Apprenticeship Levy

Lord Clarke of Nottingham Excerpts

Tuesday 25th April 2023 Lords Chamber

[Baroness Barran (Con)]

Given that the creative industries are full of small and medium-sized enterprises, I assume that it is the vast majority. If it is different from that, I will write to the noble Baroness.

[Lord Clarke of Nottingham (Con)]

My Lords, in recent years a practice has sprung up in British industry of not training staff but recruiting them directly, already trained, from overseas, often from countries that could benefit from having their own trained staff stay at home. This leads to the shortages of skilled staff that we have in the economy and surges in immigration through work visas, which we find difficult to accommodate with housing and adequate social services. Can the Minister confirm that the Government will not waver in their application of the apprenticeship levy, which is making an important difference in stimulating firms to start training their own staff in the way that they used to? Will the Government also take steps to stop the abuse of the levy when it sometimes gets employed for management training for long-serving senior managers, who would be trained by the company anyway in the ordinary course of events?

[Baroness Barran (Con)]

I am happy to reassure my noble friend that we have no plans to do away with the levy. Indeed, as I said, based on the OBR forecast we expect it to increase to £2.7 billion in 2024-25. The levy is part of a wider strategy to offer more flexible opportunities, such as modular learning and the lifelong loan entitlement, to potential employees and address the skills gaps of employers more effectively.

Skills and Post-16 Education Bill [HL]

Lord Clarke of Nottingham Excerpts

Report stage
Thursday 21st October 2021 Lords Chamber

Moved by

[Lord Clarke of Nottingham]

50: After Clause 21, insert the following new Clause—
“Provision of opportunities for education and skills development
(1) Any person of any age has the right to free education on an approved course up to Level 3 supplied by an approved provider of further or technical education, if he or she has not already studied at that level.(2) Any approved provider must receive automatic in-year funding for any student covered by subsection (1), and supported by the Adult Education Budget, at a tariff rate set by the Secretary of State.(3) Any employer receiving apprenticeship funding must spend at least two thirds of that funding on people who begin apprenticeships at Levels 2 and 3 before the age of 25.”

[Lord Clarke of Nottingham (Con)]

My Lords, this amendment was tabled by the noble Lord, Lord Layard, and myself. We discussed it in Committee, without much response from the Government. I travel more optimistically today and hope that we will get a more favourable reception. We probably should, because it is entirely consistent with the Government’s stated aims on skills and the need for skills development in this country, and with the admirable spirit of this Bill, which I broadly welcome. As the noble Lord, Lord Adonis, said rather forcefully on more than one occasion in Committee and on Report, the Bill is very sound in principle, trying to develop our training and skills system in this country, but a little thin on substance in places. This amendment seeks to add a little more specific substance.

The first two subsections of the proposed new clause hang together and are connected. Proposed new subsection (1) speaks for itself, if one reads it. It deals with those people who have not managed to attain skills up to level 2 or 3, which are quite essential in today’s world and will be for the future, and entitles them to free education of the kind they are entitled to up to the age of 18, as far as school education is concerned, if they, at any stage in their life and for whatever reason, turn to try that level of skill. People do not always take the opportunities available to them in their teens and early years. This subsection would enable people to turn to free education. It takes a step further, and for this particular case is more suitable. I have been listening to all the discussions we have had about the Government’s loan schemes and so on, which I welcome. There is no need to read out the subsection’s terms; noble Lords can read it for themselves. It spells out this entitlement to free education.

Such an entitlement is quite useless if, where you live, there is nobody in a position to provide such courses. That is where proposed new subsection (2) comes in. Although this is a modest amendment, it addresses the rather bigger problem of how we fund further education in this country. From listening to debates throughout the Bill, I see that there is nothing new in the world; we have been debating all this for 50 years. I can well remember that when I was Secretary of State we just acknowledged that further education had for too long been treated as the Cinderella of the education system. There was the great gap left by the failure of the 1944 Act to develop technical colleges and all the rest of it. I am not sure, when we look back on our efforts, that Governments of both parties of the last few decades have made anything like adequate progress.

One of the problems is the way that further education is funded. Proposed new subsection (2) deals with the question of how one would fund the entitlement to free education that proposed new subsection (1) proposes. There is a huge difference between the way courses are funded at schools—at the lower level—at universities and in further education. Schools are paid open-endedly about £5,000, if it is a sixth former, for every student they manage to retain. That is why it has been said several times in the debate that schools sometimes unhelpfully persuade people to stay in the sixth form because it is worth £5,000 a year for the school budget, when from a pupil’s point of view they might very advantageously move to a more suitable course. If you are a university, for every student you manage to recruit for a degree course, of whatever quality you have laid on, £9,500 comes automatically, student by student.

Further education colleges are still subject to cash-limited budgets. Those budgets, like most public expenditure, have been particularly fiercely curtailed in recent years, for necessary reasons in large part. The proposed new subsection makes a straightforward suggestion: if you accept proposed new subsection (1), that you are giving a right to free education to the people whom I have described, then you actually have to provide the funding. It says that the Secretary of State, out of the adult education budget, at a tariff to be set by the Secretary of State, will provide the funding to colleges to provide the courses. It hangs together very neatly.

I cannot think of any policy reason or reason of principle for opposing these two modest suggestions. My hope, were we to get the second in place, is that sooner or later one would face up to the big prospect, which I hope the Chancellor is contemplating in his current public spending round, of moving further education colleges to the open-ended funding that will be necessary to let them play the major part they are going to have to play in the reskilling of our population, providing the skills for our economy in future years.

The third part, which is obviously related to the subject but moves on slightly, is on apprenticeships and the working of the apprenticeship levy. It makes the proposal that, following the introduction of the levy and the intention of injecting powerful financial incentives to get our employers back into providing the apprenticeships, opportunities and training that our workforce requires in future, two-thirds of the levy-funded apprenticeships should be for those between 16 and 25.

This is a marked change from what has actually happened since the apprenticeship levy was introduced, which I do not think anyone foresaw. I am sure that, when the policy was first brought in, the Ministers involved and the general public envisaged that we would see a steady growth of good-quality apprenticeships —because very valuable conditions were put in, such as having off-work training and not just calling everything at work “training”, and so on—that young people would, steadily, have an attractive alternative if the academic education route did not suit them and that we would develop, through apprenticeships, people skilled in the new skills of tomorrow’s economies, which our young people in particular will require if they are to have a satisfactory work career thereafter.

That did not happen because the large companies were, I am afraid—not too surprisingly—anxious to see how they could recover levy money and reduce the impact of what was otherwise a new tax by ascribing to the levy most of the training that they already did for their existing workforce of all ages. It did not have the effect that we all hoped—which would advantage the company as well—of making people contemplate taking on and providing new training opportunities for young people coming out of schools, colleges and universities in order for them to get into the beginnings of their careers.

I know that the Government have got rid of the worst excesses. People without any kind of training, at every level of large companies and in the public sector, including the Civil Service, in order to improve the figures were being described as apprentices. Most of them did not know that they were apprentices but, for the purposes of recovering the levy, quite high-ranking managers were described as such. As I said, the Government have got rid of the worst abuses. At one point, it was possible for a high-flying senior manager to go on a business management degree course at a university and the apprenticeship levy would be recovered against the cost incurred.

Therefore, our amendment seeks to take the policy back to what it was expected to produce when it was first introduced and certainly to what the general public and both Houses of Parliament thought we were talking about when we first introduced the apprenticeship levy. It depends on all kinds of other things, such as explaining it to the public, improving the status of apprenticeships alongside alternative academic and technical routes and so on. But it was mainly an opportunity for the under-25s.

I quite accept that there are older people who can benefit from training or retraining. Indeed, people will have to change their jobs far more frequently in tomorrow’s economy, and plenty of people will, at the age of about 50, find that their existing job is coming to an end, and retraining is important. Because I have seen the Minister’s note, I anticipate that her response, which will no doubt be as courteous as ever, will say, “Well, first, we cannot interfere with businesses; they must decide what training they want”. That rather overlooks the fact that they are doing it for financial reasons, just to minimise what they spend on training anyway. More importantly, she will say, “Training is required by people of all ages”. I have already conceded that, and that will include some people who are sent off on totally fresh training courses by their employers.

--- Later in debate ---

[Baroness Barran (Con)]

My noble friend is quite within his rights to press me and the Government as hard as he sees fit, but I have set out the Government’s position as best as I can at this stage.

Turning to the other aspects of the amendment in the name of the noble Lord, Lord Watson, I agree that the list of qualifications—

[Lord Clarke of Nottingham (Con)]

I am sorry—I know that the point has been made—but I find this an extraordinary approach to legislation. Everything that the Minister has said so far has given examples of things that the Government are doing that are compatible with the amendments that we are discussing. She has not raised a single objection in principle to either of the amendments, but she has been given a brief saying that it is not necessary to legislate. What harm is done by legislation, given that so many Governments in the past have, in the end, fallen rather short of their agreements in principle?

[Baroness Barran (Con)]

I think that the Government’s priority is to see this measure working in practice. Many of your Lordships have far greater experience than I do of how attempts have been made to reform this area, including through legislation, which have not delivered the outcomes that noble Lords across the House violently agree we want to see. So, our focus—

--- Later in debate ---

I hope my noble and learned friend and the noble Lord, Lord Watson, are satisfied with the work being done in these areas. If so, would my noble and learned friend be happy to withdraw his amendment, and would the noble Baroness, Lady Wilcox, in place of the noble Lord, Lord Watson, not move Amendment 60 when it is reach?

[Lord Clarke of Nottingham (Con)]

My Lords, my noble friend kept thanking us all for introducing these amendments, which is very kind of her. I think we all thank her for the skill and courtesy with which she delivered her brief in attempting to reply. Faced as I am with a situation where, as far as I can see, her brief gives examples of things the Government are doing that are entirely compliant with our amendments but provides no reason in principle for opposing them, except that it is not convenient or wise, I would like to take the mood of the House and put my amendment to a vote.

Schools that work for Everyone

Lord Clarke of Nottingham Excerpts

Monday 12th September 2016 Commons Chamber

[Justine Greening]

I reiterate that this is the beginning of a consultation that sets out a debate that we need to have in our education system if we are going to make sure that we deliver on our manifesto commitment, which is to have an excellent school place available for every single child in our country. We set out very clearly that that would include more places at grammar schools.

The hon. Lady had nothing to say about how we can make independent schools play a stronger role in raising standards or how universities can play a stronger role in raising attainment. In spite of all the challenges and issues that she raises from a Labour perspective, it is worth pointing out that the leader of the Labour party, as I understand it, wants to scrap existing grammars. Is that correct? I cannot see a flicker of recognition of that policy from the Leader of the Opposition; perhaps he has been distracted over recent weeks.

In spite of all the challenges and issues that the Labour party raises over grammars, and in spite of the fact that the party was in power for 13 years, it took no steps when in government to ensure that grammars played a stronger role in raising attainment in their broader communities. What did we actually see under Labour in government? It was not education, education, education; it was grade inflation; children leaving school without even the most basic skills of reading, writing and adding up; a university system that had a cap on student numbers and aspiration; and youth unemployment that went up by the best part of 50%. We need no lectures from the Labour party on how to deliver opportunity for our young people.

If we are going to ensure that ours is a country where everybody can do their best, wherever they start, we have to be prepared at least to have a debate about how we will make that happen. It seems to me that the only distraction in this Chamber for the Labour party is, yet again, its own leadership contest. In the meantime, the ideas and the initiative to drive opportunity across Britain will come from Conservative Members.

[Mr Kenneth Clarke (Rushcliffe) (Con)]

I warmly welcome the motives behind my right hon. Friend’s statement, which appeared to be to try to restore some of the best of the 1944 Butler Act—with its amazing opportunities for bright working-class children—while avoiding some of its serious downsides, such as the great damage that it did and the poor alternatives that it offered to the majority of pupils who did not pass the exam. Does she accept that the devil lies in the detail? Does she accept that, as she develops the policy that she is setting out for consultation today, it will be tested by how far she can, in specific ways, ensure that this change does not damage the opportunities for pupils in other schools and does not distract priority from raising the standards of all schools for all pupils, which has been the objective of this Government?

May I also ask my right hon. Friend to reconsider pretty fundamentally the announcement she has made about faith schools? We need to live in a society where we reduce barriers and improve contacts and integration between people of all faiths. If the system has been imperfect, we need to know why it has not worked. It may be right to modify it, but will not simply removing the cap altogether lead us into considerable danger?

[Justine Greening]

My right hon. and learned Friend went back some time to talk about the 1944 Butler Act. I do not personally recall it, having not been born at the time. The point is that the education system in our country is in a radically different position from when we effectively had a binary system, which that Act did not intend, of secondary moderns and grammars. Our education system has been transformed out of all recognition. This proposal is about improving choice for parents, wherever they are in the country; it is about building capacity in our school system; and it is about continuing with the reforms that have already seen 1.4 million more children get into good or outstanding schools. Those reforms are absolutely critical, alongside this work, to making sure that we improve opportunity.

On faith schools, let me explain the situation more succinctly. The existing 50% rule was put in place with the best of intentions, and it kicks in when new faith schools are oversubscribed. The issue is that that very rarely happens, so in spite of the fact that it was designed with the best of motives, the rule does not operate effectively. Some new faith schools are overwhelmingly comprised of children with one faith, because the school did not have to go and seek more children of other faiths and no faith. The consultation document therefore sets out a number of different proposals. For example, proposed new faith schools would have to demonstrate more clearly that there was a broader community desire for places at that new school, not just from parents of that faith but from parents of no faith and other faiths.