. For poorer students travel to colleges is expensive even now, particularly in sparsely populated rural areas. The closure of a college in one town and having to go to a town many miles further on will cause great difficulty in financial terms and in terms of the time spent travelling and the reliability of public transport.

[Gordon Marsden]

My hon. Friend again makes a very good point. It underlines our concerns and why we think such issues need to be taken into account.

Amendment 2 is designed to ensure that, within the circumstances in which the process takes place, all relevant stakeholders are fully consulted about decisions taken by the education administrator in respect of the future of the institution. This touches on a theme not dissimilar to that which we discussed during the debates on schedule 1 to the Higher Education and Research Bill, where consultation with staff and students was a high priority.

The amendment would ensure that there is full consultation with various bodies or groups representing further education staff and students. Members of the Committee might ask, “Is this necessary? Surely the students and the student body are bound to be informed,” but I have to say—Members may have experience of this—that is supposed to be the case when businesses fail and companies go bust or when something cataclysmic happens, but often workers or employees are not kept in the loop. We should legislate for the worst scenarios and the worst employers, not for the best.

It is important that the education administrator should consider representations from relevant stakeholders such as students and staff, as they have invested two or three years of their time and money in studying and their livelihoods will depend on the institution in question. It is surely not too much to ask that the education administrator should have the responsibility placed on him or her to consider those representations, too.

The other group it is vital to consult are recognised trade unions at the further education body. The positive influence of unions on training and skills in the workplace and in colleges is another key reason why unions should be consulted. Research by Unionlearn has shown, as I have mentioned before, that the union effect on skills across the whole economy is significant and has strengthened in recent years. I am obviously referring to the training that goes on at work, but often the trade union representatives who operate in a college will be either union learning reps themselves or closely associated with union learning reps. That point needs to be made. On the union learning fund, an independent evaluation has demonstrated a range of new findings about the positive impact of union learning for both employers and employees. That also has a bearing on the necessity and advisability of consulting the recognised trade unions at the further education college in question.

I will finish with those remarks, but I ask that the Minister gives some thought to both amendments. These are things that should happen, and by making the amendments we would ensure that they do happen.

Technical and Further Education Bill (Sixth sitting)

Kelvin Hopkins Excerpts

Committee Debate: 6th sitting: House of Commons
Tuesday 29th November 2016 Public Bill Committees

[Gordon Marsden]

We have a weaker version of that. The Education Committee interviewed the chief inspector-designate of Ofsted and was not satisfied, but the Secretary of State was satisfied and that process went ahead. Amendment 17 is not proposing some form of constitutional innovation; it is something that goes on already.

Sometimes the Minister or the Secretary of State agrees with the view of the Select Committee and sometimes, if the Select Committee has said no, they do not. I do not have a problem with that. In terms of raising the profile of the institute, which is surely what we all want to do in the run-up to its formal launch in the spring, this would be a very useful measure for the Government to agree, which would send out a signal.

As I said, this is a probing amendment. If the Minister were to say, “It is probably more appropriate for just one of them—the chair or the chief executive—to have it,” we would not argue with that. Agreeing to this measure would send out an important signal about how important the Government consider this issue to be. The Select Committees have already shown interest in apprenticeships, technical education legislation and the apprenticeships levy, as the Minister well knows because he has been before them, so I cannot believe that they would not be happy to perform this duty. That is the basis on which we tabled the amendment.

[Kelvin Hopkins (Luton North) (Lab)]

I support what my hon. Friend says about amendment 17. It is very important to have representation by an apprentice or someone who has recently been an apprentice, so the board gets feedback from someone who has been on the receiving end of the experience, rather than just from people who think they know about it, but may not know it all. An apprentice who has spent considerable time going through the system will have a lot to offer to the board, so that is very important.

It is important to have members of the board who are different from the rest of the board. In the past, having one woman on a board—nowadays, we have many more than that, I am glad to say—made a difference to the nature of the discussions. Having representatives from minority communities on boards makes a difference by broadening the discussions and making them better. Assumptions that might have been made if the board were made up of small “c” conservatives and middle-aged white men in suits—I am one of them—can be challenged. We see too many people like me, and not enough of other people—[Interruption.] I said people like me, not necessarily me personally. It is important to recognise that there are other voices and other views, and the way to get those views represented is to have such people on the boards. Having at least one apprentice on a board is a good idea, although it should be someone who is experienced—someone who is coming to the end of their course or has just completed it, not someone who is at the beginning of their course. I strongly support what my hon. Friend said, and I hope the Government take cognisance of his views.

Turning to amendment 32, I have chaired two confirmation hearings and I sat on a committee interviewing an appointee before they went for their confirmation hearing. I think it is an extremely good exercise that has improved the quality of the appointments in recent years, so I very much welcome it. Occasionally, the people have not been ideal for the job and have chosen to stand down before going right through the process; I think that shows wisdom. Sometimes the Government and Ministers have been reluctant to let go of appointments, but they have now done so, and I think they are pleased with the job that Select Committees have done on confirmation hearings. I really do think that this would be a very good idea.

It is particularly important to have confirmation hearings for the chair, although perhaps the chair should deal with the chief executive. The confirmation hearings I chaired were to do with that role. It might not have been a chair—it might have been a director or something—but we were essentially interviewing for the chair role. It was extremely interesting and very useful, and I think that in each of those hearings we got the right result. I support amendment 32 in principle, even if my hon. Friend does not press it to a vote.

[Robert Halfon]

Let me begin by saying that if there were more people like the hon. Member for Luton North in education and skills, we would be in a very good place indeed—whatever their age may be.

[Kelvin Hopkins]

I should correct myself. I said “middle aged”; I think that is rather beyond me. [Laughter.]

[Robert Halfon]

I thank the hon. Member for Blackpool South for tabling these amendments, particularly amendment 17, which is a very thoughtful amendment. He may be interested to know that even before they were tabled, when we were discussing these matters, I made some of the points that he just made.

Regarding advertising and interviewing for the board members, we have had 281 applications to the board, representing a wide spectrum of apprenticeship experience. I believe that once the board is finalised the hon. Gentleman will be happy with the membership—we have a few rubber stamps to go yet, but I think he will be happy. He will know that the board is responsible for ensuring that the interests of apprentices and students of technical education are well represented.

I have thought about this issue very seriously—long before we discussed it in Committee—but I cannot go so far as to say there should definitely be apprentices on the board. In part that is because board members need to have experience and they carry a great deal of governance responsibility; they also come under press scrutiny, which is not easy. In addition, the board needs to represent the interests of all apprentices of varying levels, ages and sectors, so a single recent apprentice would be unlikely to speak for all apprentices. We do not think that the amendment offers the best way to represent the interests of apprentices and those in technical education.

I think we can square the circle by agreeing that the institute should draw on the experiences of apprentices, so I am pleased to announce that we expect the institute to invite apprentices to establish an apprentice panel, which would report directly to the board. The panel would be made up of apprentices from different occupations and experiences. The panel would decide for itself which issues to focus on, and it will challenge and make recommendations to the board. That squares the difficult circle of wanting experience but also having the vital input from apprentices up and down the country. The Institute for Apprenticeships and Technical Education will ensure that the first panel is in place before the institute goes live in April 2017. The institute will consider how best to engage with apprentices on an ongoing basis and how best to represent technical education students ahead of it taking on that responsibility in April 2018.

I am also pleased to report that there are plans to recruit three apprentices to work at the institute, which will review that number periodically. While I am in this post, I will certainly look at this issue with an eye to expanding the number of apprentices who work for the new institute.

Regarding amendment 32, I understand that it is looking for scrutiny of these crucial appointments—the hon. Member for Luton North spoke about how important these appointments are. However, given the size and scope of the institute, and even after the addition of the new functions in the Bill, I do not agree that the amendment is necessary. Generally, appointments that are subject to confirmation hearings by Select Committees are to much larger organisations. Furthermore, the appointment of the chair is subject to a code of practice set out by the Office of the Commissioner for Public Appointments, as the hon. Gentleman no doubt knows, and is already subject to a high degree of scrutiny.

In line with requirements, the Secretary of State has approved the launch of a recruitment campaign for the chair and the public appointment selection panel. The panel is chaired by a public appointments assessor, and as the appointing Minister I am kept informed every step of the way. A shadow chief executive is in post; the recruitment of the permanent chief executive will follow established civil service rules, with fair and open competition. Also, the Enterprise Act 2016 is clear that the chief executive will first be appointed by the Secretary of State in consultation with the chair and thereafter by the institute itself. The chair and chief executive can of course be called on by the relevant Select Committees to give evidence to Parliament and account for their actions

I do not think the amendment is necessary as I believe that the appointments will be subject to appropriate scrutiny, consistent with established public appointment rules. I hope that the Committee agrees on the need for the institute’s leadership to be established without delay, especially given questions posed by the hon. Member for Blackpool South about the institute’s capacity, whether it will be set up in time, and so on. I hope that the Opposition are sufficiently reassured by that information to withdraw the amendment.

[Gordon Marsden]

I will treat the Minister’s two responses separately. On amendment 32, which deals with the appointment of the chair and chief executive, yes, there is always the argument that because we are speeding towards setting the institute up—I do not criticise that—there is not time for a confirmation process. I hope that I do not misrepresent him, but I think that is the gist of what he said.

All these things are contextualised. I do not want to open old wounds, but the Institute for Apprenticeships has not had a great record with shadow chief executives—not because of their calibre, but simply because of the time for which the first stayed and the fact that the second, Peter Lauener, is doing the job two days a week. To be blunt, that has aroused scepticism—or to put it positively, a wish to be reassured—among stakeholders across the board about whoever the new chief executive is. It seems to me that an appointment hearing would be neither inappropriate nor unreasonable.

The Minister cannot have it both ways. He tried to persuade me the other day that I did not need to worry too much about the institute having only 60 employees because an enormous number of other people were doing things, but if that is the case, it is a rather more significant organisation than the Minister’s bald figures and comments suggest. To be frank, I am not sure that is the strongest of arguments.

[Kelvin Hopkins]

There is not necessarily a correlation between the importance of an institution and the number of people involved. Some institutions may be quite small but extremely important. As my hon. Friend says, size is not so significant.

[Gordon Marsden]

My hon. Friend may well be right. Significance is the important thing, and I just think a confirmation hearing would be appropriate for a new organisation such as this. As the Minister said, such a hearing may well take place in some shape or form with a Select Committee anyway, but we will see. We will not press amendment 32 to a vote at this point, but we reserve the right to return to it on Report.

Let me turn to amendment 17. I listened carefully to what the Minister said in addition to his point about the proposed apprentice panel to report directly to the board, and I am bound to say—this is an instant comment, not a considered reflection—that I think that is a positive and enlightened approach. It addresses many of the issues that concern us and I think will concern apprentices, and although the devil is always in the detail, it could be an elegant way of squaring the circle, to use the Minister’s phrase. We will see how things go and wait to see the list of appointments.

Incidentally, our proposed amendments are not comments on individuals. I always take the view that we are making legislation for a generation and we have to make it for all individuals. Having said that, I am particularly encouraged and pleased with the Minister’s response. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the schedule be the First schedule to the Bill.

--- Later in debate ---

I am not saying that that is automatically a recipe for confusion, but the Minister will understand that, given those potential overlaps and the potential for choice that that offers people in those areas, in terms of providers or employers—I referred to that earlier as one of the factors that worries me about the capacity issues not being easily determined for the new institute—it would not be unreasonable for him to say a little more about how he and his Department envisage the overlaps being creative rather than chaotic. It would be helpful if the Minister touched on that in his response.

[Kelvin Hopkins]

I will not speak for long, but I want to support the three new clauses.

I feel very strongly about new clause 3, because there has been a lot of talk in recent years about apprenticeships that do not really deserve the name—the quality of them was so poor that they were really forms of cheap employment and nothing more. Quality is important. Apprenticeships have to have a high reputation so that when people are offered an apprenticeship, they know that they will get something of real value from the experience. Therefore, reporting back information about apprenticeships—about how individuals are doing and about the quality of apprenticeships—is very important. We have to raise the status of apprenticeships and not allow that to diminish.

On new clause 5, which is about consultation, we want feedback from everyone concerned with apprenticeships to ensure that the institute and, indirectly, the Government have proper information about what is going on on the ground. We want to know what is actually happening and to be able to say that we are making progress and having success.

On new clause 4, I congratulate my hon. Friend the Member for Batley and Spen on her excellent speech; it was first class. Nothing more needs to be said, but I just want to reinforce what she said about the lack of careers advice.

When I was at school, there were two courses: either we were going to stagger on towards university and higher education or we were told, “Go and work in a bank.” That was all that was given. Indeed, an extraordinary number of my school friends ended up working in banks. Whatever their talents, many of them finished in a bank. I had friends who had superb writing skills or were natural cartographers and could have done all sorts of different things, but they finished up working in banks because that is where they were guided to by our school. They were almost dismissed. The school was really interested in those going on to higher education, and so to anyone else it said, “Go and work in a bank.” It really was not good enough. I was one of those who eventually staggered through higher education, otherwise I would have no doubt finished up in a bank—[Laughter.]—not as a senior banker, but just a clerk.

Over the past 10 or 20 years, I have seen a wonderful careers service in my town of Luton, where I knew most of the careers advisers as personal friends, being dissolved. It has been dismantled bit by bit, and the advisers have ended up doing other things. One has become a headteacher of a school, which is fine. She went on to retrain as a teacher after the careers service disappeared. That means young people are not getting the advice they need.

We are talking about apprenticeships and post-16, but lower down, in schools, we want children to be aware of the immense possibilities and tremendous variety of work, so that they can match their skills. If someone can write, they can then get into something that involves writing. If someone is naturally mathematical, they can move into that area. If someone is naturally bent towards engineering and mechanical things, they can be guided into all sorts of interesting jobs. However, if there is no advice, they might finish up doing the wrong thing and spending their lives being a bit frustrated because they really wanted to do something else. That is a very important point.

My two granddaughters are only eight and nine, but they are already talking about what they are going to do when they are adults. They fortunately come from a background where their parents talk incessantly about all sorts of interesting things and what they can do in life, but not everybody has that opportunity. Many children have parents who are not so well informed and cannot give advice, so they depend upon professionals giving advice.

Advice should cover the whole range of abilities, not only highly skilled jobs and professions. There are millions of jobs that are much more basic, but that are equally valuable to society. We depend on everybody and every type of skill, and we should present all our children and young people with a full understanding of the possibilities of life, so that they can not only enjoy life and fulfil themselves, but make the most effective contribution to the economy and to our world. What my hon. Friend the Member for Batley and Spen said was first class, and I hope that the Minister will accept it.

[The Chair]

Before I call the Minister to respond, I remind Committee members that any decisions on new clauses are taken at the end of the Bill.

--- Later in debate ---

[Gordon Marsden]

I thank the hon. Gentleman for his intervention, and for the penetrating questions he put to the witnesses. Hopefully that will be a by-product of the process, and that is entirely right. I am also bound to observe that there are other factors pushing it down this route. One of those other factors is the underlying financial weakness of the sector. When the further education commissioner gave evidence—he talked of 82 or 84 colleges in a merger position—he was, to be blunt, far more optimistic and gung-ho about the outcome of those mergers than I would be. From memory, some other members of the Committee expressed a different point of view. The truth of mergers is that they do not always work out well, and this was commented on by Mr Pretty from the Collab Group. He made those observations based on his own experience. There are a number of factors here. Changing priorities in public funding is a reduction, it is how some colleges have struggled with large debts or partially completed capital investment projects. The latter partly reflects weaknesses in the planning and financing of capital projects under the former Learning and Skills Council.

[Kelvin Hopkins]

Two or three points were made about mergers during our evidence sessions. One was that it is not just a question of scale. Sometimes colleges are not enormous, but they still work well separately. Sometimes mergers take place where a weak college is merged with a strong college, which turns them into a joint weak college, not a joint strong college. So there are all sorts of possibilities, probabilities and problems with mergers, and they should be judged carefully on their own merits.

[Gordon Marsden]

My hon. Friend is right, and what he says is underpinned by his great experience in this area. I am not saying that every area review that produces merger proposals will automatically result in colleges finding themselves in a financially weaker position and therefore more in need of the insolvency clauses in the Bill than otherwise, but it is part and parcel of that aspect.

It is not just FE colleges feeling the strain. It was helpful to have the presence of the Sixth Form Colleges Association in the evidence session. It, too, mentioned courses having to be dropped as a result of funding pressures. Three quarters of colleges have limited the size of their study programmes and more than a third do not believe that next year’s funding will be sufficient to provide the support for educationally or economically disadvantaged students.

In my neck of the woods, as well as the excellent FE college, Blackpool and the Fylde College, which the Minister visited, is Blackpool Sixth Form College, which is also an excellent college that has, over the years, done splendid work on the vocational side, in traditional qualifications and with the previous Aiming Higher programmes. Although the college is outside of my constituency—it is just in the constituency of the hon. Member for Wyre and Preston North (Mr Wallace)—it takes students from three or four constituencies. It has done splendid work, but the previous principal and the current principal have had to juggle the finances very carefully indeed to complete some of the programmes they wanted to do for the college and for the physical infrastructure. Sometimes the physical infrastructure of such colleges is 30 or 40 years old, and needs renewing.

I am reflecting on the various factors that give rise to the clauses we are passing into legislation. I want to focus us on the detailed conversations we will have when we move on. The picture of fragility that I described makes it even more important that the insolvency clauses and the position of the educational administrator, which we will talk about in considerable detail in due course, are a real answer to this problem, rather than something that sounds good on paper but does not do the business in practice.

[Kelvin Hopkins]

I have some experience in these matters. There have been funding pressures in all spheres of post-16 education, although not necessarily in universities, which seem to be well funded compared with other areas. In spite of the fact that there are advantages of scale in producing wide ranges of subjects in whatever qualification one is taking, some of the smaller subjects are, even now, dying. We are getting to a point where subjects such as modern European languages are being lost entirely from an area because no college or school will teach them any more. That is tragic. We should be creating more variety of opportunity in technical and academic education, not less.

My second major speech when I first came into this place was about funding for sixth-form colleges and the fact that they did a superb job. I said that funding constraints were in danger of killing the goose that lays the golden eggs: the sixth-form college sector. They do a fabulous job and I know from experience that we should have created more of them. Sadly, a view was held that we should create lots of schools with small, less efficient sixth forms with much narrower subject ranges, instead of sixth-form colleges. I think that went in entirely the wrong direction. I hope that I can persuade the Minister and others that we ought to look more favourably on sixth-form colleges and FE colleges if we are to make serious advances in educating and training our young people better than we have done in the recent past.

[Robert Halfon]

May I put some things in context for the hon. Member for Blackpool South before I speak directly on the clause? No one denies that there have been funding pressures, as the hon. Member for Luton North pointed out, but, even with such pressures, 80% of colleges are either good or outstanding, and 79% of adult FE students get jobs, move to apprenticeships or progress to university. Some 59% of institutions are in good financial health and 52% are operating with a surplus. That does not mean everything is rosy, but it puts things into context.