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

Gareth Snell Excerpts

2nd reading
Tuesday 25th February 2025 Commons Chamber

[Bridget Phillipson]

My hon. Friend has a long-standing interest in this area and has consistently raised not only the challenges faced by small businesses but the opportunities to create more apprenticeship starts and more training routes for people across our country. One of the changes that we set out during National Apprenticeship Week was to the maths and English requirements for adult apprentices, which will make a big difference to employers large and small and was welcomed by business, but he is right to say that much more is needed to help smaller employers and small contractors to take on apprentices. That is the work that Skills England will drive forward and that is why this Bill is such a crucial development.

The skills gaps that we face in our country deny people the opportunity, the power and the freedom to choose the life that they want to live. But it is not just today that we count the cost; those gaps limit our power to shape the careers, the economy and the society of tomorrow as well. Only with the right skills can people take control of their future, and only with the right skills system can we drive the growth that this country needs. It is time this country took skills seriously again: no longer an afterthought, but now at the centre of change; no longer a nice to have, but now a driving force for opportunity; no longer neglected, but now a national strength.

There is much to celebrate. Plenty of colleges go above and beyond, plenty of employers are ready to contribute and plenty of people are eager to upskill, but our system needs reform. Too many people have been sidelined and left without the skills to seize opportunity. One in eight young people are not in employment, education or training. We can, and we must, do more to break down the barriers to learning that too many people still face. We need a system that is firing on all cylinders.

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

The figure in Stoke-on-Trent is even more stark, with 22% of young people not in education, employment or training. We have a wonderful ecosystem of colleges, with Stoke sixth form college, Stoke-on-Trent college and the University of Staffordshire, but as my hon. Friend the Member for Chesterfield (Mr Perkins) said, we also have small and medium-sized organisations. Can the Secretary of State set out how this Bill will help an organisation such as the Spark Group, run by Dan Canavan, to tap into opportunities in order to spread his ability to help those young people into well-paid jobs in my community?

[Bridget Phillipson]

My hon. Friend names a fantastic business in his constituency and the contribution that it makes. There is a lot more that we need to do to support smaller employers to be in a stronger position to benefit from apprenticeships.

This Bill will bring together the many disparate parts of a very fragmented system, which employers, particularly smaller employers, often find hard to navigate the right way through, and are not always clear about the best training and qualification routes in order to find the people that they need. Also, the changes we have made to English and maths in particular will support employers to create 10,000 additional apprenticeships every single year. This was a call that we heard loud and clear from employers, and it is a simple, straightforward change that will open up opportunities for people across our country. They will still have the English and maths standards as part of their apprenticeship, but they will no longer be held back by some of the red tape that has denied them the chance to get on in life.

The skills system that we have right now is too fragmented, too confusing and too tangled up across too many organisations. There is no single source of truth, no single organisation able to zoom out and see the big problems and no single authority able to bring the sector together to solve them. The result is a system that amounts to less than the sum of its parts. For young people, it can be hard to know where the opportunities lie. Adults looking to upskill or reskill and working people hoping for a fresh start are too often met with confusion, not clarity. They are presented with a muddling mix of options when they need clear pathways to great careers.

It is no better for employers. They tell us that the system is difficult to navigate and slow to respond. They tell us that they are too often shut out of course design and that their voices are too often not heard. The result is frustration. Learners and employers are frustrated, and they are right to be frustrated. Many businesses do a good job of investing in the skills of their workforce, but others simply are not spending enough.

Investment is at its lowest since 2011 at just half the EU average. We must empower businesses to reverse the trend by investing in their employees, and for that, we need to move forward. There will always remain a strong and galvanising role for competition, but where it is harmful, adds complexity, duplicates efforts or twists incentives, we will balance it with supportive co-ordination to ensure that all parts of the system are pulling in the right direction.

Here is our vision and the change we need. From sidelined to supported, we need a system that helps everyone so that businesses can secure the skilled workforce they need. From fragmented to coherent, we need a system defined by clear and powerful pathways to success and towards effective co-ordination. We also need a system of partnership with everyone pulling together towards the same goals. That is the change that Skills England will oversee.

This Labour Government are a mission-led Government with a plan for change, and skills are essential to Labour’s missions to drive economic growth and break down the barriers to opportunity. In fact, skills go way beyond that. Skills training contributes across our society, and great skills training driven by Skills England, supported by my Department, guided by the wisdom of colleges, universities, businesses, mayors and trade unions, and directed by national priorities and local communities is the skills system we need. It is a system that will drive forward all our missions. It will help us fix our NHS, create clean energy and deliver safer streets.

Skills are the fuel that will drive a decade of national renewal, which is vital for our plan for change. That is why earlier this month we unveiled our plans to help thousands more apprentices to qualify every year. That means more people with the right skills in high-demand sectors from social care to construction and beyond. We have listened to what businesses have told us. We will shorten the minimum length of apprenticeships and put employers in charge of decisions on English and maths requirements for adults.

Last November, the Government announced £140 million of investment in homebuilding skills hubs. Once fully up to speed, the hubs will deliver more than 5,000 fast-track apprenticeships a year, helping to build the extra homes that the people of this country desperately need. We are driving change for our skills system, and Skills England is leading the charge. It will assess the skills needed on the ground regionally and nationally now and in the years to come. Where skills evolve rapidly and where new and exciting technologies are accelerating from AI to clean energy, Skills England will be ready to give employers the fast and flexible support they need.

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[Bridget Phillipson]

I will set out the reason primarily and then say a little about the way in which Skills England will operate. First, the need to do it in this way is one of time and speed. As I hope I have set out to the House, the need to act is urgent; we must get on with this and ensure that we tackle the chronic skills shortages right across our country—there is no time to waste. The Government are determined to drive opportunity and growth in every corner of our country. Further delays to that will hold back not just growth but opportunities.

When it comes to the function of Skills England and how it will operate, it will be an Executive agency of the Department for Education. It will have the independence that it needs to perform its role effectively, with a robust governance and accountability framework and a chair who brings an enormous wealth of experience from business. A strong, independent board, chaired by Phil Smith, will balance operational independence with proximity to Government. It will operate in the same way that many Executive agencies, such as the Driver and Vehicle Licensing Agency, already operate.

As with any new arm’s length body, in the next 18 to 24 months we will review how Skills England is functioning, to consider whether it still exists within the best model. [Interruption.] That is entirely in keeping with the way in which arm’s length bodies are routinely considered by the Government. I am surprised that Conservative Members are surprised, because that is simply how these things are done, as they know all too well. If they are content to allow drift and delay, they will hold back opportunity for people across our country; they will hold back the demand that businesses rightly lay at our door to get on with the job of creating the conditions in which they can deliver more apprenticeship starts, more opportunities, and more chances to learn and upskill.

Skills England will work closely with the Industrial Strategy Council, which will monitor the strategy’s progress against clear objectives. The Skills England chair will have a permanent seat on the council—that really matters. By 2035 there will be at least 1.4 million new jobs. Our clean energy mission will rely on talented people with the expertise to power our greener future. The pace of technological change, including artificial intelligence, is accelerating, and it brings huge opportunities for our economy. However, to seize those opportunities, firms need a ready supply of people with the right skills. We will nurture home-grown talent in all regions so that people have the skills they need for those exciting jobs of the future.

Skills England will work with the Migration Advisory Committee to ensure that training in England accounts for the overall need of the labour market and to reduce the reliance of some sectors on labour from abroad.

[Gareth Snell]

I thank the Secretary of State for being so generous with her time. I absolutely support her ambition of ensuring that we have the skills for the jobs of the future. Will she say a little about how Skills England will support foundational manufacturing industries, such as ceramics in Stoke-on-Trent, which will not be prioritised in the industrial strategy but still have a lot to offer our economy and are crying out for skills from local people? If we can get that right, we can grow our own economy, and that is true levelling up in my opinion.

[Bridget Phillipson]

My hon. Friend always champions the ceramics industry in his constituency. We have had many conversations on that topic, and he is absolutely right to put it into context. Skills England will benefit the ceramics industry and his constituents because we will be able to move much more rapidly to make changes to qualifications and training requirements in order to meet the needs of employers, with further flexibility, shorter courses, and foundation apprenticeships for young people for the chance to get on, including in long-standing traditional industries as well as in future jobs and opportunities.

The Bill is a crucial leap forward, bringing the different parts of the skills system closer together, and it paves the way for Skills England. It transfers the current functions of the Institute for Apprenticeships and Technical Education to the Secretary of State, not to exercise power from Westminster, but to empower the expert leadership of Skills England to drive the change we need. Bringing those functions to Skills England will place the content and design of technical qualifications at the heart of our skills system, where they belong.

Skills England has existed in shadow form since Labour took power and began the work of change in July. It set out its first “state of the nation” report into skills gaps in our economy in September. Skills England is moving ahead. The leadership is in place, and by laying the groundwork for a swift transition to Skills England, we are moving a step closer towards a joined-up skills system.

At its heart, this Bill is about growth and opportunity—growth for our economy, and opportunity for our people—and there is no time to waste. We need action, not delay. The people of this country need better jobs, higher wages and brighter futures; no more vacancies unfilled due to a lack of skills, no more chances missed and no more growth lost. We need change now, not change pushed back to some foggy future, so we are pushing ahead.

This is legislation that builds on what has come before but demands more—more cohesion, more dynamism and more ambition. That is how we break down the barriers to opportunity, that is how we fire up the engines of economic growth, and that is how we deliver the future that this country deserves—the bright hope that our best days lie ahead of us. I commend this Bill to the House.

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[Ian Sollom]

I point out that I represent St Neots, which is not Cambridge, and many employers have spoken to me about their concerns about Skills England and the lack of clarity on its future.

We cannot support this Bill. That is not because we oppose reform—we desperately need it—but because centralising power in the hands of Ministers, removing proper scrutiny and weakening employer involvement in our skills system will make things worse, ultimately. Learners, employers and our economy deserve better than this overcentralisation of power.

[Gareth Snell]

Will the hon. Member give way?

[Ian Sollom]

I am going to finish now.

Learners and employers deserve a properly independent Skills England with the authority and accountability to drive real change. I urge the Government to think again and bring forward legislation that delivers the genuine reform that our skills system needs.

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

Gareth Snell Excerpts

Report stage
Monday 31st March 2025 Commons Chamber

It is vital that the next generation of workers have the necessary skills to meet the industrial challenges we face, whether it is constructing new homes, developing our infrastructure or meeting our environmental targets. Most importantly, however, we must ensure that the next generation of young people is provided with the skills and opportunities to develop their potential and pursue their ambitions. I will be glad to join my colleagues in voting against the amendments in front of us tonight.

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

If I may, I will start by joining my colleagues on the Government Benches in my opposition to new clause 1, new clause 4 and amendment 6. Well-meaning they may be, but I am impatient for change.

Stoke-on-Trent has one of the highest rates of youth disengagement in education, employment or training in the country. As always, when we look at those heat maps, we see the big yellow splodge in the middle of the midlands, which is Stoke-on-Trent, showing that we have one of the highest numbers of workers in the country with no form of formal qualification whatever. Our young people tend to find themselves unable to access any form of training or support that they need to make a future career for themselves.

I declare my interest as a governor of the City of Stoke-on-Trent Sixth Form College, as we offer T-levels. Even though I do not have an apprentice in my office like my hon. Friend the Member for Chesterfield (Mr Perkins), as of next week a T-level student will be in a placement there for the next 18 months, to help their advancement.

My impatience stems from the necessity of identifying the skills that we need in the city I represent and of making sure that the next generation of young people coming through education have them. That is the only way I can see for us to fulfil our desire and ambition to rebuild our economy and attract those higher quality, well-paid and long-term jobs into the city that will mean higher wages and the ability to dig ourselves out of our city’s economic troubles. I do not expect or hope any Government to come over the hill like a cavalry, with a big sack of cash, saying, “Here you go—here is what you need.” It is partly on us to do that, by matching up the skills that we have and the skills that we need in the city to do the jobs of today and the future jobs of tomorrow. That is really important. The local skills improvement plan put together by our chambers of commerce and colleges has gone some way to achieving that. However, as always, it is a bit like wading through treacle, because we get to where we think we are going to be and all of a sudden something appears that makes it more difficult. Then, the people who struggle with that are the young people.

I am afraid that anything that seeks to delay the advancement of this Bill, such as new clause 1, new clause 4 and amendment 6, will not get my support this evening. I do, however, wish to spend a few minutes on my own new clause 2, which is a probing amendment. It is not intended to cause any frustration or Divisions; I say to the Whip that I am not seeking to test the House’s opinion on it. However, when we consider what apprenticeships will look like in the future and what they mean for cities such as Stoke-on-Trent, it is important to understand that level 7 apprenticeships, funded by the apprenticeship levy, are a genuinely important part of the educational offer available to young people in my constituency.

The week before last, I visited DJH accountants in Stoke-on-Trent, which is a significant regional player that is training its own generation of chartered accountants at level 7 using the apprenticeship levy that would otherwise just disappear into the Treasury. People there explained to me quite succinctly, and I agreed, that through their own means they simply would not have the available capital or cash to fund the quantity of training courses that they run. The apprenticeship levy allows them to grow a group of young people into chartered accountants. The people I met were all young. They were not at the mid or tail-end of their careers looking for a final bump before they got to their pension; they were young people who had come in after GCSEs, done their basic accountancy skills and had their eyes firmly set on a chartered accountancy qualification. The levy was allowing them to do that.

I asked the young people where they were all from, expecting them to be from the city, which they were. I then asked them where they wanted to work once they had their chartered accountancy status and, wonderfully, they all wanted to stay in Stoke-on-Trent and practise the craft that they had been learning. The economic benefit of that to my city is that if it were not for the ability of that company to train to level 7 using the apprenticeship levy, it would have to import that labour from neighbouring areas. So somebody who already had the level 7 qualification, or had been trained somewhere else through a company that could afford it, would come into Stoke, do the level 7 job, attract that level 7-equivalent salary and take it back to where they actually lived. That would mean that the level 7 salaries those young people were going to earn and spend in Stoke-on-Trent would end up migrating to other, slightly more affluent places in the midlands—and, candidly, there are many more affluent places in the midlands than Stoke-on-Trent.

The economic damage done by turning off the apprenticeship levy, or even the skills and growth levy, from level 7 apprenticeships could mean that the places such as Stoke-on-Trent that already suffer from ingrained regional inequality see it further ingrained into their local economies, because the people who have those skills travel in to do the work, or work from home, and the money flows out of the city and is spent in those other local communities.

There is also the message that we are sending to young people in the city. If level 7 qualifications are not available to them, they will be unlikely to have the means to pay for a level 7 qualification themselves. Having a level 7 qualification in Stoke-on-Trent is quite a rarity. You are more likely to find somebody with no qualification than with a master’s level qualification. New clause 2 is a hook to allow the Minister to go away and consider this. I do not believe for one second that it is the determination of the Government to artificially stymie or cap the aspirations of young people in Stoke-on-Trent by suggesting to them that those level 7 qualifications are not available to them.

I appreciate that there are concerns in the system about the levy not being used for its intended purpose, but to take people through higher level qualifications who already have a career behind them. There are obviously organisations and companies that have done that because, rather than send that money to the Treasury, they have sought to upskill their own workers. I understand why the Government want to get tough on that, because it is not what the levy was intended for, but the level 7 learners that I have met are all young. They are people who have a clear idea of the path and trajectory of the career they want to take, and the levy simply makes that more viable and likely to be achieved in an economically depressed and deprived place such as Stoke-on-Trent.

The other side of the issue is that 95% of the apprenticeships at the University of Staffordshire are at level 6, and 5% are at level 7. It provides level 7 training for the Ministry of Defence and a number of public services. Some of that is funded by the apprenticeship levy. That is an invaluable income stream for the university to deliver that training for people who then go back into the public sector to make it more efficient, to crack down on waste and to deliver those skills that we as a nation determine that we need.

That will undoubtedly need to be looked at as we have more defence spending, because we will need people with those level 7 qualifications in the defence sector, in the manufacturing companies, and in the electrical and chemical engineering companies. Ordinarily, companies in places such as Stoke-on-Trent will simply not have the capital or the cash to provide that. Only by drawing down from the apprenticeship levy will they be able to train people locally to do those jobs. If we are not training people to do those jobs, the opportunity that comes from that Government investment simply will not be felt in places such as Stoke-on-Trent, and the regional inequality that is already quite clear in my city will become more entrenched.

My hon. Friend the Member for Hertford and Stortford (Josh Dean) talked about finding people finding career, and that is what all of us want for the young people in our communities. It is certainly what I want for the learners in my city, but that career should take them as far as they want to go. That career should take them, if they want, up to a level 7 qualification that allows them to build a life and a career that they enjoy and are happy doing. My concern is that the unintended consequence of the Government’s decision that level 7 qualifications will no longer be available from the apprenticeship levy will be that in cities such as mine, aspiration and ambition will be capped because the cash and the capital are simply not there to meet those young people’s demands.

I have no truck with or support for the delaying amendments of the Opposition, and I have no intention of doing anything with my new clause other than sitting down in a moment. I hope that the Minister will take back the concerns that I have raised this evening and see whether there is a way, maybe through devolution deals, through reorganisation or through the mayoral strategic authorities, in which certain areas could be able to continue with the levy funding for level 7 qualifications that we so desperately need.

[David Pinto-Duschinsky (Hendon) (Lab)]

I rise to speak against new clauses 1 and 4 and amendment 6. The simple truth is that we cannot have any more dither and delay. Our starting point in this debate must be the fact that we are in a skills crisis, and one that lies at the feet of the Conservatives. Twenty-six years ago, I worked on the new deal taskforce for the Labour Government of the time, clearing up the mess that the Major Government had left in the skills system. Fast-forward over a quarter of a century, and once again we find the Labour Government having to clear up the mess in skills left by Conservatives.

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[Janet Daby]

I absolutely agree with my hon. Friend that the Bill will help young people to gain the skills that they need—in his wonderful constituency and in many other wonderful constituencies as well.

Amendment 6 tabled by the hon. Member for Harborough, Oadby and Wigston would frustrate the complete establishment of Skills England by delaying the transfer for a full year of the functions as set out in the Bill. Members have heard the Government set out already that delay is not an option; that has been repeatedly said. They should not just take my word for it: technology training provider QA has said that this is a pivotal moment for shaping the skills system to meet the UK’s industrial and economic needs, and it is right. The complex and fragmented nature of the skills system is contributing to critical skills gaps in our economy today: opportunities are being missed today, growth is being held back by a lack of skills today, and we cannot afford to be sluggish in our pursuit of a more joined up, data-driven approach.

In the first set of apprenticeship statistics under the new Labour Government we saw an increase in starts, participation and achievement compared with the same period under the Tories in 2023, even in the constituency of the hon. Member for Harborough, Oadby and Wigston. When the Conservatives were in government, starts in his constituency fell by 13%; almost 100 fewer people were starting apprenticeships on their watch. This Government marked National Apprenticeship Week with a set of reforms going further and faster on growth, whereas under his Government a third of vacancies were due to the lack of skills. We will press on.

The British Chambers of Commerce has urged us to work at pace to establish Skills England, and we are doing exactly that. Since being set up in shadow form, Skills England has got to work. It has got to work by identifying skills gaps in the economy and building relationships with strategic authorities, employers and other groups. Indeed, Skills England has worked with mayoral, strategic authorities and other forms of regional government as well as regional organisations to ensure that regional and national skills needs are met in line with the forthcoming industrial strategy. Skills England will work closely with the Industrial Strategy Advisory Council so that we have the skilled workforce needed to deliver a clear long-term plan for the future economy, and with the Migration Advisory Committee to ensure that growing the domestic skills pipeline reduces our reliance on overseas workers. Our constituents will not thank us for sticking in the slow lane. There is no need to wait another year, and we are ready to go now.

New clauses 2 and 3 tabled by my hon. Friend the Member for Stoke-on-Trent Central (Gareth Snell) and the hon. Member for Harborough, Oadby and Wigston respectively would impose a duty on the Secretary of State to publish within one year of Royal Assent reports on the impact of the Act on T-levels and higher education. Members will be aware that we have already included in the Bill a duty for the Secretary of State to report on functions transferred from the Institute for Apprenticeships and Technical Education that will be exercised by Skills England, including their impact on technical education and apprenticeships. This report will need to be published not after a year but after six months, which is much sooner. We have therefore already made commitments to transparency in the Bill, and that was welcomed by stakeholders, including the Association of Colleges in its written evidence to the Bill Committee. We all agree that T-levels and higher education are central to fixing our skills challenges and, as I made clear in Committee, the Skills England six-month report will include necessary information on T-levels as well as technical education and apprenticeships delivered in higher education settings. The Conservative party has argued that we must avoid Skills England being overlooked and distracted from its important work. Surely, then, we should avoid forcing it to spend its first year producing more and more reports covering the same issues.

Amendments 1 and 2 were tabled by my hon. Friend the Member for Stoke-on-Trent Central and by the hon. Member for Harborough, Oadby and Wigston respectively. These amendments would also place additional reporting requirements on the Secretary of State, this time in relation to degree apprenticeships. As with T-levels and higher education, the report that the Government have committed to providing after six months will necessarily include information on apprenticeships, including degree apprenticeships. Amendment 1 is about funding for those apprenticeships. We are setting Skills England up to build the evidence and the partnerships needed to deliver change, but policy and funding decisions on skills provisions will not sit with Skills England; they will continue to sit with the Secretary of State. That is entirely right and appropriate, and nothing in the Bill changes that. We will set out more information on level 7 apprenticeships in due course.

[Gareth Snell]

If I have heard the Minister right, the first report that will come out will include aspects of the implications for higher-degree apprenticeships, but the funding decisions will still sit with the Department, as they should. Will the report refer to the funding decisions made by the Secretary of State, so that when it comes to the impact of the decisions made, we can see correlation and causation?

[Janet Daby]

I absolutely hear my hon. Friend and his concern for level 7. I do not want to stray too far from the Bill and what it seeks to achieve, but I am very happy to look at that further with him, and to get back to him.

On Sunday, it will be eight years since the levy was introduced, and only now, under a Labour Government, are employers getting the flexibilities they have been crying out for, including on maths and English, and on the length of apprenticeships. That is in response to industry needs, and recognises the needs of jobs, and the need to get young people a foot in the door, so that they can start good careers. After nine months in government, this Labour Government have cut through red tape and are driving the skills that our employers need, showing that Labour is the party of business. We are reforming apprenticeships, tilting the system towards young people most in need of developing skills, and ensuring that young people get a foot on the careers ladder.

Amendments 3 and 5 were again tabled by the hon. Member for Harborough, Oadby and Wigston. They would create a statutory duty on the Secretary of State to have due regard to the reasonable requirements of employers and individuals when considering whether to approve a standard or assessment plan where it has been developed by a group of persons. As I made clear in my response to the hon. Member in Committee, the Secretary of State is already subject to a general public law duty that requires them to take into account all relevant considerations when making decisions relating to the functions for which they are responsible. There is therefore already a requirement for the Secretary of State to balance the needs of users of the system when executing the functions described in the Bill. In fact, the public law duty is broader than the factors listed in the amendments and includes, for example, consideration of value for money and quality.

Turning lastly to amendment 4, tabled by the hon. Member for Harborough, Oadby and Wigston, it is critical that technical qualifications and apprenticeships reflect the needs of employers, and that they have confidence in them. Employers tell us that speed and flexibility are crucial if we are to work together more effectively to plug skills gaps. The precise make-up of “a group of persons” is not currently mandated in legislation. Flexibility is necessary to ensure that the membership of every group reflects the factors relevant to an occupation. Specifying in the Bill that a group must always include a particular voice would introduce new and unnecessary constraints on the structure of groups.

To conclude, this Government are committed to transforming the skills system so that it can deliver the highly skilled workforce that our country needs. Skills will power this Government’s relentless focus on delivering our mission. That is why this Government’s first piece of educational legislation paves the way for Skills England to identify and fill skills gaps.

Question put, That the clause be read a Second time.