Technical and Further Education Bill

Lord Nash Excerpts

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

[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.

[The Parliamentary Under-Secretary of State, Department for Education (Lord Nash) (Con)]

My Lords, I am very pleased to be able today to speak about this legislation, which will help lay the foundations for transforming technical and further education, ensuring that all our young people have the same opportunities to travel as far as their talents may take them, move to a lifetime of sustained employment and provide the skills that British business needs. I am grateful for the remarks made by the noble Baroness, Lady Cohen. I share her sentiment: this Bill is the greatest engine of social change that can be imagined, or at least we hope that it will be. I also express my thanks to noble Lords for their continuous engagement in the Bill, which, as the noble Baroness said, has all-party support.

In Committee, we had some very interesting discussions on some of the broader aspects of the Bill, and on the operation and delivery that will turn this legislation into reality. My ministerial colleague Robert Halfon and I have found this scrutiny extremely helpful in refining our thinking for this next stage of the legislation—the transition. Minister Halfon was looking forward to being able to join today’s discussion, as he has done previously, but unfortunately has been called away as he needs to participate in the public sector apprenticeships debate.

I turn now to the first group of amendments, tabled by the noble Lords, Lord Watson and Lord Hunt. I welcome the sentiment behind this amendment: that young people who choose to take up an apprenticeship should not be financially disadvantaged and that, in particular, young people who leave care should be encouraged to enter apprenticeships. I believe, however, that we have already established sufficient safeguards and support to deliver these aims. Following a 3% increase in October last year, the national minimum wage for apprentices is now set to rise again to £3.50 an hour from April this year. Most employers pay more than this minimum. The most recent Apprenticeship Pay Survey, in 2016, estimated that the average gross hourly pay received by level 2 and 3 apprentices in England is £6.70 an hour. Moreover, apprentices receive training which, together with their paid employment, sets them up for increased earnings in the future.

[Lord Watson of Invergowrie]

I wonder whether the Minister is going to respond to the point I made about apprenticeship pay. At the beginning of the year, the Low Pay Commission reported that 18% of apprentices were not getting even the national minimum wage.

[Lord Nash]

The noble Lord has raised that before. As we discussed at that time, it is illegal to pay below the minimum wage. We and HMRC are focused on ensuring that it does not happen. We all share the noble Lord’s concern about this. I assure him that we will do everything we can to stamp out such practices.

One of the core principles of our reforms is that an apprenticeship is a genuine job. As such, apprentices are treated accordingly in the benefits system. Child benefit is intended to provide financial support to parents to help with the extra costs of raising a dependent child. It is payable to parents until the end of the academic year in which their child turns 16. After that, payment can be claimed for children up to the age of 20 if they are in approved education or training. From April this year, undertaking an apprenticeship at minimum wage will pay more than five times the maximum child benefit rate. Therefore, an apprentice’s parents are not eligible for child benefit for supporting that employed young person. These rules have been a long-standing feature of the welfare system.

Moving to paragraph (b), on extending the higher education bursary to statutory apprentices, while I understand the intentions behind the proposal, it is not correct to equate being on an apprenticeship to being in higher education, where a student is making a substantial investment in their education and has appropriate access to student finance. Apprenticeships, by contrast, are real jobs and those undertaking them are employees who earn a wage, unlike participants in HE who are students and treated as such by the benefits system. Although apprentices generally spend a fifth of their time in training, it is part of the minimum wage regulations that they are paid while undertaking that training, so I cannot share the suggestion of the noble Lord, Lord Watson, that the training equates to being in HE. They are still being paid.

Consequently, our focus continues to be on ensuring that there are incentives for employers to recruit care leavers as apprentices. An additional £1,000 is paid to employers who take on a care leaver as an apprentice, as well as their training providers. Furthermore, the funding system ensures that, for all care leavers aged under 25, the full training costs related to undertaking an apprenticeship are met by the Government in recognition of their particular vulnerabilities.

I hope that I have provided sufficient reassurance that reflects that apprenticeships are real jobs, pay a wage that is more than sufficient to offset any household income reductions through the loss of child benefit, and are funded to ensure accessibility for care leavers.

Amendments 14, 15A to 15C and 16 concern the protection of students at independent training providers in the event of their closure. I am sympathetic to the intention behind these amendments that the interests of learners must be at the heart of the system.

Turning to the detail of Amendment 14, I think that it will be helpful also to consider Amendment 15, which would amend it. As currently drafted, Amendment 14 would apply only to further education bodies, which the Bill defines as further education corporations and specialist designated institutions in England and Wales, and sixth form colleges in England. Private providers would not fall under the scope of this amendment, although we need to consider that Amendments 15A to 15C would make this change so that private providers are within scope of the amendment.

As noble Lords will be aware, the main purpose of this part of the Bill is the introduction of a special administration regime which will prioritise the needs of learners. It places an overriding obligation on the education administrator to take the action that best avoids or minimises disruption to the studies of existing learners. This will apply to all students—fee paying as well as non-fee paying. The special objective focuses, rightly, on giving learners the opportunity to continue and complete their studies having set out on their journey to gain new skills or qualifications. That is what individuals will be most concerned to achieve rather than the repayment of any money for which they have not received provision.

Of course, fee-paying students typically pay for their courses in stages, as they do via advanced learner loans, and quite often in arrears, so it is likely that the student will not be significantly—if at all—out of pocket. But, through the special objective, the education administrator will be working to identify opportunities for learners to complete their studies, whether by rescuing the college or transferring the individual to another provider, meaning that the learner can continue on their study path.

We know that noble Lords are interested in the idea of a fund or guarantee to support students in the event of private provider failure, especially where they have paid money in advance. Following recent cases highlighted in the press. I will now say a little about what we are doing to provide support for those affected. Our priority is to support learners whose providers have ceased trading. I want to make it clear that we will take every step we can to ensure that learners are given the opportunity to complete their studies, be that with their current provider if possible or with another provider. In the rare cases where providers fail, the Skills Funding Agency and the Student Loans Company work together to identify solutions for any individuals affected. They make direct contact with learners to inform them of the help they will get. I am happy to say that this is already current practice and is an integral part of the contractual arrangements between the funding agency and the provider. There are many cases where those learners who are affected are successfully transferred to alternative providers.

Students’ new providers may receive funding to deal with necessary administrative costs relating to transferred learners to ensure that they are not out of pocket. We have taken further action to protect learners due to recent cases of private providers going into liquidation. For those who have not completed their course, and while we work to make transfers happen, they will not be required to start repaying their loans during the 2017-18 tax year.

I shall now look at the detail of Amendment 16. I believe, as a number of noble Lords have said, that we should approach the regulation of independent private training providers with caution. These are mostly private profit companies and, unlike the further education bodies which are the subject of this part of the Bill, they are not part of the statutory FE sector and are created by their promoters and owners with no hand from government. They are not subject to the same intervention arrangements as the statutory sector. Furthermore, while they may receive state funding, that funding does not have the same breadth of purpose as the funding for the statutory sector and is paid on a different basis. In particular, the funding is contractual and normally paid in instalments linked to attendance, which limits the financial risk which this amendment is seeking to address.

There are around 400 private providers, of which the vast majority are financially sustainable. I am delighted to join with the noble Lord, Lord Storey, in his comment that many of them provide very good quality education.

Providers must be listed on the SFA’s register of training organisations to receive advanced learner loans funding, while successful approval includes due diligence to assess providers’ capacity to deliver contracts to the required standard and to determine whether they are financially robust. Providers delivering only loan-funded provision must have a financial health assessment rated as good or outstanding. Once on the register, the SFA closely monitors providers’ financial health and achievement rates, with providers having to comply with robust funding and performance rules.

However, I accept that there could be rare cases where a private provider fails and students suffer as a result. Although learners choose their private provider as consumers, “buyer beware” may be thought an unduly harsh response to that predicament. That is the concern which noble Lords are seeking to address through this amendment. I understand the concern, but at the moment I am not convinced that the imposition of significant new regulation on a fully private part of the sector is either a necessary or proportionate response to it.

As far as I am aware, a banking or insurance market for the guarantees referred to in the amendment does not exist and would have to be developed. We do not know whether and how fast this might happen, or at what cost. However, much more significantly, the nature of this sort of financial protection is that it puts a burden on the vast majority of healthy providers, where it is not needed, as well as on those few where it is. In aggregate terms, it would mean substantial sums of money, much of it originally public money, moving from the education sector to the insurance and financial sector, which is not necessarily what the taxpayer would want for the sake of a safety net in very rare cases of failure. Moreover, as the noble Lord, Lord Aberdare, said, it would lead inevitably to an increase in the cost of these courses.

Private providers and their representatives will also have views on this of course, and there has not been the opportunity to seek them or reflect on these matters since the amendment was laid, so we are by no means ready to accept that legislation is an appropriate response to the risk that noble Lords have helpfully highlighted. However, I would be delighted to discuss this matter further with the noble Lord, Lord Storey. We are looking into this carefully, but we need to take proper time to consider our policy response, which may not require legislation.

I will now discuss Amendment 20. I am grateful to the noble Lords, Lord Watson and Lord Hunt, for this amendment. I understand their concerns, but I hope that I can reassure them that this amendment is not necessary. The Government are doubling investment in apprenticeships because we know that they provide employers with the skills they need to grow their businesses and benefit the economy. Through the funds raised by the apprenticeship levy, we will be able to invest twice what was spent in 2010-11 in apprenticeships by 2019-20.

The institute’s responsibilities include ensuring that the quality of apprenticeships available to employers reflects employer needs and the Government’s priority for apprenticeships to be a high-quality programme. It will need to work closely with the Department for Education, employers and other stakeholders to make that happen. Its responsibilities also include advising on the pricing of apprenticeship standards to ensure that government funding supports the delivery of high-quality training. The institute will work with employers and providers to understand the cost and value of apprenticeships to inform their advice. The institute does not have responsibility for the apprenticeship budget or how much of it is spent. This resides with the Secretary of State for Education and her department’s agencies.

The Government are fully committed to comprehensive investment in apprenticeships. The apprenticeships budget is set at the spending review. That provides certainty on the forward spending profile for the duration of the Parliament, as well as ensuring affordability of the programme and that the taxpayer receives value for money.

Tying a commitment on spending explicitly to the levy receipts could mean adverse funding consequences for the programme as a whole. The 2016 Autumn Statement revised down the projections for income from the apprenticeship levy over the next five years, but this does not impact on the agreed budget that the department already has as part of the spending review settlement. For example, the provisional budget for spending on apprenticeships in 2019-20 for England and the devolved Administrations totals in excess of £2.9 billion, versus the projected levy income of £2.8 billion. Having certainty over the funding for apprenticeship training is preferable to directly linking the funding on a year-by-year basis to the wider performance of the economy. As described earlier, levels of spending will be determined by the choices that employers make.

I hope that noble Lords feel reassured enough by my responses to these amendments not to press them.

[Lord Watson of Invergowrie]

My Lords, I thank the Minister for his response and all noble Lords who have participated in this debate. On the three amendments that carry my name—our amendments to Amendment 14, in the name of the noble Lord, Lord Storey—the Minister said that we will have an opportunity to consider that further. That is to be welcomed.

On Amendment 20, I feel the Minister rather overegged the pudding. I said that I do not think the levy will be undersubscribed or short of applications. He seemed to be saying that this would depend on monetary fluctuations. The fluctuation that would concern me would be, if not enough applications for the fund came forward, what would then happen to any so-called surplus that would remain? I am not unhappy with his response. I am optimistic that the levy will be fully taken up.

I am not so optimistic about the Minister’s comments on Amendment 1 and apprentices being described as approved learners, as I think they should be. He mentioned apprentices as being employed and receiving—or at least being entitled to receive—the national minimum wage of £3.50, but that is the figure that will apply next month. For any other worker aged up to 18 the rate will be £4.05; for those aged between 18 and 20 it will be £5.60. Despite that very low level, apprentices are paid less than their peers who, for whatever reason, are not in apprenticeships but are working. I do not think that argument carries a great deal of weight.

The Minister also said that he is not willing to support extending the higher education bursary of £2,000 for apprentices to those leaving care. Surely any barriers to young people taking up apprenticeships should be removed or at the very least mitigated. On those two issues, the Minister did not show any willingness to do so. He said there were sufficient safeguards to ensure that apprentices and their families do not lose out by dint of the young person taking up an apprenticeship. That is palpably not the case. Further education colleges have already drawn to the attention of the Association of Colleges a number of cases of would-be apprentices being dissuaded from applying for—or, having applied for, then taking up—an apprenticeship when the financial consequences become clear. That is through pressures within their families. Whatever the rates in place, there are not sufficient safeguards. That deters some young people from taking up apprenticeships. That they are not regarded as approved learners is surely a glaring loophole which the Government must at some stage move to close.

I regret that the Minister has demonstrated no willingness even to acknowledge that there is an issue, far less a willingness to find a means of resolving it. We regard that as unsatisfactory. For that reason, I wish to the test the opinion of the House on Amendment 1.

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[Lord Nash]

My Lords, I am grateful to the noble Lords and the noble Baroness for the amendments on reporting issues for the institute. I start by discussing Amendment 2, tabled by the noble Lords, Lord Watson and Lord Hunt. Being able to assess how well the apprenticeship reform programme is achieving outcomes is of course essential. We need to know whether those undertaking apprenticeships or technical education qualifications are receiving the benefits that we would expect them to receive. To be able to do that, we obviously need the right information to help us make such an assessment. How the institute reports on its work is a topic that we discussed in Committee, but I remain convinced that the provisions already in the Bill are the right ones and that they are sufficient. I am sorry to disappoint the noble Lord, Lord Watson, but I therefore still do not believe that an amendment to the Bill is necessary to achieve that objective.

As I have said, the amendment was discussed in Committee and on Report in the other place, and in Committee in this place, and both the Minister of State for Apprenticeships and Skills and I have given sound justification for why it is not necessary. The institute will be required to report on its activities annually under the Enterprise Act 2016, and the report must be placed before Parliament. This will include information on how the institute has responded to the statutory guidance. In addition, the Enterprise Act includes provisions enabling the Secretary of State to request information from the institute on any topic.

The information set out in the amendment is already collected and published by the Secretary of State on the performance of the FE sector, which includes apprenticeships. In order to inform its activities, we would expect the institute to make good use of these data in its annual report when it assesses its performance and impact each year. Indeed, the shadow institute has explained in its draft operational plan that it,

“will make more use of learner, employer and wider economy outcome data when reviewing the success of standards”.

The institute’s core role is to oversee and quality-assure the development of standards and assessment plans for use in delivering apprenticeships and, we expect, from April next year, college-based technical education. Much of the information that the amendment proposes that the institute provide goes well beyond what is in scope of its remit. It would therefore be inappropriate for the institute to be asked to provide this type of information, and an unnecessary duplication of effort, given that this information is already collected and published by the Secretary of State. It is right that the Government collect and monitor that information, but where it falls outside the remit of the institute, it cannot reasonably be expected to provide it.

I turn to Amendment 3. Improving social mobility is integral to our apprenticeship reforms. The Institute for Apprenticeships is supporting this by helping to create a ladder of opportunity based on quality apprenticeships for people across the country. This ladder will ensure that, no matter where you are born or who your parents are, if you work hard and apply yourself, you can get ahead, succeed and shape your own destiny.

To support this aim it is of course critical that reporting measures are in place to enable us to assess how well the programme is achieving positive outcomes for a range of groups, including young people. I agree therefore with the spirit of the amendment, which proposes that such information is monitored, measured and reviewed regularly. However, I believe this amendment is unnecessary to achieve that.

We want an education system that works for everyone and drives social mobility by breaking the link between a person’s background and where they get to in life. Our defining challenge is to level up opportunity.

On 18 January, the Secretary of State for Education set out her three priorities: tackling geographic disadvantage; investing in long-term capacity in the system; and making sure that our education system as a whole really prepares young people and adults for career success. That is why the Government are delivering more good school places, making school funding fairer, strengthening the teaching profession, investing in improving careers education, transforming technical education and apprenticeships and opening up access to our world-class higher education system.

The Department for Education already publishes a range of data on apprenticeships through a number of reports broken down by starts, achievements, sector subject area, framework and standard, geography, gender, age, ethnicity and other diversity and disadvantage markers. These data are published as national statistics by the department and intended to provide transparency.

It would be more appropriate for the head of profession in the department to consider how and where breakdowns of disadvantage for apprenticeships data are published, in accordance with the code of practice for statistics set by the National Statistician. Additionally, the department is considering publishing new data and measures required to support the Secretary of State’s three priorities. The department is committed to publishing disadvantage measures such as the pupil premium, but needs to be free to find the most appropriate for each age group, programme and purpose.

Data are already helping our work to improve social mobility. For example, we know that 10.5% of those starting an apprenticeship in 2015-16 were from a black and minority background, and we have set an ambitious target to increase the apprenticeships started by people from BAME backgrounds by 20% by 2010. In addition, the department publishes 16-to-18 performance tables that cover classroom-based provision within schools and colleges. The 2016 performance tables were reformed to report five headline measures for students taking A-levels and vocational qualifications at a similar level. Further reforms are planned for 2017 performance tables. This includes extending the performance tables to include outcomes for students still studying at GCSE level and reporting outcomes for disadvantaged students, the definition of which is those who were in receipt of pupil premium funding in year 11. This will have the effect of linking key stage 4 pupil premium information with 16-to-19 outcomes. In 2018-19, we will include only GCSE-level equivalent qualifications that are on the technical certificates list.

The institute has been given a clearly defined role, in which it will be responsible for setting quality criteria for the development of apprenticeship standards and assessment plans—reviewing, approving or rejecting them; advising on the maximum level of government funding available for standards; and quality assuring some end-point assessments. While we expect data to be at the heart of the institute’s operations, the collection and publication of the data in this amendment goes beyond that remit and would create an undue burden on the institute, preventing it from carrying out the range of its other duties effectively.

I am grateful to the noble Baroness, Lady Garden, and the noble Lords, Lord Storey and Lord Lucas, for tabling Amendment 21. I completely agree with the spirit of the amendment, but there are already measures within the Bill that require the institute to monitor, measure, review and report on performance on a regular basis. I hope that after I have explained this further, the noble Lords and the noble Baroness will feel able not to press the amendment.

The institute will be a sustainable and long-term governance body that will support employers, individuals and others and will, among other things, uphold the quality of standards. I am grateful to my noble friend Lord Baker for his comments on the strength of the board and its governance. Although the institute will have wide-ranging autonomy across its operational brief, and will be able to carry out its functions in relation to apprenticeships independently, the Secretary of State will retain strategic oversight of the reformed technical education system and will be able to give directions and statutory guidance where appropriate. Of particular relevance to this amendment, the Secretary of State may direct the institute to prepare and send to the Secretary of State, as soon as reasonably practicable, a report on any matter relating to its functions. It may be in that context that the idea to which my noble friend Lord Baker referred, of a letter, would be most appropriate.

The institute will be required to report on its activities annually under amendments made under the Enterprise Act 2016, and that report must be placed before Parliament. This will include information on how the institute has responded to the strategic guidance provided to it by the Secretary of State. While the institute will collect and report on relevant data and information, the Secretary of State will also continue to collect and publish a range of data on the performance of the FE sector, including apprenticeships. We would expect that, to inform its activities, the institute would make good use of those data when it assesses its performance and impact each year, and compiles its annual report. The Enterprise Act has made amendments that also include provisions enabling the Secretary of State to request information from the institute on any other topic that she deems appropriate in relation to their functions in relation to apprenticeships. Through this Bill, those provisions extend to technical education.

Therefore, although ultimately the Secretary of State will retain sufficient powers to ensure that government retains overall control in relation to technical education and will provide strategic guidance in respect of both apprenticeships and technical education, we would expect that, in the exercise of its functions, the institute would assess its performance and take action to address any issues identified. I am confident that, with the governance that it has managed to line up, that should happen.

I hope that noble Lords and the noble Baroness will feel reassured enough on the basis that I have explained not to press their amendments.

[Lord Watson of Invergowrie]

I thank the Minister for his comprehensive reply—almost half the debate on this group of amendments was from his lips—which in some ways was not unencouraging. I welcome the contributions of two former Secretaries of State for Education, which are always informative. Although my noble friend Lady Morris was very supportive, the noble Lord, Lord Baker, was supportive only up to a point. He said that he did not believe this needed to be on the face of the Bill, but welcomed what Amendment 2 seeks to achieve. I noted that the Minister said it was likely that the request by the noble Lord, Lord Baker, for a letter from the Secretary of State would be taken up, and that is to be welcomed.

I also welcome the supportive contributions of the noble Baroness, Lady Garden, and the noble Lord, Lord Lucas. We are trying to make the point—expressed strongly by my noble friend Lady Morris—that the institute is just being established and needs to build its reputation. One way it will do that is by being as open and transparent as possible. The Minister said that collecting the information mentioned in Amendments 2 and 3 would be an undue burden. However, Amendment 3 provides only for the institute to ask the department for information which it already holds, which is not particularly burdensome.

The transparency mentioned in Amendment 2 is important because it will build confidence, as my noble friend Lady Morris said. Many employers and training providers—all further education colleges—as well as putative apprentices, are looking to the institute to raise the quality of apprenticeships. Why not demonstrate that as effectively as possible by both assembling and publishing the information mentioned in Amendment 2? The Minister said that the activities of the institute will be monitored, measured and reviewed but not reported on in the detail we have asked for. The Department for Education will have the information but apparently it does not want to give it to the institute to publish in its reports, which seems slightly odd.

Nevertheless, the Minister said quite a lot. I need to read his words in Hansard but he seemed to be mentioning quite a lot of benefit which will be seized on by those in the sector who have a genuine desire to make the Institute for Apprenticeships successful—to get it off to a good start and then build from there. There was certainly some positive input from the Minister, which I welcome. On that basis, I beg leave to withdraw the amendment.

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[Lord Watson of Invergowrie]

My Lords, I thank my noble friend Lord Young for moving this amendment, which I am happy to support. In broad terms, we believe that the recommendations of the Sainsbury review should be fully implemented and funded. In the short term, there are three clear funding needs from the skills plan: fair funding for colleges; costs associated with finding and managing work placements, because they involve an individualised service to young people and employers rather than education to a group; and the cost of the transition year. A two-year full-time course would be the standard model under the plan, but with the expectation that some school leavers would need to take an additional transition year. This implies a full-time three-year programme. The current 16-to-18 funding system assumes a full two years and then administers a 17.5% cut in the third year. A sensible step, therefore, would be to maintain the full rate for three years for those students taking the transition year.

In his letter to noble Lords dated 22 February, the noble Lord, Lord Nash, stated that there are currently around 3,500 vocational qualifications. Most professionals in the sector have cited a figure of more than three times that amount, but more important is how the transition to the new regime is managed and funded. The Minister also said in his letter that the reforms would be phased in progressively, with the first routes available for delivery from September 2019. That apart, the transition was not set out and the amendment in the name of my noble friend Lord Young would enable that to happen. It would be a positive move and we believe that it is incumbent on the Minister to commit to it by accepting this modest amendment.

[Lord Nash]

My Lords, I am grateful to the noble Lords, Lord Watson and Lord Young, for tabling this amendment. I fully understand their concerns and hope that I might be able to provide an explanation that will put their minds at rest. I was grateful to the noble Lord, Lord Young of Norwood Green, for his kind comments about our branding as T-levels.

We know that colleges, students and awarding organisations will need to know in good time the arrangements for existing qualifications as the new qualifications are introduced. As the noble Lord, Lord Watson, has just said, we plan for the first new technical routes to be introduced in autumn 2019, with the full range of programmes coming on stream soon after. Additional hours will be available for the new programmes as they become available and we will announce further details in due course following further engagement with employers, colleges and other key stakeholders.

In implementing the reforms, the Government will consider in consultation with the institute how best to manage the transition from legacy qualifications to new technical qualifications approved by the institute and intend to involve stakeholders and set out plans for this in due course.

Given that the new technical education routes will be subject to phased introduction, it would not be sensible or appropriate to commit to a fixed timescale for publishing detailed proposals for transition. I reassure the noble Lords, however, that once the institute has approved a new qualification, the Department for Education will consider future funding for the current, similar qualifications on a case-by-case basis. We will not withdraw funding for a student who is part way through their course. I therefore hope that the noble Lords, Lord Watson and Lord Young, will be sufficiently reassured to consider not pressing their amendment.

[Lord Young of Norwood Green]

I listened carefully to what the Minister said but am not sure that it entirely dealt with the transition process. Maybe I did not quite grasp what he said. I understand his point: I fixed upon a period of time that I thought would be sufficient for him to be able to describe to the various stakeholders how this would happen. Telling them at the end, “We’ve identified this particular new qualification”, seems a bit late in the day. It still does not seem to give the kind of reassurance that people would want: “This is the process we are to go through, how we will carry it out and how we will manage during the transition period”. I am not particularly fussed about the timing—I had to put something in there—but I am concerned about the detail of the transition process and a more detailed response would be welcome. Perhaps we will have an opportunity before Third Reading to meet again and get a more detailed assurance. In the meantime, I beg leave to withdraw the amendment.

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[Lord Young of Norwood Green]

My Lords, if you want to change attitudes in schools and colleges, one of the most powerful influences you can have is to send in their peer groups to talk to them. I met a young woman today who had taken a degree in mechanical engineering. It was interesting talking to her about what her influences had been in taking that decision. More importantly for me, when I asked her whether she was going back into schools and colleges to talk to young people about what a successful career they could establish in engineering, the answer was a very clear affirmative.

When Ofsted is carrying out an inspection, I hope it will take into account the general approach of the school. It is not just about formal careers advice, as has already been stated, but about whether they have an open mind. I take my noble friend Lady Morris’s point about the quality of speakers; obviously you want someone who can engage in a positive way. But I hope that when Ofsted looks at schools and colleges it is taking into account the links with business, business people and people who have successfully completed their apprenticeships coming into schools, and the role of women in subjects like engineering, STEM and construction in changing attitudes and making young people, and especially young women, aware that there is a wide variety of careers open to them with lots of well-rewarded career paths. That is an essential part of any careers advice.

[Lord Nash]

My Lords, I thank noble Lords for tabling the amendments, which relate to careers. I have to say I am still struggling with the concept of the noble Lord, Lord Watson, being the meat in anyone’s sandwich. He is a pretty tough piece of meat, based on my experience of sitting opposite him at the Dispatch Box. That is meant as a compliment, actually.

On Amendment 8, tabled by my noble friend Lord Lucas, Clause 2 requires schools to ensure that there is an opportunity for a range of education and training providers to talk directly to pupils about the technical education qualifications and apprenticeships that they offer. The amendment is intended to ensure that such access is extended to people who represent groups of providers, such as women in construction or manufacturing. I remember attending an event held for women in manufacturing in your Lordships’ House a few years ago. I agree that we need a degree of flexibility so that pupils hear from the person best placed to inform them about the opportunities on offer. I recognise that in some cases that may not be the provider itself but perhaps it could be an ambassador, an employer or a member of a trade association or representative body, speaking on behalf of a number of small providers.

We will publish statutory guidance that will set out more detail and make it clear that we do not wish to impose unnecessary constraints. We are placing the onus on the school to develop their own arrangements for provider access, including agreeing with providers who will attend to talk to pupils. Clause 2, both as drafted and as we intend to clarify in underpinning statutory guidance, already provides for persons acting on behalf of a number of providers to access pupils. To get really technical and legal for a moment, I queried this in terms of statutory interpretation. The legal authority for our decision to resist the amendments is found on page 1019 of Bennion on Statutory Interpretation:

“Where an enactment refers to a person it is usually taken as intended to include that person’s agent authorised either expressly or by implication”.


The earliest legal authority on this is R v Symington (1895) 4BCR 323. It follows that the words “on behalf of” in the statute would not be needed to allow a person to act on behalf of providers.

Turning to the very good point made by the noble Baroness, Lady Morris, regarding the amendment from my noble friend Lord Baker, it is certainly clear to me, and my officials have confirmed this, that the obligation on the school is to ensure that there is an opportunity for a range of education and training providers to access pupils, that they must prepare a policy statement and that that statement must include, for example, grounds for granting and refusing requests for access. Obviously it must be at the discretion of the head; if he feels that the people coming along are, frankly, not of quality and are not going to give their pupils the right advice, then it must be within the head’s remit to refuse access, provided that he is providing a range of education and training providers and has some other alternative that is better.

Amendment 9 is also in the name of my noble friend Lord Lucas. It is intended to ensure that the policy statement produced by every school will set out the circumstances in which both providers and persons acting on their behalf will be given access to pupils. The current provisions already allow for such persons to talk to pupils. As I said, we will publish statutory guidance which makes this degree of flexibility explicitly clear: the onus is on schools to liaise with providers to agree who is best placed to talk to them.

Turning to Amendment 17, which deals in more detail with Ofsted and careers advice, careers advice is a vital part of the role that every school and college must play in preparing students for the workplace. I agree entirely with the noble Lord, Lord Storey, that careers advice should start in primary school. Primary Futures does excellent work in this regard. I also agree with the noble Lord, Lord Aberdare, that the Careers & Enterprise Company, in which we are investing considerable money—£90 million—has made an excellent start.

However, the quality of the careers offer is considered carefully by Ofsted when conducting standard inspections of FE colleges. Therefore, the amendment is unnecessary. Matters relating to careers provision feature in all four graded judgements made by Ofsted inspectors. First, in judging leadership and management, inspectors take account of the extent to which learners receive thorough and impartial careers guidance to enable them to make informed choices about their current learning and future career plans. Secondly, in judging the quality of teaching, learning and assessment, inspectors consider how far learners are supported to develop their employability skills, including appropriate attitudes and behaviour for work. Thirdly, in judging students’ personal development, behaviour and welfare, inspectors consider how learners benefit from purposeful work-related learning, including external work experience. Finally, in judging outcomes, inspectors consider information about students’ destinations and the acquisition of the qualifications, skills and knowledge that will help them to progress.

Ofsted also evaluates the education and training provision offered by the college, including 16 to 19 study programmes, apprenticeships and traineeships. In making these judgments, inspectors consider the extent to which each type of provision offers tailored careers advice and work experience opportunities to students and develops their employability skills. Noble Lords made some good points about Ofsted’s approach to that, and I will certainly discuss that further with Ofsted shortly. However, I hope that what I have said about its obligation framework reassures my noble friend that colleges are held to account properly for the quality of their careers provision and that he will be able to withdraw the amendment.

[Lord Lucas]

My Lords, I am very grateful to my noble friend for his short CPD session, which I hope I shall manage to remember and will rehearse later in Hansard. Given that, I beg leave to withdraw the amendment.

--- Later in debate ---

[Lord Nash]

My Lords, I am grateful for these amendments. I have made it clear that our priority in introducing the special administration regime is to ensure that the interests of students are safeguarded as far as possible. That is the purpose of the special objective, which places an overriding obligation on the education administrator to take the action that best avoids or minimises disruption to the studies of existing students. I am pleased that noble Lords recognise, and share, that objective.

I understand the noble Lord’s concern about the drafting of subsection (2), that the inclusion of the words “if possible” may be considered to cast doubt on the special objective. As he indicated, I can assure noble Lords that is not our intention. I have reflected on the noble Lord’s amendment. The regime that we are introducing is one which places students at the heart of further education, but does not demand that the education administrator achieves the impossible; nor does it disregard the interests of creditors. The words “if possible” in Clause 24(2) were intended to clarify this position, but I understand the noble Lord’s concerns that they might have the opposite effect. Let me be clear that our position remains unchanged and I am satisfied, on the advice of my lawyers, that their deletion would have no substantive effect on the application of the regime. I am therefore delighted to accept the amendment.

As for the noble Lord’s kind offer not to move Amendments 11, 12 and 13, I am delighted that he has been reassured by the letter from my noble friend Lady Vere. I assure him that the normal insolvency procedures would be followed and that there is no intention to disrupt those, apart from the overriding special objective.

Amendment 10 agreed.

--- Later in debate ---

[Lord Hunt of Kings Heath (Lab)]

My Lords, we had a very interesting debate in Committee about the role of clerks in FE institutions. It is clear from our debates on the Bill that these institutions face many challenges. We have agreed that it is important to have the highest quality of people appointed to their governing bodies and that clerks can be very helpful in giving advice to them. The Minister said he would give some consideration to this and I look forward to his response. I beg to move.

[Lord Nash]

My Lords, I welcome the opportunity to continue our discussion in Committee, about the importance of good governance in FE colleges, to which the noble Lord, Lord Hunt, has referred. As I said in our earlier discussion, I fully recognise the important role played by clerks as expert advisers to governing bodies of FE institutions. As the Minister responsible for governance in schools, I have made it a priority to improve this vital area, including the important role of clerks. However, we believe that it is essentially a matter of improving practice, not legislative change, for reasons that I will outline.

We are supporting the role of clerks through development programmes run by the Education and Training Foundation. The noble Lord will also have received a copy of a letter from the Association of Colleges setting out some of the steps it is taking to strengthen governance. Hard copies of that letter are available for noble Lords today, should they wish to see it. I note from the letter that the AoC is currently undertaking a review of the existing code of practice on governance, to which many colleges adhere. I will be meeting it shortly to hear what further action it intends to take. There is clearly a strong and shared aspiration across this House for strengthening governance. The sector is keen to engage and it is only right for others, including government, to take up that invitation, and to offer the right combination of challenge and support. While legislation might appear attractive, it should not be something that is reached for without good evidence as to the nature of any problems, and full consideration of the most appropriate solutions. In an area as complex as governance, simple legislative approaches are unlikely to be effective in delivering real improvement.

The effect of the noble Lord’s amendment would be to reinstate one element of model articles for colleges that applied prior to the Education Act 2011. That would deliberately limit the freedom that colleges currently have in respect of the contents of their instrument and articles, by requiring them to retain provision in those articles regarding the role of the clerk. I have significant doubts about the efficacy of such an approach. A recent sample of the contents of the instrument and articles of 10 colleges, carried out by my officials, found that in every case the relevant documents already contained a provision similar or identical to that proposed in the amendment. If that sample is representative of the sector as a whole then it would suggest that the amendment will have no substantive effect—certainly not in terms of delivering the improvement to standards of governance which I believe is the noble Lord’s intention—particularly as all 10 colleges in the sample had been subject to intervention by the Further Education Commissioner. In many cases, the commissioner found significant failures of governance. Although I will not read out the relevant sections from the commissioner’s reports, which are published on GOV.UK, there is more than one instance of unsatisfactory clerking arrangements being a significant contributory factor. Those failures occurred despite the role of the clerk being set out in the instrument and articles.

This evidence strengthens the argument that setting out the role of the clerk in the instrument and articles, as would be required by the amendment, is by no means a guarantee of good governance in practice. Nor, unfortunately, is it an effective protection against poor governance. Our focus has to be on good practice in governance, and what more we can do to share good practice, not introducing additional box-ticking measures.

In conclusion, I stress that strengthening governance clearly remains a priority for the sector and for the Government and we will continue to drive this. In the small number of cases where there are significant failures in governance, we will continue to intervene swiftly and effectively to ensure that governing bodies are held to account, and that lessons are learned. We must continue to drive up the performance of all governing bodies. This approach strikes the right balance in helping to ensure a robust and well-governed sector that is in the best position to deliver its important mission for learners, employers, and the community. For these reasons, I believe that greater statutory prescription, as set out in the amendment, is unfortunately unlikely to be effective in achieving those goals. I therefore urge the noble Lord to withdraw the amendment.

[Lord Hunt of Kings Heath]

My Lords, as the Minister mentioned the ETF, I remind the House of my declaration that my wife is a consultant to it. I am grateful to the Minister, particularly because he is going to meet the AoC to discuss the outcome of its review. I accept that good practice is probably the best way forward. However, I hope the Government will keep up the pressure on the AoC and colleges to ensure that they employ good people who can provide robust advice. Having said that, I beg leave to withdraw the amendment.

--- Later in debate ---

[Lord Nash]

My Lords, I am grateful to my noble friend Lord Lucas for this amendment, the effect of which would be to require each group of persons who develop a standard to consider whether an existing qualification ought to be included within it. Occupational standards will form the basis of both apprenticeships and technical education qualifications, and need to be suitable for each of them. The standard should include the knowledge, skills and behaviours needed to form the basis of either an apprenticeship or a technical education qualification. Including existing qualifications in addition to the knowledge, skills and behaviours would cause complications when technical education qualifications are being developed using the standard.

One of the core principles of the apprenticeship reforms is to move away from qualifications. Under the framework model, apprentices collect a number of small, often low-quality, qualifications throughout their apprenticeship which often do not give employers much reassurance about apprentices’ ability to do the job. By moving to a single end-point assessment, the apprentice will be tested on the knowledge, skills and behaviours set out in the standard and their occupational competence to do the whole job, not just a small section of it.

This amendment does not require the inclusion of qualifications in standards but it is moving the approach back towards the system that we are moving away from. Although it is no doubt something that the awarding bodies would welcome, it could actively encourage employer groups to include qualifications where they may otherwise not have done so. That is likely to be contrary to the Government’s strategic guidance for the institute. However, I can reassure my noble friend and the House that in occupations where there is a qualification that is needed for an apprenticeship—for example, to achieve a professional status—they will not need to be prompted by this Bill to consider its inclusion in the standard, which is permissible as long as they meet set criteria for an exception. This is in line with the employer-led nature of the reforms. We therefore believe that this kind of direction is not needed in such a system. I hope that my noble friend will feel reassured enough on the basis of my explanation to withdraw this amendment.

[Lord Lucas]

My Lords, I am mostly comforted by my noble friend’s reference to employer-led matters. If that indicates that if employers want a qualification and fight hard enough they will get it, that seems to me satisfactory. Therefore, I beg leave to withdraw the amendment.

--- Later in debate ---

[Baroness Garden of Frognal]

My Lords, I beg to move Amendment 23 in my name and that of my noble friend Lord Storey. The Government have introduced a raft of reforms to the apprenticeship system which they hope will contribute to the quality as well as the quantity of apprenticeships. One of the biggest departures, and among the most contentious, is the move to end-point assessment—EPA—as the sole formally recognised method of assessing an apprentice’s competence to do the job they have trained for. I am grateful to SEMTA and to Professor Lorna Unwin and Professor Alison Fuller from the Institute of Education for their work in this area and pay tribute to their expertise.

If we take the example of engineering, employers have looked to continuous assessment over three or more years, with formal qualifications used as the mechanism through which they can both assess and ensure that the full range of skills and knowledge has been learned, and that apprentices’ attainment has met national standards and earned national recognition. In overseas countries where EPA is used, it tends to be used in conjunction with other assessment and formal accreditation practices, with the assessment of skills taking place over the whole lifetime of the apprenticeship as well as in a summative form at the end of the programme and through formal qualifications. It is important that the assessment methodology is appropriate and is encouraging to the apprentice. Young people need to gain confidence as they learn that their skills are being recognised. The best way to do this is through continuous assessment. I hope that the Minister will be able to confirm that EPA will not be the only assessment used and that learners will be assessed continuously to ensure that they reach their potential and help to plug the yawning skills gap in the country. I beg to move.

[Lord Nash]

My Lords, I welcome the opportunity to discuss Amendment 23, tabled by the noble Baroness, Lady Garden, and the noble Lord, Lord Storey, which would require all apprenticeship assessment plans to include continuous assessment.

Reviewing the role of continuous assessment in apprenticeships has been a very important part of the apprenticeship reforms following the 2012 Richard review of apprenticeships. It concluded that continuous assessment throughout an apprenticeship tested only incremental progress, not whether the apprentice is fully competent at the time of completing their apprenticeship. This approach also undermines our principle of ensuring that assessment is delivered by an independent third party with nothing to gain from the outcome of the assessment. The continuous assessment model often means that the same individual trains and assesses an apprentice—a conflict of interest we have sought to avoid.

An important feature of approved English apprenticeship standards and plans is therefore the move away from this reliance on a series of small and pre-existing qualifications making up an apprenticeship, and the move instead towards a single, independent end-point assessment, which tests the apprentice in a holistic and robust way. This test at the end of the apprenticeship proves genuine employability by demonstrating that the apprentice has acquired the knowledge, skills and behaviours needed to be fully competent in their occupation. The requirements for the end-point assessment of each standard are developed by employer groups and approved by the institute to ensure that it meets the needs for that specific occupation. In view of this, I hope the noble Baroness feels reassured enough to withdraw her amendment.

[Baroness Garden of Frognal]

My Lords, I thank the Minister for his reply. He said that the same people will be testing and assessing but the likelihood is that that will be the employer, who will know the standards they wish the apprentice to reach. There is a place for end-point assessment, but it should not be the only way of assessing these skills. They are learned continuously and should be assessed continuously. However, I hear what the noble Lord says, and we need to keep this under review to make sure that we are not putting off a lot of people with practical skills, who find the end-point assessment a real barrier to learning and accreditation. Meanwhile, however, I beg leave to withdraw the amendment.

--- Later in debate ---

[Lord Hunt of Kings Heath]

There is no guarantee at all because the clerks are tight about what they will allow. The Government have to agree that they will allow us to bring it back. That is why I made the point.

[Lord Nash]

I should make it clear that if the noble Baroness and the noble Lord wish to test the temperature of the House, they should do so now.

[Baroness Garden of Frognal]

We were hoping that we could have a dialogue about this because these matters are key to the success of apprenticeships. But if that is the Minister’s approach, I beg leave to test the opinion of the House.

Technical and Further Education Bill

Lord Nash Excerpts

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

[Baroness Garden of Frognal (LD)]

My Lords, I fear that this may be something of an anti-climax after the previous excitement. Nevertheless, I wish to move Amendment 34 and speak also to Amendment 35. They have the support of the noble Lords, Lord Lucas and Lord Watson, and of my noble friend Lord Storey.

As we set out in Committee, there are quite a few questions to be asked about the institute’s power to issue technical education certificates. We understand that this will not be done by the institute but be delegated to the Skills Funding Agency. Either way, public time and money will be used to duplicate a function which is already well covered under existing systems.

This proposal was not set out in the skills plan. It potentially removes any continuing link between the awarding body and the qualification that it has produced. We are here attempting to clarify the relationship between the issuing of the proposed certificates and the qualification certificates issued by awarding organisations. Are the Government proposing to issue these “technical education certificates” alongside the awarding organisation’s certificate?

We heard earlier from the Minister that employers would pay for the certificate. It would be helpful to hear more about who makes the application. Does it come from the employer, from the training provider or from the awarding body? Is it automatically triggered by attainment of a qualification?

I do not think that we have had an assessment of the resources required by the institute, or the SFA, to authenticate, print and send out the 3 million apprenticeship certificates to meet the government target. Will the institute require the addresses of all the candidates or will they be sent to the employer or training provider to distribute?

There is a very simple solution. Government issuing of certificates is not common procedure at qualification level in any other area of the education and training system and would appear to bestow unnecessary cost, duplication and complexity on to whichever body is tasked with carrying it out. Would it not be simpler if the certificate issued by the awarding organisation also carried the logo of the institute or of the Department for Education? This has been common practice in the past, including with national vocational qualifications, and would have the benefit of adding government backing and status to a certificate already being validated, processed and issued.

I assure your Lordships that awarding bodies can produce some immensely impressive certificates to meet immensely impressive achievements. I hope that the amendment will be seen as positive and helpful. I beg to move.

[The Parliamentary Under-Secretary of State, Department for Education (Lord Nash) (Con)]

My Lords, I am grateful to the noble Baroness, Lady Garden, and the noble Lord, Lord Lucas, for tabling these amendments. A fundamental reason for introducing the technical education reforms is to tackle the weakness in the current 16 to 19 education system caused by fragmentation and variation in the quality and value of the qualification certificates currently provided by many individual awarding organisations.

To address this, it is important that the technical education certificates are issued consistently by one entity under consistent branding so that they are recognised and understood by employers regardless of the qualification or where it was undertaken. The Bill makes provision for the Secretary of State to issue a technical education certificate to any person who has completed a technical education qualification and any other steps determined under new Section A2DB.

Those completing either an apprenticeship or a technical education course will receive a nationally awarded certificate from the Secretary of State. This will confirm that they obtained as many of the key skills and behaviours as the institute deems appropriate for a particular occupation. The technical education certificate will also recognise the other essential elements such as attainment in English and maths, completion of work placements and other route-specific qualifications. The certificate will demonstrate to employers that individuals obtained the knowledge, skills and behaviours necessary to undertake their chosen occupation. It will provide clarity for employers and support the portability and progression value of the qualifications.

As currently drafted, these amendments will allow the Secretary of State to use the DfE logo and standard wording on technical education certificates—which of course she may already do. It is also right that only the certificate should bear the department’s logo and standard wording. This will also ensure that certificates for technical education align as closely as possible with certificates for apprenticeships. However, this will not affect any arrangements that the institute entered into with an organisational consortium that is approved to deliver a technical education qualification. These arrangements are likely to include the use of their own logo or branding on any certificate that they issue in respect of that qualification.

We expect costs to be incurred in issuing the certificates. It is therefore right that the Secretary of State should be able to determine whether to charge for the first technical education certificate and a copy of it, and if so how much. This is consistent with the procedure already followed for charging for the issuing of apprenticeship certificates or supplying copies of them. Our reforms will ensure we operate a system for the future, providing a national offer that is recognised and understood by employers regardless of the qualification or where it is undertaken.

I hope that clarifies the situation for the noble Baroness. She made a point about how the institute will be aware of the addresses of recipients. That information will come via the awarding organisation to the institute. Students must apply to the Secretary of State for their certificate. If I have not answered all the points that the noble Baroness is concerned about, I am happy to discuss this with her further and to provide more information. In that spirit, I hope she will feel reassured to withdraw her amendment.

[Baroness Garden of Frognal]

I thank the Minister for his reply. I am slightly bemused because employers seem to understand very well the previous certificates that went out, with NVQ and awarding-body logos. There was not a particular confusion about the standards there. As I say, given that the awarding organisations already issue certificates, it would seem a much neater operation if it was combined into one certificate instead of having the confusion of two. I thank the noble Lord for his offer to have further discussion on this and meanwhile beg leave to withdraw the amendment.

Immigration Skills Charge Regulations 2017

Lord Nash Excerpts

Thursday 23rd March 2017 Lords Chamber

Moved by

[Lord Nash]

That the draft Regulations laid before the House on 20 February be approved. 27th Report from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 21 March.

Motion agreed.

Young Carers

Lord Nash Excerpts

Thursday 23rd March 2017 Lords Chamber

[Baroness Hussein-Ece]

To ask Her Majesty’s Government what progress they have made in ensuring that children and young people who care for family members are identified and supported.

[The Parliamentary Under-Secretary of State, Department for Education (Lord Nash) (Con)]

My Lords, we introduced changes to the Children and Families Act 2014 to ensure that local authorities identify needs and assess and support young carers. We have considered recently published research and are exploring policy avenues to help local authorities, schools and professionals to improve young carers’ identification and support. We will be setting out our vision and future plans in the cross-government carers strategy, led by the Department of Health, to be published later this year.

[Baroness Hussein-Ece (LD)]

I think the Minister for that response. Is he aware of any more accurate figures of the sheer numbers of children and young people who care for family members with disabilities and those with mental disabilities? Barnardo’s has estimated that it is somewhere in the region of 200,000, possibly more. Can he say whether, in the strategy that will be published, health professionals will be trained to identify children who are carers? Can he also say what is being done about 16 to 18 year-olds who are twice as likely as their peer group to not be in employment or education? What support will they get to reach their full potential?

[Lord Nash]

My Lords, we have supported various programmes in this regard, such as the Suffolk Family Carers programme, to raise awareness of young carers among teachers and other staff. We have focused on embedding a whole family approach to this issue and have trained school nurses to be champions for young carers. As I say, we will set out further proposals in the carers strategy. I agree entirely with the noble Baroness: although we collect some data centrally, we need to work harder to collect data and identify young carers wherever they are.

[Lord Laming (CB)]

My Lords, I know the Minister will agree with me that there is deep concern when you meet young carers that some of them do not want the teachers to tell children’s services about them in case that leads to care proceedings. Will the Minister assure the House that in the new strategy everything will be done to tell and reassure young carers that the state services are there to support them, not to add to the burden that they carry?

[Lord Nash]

The noble Lord makes an extremely good point. I know from experience that this can be a very sensitive issue with children, who may not wish even to tell anybody that they have these responsibilities. Our training of school nurses can help greatly with this.

[Lord Watts (Lab)]

My Lords, would it not be a good idea for young carers to be given a statement setting out the support mechanisms that would be put in place to support them and their families?

[Lord Nash]

Again, I make the point that the first step is to identify them. The Children and Families Act now places an obligation on local authorities to assess their needs and support them, where they request it. However, we need to do more to identify them in the first place.

[Baroness Thomas of Winchester (LD)]

My Lords, I remind the noble Lord’s department that some young carers do not identify themselves with the words “caring” or “carer” if they care for a disabled parent. The noble Baroness, Lady Grey-Thompson, has confirmed this. They undertake this caring as a matter of course and have done so all their lives. They need to be identified but they may not know the word “carer”.

[Lord Nash]

The noble Baroness makes a very good point. Again, our guidance to schools is helpful in this regard. As I say, the work we are doing with schools and school nurses will, I hope, make sure that all pupils are aware of what the terminology means.

[Baroness Finlay of Llandaff (CB)]

My Lords, I declare my interest as chair of Dying Matters. Do the Government accept the figure that approximately 10% of schoolchildren are bereaved, a third of those of a parent or sibling, and that many of them have cared for that person during their final illness and, after death, often provide care and support for the other bereaved members of the family? Will the whole House join me in expressing the most sincere condolences to the two children who were bereaved because their mother was killed yesterday on Westminster Bridge?

[Lord Nash]

I agree entirely with the noble Baroness on child bereavement. I suffered from that myself and share the sympathy that she expresses.

[Lord Cormack (Con)]

My Lords, further to the point made by the noble Baroness, Lady Thomas, do general practitioners as a matter of course annotate their records where there is a child carer looking after a patient?

[Lord Nash]

I am afraid that I do not know the answer to that question but I shall talk to the Department of Health and write to my noble friend.

[Lord Watson of Invergowrie (Lab)]

My Lords, the Children’s Commissioner recently reported that four out of five young carers were not receiving support from their local authority and that not enough local authorities take steps to identify children in their area who may be providing care. Too often, it seems that funding under the Care Act is used for assessment purposes rather than providing support and activities that would allow young carers to enjoy some aspects of the childhood that every child surely should have. Will the Minister say what steps the Government are taking to ensure that young carers receive appropriate assessment and support, no matter where they live, through inspection and other forms of monitoring?

[Lord Nash]

The noble Lord makes a very good point. We welcome the Children’s Commissioner’s report. We have just concluded our analysis of its findings and are considering what more we can do. We know that many local authorities are making great progress in their data analysis and capabilities but, as the noble Lord says, there is more for us to do. We are considering that in the light of the Children’s Commissioner’s report.

[Baroness Farrington of Ribbleton (Lab)]

My Lords, will the Minister undertake to ensure that psychiatric nurses treating patients are very careful? Often they have responsibility for doing what is best for the parent in a case of severe and distressing mental illness, but sometimes no one looks to the needs of the child, who may be in a home with a parent in an extremely distressing state. Surely there should be somebody there to protect the child from what can be a rather frightening and very paranoid parent.

[Lord Nash]

As I am sure the noble Baroness knows, we are working with the Department of Health to commission a major countrywide thematic review of children and adolescent mental health. We will bring forward a new Green Paper on children and young people’s mental health, and I shall certainly feed the noble Baroness’s comments into that thinking.

Education: Nursery and Early Years

Lord Nash Excerpts

Thursday 23rd March 2017 Lords Chamber

[Lord Storey]

To ask Her Majesty’s Government what estimate they have made of the level of annual funding required for nursery and early years provision, in order to ensure quality of service.

[The Parliamentary Under-Secretary of State, Department for Education (Lord Nash) (Con)]

My Lords, we will be investing an additional £1 billion per year in the free early years entitlement by 2019-20, including over £300 million per year to raise hourly average funding rates. Our record level of investment was based on our review of childcare costs, which was described by the National Audit Office as thorough and wide-ranging. More children than ever now benefit from high-quality early education: 93% of settings are now rated good or outstanding.

[Lord Storey (LD)]

I am very grateful for the Minister’s reply. He may know that UK and international research shows that high-quality early years education, led by a graduate teacher, is one of the most decisive interventions for tackling poor preschool attainment and has the biggest impact on children, particularly those from deprived communities. What are the Government doing to make this a reality?

[Lord Nash]

The noble Lord is extremely accurate in this, and I know he has great experience in this area from his career in the primary school sector. Of course the early years workforce is the sector’s greatest asset in ensuring that we continue to maintain such a high standard, with 93% of providers rated good or outstanding, in the future. The proportion of staff in group-based providers with a level 6 qualification, degree level or higher, is 10%; and 79% of staff in group-based providers and 69% of child minders have at least a level 3 qualification. Earlier this month we published the workforce strategy, which outlines a range of activities to help employers attract, retain and develop high-quality staff.

[Baroness Massey of Darwen (Lab)]

My Lords, I thank the Minister for that, and I am pleased that he mentioned the development of staff in his reply. I wonder if he could be more precise. Surely he will agree with me that the quality of service in education of any kind depends on the quality of the staff. Can he say something further about the notion of the qualified status of nursery school teachers and what the Government are doing to develop it?

--- Later in debate ---

[Lord Nash]

We are investing heavily in improving the quality of the status of nursery teachers, and increasing the funding rate will help with recruiting more high-quality staff. A lot of details on that are set out in our workforce strategy.

[Baroness Howe of Idlicote (CB)]

Will the resources that the Government make available cover the particular requirements and needs of those with special needs?

[Lord Nash]

Yes. Our recently published workforce strategy sets out how we will support staff to offer good-quality provision for children with SEND. We are funding a range of training and development opportunities in this regard, working with organisations that specialise in SEND. We have a new targeted £12.5 million disability access fund and a requirement for local authorities to set up a local inclusion fund to support providers for better outcomes for children with SEND.

[Baroness Farrington of Ribbleton (Lab)]

My Lords, will the Minister undertake to look at research into high-quality preschool experience combined with adult education for children who fail later in life? Will he look at the Midwinter experiment in Liverpool, which did so much many years ago to demonstrate that the most important investment is high-quality nursery education combined with help for parents who sometimes have difficulty themselves in helping their children unless there is high-quality adult education for them?

[Lord Nash]

The noble Baroness is quite right in her remarks. We all appreciate that helping children at an early age, particularly those who have a difficult home life, is absolutely essential. The payback on that for both those children and our society is massive. I certainly would be delighted to look at the research to which she refers, and I would be happy to discuss it with her because I know that she has experience in relation to this.

[Baroness Walmsley (LD)]

My Lords, the early years sector is very diverse in relation to types of governance. We have the state-funded sector, private settings, and not-for-profit and voluntary settings. Can the Minister ensure that the money to employ qualified early years teachers is easily available to all kinds of settings?

[Lord Nash]

Yes, I think that that is the aim. As the noble Baroness says, there is a mixed range of providers and we must ensure that they all have access to the appropriate funding. As I have said, the quality of provision speaks for itself.

[Lord Lexden (Con)]

Does my noble friend have confidence in the inspection arrangements that exist for these sectors of education and in the part that they can play in helping to raise standards?

[Lord Nash]

The inspection arrangements are absolutely essential and Ofsted’s role in this is crucial, so I agree entirely—we have confidence in it.

[Lord Blunkett (Lab)]

My Lords, leaving aside the tragic demise of the Sure Start local programmes, can the Minister comment on how we can implement better the report by Sense, the organisation for deafblind men, women and children, which was published last year, in terms of early years settings and the training not just of professional staff but of volunteers, which is absolutely crucial in ensuring that those with the severest disabilities have the best possible start in life?

[Lord Nash]

I agree entirely with the noble Lord in this regard. I am not familiar with that report but I will look at it and, I hope, have the opportunity to discuss it with him.

[Lord Watson of Invergowrie (Lab)]

My Lords, if the Government really are serious about social mobility, then children’s first four years is where they should be concentrating—and doing so relentlessly. As the noble Lord, Lord Storey, said, early years teachers are crucial to the development and effectiveness of childcare. In the workforce strategy, launched earlier this month and to which the Minister referred earlier, the Early Years Minister, Caroline Dinenage, said that if we are to prepare “the best” for our children,

“in their earliest and most formative years, we must … value”,

and train adequate staff to ensure their development. That is fine—that is as it should be—but the Family and Childcare Trust recently reported that one in 10 nursery workers do not receive the national minimum wage. Will the Minister work with Ms Dinenage and other Ministers to ensure that all childcare workers are properly and fairly paid and that public, taxpayers’ money does not go to employers that are breaking the law?

[Lord Nash]

That is an extremely good point. Nurseries are of course legally required to pay the national minimum wage and, just as any other organisation or business, they risk fines or even prosecution if they do not. We will be vigilant in this regard.

Schools: Funding Formula

Lord Nash Excerpts

Tuesday 21st March 2017 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Education (Lord Nash) (Con)]

My Lords, through our careful management of the economy, we have protected the core schools budget in real terms. In 2017-18, schools will have more funding than ever—over £40 billion—set to rise to £42 billion by 2020. The IFS analysis shows that per pupil funding in 2020 will be over 50% higher in real terms than in 2000. While we know schools are facing pressures, we know that there is scope for schools to become more efficient and we are supporting them to achieve this.

[Baroness Massey of Darwen (Lab)]

I thank the Minister for that interesting reply. Could he say whether he recognises the concerns of teachers at schools with more disadvantaged pupils, who are more likely to suffer than others under this funding formula? Could he predict what the future for those schools might be?

[Lord Nash]

I think that the EPI, to which the noble Baroness refers, supports our national funding formula and agrees that we should proceed with it, and it confirms that we will be focusing money on the disadvantaged.

[Lord Storey (LD)]

My Lords, in the next four years, the budget of an average primary school will be £74,000 worse off. That is the equivalent of two teachers. The budget of an average secondary school will be £291,000 worse off, which is the equivalent of six teachers. Does the Minister think that it is wise to be spending £240 million on expanding grammar schools and £320 million on creating new free schools when these budgetary pressures exist?

[Lord Nash]

All public services are facing budgetary pressures. We are still trying to recover from the deficit that we inherited. The National Audit Office has made it quite clear that it is reasonable to look to schools to make efficiency savings. The Education Endowment Fund has said that there is significant scope for better deployment of staff in schools. We find that many of our best schools educationally are also running themselves financially very efficiently. We believe that there is significant scope for saving, in non-staff costs in schools, of over £1 billion.

[Lord Polak (Con)]

Will the Minister join me in recognising that the current funding system for schools is fundamentally flawed? It is a postcode lottery, where resources provided to identical schools depend not on their needs but on location. This is unfair and needs to be addressed urgently.

[Lord Nash]

I wholeheartedly agree with my noble friend. As I have already said, the EPI, to which the noble Baroness, Lady Massey, referred, has agreed with him that the system as it currently stands is broken, is unfair and must be addressed urgently. Underfunded schools do not have access to the same opportunities as others do, and this cannot be right. This is why we are introducing a much clearer, fairer and more transparent system.

[Baroness Symons of Vernham Dean (Lab)]

My Lords, does the Minister accept that these proposals have a disproportionate effect on small primary schools in rural areas? I declare an interest because the school in my village, of Vernham Dean in Hampshire, will have suffered a cut of £64,000 in relation to the money that was available to it only a year and a half ago. I wonder whether the Minister can accept that these proposals will adversely affect young children in small, rural schools in relation to their counterparts in larger towns.

[Lord Nash]

Rural schools are of course essential to their local communities and ensure that children do not have to travel long distances to school, but we are including an enhanced sparsity factor in our formula to target additional funding to our smallest and most remote schools. This sparsity funding is over and above the lump sum that all schools will receive to help them meet costs that do not vary with their pupil numbers.

[Lord Evans of Weardale (CB)]

My Lords, while I welcome the additional efficiency and flexibility that come from the multi-academy trust system, and from trusts and free schools overall, does the Minister agree that a reduction in funding per pupil at a time when greater skills are needed to compete internationally, and when mental health problems among young people are increasing so rapidly and causing problems for many schools, is a bad allocation of money?

[Lord Nash]

I am grateful to the noble Lord for his comments about the efficiency of multi-academy trusts. One study shows that multi-academy trusts can achieve a saving of £146 per pupil. As I said, we are still recovering from the financial hole that we inherited in 2010 and we all have to adjust our resources. Schools have had a huge increase in money in recent years. We are trying very hard and have a lot of resources available on our government website to help them become more efficient.

[Baroness Farrington of Ribbleton (Lab)]

My Lords, will the Minister apologise for the fact that the Government are taking money out for their own pet schemes for grammar schools and depriving children in other schools in other parts of the country? Will he agree to go away and look at whether the Government’s pet schemes should have additional money that is not stolen from children in other schools?

[Lord Nash]

I will not apologise any more than the party opposite has apologised for the probably £10 billion that it wasted on its Building Schools for the Future programme.

Immigration Skills Charge Regulations 2017

Lord Nash Excerpts

Tuesday 21st March 2017 Grand Committee

Moved by

[Lord Nash]

That the Grand Committee do consider the Immigration Skills Charge Regulations 2017.

[The Parliamentary Under-Secretary of State, Department for Education (Lord Nash) (Con)]

My Lords, this Government are committed to a strong skills system that can drive increases in productivity and improvements in social mobility and help make a success of Brexit. We need to do more to support people into high-quality jobs and help them gain world-class skills that meet employers’ needs. Lack of investment in skills is damaging our productivity and our economy. Employer investment in training has been declining for 20 years. On average, UK workers undertake 20% less continuing vocational training than those in the EU. According to the latest available international comparison, the UK spends 55% less than Germany and just over 70% less than France per employee on vocational training. We are forecast to fall from 24th to 28th out of 33 OECD countries for intermediate skills by 2020. We need urgently to address this underinvestment, and the immigration skills charge is one way we are doing so.

The charge was first announced in May 2015. The Immigration Act 2014, as amended last year, provides the Secretary of State with the power to require certain employers who recruit skilled workers from outside the European Economic Area to pay an immigration skills charge. These regulations provide for the amount and obligation to pay the charge. Through the charge we want to incentivise employers to think differently about their recruitment and skills decisions and the balance between investing in UK skills and overseas recruitment.

There is no doubt that skilled migration has brought economic benefit to the UK. It has boosted our ability to compete in global markets and helped make us world leaders in many sectors. There are many examples of good practice, but it seems that some employers would prefer to recruit skilled workers from overseas rather than invest in training UK workers. Use of the tier 2 visa route grew by 37% between 2010 and 2016. Our aim is to see UK workers with the right skills fill these roles.

When we first announced this policy, we commissioned the independent Migration Advisory Committee to advise on applying a skills charge to employers recruiting workers from outside the European Economic Area as part of its wider review of tier 2. As the Secondary Legislation Scrutiny Committee acknowledged, most respondents to the MAC’s consultation were not in favour of a charge. It is not surprising that those who will have to pay the charge did not welcome it. Based on the SLSC’s comments, we revised and re-laid the Explanatory Memorandum accompanying the regulations to reflect more of the evidence we considered. The MAC, which is made up of independent experts in the fields of economics and migration policy, supported it. The committee analysed different levels of charge and took into account views from more than 250 written submissions and from meetings with more than 200 public and private sector employers. It considered that a flat charge of £1,000 per worker per year would be large enough to have an impact on employer behaviour and that this would be the right level to incentivise employers to reduce their reliance on migrant workers.

Where the Government took a different line from the MAC was to protect the UK’s position as a centre of excellence for education and research and to support smaller employers. We announced the rate, scope, exemptions and introduction date for the charge in March last year. The draft regulations implement the decisions taken last year. We believe that this has given employers enough time to prepare for its introduction on 6 April, subject to parliamentary consideration. In deciding the scope and rate of the charge, we took into account the MAC’s recommendations, but we also responded to concerns raised in Parliament during the passage of the Immigration Bill and from employers to announce a number of exemptions and a lower rate for charities and smaller employers. For that reason, Regulation 3 introduces a reduced rate of £364 per individual per year for small and charitable sponsors.

Regulation 4 provides for the exemptions. As the MAC recommended, sponsors of tier 2 intra-company transfer graduate trainees are exempt from paying the charge. The Government have also exempted specified PhD-level occupations, including higher education lecturers and researchers. In addition, those switching from a tier 4 student visa to a tier 2 general visa to take up a graduate-level position in the UK are exempt. This was welcomed by the British Medical Association as it will benefit doctors completing their foundation training. These exemptions are designed to protect employers’ ability to recruit the brightest and the best. For out-of-country applications for entry clearance, the regulations provide that the charge does not apply for leave of less than six months.

Regulation 5 provides that the sponsor must pay the charge up front. This is for a minimum of 12 months and then in six-monthly increments, rounded up. It will be calculated according to the length of employment the sponsor enters on the certificate of sponsorship. Employers will pay the charge as part of the existing sponsorship process, administered by the Home Office.

Regulation 6 provides that part or all of the charge may be refunded or waived. Regulation 7 means that the charge will not be retrospective. Employers of individuals who are already in the UK on a tier 2 visa or have been assigned a tier 2 certificate of sponsorship at the time the regulations come into force will not have to pay the charge. This is also the case where these individuals apply to extend their stay or change job or employer.

I turn to how the funding raised will be used. Based on Home Office analysis of the use of the tier 2 route, it is estimated that the charge could raise £100 million in the first year. The Home Office will collect the charge and transfer it to the Consolidated Fund, less an amount to cover the costs of collection. The population percentages underlying the Barnett formula will be used by the Treasury to determine the split of funding between the Department for Education and each of the devolved Administrations.

The income raised from the charge will be used to address skills gaps in the workforce. It will make a contribution to the department’s skills budget, ensuring that we can continue to make a significant investment in developing the skills the country needs. The charge will raise income but it is also designed to change employer behaviour, and that applies across all sectors.

I recognise the concerns about the impact of the charge on health and education in particular. The MAC was clear in its recommendation that the public sector should not be exempt. As an employer like any other, it should be incentivised to consider the UK labour market first. This is in line with government policy. It is not sustainable to rely on recruiting overseas staff. We are committed to building homegrown skills, to recruit from the domestic labour market and to invest in training.

We recognise that immigration has a role to play in the supply of workers where there are genuine skills shortages, but that should not come at the expense of investment in skills in our country. The immigration skills charge is designed to incentivise employers to invest in training and upskilling the resident workforce. It will also raise funding to support ongoing investment by the Government in their skills programmes. I hope that the Committee will support these regulations. I beg to move.

--- Later in debate ---

[Lord Watson of Invergowrie (Lab)]

My Lords, the Labour Force Survey showed that by 2014 the number of workers participating in training courses away from their own workplace has collapsed since 1992. I will not repeat the figures that the Minister gave, but this feeds into a pattern. In general, UK employers underinvest in training relative to comparable countries. It is therefore understandable that the Government should decide to incentivise employers to invest in training so as to maximise the number of jobs available to the domestic workforce. In that aim, we support what the Government are attempting to achieve through these regulations.

However, the Secondary Legislation Scrutiny Committee was critical of the fact that the Explanatory Memorandum laid with the instrument said nothing about the opposition to the proposals voiced by most of those consulted by the Migration Advisory Committee. The Secondary Legislation Scrutiny Committee was also critical of the fact that the Explanatory Memorandum provided little or no detail about the impact of the charge on those employers likely to be affected. That led the committee to conclude that the process of policy formulation for the proposals was not complete and that the Government were not in a position to supply Parliament with sufficient information about the implementation and impact of the proposed charge. If that is not the source of some embarrassment to the Minister and his officials, then it ought to be.

As far back as May 2015, the then Prime Minister announced the intention to introduce the charge, and in March 2016 the scope of the charge was set out. Why then was the DfE not ready when the regulations came to be submitted? Given the array of staff in the department, there is surely no excuse for this. I hope that the Minister will apologise and give an assurance that in future his officials will be better prepared.

Since the charge was first proposed almost two years ago, we can discount any suggestion that it had its roots in what I regret to say is the increasingly anti-immigrant rhetoric that since last year’s referendum has characterised some government policy. The Government’s generally hostile approach towards migration—and the definition of it, as evidenced by their attitude on the Higher Education and Research Bill in relation to international students—risks further fuelling discrimination and social tension.

Changes to migration policies should be developed through consultation with employers and trade unions and, once agreed, should be introduced with adequate lead-in time to allow employers and employees to plan accordingly. That allows short-term gaps in the labour market to be filled while other measures are taken to address long-term training needs in the domestic labour market. It is to be hoped that that is what this charge will achieve.

Last week, during the briefing session on the charge, the Minister for Skills, Mr Halfon, explained that it will be used to address skills gaps in the workforce. In terms of the resources available to do so, and to some extent reflecting what the noble Baroness, Lady Walmsley, has said, the Minister said he anticipated an annual surplus of around £100 million once the Home Office had deducted the costs involved in collecting the charge.

Identifying those skills gaps is at the heart of these regulations. The UK Commission for Employment and Skills’ Employer Skills Survey 2015 shows that, while overall employer investment in training, in kind and cash, increased between 2011 and 2015, per employee expenditure flatlined at £1,600, despite a period of economic recovery and business growth. That was the last survey to be published, and I regret to say that it will remain the last survey to be published because earlier this year the Government closed the UK Commission for Employment and Skills. We no longer have a national overview. Perhaps the Minister will explain the rationale behind what appears to be an extraordinary step. What will replace it?

The Employer Skills Survey 2015 highlighted what it termed skill-shortage vacancies by sector and listed 13. The top five were: construction; manufacturing; electricity, gas and water; transport and communications; and agriculture. Interestingly, health and social work were only in seventh place, despite the regular reports of difficulty in filling vacancies. The noble Baroness, Lady Walmsley, has stolen a bit of my thunder here, so I will not repeat the thrust of her argument. Certainly, the proportion of NHS staff who are not UK nationals is high, although already in decline following last year’s referendum. It seems questionable, at the very least, that the list of exempted occupations listed in the regulations does not include doctors or nurses at a time when the NHS is under real pressure in filling posts in these areas. I acknowledge that the noble Baroness, Lady Walmsley, said that it goes wider than doctors and nurses. Enforcing the levy would effectively penalise the NHS for recruiting workers from outside the EEA to fill gaps in an already stretched workforce in an essential public service. I accept that to some extent the NHS has over the years gone for the easier option of hiring from outwith the UK, but the pressures currently being experienced there will be as nothing two years hence. I urge the Minister to consider what the noble Baroness, Lady Walmsley, said and what the pressures on the NHS will be if the charge is applied across the board for that sector.

Science, technology, engineering and mathematics are also areas where there are skills gaps, not least in schools, where recruitment also remains a problem. I shall not repeat the comments I made in respect of the Engineering Construction Industry Training Board in a previous debate. Few teachers will earn above the £30,000 cut-off for the charge, and so non-EEA nationals will be unable to be used to help fill these gaps. From memory, Mr Halfon—or perhaps it was officials—said that there are only about 150 non-EEA nationals in that bracket. I accept that that is not a big number, but none the less these gaps need to be filled. With maths and ICT demonstrating digital skills shortages for the jobs of tomorrow, there could have been a case for relaxing the charge in these areas.

One suggestion I shall make concerns the follow-through on the charge, which we all hope will meet its aims. Could employers not be eligible for some sort of rebate on the charge for employing a non-EEA worker? There is an element of double-charging. If an employer has identified a gap for a group of employees, so that he or she has to take on workers from outwith the UK and, I assume in this case, from outwith the EEA, while doing that, the employer is meeting the aims of this charge by bringing through young, or perhaps not so young, people to train them up to the necessary level. So he is paying the charge for them to be employed and to be trained, and he is also paying a surcharge for those outwith the EEA who he is using temporarily. So in a sense he is training people for the long-term good of the business and of the UK economy, and there does seem to be an element of double-charging, particularly when the £1,000 rises over the years to a maximum of £5,000—leaving aside the charitable sector—when the employer is in fact doing what the Government want him or her to do: training employees.

My other question for the Minister is: when will the charge be reviewed? I do not know whether there is any significance in the fact that the assumption in the regulations is that it covers only non-EEA employees for up to five years. I am not clear whether that is to be a maximum. But there may be a case for, in effect, a sunset clause so that after five years the regulations could be reviewed and some assessment made of the charge’s success. As I said earlier, all of us in this debate, whatever our views and however critical we have been, want to see the outcome that the Government intend. I would be interested in the Minister’s views on that point. I do not expect him to respond just now. I do not expect his officials to give him a response just now. If it is more convenient, I am more than happy to receive something in writing.

Overall, I certainly want to see this charge introduced effectively and fairly, leading to a situation where there are more UK workers able to fill the gaps that are evident now and likely to be even more evident in the post-EU years ahead of us. To that extent, I do not do this often but I wish the Government well because I think their intentions are good, but there are certainly some rough edges in this charge which could perhaps be smoothed down to make it more palatable and perhaps even more effective.

[Lord Nash]

My Lords, I thank all noble Lords for a really interesting debate. We welcome this feedback. I come back to my opening remarks: the investment in skills is crucial to a productive, strong UK economy—an economy which gives people from all backgrounds the opportunity to fill today’s skilled roles as well as those in the future. Migration has a role to play in supporting the development and supply of expertise and skills and we want to continue to attract the brightest and the best, but through the immigration skills charge we want to incentivise employers to invest in training. I am grateful for the support that has been expressed today for our desire to upskill our workforce. I am afraid that I will not cover all the points that have been raised but I will write to all noble Lords present today.

The noble Baronesses, Lady Walmsley and Lady Hamwee, asked why this impacts particularly on the health service. The MAC was clear in its view that the charge should apply to the public sector. It is not sustainable to rely on recruiting overseas staff and the Government are committed to building home-grown skills. All employers need to look at how they meet their longer-term skills needs, and the long-term strategy must be to train and retain our own nurses and doctors in the UK. Steps are being taken to address the shortage of nurses, including continued investment in training, retention strategies, and a return to practice campaign. We are introducing a new nursing degree apprenticeship. Health Education England has increased nurse training places by 50% over the past two years and is forecasting that more than 40,000 additional nurses will be available by 2020. Similarly, Health Education England is forecasting that more than 11,000 additional doctors will be available by 2020. The noble Baroness, Lady Walmsley, asked about the number of nurses impacted by the charge: 2,600 certificates of sponsorship were used for nurses in the year ending August 2015.

The noble Lord, Lord Watson, asked about the delay in publishing the impact assessment. As the charge is classified as a tax, we have not been required to carry out a formal impact assessment. It is also difficult to do so because it is difficult to anticipate how employers will respond to the charge and to wider changes to tier 2. In addition, the charge does not sit as an isolated measure—it is part of a wider skills programme to develop a strong, productive economy. On the noble Lord’s point about how we will assess and evaluate the impact of the policy and whether the charge will be reviewed, we will monitor the operation of the charge and will undertake a review of the policy after one year, as covered in the Explanatory Memorandum.

--- Later in debate ---

[Lord Watson of Invergowrie]

Before the Minister finishes, I mentioned the UK Commission for Employment and Skills, and that apparently it has been disbanded. Perhaps the Minister can give me a commitment that he will also write to me about that. I am happy to leave it at that just now.

[Lord Nash]

I will certainly cover that.

[Baroness Walmsley]

Before the Minister concludes his remarks, I will make one point. Of course I agree with what he said about the need for employers to make a contribution to the training of the workforce from whom they will eventually benefit. However, is he aware of the very high level of commitment to training that all health and care employers already make? It takes them a lot of time and costs them a lot of money. Every ward has training nurses on it; every clinical team has trainee doctors on it; most GP practices have GP trainees; most care homes also have trainee co-workers. An enormous contribution is made already. The noble Lord, Lord Watson, talked about double charging—that is what we have here.

[Lord Nash]

I have listened to what the noble Baroness and the noble Lord have said but I cannot add any more at this stage. I commend the regulations to the Committee.

Motion agreed.

Careers Advice and Guidance

Lord Nash Excerpts

Monday 6th March 2017 Lords Chamber

[Lord Cotter]

To ask Her Majesty’s Government what steps they are taking to continue to ensure the availability of good careers advice and guidance.

[The Parliamentary Under-Secretary of State, Department for Education (Lord Nash) (Con)]

My Lords, we know that careers advice still varies hugely, even though a lot of good work is under way. That is why we will publish a comprehensive careers strategy for all ages later this year. We want to build on the progress so far. The Careers & Enterprise Company has made an excellent start and is boosting the level of employer input into schools and colleges, while the National Careers Service continues to provide free, impartial support across the country and has excellent customer satisfaction rates.

[Lord Cotter (LD)]

My Lords, there is a great need in this country for skills, and many 16 year-olds and others are not aware of the vocational education opportunities available. I recently met members of the aerospace industry, who are combining together. Many other organisations and trades are combining to offer training and vocational opportunities. May I say to the Minister that people are not always aware of the opportunities for training and vocational education and suchlike? Will he ensure that the Government publicise the many opportunities that are available in this country for training and vocational education?

[Lord Nash]

I share the noble Lord’s concern about the lack of awareness in some cases of these kinds of opportunities. Of course, we are determined to increase the status of technical education. We have been discussing this in the Technical and Further Education Bill and have accepted an amendment from my noble friend Lord Baker to require schools to allow principals of institutions offering technical education to come into the schools to meet the pupils.

[Baroness Nye (Lab)]

My Lords, a recent report on apprenticeships from the Young Women’s Trust found that young women received lower average pay and less on the job training and were more likely than their male counterparts to be out of work after their apprenticeship. I declare an interest as a trustee of the Young Women’s Trust. Part of the problem is the occupational segregation that occurs. What are the Government doing to make sure that young women receive appropriate careers advice?

[Lord Nash]

I share the noble Baroness’s concern. Our reforms to career guidance are based on schools connecting with pupils so that they understand the breadth of opportunities available to them, particularly in relation to girls. We welcome initiatives such as the Inspiring Women campaign, run by Inspiring the Future. We also have a lot of activity under way to stimulate more interest in STEM, including the Stimulating Physics Network and the Further Mathematics Support Programme. These provide support to schools, with a particular focus on engaging girls.

[Lord Flight (Con)]

My Lords, I believe that something like 58% of graduates are employed in what are described as non-graduate jobs. I suggest that part of the reason for that is that there is not an efficient functioning of the guidance of young people at university into career areas that are suitable for them. Indeed, as has been commented on, a lot of people are not even aware that there is advice at university. I hope the Government will think hard about how they can improve that and help our graduates get into the sorts of jobs that they are suitable for.

[Lord Nash]

My noble friend makes an extremely good point. I know that my ministerial colleague Jo Johnson is very focused on this. I remember Andreas Schleicher telling me that we are the worst country in Europe for aligning courses at universities with the jobs available. We believe that our plans under the Higher Education and Research Bill will make students much more focused on what are worthwhile occupations.

[Lord Watson of Invergowrie (Lab)]

My Lords, a few moments ago the Minister referred to the Technical and Further Education Bill, which is in Committee, and that he had accepted a cross-party amendment which means that from September this year all state-funded schools in England must provide access to a range of education and training providers. That was very much welcomed by all those in Committee, but in that debate the Minister said:

“Our careers strategy will not be effective unless schools and colleges are held to account for the quality of their careers provision. Ofsted has an important role to play in this regard”.—[Official Report, 22/2/17; col. GC 70.]


With schools that were previously reluctant to have their pupils advised about routes other than those that lead to university now being obliged to do so, does the Minister accept that when this comes into effect Ofsted should give an overall “good” or “outstanding” rating to a school or college only if it considers that the careers advice provided by them is of a good or outstanding standard?

--- Later in debate ---

[Lord Nash]

When we came into government in 2010 I think there were about 30 different Ofsted categories for ratings and we were very keen to sharpen and simplify the Ofsted arrangements. Ofsted has sharpened its approach specifically to careers provision and continues to remind inspectors of the importance of effective information, advice and guidance. Careers provision features within three of the four graded judgments: effectiveness of leadership and management; personal development; behaviour and welfare; and outcomes.

[Baroness Afshar (CB)]

My Lords, what advice is provided for minority women who want to break out of the stereotypical jobs towards which they are normally encouraged to move and into careers that are not normally assumed to be their domain? What support do they get once they make such choices in order to enable them to continue?

[Lord Nash]

I have already referred to Inspiring Women, the Stimulating Physics Network and the Further Mathematics Support Programme, which are particularly focused on encouraging women into STEM. Of course, schools should be organised to encourage their female pupils, in particular, to see a wide range of career opportunities and to support them further to make sure that they are encouraged to go on visits and trips, which, as we know, are sometimes not easy.

[Lord Storey (LD)]

My Lords, we all wait for this comprehensive strategy with great anticipation. Does the Minister agree that the comprehensive strategy should ensure, first, that there are properly trained people to give face-to-face advice and secondly, that the importance of careers, jobs and enterprise are recognised at primary school level?

[Lord Nash]

I agree that careers advice should start at an early age. It depends precisely how you pitch it, but certainly all schools should be identifying their children’s passions, interests and aptitudes. What the noble Lord says about face-to-face careers advice is interesting. There is clear evidence that if that is all one relies on it is a very ineffective strategy. Most studies have concluded that the best careers advice comes through activities with employers, and there is evidence that five or more employer engagements during secondary school means that students are seven times less likely to be NEET.

Technical and Further Education Bill

Lord Nash Excerpts

Committee: 3rd sitting (Hansard): House of Lords
Wednesday 1st March 2017 Grand Committee

[The Parliamentary Under-Secretary of State, Department for Education (Lord Nash) (Con)]

My Lords, I am grateful to the noble Lords, Lord Watson and Lord Hunt, for these three amendments, to the noble Lord, Lord Stevenson, for his remarks supporting them and to the noble Lord, Lord Storey, for his comments.

These amendments relate to assessing the impact of the proposed insolvency regime on further education colleges. Before I deal with individual amendments, I shall respond to some of the general points made by the noble Lord, Lord Stevenson, and if I do not cover them all I will certainly write to him. Following the area reviews, all colleges should be on a sound financial footing for the longer term. That is part of the reason behind the area reviews. These measures will not come into force until after the recommendations of the area reviews have been implemented. There will be no closures as a result of the reviews. Colleges are working together to remove overcapacity in their area and to better align their offer to local employers’ needs. Some colleges may merge as a result, but there will be no insolvencies as a direct result of the reviews.

I believe that Amendment 37 is intended to ensure that the special objective offers protection not only to existing students of an insolvent college but to those of the future. In that regard, noble Lords and I share common ground. Indeed, that is the purpose of our programme of area reviews. We are working with colleges, local authorities and other local stakeholders to ensure that FE bodies are put on a strong and resilient footing. This is the best way to safeguard the interests of all students. Delivering strong, sustainable colleges that can provide young people now and in the future with the opportunity to pursue courses right for them will offer them the opportunity to achieve their full potential.

In the unlikely event that an FE body were to become insolvent, our first priority would, rightly, be to the existing students, whose studies are likely to be directly affected. That is the purpose of the special objective. While we cannot know how the education administrator will propose to achieve the special objective in every insolvency, as that will clearly depend on the circumstances of each case, it seems likely that the preferred solution would be to find an alternative provider to take over provision at the insolvent body’s campus. That would almost certainly prove least disruptive for the students involved. However, that may not be possible or the right outcome. It might ultimately be better for existing and future students to attend other colleges where they may have access to a greater choice of course, better facilities and the like.

I recognise noble Lords’ concern that moving to a different provider might mean travelling greater distances, with a consequent increase in travel costs. While many students would be willing to travel to access the right provision—a point the FE commissioner made when he gave evidence to the Committee in the other place—there will be those for whom this would be a challenge. Colleges are already able to provide financial support to help eligible students with their travel costs, and this will extend to students transferring in from an insolvent college. In addition, the education administrator may be able to make provision for such costs where it is for the purpose of pursuing the special objective.

There is the possibility that a college that is the only FE provider in the wider area may become insolvent; for example, in a rural area such as Devon or Cornwall. Were that to happen, I assure noble Lords that the Government could not and would not ignore their wider responsibility to students in the area. No Government would leave an area without any FE provision. However, this is a matter for the Government of the day to consider, not the education administrator.

I shall now respond to Amendment 38. Clause 14 sets out the fundamental principle underpinning the special administration regime we are introducing in the Bill. In the unlikely—I must emphasise “unlikely”—event that an FE body becomes insolvent, we are acting to ensure that disruption to students’ studies is avoided or minimised as far as possible. That is the purpose of the special objective set out in subsection (1). Pursuit of that objective will govern all the actions of the education administrator. It will be for the education administrator to decide how the special objective can best be achieved. Whether it is one of the solutions suggested in subsection (2), a combination of them or something different will depend on the special circumstances of the college or FE body. Only by considering these issues will the education administrator be in a position to come to a view on the most appropriate approach. As we all know, something that might be right in one situation will not necessarily be right in another, so, in a way, I agree with Amendment 38. Noble Lords are right that there are a number of assessments that the education administrator should carry out before taking any action to achieve the special objective, including assessments of the capacity of other bodies or institutions to undertake any additional functions or provide education to additional students.

Noble Lords are right, too, that there should be discussion with those most directly affected by the decisions to be taken—the students, the staff and their unions. Where I think we differ is that I do not believe such assessments or discussions need to be prescribed in legislation. As my colleague the Minister for Apprenticeships and Skills said when this matter was debated in the other place:

“It is inconceivable that they,”


by which he meant the education administrator,

“would draw up proposals for achieving the special objective without having had discussions with a wide range of stakeholders, such as the Further Education Commissioner, student bodies and others, and without considering a wide range of pertinent issues”.—[Official Report, Commons, 9/1/17; col. 113.]

I wholeheartedly share this view. As the Minister made clear in the other place—and I do here today—it is our clear expectation that the education administrator will engage fully with those who have the knowledge and experience to aid them in developing their proposals: the commissioner, staff and students, local authorities and other providers.

When we refer to avoiding or minimising disruption to student studies, this is not just about keeping students’ timetables unchanged or ensuring that they remain at the same campus—although, in reality, this might well be the case. It is also about ensuring that where it is necessary to transfer students, factors such as those identified by noble Lords are taken into consideration. In developing their proposals, the education administrator will be expected to consider the quality of the alternative provision, as well as the impact of travel distances if students need to complete their studies at another location.

Of course, some trade-off or compromise between the different factors might be necessary, but this will be for the education administrator to address in the particular circumstances. If students find themselves having to travel to another location, I recognise that they may incur additional travel costs. Where this is the case they may be eligible, as I have said, for the 16-to-19 bursary fund, or the education administrator may consider setting up a specific scheme for them paid for by from any funding provided by the Secretary of State or Welsh Ministers.

I turn now to Amendment 39. In developing the special administration regime we have been concerned to ensure that the process should take no longer than necessary. Concerns have previously been expressed, including during debate in the other place, about the time a special administration might take. I share these concerns. However speedily the special administration is concluded, it will be too long for those involved. Staff, students and creditors will want certainty about what will happen to them at the earliest opportunity. Amendment 39, which seeks to require the education administrator to consult students, staff and the trade unions of the FE body before making any decisions on how to achieve the special objective, would inevitably lengthen the process but would be unlikely in reality to have any real benefit to the education administrator. Indeed, it may fetter his or her discretion to find the best way of achieving the special objective to the disadvantage of all concerned.

We are not disputing that the issues raised by noble Lords are important. They are. But, as I hope I have made clear, they cannot help but constitute a major element of the education administrator’s considerations in developing his or her proposals and there is therefore no need to legislate in this case. I hope the noble Lord will feel reassured enough by my explanations to withdraw the amendment.

[Lord Stevenson of Balmacara]

My Lords, I thank the noble Lord, Lord Storey, for his support for these amendments and his comments about what we are trying to achieve with them. I think that those were picked up by the Minister, and I thank him too for taking the time to go through some of the issues and recognise that they had a bearing on this, should insolvency happen. The fact that these words are now on the record is a very good thing.

We particularly recognise that where provision has to be provided at a distance under special measures, travel will become a material issue. Confirmation again that costs could be considered within that is very important. We accept that it would be wrong to tie the hands of the education administrator if, by having a list in the Bill, damage was done to how he or she approaches his or her work. I do not think that that was the intention, but I recognise the danger. The issues were engaged with by the Minister and were recorded in Hansard, which will be sufficient to ensure that these points are not ignored at the appropriate time.

We might want to come back to the question of how and on what basis the comparison between the provision made in one institution that might have to close and another will be done in practice, but that comes under the next group of amendments. For the moment, I beg leave to withdraw the amendment.

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Other issues may counterpose on the activities of those who are in further education colleges. It is not impossible that the Office for Students, which is soon to be established, may have made an order in relation to, for instance, access and protection in relation to a course that a student is taking. Would that be part of the order? I look forward to hearing from the Minister on that point. I beg to move.

[Lord Nash]

My Lords, we have seen from our recent scrutiny of the Higher Education and Research Bill that it includes provisions to ensure that those undertaking higher education courses are able to continue their learning and are protected if their provider is unable to deliver their course—perhaps, but not solely as a result of it exiting the market; the noble Lord, Lord Stevenson, referred to that. Under these proposals the Office for Students will have the flexibility to require any provider on the register to have a student protection plan in place through conditions attached to its registration. We expect that the OfS will require all approved fee-capped providers, including FE colleges, if they are higher education providers, to have plans in place. In those FE colleges with students studying HE courses, the FE students will have the benefit of being protected by the special objective in the event of the college becoming insolvent and the body being placed in education administration. Measures within the provider’s student protection plan may also be relevant and could be brought into play.

I understand that noble Lords are concerned that FE colleges offering such provision will be subject to both regimes and that this will add to the cost of running HE provision. Whether to require FE bodies to have student protection plans in place will be a matter for the Office for Students to decide. However, I agree that where an FE body is insolvent and in special administration, it would make little sense for the education administrator to be required to implement the SPP at the same time as implementing the proposals to achieve the special objective, if possible, as those proposals will extend to the very students covered by the student protection plan.

Where the Secretary of State or Welsh Ministers have decided to place an FE college in special administration, the special objective should take precedence over SPPs. In seeking to achieve the special objective, the education administrator must avoid or minimise disruption to the studies of students of the FE body as a whole, regardless of the course they are studying. There may be circumstances in which the education administrator may find it helpful to refer to the measures within the plan to inform the proposals for a particular student or groups of students, but a student protection plan might impede the education administrator’s discretion about the best way to achieve the special objective. Where this is the case, the provisions of the Bill already allow the court to make an interim order that would suspend existing student protection plans where it considers that necessary or appropriate. I hope that I have been able to reassure the noble Lord that the proposed amendment is unnecessary and that he will withdraw it.

[Lord Stevenson of Balmacara]

I thank the Minister for his response. I am glad we agree on this. I thought for a moment he was going to give me a concession, which would have been unexpected for a very broad probing amendment. He did not, but he did say that there is a power in Bill. I have been unable to find it, so if he could write to me about that, I would be grateful. I beg leave to withdraw the amendment.

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[Baroness Cohen of Pimlico]

I support what I think the amendment is about. There is a worrying set of complications, in my mind. Someone has provided the money to keep the FE college going while the special administrator decides that actually it cannot be kept going. Where does the person who provided the money rank among the creditors? We are talking about selling assets at the end of this. For a start, the bank might have a charge on those assets, in which case I guess that is the answer, but somebody has put money in to keep the business going. I have done this on behalf of the Department of Industry—we took back the money that we had put in to keep it going. What is the order of batting in relation to the local authority, or whoever it is, who put the money in to keep the institution going, and the rest of the creditors?

[Lord Nash]

My Lords, I start by saying that I recognise that the amendment is driven by noble Lords’ good intentions. They are concerned that assets that have been paid for largely by money from the taxpayer should not then find their way into the private sector at an undervalue, when they can then be sold and used to make a profit at the taxpayer’s expense. I recognise and share those concerns. FE colleges are statutory corporations with significant freedoms to deal with their own assets, but the key check on those freedoms is that any such dealing must be in the interests of the colleges’ charitable education—as the noble Lord, Lord Stevenson, said, the basis on which they have their charitable status.

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Moved by

[Lord Nash]

48: Schedule 3, page 34, line 34, after “authority,” insert—
“( ) to the director of children’s services at the local authority or combined authority in whose area the relevant institution is based, and to any other director of children’s services that the education administrator thinks appropriate,”

[Lord Nash]

My Lords, I want to explain Amendments 48 to 55, which we have tabled to Schedules 3 and 4. These reflect the commitment that my colleague, the Minister of State for Apprenticeships and Skills, gave in the other place to ensure that the needs of care leavers are provided for in the event that the FE body they attend enters educational administration. We agree that students who are care leavers and have already experienced uncertainty and disruption in their lives may well need additional support to help and reassure them during what may feel like uncertain times. Of course, it is entirely possible that, in the event of insolvency, the insolvent college will be taken over by another provider and students will be able to remain on the same campus, studying many of the same subjects. If this is not possible and students need to be transferred to other providers and possibly other courses, we want to ensure that care leavers can get the advice and guidance that they need, particularly if this encourages them to remain in further education. Having got care leavers into education—which is sometimes not easy—it is important to make sure that we retain them there.

There was debate in the other place as to whether there should be a requirement placed on the education administrator to take particular account of the needs of care leavers in much the same way as Clause 22(3) requires them to take account of the needs of students with special educational needs. As the Minister for Apprenticeships and Skills explained, the needs of care leavers are more pastoral and would, therefore, be better met by the personal advisor appointed by the local authority to support them. He committed the Government to ensuring that guidance to local authorities on their corporate parenting responsibilities would include advice to personal advisers in the event of a college insolvency affecting a young person for whom they were responsible. This amendment supports the delivery of this commitment. It ensures that support and advice is available to those who need it, by adding the director of children’s services in local authorities—or in combined authorities where relevant—to the list of those to whom the education administrator is required to send a copy of the proposals for dealing with the insolvent college. In this way, the local authority will receive formal notification of what is happening and can trigger the necessary action by personal advisers. I hope that noble Lords will agree to accept these amendments. I beg to move.

[Baroness Garden of Frognal]

My Lords, I warmly welcome these amendments. I am sure that if the noble Earl, Lord Listowel, were in his place, he would be particularly pleased to see that these were included. It is reassuring to find the director of children’s services being included in the Bill.

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Moved by

[Lord Nash]

49: Schedule 3, page 34, line 44, at end insert—
“( ) to any director of children’s services to whom the statement of proposals was sent under paragraph 49,”

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[Lord Stevenson of Balmacara]

I shall, rather sensibly, be brief because I am trying to amend a clause that I think will be deleted in the next group, so there is not much point in me trying to argue persuasively the merit of my case, although I certainly could. Since the point arises again in relation to the new Clause 37, if it is approved by the Committee, we may as well just cover it.

I do not think we are far apart on this. The question is more one of being clear about what is asked for and how it will be made available. The issue raised by the amendment is that where people are disqualified from holding office in the further education sector, there is a risk if their names are not made available because they could pop up in other colleges and might be subject to the same concerns. A list, which is quite common in other areas of insolvency, should be made available. It is not mentioned in the Bill or the new clause. When the Minister speaks, I may be advised that this will be dealt with in regulations. If so, I would be very happy at that stage to concede that this point is not required. I beg to move.

[Lord Nash]

I intend to go into the detail, which the noble Lord, Lord Stevenson, referred to, of the application of the Company Directors Disqualification Act 1986 to FE bodies when I speak to the amendment that I have tabled to amend Clause 37 by replacing it with a revised version. As we continue to refer to that Act, in this and the subsequent amendment, I propose that we use its acronym, the CDDA.

For consideration now is Amendment 57, which was tabled by the noble Lords, Lord Watson and Lord Hunt, which specifically provides that the Secretary of State must ensure that the list of disqualified officers is made publicly available. This amendment refers explicitly to disqualified officers, which we take to mean members—that is, governors—of an FE body who have been disqualified by the court having been found liable of wrongful or fraudulent trading under the Insolvency Act 1986, as applied to FE bodies that are statutory corporations by Clause 5, or of similar offences. Under Clause 5, the provisions in the Insolvency Act 1986 relating to wrongful and fraudulent trading will apply to governors and other individuals who run FE bodies in the same way as those provisions apply to directors of, and others involved in the running of, companies.

I understand noble Lords’ concerns and recognise the intent behind this amendment that a publicly searchable list of disqualified individuals should be maintained, so that it is apparent who should not be appointed as a governor of other FE bodies. However, there is already provision in the CDDA for a register of disqualification orders, which is to be open to inspection, to be kept by the Secretary of State. Therefore Clause 37, both as currently drafted and as we intend to amend it, already provides for the well-intended purpose that noble Lords are seeking to achieve. On this basis, I hope that the noble Lord will withdraw the amendment.

[Lord Stevenson of Balmacara]

I thank the Minister for his comments, which I fully accept. I beg leave to withdraw the amendment.

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Moved by

[Lord Nash]

58: Clause 37, leave out Clause 37 and insert the following new Clause—“Disqualification of officersIn the Company Directors Disqualification Act 1986, after section 22F insert—“22G Application of Act to further education bodies(1) This Act applies to further education bodies as it applies to companies.(2) Accordingly, in this Act—(a) references to a company are to be read as including references to a further education body;(b) references to a director or an officer of a company are to be read as including references to a member of a further education body;(c) any reference to the Insolvency Act 1986 is to be read as including a reference to that Act as it applies to further education bodies.(3) As they apply in relation to further education bodies, the provisions of this Act have effect with the following modifications—(a) in section 2(1), the reference to striking off is to be read as including a reference to dissolution;(b) sections 9A to 9E are to be disregarded;(c) references to any of sections 9A to 9E are to be disregarded.(4) In this section—“further education body” means—(a) a further education corporation, or(b) a sixth form college corporation;“further education corporation” means a body corporate that—(a) is established under section 15 or 16 of the Further and Higher Education Act 1992, or(b) has become a further education corporation by virtue of section 33D or 47 of that Act;“sixth form college corporation” means a body corporate—(a) designated as a sixth form college corporation under section 33A or 33B of the Further and Higher Education Act 1992, or(b) established under section 33C of that Act.”

[Lord Nash]

My Lords, the amendments we have tabled are to replace the original Clause 37 with a new version, with the intention of fully applying, rather than replicating, the CDDA to FE bodies in England and Wales. Amendment 65 to Clause 43 adds an additional clause—Clause 5, in so far as it relates to Section 426 of the Insolvency Act—to the parts of the Bill which extend to all parts of the UK.

The amendment to Clause 37 removes the delegated power to replicate the CDDA and instead applies that Act in full to FE bodies in England and Wales. This allows the court to disqualify any governors whom it finds liable to wrongdoing, not only from being governors but also from being company directors. In so doing, it fully prevents them from being able to repeat, in a different way, the mistakes they have made potentially at the expense of another FE body. This was not possible with the original drafting of the clause, which allowed us to replicate the CDDA but not fully apply it. The amendment closes a potential loophole in the legislation and more fully protects learners at FE bodies from the actions of any governor who chose to act recklessly.

Wrongful and fraudulent trading are important elements of the corporate insolvency regime, which protects creditors against wrongful conduct by directors. We are looking to achieve the same protection in our own regime for creditors of FE bodies. The responsibilities we propose for those bodies’ governors are very similar to their existing responsibilities as charity trustees. Part of that protection is the deterrent effect enshrined in and created by the CDDA regime, which goes hand in hand with the corporate insolvency regime and has done so for the past 30 years. The Charity Commission is wholly supportive of the approach we are taking and sees it as in line with the approach taken for the trustees of charitable companies and charitable incorporated organisations.

The amendment to Clause 43 provides that the provisions of the Bill which extend in their application to all the different parts of the UK include Clause 5, in so far as it relates to Section 426 of the Insolvency Act. Let me be clear: this does not mean that the FE insolvency regime would apply to FE bodies incorporated in Scotland and Northern Ireland. It would apply, as set out in Clauses 5 and 6 when read together with the definitions in Clause 3, only to those FE bodies in England and Wales established under the Further and Higher Education Act 1992.

The amendment would provide that Section 426 of the Insolvency Act extends to the whole of the UK, which would ensure co-operation between the courts of the different parts of the UK. This means that courts in different jurisdictions might be asked to co-operate on a particular case, for example over the enforcement of a charge where assets are located in a different part of the UK to the location of the insolvent FE body; or, in the case of governor disqualification, preventing a governor disqualified in England or Wales becoming a governor in another part of the UK. In view of what I have said, I hope noble Lords will agree to accept the amendments to Clauses 37 and 43.

Amendment 58 agreed.

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[Lord Stevenson of Balmacara]

My Lords, I support the amendment; it is a probing amendment in a complex area. Of course the matter is not in the hands of the Minister who is due to respond to it, because it is a matter that is jealously guarded by the Chancellor of the Exchequer, who after all is responsible for tax receipts. In my experience, the issue is very complicated, not least because of history and practice. There may be a strand of European ideology built into this as well, which may reach a conclusion in a couple of years’ time—or not, as the case may be.

The basic principles of the VAT system are very straightforward: a trading operation has to trade with the full weight of VAT on it, and expenditure on it is recouped against subsequent users and from those who purchase the goods and services provided. Those things that are not deemed to be trading do not attract VAT, but equally they cannot be redeemed against the VAT that has been incurred in the purchase and preparation of them.

As the noble Baroness, Lady Garden, said, those bodies exposed to the full weight of VAT on their non-trading activities suffer a 20% penalty for the work that they are doing, and that is money that could be properly reinvested. That is a sound case and I am sure it has exercised Ministers before. I look forward to hearing the response.

[Lord Nash]

I thank noble Lords for this amendment, which calls for a change in tax policy. It seeks to allow FE colleges to claim refunds of VAT incurred on their non-business expenditure. As noble Lords have acknowledged, tax policy is a matter for the Chancellor and the Treasury. Any tax changes are considered by the Chancellor in the normal way and announced in the context of his Budget judgment, as he will be doing next week.

I understand this call for additional funds from the Treasury for FE, but there are clear implications when thinking about such a change. It is estimated that it would cost the Exchequer about £145 million per year. That cost would have to be covered somewhere in the economy—for example, reducing public expenditure on other government priorities. In addition, the VAT treatment of FE colleges is no different from many other public bodies.

However, in view of all that the noble Baroness said about the previous Prime Minister’s comments about looking carefully at the matter, I will go back to see what further I can say by way of explanation for the status quo. I hope that in view of my comments, she will feel able to withdraw her amendment.

[Baroness Garden of Frognal]

I am grateful to the Minister for his careful looking and I thank the noble Lord, Lord Stevenson, for his support for the amendment. I beg leave to withdraw the amendment.

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[Lord Stevenson of Balmacara]

I hesitate to speak because I can see that a Division is pending and it would be nice for us to be able to finish at just the right point, but I realised when my noble friend was speaking that I was that clerk. In an earlier career, I was the clerk of an FE college. The spectre of the buccaneering principals who were around in FE at that time came crowding back, and I felt I ought to share that with the Committee. The problem was that these institutions were very often the creatures of the local authority that owned and fronted them, and there were pressures at play. The principal wanted to be the person who was the main conduit to the local authority and would not brook any interference. Absent the principal, the company secretary, who was indeed a demon of great skill and ability to maintain her position in the structure, took over and ran the place very adequately. But with the growth of corporate structures and, now, the whole question of how that must be used to mature and operate organisations of some scale and scope, I would have thought there must be a way of ensuring that, when corporate structures such as companies are established, there has to be a company secretary, and that company secretary must fulfil at least the minimum standards required of those who operate in the private sector. So there may be a way forward.

I agree entirely with what my noble friend said: the pressure to keep those who are academics—and who should be academics—away from trying to do things that they are patently unable to do, just because they happen to occupy the position of principal or vice-principal, has been an enduring theme with those who have worked in the education sector at FE and HE level. It is only recently that appropriately qualified and suitably remunerated members of that profession have been operating in the way that they should. I support the amendment.

[Lord Nash]

My Lords, I recognise the very important role played by clerks as expert advisers to governing bodies of further education institutions, and I pay tribute to the contribution by clerks and governing bodies up and down the country. As the responsibilities of those bodies increase, we must also support the development of the capability and professionalism among clerks. As the Minister responsible for governors in schools, I can completely see the importance of this matter. That is why we support the Education and Training Foundation in the delivery of a new professional development programme for clerks to be rolled out this year. Sector representative bodies also deliver a range of activities to support clerks, including a very active clerks’ network and best-practice materials. The ETF is also supporting the increased professionalism of clerks through the improving clerk to company secretary programme to take account in changing college structures and clerks’ responsibilities, whereby clerks can attain company secretary qualifications. We are supporting chairs of boards of governors through the national leaders of governance programme, where experienced chairs mentor others who need support.

There is a well-established statutory requirement for the instrument of an FE institution to make provision for there to be a clerk, and for provision for the responsibilities of that role to be set out in the instrument. That is set out in Schedule 4 to the Further and Higher Education Act 1992. This means that the importance of the clerk’s role, which I know is recognised by members of this House, is also reflected in law.

While further statutory prescription in relation to duties and responsibilities of the clerk may appear attractive, I do not believe that it is the right approach in this case. I will elaborate. The amendment proposes a few high-level matters relating to advice that clerks should provide and, as proposed, overlooks certain features that would reasonably be expected to be an important part of any clerk’s role. These include, for example, independence from the senior management team at the institution and a duty to take appropriate action if the board, the chair or one of the committees appears to be at risk of acting outside their powers or to be proposing actions that may be unlawful.

The 1992 Act sets up high-level requirements for the instrument and articles, including a requirement for there to be a clerk and for the clerk’s responsibilities to be set out in the instrument. Since 2011, colleges have not required the consent of the Secretary of State to amend their instruments. The detailed content of the instrument, including the details of the responsibilities of the clerk, now largely rests with the governing body of the FE corporation rather than with Ministers.

In my view, the existing balance between the requirements set out in legislation and the responsibilities of the governing body is the right one. We should be very careful about removing from colleges the necessary flexibility that enables governing bodies to adapt and tailor their governance arrangements to fit the circumstances of their institution. That is particularly important in a sector as varied as further education. It is obviously important to guard against the possibility that greater prescription has the unintended effect of undermining the responsibility and thus the accountability of governing bodies. The careful balance set out in the current legislation in relation to matters of governance, including in respect of the role of the clerk, remains important going forward.

Principals do not appoint board members. Governors are appointed to the board by the board itself. A good principal will have a strong interest in having a capable body. When there is a material pre-existing relationship between the principal and a member of the board, it should be declared as part of the appointment process. The Association of Colleges’ model job description states that the clerk should be independent of the senior management team and should provide unbiased advice.

We do not think this amendment would add materially to the conduct of clerking or to governing bodies of FE colleges. We believe clerking is generally working well, and the quality of clerking has undoubtedly improved significantly in recent years. However, as I have spent part of the last four years attempting, I think with some success, to raise the importance and effectiveness of governance in schools, and in view of what noble Lords have said, I will go back and investigate their concerns and see what more we might be able to do in this regard, because it is important. Legislation may be a very blunt instrument, but I will go back to look at it further.

[Lord Hunt of Kings Heath]

I am very grateful to the Minister. I beg leave to withdraw the amendment.

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Moved by

[Lord Nash]

65: Clause 43, page 20, line 4, leave out “extends” and insert “and section 5 so far as it relates to section 426 of the Insolvency Act 1986 extend”

Secondary Schools: Funding

Lord Nash Excerpts

Monday 27th February 2017 Lords Chamber

[The Earl of Clancarty]

To ask Her Majesty’s Government what assessment they have made of the effect of proposed levels of funding allocated to secondary schools on the quality of education including the teaching of non-English-Baccalaureate subjects.

[The Parliamentary Under-Secretary of State, Department for Education (Lord Nash) (Con)]

My Lords, through our careful management of the economy we have protected the core schools budget in real terms. This means that in 2017-18 schools will have more funding than ever before for children’s education, totalling more than £40 billion. We are also committed to ensuring that all pupils receive a broad and balanced curriculum that includes both an academic core and additional subjects that reflect their individual interests, strengths and characteristics, including arts subjects.

[The Earl of Clancarty (CB)]

My Lords, is not the Minister alarmed by the recent comments of the head teacher of a school in Cheshire, who said that if further cuts—and they are cuts according to the National Audit Office—go ahead then all non-EBacc subjects could be removed from the curriculum, meaning no art, music, drama or design and technology? Arts departments across the country are already bearing the brunt of the current cuts, such as to specialist teachers, provision of materials and ICT. Will the Minister accept that there is simply not enough of a funding cake to go round?

[Lord Nash]

I am alarmed by the comments because it is quite clear that those schools that perform well in arts subjects also perform particularly well in the EBacc. As the NAO has said, by comparing efficient schools with others, there is plenty of money in the system and we have a number of tools in the department to enable schools to run themselves more efficiently, and those that do have sufficient resources, particularly for the classroom and for their curriculum.

[Baroness Nye (Lab)]

My Lords, it must be the case that these cuts will fall disproportionately on non-EBacc subjects as schools encourage pupils to take more EBacc subjects to boost their results. To avoid a ticking time bomb for the creative industries pipeline, will the Government consider including design and technology as well as computer science as part of the EBacc, as proposed by his colleagues in the other place?

[Lord Nash]

There is no evidence that the take-up in GCSE art subjects has declined as a result of the EBacc. In fact, the New Schools Network found that the number of art GCSEs taken by pupils has gone up since the introduction of the EBacc. We have to remember always that when we started in 2010, sadly, only one in five pupils in state schools were studying a core suite of academic subjects. That is why we focused on the EBacc and have doubled the number of pupils who have these academic subjects, which are particularly important for pupils from disadvantaged backgrounds.

[Lord Storey (LD)]

My Lords, the Minister says that his Government have protected the main core school budget, but would he not accept that on-costs which schools have to pay, such as national insurance, have ensured that schools have not got the money? In fact, the IFS yesterday reported that, for the first time, there is a real cut in school budgets. Would this account for the fact that there has been a 10.6% decrease in the number of hours given over to creative art teaching?

[Lord Nash]

The IFS pointed out that over the 20 years from 2000 to 2020, schools will have a 50% per pupil increase in real terms. As I said, we believe that there is considerable scope for savings in schools’ efficiency. We are already on course to save £250 million in academies by next year alone with our RPA scheme substituting insurance costs. We believe that our buying strategy can save £1 billion out of £10 billion a year of non-staff spending.

[Lord Watson of Invergowrie (Lab)]

My Lords, the noble Earl, Lord Clancarty, quoted a head teacher and I would like to do the same. Last week, the head teacher of the Forest School in Winnersh, Berkshire, resigned her post because of the increasing amount of cuts facing her school. In a letter to parents, pupils and staff, she said:

“The situation with regard to schools funding, both nationally and locally, is bleak: in common with other headteachers, I did not enter the teaching profession to make cuts that narrow the curriculum, or to reduce the number of teachers and increase class sizes, yet my hand has been forced and I see no immediate easing of the situation. Consequently”—


this impacts directly upon the question—

“I feel unable to deliver the quality of education the boys at The Forest so clearly deserve”.

The National Association of Head Teachers says that that is increasingly becoming the situation across England. That is not surprising, as the National Audit Office has reported that there will have to be an 8% real cut in the schools budget up to 2020—this, it should be said, by a party that in its 2015 election manifesto pledged to protect the schools budget. The Government say that the new funding formula—

[Lord Watson of Invergowrie]

I am not surprised that Members opposite are unhappy about this, because it is unpalatable. The Government say that the new funding formula is about fairness. How can the funding be fair when it is not sufficient?

[Lord Nash]

I do not think that time will permit me to respond to that speech. I can only repeat what I said: that schools that run themselves efficiently have ample resources for a broad curriculum. I invite the noble Lord to go on to the department’s website and watch a clip by Sir Mike Wilkins about the curriculum-led financial planning at Outwood Grange. Academically, this is one of the most successful and, financially, one of our most efficient multi-academy trusts.

[Lord Lexden (Con)]

Will not the production of a national funding formula assist the progress of our education system in a substantial manner?

[Lord Nash]

I agree entirely with my noble friend. This is long overdue. Previous Governments have not done this, but it will enable a much fairer system from which 54% of schools will benefit. Schools can lose only 3% of their costs.

[Baroness Kidron (CB)]

Does the noble Lord agree with what Professor Brian Cox said when I asked him about the fetishisation of science in the school curriculum? He said that physics has taught us that the world had a beginning and will most probably have an end, but the arts will teach us how to live in the vast expanse of time in between.

[Lord Nash]

I agree entirely with the noble Baroness about the importance of arts. We all know that the STEM subjects are very important, and it is encouraging to see that the STEM intake at A-level has gone up substantially in recent years. However, as I said, there is plenty of room in the curriculum. The EBacc takes only five subjects and on average students now take nine qualifications, with many taking 10 or 11. Therefore, there is plenty of room in the curriculum for arts subjects.