Institute for Apprenticeships and Technical Education (Transfer of Functions etc) Bill [HL]

Baroness Garden of Frognal Excerpts

2nd reading
Tuesday 22nd October 2024 Lords Chamber

[Baroness Garden of Frognal (LD)]

My Lords, this looks such an innocuous little Bill, but there is so much more to it than meets the eye. It is a precursor to the arrival of Skills England, which we all hope will bring together the myriad of agencies operating in FE and skills to ensure quality and accessible education and skills for 100% of the population, as the Association of Colleges so heartily wishes, along with all of us who really care about technical and vocational skills and the well-being of the further education sector.

However, the Bill does something that those of us on these Benches will always be wary of, as my noble friend Lord Addington has set out and other noble Lords have alluded to. It transfers powers from IfATE, a body made up of professional people who know and care about apprenticeships and vocational education, to the Secretary of State. It is a great pleasure to follow the noble Baroness, Lady McGregor-Smith, who has chaired the board of IfATE so successfully. I add my congratulations, too, to Jennifer Coupland, the chief executive, and the other key members who have shown knowledge of, and dedication to, the further education sector and work-based qualifications.

Alas, they are to be replaced by a here today, gone tomorrow Minister, almost certainly university-educated, with little direct knowledge of, and, sadly perhaps, even less interest in further education colleges and the work-related training and qualifications which they so brilliantly deliver. In a democracy, we should never aspire for unlimited power to be given to politicians. The Minister may argue that this is an interim stage, but it appears that Skills England, when it comes, will not have a statutory basis—as many other noble Lords have pointed out—and will be at the whim of the Secretary of State, who could fundamentally change it.

Skills England will legally be part of the Department for Education, so not as notionally independent as IfATE was. The Education and Skills Funding Agency is also an executive agency, and as such could be easily abolished without parliamentary debate. So what will happen to IfATE’s “employers first” approach to developing policy and qualifications, which could well be at risk if the Education Secretary of the day prescribes a different policy?

It was hoped that Skills England would be able to work across departments, have recourse to employers and be flexible enough to be responsive and approve standards to ensure that work-based qualifications were always employer-led. As I know from my days at City & Guilds, work-based qualifications have always been employer-led. This was by no means true at first with T-levels, which were always billed as different because they were employer-led. Will that be the case when it is set up?

As we have heard, the impact assessment states that there will be a drop in apprenticeship starts while functions are transferred from IfATE, which will disproportionately impact adult apprentices and disadvantaged learners and regions. What will the Government be doing to minimise this? We know that the numbers of young people starting apprenticeships are already disappointing. If these changes make the position worse, what steps will the Government take? What steps are being taken to ensure that apprenticeships under the growth and skills levy will be available to learners of all ages and at all levels, and how will the growth and skills levy do a better job than the apprenticeship levy?

Lifelong learning matters now more than ever. Can the Minister say what steps are being taken to incentivise flexible lifelong learning? What assessment has been made of the lifelong learning entitlement and its introduction from 2026? It is crucial to improving the UK’s economic growth. Supporting and encouraging adults to upskill and reskill will help with increasing productivity and filling skills shortages in growth areas of the economy. Flexible study is also essential in allowing people to fit their studies around busy work and family lives and in allowing people to access higher-level skills in the local area where they live, even if there is limited face-to-face provision. However, over the last 15 years, the number of adults aged 21 and over accessing higher-level skills courses has fallen dramatically. Policy and funding interventions are now long overdue for flexible higher education provision.

This little Bill could hide a very damaging move to overpowerful politicians overriding experts in the field. We shall monitor this with great care as this Bill and the Skills England Bill proceed. Of course, we all hope for the best, because this is a vital area, but we shall be watching carefully for the independence of Skills England if it really is to fulfil its ambition.

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[Baroness Smith of Malvern (Lab)]

My Lords, I thank noble Lords for their contributions and acknowledge the many passionate and informed speeches that we have heard and the expert knowledge that this Chamber has brought to the debate.

I particularly welcome and give a special mention to the maiden speech of my noble friend Lord Beamish. He and I served together in the other place. I remember the breakfast meetings that he used to have in the tea room—particularly when I was Chief Whip, because no Chief Whip likes to know that there is plotting going on in the tea room. My noble friend was a steadfast colleague and a strong supporter of the Government. As he outlined in his maiden speech, he used his real enthusiasm to challenge the Government on issues relating to defence and to protect those affected by the Post Office scandal. Based on his maiden speech and what I know about his history, I know that he will certainly play a very important role in this House, and I am very pleased to welcome him.

The Government’s first mission is to grow the economy. To succeed, we need to harness the talents of our people. A skills system fit for the future can enable people to learn the skills that they need to seize opportunity and businesses to access the skills in the workforce that they need to grow. I join the noble Earl, Lord Effingham, in celebrating both those who are taking part in apprenticeships and those who are delivering them. There is excellent work going on across the country, which I often have the opportunity to celebrate, where providers and employers are providing a splendid apprenticeship opportunity.

The noble Earl asked me, as did the noble Baroness, Lady Barran, to celebrate the last Government, but I have to point out that apprenticeship starts peaked in 2015-16 at 509,360 and in the most recent year were at only 337,140—in other words, a 34% reduction on the levels seen in 2015-16—so I do not think it is enough for us simply to rest on what the previous Government have done. In fact, we need a fundamental change in our skills system if we are going to ensure the potential of our people and our economy.

On the specifics of the debate, I will start with the number of contributors who have asked questions about how we maintain an employer-led approach to the skills system. The noble Baroness, Lady Finn, the noble Earl, Lord Effingham, and the noble Lord, Lord Storey, asked questions about that. I reassure noble Lords that employers will continue to play a central role in the design and delivery of apprenticeships and technical education. Indeed, it is crucial that apprenticeships and technical qualifications reflect the needs of employers and that employers have confidence in them. That is why, through Skills England, we will ensure that there is a comprehensive suite of apprenticeships, training and technical qualifications for individuals and employers to access, all of which will be informed by what employers and other partners tell us that they need.

The default will be that employers will set standards and assessment plans—I hope that responds to the point made by the noble Lord, Lord Storey. It is not the case that this legislation enables the Secretary of State to rewrite a standard on a train, even if she were to have the time to do that. Employers remain fundamental. In fact, regarding standards and assessment plans, the legislation states that the Secretary of State will be able to prepare these only where she is satisfied that it would be more appropriate than using a group of persons. Each time the Secretary of State does this, she will need to make such a consideration and she will not be able to proceed without doing so. That approach will be taken in only a minority of circumstances where there is a clear rationale for doing so, some of which I outlined in my opening speech and all of which I will be very happy to go into more detail on in Committee. I think the important point was made by my noble friend Lady Wilcox, who, using her experience, identified some very good examples of the need for flexibility in the system, as was also recognised by others in the debate.

My noble friend Lord Watson asked about the Ofqual amendment. This amendment will ensure that, should the Secretary of State wish to in the future, she could grant an exception so that Ofqual can consider whether it is appropriate to accredit certain types of technical education qualifications. It will therefore reintroduce in a managed way the potential for Ofqual to exercise its accreditation power for technical education qualifications. Where the Secretary of State deems it necessary to maximise the quality of and confidence in technical education qualifications, it will become possible for the full suite of regulatory options to be applied to them, helping to put them on an even footing with other academic and vocational qualifications.

On the specific point about Clause 9 raised by the noble Baronesses, Lady Barran and Lady Finn, these are not sweeping powers. This is not an undermining of the correct exhortations made by the Attorney-General on the use of delegated powers. Clause 9, in introducing Schedules 2 and 3, details the primary legislation that we are amending simply to remove references to IfATE as a result of its abolition. We have attempted to identify all the primary legislation that will need to be amended as a result of the Bill and the Henry VIII power that is included in the Bill exists solely in case we uncover any other Acts in need of consequential amendment after the passage of the Bill, so there is no way that this could be called a sweeping use of delegated powers.

To return to the nature of Skills England, at its heart will be the role of employers, alongside an important partnership to ensure that we are developing the most effective skills system. The noble Earl, Lord Effingham, questioned whether trade unions should play an important role in that, but my noble friend Lord Blunkett rightly identified the enormously important contribution that trade unions have made to the development of skills for their members, citing in particular the important work done by the Union Learning Fund. We make no apology for including trade unions in our work to improve the jobs and skills that their members will get. It is also a feature of high-performing systems across the world that trade unions are involved.

My noble friend Lord Watson talked about the role of higher education. We certainly believe that it has a very important role to play in this partnership with Skills England.

The noble Lord, Lord Ravensdale, talked about regional flexibility and the excellent work that he identified. Skills England will collaborate with combined authorities as well as with equivalent bodies in places which have devolution deals but where there is no combined authority present, and it will also work with a wide range of regional organisations as well as other local and regional partners, such as employer representative bodies. It will support them to construct skills systems which reflect and feed into both local and national priorities. That is the partnership that Skills England will bring together to deliver the impact we need to see in our skills system.

I turn to the charge made by several speakers in the debate that, somehow or another, as an executive agency Skills England will not have the independence or, frankly, the oomph that it will need. That is wholly wrong. As an executive agency, Skills England will have operational independence from the department. A permanent chair and board members will be recruited to oversee Skills England. I am glad that my noble friend Lord Blunkett recognised the status, experience and impact that the current chair, Richard Pennycook, is already having in this role, and I can tell noble Lords that we have had several hundreds of applicants for the board of Skills England—clearly, people understand the significance of that role and the impact that it will have.

I am sure that the noble Baroness, Lady Garden, did not mean to suggest that I was a “here today, gone tomorrow” politician with no clue about what I was doing, despite the fact that that is what she said.

[Baroness Garden of Frognal (LD)]

I assure the Minister that it was not personal.

[Baroness Smith of Malvern (Lab)]

Okay. I do not note any other Ministers in the Chamber—but anyway, in that case I will not take it personally.

The important point here is that, once in place, it will not be Ministers who decide the day-to-day activity of Skills England; the board will provide scrutiny that Skills England is operating effectively within the agreed framework and will provide assurance functions as well as leadership and direction.

However, while operationally independent, it is critical that Skills England, for many of the arguments made in the debate, has sufficient proximity to government to directly influence and inform policy decisions, as many have argued for. This will allow Skills England to use its insights to influence skills policies and funding decisions. It is important that they are retained by the Secretary of State, but Skills England will have a crucial role in informing them.

For further reassurance, I say that we do anticipate the relationship between the Department for Education and Skills England will be set out in a publicly available format and updated periodically. I expect us to talk about this more in Committee. People have argued that we know little about Skills England and its functions —the noble Baronesses, Lady Evans and Lady Barran, for example—but having been set up only in July, Skills England has already produced a report which, as others have mentioned, outlines its functions and ways of working. That is how we expect Skills England to operate in the future.

I thank the noble Baroness, Lady McGregor-Smith, for the excellent work she has done in leading IfATE. I echo her thanks to the board and the chief executive for that work. In talking about how employers will remain at the heart of Skills England, I hope to learn from the way in which IfATE has done that. However, bringing the functions currently held by IfATE into Skills England is essential to address complexity and fragmentation in the skills system. The majority of IfATE’s functions will be transferred to the Secretary of State but will be exercised by Skills England unchanged, so we will be able to ensure continuity of skills delivery through the transition process. My officials are working very closely on this with IfATE’s senior leadership team. The noble Baroness, Lady McGregor-Smith, has been very clear about this, as she was when we met. She has been very engaged in ensuring that there is a transition plan which will ensure minimal disruption to learners, employers, providers and IfATE staff, and which will safeguard the good elements of the work that IfATE has already done, which she outlined.

It is absolutely not our intention to allow the transfer to cause a delay or drop in apprenticeship numbers. We will mitigate the risk of that through the transition plan I have talked about. On the point raised by the right reverend Prelate the Bishop of Leeds, any approvals by IfATE will transition and will not have to be redone as a result of this legislation. These decisions will continue to stand until such time as the occupational standard, apprenticeship or technical qualification in question is reviewed under successor arrangements and a new decision is taken.

The noble Lord, Lord Aberdare, also raised points about the sharing and transferring of IfATE’s functions. We have been clear that we expect the functions of Skills England to include broad continuation of the core work IfATE does with employers. I will be very happy to talk more about that in Committee. My noble friend Lord Watson asked about the engagement between Skills England and Scotland on UK-wide organisations such as the Migration Advisory Committee and the Industrial Strategy Council. We have had close collaboration with devolved Governments, as was recognised by my noble friend Lady Wilcox. This is critical to ensuring that there is an effective skill system regardless of where in the UK you live, work and train. We have had regular meetings with senior officials from all four nations to share best practice and approaches and their long-term strategic goals. These relationships will be important to Skills England’s success, as has already been set out by Richard Pennycook in his role as the chair.

My noble friend Lord Layard and the right reverend Prelate the Bishop of Leeds rightly talked about the significance of young people and how we can ensure that we improve our skills system for them. This is where our commitment to developing a youth guarantee is very significant, and my noble friend Lord Layard once again made his strong call for the apprenticeship guarantee, which I have discussed with him on numerous occasions. He is pushing us further as a Government than we are able to go at this time, but he continues to make a strong case and I will continue to listen to him.

However, we have of course already started to think about how we reform the apprenticeship system to ensure it better serves young people, who have particularly seen the numbers of apprenticeships fall off. That is why we recently announced that we would develop foundation apprenticeships to provide a route into apprenticeships for young people who have not been able to benefit from apprenticeships up to this point.

We have also heard calls with respect to the growth and skills levy. Our reformed growth and skills levy will deliver greater flexibility for learners and employers, including through shorter duration and foundation apprenticeships in targeted sectors. We will want Skills England and the employers it engages with to have a crucial role in determining how that skills levy is spent. I also recognise the significance of the role of further education, as outlined by my noble friend Lord Watson and others in the discussion, and I can assure him that we will continue to do more than perhaps has been the case for FE previously to raise the status and significance of that sector, because it is so important for young people. We will include more about our overall role in the post-16 strategy, which we are currently working on.

The role of schools is really important, as my noble friend Lady Wilcox and the noble Lords, Lord Aberdare, Lord Hampton and Lord Lucas, outlined. I can assure noble Lords that the curriculum and assessment review will look at the significance of digital skills, creativity and how enterprise can be developed in our schools.

If we are to meet the skills gaps that persist in our economy, we must address the fragmentation in our skills system. To respond to the challenge of the noble Baroness, Lady Barran, I do not believe we can do that by simply building on IfATE. We need, with Skills England, to make sure that we do more than the excellent work that IfATE has done. We have to make and maintain an authoritative assessment of national and regional skills needs in the economy, now and in the future, combining the best possible insights from employers and other key stakeholders.

This legislation will enable Skills England to build on IfATE’s work but will also enable us to build that broader partnership and assessment that will help us to transform our skills system. This Bill is an important milestone in the delivery of the Government’s manifesto commitment to establish Skills England. I look forward to further discussion through the passage of this legislation.