Skills and Post-16 Education Bill [HL]

Debate between Lord Adonis and Lord Ravensdale

Report stage
Tuesday 12th October 2021 Lords Chamber

[Lord Ravensdale (CB)]

My Lords, I declare an interest as an engineer and project director for Atkins, and as a director of Peers for the Planet. I am delighted to support the amendment in the name of the noble Baroness, Lady Neville-Rolfe, to which I have added my name. I apologise to noble Lords for not speaking at earlier stages of the Bill, but I have followed its progress closely and am really pleased to be able to speak on this amendment today. I welcome the noble Baroness, Lady Barran, to her post in the DfE. It is great to see her in her place.

Amendment 8 seeks to ensure that some critical skills development for long-term national skills needs are taken into account in local skills improvement plans.

On digital skills and innovation, these skills areas are critical to the recovery of the economy following the pandemic and to the future, yet we are seeing a crisis in digital skills, with the number of young people taking IT at GCSE falling by around 40% since 2015, and high rates of digital exclusion; 20% of children in one class in a secondary school local to me do not have access to the internet, which is a shocking statistic. Digital skills cut across all areas of the economy and will be part of the key to addressing the flatline in total factor productivity growth across the economy that we have seen since 2008.

I will give noble Lords a simple example. In my consultancy business a few years back we were commissioned to do a project to undertake a large data transfer activity. On reviewing the task, one of our young engineers proposed using robotic process automation techniques to complete the task instead of the original manual approach, whereby an advanced computer script undertook the task in place of engineers. This allowed it to be completed in a third of the time and cost, saving hundreds of thousands of pounds. That is productivity growth in action. In addition to improving productivity, such a process frees people from mundane and repetitive tasks and enables them to take on more value-added work; I liken the technology to the modern equivalent of machine automation, saving people from the drudgery of Adam Smith’s pin factory. Robotic process automation is already leading to data and finance sectors repatriating work that had previously been offshored, and to significant productivity gains, with work being undertaken by teams of software robots overseen by humans.

Time and again I have seen the ability of advanced software skills to automate tasks and radically improve the productivity of teams and projects, yet in my business and in businesses across the UK we are struggling to attract these skills. I am currently building a software team to design the control system software for a new nuclear reactor, and our job adverts for software engineers go largely unanswered. It is possible that this reflects my limited aptitude for advertising, but, in all seriousness, we must ensure that digital skills are prioritised to enable our businesses to grow, innovate, compete, create the jobs of the future and create the high-wage, high-productivity economy that we all want.

Our economy has long seen a shortfall in engineering skills. EngineeringUK estimates an annual shortfall of around 59,000 people in meeting an annual demand for 124,000 core engineering roles requiring level 3-plus skills. As our economy undergoes one of the biggest transformations in its history, engineering will become more important than ever. For example, it is estimated that between nine and 12 gigawatts of new generating capacity must be installed every year between now and 2050 to meet our net zero goals. New gigafactories will need to be constructed and immense infrastructure programmes completed to decarbonise heat and industry. All this will need to be accomplished by engineers. Again, in my consultancy business we are struggling to grow to meet demand from clients because there are simply not enough qualified engineers to go around. This is just to meet current demand. As engineering is a key enabler for the future economy, it too must be prioritised in LSIP developments.

I second the comments of the noble Baroness, Lady Neville-Rolfe, on the built environment and will not expand on them here, but I congratulate the Government on bringing forward amendments on alignment with climate and net zero goals in response to the work led by my noble friend Lady Hayman. Our amendment complements these by focusing on the key enablers for our future economy. I note the synergies with the green skills strategy amendment proposed by my noble friend.

Finally, I have a question for the Minister. I had an excellent skills review meeting with stakeholders from the Midlands Engine yesterday—I declare my interest as co-chair of the Midlands Engine All-Party Parliamentary Group. Given the importance of SMEs to the region and indeed nationally, there was some concern that their voices would not be heard, and that employer representative groups would be dominated by large corporates. This follows on from amendments raised by the noble Baroness, Lady Neville-Rolfe, and the noble Lord, Lord Patel, among others in Committee. Can the Minister provide some reassurance that those important voices will be heard in LSIP development?

[Lord Adonis (Lab)]

My Lords, it is very hard to disagree with anything that has been said in the last hour. Obviously, we all want to see that skills are promoted. We all agree that we need more green skills. We all agree with Amendment 8 in the name of the noble Baroness, Lady Neville-Rolfe, that we want to see more digital innovation, engineering and built environment skills. She has a catch-all of

“any other fields the Secretary of State deems relevant.”

So, in case the noble Baroness feels that she does not have enough powers in the department, she can have almost anything she likes under paragraph (e). Who would want to disagree with Amendment 9 in the name of the noble Baroness, Lady Bennett of Manor Castle, that we should include the food system and ecomanagement systems? We all agree with all those things.

However, in essence, this is all fiddling while Rome burns, because the Government do not require any of these powers to promote skills. They have all the powers they require to promote skills. They do not need any additional funding powers. They have funding powers, and they directly control all the funding levers. They appoint all the people to the various quangos. The whole of Clause 1 on these local skills improvement plans appears to me to be a substitute for actual action on improving skills.

Obviously, we will have a lot of generation of plans now. Consultants are salivating; I know because I spoke to one last week who told me that he is already starting to put bids in writing. The people who will actually do these skills improvement plans are not all the big employers and those others we have paid tribute to. They will be consultants, who will be paid by those people, who want to start bidding for the money to start producing all these plans. Now that they might have an even longer list of things they have to produce—particularly with the amendment in the name of the noble Baroness, Lady Neville-Rolfe—my goodness, the fees these consultants will charge will go through the roof as they start to produce them.

It is motherhood and apple pie. No one is going to disagree with any of these things. The fact is that they will not make any difference: the Government could do it all already. They have had years to do it. They do not require any of these powers. They do not require local skills improvement plans for employers to be brought together locally. Indeed, as we ascertained in Committee, the actual groups of employers that are going to be brought together do not exist at the moment. In the White Paper, which I recommend that noble Lords read, there was a great tribute to chambers of commerce. They might be able to bring these together—except that the box on page 15 of the White Paper says:

“Case study: German Chambers of Commerce”,


because, for the most part, chambers of commerce do not exist in this country due to chronic failure of policy over the last 150 years.

This is all fine; we can carry on like this and make all these legal provisions and probably nothing much will change. But we face a real crisis in the real world. The noble Lord, Lord Bird, referred to apprenticeships. The route by which most young people who do not go to university get on a career ladder to get well-paid jobs in this country is, or should be, apprenticeships. While we are talking about local skills improvement plans and new employers’ bodies that do not currently exist and which are going to produce all these plans, in the real world there is a deepening apprenticeship crisis at the moment. I looked up the figures before coming into the House. The latest figures published by the ONS in May this year show a 19% drop—I repeat, a 19% drop—in the number of apprenticeship starts in the first two quarters of 2020-21 compared with a year before. The drop in intermediate-level apprenticeships, which is by and large those people who most noble Lords would think of as apprentices—that is, school leavers who are getting on a work and training route which will get them an apprenticeship—dropped by even more. The apprentices mentioned by the noble Lord, Lord Bird, are now few and far between.

By the way, none of these local skills improvement plans will make much difference to this, because apprenticeships are largely created directly by employers, whereas the local skills improvement plans we are talking about are guidance to public providers, predominantly FE colleges, on what sorts of courses they should provide. But the number of actual apprenticeships—which are the things that, for the most part, will get young people jobs—is declining. We went through the reason why they are declining earlier, but we have not yet had any satisfactory account from the Government about it. It is because of the chronic misdesign and failure of the apprenticeship levy. The apprenticeship levy, which was dressed up by George Osborne as a levy on all employers to require them to train more apprentices, has led to a systematic decline in the number of apprentices, for two reasons.