Apprenticeships Funding

David Lammy Excerpts

Tuesday 1st November 2016 Westminster Hall

[Mr David Lammy (Tottenham) (Lab)]

I beg to move,

That this House has considered apprenticeships funding.

I am pleased to bring this important debate to the House and I thank the 55 Members from six parties who helped to secure it. I speak, of course, as a former Universities and Skills Minister, and I am well aware of how important apprenticeships are across the country. There is a further education college in every constituency, so cuts in funding will directly affect thousands of young people all over the UK. It is therefore disappointing that the Government published initial details of those cuts in August without any parliamentary debate or scrutiny.

I do not want to be churlish, so I thank the Minister for the letter that I received from him at 26 minutes past 6 last night. I am grateful for that. That was 56 days after I first wrote to him about those cuts, 45 days after the Prime Minister said during Prime Minister’s questions that she does not recognise the cuts, 21 days after the Minister batted away questions on the cuts during Education questions, and a timely 15 hours before I opened this debate. Unfortunately, the letter says nothing that I did not already know.

It is important to acknowledge that the Government have listened to concerns raised by the further education sector and opposition from Labour Members of Parliament in particular. The written statement that the Government made last Tuesday goes some way to mitigating the worst effects of the cuts, particularly for 16 to 18-year-olds and disadvantaged areas, but that U-turn is a very different line from the one taken by the Department on 9 September in its response to my letter to the Minister, when it made no mention of a consultation or change of heart and stated that the cuts of up to 50%

“will help to ensure every young person, regardless of background or ability, has the chance to take their first step into work”.

As is always the case with funding announcements, the devil is in the detail. Despite the Government’s U-turn, areas such as my constituency of Tottenham will face huge cuts. Tottenham is rapidly regenerating, and with the Government apparently committed to building the homes needed to tackle the housing crisis, there should be opportunities for my young constituents to get skilled jobs in the construction sector, yet the Government are cutting funding for 16 to 18-year-old construction apprentices in Tottenham by a staggering 37%. According to the College of Haringey, Enfield and North East London, funding will be cut by 28% for 16 to 18-year-olds in Tottenham in customer service, 38% for those wanting to go into business administration, 43% for engineering apprentices, and 45% for hairdressing apprentices.

I ask the Minister why. Why does he think that my constituents, who live in one of the country’s most deprived constituencies, should not be able to participate in the construction that is happening across the capital? Why should they not be afforded the opportunity to become engineers? Why do his Government prioritise the academic stream with their new scheme to expand grammar schools while cutting funding for those with vocational backgrounds who want to be construction or engineering apprentices? It is a simple question: why?

[Richard Burden (Birmingham, Northfield) (Lab)]

I congratulate my right hon. Friend on securing this debate. The Institute of the Motor Industry described the original cuts as a “car crash”. I suppose a U-turn is not a bad idea when faced with a car crash, but that organisation is still warning that a lot of employers in the motor industry simply will not be able to cope with the existing shortfall in funding and the complexity of the existing frameworks. The Minister really needs to do more work on that if he is to answer the criticisms that have been levelled by both employers and potential apprentices.

[Mr Gary Streeter (in the Chair)]

Order. Let me give an early reminder that interventions should be brief.

[Mr Lammy]

Absolutely. Nissan might have decided to stay, but it may look again at the decision if apprentices do not come forward and participate in the industry. That is very important.

[Jack Dromey (Birmingham, Erdington) (Lab)]

I praise my right hon. Friend for his outstanding leadership on this vital issue. Apprenticeships transform lives. Warren Shepherd, an apprentice in Erdington, moved into the house of his dreams as a consequence of gaining an apprenticeship and becoming a time-served engineer in the Jaguar factory. Erdington is rich in talent, but it is one of the poorest constituencies in the country. Does my right hon. Friend agree that if the ladder of opportunity is kicked away for people like Warren, the Government can talk until the cows come home about social mobility and building a strong economy in the midlands, but they will not be willing the means to deliver that?

[Mr Lammy]

My hon. Friend is absolutely right. I say to the Government, “Put your money where your mouth is for the great young people of cities such as Birmingham.” That is what this debate is about.

[Mr Jim Cunningham (Coventry South) (Lab)]

I congratulate my right hon. Friend on securing this debate. He has been pursuing this subject for a long time. Our hon. Friend the Member for Birmingham, Erdington (Jack Dromey) raised a real question about the Government’s boasts and commitments to west midlands manufacturing. They have made great play of manufacturing, but in Coventry, for example, further education funding has been cut by 24%. That raises serious questions.

[Mr Lammy]

My hon. Friend is absolutely right. Services now account for 80% of this country’s economy. If we are to build manufacturing and have young people who are able to construct wonderful buildings such as Coventry cathedral, which was levelled during the war, we need apprentices.

[Rebecca Pow (Taunton Deane) (Con)]

In my constituency, apprenticeships are booming. At the new Bridgwater and Taunton College, which is soon to become a university, the first nuclear apprenticeships have started to fuel training of young people in that booming new industry. For Taunton Deane, everything that the Government are doing is positive—particularly the levy that will come in next year and fuel many more apprenticeships.

[Mr Lammy]

I encourage the hon. Lady to get into the detail, because that may not be the picture after the cuts that are coming. She may also have seen that the axe is, sadly, falling heavily on disadvantaged areas. I do not know whether there are pockets of deprivation in her constituency, but that is an underlying theme in this debate.

[Helen Whately (Faversham and Mid Kent) (Con)]

Will the right hon. Gentleman give way?

[Mr Lammy]

I will not. I ought to make some progress, because I am conscious that many Members wish to speak.

The national picture is also worrying. Analysis by FE Week of the new funding rates found that children’s care, learning and development apprenticeships now face cuts of between 27% and 42%, compared with between 36% and 56% in August. Hospitality and catering funding will now be cut by between 34% and 45%, compared with between 41% and 60% in August. As the principal of the College of Haringey, Enfield and North East London told me, those cuts will only make it harder to get young people into apprenticeships.

Even after the Government’s U-turn, nine out of the 10 most popular apprenticeships still face cuts ranging from 14% to 51%. The best case scenario is average cuts of 27%; the worst case scenario is average cuts of 43%. The Department for Education was presented with that analysis last Thursday morning, less than 48 hours after it published details of the cuts on the gov.uk website, yet no response has been forthcoming. I look forward to hearing what the Minister has to say about the detail of the range of those cuts—after all, he has had plenty of time to prepare.

[Helen Whately]

Will the right hon. Gentleman give way?

[Mr Lammy]

I will not at this stage.

I now turn to the disadvantage uplift—the additional funding to support disadvantaged areas that I referred to earlier. That was quietly scrapped completely in the proposals published in August. Last week’s statement promised a

“simplified version of the current system of support for people from disadvantaged areas”,

yet the Minister has told FE Week that that is guaranteed only for one year, while the Department undertakes a review to work out how best to support disadvantaged young people to undertake apprenticeships. One year? Why does it take so long to work out what needs to be done for disadvantaged young people? It is clear: give them an opportunity! It is quite straightforward, and that requires resources.

What does this mean? Will Parliament be told what is going on or will Members of Parliament have to find out through the media? It sounds to me like more cuts will come in a year’s time. Will the Minister confirm today what will happen to support for disadvantaged areas in 12 months’ time? Will the support be maintained or cut? If it is to be cut, may I reassure him that I will be back here, along with many other Members of Parliament, to oppose that once again?

On Tuesday, the Secretary of State told Parliament:

“Apprenticeships transform lives and are vital in making this a country that works for everyone.”

Apparently, the changes made since August

“will ensure apprenticeships are high quality…and provide opportunities for millions more people.”—[Official Report, 25 October 2016; Vol. 616, c. 6WS.]

If the Government are serious about social mobility, will the Minister explain today why the Government are pushing ahead with cuts of anything between 27% and 45% for nine of the 10 most popular apprenticeships? Does he have a response for Paul Warner of the Association of Employment and Learning Providers, who warned:

“It is completely self-defeating to cut funding, because that is just preventing disadvantaged young people from getting on”?

The apprenticeship levy will raise £3 billion from large employers and will replace all current Treasury funding of apprenticeships. If the Government are making a saving by passing the cost of funding apprenticeships to the private sector through the levy, why cannot the Treasury give some of that money back to reverse the funding rate cuts and provide support for disadvantaged areas? I hope the Minister will be able to explain.

It is also important to look at the context in which the cuts are happening. The Brexit vote was underpinned by people living in our post-industrial towns in the north and the midlands and in our seaside towns, who are feeling left behind and left out of economic growth. Youth unemployment stands at 13.7%, with 624,000 people aged between 16 and 24 unemployed; more than 100,000 of them have been unemployed for at least a year. The unemployment rate for 16 and 17-year-olds is a staggering 27.7%. It is interesting to look at other countries. Relative to population size, we are doing worse than Slovakia, worse than Hungary, worse than Ireland, Poland, Portugal, the United States, Canada, Australia, Estonia and New Zealand. We are doing four times worse than Germany, three times worse than the Czech Republic and twice as badly as Japan, Denmark and Sweden in terms of the proportion of our young people who are not in education, employment or training.

Last year, the Treasury found that

“the UK’s skills weaknesses…are of such long standing, and such intractability, that only the most radical action can address them.”

I ask the Minister: is this the radical action that his Treasury was talking about?

[Michael Tomlinson (Mid Dorset and North Poole) (Con)]

In fact, the national picture is that the youth unemployment statistics are down to 13.7%, which is down on last year, down from the height, and close to the lowest they have ever been, which was 11.1%.

[Mr Lammy]

Unless the hon. Gentleman is suggesting that the figures I just quoted are wrong, we should not be happy with the picture of youth unemployment in our country. Many Members in the Chamber are well aware of the young people walking our streets literally because there is not enough to do. I might just remind him that I have seen two riots in a generation, so I know something about idle hands making very dangerous work indeed. We need to put these young people to work. We need apprenticeships for them. We need more than rhetoric from the Government, and we certainly do not need cuts in this part of the economy.

The Royal Institution of Chartered Surveyors has warned that

“we are in the grip of our worst construction skills crisis in almost 20 years.”

That skills crisis will hold back big infrastructure and house building projects. Post-16 education was cut by 14% between 2010 and 2015 and last year the Public Accounts Committee warned of a “financial meltdown” in further education.

Further education is just about on its knees. Most of the Members in this House grew up in a period when they could go into an FE college that was open well into the evening, not just for young people but for adults—adults could also get into FE and skill up. I ask hon. Members to find me an FE college open past 8 o’clock in the evening where an adult can skill up and I will give them a beer. It is not happening! We should not be having a debate in Britain about grammar schools; we should be having a debate about night schools. Bring back night schools! Instead, we see cuts in funding for young people and no mention of the importance of adult education in an economy that will be more reliant on talent on its own shores in the coming years.

[Helen Whately]

I agree with the right hon. Gentleman that vocational education is incredibly important for young people and the economy, but will he bring a little more balance into his argument and recognise that since 2010-11 vocational education has improved? The UK has made progress in international rankings such as PwC’s recently published young workers index and in 2020 we will spend double what was spent on apprenticeships in 2010.

[Mr Lammy]

I would rather not rely on PwC reports, if the hon. Lady will forgive me. I would rather rely on what I see happening in the country. We have a lot more to do. I gently remind the hon. Lady, who is a new Member, that having been Minister for Skills in the previous Labour Government I am well aware of how Labour lifted apprenticeships from their dismantling under the Tories. We were down to 5,000 apprenticeships across this country, and completion and success rates were on the floor. It was the Labour Government who lifted up apprenticeships, put all the effort in and grew them to a figure by the time we left office. Now, unsurprisingly, this Government are about to dismantle them.

The National Audit Office found that the Department for Education must do more to ensure that all apprenticeships meet basic quality requirements and that the Department had not even set out how an increase in apprenticeship numbers will deliver improvements in productivity. There are real concerns that some employers are hiring staff as apprentices to undercut the minimum wage of £5.55 an hour for 18 to 20-year-olds and pay them the apprentice minimum wage of £3.40 an hour. One in five apprentices reported that they had not received any formal training at all and Ofsted reports found that 49% of apprenticeship programmes require improvement or are inadequate. The Government’s own “Post-16 Skills Plan”, published in July, states that

“Reforming the skills system is one of the most important challenges we face as a country. Getting it right is crucial to our future prosperity, and to the life chances of millions of people.”

Why is further education and skills training more generally always the poor relation of higher education? Why did it take a huge campaign by the sector and Labour Members even to bring this debate to the House?

Announcements on higher education are pre-briefed to the Sunday papers, together with opinion pieces from the Prime Minister and TV interviews, while apprenticeships funding cuts are snuck out of the back door on a Friday afternoon in the middle of the summer recess in the hope that no one will see them. In a written statement placed before Parliament last Thursday, the Secretary of State committed the Government to a

“fundamental mission of social reform to deliver our vision of an education system that works for everyone”

as part of delivering on

“the Government’s vision for an economy that works for all”.—[Official Report, 27 October 2016; Vol. 616, c. 16-17WS.]

I therefore ask the Minister a simple question: can he explain today how cuts in apprenticeships funding of 30%, 40% or even 50% fit into that mission to deliver an education system and an economy that works for all and not just for the privileged few?

[Several hon. Members rose—]

--- Later in debate ---

[Robert Halfon]

I am sorry, but I cannot give way because very little time remains.

More money will be spent on standards. A huge amount of money is going into the system to ensure that 16 to 18-year-olds and those who are socially disadvantaged are properly represented. Many of the frameworks that apply to adults are the same as those applied to 16-year-olds, yet the ones for 16 to 18-year-olds can cost double the amount. The surveys and the evidence show that they do not need to cost as much, and that, often, only a few hundred pounds would make a difference.

We are moving into a new world. The apprenticeship levy is changing employer behaviour. Businesses will choose different kinds of apprenticeships because of the move to standards, and would-be apprentices will choose different kinds of apprenticeships. The way the discussion has gone among some Opposition Members, it is as if we were comparing apples with apples. However, the world is changing and we are now comparing apples with pears.

[Mr Lammy]

Will the Minister give way?

[Robert Halfon]

I will not, because I only have a few minutes left to speak, and I think that the right hon. Gentleman had a fair crack of the whip.

We are putting a huge amount of money into FE funding, guaranteeing that £7 billion will be spent on FE funding and training. We have put money into a transition year and traineeships. Of those who do traineeships, 60% are aged 16 to 18 and 50% go on to get work, apprenticeships or education. Some £50 million has been spent on traineeships thus far—again, that was not mentioned in the debate.

Of course, we are doing a lot of work on welfare reform to help with jobcentres and so on. An enormous amount of money is going towards helping 16 to 18-year-olds and people from socially disadvantaged backgrounds. To use some frameworks as a way of saying that the Government are not helping the poorest is entirely wrong. I have five priorities for apprenticeships.

[Mr Lammy]

On a point of order, Mr Streeter. The Minister is reliant on the new standards, which only just over 3,000 apprentices have taken up. More than 99% are on the current frameworks, which is the subject of the debate, and the Minister has not addressed that at all. He is trying to hoodwink the House.

[Mr Gary Streeter (in the Chair)]

That is not a point of order. The Minister may continue.

--- Later in debate ---

[Mr Lammy]

It is disappointing that the Minister has said nothing about funding cuts. He has been reliant on the extra £2.5 billion that he said is coming in. He is robbing Peter to pay Paul. Will he confirm that there will be funding cuts that will lead to deserts—

[Mr Gary Streeter (in the Chair)]

Order. We must move on from this excellent debate to a debate on another interesting subject.

Motion lapsed (Standing Order No. 10(6)).