Technical and Further Education Bill

Baroness Cohen of Pimlico Excerpts

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

There was a fairly broad sweep within that, but the main thrust of what I wanted to say was in respect of apprentices being denied the rights of their peers—that is, students of further education at universities. On that basis, I beg to move.

[Baroness Cohen of Pimlico (Lab)]

My Lords, I support the amendment. The Bill has cross-party support; it is potentially the greatest engine of social change that can be imagined and rights the injustice of the many years when technical education has been regarded as much less important than formal academic education. The effect of cancelling benefit for 16 to 18 year-olds embarked on apprenticeships will be to deter a small but important group of these young people from taking them up. Since the apprenticeship is not just education but a route into a job, this would be entirely wrong. In families with very low incomes, budgets are extremely delicate. Allowing one child to do an apprenticeship when they are not fully funded could damage the rest of the family and is therefore not likely to happen. I therefore hope that the Government will think again on this.

I will also speak to Amendments 14 and 16, which provide slightly different versions of guarantees if trainers go bust. I remind the House that I am chancellor of BPP University, with 2,000 degree-level apprenticeships, and my sister company has 2,000 16 to 19 year-old apprenticeships. It is not very difficult for long, well- established training operations to contribute to a contingency fund, if that is what is wanted, or to get a bank guarantee. I am thinking of new people who may want to come into this field, whom I believe the Government want to encourage. I suspect that having to contribute to a contingency fund, which is difficult and requires special provision, is possibly a barrier to entry, whereas producing a bank guarantee is—as my noble friend Lord Watson said—a well-understood route and I believe a lot of banks know how to do this. I would, therefore, much prefer any measure to require providers to produce a bank guarantee rather than a contribution to a contingency fund, or their own private contingency fund.

[Baroness Wolf of Dulwich (CB)]

My Lords, I also support the amendment and share its concern for the small but important group of young people who may be denied an apprenticeship. I will also speak to Amendment 16 tabled in my name and lend strong support to the general argument that we must provide financial guarantees and security to young people in the training field. I declare an interest that, as a member of the Sainsbury review, I was part of the panel which lies behind other parts of the Bill. I also strongly welcome the provisions to ensure that, should an FE college fail, special arrangements will be in place to make sure that students are looked after; that clearly set out procedures will swing into place; and that they will not just go to the bottom of the list after creditors, in the hands of administrators whose responsibilities and skills are essentially commercial. It is absolutely right that the Government have recognised this as their duty. It is their duty because, by funding young people and adults, encouraging them to enter training—and, in very many cases, to take out loans—the Government have implicitly promised that an institution to which they are lending money will give a good-quality education and will endure to see students through. The introduction of loans is a mammoth change and lies under much of the Government’s conviction that they need to change the HE regime. We must recognise that the Government’s ambition for huge increases in adult learner loans changes the environment in which young people and adults are studying and training.

Many noble Lords will know that failures are not unheard of—one wishes that they were. In the United States, huge companies have gone under, leaving many thousands of people with loans. These are not all at degree level; they are often at associate-degree level, which comprises two-year courses. On the one hand, therefore, it is very welcome that we have these provisions for FE colleges, but, on the other, I find myself completely unable to understand why equivalent protections should not be introduced for people training and studying in institutions which are not FE colleges and which also offer—and are being funded to offer—technical education. Many of these people have loans, and many of them are not mobile. The loans represent large sums of money for them, and they have made big changes in their lives to undertake this form of training. Again, it is tremendously welcome that the Government are putting so much effort and money into technical education. However, we have to ensure that the promise, encouragement and—sometimes—pressure to enter technical education is matched by a guarantee that the Government will deliver on their implicit promise.

Against this background, the repeated failures—that is what it has felt like—in recent weeks of a number of private training providers should make us aware that this is not a hypothetical situation. Like the noble Lord, Lord Watson, I was not very convinced by the letters from the department and the SFA. My noble friend Lady Watkins will speak in a moment. She and I had a very productive meeting with the Bill team. We appreciated their willingness to listen to our arguments. However, the letters that we received seemed to amount to a combination of the statements, “We are muddling through” and “There aren’t very many of them anyway”. That is not adequate at a time when we are embarking on a major rethink—and, I hope, a major expansion—of technical education.

In Committee, the Minister noted that you cannot treat private businesses as though they were public organisations. That is indeed true. Although many private training providers are small charities, many others are commercial organisations, as the noble Baroness, Lady Cohen, said. Many of them survive entirely on government contracts and are very small. That is why I have proposed a mechanism which I think would be entirely appropriate for this situation. We have heard about it already, and I thank the noble Baroness, Lady O’Neill, for first bringing it to my attention. It is well established, costs the Government nothing and would not cost providers anything that would begin to wipe out their margins. It is well and frequently adopted in other sectors and I cannot see why it should not apply here.

That brings me to my final point—the idea that we do not need to worry about this matter because only a few people are involved and the risks of failure are quite small. Even if the figure is less than 1%, that is hundreds of people a year on current levels of loans. If we have the expansion that we hope for, thousands of people a year will be affected. To give a medical analogy, if 1% of life-changing operations were cancelled and eventually lost because people got older and were never able to have their operations and had to go back to the bottom of the waiting list, I do not think that anybody would find that acceptable. Therefore, I strongly hope that the Minister will assure us that at Third Reading he will be able to bring concrete proposals to this Chamber and that we will see the same acceptance of the importance of looking after students in the entire technical education sector that we so happily see in further education colleges.