Young People: Skills (Youth Unemployment Committee Report)

Baroness Wilcox of Newport Excerpts

Wednesday 23rd November 2022 Grand Committee

[Baroness Wilcox of Newport (Lab)]

My Lords, I declare that I too am a vice-president of the Local Government Association. I thank the noble Lord, Lord Shipley, for leading the production of this report over a year ago and for his introduction, which provided a detailed summary of the report’s findings, together with positive suggestions for improvement. I restate my thanks to the noble Lord, Lord Baker, for the introduction in 1988 of those five Baker days, which helped to put professional development for teachers on a positive footing. I will try to give him some optimism tonight as I detail throughout my speech what a Labour Government intend to do about righting the wrongs so exposed by this excellent report.

This report makes for stark reading. At the time of publication last November, 12.6% of 16 to 24 year-olds were neither working nor in full-time study, and youth unemployment was at 11.7%. It is not much better today; now that the pandemic is abating, it is just under 10%. The committee’s report notes

“Unequal access to high quality careers guidance and a decline in work experience opportunities”,


and that careers guidance often starts too late to be useful. Noble Lords may remember my Front-Bench colleagues and I attempting to amend the skills Bill to ensure careers education from year 7, but we were unfortunately unable to persuade the Government of the merits of this, as so well detailed again this evening by my noble friend Lord Watson. Perhaps now they will think again.

Under the current system, employers can use the apprenticeship levy money only on apprenticeships. Some businesses have decided not to touch their levy money, while among those who spend it, employers report spending on average 50% to 60%, meaning that around £1 billion a year is going unspent in England. As a result, the CBI, Make UK, the British Retail Consortium and other business groups have highlighted a number of problems with the system and called for additional flexibility for business. The report that we are discussing today deals with this need for additional flexibility and calls for reform of the apprenticeship levy, such that any employer receiving funding from it is required to spend at least two-thirds of it on young people starting apprenticeships at levels 2 and 3 before the age of 25.

To begin to address these reforms that are so badly needed, my party has committed to a new growth and skills levy, which will give businesses the freedom to use currently unspent money, up to 50% of their total levy contributions, on non-apprenticeship training, with at least 50% reserved for apprenticeships. Clearly, stakeholders of all stripes are united: the levy is not working as it should for our young people.

Last month, my noble friend Lord Blunkett launched his report Learning and Skills for Economic Recovery, Social Cohesion and a More Equal Britain, which set out the scale of the transformation that we must deliver to equip Britain to succeed in the 21st century. Skills England, a new national skills taskforce, should be implemented to drive a national mission to ensure that young people and adults can access the training, reskilling and upskilling needed to thrive. We need to see similar focus and ambition from the Government on tackling youth unemployment, which is still above the G7 average.

My noble friend Lord Knight of Weymouth posed some far-reaching questions on the future needs of young people in education today, and how those needs have to be future-proofed. We must make much more use of developing the green economy and technology in developing young people’s skills. My noble friend Lord Watson referred to the careers aspects of this transformational report.

In taking this forward, Labour will be focused on how we deliver growth and enable people to take up good jobs in towns and cities across the UK. That is why Keir Starmer has already said that we will adopt my noble friend Lord Blunkett’s recommendation to introduce flexibility into the apprenticeship levy, flexibility that businesses are telling us they need to access the range of skills relevant to their workplaces. They will be able to spend money on short, modular courses, or pre-apprenticeship training, helping people to get new opportunities.

After more than a decade of failed Conservative policies, it could not be clearer that it is working people who will drive economic growth in this country, and we will focus on enabling people to succeed. As it stands, skills budgets are disparate, incredibly centralised and, more importantly, clearly not working. If we want young people to get on, we must devolve and combine these budgets, so decisions about training and upskilling are made closer to the people, businesses and communities who need them—those with real skin in the game. There is a tangible need for skills policies to be better aligned with regional economic policy and local labour markets, to deliver a more local, tailored approach to skills provision.

Analysis for the LGA by the Learning and Work Institute shows that the number of people improving their skills or finding work could increase by 15% if councils and combined authorities were better able to co-ordinate and bring together employment and skills provision across a place. Labour will merge the various education skills funding for adult streams, such as the shared prosperity fund and Multiply, with the existing adult education budget. This will then be devolved to combined authorities which, in collaboration with central government, will direct skills spending in their region and use their convening power to ensure that skills provision in their area is aligned with the local labour market, bringing together representatives from new local skills improvement partnerships, FE colleges, universities and local businesses. Skills England will co-ordinate the framework within which combined authorities deliver skills funding to make sure that local outcomes and local priorities are aligned with our industrial strategy and help us meet the challenges the country will face over the coming decades.

We will introduce a list of approved qualifications that businesses could spend their flexible levy money on, which will be developed by a new body in collaboration with businesses, unions and wider experts. We will include modular courses in priority areas which lie at the core of our industrial strategy, including digital and green skills, social care and childcare, which will boost training opportunities with a view to supporting national ambitions such as the transition to net zero. Functional skills and pre-apprenticeships training will help to tackle key skills, especially around basic digital skills. SMEs, which do not pay the levy, will be able to reclaim 95% of co-payments on approved courses in the same way.

Furthermore, Labour is committed to a complete review of the school curriculum, which was mentioned by noble Lords in the debate this evening. We would ensure that young people are equipped for the world and workplace of the future, not of the past. Among other things, we will look to reform the citizenship curriculum so it embeds practical life skills—looking at budgeting or understanding employment contracts—and digital competency, so that all young people gain the digital skills that they will need to thrive. We will ensure that this review is carried out by expert opinion because we want to give young people the best start in life and ensure that they leave our schools ready for the future.

I can go through the Government’s record on this issue to date—I am not normally a negative person, but apprenticeships have declined by almost 200,000, 11 million adults lack basic digital skills, and 9 million lack essential literacy or numeracy skills. There were 4 million fewer adults taking part in learning in 2020 compared with 2010.

What are we to do? A headmaster told me once, “Debbie, the biggest room in the world is the room for improvement.” He was right. He had it on a T-shirt which he liked to wear.

I end by quoting from the conclusion of my noble friend Lord Blunkett’s report:

“If there is not a step change which re-balances the economy, lifts the productivity and growth in regions across the nation to the levels seen in London and the South East, then the danger of stagflation will continue, the country will stagger on accepting mediocrity, gradually sliding further behind those countries who are determined to equip their nation for tomorrow’s world.”