Technical and Further Education Bill

Lord Aberdare Excerpts

Report stage (Hansard): House of Lords
Monday 27th March 2017 Lords Chamber

[Baroness Watkins of Tavistock (CB)]

My Lords, I support Amendment 16, to which I have added my name. It is very clear that many young people who take out government-backed loans believe that they give a quality indication to the provider, to which they then enrol to study. It seems extremely unfair that, in the event of such a provider becoming unable to continue, they would go to the back of the queue for the repayment of their loan.

When meeting the Bill team, who have been extremely helpful, we heard evidence that everybody tries to find an alternative provider so that the student can complete their programme, and that is clearly the most desirable outcome. The most undesirable outcome is if a student is unable to complete the programme and is left with debt, even if that debt does not have to be repaid immediately. Our amendment is intended to protect students in such circumstances so that their loan is repaid by a provider if they cannot find an alternative provider with which to complete their course.

We want to encourage people to undertake this kind of technical education, and I commend the Government on their Bill because it will encourage young people to do far more local-based technical education and should get both young and more mature people into work, which, after all, is the overall aim of the Bill. Therefore, I hope that the Minister will be in a position to take this matter away and to come back with something at Third Reading that will protect students in the future.

[Lord Aberdare (CB)]

My Lords, I too will speak mainly on Amendment 16, spoken to by my noble friend Lady Wolf, although I regret that I am not able to support it, so I hope that that is not the end of a beautiful noble friendship.

I am concerned that Amendment 16 would make it harder for independent training providers, which provide a significant proportion of the technical education we so desperately need, to compete on fair terms with FE colleges. I should perhaps declare an interest as having been an independent training provider in the distant past.

The effect of the amendment as worded would be to increase the price of such courses offered by commercial and charitable contract-funded providers in order to cover the cost of underwriting the loans made to students with an external financial institution. This would mean that the cost incurred by the vast majority of loan recipients, who will not suffer curtailment of their studies due to insolvency, would increase, even if only by a relatively small percentage. It might also discourage high-quality independent providers from offering loan-funded courses, not just because of the extra cost but because of the extra administration and bureaucracy involved, thereby limiting the range of options available to learners and, as the noble Baroness, Lady Cohen, said, providing a barrier to entry for potential new providers.

The amendment would not apply to FE colleges and other bodies covered by the insolvency regime being created by the Bill, so learners at FE colleges, which might be at least as likely to fail, would be protected by a special insolvency regime without any extra cost.

FE college loan-funded courses already have the additional benefit of being exempt from VAT, so most independent providers are already likely to face a 20% cost disadvantage. Apart from that, the cost and complexity of setting up the sorts of schemes proposed in Amendments 14 and 16 seem likely to considerably outweigh their effectiveness or value. If some special provision for independent training providers were needed, it would surely be better to take a similar approach to that proposed for colleges based on government underwriting, as I believe has happened in practice in the past. Of course, in some cases, independent training providers may even be partly owned by further education colleges, as was the case with the provider First4Skills, which was 60% owned by the City of Liverpool College and had to call in the administrators. I am not clear how the amendment would address a situation such as that.

Finally, I know that many independent training providers would be happy to help put a clear mechanism in place so that learners could easily transfer to another provider if their existing provider failed. For all those reasons, I believe that the amendment is not the right way forward.

[Baroness Pidding (Con)]

My Lords, noble Lords may remember that I spoke some weeks ago on this Bill at Second Reading and described the challenges that the UK labour market will face in the coming years and decades. Such times need flexible legislation, so as not to tie the hands of government, the UK labour market and private providers. I believe that it would be a mistake to complicate and overlegislate, and then expect any improvement on the current system.

I agree with the sentiment of Amendments 14 to 16. It ought to be our duty to make sure that students are not left stranded after provider failure, through no fault of their own. However, it is my fear that these amendments may do the very opposite of their well-meant intention. I am particularly concerned by Amendment 14, explicitly subsection (3). I want to stress that however well intentioned it is to demand that private providers set contingency funds that can be used only for the purposes outlined in subsection (2), it risks placing additional financial commitments and burdens on providers unnecessarily. It would also, inevitably, deter excellent private providers from offering loan-funded courses, given these extra commitments.

Given that the Government have made a commitment to helping students affected by provider failure by providing them with alternative providers, it is my belief that this well-intentioned legislative burden is not necessary. It will simply overcomplicate the system and deter private providers from offering excellent qualifications and training.

--- Later in debate ---

[Lord Storey]

Amendment 17 is in my name and those of the noble Lord, Lord Watson, and my noble friend Lady Garden. I moved a similar amendment in Committee, when I talked about “good” or “outstanding” FE colleges being awarded either status only if their careers education was of a high standard. The noble Baroness, Lady Morris, spoke in a sort of roundabout way about the importance of careers education, but was concerned about straitjacketing through the use of “outstanding” and “good”. Having reflected on what she said, I have come back with a slightly changed amendment, which highlights the importance of careers education in further education and says that when Ofsted carries out inspections, it is important that the careers guidance in those establishments be of a high calibre.

One of the most important things that we need to do for young people is to provide that guidance and knowledge about careers. Many of us do it with our own children: if careers advice is not available, we have networks of people who can talk to our children and perhaps provide opportunities for them to do work experience. But many children and young people, particularly those from disadvantaged backgrounds, do not get that network of support, and it must be down to the education system to provide that. Careers education should start in primary school. I remember that at my own school we had a careers session, where people from different jobs and workplaces would come into the school. There would be a carousel approach, and children could listen to them. That should go through to secondary schools, so I was delighted that the Government accepted the amendment from the noble Lord, Lord Baker, on university technical colleges being able to come into schools. They will be able to go into schools and tell young people about the different opportunities. We do not want a straitjacketing approach but one which lets young people see all the different possibilities. We have talked about this for a long time and have heard all sorts of promises about what will happen down the road. The situation is getting slightly better, but surely, if we are going to do one thing, the most important thing we can do for young people is to get careers education right.

I was interested in what the noble Lord, Lord Young, said on Amendment 4. Careers education is not just about careers advice and guidance, as important as those are, but about preparation for a career. If a young person has a career opportunity, I would have hoped that the educational establishment would prepare them for that, whether through techniques for interviews, filling out an application or preparing a CV—all those things come together in good careers advice. I hope the Government will listen to this, as I am sure they will, and that we can agree that careers advice should be part of the establishment of good FE providers.

[Lord Aberdare]

My Lords, I support Amendment 17 in the name of the noble Lord, Lord Storey. It is widely recognised, including in a number of reports published by some of your Lordships’ committees, that the quality of careers education and advice in both schools and colleges has hitherto ranged on a spectrum from patchy to poor. Surely one reason for that is the lack of any real incentive for schools and colleges to up their game and improve their offer. It seems to me that one of the most effective incentives that could be put in place is for schools and colleges to know that the quality of their careers education will be a significant factor in determining what sort of rating they get when they are inspected by Ofsted.

As we have heard, some good things are happening: the National Careers Service is developing its offer and in particular I am very impressed by what I have seen of the Careers & Enterprise Company and its effort to put a network of schools co-ordinators in place. None the less, we still hear constantly that, although schools are good at reporting their academic progressions and the number of people who have gone on to university or further academic education, they are not nearly so good at talking about students who have gone on to apprenticeships or further levels of technical and professional education. I rather like that term “technical and professional”, and thought the Minister in the other place was also rather keen on it, but that does not appear to be necessarily the case.

I very much support the amendment, particularly as it would go no further than requiring Ofsted to take account of the provision of careers advice in carrying out inspections, so it would not appear to be a huge burden on either Ofsted or the schools. It just sends a signal, as we always used to like doing. I support the amendment.

[Lord Baker of Dorking]

My noble friend Lord Lucas’s amendments are an addition to the clause that I introduced in Committee, but quite a useful one. The purpose of the clause is to ensure that schools have a duty to accept—and cannot reject—various people going in and talking to students at the ages of 13, 16, and 18 about the various types of training and education they provide, which is the most effective way to improve careers advice. I have sat through several Governments who have tried to create careers advice by legislation, and it just does not work. You cannot expect many teachers to know a great deal about life outside because they leave school, go to a teacher training college and then go back to school. You have to have real, live people going into schools and talking about what life is like in a factory or a business complex and offering the opportunities—and we will now have this.

In September this year, for the first time, not only the heads of university technical colleges but those of studio schools, career colleges and FE colleges, as well as apprenticeship providers, will have a right to go and speak to 13, 16 and 18 year-olds and explain to them the opportunities that are available to them other than just getting three A-levels and going to university. That is a major change. I strongly support the amendments in the name of my noble friend Lord Lucas. Groups such as Women in Engineering spend a lot time trying to persuade more women to get into engineering. We have courses in the UTC movement to persuade more girls to go into engineering, and the numbers are going up all the time: we sometimes get over 20% or 30% girls. We like that because when a girl decides to be an engineer, she is usually very determined and confident, and in many cases the brightest member of the team. This will help in all of that, so I support it. Careers advice in FE colleges is largely an unknown area, frankly, and they should certainly improve their advice. But they have the advantage of being able to go in and talk to schools from September of this year.