Skills and Post-16 Education Bill [HL]

Lord Layard Excerpts

2nd reading
Tuesday 15th June 2021 Lords Chamber

[Lord Layard (Lab) [V]]

My Lords, we should really welcome this Bill, because, as we know, our country does a pretty good job with its graduates but a much less good job with the other 50%. If we are looking for reasons for the difference in the treatment of these two, we should look immediately at the different ways in which they are funded. If you are going down the academic—the route to university—the funding automatically follows the student. Any sixth form or university, therefore, has total freedom to put on a course and admit students, because it knows that if it attracts students, they will be funded, student by student. This system has produced one of the most dynamic learning systems in the world. The non-university route is totally different. The FE college or other provider has to contract, with the Education and Skills Funding Agency, for its budget year by year. The total budget is capped, and it is the Government, therefore—not the students or providers—who decide how many places there are in the sector.

Over the last 10 years, the result has been quite extraordinary. In the 10 years before Covid, the further education budget for people over 18 was cut, in real terms, by 50%. Even if you add in the funding for apprenticeships, the cut is over a third, while, at the same time, university funding has soared. The difference is just incredible. This situation and this system cannot be allowed to continue. Elementary fairness requires that we provide automatic funding for every qualified person, whether they go down the route to university or the route through further education.

This is the moment to make the change, because the Government have, to their great credit, announced that they plan a lifetime skills guarantee, which provides free education up to level 3, independent of age. The guarantee would be a historic landmark if it were put in the Bill, which it has to be. But there needs to be a mechanism to make sure that the guarantee can be implemented, because you cannot implement such a guarantee with the existing system of funding, which has no mechanism for reflecting the demand from the students.

The Bill therefore needs two more clauses: one to put the lifetime skills guarantee in law, and a second to state that by, say, 2025, all colleges and other approved providers should receive automatic in-year funding for any student covered by the lifetime skills guarantee. That is my main proposal.

I will end on the subject of apprenticeships. In the year before Covid, nearly one-third of all 18 year-olds were not in any form of education or work-based training. That is amazing—what a disaster. In my view, most of them should have been on a level 2 or 3 apprenticeship, or on a pre-apprenticeship course, but currently, there are simply not enough apprenticeship places to meet the existing demand from young people. It is not a cultural problem; it is a problem with the supply of places. Yet at the same time, half of all apprenticeship starts are not for young people but for people aged over 25, many of them long-standing employees getting top-up training that should be paid for by the employer. In addition, as the department’s own research shows, the benefit-cost ratio for apprenticeships for those aged over 25 is barely half what it is for apprenticeships for those aged under 25.

Many more of our apprenticeships have to be directed at young people. In my view, the state’s prime duty in education is to get every young person a proper start in life and a proper skill. Until we have done that, there should not be any apprenticeship money—or nearly none—for the over-25s. At the very least, there should be a legal requirement in the Bill that, by 2025, no more than, say, one-quarter of apprenticeship funding goes to people over 25.

This is a Bill with enormous potential to transform people’s lives and to improve our economy, but I believe that it needs at least three additional features. First, if it is to mean anything, the lifetime skills guarantee should be in the law; secondly, there should be automatic in-year funding for every student exercising the lifetime skills guarantee; and, thirdly, there should be a maximum limit of, say, one-quarter on the share of apprenticeship funding going to people over 25. I hope the Minister will be able to consider and support these proposals.