Skills and Post-16 Education Bill [HL]

Debate between Lord Layard and Lord Lucas

Committee stage
Monday 19th July 2021 Lords Chamber

[Lord Lucas (Con) [V]]

My Lords, it is always a pleasure to follow the noble Lord, Lord Adonis, in such fine form, but I am going to argue with his conclusion on degree apprenticeships and other higher apprenticeships. They have been a great boost to the quality of British management. We have needed for a long time to put more effort and skill into that level of business. We needed better management; we needed more and better managers. The money going in that direction has not been a waste—it is just that we needed rather more money in addition to go towards young people.

I am not sure whether the pattern of apprenticeship that we dreamed up, and now have some experience of, has really proved itself. If I understood the Minister aright on a previous day, we are going to make a serious attempt to provide apprenticeship-style funding and opportunities for people in the creative sector where the pattern of employment has so far precluded apprenticeships. We are going to look at, I believe, something much more akin to a series of shorter-term training opportunities, with something that glues it together into a career progression, such as a relationship with a learning provider or someone else independent of an employer.

That is a much better pattern for a lot of young people than an apprenticeship. They can get the skills they need to get into a job and to regularly have opportunities to upskill, not a year or three years at a time, but two or three months at a time. It is a pattern that has evolved quite successfully in the IT and creative industries. The lack of support and effective government funding has had some unfortunate socially exclusionary consequences—people have to be able to afford the training themselves rather than having support. I am delighted that the Government are coming into that area.

I do not think we should assume that, just because we dreamed up apprenticeships at levels 2 and 3, in a lot of cases they have proved themselves. They have in some places, but it would suit young people in particular and employers better to have something made up of shorter-term elements with the pastoral care—particularly for small companies—being provided by experts rather than randomly through an overstressed corporate HR department.

That would provide quite a good structure for looking after the interests of returners and career changers. We ought to be providing these people with a real opportunity to contribute to the economy in the way they can. That will involve a degree of retraining. There should be no hurdles as to the level someone has reached previously. They might well have a degree in Greats but want to retrain as a motor engineer, and it does not help if they are not able to access the right level of provision for that change. We ought to be supporting that.

We ought to do it through grants initially. I agree with my noble and learned friend Lord Clarke that for someone coming out of education and into their early years of economic life with no substantial qualifications, to have a chance to get something under their belt is important. However, it should be what is necessary to get on the ladder for the career they are looking at. That may well be a level 2 or 3 qualification, or it may be something much shorter.

If you are looking at doing something more substantial than that, I do not think that we need do more than make sure that people can access the loans system to get themselves on track. However, we ought to be being fair. I like the spirit of these two amendments, and I hope that the Government will move in their direction.

[Lord Layard (Lab)]

My Lords, I rise to support Amendment 76. As the noble and learned Lord, Lord Clarke, has argued so powerfully, we are, as a nation, very good at producing graduates and pretty bad at producing skills for the other 50%.

I start with a quite extraordinary statistic: if you ask what proportion of all the 18 year-olds in our country are not in any form of education or work-based learning, the answer is 30%. That is an absolutely incredible situation, and it really is time that we addressed that problem. It is a problem for our national productivity and, of course, it is a big problem for the subsequent incomes of those people. If we are looking for priorities, which is what this is all about, the central aim of post-school policy development must now be to deal with that problem and get more of our young people up to level 3—or at least level 2.

The lifetime skills guarantee is of course a very welcome proposal towards that end—giving a first level 2 or 3 to everyone, free of charge, irrespective of age—but it should be put into law. If the Government are serious about it, they should have no reservations on that point. That is covered in the first bit of this amendment. However, the more substantial issue, to which my noble friend Lord Adonis referred, is how to deliver that guarantee. Unless the places are there, there is no point in a person feeling that they have the right to free education if, when they look around, they see nothing that they like. They would not, in effect, have a right—they have that right only if the money automatically follows their choice.

What we are saying to the Government—I hope that the Minister will reflect on this—is that there is actually no chance that the guarantee can be delivered through the existing system of contracting with the colleges. In that system, each college has a capped budget, the size of which it negotiates annually with the Education and Skills Funding Agency. That agency, in turn, has a capped total budget, which, currently—even taking into account recent increases—is half of what it was in 2010. So that is what our present funding system enables us to do for the other 50%. We can do whatever we will, but, unless we do something about that funding system, we will not be able to deliver the right to a lifetime skills guarantee.

The contrast between what faces those people and what faces people going down the academic route is extreme because if you go to university or sixth form, the money of course follows you automatically. That is why our academic education is among the best in the world. It is difficult to think of anything more completely unjust in our social arrangements in this country than the comparative treatment of people going down the academic route and of those wanting to go into further education.

We have to dynamise the system of further education in the same way that we have dynamised universities: by enabling any institution that thinks that it can attract the people who are entitled to put the course on, knowing that the money will automatically follow. It is very nice that we have the “lifetime skills guarantee” expression because we can say that any student who is accepted by a college should automatically be funded for exercising their guarantee. What is a guarantee if the money does not come with it? It should be a guarantee of free education, funded in an automatic fashion. We want our colleges to lead in transforming the skills of our non-graduates, which, as I say, is more important than any problem relating to graduates. Let us take the colleges off the leash and pay them for any eligible student who they can attract—that is the only way that we can implement the lifetime skills guarantee. I hope that the Minister can reflect on how that guarantee could be implemented in any other way.

I turn finally to apprenticeships. Again, as many noble Lords have already said, we have to be clear about what the really big problems are, as opposed to other things that would also be desirable but are not of the highest priority. As I said at the beginning, the biggest problem is that so many young people are entering adult life without any proper training—we absolutely have to address that. The key moment occurs before people are 25; we must do better for people at that stage. To put that in context: 30% of people have had no form of work-based training or education. This is a problem of opportunity and of places. We are still trying to get the figures, but we know that there is huge excess demand from young people for places on apprenticeships. There are people who want apprenticeships and cannot get them. Finding a mechanism to generate those places is absolutely critical. At the Youth Unemployment Committee, to which the noble Lord, Lord Baker, referred, we constantly have evidence of this huge excess demand. We are trying to get the numbers; we do not have them yet, but everyone says that that demand is there.

We can only solve that problem if we use the apprenticeship levy to generate those places. One could imagine all kinds of subtle ways to incentivise employers to spend the apprenticeship money on younger people, but I do not think that they would work. That is why this very simple rule—two-thirds of apprenticeship funding going to people under the age of 25—is the most direct approach. Of course, it has to be for people taking apprenticeships at levels 2 or 3 because, if we said “under 25” but not the second part, we would see that they would want to fund degree and graduate apprenticeships. They would want to recruit bright young graduates and not bother about the other half of the population.

I stress the need to focus not just on the places but on the money for the places, because places for younger people are cheaper than those for the older people. As the amendment says, two-thirds of the money should go to people starting at levels 2 or 3 when aged under 25. Of course, I am very keen on degree and graduate apprenticeships but, if employers want to do those, they should come from the other third of the money or their own resources.

This whole amendment is about how to generate the places for young people to get the proper start in life that we want them to have and, thereby, earn a decent wage and contribute to national productivity. Such things do not happen just by saying, “You’ll have a guarantee”; you have to put it into law, as the other amendment also says, and then have proper ways of funding both the guarantee and the apprenticeship.

It is true that the Government now have the right aspirations. We are in a new situation with huge opportunity, and the skills White Paper absolutely heads in the right direction, but this amendment is, in a sense, a test of how serious the Government are about actually realising their admirable aspirations. I hope that the Minister will find the amendment helpful.