Technical and Further Education Bill

Baroness Wolf of Dulwich Excerpts

2nd reading (Hansard): House of Lords
Wednesday 1st February 2017 Lords Chamber

[Baroness Wolf of Dulwich (CB)]

My Lords, I thank the Minister for his very kind words about my work on vocational and technical education, and the noble Lords, Lord Watson and Lord Storey, for their kind comments. I welcome the Bill for reasons I will discuss. I declare an interest as a member of the Independent Panel on Technical Education, chaired by the noble Lord, Lord Sainsbury of Turville. Many of its recommendations went into the Government’s skill plan and some are now encapsulated in the Bill, particularly those in Schedule 1 that deal with the institute.

The reason why I am particularly delighted to see this Bill—which, happily, is quite slender compared with the higher education Bill—is that, after many years of well-meaning but in the end pretty empty rhetoric, we are now aware that we need to do something as a country about our technical education system which is serious, immediate and properly thought out. For years, we have had a rather bizarre approach—I do not want to call it market-led—whereby government tried to achieve quantity over quality, with a huge number of qualifications; if there were 50 awarding bodies today, then 100 awarding bodies tomorrow would be even better. It was a very strange system. One result was that we reduced the quality and credibility of our technical and vocational system. That had been very good—it is not that this country never had a good system; it had a good system of apprenticeships and it destroyed it. Instead, we have on the one hand gone for this rather strange approach of “more, more, more and never mind the quality” while, on the other, being increasingly obsessed with growing a very uniform higher education system. In that, we are almost unique in the world in trying to have a single, huge university system in which all institutions do everything. If you compare that system with just about any other country, you will be very struck by the fact that, elsewhere, there has either been maintained or established a strong and distinctive technical route which is high-status in and of itself.

It is more than time that we did something to re-create this. We have effectively destroyed any high-quality, tertiary technical offer—it is what in the business they call level 4 and 5, but for the rest of us it is the stuff you do after age 18. I believe that the Government are genuinely committed to re-creating that. This Bill is one of the major steps towards it, and I hope that it along with the industrial strategy and the policies introduced there mark the beginning of a serious reversal of years of decay. I look forward to looking in detail at the individual clauses in Committee.

I do not want to say any more now about the general importance of the Bill—I know that other speakers, particularly the noble Lord, Lord Baker, will be able to speak with enormous eloquence about the importance of this part of our education system. Instead, I want to talk about the insolvency aspects of the Bill, because I welcome those, too. I do so because one thing happening in our societies is a move towards near-universal involvement in tertiary education. In our country, we have moved at a remarkable rate to a quite extreme position in how far we fund tertiary education via student loans. We are very unusual in the degree to which we now use student loans and in the proportion of our funding that comes from them. Everything that I see in the Government’s proposals indicates that this will be increasingly the funding mechanism for non-university tertiary education, including post-18 further education, just as it has been in the higher education sector.

We need to recognise in this context the duty of government to carry out its role as a guarantor of quality. One of the earliest things that Governments existed to do was to ensure that weights and measures were true. A modern version of that is ensuring that the qualifications which government offers to its young and adult people are good and saying, “We will give you a loan if you take that”, thereby implying that the quality is good. It has a duty to ensure that, if anything goes wrong, it as the weights and measures guarantor and the underwriter of the loans protects the people to whom it has made an implicit and explicit promise of quality and of endurance. One of the very obvious things when you look at the modern tertiary scene is that, far too often, individuals enrol on courses or take out loans believing that they have that implicit or explicit promise from government but then find that this is not necessarily the case. Obviously, at the moment this is a minority issue but as we move to a larger and more heterogeneous tertiary system it will become more important that government explicitly recognises that duty.

I entirely agree with the noble Lords, Lord Watson and Lord Storey, that one reason why we need an education administration regime in further education is that the whole sector is crazily underfunded and expected to do things on a smaller scale than we do for 14 or 15 year-olds. Again, that is extraordinary and almost unique. It is hardly the way to guarantee high-quality technical education. However, whether or not that is the case, it is absolutely right that a Government providing a publicly supported education system should also have a system in which, if things go wrong, there is an administrator whose job it is to avoid or minimise disruption to the studies of existing students in the further education body as a whole. Where necessary, the administrator should rescue and maintain that institution as a going concern until people finish their studies. I really welcome the recognition in the Bill that this is a duty of government. I wish that the Government recognised that same duty with respect to both higher education and private providers of training. It should be of enormous concern to all of us in the House that that is not the case.

Just a week or two ago, in talking on the higher education Bill, I related what happened with an alternative provider of higher education, the London School of Business and Finance, which lost its tier 4 authority. You had these heartbreaking stories of students who had paid money and assumed that this would be a safe thing to do. As one said, “I did not expect this to happen in the UK”. Suddenly, they found their course collapsing around them. Just last week, it was clear that there would be a major issue around a failed private training provider, John Frank Training, which, a few months after returning record profits, collapsed into bankruptcy. Again, more than 500 people took loans to start courses with this training provider. While it is absolutely right and welcome that the Bill introduces an education administration regime for further education colleges—I truly welcome that—I would like the Government to consider as a matter of urgency why there is not a comparable regime for people in other parts of the tertiary system, including private providers of training funded by the Skills Funding Agency or the Student Loans Company, and higher education.

In conclusion, I am absolutely delighted that the Government brought this Bill to the House. This could be an important moment for the skills base of this country, for technical education as a high-status route and for a tertiary system that is fit for purpose rather than dominated by the idea that the only thing you need is a three-year bachelor’s degree. I very much hope that in the months ahead the Government will build on this and go further, recognising even more explicitly their duty to the students and the borrowers of this country, to whom they made a promise.

Technical and Further Education Bill

Baroness Wolf of Dulwich Excerpts

Committee: 1st sitting (Hansard): House of Lords
Wednesday 22nd February 2017 Grand Committee

[Lord Aberdare]

My Lords, as a vice-chair of the All-Party Parliamentary Group for Apprenticeships, I meet a lot of apprentices and am constantly surprised and shocked at how few have either heard about or been directed towards the apprenticeships that they are on through their schools or any formal careers education. As we have heard, schools have an in-built bias towards promoting the academic route and I do not need to say any more about that.

However, with the best will in the world, teachers and parents may have only a limited understanding of the sorts of jobs and careers available in today’s job market, the opportunities they offer and the routes available to access them. Again, as we have heard, the careers education system, if one can call it that, has been at best patchy and at worst shockingly poor. Some good initiatives are beginning to emerge. The National Careers Service offers a valuable central online resource; the Gatsby benchmarks have defined what good careers education looks like, which is important; and, as the noble Lord, Lord Storey, has said, the Careers & Enterprise Company in particular is creating a vital network of enterprise advisers and co-ordinators to support schools.

However, all those initiatives need to be properly linked, and the gaps that even they allow in provision need to be identified, measurement systems need to be put in place and we need a strategy driven by government. Indeed, I am delighted that the Government are committed to producing a strategy later this year. However, there is real value in including a provision for that in the Bill. Part of that strategy, as we have heard, should be a much better, UCAS-like system for identifying and applying for technical education and apprenticeship opportunities. I am delighted that that is promised in the industrial strategy but support the idea of it being incorporated in the Bill through Amendment 9.

I also support the amendment of the noble Lord, Lord Baker. The careers system provides a bit of supply push but unless there is some demand pull, and unless schools want or are required to allow those systems to work, and young people and their parents are aware of them, the system is not going to work.

Finally, I was delighted that the noble Lord, Lord Hunt, reminded me of my visit to the Skills Show some years ago because that was one of the most inspiring ways in which to promote apprenticeships and technical education that I have come across. There was a real buzz about it; there should be skills shows all over the place. There needs to be an incentive to ensure that schools do what we need them to do. I therefore support Amendment 61 to ensure that only colleges with good careers education can get good or outstanding Ofsted ratings.

[Baroness Wolf of Dulwich (CB)]

My Lords, I can only second what has been said this afternoon. I was interested to hear from the noble Lord, Lord Baker, that he started off with a five-line amendment that seemed to encapsulate what this issue is about. Will the Government reconsider whether they need to put all of Amendment 11 into primary legislation?

I will give the Committee an example of why I read the whole thing with mounting grief, after thinking that the five lines were splendid. I am the governor of a small specialist sixth-form academy. We have a small group of young people who have already chosen a specialist route, in this case mathematics. I am very proud of the fact that our first class included one young lady who went off to be a Dyson apprentice at 18 with her extremely good A-levels, and your Lordships will not be surprised to hear that we have been visited by people from the Dyson Institute of Technology who are very keen that we should send them some more apprentices.

Technical and Further Education Bill

Baroness Wolf of Dulwich Excerpts

Committee: 2nd sitting (Hansard): House of Lords
Monday 27th February 2017 Grand Committee

[Lord Blunkett (Lab)]

My Lords, I support the amendment. It would be very useful if the Minister were prepared to meet separately with my colleagues to see whether a solution could be found. I want to reinforce a point about the challenge of transport costs for apprentices. They can be extremely irksome and difficult for them. The proportion of a very small income going on getting to and from work can be way beyond anything that we, as adults, have experienced.

[Baroness Wolf of Dulwich (CB)]

I, too, support the amendment. Like other noble Lords, I recognise that this is not something that is easily in the Minister’s gift, but it is a major issue and has been for some time.

Apprentices are employees and they should be employees, so they are different from full-time students, but it is also important to recognise that they are not skilled workers, which is why they are apprentices. That is why it is also important that there is an apprenticeship wage, but that apprenticeship wage is very low. This is a major issue and has been a major issue for a while, but, curiously enough, the improvement in the quality of vocational training and the drive to improve vocational training and to make sure that young people go into apprenticeships rather than into some form of quasi, not-real apprenticeship has made the problem worse, because more parents are now faced with the situation in which they tell their children, “I can’t afford for you to take the apprenticeship”.

This is a major issue, and it cannot be beyond our capacity to do something about it. I add my voice to those urging the Minister to see what can be done to prevent young people from the most deprived families feeling that there is a serious barrier to them taking up an apprenticeship.

[Baroness Donaghy (Lab)]

My Lords, I shall make one additional point in support of the amendment. I was one of the founding members of the Low Pay Commission. When it was first established, its job was to create the infrastructure around not just the minimum wage but the wage for apprentices and how that would play out in the world of employment. It was 19 years ago that we first grappled with these issues, so the noble Baroness, Lady Wolf, is quite right that this has been a problem for quite some time. It is a structural issue.

I know that the Minister is very good at leaping over barriers to try to solve problems. I know it is not easy, but he can see the broader pictures and can try to bang heads together on an issue which will not go away unless something positive is done.

I fully endorse what my noble friend Lord Blunkett said. The Low Pay Commission had to agree to a very low wage not only to get a unanimous report but because we were pioneering and wanted to be absolutely sure that we were not going to damage the economy. When we look at that low wage, as it still is, and the transport implications, to be honest it is a miracle that anybody whose family receives benefits goes in for an apprenticeship at all. Far from being the group that needs the least motivation—we are trying to tackle the fact that the education system is failing that group at the moment—these people require the most motivation to keep going.

This is a plea for the Minister to do his Superman act—he is about to take his jacket off, so I am feeling much more optimistic—and try to find ways of breaking down barriers and breaking through this structural anomaly, which we all want to do.

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[Lord Knight of Weymouth]

This is an important amendment. I very much enjoyed the exchange at Oral Questions today in which the noble Lord, Lord Prior, responded for the Government on the importance of employee engagement. I felt he really understands how important it is in the private sector and, in some ways most surprisingly, in the public sector, particularly from his comments about junior doctors. In that spirit, obviously I hope that apprentices—who, as we have discussed this afternoon, are employees—will enjoy employee engagement with their employers, even though they are apprentices. It is equally important that the institute feels that it is accountable to learners and that the accountability of the institute is not more upwards to the Government than it is to employers and learners.

As I said last week in this Committee, I have general concerns that the dynamic, rapidly changing nature of the labour market presents ongoing challenges to the institute. I was set a challenge by my noble friend Lord Hunt to come up with a solution to some of that before Report. I have been mulling on that and may have at least the beginnings of a solution, but I shall wait to surprise the Minister with it at some future date. The point remains that, if the institute does not have within its structure a way of listening acutely to the learner experience, of assessing the relevance of the qualification in the labour market for learners not only while they are going through their apprenticeship but in the months immediately after they have completed it, and of being accountable to employers of all sizes, as my noble friend pointed out, I worry that our efforts in this Committee to try to help and advise the Government in making the institute a success will be in vain because it will too quickly become out of touch and out of date.

[Baroness Wolf of Dulwich]

My Lords, I shall speak to Amendment 36A, which is in my name and has been placed in this group. It is also about accountability, but a rather broader form of accountability which links the Government, who are encouraging young people and adults to enter training, and the changing environment, which means that many of them are put at risk in a way that was never the case before.

The amendment relates to Clause 13 and asks that any,

“training provider offering publicly funded apprenticeship training or offering publicly funded education training for students aged 18 or over”,

should be included in the requirements of that clause—in fact, what I would like to see is that extended through the whole chapter.

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[Lord Nash]

I will have to write to the noble Lord about that.

As well as advising the board, the first panel will decide how the panel will be run, including how future members will be recruited. The proposal is for the institute to take on responsibility for technical education from April 2018. I can confirm that it would be our intention to include a request in its guidance for 2018-19 for a panel to represent those undertaking technical education.

Amendment 18 would stipulate the make-up of the group of persons whom the institute could approve to develop a standard. In particular, it would require that the group includes a range of employers and at least one provider. I agree that it is essential that the standards that form the basis of reformed apprenticeships and new technical education qualifications are of high quality, and meet the needs of a wide range of employers and learners, but I am not convinced that this amendment is necessary. I have already explained that the institute needs to be independent from government to be able to undertake its functions with credibility. It will be well placed to make decisions about who can develop a new standard, based on a range of factors, and it is right that it should be given the flexibility to do so without the constraints that this amendment would impose.

However, in my remarks on the preceding amendment I referred to the strategic guidance providing a vehicle for government to advise the institute. The current draft of the guidance includes the recommendation on who should be able to develop standards and makes it clear that we will expect the institute to continue to ensure that standards are developed primarily by employers, but with input from others with the relevant knowledge and experience, such as professional bodies, other sector experts, providers and assessment organisations. If the institute decides not to follow the government guidance it must give reasons in its annual report, but it is crucial that, as an expert, independent organisation, it retains the ability to make decisions itself about delivery, taking into account all the relevant circumstances. We believe that our approach strikes the right balance. I hope that, on the basis of my explanation, the noble Lord will feel reassured enough to withdraw this amendment.

I thank the noble Baroness, Lady Wolf, for her Amendment 36A. I am sure it was prompted by concerns for publicly funded learners who may find themselves without a place to complete their course in the event that an independent provider shuts down. I share her concerns but just as with FE bodies, the likelihood of independent training providers becoming insolvent is low. The Skills Funding Agency has a robust entry process in place to ensure providers are capable of delivering a high-quality learning offer to loans learners. Once providers have met the entry criteria and are eligible to offer loans-funded provision to learners they are subject to a range of further measures and controls, including review of their financial health, audit, and assessment of their qualification achievement rates. Providers are also required to comply with robust funding and performance rules. A small handful of providers is facing difficulty, but the numbers affected by these cases represent less than 1% of providers operating in the advanced learner loans programme.

[Baroness Wolf of Dulwich]

If it is not necessary to have protection because not very many people get affected, why is it necessary to have it for further education colleges, which also do not fail very often?

[Lord Nash]

I will come to that in my explanation. These are private companies and it is not our role to interfere. I will elaborate in a moment.

In cases where independent providers delivering publicly funded training courses have closed down, our first priority is to support any publicly funded learners affected, ensuring they can continue their courses with minimal disruption. The SFA works closely with the SLC to ensure that, wherever possible, we identify a suitable alternative training provider or college where individuals can complete their learning. We have been doing just that in a recent case, which received a certain amount of publicity, when a provider went into liquidation in November: we have matched all the learners to alternative provision.

However, these are private companies, and it is not for the Government to involve themselves in their financial matters any more than those of other private companies. This is, essentially, the point I made in answer to the noble Baroness. We will always work to support learners affected in cases where the provider fails and it is right that we do so, in the way I have outlined. But as to whether we should have a special administration regime, we cannot make the same special and complex arrangements, which will often involve significant and additional public funding, where a private company has failed. This is, and must remain, a matter for the company and its creditors and shareholders. I hope the noble Baroness will agree, and will therefore not press her amendment.

[Lord Nash]

It is Ofsted.

[Baroness Wolf of Dulwich]

I am happy not to press my amendment, but I would like some clarification on why a private company which is often entirely dependent on public funding should be in some sense exempt from any requirements. This does not seem to be consistent with much of what goes on elsewhere in the public sector and what it requires of people.

[Lord Watson of Invergowrie]

I think the Minister has sat down now and that the point made by the noble Baroness, Lady Wolf, is very pertinent. From what has been said over the past half-hour or so, it is likely that we will return to this subject on Report. I have no doubt that the Minister and his officials will be looking at this in greater detail because the question of accountability is very important. Whether or not these are corporations, they are, as the noble Baroness, Lady Wolf, said, dealing with public money.

My noble friend Lady Cohen asked what recourse students have if they are dissatisfied. The Minister did not answer that point. Again, this comes down to accountability. People have to have some come back if they do not get what they thought they were getting. I am talking about situations that fall short of the provider collapsing into insolvency. Many people may feel that they are getting an inferior product and that has to be something that can be followed up.

I take the Minister’s point in respect of Amendments 16 and 18 about the institute being independent and having the freedom to decide how it delivers. However, he went on to say that there would be two panels: one for students and one for apprentices. That is what our Amendment 16 asks for and it goes no further, other than to say that it need not be limited to those two panels. The Minister has conceded the point, as did his colleague Robert Halfon in another place, as I said earlier. We knew that, but it would be helpful to have a commitment because—we say this in respect of many pieces of legislation—we may get a commitment from Ministers now, but what about the Ministers or Government who follow them? There is nothing to fall back on should views change. That is why it is important on occasions such as this to have it written into the legislation.

The same could be said about Amendment 18 on employers. The Minister said—I wrote it down—that there would be a range of employers. We are asking for almost the same wording,

“a number of employers who, taken together, comprise a broad range of employer types”.

We are surely talking about the same thing and I do not understand the reluctance. The Minister clearly wants to see a broad range; so do we.

I think we might want to revisit these matters because we are capable of reaching a situation where both sides are satisfied. We want to make sure that this works and works well: that the boards are representative and that the standards set are proper and reached with the full support of the sector. They have to be acceptable to employers within each of the 15 occupational groups and seen to be representative of their needs. We have a bit of common ground but there is some ground yet to be made up before we reach what either side might find a satisfactory outcome. At this stage, I beg leave to withdraw the amendment.

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[Baroness Garden of Frognal]

My Lords, I entirely support what the noble Lord, Lord Lucas, said. We have no pattern of a single awarding body which has been a success in any shape or form. With GCSEs, O-levels and all previous exams there was always a choice of learning styles, and each of the vocational awarding bodies brought something different in the material they used or type of learning style that lead to the final qualification. It was always up to the trainers, the teachers, to decide which awarding body they felt best met the needs of their students. Provided the standard is set, so you can guarantee that the same standard will be reached, there is immense benefit in having variety among awarding bodies and competition.

It is slightly ironic that whereas in higher education the Government seem to view more competition as the virtue above all others, in the Bill they are moving to a single source of awarding bodies. As the noble Lord, Lord Lucas, said, we need to be very cautious before destroying some worthwhile and reputable organisations and qualifications, not just in this country but internationally.

[Baroness Wolf of Dulwich]

My Lords, I must rise to defend the position of the Sainsbury review, as I was a member of it and signed up to it, after a great deal of debate. No one in the group moved easily to the position where we recommended a single qualification for the college-based route—not, I should add, for all apprenticeships. Nothing in the Sainsbury review says that employers do not have a choice at that level. We did so for historical reasons and for comparative reasons. Historically, the model described by the noble Baroness served us quite well, but it is pretty much unique. Other countries have a single set of national qualifications. They do not have competing awarding bodies.

Historically, the Government set out consciously to destroy any near-monopoly in the vocational area. Back in the 1960s and 1970s, although there was no formal monopoly for City & Guilds, for example, none the less, construction awards were City & Guilds. If you wanted to train as a nursery nurse, you did NNEB. These were extremely well-known and well-respected qualifications. Since then, we have had repeated attempts to break that situation open and instil standardisation via standards. The result has unfortunately been in many cases a clear race to the bottom and, worse, the disappearance of any qualification which is clearly recognised and therefore has a brand and market value. This was, in a way, a slightly sadder but wiser recommendation.

When I wrote the vocational education review for 14 to 18 year-olds, I did not recommend a single awarding body. I hoped at that point that a regime within the Department for Education, which had clear standards for a qualification passing muster, would lead to a serious improvement in the quality of the vocational awards and the assessment, and the emergence of recognised market leaders. It really depresses me that that did not happen. We have a real problem at the moment: the old recognition has gone and the modified regime, which was brought in in the middle, does not seem to have done the trick. We have a gigantic number of qualifications on the books, many of them taken by tiny numbers of people, with no clear recognition at all. This area is by necessity very different from GCSE, where the Government really do not give awarding bodies much freedom any more. The degree of freedom which you have in the key areas of English or maths is pretty notional. The decision not to go ahead with the single awarding body was not because of a belief that we should not have one but because of Ofqual’s well-justified conclusion that it would not merely disorient the whole system but so destabilise it that we might have a national disaster.

There is a real issue in how the institute does its licensing, but it is not true that a body which holds a licence does so forever. Clearly, nothing will prevent the institute varying its regime in future years. However, I feel we are now in a situation where if we do not make a clear attempt to create a recognised, national qualification for each of these routes, people will not take them. They will feel that everybody knows what an A-level or a BTEC is, but we still have 15 of these things and do not know what any of them mean. So for once, unusually, I disagree with the noble Lord, Lord Lucas, and the noble Baroness, Lady Garden. The Sainsbury review was right to feel that a single licence for these classroom-based routes is what we have to do now, in 2017.

[Lord Lucas]

Yes, it is perfectly possible to do that but does the noble Baroness not think that we need a decent level of staff in IFATE in the middle of that? If she is saying that it will be the repository of this qualification and will maintain quality, integrity and innovation down through the years, can that be done on two and a half people, who seem to be all that are left to spare?

[Baroness Wolf of Dulwich]

I hope that with the licensing situation there will be a chunk of time when it is worth investing. There are issues relating to the licensing system, which we will get to later in the Committee, but we are not asking the institute to run the qualification. We are saying that there should be a licensed awarding body but that if the situation is not restored to where there is one clear, recognised qualification for a route, the qualification will have no brand recognition. The Government also tried repeatedly to kill off BTECs and they failed, because people value and need something that is known. In the current situation, we have created something of a desert with a few rather feeble weeds.

[Lord Young of Norwood Green]

I must admit that I am torn now between the two positions, having heard what both sides have said. I must admit that my fear is that while I understand the point the Sainsbury review came to, that there are too many qualifications and there is a need for rationalisation, I have a sinking feeling that the baby could well go out with this bathwater—I cannot think of another cliché. To describe some of these well-known qualifications, whether they are City & Guilds, HND or HNC as bathwater seems unfair, but they are recognised brands with good reputations. As I understood it from previous debates, it was not absolute that they would go.

I accept the point that if you have too many qualifications, that creates confusion. I welcome that bit of it but I would welcome hearing some analysis from the Minister which says that we need not worry about these well-established brands which I have referred to and that if they go, so be it.

I cannot help but feel that the noble Lord, Lord Lucas, is right to issue a word of caution about putting all our eggs in one basket. It will take time to establish a new brand—we know how difficult that is. The idea of these debates is to probe, and this is an area where we need to be sure that we are heading in the right direction.

Technical and Further Education Bill

Baroness Wolf of Dulwich Excerpts

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

[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.

[Lord Storey (LD)]

My Lords, I will speak to Amendment 14 and to Amendment 16, which is linked to that, and will say a few words in support of Amendment 1.

It is interesting that a large part of the Bill is about insolvency—what happens if a college becomes insolvent. Yet it does not say very much about what happens if a poor student, through no fault of their own, becomes insolvent because of debt problems arising from the fact that their college no longer exists. We also encourage private providers—I say right at the outset that there are many good private providers, who have an exemplary record and are very worth while. Sadly, however, some providers have caused immeasurable harm to young people, and we need to ensure that there is a proper safety net for those young people.

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[Baroness Wolf of Dulwich]

My Lords, I rarely disagree with the noble Baroness, Lady Garden, on technical education, where I highly respect her expertise and experience, but I confess to a certain unease about the idea that there should be only one list and that it should overtly include everything. One of the key things that we are trying to do here is to create a highly respected and distinctive technical education course which sits alongside the academic one, and therefore by definition it cannot include everything that has passed a basic set of requirements for being an acceptable qualification.

I remind noble Lords that I have an interest in this, having been on the Sainsbury panel, but also looking back to my experience when I was doing the 14 to 18 vocational education review. I completely agree that one could go round for ever on vocational to technical to professional. But there is a really important distinction here between a limited set of qualifications that have been identified as having a very clear purpose and the possibility—and, I would say, high desirability—of allowing a very large number of qualifications to arise and be offered and meet a minimum threshold in the vocational and technical area. It may be that the wording of the noble Baroness’s amendment will not get in the way of that, but these distinctions are important.

When I made the 14 to 18 recommendations, I said explicitly that there should be a distinction between there being strong requirements before something could be offered in mainstream 14 to 16 education and a very different set of requirements which said that they could be out there and schools could offer them if they wished but they could not count in the league tables as being equivalent to GCSEs or A-levels. The same thing applies here with the task set for the new institute to identify qualifications which really meet the requirements of that distinctive high-status route. That is not the same as being on the Ofqual register.

This is not about whether it is craft or creative or technical, where I entirely agree with the noble Baroness, but about creating this “lost” route that we used to have without at the same time throwing overboard a large number of qualifications—some of them tiny, some of them big—which may serve quite different purposes. It is really important to recognise that one of the purposes of the institute is to create that alternative route and that part of that is about having a set of qualifications—probably not thousands long—that meet these criteria. Getting there is going to be difficult but if you do not have this end in view, it is hard to see how we will ever get out of what is at the moment a hugely confused and confusing mass of qualifications.

Again, to talk from personal experience, when I did the 14 to 18 review, I did not recommend anything like as much restriction at 16 to 18. What was recommended and adopted was this idea of a programme of study for each individual student between 16 and 18, which has worked quite well. I thought at the time that as a result of that we would move to a situation where a smaller number of good qualifications became clearly apparent as market leaders, and strongly established. I was convinced by Nick Boles, the Minister at the time the Sainsbury panel was set up, that this was just not happening; we needed to be more active and the programme of study was not enough.

It seems to me that a fundamental part of what the institute is about is creating a set of qualifications which meet the requirements for that alternative, high-status route from 16 on into adult life. Without talking to lawyers or drafting clerks, I do not know whether the amendment would have any negative impact on that but it is important to understand that one of the purposes of the institute, for which I think there is cross-party consensus, is to recreate that route. In my view, that means that you cannot just say that everything that is not an A-level can be on the institute’s list, because we need a list that is clearly part of this route without wiping out all the other many qualifications which may serve other and different purposes. That is what I wanted to say and I hope the noble Baroness and I do not really disagree.

[Baroness Vere of Norbiton]

My Lords, I welcome the opportunity to debate the amendments in this group. I thank all noble Lords for their contributions.

I fully understand why the noble Baroness and the noble Lord have tabled Amendment 6, which seeks to define technical education qualifications as,

“the full range of work-based qualifications”.

I reassure them that all relevant and appropriate occupations in the economy will be covered within the technical education routes. What is important is that there is good provision for everyone and that the reformed technical education system focuses on occupations for which skilled technical training is a requirement.

The Sainsbury panel report has already provided a clear definition:

“Technical education must require the acquisition of both a substantial body of technical knowledge and a set of practical skills valued by industry”.


Trying to define these qualifications in this manner could restrict the scope of technical education qualifications, both now and in the future. In practice, technical education qualifications will be defined by the coverage of the 15 technical education routes. Each route will provide a framework for grouping together occupations where there are shared training requirements. An occupational map will identify all the occupations within the scope of each route.

When defining the coverage of the 15 technical education routes, it is important to highlight that not all occupations will be included. The Sainsbury panel was clear that unskilled and low-skilled occupations that do not have sufficient knowledge requirements would not warrant a technical education route. Rather, these occupations can be learned entirely on the job, often within a matter of weeks. For these occupations, it would not be appropriate to offer technical education qualifications.

I reassure the noble Baroness and the noble Lord that within the technical education routes there will be comprehensive coverage of the skilled occupations that are vital to the success—

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Tabled by

[Baroness Wolf of Dulwich]

16: After Clause 35, insert the following new Clause—
“Providers of technical education: guarantee to students
(1) Any providers of technical education who are not covered by the insolvency regime created by this Act must provide a guarantee from a reputable financial institution to each Government supported student that, if the provider is made insolvent, the financial institution will cover the cost of operating that student's course until a suitable end point.(2) In subsection (1), a “suitable end point” means the completion of the course or the successful transfer of the student to an alternative institution.(3) In subsection (1), a “Government supported student” means any student whose education is funded directly by the Government through grants to the providers or student loans.(4) The cost of providing the guarantee under subsection (1) must be met by the relevant provider under subsection (1).”

[Baroness Wolf of Dulwich]

I note that the Minister did not reply to my amendment in his response, and I hope we can have further discussions before Third Reading.

Amendment 16 not moved.