Technical and Further Education Bill

Gordon Marsden Excerpts

Money resolution: House of Commons & 2nd reading: House of Commons & Programme motion: House of Commons & Ways and Means resolution: House of Commons
Monday 14th November 2016 Commons Chamber

[Gordon Marsden (Blackpool South) (Lab)]

I thank everyone who has spoken today. We have had a thoughtful, productive and constructive debate. Among Government Members, I particularly welcome the comments of the hon. Members for North Swindon (Justin Tomlinson), for Macclesfield (David Rutley) and for Dover (Charlie Elphicke). The hon. Member for North Swindon is not in his place—[Interruption.] Oh, I am sorry; he is. I particularly want to congratulate him and my constituency neighbour, the hon. Member for Blackpool North and Cleveleys (Paul Maynard), on the work that they did on the review of access to apprenticeships for those with learning disabilities, which was really important.

We have had some excellent speeches from Opposition Members. My hon. Friend the Member for Stoke-on-Trent Central (Tristram Hunt) quoted the famous American academic Robert Putnam on the decline of technical education and made a powerful argument for UTCs. My hon. Friend the Member for Manchester Central (Lucy Powell) talked about the importance of adult learning and the need to worry about the binary split, and I will say a couple of things about that. My hon. Friend the Member for Bristol South (Karin Smyth) pressed hard the need for upskilling, on the basis of the number of people in FE and schools in her constituency. My hon. Friend the Member for Scunthorpe (Nic Dakin), a most excellent former college head, spoke doughtily for his sector. He talked about the “cavalry coming over the hill”, but I think that the area-based reviews are not so much the cavalry coming over the hill as the “Charge of the Light Brigade”.

My hon. Friend the Member for Hove (Peter Kyle) drew on his considerable business and FE experience and talked about the rigidity of the levy. The Minister and his colleagues would do well to take on board the points he made. My hon. Friend the Member for Luton North (Kelvin Hopkins) brought his own wealth of experience to discuss the pitfalls of reorganisation, and he reminded us all of how these processes come and go and sometimes reincorporate themselves.

The Bill is timely, even if the methodology of its appearance is curious. If we wonder why it is necessary and why the Government should introduce it in a mood of humility, we need only survey the state of play in the twin areas of its operation. I bring to the House’s attention a document published today by Alison Wolf called “Remaking Tertiary Education”, which was supported by the Education Policy Institute. That research finds that technical education at levels 4 and 5 is on the verge of total collapse in terms of numbers. In 2014-15, only 4,900 learners achieved level 4 awards. In England, technical post-secondary awards now account for less than 2% of the qualifications taken and well under 1% of all qualifications funded in the skills system. Where level 4 and 5 qualifications are being delivered, they are not in subjects that meet the needs of the UK economy or labour market. Those are things that we should all think very hard about, and I look forward to Professor Wolf’s further observations when she comes before the Bill Committee as a witness.

We have heard about the decline in the financial health of the sector, and current forecasts suggest that the number of colleges under strain is set to rise rapidly. As my hon. Friend the Member for Ashton-under-Lyne (Angela Rayner) said in her excellent speech, it is no wonder, given the alarm bells about their continued viability that the Skills Funding Agency and the National Audit Office have been ringing. It is not just FE colleges that are feeling the strain. In September 2016, a Sixth Form Colleges Association survey showed that two thirds of colleges had dropped courses as a result of funding pressures, a third did not believe that next year’s funding would be sufficient and 31% thought that the college would cease to be financially viable in the next three years.

That is the context in which the Government decided to introduce a stand-alone Technical and Further Education Bill. We all know why they have done so: because the academies Bill into which they wanted to drop these measures as a feel-good sweetener has itself been dropped. The entire process has been mired in dither, uncertainty and an overall lack of connection. There was no attempt to put these measures into the Higher Education and Research Bill, where they would naturally have fitted. Rightly, the HE White Paper banged on strongly about the importance of technical and higher education skills. However, we have to look at the Bill before us.

As we have said, there is no role in the Bill for apprentices or learners to be on the board or to be involved with setting standards. We are right to draw parallels with the way in which, in the recent Higher Education and Research Bill, the Government resisted putting stakeholders—in that case, students; in this case, apprentices—into a new institution that is crucial for their success.

[Jo Churchill (Bury St Edmunds) (Con)]

Will the hon. Gentleman give way?

[Gordon Marsden]

I am afraid that I will not because I am short of time. [Interruption.] I am sorry, but it was indicated that I had 10 minutes.

The Government’s argument was, “You can trust us. You can leave it to us.” However, the evidence is clear: we cannot leave it to them. The skills plan consistently talks about the Institute for Apprenticeships and Technical Education being employer-led. That is precisely why FE colleges, other training providers and learners need to be an essential component of it.

The Government gave us a body that has had two shadow chief executives so far—one was a career civil servant who left fairly rapidly to become a university registrar, and the other was the head of the Education Funding Agency and the Skills Funding Agency, Peter Lauener, who was drafted in part time. That is very much of a piece with the “make it up as you go along” way in which the Government have proceeded so far. It is therefore right for us to ask how the new institute will co-operate with the Office for Students, given how inadequate the current arrangements are for involving learners and providers. Given the fiascos during the past 18 months—for example, the Apprenticeship Delivery Board, which is tasked with advising the Government, has, with the new Government, lost its tsar and now has only the previous private sector co-chair of the board as its sole chair—we are right to ask such questions. Six months after their introduction, we are no closer to finding out how the two bodies will interact with each other.

We have had no word about what capacity the Institute for Apprenticeships and Technical Education will have, and many concerns have been expressed about that. My hon. Friend the Member for Hove did us all a service by putting that question to the Minister. We know that the body was originally going to involve only 40 employers; it is now suggested that there will be 100 employers. As the chief executive of the Association of Colleges has said, in neither case will it be adequate for the purpose.

The Government have shown little sense about how the institute will operate in the jungle of organisations that now exist. There is the EFA, the SFA, the National Apprenticeship Service and the Apprenticeship Delivery Board. How will their roles overlap? What role will Ofsted play in the process? What about Ofqual? At best, it is an alphabet soup. At worst, it could become a tug of war in Whitehall, with the interests of providers and apprentices pushed from pillar to post.

The Bill has more than 20 clauses on insolvency and administration, which shows the direction in which the Government think things are going in the next few years. We believe that the outcomes of the area reviews may entrench, rather than remove, such liability. The college insolvency regime is being introduced alongside the Treasury-controlled restructuring facility. We will want to look very closely in Committee at that process and at the consultation process. We will also want to make sure that public assets are not handed to private, for-profit companies if an insolvency process is taken forward. We agree with the Association of Colleges that the Government have missed an opportunity to introduce a legal scheme that would cover both FE and HE corporations. This means that a college might have an additional regulatory burden that will make it harder to secure finance.

The skills plan itself is not without criticisms—how strategic it will be post-Brexit, and on productivity, workplace training and adult training—and the Government will need to talk about such issues. The concerns about binary choices and standards, which my hon. Friend the Member for Manchester Central spoke about, have been echoed by me, the general secretary of the Association of Teachers and Lecturers and the University and College Union. We are also concerned about the potentially limiting scope of some of the routes. As Mark Dawe, the chief executive of the Association of Employment and Learning Providers, has said, a large proportion of jobs in the economy will be outside the scope of the routes. As a Blackpool MP, with my local FE college, I believe it is crucial that the service sector, which will potentially provide huge numbers of apprenticeships and jobs, is not left out of the process.

There is no reference to the new institute having any responsibility to widen access, and nothing on a strategy to promote participation among care leavers, people from black and minority ethnic backgrounds or those with disabilities. We need that to be in the Bill. We agree with the excellent analysis of Shane Chowen, the head of policy at the Learning and Work Institute, on that point. We agree that the Bill ought to enshrine the recommendations of the Maynard review, to which we contributed. It suggested that the Department for Business, Innovation and Skills revisit the recommendations of the Little report of 2012. The Bill needs to do more for looked-after children and care leavers.

Insolvency might force some students to travel longer distances, but the Bill makes no reference to how they might be compensated or how difficult it might be for suburban and rural colleges. All these points strengthen our argument for the return of the education maintenance allowance.

I spoke earlier this afternoon about the problems the Government have got themselves into over careers advice. If we are to make a success of the institute, it is crucial that young people are alerted early in their school life to the importance and attraction of technical routes, and we must maximise the opportunities for them to get work tasters that translate into real work experience.

I am glad that the Minister for Apprenticeships and Skills has shown more enthusiasm for the progression from traineeships to apprenticeships than a couple of his predecessors. Traineeships are a key point of entry that can make more young people competitive. However, traineeships have to be progressive. If not, there is a danger that we will see some of the issues we saw in the 1980s.

Finally, I come to the issue of devo-max. In view of the potential for combined authorities to take on skills and education, why does the Bill not take more account of the potential for devolved skills policy? All it contains is a brief but important reference to the need for such authorities to report their statistics to preserve a national database. That is hardly an endorsement of the potential to drive apprenticeships and skills at a local level.

We speak in this debate having seen two overviews from two key think-tanks, the Institute for Public Policy Research and Policy Exchange, cast doubt on the Government’s direction of travel. The Government need to think very hard about some of the issues raised, such as whether level 2 apprenticeships are too job specific and whether a significant proportion of the apprenticeship standards are inadequate and a cause for concern. We will give the Bill a fair hearing. We want the Bill to succeed, but if it is to succeed there needs to be more detail and we need to hear less self-congratulation from Ministers and more aspiration for the groups that they have signally not included in the Bill.

Technical and Further Education Bill (First sitting)

Gordon Marsden Excerpts

Committee Debate: 1st sitting: House of Commons
Tuesday 22nd November 2016 Public Bill Committees

[The Chair]

Before we begin, I have a few preliminary points, which some of you may be familiar with. Please switch electronic devices off or to silent. Tea and coffee are not allowed during sittings, but you may drink water. Today we will consider the programme motion on the amendment paper. We will then consider a motion to allow us to deliberate in private about our questions before the oral sessions, and then a further motion to enable the reporting of written evidence for publication. There is an amendment to the programme motion, because one of our witnesses, Poppy Wolfarth from the National Society of Apprentices, has had to pull out because of a family illness.

[Gordon Marsden (Blackpool South) (Lab)]

On that point, we all try very hard to get the apprentice voice heard, so it is unfortunate that the witness cannot come today. On the original list of witnesses was the name of Baroness Wolf, which has since disappeared, so she is obviously not giving evidence to us today. Do we know the background to that?

[The Lord Commissioner of Her Majesty’s Treasury (David Evennett)]

I believe she is unavailable to come along today because of other commitments. We are disappointed, but obviously people have full diaries.

[Gordon Marsden]

Indeed, and she is a very busy lady.

[The Chair]

In the Minister’s absence, I call the Whip to move the programme motion and the amendment to it.

Motion made, and Question proposed,

That—

(1) the Committee shall (in addition to its first meeting at 9.25 am on Tuesday 22 November) meet—

(a) at 2.00 pm on Tuesday 22 November;

(b) at 11.30 am and 2.00 pm on Thursday 24 November;

(c) at 9.25 am and 2.00 pm on Tuesday 29 November;

(d) at 11.30 am and 2.00 pm on Thursday 1 December;

(e) at 9.25 am and 2.00 pm on Tuesday 6 December;

(2) the Committee shall hear oral evidence on Tuesday 22 November in accordance with the following Table:

--- Later in debate ---

[The Chair]

Before I call the first Member to ask a question, I remind all Members that questions should be limited to matters within the scope of the Bill and that we must stick to the timings set out in the programme motion that the Committee has agreed. For this session we have until 10.10 am, so if we are approaching 10.10 am please do not ask a long question that the witness would be unable to answer before the knife falls. I call Gordon Marsden.

[Gordon Marsden]

Q Thank you, Mr Bailey. It is a great pleasure to serve under your chairmanship and to welcome our witnesses, both of whom have a distinguished and long-standing interest in this area, which we will pursue.

Lord Sainsbury, these issues about technical education, which you have campaigned and lobbied for hard over many years, have finally reached some form of catharsis—if that is the right word—in terms of the statute book, which for you must be somewhere on the spectrum between huge delight and moderate satisfaction. However, the Bill has avoided committing to the 15 routes that you suggested in your review. Are there any specific additional provisions that you would like to see in the Bill?

Lord Sainsbury: No. It seemed to me to be a very sensible approach to this issue. Always, in these things, you have to combine the basic requirements, but you also need to leave room for flexibility. I do not think that there has been a great argument about the 15 routes, but in the end one needs to have some flexibility built into a piece of legislation, if it is going to last as we hope it will.

[Gordon Marsden]

Q Yes. I am sure that in later discussions the Minister will want to elaborate on this issue, but there have been statements by Department for Education and Skills Funding Agency officials on the extent to which the routes themselves might be rather flexible, in terms of what they could include, even within the 15. It makes me think of the line:

“In my Father’s house are many mansions”.

We hope that some of those mansions will be explored further on.

I want to press you further, because you said that you are perfectly content with the position as it is, but you have been—forgive the English, or the French—“banging on” about this for years and years. I remember at least two excellent addresses in the past decade that you have given to various organisations on this issue. Yet we know, according to Baroness Wolf and the pamphlet, “Remaking Tertiary Education”, which she has just been involved with, that:

“Technical education, at Level 4 and Level 5, is on the verge of total collapse due to a steep decline in numbers.”

I also note that you have called for more funding for the technical route and for implementation. Would you like to comment further on those two points?

Lord Sainsbury: I think that funding is absolutely key to this whole area. I think that we have organised our system of technical education extremely badly over the years, but it is also true that we have underfunded it on quite a substantial scale. What has been proposed in my report, and what is in the Bill, will greatly improve and clarify the system, but there is still an issue of funding. If you look at the number of hours we fund further education colleges to do this kind of training, you will see that it is extremely low by international standards. So there is a funding issue here, as well as the bits of funding that we have suggested, for example for work placement, which is clearly fundamental and which I hope we can get movement on. There is a more long-term basic funding issue.

[Gordon Marsden]

We may or may not get some clarity on that in the autumn statement, but I am grateful to you. Mr Bailey, I would like to ask Mr Lauener some questions in due course.

[The Chair]

Are there any other takers? While other Members dwell upon that, I will invite you, Mr Marsden, to ask your question of Mr Lauener.

[Gordon Marsden]

Q Mr Lauener, it is a great pleasure to have you with us today. You have an enviable record of longevity in this area of activity. When I was going over your CV and looking at the various things you have done over the years, I was reminded of the famous French statesman Talleyrand. When asked what he had done during the French revolution, he famously replied, “I survived.” You seem to have survived several revolutions in this area, and several Governments. Could you start by saying what the key issue is for you in your new position, as opposed to the variety of positions you have held in the past?

Peter Lauener: Thank you very much; that was a very interesting introduction. The Institute for Apprenticeships does have a key role, and of course as a result of this Bill it will morph into the Institute for Apprenticeships and Technical Education—subject to Parliament. The key thing for me is, first, that it demonstrates employer leadership of apprenticeships and technical education. That is not just about the body at the head of the institute, where we have been very pleased with the high calibre of applicants for positions, but it also refers to all the route panels and other bodies that will bring expertise to the institute.

We have estimated that overall that should amount to between 250 and 300 employers involved in all parts of the institute. The number itself, if it is managed badly, could just become a bureaucratic process, but I think it is vital that those employers bring expertise and credibility, and that when the institute says we need a new standard in this, it is because employers are saying that.

[Gordon Marsden]

Q I could not agree with you more on that; it is extremely important, going back to the original review in 2012, which talked about the whole area being employer-led, that that is the case. Unfortunately, following a series of untoward events, that has not exactly been demonstrated in the institute’s leadership so far, has it? Because you are the second shadow chief executive who has been there. The first was a lady who had a significantly long civil service career in various Departments, but she did not stay terribly long—I think she stayed about a couple of months. Now you have taken over. I pay tribute to your versatility, because you hold a number of other positions.

The message that has been sent to the outside world, which may be unfair, is that although the Government have talked about the institute being employer-led, they have not put that into practice thus far when it comes to its shadow chief executives. What confidence can we have that the new board, chair and chief executive will have a very strong employer focus?

Peter Lauener: To make an obvious point, the institute does not yet exist—legally it will start on 1 April next year—so the preparations and appointments are being made. When people see the calibre of the board, and the employers on route committees supporting that and bringing particular sector expertise, everyone will see that the institute has employer knowledge, skills and behaviours—to take that phrase—built into every aspect of its operation.

[Gordon Marsden]

Q Can I just stop you there? You talked about the recruitment process, but can you give us any clarity on when it will be completed and when we might expect to see, as it were, white smoke coming out of the chimney? We are on a terribly tight timescale for this process, with the introduction of the apprenticeship levy and the formal setting up of the new institute.

Peter Lauener: The process for appointing members of the institute is substantially complete. I expect an announcement will be made about that shortly.

[Gordon Marsden]

Q Is that a civil service “shortly” or a general one?

Peter Lauener: There is not yet a planned date for it. There are one or two items—

[Gordon Marsden]

Before Christmas?

Peter Lauener: I would be surprised if there was not an announcement before Christmas. Incidentally, we are also planning to publish for consultation the Government’s remit letter in draft to the institute, and I would also expect, again before Christmas, a draft of the institute’s first strategic plan. The intention is that that would then be open for discussion with a wide group of employers and stakeholders, so that the institute, when it is formed, with the employer members and the shadow chair—I will say something about that in a moment—will be able to start its operation with an agreed plan for the 2017-18 year, which has already been subject to wide consultation and which is owned by the institute.

The other thing to add, of course, is that Antony Jenkins has been shadow chair. In my experience, having had several discussions with him, he has brought very visible employer leadership to this set-up phase, and I have been very happy to support him during that. The advertisement for the post of permanent chair is now closed. I expect interviews to take place shortly and an announcement to be made in due course. That might well take a bit longer.

[Gordon Marsden]

Q It is helpful to hear that you want to keep the employers in a prominent position. It is also important for the wider FE sector, which you are trying to encourage to take up apprenticeships. The Minister’s predecessor, perfectly rightly, exhorted the sector—not with significant success—to increase apprenticeship numbers. On the subject of increasing numbers, I want to ask about capacity—not your personal capacity, which obviously encompasses quite a few areas already, but the capacity of the institute to do some of the things said on the tin.

One of the Bill’s important provisions is the extension to the area of technical education. We welcome that and think it is very important. I am sure Lord Sainsbury does as well. However, that area has capacity issues, too. The Minister and, for that matter, you, have been rather coy about putting out any figures for the staffing of the institute, so we have had to rely on rumours and leaked papers. We were told originally that there were going to be 40 employees, and there is now some suggestion that there will be around 100. Are you able to give any more clarity on that?

Peter Lauener: I expect that when the institute starts at the beginning of April next year, it will have about 60 employees. The planned running costs next year are about £8 million, but the number of staff will need to build up as the additional responsibilities, subject to Parliament, are added. That will probably be another 30 or so staff. I should emphasise that those figures are provisional at this stage. We need to keep them under review. One thing I am looking at is the roles and responsibilities of the Skills Funding Agency and the institute. There may be some marginal adjustments.

[Gordon Marsden]

Q So you are interrogating yourself on a daily basis.

Peter Lauener: I constantly challenge myself by saying, “Am I using the resources available in the best way possible?”

[Gordon Marsden]

Q Well, at least you will have a convenient and convivial conversation, because you are one and the same thing, are you not?

Peter Lauener: I am indeed. As I am sure you are aware, I am also chief executive of the Education Funding Agency. It would not be at all appropriate for these three things to be combined on an ongoing basis. As I said at the start, I am very pleased, because of a lifelong interest in and commitment to apprenticeships, to have the responsibility of helping to set up the institute for next April and to ensure that the governance is—

[Gordon Marsden]

Indeed, and we will not commit you to the two further roles that FE Week cartooned you as having: taking part in the “Great British Bake Off” and “Strictly Come Dancing”.

Peter Lauener: No one has contacted me about those.

[Gordon Marsden]

Q As we know from Vince Cable, people from this area have a good track record, so you might want to put that on your list.

You talked about the numbers. I think there will be considerable concern in the sector as to what skills these people bring to the table. With that in mind, and given the staff reductions in the Department for Business, Innovation and Skills—of course, this is a machinery of government change—do you expect to be moving across or recruiting people from either the SFA or BIS who have previous experience in this area?

Peter Lauener: We have advertised externally for the key role of deputy directors, where we are looking to fill six posts. We have been very pleased, again, with the quality of applicants, which I think is an indication of the widespread interest across employers and the training and skills sector in the institute being set up. We have had a very good set of applications. From memory, we had 90 applications for those six posts, and we are very confident that we will be able to appoint a broad range of experienced individuals.

[Gordon Marsden]

Q Can I take you up on that point about a broad range of experienced individuals? That can cover a multitude of abilities or a multitude of sins. Many stakeholders have expressed concern throughout this process—indeed, the Opposition expressed it during the passage of the Enterprise Act 2016, which gave birth to the concept—that the new institute’s board might be too narrow in its experience and focus, as we believe the apprenticeship delivery board has been. Do you have any views on the importance of having, for example, an apprentice or someone from the apprenticeship coalface, as it were, on the board?

Peter Lauener: I think that the institute should certainly be clear how it is going to secure the voice of apprentices in its understanding and deliberations. I do not think that I should comment about the particular membership of the institute, but the principle of having knowledge, understanding and the live voice of apprentices is really important for the institute’s work. Inevitably, there is a lot of focus on employer leadership, but I think we need to look at apprenticeships from the perspective of employers and individuals.

[Gordon Marsden]

Q My final question is not so much about the membership of the board as about the reception that you want the new institute to get from providers and employers. As you know, a big question that is still being discussed vigorously in the FE sector is the extent to which small and medium-sized employers will be able to benefit from the apprenticeship levy. It is widely believed that gaining acceptance in the SME sector will be critical for the Government to reach their 3 million target. What confidence do you have that the new board will be able to reflect and respond to the SME sector’s continuing concerns that it is not exactly at the front of the queue in terms of the apprenticeship levy?

Peter Lauener: I would extend that beyond the board itself and to the route committees that I have talked about. There needs to be a wide range of employer experience, both from large employers and small and medium-sized employers, in these critical bodies—the route committees—which will be looking at the right standards. Of course, the standard that we are talking about is the standard wherever it is applied; it is about the standard for an occupation and about the knowledge, skills and behaviours that an individual needs to be able to do a job properly for the benefit of the employer. You need the context both of large employers and of small and medium-sized employers to make that work properly.

[Gordon Marsden]

Q But you understand the point that I am making, I hope. Without becoming too technical, one issue historically for SMEs in taking on apprenticeships has been the lack of back-office support. In my experience—I have employed three apprentices over a three-year period, and being an MP is like running a small business; you juggle all sorts of things—SMEs constantly say that they would love to take on apprentices, and when they do and the apprentices are successful, no one is a stronger advocate for them than SMEs. However, they struggle with back-office support, red tape and all the rest of it. I am not trying to commit you to a specific SME place on the board, but do you understand why those concerns persist? Do you intend to try to provide reassurance about them and, if possible, given your years of unrivalled experience in this area, cut some of the red tape?

Peter Lauener: First, the new technical system—the digital apprenticeship service—that will be introduced from the beginning of next year will be much easier for employers of all sizes to navigate and for individuals to see apprenticeships on the system. That will be open to only large employers at the start, but we would expect to extend it over time.

Secondly, we should not underestimate the role of training providers. Again, under the digital apprenticeship system, most employers will still be using a training provider. They will be able to choose from the training providers on the system. In my experience—I speak partly as an employer in my own organisations of apprentices—organisations are heavily reliant on the training provider to make sure that the training is relevant, well managed and that the trainee is supported through the apprenticeship. I would expect that to be a continuing pattern in the future.

[Justin Tomlinson (North Swindon) (Con)]

Q I want to build on some of the comments Mr Marsden has made. I used to run a small business, and by accident I employed someone on an apprenticeship because I stumbled across an apprentice, and I benefited greatly. One of the biggest challenges in us reaching the commendable target of 3 million apprenticeships is that lack of awareness from small businesses. I have repeatedly pushed that we should use the business rate mailer to include a rather nice, glossy A5 flier.

It is encouraging that you are talking about this digital portal where there will be a one-stop shop for all the information, but you said at the beginning that that is just for the larger employers. How quickly do you see that being cascaded down to the smaller employers? The reality is that, whatever the political persuasion of the Government of the day, the large employers will re-badge their ongoing training packages to match what is going. If we really are to create some great opportunities, we must include those small and medium-sized businesses that can offer those unique, more bespoke jobs that can fit apprentices’ individual skills and give them a real opportunity to progress. However, those businesses are waiting to be told of this fantastic resource. How quickly can we cascade that information down?

Peter Lauener: I should make it clear that the ability of small and medium-sized employers still to be involved in apprenticeships does not depend on day one of the digital apprenticeship system. We would expect to continue the allocations of funding to training providers—to be clear, that is through the Skills Funding Agency rather than through the Institute for Apprenticeships—which we have operated for many years, for small and medium-sized employers. That will ensure significant continuity in the system. I would expect no risk to the target for growth in numbers.

That will apply for the 2017-18 year. We will need to review that in the context of how quickly the levy-paying employers take up the opportunities to secure apprenticeships under the levy system, so we will monitor that closely. The 2017-18 year is secure, and after that we will review how small and medium-sized employers should be brought on to the core digital apprenticeship service. But even from day one it will be a public-access system and people will be able to see what is on it, so I think it will be a good way of conveying the richness of apprenticeships available.

--- Later in debate ---

[The Chair]

We will now hear evidence from the Association of Colleges, the Further Education Commissioner, the Sixth Form Colleges Association, the Collab Group and Professor Alison Fuller from University College London. We have until 11.25 am. Welcome. Please introduce yourselves for voice transcription purposes.

David Hughes: Good morning. I am David Hughes, chief executive of the Association of Colleges.

Professor Alison Fuller: I am Alison Fuller, professor of vocational education and work at UCL Institute of Education.

Richard Atkins: I am Richard Atkins, the FE Commissioner.

Bill Watkin: My name is Bill Watkin and I am chief executive of the Sixth Form Colleges Association.

Ian Pretty: I am Ian Pretty, chief executive of the Collab Group.

[Gordon Marsden]

Q I warmly welcome all of our panel, each distinguished in different areas. Who to pick on first is an invidious choice, but given the context of the previous conversations, perhaps I could start with David.

We have just heard from Peter Lauener an expansive view of where the institute is going. He talked about its digital abilities and I think the words he used were that standards would continually need redefining. As that was going on, hammering in my brain was “capacity, capacity, capacity”. You have expressed some concerns about the capacity. Would you like to elaborate on that?

David Hughes: Thank you for picking on me first. The capacity issue is partly about timing as well. I am concerned—we are very concerned—that the changes are being rushed because of the timing issues. Sixty people sounds like a small organisation to deal with 15 routes and 250-odd employers. There is a big job to be done and it does feel as though a lot is changing at the same time.

What we have been doing with Peter and his team and with officials in the Department is trying to think through the risks and to work with them to make sure that we can address any problems that occur very early on. When you are fundamentally changing the funding system, there are lots of unknowns. The big unknown is how employers will behave in the new system—nobody can predict that. It is in all our interests to make sure that we do not lose capacity in the whole system, let alone in the IFA itself. We have offered to work closely with Peter and his team to try to address any problems at a really early stage, and I am really pleased with the response so far.

[Gordon Marsden]

Q That is good, and highly valuable. One of the things I did not mention is the fact that the Government used to be able to use the UK Commission for Employment and Skills as a backstop—sometimes a very short-term backstop—in terms of delivery mechanisms out of the Department, but of course they rather unfortunately abolished that earlier this year. On that point, because as you well know there has been a lively debate between Ministers and your membership in the past as to whether they are doing enough for apprenticeships, are you confident now that your members have got the message about the new institute, or are there particular issues that you would still like to highlight?

David Hughes: I think there are three key issues. One is funding, and it was good to hear Lord Sainsbury talking about the funding issues. If we want a really high-quality system, we need to invest in it. I still find it completely illogical that we fund 11 to 16 at something like £5,500 per head, 16 to 18 at about £4,000, apprenticeships at about £1,500 per head and higher education at £9,000. In HE, we have index linking coming in with the new teaching excellence framework which we do not have in FE. If we want a high-quality offer at 16 to 18, which we do, we need to get the investment right.

Two other issues that go with that investment, and are really critical to allow colleges and other providers to invest in quality themselves, are stability and certainty. The thing that we want more than anything else, both on the technical education side and on the apprenticeship side, is some stability rather than constant change and churn, and certainty about those changes, so that my members and others can invest over the long term in the equipment, the people, the relationships and the outreach to students and potential apprentices. We have had a blizzard of changes over the past 10 or perhaps 15 years, and that causes my members and others to be cautious about the investment they make. The biggest risk to all this is the lack of certainty for the future. It is difficult, because how do you provide certainty? Some big statements from Government would be really helpful.

[Gordon Marsden]

Q You are absolutely right to make that point. The old joke used to be that when the Minister for HE sent a letter to universities it was more like the opening gambit of a conversation, or, “Would you like to do this?” whereas the letter that went to FE just said, “Do it.” I think and hope that we have moved on from there, Minister, and I hope that will not be the case in quite the same dirigiste way in the future. One of the issues that employers and other sectors are raising with me is just how rapidly some of the things, such as the digital system, are going to come on board. If that does not work to start with, that is going to be a further downer and concern for your members, is it not?

David Hughes: There are lots of concerns. The comparison with HE is quite interesting. Last week, the Higher Education Funding Council came out with a report on the financial picture for the sector; it is very concerned that there is only a 4.3% surplus predicted for next year. The FE sector has no surplus. That is my investment point. Quality needs investment, and FE colleges do not have that investment capacity at the moment. Issues around the digital service would and could be overcome by providers and colleges working closely with the employers they already work with, and that is one of those issues of timing and capacity. So there is a partnership approach that we are trying to push very strongly.

[Gordon Marsden]

Q Ian Pretty, you have been in post for about a year now. You have come to what we used to know as the 157 Group, now Collab, from a distinguished background as a career civil servant and also having spent time in the private sector. Having been in post for a year, what have you learned and what are your members telling you about capacity issues that is relevant to the Bill and particularly to the specific questions we have raised about the institute’s capacity to do all the wonderful things Peter Lauener told us about?

Ian Pretty: I agree with a lot of what David said. In terms of the capacity issue for the institute, you have to get the right resources in there. As you said, I am a former senior civil servant and a tax inspector, so I have a lot of experience in those things. I would focus on capability as well. You can have 60 people or 100 people in the institute, but have you got the right capability? I would be nervous if the institute was completely staffed by civil servants. If this organisation is about co-creation with the private sector and the education sector, you need people with the capability to understand how business thinks and how business operates. You also need people who understand how the education providers operate. On the capacity issue, in terms of raw numbers you will cite something, but capability is more important.

[Gordon Marsden]

Q You have to drill down, basically; that is what you are saying.

Ian Pretty: Yes, and you have to have the right people sitting in that institution. If the institute is focused on the skills plan, as the Government propose, that is sensible to me. Given my background, one thing I am mindful of is that we spent a huge amount of time—displacement time—on the area-based reviews. If we had had the skills plan and the insolvency regime in place, the ABR process might have been a smoother and easier process, because there would have been a logic to it.

[Gordon Marsden]

Q Your members include a significant number that have HE capacity. We were talking yesterday in another place about HE issues. One concern that has been expressed to us is the institute’s ability to grapple with the HE dimension of higher skills, which I am sure Lord Sainsbury would think is important, and treatment in terms of HE in FE colleges. Sometimes, dare I say it—I certainly felt it in the White Paper—it is an afterthought, rather than an integral part of the solution. What do you think the institute and Ministers need to do to ensure that the role of HE in FE is more fundamentally understood by Departments?

Ian Pretty: In terms of the institute’s capabilities and the people who are in there, it is important; you are right. Most of our members have HE as part of their remit. This goes back to the whole issue around the skills plan and the Sainsbury review. If you create the right technical pathways, you need to understand through that, from level 1 up to 6-plus, where that will be delivered and the role of HE within that. It could be HE in terms of the universities sector, but in our case it is HE sitting within the FE sector. That is a growing business for us, particularly around things like degree apprenticeships. It is important that the institute understands HE and plays an active role in understanding how HE operates within the FE sector.

[Gordon Marsden]

Q Finally, I will come to you, Professor Fuller. I am not going to credit you with quite the longevity—perhaps I should, but never mind—that I gave to Peter Lauener, but you have been around for quite a long time in this area. You have seen promises and Select Committees come and go. In the things you have seen and heard so far about the new architecture that the Government are proposing, which do you think are good and positive steps forward, and which are you feeling a bit more queasy about?

Professor Alison Fuller: I certainly welcome the renewed focus on what we used to call vocational education but now call technical education, and the seeming rise of it up the public policy agenda. However, today and in this Bill what we are trying to scrutinise is what stands behind that. We have been concerned about that for years, and it is about the seriousness with which this is taken. My colleagues have talked very clearly about capacity and capability issues. When we look at comparative countries, we see much more stability and longevity about arrangements for drawing in all the key constituencies to the decision-making processes. That kind of stability is there.

In addition to the stakeholders that have been mentioned, I would also say that the professional bodies and associations are key to this as well, because we are talking here about how these new routes will articulate during a career with the ladders of progression that exist. The professional bodies and associations are essentially the guardians of that kind of area.

In terms of concerns, it is really the substance and significance of the routes that are being proposed that concern me, if we are going to try to create something that is really high quality and which begins to address the parity of esteem question, which one of the panel was talking about earlier. The reality is that we are talking about a proposal for two-year programmes, which are called full time, but if you dig into what full time means, the definitions can be as little as 12 to 14 hours a week. If you phone up a college and say, for example, “I am looking to do a level 3 course in business administration. How many hours would that be?” you will typically be told 12 to 14 hours. If you look at the benefit rules, full time is defined as around that time. Potentially, we are looking at trying to help young people to reach a much higher level—level 3, hopefully, after two years—but with very little input. That is a real concern for me. That raises questions about how the routes are articulating downwards with the GCSE and upwards to higher education.

There is a big issue about intensity. Again, when we compare with other countries, we see that the full-time vocational routes tend to be longer. They may start a bit earlier. We have at the moment 16-plus, 16 to 18; they may start at 15, but they will typically have three or even four years, ending up at a good level 3 standard. That is an issue and has huge implications for resourcing and funding, which David and others have raised.

[Gordon Marsden]

Q You are talking about length. There have been a lot of conversations, some of them a bit semantic, about the pre-apprenticeship route, particularly if we want young people to get good-quality apprenticeships. There is obviously the traineeship issue, or call it pre-apprenticeship, or whatever. Are you saying, Professor Fuller, that the actual process needs to be longer or that there need to be more preparatory steps to get young people—not only them, though they are the key component—who would not otherwise be able to compete for some of the high-quality apprenticeships that will be on offer?

Professor Alison Fuller: Probably both. If you look at attainment at 16, we have just had recent figures that show that still it is only just over 50% of young people who are achieving five GCSEs A to C grades, including English and maths. We know that those who are achieving that benchmark tend to stay on in the school route and take A-levels or a combination of A-levels and BTECs, which are sometimes called applied A-levels. That particular route has been quite successful in supporting social mobility and particularly progression to higher education.

Unless we start to eat into that population, we are talking about young people who have not attained that level at 16. We are proposing what we would all want to be a very high-quality technical education route within two years to get to what point? That is where we need to take a check and be realistic about what we might be able to achieve in two years on those kinds of numbers of contact hours and that kind of period.

We know that a good-quality level 3 standard is a really strong platform for career progression and engagement with employment. So for a good majority of our young people at 18 or 19, that is the kind of real aspiration we should be aiming for. It seems to me that without a much stronger commitment to what the resources are going to be, and what the container is going to be, if you unpack what a route is, we could end up with young people who have not made sufficient progress to reach the platform where they are going to have a secure stepping stone into the labour market and good-quality apprenticeships.

We know that at the moment 60%-plus of apprenticeships are at level 2 and that not many 16 to 18-year-olds are doing them—I think it is about 130,000. So there is quite a lot to do to ensure that all apprenticeships are as good quality as the fantastic ones that we know do exist.

[Tracy Brabin]

Q David, I have been told that in some circumstances members of staff such as receptionists without relevant qualifications or training are carrying out careers guidance in colleges as a tick-box exercise. Are you concerned that there is no careers guidance provision in the Bill?

David Hughes: I am very concerned if that story about reception staff is true, because it is an incredibly important area of education and, of course, it does not start at 16; it starts a lot earlier. I would echo a lot of what Alison was saying. We need to think about key stage 4 rather than just look at age 16-plus, because the decisions that get made by young people and their parents and carers are critical to their future. We need to think about introducing them to the world of work rather than just providing them with some information about courses, so the work experience and work placements that the Sainsbury report and the skills plan rightly concentrate and focus on are really important to consider for key stage 4, rather than just waiting until 16. We want some of the best young people with good achievements at GCSE at 16 going into the technical route and apprenticeships rather than what we have now, which is mostly that if you do well at GCSE at 16, you take an academic route.

We know that probably about £1 billion is wasted when young people go on an academic route for a year and then move off it because they find it is not suitable for them. We need to stop that happening because that wastes money and, more importantly, young people are using up a year of their life on something that does not stimulate them or motivate them. We have got to go back into key stage 4 rather than just wait. It is critical that we get college information, advice and guidance right, but let us think about careers education through school, not just right at the end, and let us think about persuading the best young people to do technical if that is the right thing for them, because it should be high-quality to attract them.

--- Later in debate ---

[Mike Kane]

Q Richard, may I just challenge you a bit further? Say you have two successful FE institutions and the recommendation from the area review is to merge—this scenario is not a million miles away from what is going on—but they say, “No, we are independent institutions. Forget it.” We know that they can stand alone, but the review said that they should come together. What is the stick? What is the incentive? How do you get from the world as it is, to the world as you want it to be?

Richard Atkins: I have two points. If they were both very successful and could produce the sorts of data that David referred to, they would probably be stand-alone anyway. If they could produce five-year data that showed that they would be financially sustainable and would continue to be very successful, they would probably opt for stand-alone and we would probably support that. We have got one or two cases like that.

If they cannot produce those data and we and the steering group think that merger is the best solution—this is possible, and we are doing it in at least one or two cases at the moment—we will put that recommendation in the report. The college can still opt independently not to do it. That means it will never be able to access the restructuring fund; if something went wrong in future, it would not get access to the large restructuring fund that is currently available. Of course, it would be subject to the new insolvency regime if this legislation goes through, so the world looks quite a lot tougher for it post-2018 if it chooses to ignore the evidence-based work that my team will have done and will have shared with the local steering group.

It is possible to bury your head and say, “We don’t accept the evidence that you are putting in front of us. We can’t produce robust plans for the next five years, but we are going to go it alone anyway. We won’t co-operate with anyone.” By doing that, those governors would be taking a big risk—a risk for their learners as well as for themselves. Let us say that the insolvency legislation goes through. I am generally supportive of that legislation in this role, and as a principal—as you probably know, I stepped down from being a principal earlier this year, after 21 years—I would have been supportive of it. You are taking quite a risk if you are prepared to confound the recommendation that we would make, along with the other members of the steering group. But you are right to say that ultimately these colleges are independent, and as a long-serving principal, I got the highest level of job satisfaction when my college enjoyed a degree of independence.

David Hughes: We need to be a bit careful on this. I remember twice being asked by Ministers when I was in the civil service to try to show the evidence that large colleges were more effective—well, once with Bill Rammell and then with John Hayes to show that small colleges were more effective. There is no evidence of size making that much difference. Leadership makes the difference, and context is king. The competition that I talked about can undermine the best led college, but leadership is the key thing.

When the area review comes through with a recommendation for merger, the right thing for the colleges to do is to go through a due diligence process to examine the proposal further. In some circumstances, it is very correct that they make the decision not to go through with it, because they have to have at their heart the interests of their institution, their learners and their community. The area review will not always get that recommendation right. We have to have a degree of realism: the colleges are independent institutions, making their own decisions, and sometimes not to go forward with that recommendation might be the right thing.

Ian Pretty: The area-based reviews, as a general process, struck me as reasonable. Where it has become more challenging is that the key objectives were that you wanted fewer, larger, financially sustainable colleges; that was the premise on which the ABR process was set up. As I said earlier, the key thing for me is the extent to which you have looked at things such as the skills plan and the pathways first, putting in place things such as the insolvency regime, and then perhaps the ABR process would have been an easier process for many.

I think that it is absolutely right that further education colleges are allowed to be independent and remain independent. I recognise that that creates frictions in terms of their not necessarily agreeing to things, but that was how they were set up back in 1992. The risk with all this, in terms of the ABR and the current lack of an insolvency regime, is that I do not think you have the flexibility to be able actually to create the merged institutions that you might or might not want. I have a personal view that a solvent college merged with an insolvent college is not a solvent college; that causes problems afterwards.

Speaking as an organisation, I know that the association has representatives in Scotland, Wales and Northern Ireland—we have five colleges altogether there—and I think there is a lot that the Department for Education and Government can learn from the experience, particularly in Scotland, which did bang them together to create regional colleges. They could look at the successes and the failures. There are strong successes there, and there are colleges where the merger has not been so successful.

[Gordon Marsden]

Q I would like to continue on the theme of the implications of the area reviews and to come back to you, Richard, if I may. As you have already said, you have had a distinguished career as a college principal and have held leadership positions in the Association of Colleges, so at least for the moment, until you are covered in the bureaucracies, you can see from both angles. I want to ask you about the implications of 88 colleges moving towards merger. Sir Francis Drake famously said that

“it is not the beginning, but the continuing of the same, until it be thoroughly finished, which yields the true glory”.

Although, the question here is whether there will be glory or lots of pain along the way. I want to press you on two particular points.

The context of this, as Ian Pretty has alluded to, is two things: first, the critical National Audit Office report, which really bashed the former Department for Business, Innovation and Skills right around the head over some areas and set off alarm bells about financial stability—I am sure that played a major part in the insolvency regime set out in the Bill—and secondly, on a year-on-year basis, when we exclude apprenticeship funding, the trajectory of funding for FE colleges from Government has been going down.

The situation is febrile and, in some cases, is producing that number of mergers. Once they are merged, there are then of course the consequences for the staff and students. For example, when two colleges merge in a suburban or rural setting, the implications for them being able to maintain their courses, which are after all the viability of those colleges, will be significant if issues such as travel do not come into it. I see nothing in the Bill at the moment—and little has been said by Ministers—about where the funding to support that process will come from.

My second point picks up on what my colleague Mike Kane said earlier about his experiences with Greater Manchester—I am a native Mancunian by birth, so I understand the area’s issues well, and the cohesion that already exists, and lots of other areas will not have that cohesion. We are going through a period of significant devolution from Government of responsibilities and funding—for what it is worth, I am wholeheartedly in favour of that—and skills and FE will be affected. We have a situation in which things are beginning to be set in stone in combined authorities or mayoralties that are likely to have significant powers in the next couple of years, but they might well come along and say, “Actually, this didn’t include us. We want to unpick it.” What do you have to say to that?

Richard Atkins: May I take the first question first? Thanks for setting it in context. If I may do the same, you are right that I had a long career as a principal, and when I started there were 469 FE and sixth-form colleges; there are 321 today. Some of those mergers have been very successful, but not all. But just as in business and other walks of life, some mergers do succeed. For example, takeovers are often more successful than mergers, but some have been very successful. I remember when towns such as Derby had two or three colleges, but now they have one strong college. So I think that in a number of cases the mergers we are proposing through area reviews may well strengthen college provision in that part of the country, but I do not for one minute think that every one of them will work out as if a magic wand has made it all brilliant and successful immediately.

There is continuing work for me and my team as the agency calls us in to support the implementation of the area reviews, to work out where things are going in the right direction or how to get them back on track, or to come up with alternatives, if necessary, to keep the process going. I do not think that it will be a cliff edge as such. I am talking to colleges a lot about the fact that it is not a cliff edge. I do not see 31 March and the end of the area review steering groups as an absolute cliff edge.

[Gordon Marsden]

Q That is a fair point, but may I press you a bit further? I am not necessarily saying that all these mergers will be a disaster; what I am saying is that they will be challenging—I gave you two particular examples—and what I wonder is whether you think the Government have given this enough attention, in terms of contingency funding or, for example, support for travel for students who might be affected. Or do you think it is part of your job and that of your fellow commissioners, when you are deliberating on these things, to send a stronger message to Government on these matters?

Richard Atkins: There are two points. Mergers do not necessarily mean the closure of sites, so they do not mean the end of provision for students locally. Clearly, in rural areas, for example, the history of the sector has been that provision has not gone even when there have been mergers. When Truro and Penwith came together, that did not end provision in Penzance. In fact, it regenerated the provision in Penzance to a higher standard. You can see that across the country.

Certainly, in any recommendations for area review that I am involved in—I have said this a lot—the interests of the learners would be paramount in my mind. I know that finance is one of the factors driving this. I do not disagree with you about the fact that there are pressures on colleges. Non-apprenticeship funding has been challenging. The cuts that colleges have faced in terms of the adult skills budget have been as big as any across education, and of course we have had a demographic downturn in 16-year-olds that goes on for another five years, and more competition. So colleges are under real pressure.

However, when I go out and intervene—the second part of my role, as you know, is intervening in colleges that have had either an inadequate Ofsted assessment or serious financial concerns—I actually find that what is missing are some of the basics of governance, leadership and financial management. I do not always find that it is a lack of funds.

I would like to see more investment in the sector. As a long-standing principal, I spent a long time arguing for that. I hope that in the future we will see greater investment in technical education, but when I go out to look at some of the most acute cases, what I find is—you will see this from my predecessor’s reports as well and the lessons I share with the sector—lack of a costed curriculum plan, staffing costs well above average compared with turnover and so on.

Part of my job is to share that practice, both good and bad, with all the colleges so that people can keep on track. I do think that is part of my job. It is also part of my job to represent the interests of learners. I hope the insolvency legislation proposed in the Bill does not have to be used, but if it did, I hope that the administrator would call in our team. I hope that we would act in the interests of those learners to ensure that the right solution was found with the institution and, most importantly, the right solution was found for the learners.

I do not think that merger necessarily means rationalising the number of sites; it may do in an urban area. My first college, I seem to remember, reduced from 11 sites to two. In a reasonably small town there was plenty of room for rationalisation. The idea that you close provision down in a particular district, borough or town is not something I would be in favour of at all. I would be looking for merger solutions that bring together back-room services, avoid duplication and so on.

Equally, particularly at levels 1 and 2, I would ensure that provision continues to be delivered locally where those learners can best access it. I do not see merger as necessarily meaning a rationalisation of locality and sites, particularly at levels 1 and 2. When you get to level 3, just look at the distances that students travel to Bill Watkin’s sixth-form colleges around the country. If you go to levels 4 and 5, which I hope we are going to see more of, I find that learners are very happy to travel considerable distances for the right provision. I do not see mergers as necessarily wiping out, but I do see my role as representing the best interests of the learners, and I hope that is what I have brought with me from being a principal all those years.

I would love to see more investment in the sector, but that is not what I find when I go out and do interventions at the moment—I have done several already. I am not walking into the problems being caused simply by underfunding; I am walking into areas where there is room for considerable improvement in governance, leadership, management and financial management.

[Gordon Marsden]

Q But you will be aware, with the eagerness of people to travel distances, as you say, that they might be eager but, if they do not have the money to travel, they will not be able to.

Richard Atkins: Sure. Coming from a county such as Devon, I am acutely aware of that: there are the lowest take-home wages in the country in place such as Torridge and west Devon. I am very aware of the travel. That is why I say that provision at levels 1 and 2, in particular, needs to be as local as you can get it to the learners, whether in an urban or rural area. I agree.

[Gordon Marsden]

Q Indeed. We will keep a close eye on that.

Finally, I will come to Ian. We have been talking about insolvency provisions. You have experience in other areas that may be useful for taking an overview here. Let me say straightaway that I very much welcome the new provisions, but there seems to be a tension, which no doubt we will explore in our line-by-line scrutiny, between the role of the administrator and the natural commercial demands and pressures that will come from the traditional insolvency process. Have you had any thoughts about that? I am mindful that we do not want to paint a picture of the whole area being ripe for insolvency—David, you made that point to me not that long ago. Nevertheless, we must plan for the worst. Are you confident at the moment, notwithstanding welcoming the new provisions, that the balance is right regarding securing the interests of the staff and the pupils at the college that might be in trouble alongside those of the people who are the traditional creditors?

Ian Pretty: Broadly, yes. That is the slightly negative answer. It is right that we very much welcome the insolvency regime. I think that part of it has been adjusted. One of the concerns we had initially was with things such as winding-up orders. It looked like anyone from anywhere could issue a winding-up order on a college, which would have created some real dangers, particularly to the learners, in that they would suddenly have had nowhere to study, and to the employees, who would have had no jobs. I see that the proposed legislation has made adjustments to that, which is welcome.

On the role of the education administrator, it looks like a fairly standard role that you would see in any winding-up or any receivership or administration in the private sector. The biggest concern I have at the moment is about governance and liability in terms of disqualification under the Company Directors Disqualification Act 1986. I still have real concerns, as do our members, particularly as we are colleges that are very commercially minded, that, depending on how that is interpreted and perhaps put into secondary legislation, you might be at risk of ending up in a situation in which you deter private sector people from being on boards of governors.

You might also deter politicians and people from the third sector—from charitable trusts—from being on boards of governors. It is absolutely essential that the sector has that insight and know-how brought in to help it through the processes. If there is a risk of someone being told that they will be disqualified as a director, you can imagine that that is quite material in the private sector. That is the area we are most concerned about at the moment. On executive functions, on people like principals being disqualified, we have no problem with that.

On creditors and bankers—I know that you will be speaking to the banks this afternoon and I am sure that they will be able to tell you whether they are supportive of the provisions—

[Gordon Marsden]

I will not ask you about your experience with the banks.

Ian Pretty: Don’t ask! There are sections of the proposed legislation that talk about indemnities and guarantees given by the national authority, be it the UK Government or the Welsh Government. Again, that is fine. I am sure it must be giving some comfort to the creditors, but the risk, of course, is that the Government become the guarantor of last resort. It is noticeable that other sections of the legislation refer to the college that is in administration having to re-fund. It depends on the sums of money that are involved, but if you do that you run the risk of never getting out of the insolvency cycle.

[Kelvin Hopkins]

Q Two issues have been raised in the past few minutes. One is mergers, and I think that David Hughes suggested that there could be a case for not enormous colleges staying as independent colleges; some might merge, but each could be judged on its own merits. But that should not be elided with the issue of sixth-form colleges doing A-levels and the contrast with small school sixth forms. I should say that I am a 25-year governor of a sixth-form college, a former teacher in further education and the chair of the all-party group on sixth-form colleges. The statistics produced by the Sixth-Form Colleges Association overwhelmingly show that sixth-form colleges do better in educational achievements and in value for money, and the Government would do well to persuade schools, local authorities or whoever to pool their sixth forms and create many more sixth-form colleges. That would be enormously advantageous to the country, to education and to young people.

The other issue is governance, which Ian Pretty talked about. I agree strongly that we ought to have breadth in our governing bodies. I have to say that the governing body of which I am a member has invariably had at least two members qualified in accountancy and at least two with legal qualifications, as well as members from the education sector, including primary and secondary schools, and from local businesses. It is small, tightly knit, monocultural governing bodies—perhaps drawn only from small local businesses—that tend to get out of control and that do not do too well. There was one glaring example of that in my constituency—I will not mention its name, but many of you will know about it. It got into a disastrous state, although it has now been picked up by a superb new principal. That breadth of governance, with all sorts of skills as well as commitments, is crucial. I wonder whether you accept that that is a sensible way of doing things.

Richard Atkins: Shall I begin? First, on interventions and area reviews, the quality of governance is critical to the success of the college—more critical than many governors realise. I see that when I go into colleges that are not doing well. Getting the sort of governing body that you describe, with a broad base of skills and knowledge, is essential. I pay tribute to the chairs and to the role they play in the area review. They are giving up a huge amount of time and showing enormous commitment to their colleges by coming to all the steering group meetings and taking part in this. Governance is critical to the quality of colleges. I agree with David that the size of a college is not the key determinant; we have some successful big colleges, but we also have some very successful small, niche colleges. Logically, you would think “How do they survive?” but actually they are doing very well.

Another point that I did not make earlier is that, although area reviews are leading to these 88 mergers—I am thinking about the area review that we are about to start in your constituency; I was talking to the two principals last week—in some areas we are simply generating collaboration short of a merger at a level that we have not seen for a long time. I happen to know that those colleges in your area have already been to see me to talk about a new form of collaboration. If that is the best solution for that area, and the data underpin that, we will support it. Merger is not the single blind answer in every case; collaboration short of a merger may well be the best solution in certain cases.

David Hughes: I want to assert that governance in the FE sector is very strong. I know that the Minister is very interested in helping to improve it, but we have a sector with very strong governance. These are independent organisations taking big business decisions over the long term, and in the vast majority of cases they deliver a very high-quality service and achieve a surplus. For many years, in the Learning and Skills Council and the Skills Funding Agency, I did a job that was not dissimilar to the FE commissioner’s: overseeing all the colleges that were getting into difficulties. It is quite striking that, despite all the funding cuts and all the competition, there are still only 20 colleges in financial difficulties. That is a very familiar number; it was not dissimilar through the noughties and into this decade. Despite all those challenges, FE and sixth-form colleges have proved incredibly adaptable and have responded really well to the funding environment.

Let me just go back to the fact that higher education is generating a surplus of more than 4% every year. The Higher Education Funding Council for England thinks that that is a problem, because it is only 4%, but FE has had a deficit in the last two years. That is not a commentary on the lack of good leadership and governance, but on the competition and the funding levels. We need to address that; otherwise, we still will not have the technical and academic education we need for young people and adults in this country. These are really important issues. It is not easy, because the economy is not doing as well as anyone wants. We are looking to the autumn statement this week and perhaps the Budget in the spring. As Lord Sainsbury said this morning, how do you properly fund technical education in this country, possibly for the first time ever?

Bill Watkin: I will respond to your comments about the growth of sixth-form colleges in the context of the economies of scale they offer, the quality of qualifications, their outcomes and their support for young people. I would also add that, with the population shift, the number of 11 to 16-year-olds is growing.

There is an interesting example of a proposed merger between a sixth-form college and an academy chain. The school, which has a large sixth-form provision, is looking to shift all of its sixth form across to the sixth-form college, and then to build capacity for 11 to 16-year-olds to serve the community. That is an example of a successful outcome of an area review recommendation. There is also the opportunity for sixth-form colleges to roll out their successful brand and open up a free school 16-to-19 provision, as happened in Pontefract.

I am pleased that the Government are reviewing the approval process for small school sixth forms. We have been invited to contribute to that review. I sincerely hope that there will be a different way of considering applications to open up schools’ sixth forms.

Professor Alison Fuller: I certainly do not want to downplay the importance of governance and efficiency—we are talking about public money, after all—but I do not want us to lose sight of the issue of efficacy and quality, which we started the session off with. The initiatives in the Bill will potentially achieve a step change in quality if we get this right. We know how much this matters, because the population performs very poorly in the OECD’s programme for the international assessment of adult competencies survey—the adult skills survey, which is administered to 27-year-olds. The added value from 15 to 27 is very weak, in terms of the age range, when you compare us to countries that have strong upper secondary and strong vocational and technical systems. The legacy effects that we are suffering as a consequence of the current system and what happened historically are playing through into the economy, life chances and wellbeing more generally. The prize is huge, but so is the challenge. I am a little concerned that an over-emphasis on governance may deflect from the really difficult thing—the quality issue.

Ian Pretty: Can I build on the discussion on mergers, which I think is a healthy one? To me, the merger is the merger. It is very easy to say, “We are all going to merge together. It’s all going to be wonderful, and the world is going to be fantastic,” but if you look at the statistics across all sectors—commercial and public—only 25% of mergers ever achieve their objectives. Post-merger integration is the most difficult thing. Part of that is that you have to understand the logic of the merger—is it a logical merger or a “shotgun” merger?—because that can have an impact. The studies show that, when they are successful, it is because of culture and cultural fit. Within the FE sector, some colleges are more likely to be able to culturally fit with another than others.

Having been on the receiving end, when I was in government, of ministerial decisions to merge, I can attest to the fact that it is difficult. The merger between Inland Revenue and Customs and Excise was an interesting experience, to say the least—I promptly walked out the door and went to the private sector.

You have to look at the logic of the merger, and then there is the whole point about post-merger integration. We have talked about whether there is enough funding, and all that sort of stuff, but do you have the right leadership? Do you have the right cultural fit that will make the merger work? Does the merger have the right objectives?

The other thing that is worth looking at is that we see regional college groups merging, and we see alternative versions of collaboration. Devon recently announced the launch of the Devon Colleges Group. The colleges have not merged together; they are collaborating. That is quite significant. You will then see that some college groups are working very well as merged entities or as groups. Hull, for example, is a successful college that has HE sections and FE sections. Warwickshire has merged a large number of colleges together, but it has not got rid of the place. It can therefore maintain community.

Going back to one of my earlier points, it is worth looking at the experience of places like Scotland. North East Scotland College has been a highly successful regional college group around Aberdeen and Aberdeenshire, and it has campuses that are 40 miles apart and still work—it still succeeds. It is worth looking at those models, but it is about the objectives of the merger. There must be a clear post-merger integration plan, because that is where you are going to get more success, rather than just saying, “We need to knock this together to get a smaller number of colleges.”

Technical and Further Education Bill (Second sitting)

Gordon Marsden Excerpts

Committee Debate: 2nd sitting: House of Commons
Tuesday 22nd November 2016 Public Bill Committees

[The Chair]

Mr Marsden, were you going to lead first?

[Gordon Marsden (Blackpool South) (Lab)]

Q 41 Yes. Good afternoon, gentlemen; I see that it is all gentlemen, which might raise some interesting questions for the future. Obviously, you have been invited here this afternoon. We hope you have a generous overview of the further education sector, but you are principally here this afternoon as the lenders and, possibly, subsequently the enforcers—if I may put it that way. We are particularly interested in the parts of the Bill that have the details of the insolvency process.

Perhaps I could start by asking this genuinely open question to each of you in turn. We had some discussion on this insolvency regime this morning and its genesis may be disputed, or it may come from a number of areas, but undoubtedly one of those—I quoted this earlier—was the concerns expressed in the National Audit Office report in 2015 about the financial situation of a number of FE colleges. You will probably be familiar, in some shape or form, with that report, because I imagine it would have sat somewhere on your risk profiles. As I said this morning, I do not want to over-exaggerate that threat, because doing so would be very unfair to the FE sector. May I ask each of you to say briefly, from your own experience, whether the events of the past couple of years, including that NAO report and the inclusion in this Bill of a fairly detailed insolvency process with some novel features, have already sharpened—or are likely to—your willingness or otherwise to loan to colleges? Who would like to start on that?

Richard Robinson: I think it is fair to say that the deterioration in the financial performance of the sector over the past couple of years has led to a tightening of the terms of finance available to further education colleges.

Our experience to date has been that when colleges have got into financial difficulty, they have been helped out by one of the agencies—be that the Skills Funding Agency or the Education Funding Agency—that have provided exceptional funding support to help turn those colleges around and keep them going. I think we are going to allow colleges to become insolvent. From a creditor’s perspective, that is a worse position than the one we are in now, simply because, from our experience, we know what is going to happen. However, the proposed insolvency regime has been well thought through, and the points that we made through the consultation process have been well listened to. Our preference as a creditor is still that it is not introduced, but if it is, there are a number of things that will help creditors and most of those have been well reflected in the Bill.

Gareth Jones: I agree that, over the last couple of years, lending into the sector has become a little more difficult and challenging. Overall, from our perspective, we are still very supportive of the sector—still looking to grow our exposure to the sector and grow our lending book. On the Bill and the proposed insolvency regime, we are actually supportive of the clarity that they provide.

[Gordon Marsden]

Q Mr Meddleton from Lloyds—with whom I have been for 43 years, so I have an active interest in Lloyds—I am not going to ask you to divulge any commercially sensitive information but I think it is an open secret that you are rather a large lender to a rather large number of colleges. Is that correct?

Richard Meddelton: Yes, that is correct. We are a significant lender in the FE sector, as are a number of other banks around the table. We have supported the sector for many years.

[Gordon Marsden]

Q May I ask you something, then, on the basis of that long experience—almost as long as my time banking with you? Obviously, over that period, there have been high points and low points for the economy, and there have been changes in regime and Government responsibility. How would you characterise the current situation from your perspective —obviously being supportive, but at the end of the day having to be commercial lenders? How would you characterise the current situation in terms of risk for your bank, and what do you think the proposed insolvency regime does for that?

Richard Meddelton: In answer to your first question, the sector is going through a number of difficulties at the moment. My colleagues have highlighted the reasons, which I would agree with, on that. From our perspective, yes, it is a sector that certainly has a number of stresses within it at the present time. Notwithstanding that, as a major lender in the sector we remain extremely committed to it.

--- Later in debate ---

[The Chair]

Or get closer to the microphone. Thank you.

Richard Meddelton: We are, as a bank, extremely committed to the sector and we remain so. The SAR as it is proposed—if that is your second question—does give us some cause for concern, certainly in terms of continuing to lend on a long-term basis. If you look at the current area review and start going through, they are very welcome. I am not sure, going forward, that it is particularly easy for us to make a longer term lending decision based on the performance of the college as it stands now and in the short term.

[Gordon Marsden]

Q If I could just add to that, and for the benefit of the other witnesses, who I assume were not here this morning, we had a fairly full discussion as to what the economic impact of the area reviews would be. I think it is fair to say that the FE commissioner took a slightly rosier view than I did of where some of those mergers might end up. Of course, mergers in principle run along the lines of attempting to provide greater stability, but we heard from another member of the panel this morning that that was not always his experience. Obviously, you will have to take a measured view on that. The commissioner disclosed today—of course, the area review process is not complete—that some 88 colleges are likely to be involved in merger issues. Is that something that would be a material fact when you were going to your colleagues and talking to them about the spread of risk in the FE sector and your continued loans over the next one to two years?

Richard Meddelton: Could you clarify the question for me please?

[Gordon Marsden]

I am sorry. We heard this morning from the FE commissioner that there are up to 88 colleges that are potentially involved in the process of merger, from the area reviews. The implications of merger may be positive, as the FE commissioner was keen to emphasise, or negative, if they go wrong, and if the number of students declines and if there are all sorts of problems, which would include the potential for financial instability. I was asking you whether the area reviews, and the number that I have just given to you, would be a significantly material factor for you when you are presumably discussing with your colleagues the likely factors of risk for lending over the next two years.

Richard Meddelton: Certainly we understand the area review process and the reasons for it. I would say that we look at each one in detail. We certainly welcome the area review process. We think it is a positive step forward. As you rightly say, not all mergers necessarily work and work well, if you draw parallels with corporate life. Nevertheless, we see a lot more good than not in what is being proposed.

[Gordon Marsden]

Q Finally, I wonder if I could come to you, Mr Harris. You are set apart from your colleagues, but only set apart in the sense that you have been there, done that and bought several T-shirts, probably. That is why we are very pleased to have you here today, because you have been through situations where there has been a special administration regime.

You will have seen in the Bill that there are clauses that spell out the nature of what the special administration regime would be. I note your comments; I have read your comments on the Bill. You perfectly reasonably hedge your bets about the outcome. You have asked the most pertinent question that we probably all need to ask—a focus for the responsible authority creditors and the insolvency practitioner: who will foot the bill for the greater good? Perhaps the Minister will be forthcoming on that at some point in the future—I do not know. I want to ask you what you think, because we have this very technical clause about the way in which colleges can have more than one corporate identity and legal identity. Could you comment on the implications of the distribution of that, in the insolvency part of the Bill, on the way in which colleges are defined, whether as corporate entities or some other body?

Stephen Harris: May I just clarify the clause that you refer to?

[Gordon Marsden]

I am referring to clause 22 on the general functions of the education administrator, which draws a distinction

“where the further education body is a company”.

I am interested in the extent to which that would affect all FE colleges that found themselves in this situation, as opposed to a particular number.

Stephen Harris: Paragraph 22—

[Gordon Marsden]

It is clause 22, paragraph 43—

Stephen Harris: I am sorry to appear stupid, but I do not seem to be able to read off the same clause to which you refer. I am anxious that I do.

[Gordon Marsden]

My apologies—it is clause 22. I am looking at “General functions” of the administrator—subsection (3).

[The Chair]

Mr Harris, we will give you a copy of the Bill, which might be helpful.

[Gordon Marsden]

It might also be helpful to refer you to the explanatory notes, which prompted my question. They state:

“The education administrator must also, so far as it is consistent with the special objective, carry out the functions in a way that achieves the best result for the body’s creditors as a whole…Where the further education body is a company, subsection (4) requires the education administrator to carry out their functions in a way that achieves the best result for the company’s creditors as a whole and, subject to that, the company’s members as a whole.”

I found that rather opaque and not clear in its implications.

[The Chair]

We are sending you down a copy of the explanatory notes as well.

Stephen Harris: Thank you. I do empathise with your observation that it may be opaque. I also had to put a question mark there when I read it for the first time. This is my take on the legislation as proposed, as is writ in the draft Bill: it is very clear—this is the way I have read it, but others may differ—that the overarching or transcendental purpose is to minimise the disruption and to carry on, within certain bounds. Then there are what seem to me to be some slightly subservient points. That is not to diminish them, but an office holder would have to step back and consider those people who fall into the category of subsection (3)—people with special needs—and how that dovetails into the way he is discharging his duties. Then you get to the issue of having to carry on in the interests of the creditors. I think there is a question when you read that: is that something that clicks into place when an office holder has optionality as to the route that he might take through the maze, or is that something he has to balance with the overarching purpose itself? If you say to me that it is not exactly clear on the face of the drafting, I have to concur with you; I stalled on the very same point myself.

[Gordon Marsden]

Thank you.

[Mr Ranil Jayawardena (North East Hampshire) (Con)]

Q I refer Members to my entry in the Register of Members’ Financial Interests; I used to work for Lloyds Banking Group and spent time in corporate banking, dealing for a time with education, community and government customers. I will come to Lloyds in a moment, but first, Mr Jones, you said in your written evidence to the Committee that you think that this is a positive step and that lenders will have certainty. Can you explain the uncertainty that exists to you as a lender today?

Gareth Jones: From Santander’s perspective, the uncertainty has always been around the funding agencies and, when a college is struggling to make its payments, effectively where that interim funding will come from. There is also uncertainty about whether the current insolvency applies to college corporations at present. From a risk perspective, when we assess the underlying risk of a transaction, there has always been that uncertainty and we have had to make assumptions in the background. If the Bill is passed, the certainty it will provide is positive for us.

--- Later in debate ---

[Tracy Brabin]

Q So you are suggesting that it will be more expensive to borrow?

Richard Robinson: Not necessarily more expensive; it could just be that the loans have to be shorter or have to be secured versus unsecured. Cost is just one element of the terms and conditions of a piece of finance.

[Gordon Marsden]

Q I just want to return to the issue of cost-benefit analysis, in terms of the increased risk that will come about. Given the factors that have led to this insolvency provision having to go into the Bill, it is obvious that the Government recognise that there are increased risks in the future. That is not necessarily to say that the whole edifice is going to collapse, but it does mean that you as banks have to make difficult decisions about how you calibrate that risk.

I was struck again, going through the Bill, that there is a creative tension—hopefully it is creative and not destructive—between the needs of the education administrator and the traditional needs of the creditors. I was struck particularly by a phrase in your submission, Mr Harris, where you said, “I note also that the Bill contains measures such that a creditor or appropriate national authority may apply to court if it is dissatisfied with the conduct of an education administrator.” No one is suggesting that the majority of colleges are going to go through the procedure, but if a college was going through that procedure and the sums of money were quite large, it would not necessarily be surprising if a creditor did challenge the education administrator in that fashion.

My question is twofold. First, Mr Harris, you have already expressed the big question: where is the money going to come from? Would that presumably increase the likely legal costs to which you referred in such a way that it could make it a very expensive process? Secondly, and this is for you three gentlemen generally, it seems to me that what is coming out of this afternoon’s session is that you would welcome greater clarity, whether in guidance notes or even a new clause, although Governments are reluctant to put some details into new clauses, to understand what the Government are prepared to take on board—after all, it is the Government who are introducing the proposal—and how much security, whether quantified as a financial amount or as a supporter of last resort, you would require from the Government.

Stephen Harris: May I just stand back and piggyback on your first question? I have actually been asking myself, since you asked me the question, how I got comfortable with this last Thursday afternoon. Clearly, I was; there was a holistic package of measures here, which I felt broadly work. I would like to return very briefly to the issue of clause 22 for a moment. In subsections (4) and (5) we see the crucial words placed between commas,

“so far as is consistent”

with the overarching duty. Having stalled on it on the first read, when I went back and saw those words it became reasonably clear to me that the transcendental purpose—the carrying on for the education—is the thing that matters.

We therefore turn to the question of funding. We come full square to clause 25 and the suite of options set out in it:

“Grants and loans where education administration order is made.”

Then we travel further into the draft legislation—indeed quite a long way to the back. This is a bit of a technical area, but it is worth focusing on for a minute. The administrator will receive grant money from the funding body, and he will spend it on wages, salaries and the upkeep of the college. The fundamental question is: where is the deficit funding going to come from? Of course, he will have to borrow. Borrowing money in an insolvency process carries some technicalities. The overarching technicality is: where is the repayment of the loan going to rank? In conventional, vanilla administration, it is generally accepted that if the administrator borrows during an insolvency process, his obligation to repay the bank or the funder carries a very high priority unless it is agreed with the bank that it will be demoted for one reason or another. We need not explore that here.

In the suite of options that are available here, there is a technical clause that enables the lending authority to position the option for the repayment of the loan. Broadly—if I may put it this way—it can come at the front of the queue, the middle of the queue or the back of the queue. When I say the queue, I mean that if you take the general body of creditors as a whole, the repayment of the loan for the deficit funding can rank ahead of those creditors, alongside them or behind them.

Turning to your question, I think that what we see here is a recognition that one size might not necessarily fit all. There is probably a sense that it is not wise to be prescriptive at a total level, so having a suite of options that can be adjusted to specific circumstances may be an appropriate balance at the moment. There will be tension when it comes to borrowing the money, and I have little doubt that the funding authority will set out its stall on which it is prepared to make the money available.

[Gordon Marsden]

Q Just to clarify, when you say the funding authority, are you talking about the Skills Funding Agency, the Government or some mixture?

Stephen Harris: I think the words used in the Bill are “the appropriate national authority”. An incoming office holder is going to be faced with something that ranks at the front of the queue, in the middle of the queue or behind the queue.

[Gordon Marsden]

Q No disrespect—I think your analysis is elegant and understandable—but that is not going to make the decisions of the three gentlemen sitting beside you any easier, is it?

[The Chair]

I have to hurry you, Mr Harris. We have another panel of witnesses and a question to go yet.

Stephen Harris: I cannot answer for my respected colleagues from the banks. It is an environment in which people generally try to work together to do good things for the community as a whole. We are looking here at a minority of situations—I hope it is a minority—where there will be tensions. Ultimately, lenders, taxpayers and the appropriate national authorities are all in the same country together, but I do not speak on behalf of the banks.

Richard Robinson: I think your question was about what we would like to see. All the various options that are in here are helpful; it is one of the strongest parts of the Bill. Mr Harris is right that we, as a lender, would want to work with the college and the authorities in that situation to find the most appropriate path. The issue is that it does not specify where that ranking lies. That, for us, is very important. Although it could rank at the back, it could also rank ahead of us. Obviously, being bankers, we have got to think about the worst-case scenario, and the worst-case scenario is that it is ahead of us. We are making lending decisions today for a long time in the future, and therefore we need to work on the assumption that the worst-case scenario will come to fruition.

The other point was about security. Security is important to us to ensure that we know what our rights are as a secured creditor. If the loan and the security are going to be transferred to another provider, having that option is really helpful. We would want to explore ensuring that it was in the best interests of everybody that we did that. We would also want to ensure that it was not transferred to someone we were less comfortable with. So having that legal certainty about our rights at the outset is very important to us.

Stephen Harris: I can possibly add a little more colour to this question. I was mulling this over and trying to identify in my own mind a situation in which, for totally understandable reasons, somebody might say, “I really, really want to be at the front of this queue,” in a particular situation. In some organisations you really do not know what all the liabilities are when you first approach a situation. Sometimes, when you have travelled a little way on your journey through the insolvency, you discover that there are some very unusual liabilities, which you had not really bargained for, attached to a certain site or situation.

I have some empathy with the idea that, in structuring a funding loan for an administrator early on, and not having total visibility over the level of liabilities that might rank in a particular situation, somebody might want to proceed with caution initially and perhaps take a view on things when the assignment has progressed. At moment zero you do not always know who your liabilities and your contingent creditors are. I do not know whether that is helpful context for these clauses.

--- Later in debate ---

[The Chair]

Welcome. Witnesses, could you please introduce yourselves for Members and the record?

Bev Robinson: Good afternoon, I am Bev Robinson. I have the privilege of being the principal and chief executive of Blackpool and The Fylde College.

Shane Chowen: I am Shane Chowen; I am head of policy and public affairs at the Learning and Work Institute.

Shakira Martin: Good afternoon, I am Shakira Martin. I am the vice-president for further education, representing 4.1 million students across the UK.

[Gordon Marsden]

Q I welcome all three members of the panel. Were any of you in the room and vaguely listening to our previous panel from the banks?

Bev Robinson: I only heard the last three or four minutes.

[Gordon Marsden]

Q I only ask as an opener, on the back of the very interesting evidence that we have just had from the banks. We were talking about levels of risk in the situation of potential insolvency, and what the relationship between the education administrator and the actual creditors might be. Could I ask all three of you the same question? Obviously, as principal of a college that I know extremely well and rate extremely highly, you, Bev, would hope never to be in this particular situation. Do you think that in the particular clauses that establish, and balance the functions of, the education administrator, as opposed to the interests of the students and staff at a college that would be affected, the Government have got the balance right? Do you think that there is sufficient detail there for us to feel comfortable with this process?

Shakira Martin: First, I would like to praise the positive step that we are taking in ensuring that students get the best out of this situation, if it were to occur. However, I would like to focus on the Bill, making the point about students not being disrupted in their education. The problem that we at the National Union of Students feel could be encountered is that, for example, it is not clear how the Government will make sure that the colleges that students are transferred to will have the capacity and scope to take on more students at that further time. It is also not clear how the Government will make sure that the education the student receives in the college is kept open and to a high-quality standard. For example, the area review process may have unintended impacts. There will be fewer colleges, further apart. How will travel costs and access be addressed?

[Gordon Marsden]

Q That point is wider than the one I asked you about, but it is very interesting. We heard the view—I will not say the evidence—of the FE commissioner this morning, who was slightly downplaying the implications of that and said that in some cases mergers could be very beneficial. I think the point that you are making brings us back to the overall point that we have been discussing with the banks: where does the liability—the funding, in other words—for the process actually sit? That is one that I am sure we will continue to explore.

Bev, from your perspective as a college principal of some long standing—not just in Blackpool—and from having had nearly a year, with your colleagues on the panel who produced the skills plan, to look at all the facets and aspects of the FE sector, if you were an FE principal wondering about the future, would you feel that there was sufficient clarity in the Bill? Would you feel that what the education administrator would want to do in that situation would win out?

Bev Robinson: I am not an expert in the field of insolvency but I would make the following observation. First, the Bill is reasonably clear with regard to protecting students. What could be clearer, I feel, is protecting learning for a community in a reasonable travel-to-learn area. I welcome the idea of an education administrator with hopefully an FE background, but it might benefit from having clarity around the different roles of the different people in play—for example, the FE commissioner: how that would work. Because at the end of it all, colleges are businesses and students and learning are at the very heart of that business. Therefore, just to reiterate, I would wish to make sure that learning within a reasonable travel-to-learn pattern was protected as well as students.

[Gordon Marsden]

That is an issue. I think that is the point you were making, Shakira.

Shakira Martin: Yes. May I add one thing? We would like an amendment to make sure that there are local impact assessments made on local areas, especially with the devolution that is happening and local authorities having more say over what is happening in a local area. I definitely feel that those individual areas need to be looked at really carefully in a bespoke way to make sure that we are meeting those needs.

[Gordon Marsden]

Yes, I agree. There is very little in the Bill about the impacts of the devolution process except for a perfectly reasonable clause about data.

Shane Chowen: I would not contradict anything that any of my esteemed fellow panellists have said. I would add that, following on from Bev’s point about protecting the learning opportunities in a local area, following area reviews we are looking at quite ginormous FE corporations with budgets of close to or over £100 million. So in some areas where you have quite large group structures, if there was an exceptional incident and that group became insolvent, the kind of ideas Shakira just highlighted around local impact assessments would be particularly important as well as in areas such as rural areas where there are very few colleges and providers that can swoop in and rescue those learning opportunities.

Bev Robinson: With area review, obviously I have got limited experience in my own area.

[Gordon Marsden]

You are about to get a lot more.

Bev Robinson: I am currently in the area review process, so I am happy to comment on Lancashire but not about across England. That has not been my experience in Lancashire. We are still midway through the process. There has been value in the process and I am not seeing any cold spots at the moment. But I think this is something to watch for in the Bill, so I do want to make this point again. If an unintended consequence is not in a reasonable travel-to-learn area, it could create a cold spot. I remember that words like sufficiency and adequacy were used back in the day to ensure there was sufficiency in an area, and I recommend the Committee considers that.

Secondly, the only thing I wish to question is one of the paragraphs in chapter 7, “Disqualification of Officers”. I question whether that should apply to the college boards and their non-exec directors. I am a little bit concerned that it may discourage students and the business community from serving on colleague boards. I would appreciate it if consideration were given to that point.

[Gordon Marsden]

Q Incidentally, that point was raised by other witnesses this morning. I cannot remember who it was, but the palette was drawn wider to include local politicians as well. As I listened, I was worried who might be prepared to serve on a board. That is a similar point to the one that was made. I would just like—

Shakira Martin: Gordon, may I add two vital points? Another concern regarding the education administrator is what qualifications and expertise they have within the sector. Are they familiar with the further education sector? When we are talking about widening access, can the Committee also consider care leavers, student parents and those with disabilities? That is it for this section.

[Gordon Marsden]

Q Right, okay. Can I come back to the institute itself? We had some discussions this morning with Peter Lauener about the genesis of the institute and my concerns about capacity, particularly at the moment. I would like to touch on the issue of representation. Bev, you have quite rightly made a distinction between the community and the learners and the actual organisation in a FE college itself. Do you all believe that learners should be represented on the board of the institute? Over and above the board of the institute, where else can they add value in a process and in a new institution that—at least initially, on the basis of what Peter Lauener said this morning—will have a somewhat limited capacity in terms of the number of people working for it?

Shakira Martin: We 100% believe that there should be a learner on the board. I believe there should be two reserved places: one for an apprentice and one for a student, as their routes into education and experiences will be different. My membership—my apprentices and college students—are consumers, and they need to be around this board. As long as they are taking loan money out, they need to be getting the best deal. Additionally, we have taken the apprenticeship levy from a European model, which is fantastic. However, we have left behind the quality assurance part, which talks about collaboration and working in partnership with colleges, students and other stakeholders. I would like the Committee to consider that.

Shane Chowen: I agree. As the institute is currently set up in statute under this Bill and others, it feels like there is huge value to be added by properly consulting and working with learners at every level of the organisation. I am about to celebrate my 10th year of working in further education, and one of the lines in legislation and regulation that I have learned to fear is “having due regard for learner views”. That relegates properly consulting and involving learners and apprentices to a compliance exercise, and it quickly becomes a tick-box process. The new institute has an amazing opportunity to not do that. Learners should absolutely be on the board.

Each of the 15 route committees can do quite a lot with learners, apprentices and former apprentices. At the end of the day, they are the ones who are looking at jobs, applying for jobs, brushing up their CVs and looking at job specs, so they will have a perspective to add to the development of apprenticeship standards, right from entry up to a higher level. It is not just about the board; it is throughout the organisation.

Bev Robinson: I see merit in having a strong student voice on the board. At the moment, I do not see a strong argument for them on the 15 routes, but I would be open to that. I really welcome a debate on this aspect of the Bill. In this country, professional and technical education has been—I do not know how polite to be—woefully treated. It has been a second class and a last resort, almost. I welcome the Bill putting it where it should be, which is as a first choice rather than a last resort.

[Gordon Marsden]

Q I hope that is a view shared by everybody in the Committee. I want to probe a little more on the approval process for technical education, and both of you may have something to contribute here. Before being shadow FE Minister, I spent two years as a shadow Transport Minister and I found myself being lobbied by the maritime community because they had developed a series of qualifications—their trailblazers—that were perfectly adequate and excellent for the maritime sector, but then took nearly 18 months to jump through the hoops of the then Department for Business, Innovation and Skills. That is a particular issue in a particular area, but it raises in my mind the question of whether better learner engagement—“learner” in that respect could be treated very widely—in the approval process for technical education would facilitate and improve some of the approval process, so that the lessons from the trailblazers are heeded.

Bev Robinson: I strongly commend co-creation—by co-creation I mean the employer voice is really strong in that, and I feel it has to be. If we learn the lessons from qualifications and the proliferation of qualifications over the last couple of decades, we have lost the employer voice and therefore we have lost some of the value of some qualifications. For me, co-creation is really important. That is about employers and educationists as well as making sure that the student or customer voice—the consumer voice, as Shakira said before—is important. I commend the Committee to consider that.

Shane Chowen: I do not want this to turn into a debate about why there may or may not have been a proliferation of qualifications, but some argue that it is because employers have argued that they did not particularly want it, so something else was developed. I have seen arguments that employers themselves have driven an agenda whereby they have been allowed to create and develop qualifications under a framework —under an employer-responsive model—so there are two sides to that coin. As I said, there are huge opportunities in this Bill to do a lot of great things in technical education and apprenticeships, and it feels like we are halfway there at the moment. An area I feel we can do much more on is widening access and participation in apprenticeships and technical education. If you had learners around the table with a serious voice and a vote, you would find much more innovative, creative and effective ways to engage with marginalised and under-represented groups than you would if you had a panel just of employers.

[Gordon Marsden]

Q On that point—after this, I will conclude, Ms Dorries—I am struck by the read-across between our discussions on this Bill and those that we had during the Committee stage of the Higher Education and Research Bill, except we have substituted the words “apprentices” for “students”. There is a lot of read-across between this and the Higher Education and Research Bill, and it is right that there is because the Government’s aim is to have higher skills, whichever Bill that comes out of, and this is part and parcel of that.

Yesterday in the Report stage of the Higher Education and Research Bill, we introduced a new clause that would set up a standing commission to look specifically at how we expand adult education and learning. My question is: what more, in the context of this Bill, does the Institute for Apprenticeships and Technical Education need to do to strengthen the argument for widening access and participation with the sorts of groups that we have talked about? I am talking about on the face on the Bill as opposed to saying simply, “Once it gets going I am sure it will think of looking at this.”

Shakira Martin: The Government are talking about parity between the two routes—was it parity? The office for students has just announced that it is going to have a learner voice—a student—at the table and that is where this starts. It starts in this room, from the beginning. You also need to remember that we are not just creating students with qualifications; we are creating citizens. Getting students around the table to take ownership of their learning and of what is happening with them in society is actually having a domino effect. They have been enabled to make decisions, and they will give this back. Once you take ownership of something then you have a much better view, love and respect for it.

I do think that it starts there, by having two reserved places, because studying in the classroom and studying as an apprentice are two very different things. That is why I stress that it needs to be two reserved places. If we are saying that there is parity, then that is the beginning of where it starts.

Shane Chowen: I would go further on that point about parity. I have heard Ministers and Secretaries of State call for parity of esteem and respect between the academic and technical route for many years, and that is laudable. This Bill feels like a good opportunity to move in the right direction with that. One of the first discrepancies is the enormous agenda to widen access and participation that there is in higher education, both in terms of what is in statute—which is why this Bill is important—and also in practice, in terms of what is funded on the ground. So in HE there is an established Office for Fair Access in statute, and the director has statutory responsibilities until the current Higher Education and Research Bill 2016-17 passes, and then that goes to the office for students.

There is a student opportunities fund managed by HEFCE that is worth about £41 million. Universities themselves spend between £700 million and £750 million a year on widening participation action in the form of bursaries and outreach activities. If we are serious about widening access and parity of esteem, there has to be a dual-pronged approach. We cannot have tonnes of resources pumped into widening access on the HE model and then not very much going into widening access on the technical and apprenticeship model, because there are still under-represented groups within the technical and apprenticeship system. There are still communities that are not engaging in the system as much as they should be. The system is not reflective of the employment sector or the general population, particularly when you look at students with disabilities and learning difficulties, and students from black and minority ethnic backgrounds. They are not reflected in the sector in the way that they should be. There is a massive opportunity in this Bill to do something about that.

At the very least, the new institute can have some responsibilities to report annually on progress towards levelling the playing field on improving access and participation, as well as achievement and progression of individuals from under-represented groups. What we can learn from the HE work is that there are already sophisticated models and benchmarks to do that. I do not think that it would be a difficult job. We would not be starting from scratch. It is important that there is a dual-pronged approach if we are serious about parity of esteem.

Bev Robinson: I would like to add something about the importance of careers advice and guidance. Understanding the many opportunities at a young age is key, and with positive models you then see them. Through careers advice and guidance, it is very simple: you can relate to that person and think to yourself, “Well actually if they can achieve that, then so can I.” That is very powerful for social mobility.

[Tracy Brabin]

Q I would like to ask about the opportunities of courses. My previous background was in the cultural industries, and it seems that culture and design are grouped. How would you like the choices within these brackets to be prioritised? Should the balance be about job creation, rather than careers? Have you had thoughts about the expectations of students and what they would be taking up within these brackets?

Bev Robinson: May I clarify: when you say brackets, do you mean the routes?

--- Later in debate ---

[Kelvin Hopkins]

Apologies, Ms Dorries. I have finished now; thank you.

Shane Chowen: I would argue that there would be opportunities in the Bill to place extra emphasis on those kinds of issues that the country faces in international trade negotiations, such as basic literacy and numeracy.

[Gordon Marsden]

Q I would like to ask this, while remaining within the scope of the Bill. There has been some interesting discussion about priorities, adult skills, training and so on. I want to return us to discussing the institute. If you had been here earlier, Shane, you would have heard a number of questions put to Peter Lauener about the nature of the institute, what its capacity might be and so on. I want to talk about one thing that strikes me about what the Bill is trying to do.

The institute had an interesting genesis, because it did not start out as an institute at all; it started out as a wish list in the Enterprise Bill by the previous Government as to who could actually look after apprenticeships. At one stage, it was going to be trading standards. Obviously, that subsequently was decided not to be the way forward, so the Government brought through, in the Enterprise Bill, the first genesis of the Institute for Apprenticeships, and like Topsy, it has just growed—very beneficially, I think, but that does raise some interesting questions that go to the heart of skills policy and of the new structure that will be set up, so I would like to ask the three of you, from your different perspectives, to answer this. We have heard a lot about apprenticeships. Obviously, that was discussed this morning with Peter Lauener. The technical qualifications are coming into this institute anew, but they bring with them the issue of how many people—actually, adults—need to be retrained and reskilled, the issue of what technical means for them. What should the balance be between the new institute focusing, obviously, on apprenticeships because that is a key Government target—

[The Chair]

Order. Mr Marsden, we have a vote just before 4 pm, so if we keep to the point of the question, the witnesses will have a chance to answer.

[Gordon Marsden]

Indeed. What do you think the balance should be in terms of the new institute focusing on apprenticeships, as opposed to focusing on other retraining and reskilling?

Bev Robinson: I would probably go 50:50, because if you look at what we are asking in terms of technical professional education up to levels 4 and 5, there will be a considerable amount of work to do.

Shane Chowen: I would agree, but I also think there is a lot of overlap between the two. One thing we have argued is that the institute could do much more to publicise and promote better data around outcomes for technical education and apprenticeships. That would be the same job for different forms of learning. I am talking about things such as employment outcomes, earnings outcomes, learner satisfaction and employer satisfaction. Those are things that the institute could do jointly between apprenticeships and technical education.

Shakira Martin: One thing that the institute could do is define what an apprenticeship is—is it employment or work? There could also be better initiatives to get young people or just people back into work. An example is council tax exemptions. What does that mean for students who are estranged from their parents or whose parents are on low incomes? If it can be clarified whether an apprenticeship is education, work or both, perhaps we would be able to take steps forward in anticipating what we actually need.

[Gordon Marsden]

That involves the Minister discussing some of these things with his friends in the DWP and brings us back to the 16-hour rule and also to the conclusion of the sitting, I suspect.

[The Chair]

Does anyone else have any questions? If there are no further questions from hon. Members, I thank the witnesses for travelling here today and giving evidence.

Ordered, That further consideration be now adjourned.—(David Evennett.)

Technical and Further Education Bill (Third sitting)

Gordon Marsden Excerpts

Committee Debate: 3rd sitting: House of Commons
Thursday 24th November 2016 Public Bill Committees

[Gordon Marsden (Blackpool South) (Lab)]

On a point of order, Mr Bailey. This Bill, which we did not oppose on Second Reading, is full of lots of worthy things, but the devil is in the detail, and the latest detail that we have had was a lengthy policy statement on clause 1 and schedule 1, which was delivered to Members at only 5 o’clock last night. I do not know whether other Members have had an opportunity to look at it—I gather that printed copies are not available, which is a shame, but it will have been emailed to everyone.

The point that I want to make is that it is extremely unhelpful, to put it mildly, for the details on complex issues relating to how the powers in schedule 1 to the Bill will be repatriated into the Apprenticeships, Skills, Children and Learning Act 2009 to be delivered to Committee members at such short notice, leaving us little time to study them, let alone table amendments. I would like to know why it was not possible for this document to be delivered earlier in the week—on Tuesday, for the sake of argument—when we might have had an opportunity to look at it properly. As it is, we have been done a grave disservice.

I remind the Minister and the Government Whip that the document includes the Keeling schedules, which are designed precisely to make complex provisions comprehensible by reference to the earlier legislation that is being changed. That is their purpose. It might also be worth reminding people that Keeling schedules were the innovation of a Conservative Member and were brought about under a Conservative Prime Minister; they are designed to help Government as much as Opposition Back Benchers to do their job.

The other point is that the policy statement makes out that the provisions are merely an add-on to ones taken up in the Enterprise Act 2016, which I am not querying. However, to argue that technical education is a mere add-on to apprenticeships is to diminish its value and to underrate the complexity of what the Government will need to do. That is therefore not a very good argument for saying, “Oh well, this is just a basic set-up of principles in which we have included technical education.”

In view of that, I am asking not only for an explanation from the Minister as to why the documents could not have been made available on Tuesday, but, in fairness, for some consideration to be given to taking manuscript amendments relating to the clause—since I assume it is not possible to reprogramme it at this stage—on Monday and Tuesday. We might then be able to have a broader and more thoughtful discussion. Depending on the Minister’s response, I will then ask about the context and basis of the policy statement for our discussion of amendments this morning, or indeed of clause 1 and schedule 1, if that is what we do.

[The Chair]

Obviously that is not a matter for the Chair. However, the point has been made and I invite the Minister, if he wishes to respond, to do so.

--- Later in debate ---

[Robert Halfon]

The existing policy statement has already been on the gov.uk website for several weeks, as has the delegated powers memorandum. What was provided last night was an expanded refresh, but we have provided information on the policy, and that is the key point.

[Gordon Marsden]

I appreciate what the Minister says about the original version having been on the website, but the point is that this is not the original but an expanded version. He used the word “refresh”, which, if I may say so, politely, is another slightly slippery term that would be best avoided. This is actually an amended version of what was on the website, which is why we are raising the issue.

We broadly support the principles of the Bill. We are trying to take it forward and do due diligence, as all members of the Committee should want to do. This is not a partisan argument or an opportunity to score points; it is about treating the Committee with the respect it deserves. Hon. Members received a significantly amended version of the policy statement at 5 o’clock last night, without having had any prior indication. I return to my point, which the Minister has not answered: why could this document not have been circulated on Tuesday? Why was it left until 5 o’clock on a Wednesday evening, when many hon. Members perhaps were not looking at, or were unable to look at, their emails? The Minister has heard already that my hon. Friend the Member for Luton North has picked his up only this morning. Frankly, if we want to proceed in a co-operative and friendly way in the Committee, this is no way to run a railway.

[Mr Shailesh Vara (North West Cambridgeshire) (Con)]

As a former Minister who has taken Bills through Committee, I am confident that there is no conspiratorial issue here. Regrettably, this does happen with a number of Bills going through Committee. It is happening under a Conservative Government now, but it used to happen when Labour was in government. I am confident that, on the whole, Ministers, of whichever shade of the political spectrum, mean well and act in good faith, but the reality is that sometimes things appear at the last minute. Those on the Opposition Front Bench simply have to live with it and get on. This is not conspiratorial; it is the way the Government operate, whichever party is in office.

[Gordon Marsden]

I understand the hon. Gentleman’s point, and I assume that most of the time these things come about—if I am not using unparliamentary language—as a result of a cock-up, rather than a conspiracy. For the sake of Hansard, I stress that I am not saying that that was the case here. What I am saying is that it was not terribly helpful that the document turned up at only 5 o’clock last night. I understand that these issues are quite complex. I might add in passing, however, that some of the discussion in this sitting will be about capacity, and if the Minister’s Department did not have the capacity to produce this very important document by Tuesday, that will raise concerns about its capacity to do some of the other things that it needs to do in relation to the Bill.

I am not asking that the document not be looked at. I entirely accept the point made by the hon. Member for North West Cambridgeshire that these things happen, but in the circumstances I think it not unreasonable to ask that hon. Members on both sides of the Committee, who might want to look at some of these issues, should have the opportunity to table amendments in the light of this policy statement. I remind those on the Government Front Bench that clause 1 and schedule 1 deal with most if not all of the meat of the establishment of this new institution, and we should get that right.

[Robert Halfon]

I will just say one final word on the matter. It is important to note that this is existing material. Most of it is already in the public domain—in the Sainsbury report and the explanatory notes. We did not publish it on Tuesday because we wanted to be able to digest the oral evidence session. There is no conspiracy. We were just trying to be helpful to the Committee by ensuring that there was a fuller note on the matter.

[Gordon Marsden]

I entirely accept the Minister’s explanation. It is unfortunate that we are in this situation, but I am asking whether, under the circumstances, we will be able to move amendments to clause 1 and schedule 1 by manuscript or on a starred basis at the beginning of next week.

[The Chair]

I am informed that the deadline for tabling amendments is actually the close of business today, so that could be done. The exact timetabling of the order of business is obviously a matter that needs to be determined by informal dialogue between the two Whips, so I leave that in their hands.

[Gordon Marsden]

I do not want to test your patience, Mr Bailey, and I accept what you have said, but on that basis, since we are going to move on to discuss clause 1 and schedule 1, may I establish the status of the policy statement? Does the Minister intend to present and debate that document as part of his remarks on clause 1 or schedule 1, or should we be able to refer to it in cross-questioning?

--- Later in debate ---

[Robert Halfon]

It is a pleasure to serve under your chairmanship, Mr Bailey. I am very pleased to be here this morning to begin line-by-line consideration of this important Bill. I look forward to debating it with all members of the Committee. I particularly want to convey my thanks to Lord Sainsbury and his Independent Panel on Technical Education for the excellent work that they have done on technical education, which we are now taking forward through the post-16 skills plan in the Bill.

I want to pay significant tribute to my predecessor, my hon. Friend the Member for Grantham and Stamford (Nick Boles), who has been recovering from a serious illness. It was good to see him in the House recently. I want to thank everyone who has taken time to serve on the Committee, and I thank you, Mr Bailey, and Ms Dorries for serving as chairpersons. I thank those who gave oral evidence on Tuesday this week and those who have already submitted written evidence; their expert contribution has got us off to a great start.

Turning to part 1 of the Bill, clause 1 seeks to amend the name of the Institute for Apprenticeships to reflect its wider responsibility for college-based technical education. The Enterprise Act 2016 will establish the Institute for Apprenticeships. The institute is expected to come into operation in April 2017 with apprenticeship functions. The clause, together with schedule 1, will extend the institute’s remit to reflect the Government’s vision for the skills system set out in the post-16 plan.

The reforms will result in technical education qualifications that are designed around employers’ needs. They will support young people and adults to secure sustained employment and will meet the needs of our rapidly changing economy. Measures to extend the institute’s remit are important for a number of reasons. As a country, we face a pressing need for more highly skilled people, yet the current system presents a bewildering array of overlapping qualifications with similar aims. We cannot continue to let so many of our young people work their way through a succession of low-level, low-value qualifications that lead at best to low-skilled, low-paid employment.

The Bill will give the Institute for Apprenticeships and Technical Education responsibility for approving high-quality technical qualifications that develop the skills, knowledge and behaviours required by employers for skilled employment. Apprenticeships and college-based technical education courses will be based on a common set of employer-developed standards. This will ensure consistency between the two methods of obtaining a technical education.

Securing a step change in technical education is vital for the productivity of this country. By 2020—we are open and honest about this—the UK is set to fall to 28th out of 33 OECD countries in terms of developing intermediate skills. The size of the post-secondary technical sector in England is extremely small by international standards. That affects our productivity, where we lag behind competitors such as Germany and France by as much as 36%. Unless we take action, we will be left further behind.

A high-quality skills system needs to be distinct from the academic option. Academic qualifications such as A-levels are clearly understood, yet most young people do not go to university. Evidence shows that technical qualifications have long been regarded as inferior to academic qualifications. Reforming the system so that it provides a clear line of sight to the world of work will ensure that technical education in this country is valued as equally as the academic option.

The reformed technical education system will be built around a clear framework of skilled occupations. Occupational maps will be used to identify the occupations that are suitable for technical education, grouping together those with similar requirements, designing the system around clearly identifiable occupations, and bringing together employers to identify the skills and knowledge needed for those occupations. They will ensure that the new system genuinely meets the needs of individuals, employers and the economy.

It is important that a single organisation is responsible for working with employers and is the custodian of employer-led standards. Giving the institute responsibility at the heart of these reforms will ensure that all technical education provision is closely aligned and of the same high quality. We will ensure that the institute has the skills and capacity to be responsible for technical education when its remit is extended in April 2018. It is right that the institute’s name is changed to reflect the wider scope of its responsibilities.

[Gordon Marsden]

I associate myself with the Minister’s kind words about his predecessor, the hon. Member for Grantham and Stamford. It is a great pleasure to serve under your chairmanship, Mr Bailey, and that of Ms Dorries. I appreciate that this is quite a technical and detailed Bill, so we will depend upon the skills of the Clerks and hopefully timely policy submissions from the Government to wade our way through it.

The Minister rightly spoke about the broad need for the institute. He talked frankly about the situation in terms of technical skills, which was alluded to recently by the noble Baroness Wolf. It is absolutely right that we have the Institute for Apprenticeships and Technical Education—I do not know whether we are going to have to state that in full all the way through, or perhaps we can use the acronym; I assume the “E” will not be silent. I shall not detain the Committee with the story of why one Government had to change the title of a higher education and lifelong learning department; Members can think about that acronym.

[Robert Halfon]

On a point of order, Mr Bailey. To help the Committee, IFATE is a perfectly acceptable description of the institute during the debate.

[Gordon Marsden]

Great. I shall use it with relish.

We are very much in favour of the establishment of IFATE. We were very much in favour of the establishment of the Institute for Apprenticeships—so much so, in fact, that we anticipated the Government in tabling a clause in which, with our limited capacity as opposed to the civil service’s, we tried to spell out what that institute should do. I make that point to issue a caution to the Minister. He is still relatively new to his post, but not to this field; he has a distinguished record in championing apprenticeships, both in person and in policy. I am entirely confident that the principle of everything he has said today is very close to his heart—it is not always close to every Minister’s heart, but I think it is in his case—and that he will do his best to take that through.

We did not oppose the Bill’s Second Reading, not simply because of the Minister’s personal qualities but also because we believe there is a great deal of good in the Bill. However, the devil is in the detail, and the detail that causes us significant concern, and to which my hon. Friend the shadow Secretary of State referred on Second Reading, is the fact that we come to the Bill and to this new institution with a great deal of rather confused and not very comforting baggage.

I remind the Committee that when the Enterprise Bill was originally going through the House of Lords, where it started, there was no concept of an Institute for Apprenticeships at all. If Members consult the Hansard report of the House of Lords debates, they will see that there was much discussion on the Government Front Bench as to how the whole issue of standards could be developed. At one stage, a Government spokesperson suggested—whether accurately or otherwise I do not know—that some of it might be the province of trading standards officers. I think most Members here who know the way in which local government has had its trading standards officers cut back in recent years would agree that that is probably an over-optimistic assessment.

In due course the Government decided that they needed to set up an arm’s length body, which is why, at a relatively late stage during the Commons debate on the Enterprise Bill—I think it was on Report; I might be wrong—the then Minister, the right hon. Member for Broxtowe (Anna Soubry), tabled an amendment to that effect, which we then debated in Committee. As I said, the Government on that occasion had not got their act together to put a clause down establishing it in the Bill, so we put one down and we discussed it.

I know that no Government like to take anybody else’s idea, but we were rather disappointed that, when the Bill eventually came out, it was a fairly standard boilerplate structure, if I can put it that way, for setting up any institution of this sort. As we know, this is an innovation that potentially takes quite a lot of working responsibilities away from the Department for Education and the Skills Funding Agency. I think we are now back in the sort of territory that we were in during the Committee stage of the Higher Education and Research Bill. The Minister I faced then was the Minister for Universities, Science, Research and Innovation, but we had exactly the same conversations in that Committee about the appropriateness of a Bill that established the office for students but did not mandate students to go on to that body. I feel a sense of déjà vu, because we are in exactly the same place with this Bill. We will return to the detail of that amendment in due course, but I mention it now only to illustrate the lack of connectivity that there seems to have been, and the relatively late stage at which guidelines for the Institute for Apprenticeships have been produced.

Hon. Members might also remember that the skills plan was originally intended to be in the Government’s academies mark 2 Bill. It disappeared from that Bill at a relatively late stage, when the Government realised that that Bill would be too hot to handle with their Back Benchers. We then had the rather strange situation, again at the very last minute, in which a Government statement about introducing the Bill and laying out its provisions had a little bit tucked in the middle saying, “Oh, by the way, we’ve decided we don’t have to go ahead with the academies issue.” I am not here to talk about academies, but I mention that example because it is illustrative. The hon. Member for North West Cambridgeshire spoke earlier about things that go wrong in Government. It is illustrative of the fact that the Government felt, at a relatively late stage—largely because of their embarrassment over that Bill, some observers believe—that this set of changes, which we welcome, should have separate legislation.

Whatever the reasons for that, we welcome it now, although I will gently say that it would have been better to have been able to discuss some of this in more detail, and possibly to have the Institute for Apprenticeships itself incorporated in the Higher Education and Research Bill. During the passage of that Bill, as the Government Whip will well remember, the Minister for Universities and Research spoke at length about the importance of higher level skills and everything that went with that, so it seems rather bizarre to some of us that this did not go into that Bill in the first place. We will not dwell on that.

What we want and need to dwell on are the issues relating to capacity. Capacity and time in terms of establishment have plagued the Government ever since discussions about the skills plan and the apprenticeship levy started. Sector skills council after sector skills council, employer bodies and providers have all had queasiness about the apprenticeship levy. We, too, support the levy, but we share some of the severe concerns about its implementation. A long list of organisations, including the Confederation of British Industry and the Federation of Small Businesses, have expressed and continue to feel concern about timing and capacity.

--- Later in debate ---

[Mike Kane (Wythenshawe and Sale East) (Lab)]

Does my hon. Friend agree that matters are extraordinarily hazy? We are setting up an institution and employing a gentleman for two days a week. The Government think they might employ 60 staff and the budget is an estimated £8 million. What guarantees are there that the organisation will be fit for purpose?

[Gordon Marsden]

Of course, the broad thrust of what my hon. Friend says is right; but let us try to be fair to the Government, and indeed to the officials, including Peter Lauener, who have the slightly unenviable task of bringing the matter to fruition in the relatively short time we now have.

On Tuesday, we discussed not only capacity, but the capability of the people recruited. That was why I asked Peter Lauener where the people might come from. I offered him the opportunity to say how many transfers, if any, he expected. I asked him:

“You talked about the numbers…given the staff reductions in the Department for Business, Innovation and Skills—of course, this is a machinery of government change—do you expect to be moving across or recruiting people from either the SFA or BIS who have previous experience in this area?”—Official Report, Technical and Further Education Public Bill Committee, 22 November 2016; c. 9, Q10.]

Answer came there none. I was merely told about the process for advertising for the key roles of deputy directors. I am sure that, like generals in armies, deputy directors are very important people, but in armies it is non-commissioned officers who are needed to get things moving—the people lower down the food chain who know all the bits and pieces and nuts and bolts. Peter Lauener offered no evidence on possible transfer processes from the Skills Funding Agency and the Department for Education, or indeed whether there have been expressions of interest.

Hon. Members will remember the comments of Ian Pretty, the witness from 157 Group, after David Hughes expressed strong concern about capacity issues. Mr Pretty has significant experience in the civil service and outside it, including as a tax inspector, as he said rather ruefully. He said:

“I would focus on capability as well. You can have 60 people or 100 people in the institute, but have you got the right capability? I would be nervous if the institute was completely staffed by civil servants. If this organisation is about co-creation with the private sector and the education sector, you need people with the capability to understand how business thinks and how business operates. You also need people who understand how the education providers operate. On the capacity issue, in terms of raw numbers you will cite something, but capability is more important.”––[Official Report, Technical and Further Education Public Bill Committee, 22 November 2016; c. 16, Q22.]

I agree. We do not have a problem with the direction of travel of the institute or the long list of admirable things it is supposed to do, but we have a severe problem of confidence about believing that it is anywhere near having the ability to do it. That is the issue that the Minister needs to address.

Perhaps I can drill down into that. The Minister talked about standards and frameworks, so it would be appropriate to ask him a few questions about those. It is fair to say that, although the routes produced by the Sainsbury review and the skills plan have been broadly welcomed—they produced 15 routes, which is a reasonable starting point and, sensibly and reasonably, the Minister has said that that number will be flexible—the broader picture is that the Government are trying to get everyone behind this new institute and its new policies. I will keep coming back to the target of 3 million apprenticeships because, even though it is not in the Bill, it is central to the success of the new institute.

--- Later in debate ---

[Robert Halfon]

I could listen to the hon. Member for Luton North for a long time on this subject, because he speaks with a lot of wisdom. I have been to the north-east of England to see young people on five-year apprenticeships in companies, doing exactly the things that he talks about.

I will just say that the public and private sectors will be following the same standards. We have exactly the same standards on training and quality, and we are introducing a public sector target from April 2017 in all areas to increase the number of apprenticeships in the public sector: 30,000 by 2020.

I will respond to the points made by the hon. Member for Blackpool South. He is kind about me and it is good to be opposing someone who also cares passionately. I very much enjoyed the visit to Blackpool and the Fylde College. What it is doing is extraordinary, not just for students but for the long-term unemployed.

I will comment on a few things, given that we are about to discuss amendments. The hon. Gentleman said that the levy was an administrative challenge for the IFA. It is important that it has only an advisory role on funding caps. The implementation of the levy is for the Department and the Skills Funding Agency.

The hon. Gentleman talked about the apprenticeship target and how difficult it was. It is worth remembering that there have been 624,000 apprentice starts since May 2015. We have 899,400 apprenticeship participations in the 2015-16 year. That is the highest number on record. Of course, it is a challenge to reach a 3 million target, but we are on the way.

[Gordon Marsden]

The Minister is right to point to progress so far and I do not want to disparage that. He reminds us that implementation is for the Department and the Skills Funding Agency. I am well aware, of course, that David Hill, who is an extremely talented and assiduous civil servant, has been seconded to do precisely that as director of apprenticeships. I was puzzled, however, that the Minister made no reference to the Apprenticeship Delivery Board. I will not go into whether it will have tsars or not; that is for others to decide and the Minister to ponder.

When that board was announced, it was advertised as being a key part of the process of encouraging and driving up the numbers. It was not simply to be a bully pulpit, but it was to have a very direct and active role. Yet since the hon. Member for Stratford-on-Avon (Nadhim Zahawi) stood down from that post, we seem to have heard very little out of the board. What is its role?

[The Chair]

Order. That was rather a long intervention. The hon. Gentleman can make a further speech if he wishes, but if he could make his interventions shorter, it would help the Minister.

--- Later in debate ---

[Gordon Marsden]

I am duly rebuked, Mr Bailey.

[Robert Halfon]

I reassure the hon. Gentleman that the Apprenticeship Delivery Board is in full flow. I meet it and its chairman regularly. It goes up and down the country and works with businesses to encourage them to employ apprentices. Much of our success has been because of that board’s incredible work.

On frameworks and standards, the hon. Gentleman will know that 25% of frameworks will be gone by the end of this year. The 400 standards support around 340,000 apprenticeships. We hope by the end of the Parliament to have moved entirely from frameworks to standards. That is our target. As he knows, the standards will be determined by occupational maps based on labour market evidence and information about employer demand. We do not want to set an upper limit, because we need flexibility to respond to the economy. It will be up to the IFATE to plan the timescales for the review of those standards.

[Gordon Marsden]

Will the Minister give way?

[Robert Halfon]

I want to get to the amendments, and no doubt the hon. Gentleman will bring some of these things up again at some point, so will he allow me to answer the questions?

The hon. Gentleman asks us to sign a blank cheque on IFA capacity. We are consulting on the Secretary of State’s strategic guidance letter to the IFA. The IFA’s shadow board will publish a draft operational plan. The hon. Gentleman is right that Peter Lauener, the shadow chief executive, is excellent. He has been working with Antony Jenkins, who is the shadow chair. The shadow IFA is working hard to get the institute’s operational plan up and running by April 2017, and that plan will be published soon. Progress is being made, and the institute will be set up in April 2017.

As the hon. Gentleman knows, the institute’s board and chair are being appointed. There are 60 core staff. The IFA will draw on many more people through engagement with employer panels, experts and more than 1,000 employees, so the IFA does have the necessary capacity. We are doing this carefully. The technical education bit will start a year later; the first course on the new route will start in 2019. We are doing everything that he wants. The institute has the necessary capacity, and we have the right people and board to run it.

On occupations not included in the 15 routes, if the hon. Gentleman remembers, the principal of his college said in the evidence session that it was possible to do different things, such as sports, through the academic route and applied general qualifications. We are not closing the door on those things, but 15 is regarded as the right number. We have analysed the labour market, and I think that it is right to have those 15 routes, which are, in essence, what our economy needs. On that basis, I believe that the expanded institute is the right body to be at the heart of the reforms—we are implementing the Sainsbury reforms—and the Government are committed to ensuring that the institute plays that role. Clause 1 should therefore stand part of the Bill.

--- Later in debate ---

[Gordon Marsden]

I am grateful to the Minister for his response and his customary courtesy. I am sure that this will not be the last time I say that we agree about the ends but not necessarily the means and whether they are adequate. It was interesting to hear what he had to say about the Apprenticeship Delivery Board; perhaps if it were a little more public-facing, we might know more about what it does.

It is easy to say that we are asking for a blank cheque on capacity, but we are not. We are asking, for all the stakeholders concerned, for some reassurance and some filling in of the current blank canvas in this area. The Minister has elaborated on the various functions and how marvellous they will be—it will all be marvellous, but only when we get the right number and the right sort of people. It is simply not convincing to say an elegant version of, “It’ll be all right on the night,” because it is not all right on the night at the moment. The clock is ticking, and we do not know where these people will come from.

If we were working in “government as usual” times, coming up to 18 months since the general election, a new Government would obviously want to push their major things through. In that situation, I would be less concerned about some of the vagueness and the blank canvas, but we are not in that situation. Three things have happened since the general election that give me and most people considerable concern about the capacity of the Department for Education and—I say this gently—the Ministers concerned to deliver on what they undoubtedly hope to do.

First, of course, we have a new Government, with a new Prime Minister and new Ministers, including the Minister present. I know very well, as do most people in this room, that when we have a new Government, we cannot just pick up from day one; there is an inevitable delay, with issues to be addressed. We factor that in, but nevertheless it is the case.

Secondly, as a result of the change of Government, the machinery of government changes brought skills and apprenticeships out of the then Department for Business, Innovation and Skills and into the Department for Education. I happen to think that that was by and large a good thing. It gives a more coherent, stronger, longer narrative. However, I have been around for long enough—frankly, so has the Minister—to know that the machinery of government changes do not happen smoothly; they cause delays and confusion. That is why so many people have been worried about the speed of this process. There are ways to deal with the necessity to do things relatively quickly. Put bluntly, we put more resources and more effort into them and call upon other areas to do so. I have seen little evidence of that so far.

If the Minister was working in this area with a Department that was of reasonable complement, we could have some confidence. However, I remind him that staffing levels at the Skills Funding Agency are down nearly 50% since 2011. There is a continuing and accelerating decline in National Apprenticeship Service staffing, and the Government closed—

[The Chair]

Order. The hon. Gentleman is straying into a rather broader debate. I ask him to refocus.

[Gordon Marsden]

I will refocus to the extent, Mr Bailey, of saying that all the issues I describe have a consequence on the effectiveness of the Institute for Apprenticeships and Technical Education, which we are being asked to approve to set up as a new body. The Minister has not convinced us that that new body will have the capacity it needs to deliver all this. I have explained some of the reasons for that.

[Kelvin Hopkins]

I agree with my hon. Friend. Would it not be intelligent to look at what is done in other countries that are more successful at training people—notably Germany, which would be a good place to start—to compare the quality of apprenticeships and the resource that goes into training apprentices in those countries?

[Gordon Marsden]

Of course my hon. Friend is right, but one would also hope and think that the Department had done that already. There is a healthy industry of comparative studies out there, not just in the public sector but in the private sector. No doubt, the Department takes advantage of that. My point is that, if we want the institute to progress properly and to do everything it needs to do—what it says on the tin—we need more reassurance.

The final area on which we need reassurance is the implications of Brexit. Hon. Members might ask what Brexit has to do with the Institution for Apprenticeships and Technical Education. Well, a lot. If the Government do not manage to get the sort of money from, for example, European structural funds, which have traditionally supported the expansion of apprenticeships and small businesses in areas of the country with strong local enterprise partnerships, the Government’s ability to reach that figure will be affected. That is why we have to ask those questions about capacity, capability and join-up.

I have not even talked, you will be relieved to know, Mr Bailey—

[The Chair]

I am very relieved.

[Gordon Marsden]

I have not even talked about the relationship of the new institute to the variety of other bodies, such as Ofsted and Ofqual, which were referred to in the evidence sessions, that are circling around wondering what their relationship to the institute will be. I make the point to the Minister that this is not business as usual or something of which he can say, “Well, it’ll be all right on the night,” because it is like playing four-dimensional chess at the moment. I do not know how good the Minister is at playing four-dimensional chess, but he might need to improve his skills if some of the problems that we are talking about come to pass.

[Mike Kane]

The only blank cheque on offer here is that the implementation plan for the institute will be published “in due course”. Is it not concerning, with the competing pressures of government, as my hon. Friend pointed out, that we just do not know when that implementation plan will be published?

[Gordon Marsden]

It is, but to be fair, Governments always say things will be done in due course. Anybody who has said, “Yes, Minister, of course; we have no plans to do this,” means that they are not going to issue a statement about it on that day, so I am not going to press the Minister too hard on the phrase “in due course”. However, I hope that the Christmas to which Peter Lauener referred in terms of the employment of the new people is the traditional Christmas and not, say, the Russian Christmas, or possibly even the Georgian Christmas, which I think comes at the end of January. We all know what used to happen to the autumn statement—full marks to the Chancellor for keeping it within autumn.

I think that I have said enough to emphasise our concerns about the way in which the institute will be supplied and its ability to proceed, but we do not want to hinder its setting up in any shape or form. It needs to be set up as soon as possible, so that it can get a move on with some of these things. We therefore do not intend to oppose the clause.

Question put and agreed to.

Clause 1 accordingly ordered to stand part of the Bill.

Ordered, That further consideration be now adjourned. —(David Evennett.)

Technical and Further Education Bill (Fourth sitting)

Gordon Marsden Excerpts

Committee Debate: 4th sitting: House of Commons
Thursday 24th November 2016 Public Bill Committees

[Gordon Marsden (Blackpool South) (Lab)]

I beg to move amendment 9, in schedule 1, page 21, line 13, at end insert—

“(4) The Institute for Apprenticeships and Technical Education in performing its functions must have regard to the need to promote equality of opportunity in connection with access to and participation in Further and Technical Education.”

This amendment would ensure that the Institute for Apprenticeships and Technical Education must have due regard for widening access and participation.

[The Chair]

With this it will be convenient to discuss amendment 10, in schedule 1, page 21, line 13, at end insert—

“(5) An apprenticeship target shall specify what proportion of new apprenticeships starts is to be applied to apprenticeships for people—

(a) who have been looked after children; and

(b) with disabilities.”

This amendment would ensure the Institute for Apprenticeships and Technical Education sets targets to increase the number of apprenticeship starts made by care leavers and people with disabilities.

[Gordon Marsden]

It is a great pleasure to serve under your chairmanship again, Ms Dorries, and to begin discussing the series of amendments that we have so far tabled to the Bill. As I might have said this morning, having just come off the Committee that considered the Higher Education and Research Bill, I am struck by the fact that the same sorts of issue that we raised in relation to that Bill for students at higher education level are now appropriate to be raised for students at this level—apprenticeships and further and technical education.

Of course the difference, which we might want to contemplate, is that over recent years in higher education not only have issues relating to access and participation been high on the agenda, but, to their credit, both Governments—pre-2010 and subsequently—have taken some steps in that direction. Notably we had the creation under the Labour Government of the Office for Fair Access, but we never had a similar organisation for further education students and apprentices, so it seems appropriate to discuss this amendment today.

I am not necessarily expecting the immediate creation of an FE or technical education equivalent of OFFA, but I am certainly suggesting to the Government that at a time when we are trying to expand the number of apprenticeships and get parity of esteem for technical education, we should perhaps consider what priority that will have in the new Institute for Apprenticeships and Technical Education. Again, the words “Capacity, capacity, capacity” go around in my brain, but I will suspend that for this afternoon and focus simply on the principle and why the principle is very important.

By way of comparison, let me take us back to what the Higher Education and Research Bill said in establishing the office for students—an organisation that is not that dissimilar to the institute, although of course it is in terms of size and reach. Clause 2, entitled “General duties”, states:

“In performing its functions, the OfS must have regard to…the need to promote equality of opportunity in connection with access to and participation in higher education provided by English higher education providers”.

That duty to “have regard to” will of course cut across, in some areas, to technical education, because there will be higher skills in that area and there will be providers—FE colleges, for example—that are providing HE. However, when it comes to the broader picture—concentrating as a matter of public policy on what the Government might need to do to promote equality of opportunity and access to and participation in further and technical education—we have a significant way to go.

Shane Chowen, head of policy and public affairs at the Learning and Work Institute, gave evidence to us on Tuesday. He said that people with disabilities and learning difficulties and people from black and minority ethnic backgrounds have been famously under-represented in apprenticeships for a number of years, so why not use the introduction of this new institute to make a commitment in the Bill to improving access to apprenticeships for traditionally under-represented groups?

FE colleges and providers have already expressed concern to me about the Government’s focus when it comes to the 2 million apprenticeship target, but mandating the institute to widen access and participation would be beneficial for all parties. On top of that, the Government have set out their own laudable agenda to halve the disability employment gap. Only five in 10 disabled people have a job, compared with eight in 10 non-disabled people. Surely the Government should be using apprenticeships as a critical step towards eradicating that gap.

How, in practical terms, do we go about improving access and participation? They are fine words, but how do we actually put some sharp edges on them? One thing that I and many others would like the new institute to do is look at what might be done for groups who have traditionally been under-represented in pre-apprenticeship support and training. The Minister has already spoken about that issue, particularly with regard to traineeships. Again, I will not rehearse the history of traineeships, except to say that they were—I strongly believe that they still are—a good idea.

If we want not only to meet the targets that the Government have set for quality apprenticeships, but to ensure that those quality apprenticeships are evenly and fairly distributed among all groups, we must recognise that some groups will find it much more difficult to get to the frontline of competing for them without some prior training, support, guidance and so on. In my understanding, that was the original role of traineeships. I will not go into the swerves and views of different Ministers and different comments in the period of time since. For a variety of reasons—some to do with the restrictions that the Government placed on promoting anything other than apprenticeships at that time—traineeships did not really get the head start that, in my view, they deserved.

I welcome the Minister’s comments about traineeships, particularly about seeing them as an introductory route into apprenticeships. In that respect, traineeships would be particularly appropriate for the groups of people we might be thinking of when it comes to promoting equality of opportunity for access and participation. Traineeships are also appropriate for retraining because, after all, the institute has now been broadened out to take in technical education, not just apprenticeships. Traineeships could be used for retraining and non-apprenticeship skill access for the groups we are looking at.

One helpful option that the Government should utilise in the Bill—I am genuinely quite surprised that they have not, but maybe the commendable speed with which the Maynard review was completed has been a factor—would be to enshrine the Maynard review in law. I think that was mentioned on Second Reading, but I am not sure that I entirely followed where we were up to with the legal procedure. That would send an important signal. Therefore, although I do not want to create otiose legislation, I suggest to the Minister that there might be a mechanism to ensure that that admirable work is enshrined in law. I pay tribute to the hon. Member for North Swindon for his participation in that process, and indeed to the previous Skills Minister, both of whom worked very hard indeed to ensure that the review got its nod before the referendum—and, my goodness, considering what happened, it is just as well that they did. That would be a good thing to do.

We welcomed the opportunity to submit evidence to the taskforce that the Minister commissioned, and we welcome the Government’s intention to explore access to apprenticeships for those with learning disabilities and other, not always visible, impairments and to find recommendations for resolving that access. Will the Minister update the Committee on where the Government are on implementing the review’s recommendations? It is still early days, but that would be useful.

Schedule 1 is essentially about making sure that access and participation strategies are high up the list of things for the new institute to do, and of course that cannot be divorced from careers advice. I will not stray outwith the amendment, except to say that careers advice, and what has or has not been done for it in the past four or five years, has occupied some lively debates and been a cause of concern both across the sector and across the House. Everyone who has commented on careers advice, particularly careers advice in the school setting, has said that without adequate access to information, advice and guidance that encourages young people to take up apprenticeships, traineeships or, indeed, technical education, we will be hampered in reaching the access and participation strategies that we need.

The Minister has previously commented on the work of the Careers & Enterprise Company, which I have met. The Careers & Enterprise Company has positive goals, although I still have concerns about capacity. If we want to know where people who have become apprentices have found difficulties in access and participation, we need to hear their voice and their commentary.

The excellent 2016 survey by the Industry Apprentice Council, supported by EAL and Semta, produced statistics that strongly underline the importance of careers advice in this area. The Education Secretary has observed that there is no reason to doubt Ofsted’s finding that 80% of careers information, advice and guidance is below the necessary standard, even though schools have a statutory duty to provide impartial and detailed careers IAG. I am afraid that that was reflected in this year’s survey. The proportion of respondents from members of the Industry Apprentice Council who said that their information about apprenticeships had been poor or very poor remained high—it was 37% in 2014, 40% in 2015 and 35% in 2016. There was some improvement, but there is a considerable way still to go.

[Tracy Brabin (Batley and Spen) (Lab)]

To add to my hon. Friend’s statistics, in the evidence sessions we heard that the answer to careers advice was that it should happen in school at key stage 4. Statistically, only one in three teachers think that their school is fulfilling its statutory duty to provide decent careers advice, and 68% of students think that 16 is too early to make career choices. Working-class kids take longer to develop academically, and 42% of students said that they did not receive enough information, advice and guidance before A-levels. I add that to the plea for careers advice to be included in the Bill.

[Gordon Marsden]

My hon. Friend has been in the House for only a relatively short period of time, but she is making some absolutely excellent and spot-on points. In this context, we are concerned with the specific ways in which the measure will affect people’s ability to take up apprenticeships, and that is what I will focus on.

This is about more than information in schools; it is also about who can come into schools to influence people’s career choices. I, for one, have praised a number of companies for what they have done to offer apprenticeships to adults. In terms of young people, British Gas, for example, has for a number of years had a crack team of female ex-apprentices who go into schools and colleges to break down gender stereotypes. Without suggesting that the institute should be prescriptive in that respect, I think that it could and should encourage the breakdown of gender stereotypes in terms of applications for apprenticeships.

It works the other way around, as well. There is a young man in my constituency, a nurse, who has been very active in the campaign for NHS bursaries. We need more men in the nursing professions and the caring professions, and many of those people can come through apprenticeships. Again, there is a role for the institute. Incidentally, another issue is the commitment to continuous professional development, in which the new institute, particularly the technical education side, will play a role. We must be careful there as well to extend continuous professional development outwith the usual groups of people from a professional background.

Those are some of the issues of which we must take cognizance when considering the amendment. Unfortunately, the representative from the National Society of Apprentices was unable to give evidence on Tuesday due to a family illness, but the National Union of Students —it is important to add that the NUS figures are not dissimilar to those from the Industry Apprentice Council—has stated:

“We want the…government to invest in a truly national careers system that delivers impartial careers information, advice and guidance”,

and that in surveys, 21% of apprentices said that they had never received information about apprenticeships.

The NUS draws attention to a point that will not have escaped the Minister’s attention—I know that he was questioned closely on it by the Sub-Committee on Education, Skills and the Economy. The NUS found that the current approach to careers advice is exacerbating skills shortages. Those are some of the arguments that we believe it is important to take on board when considering the amendment.

I had a similar discussion in Committee with the Minister for Universities, Science, Research and Innovation. We did not always agree, but we came to some convergence of our views. It is important when establishing a new organisation to give some direction or guidance in the Bill establishing it, in this case in schedule 1. There should be some emphasis on the signals sent to the outside world about what sort of organisation it is going to be. Will it simply be a bog-standard Government quango or non-departmental public body, or will it be a forceful campaigning institution? We had a debate this morning about how campaigning it could be with a relatively modest workforce, but that makes the issue all the more important. Given the references that the Minister made, perfectly reasonably, to the range of people who will not be members of the institute but will be supportive, it is extremely important to send out the message in the Bill that the institute must have regard to that function.

That is extremely important, because governance in this area is relatively underdeveloped, when compared with governance in higher education, which the Minister for Universities, Science, Research and Innovation and I discussed during the Higher Education and Research Bill Committee. It may have been reasonable for him to have told me in that Committee that there was no need for me to worry about putting a measure in the Bill regarding the OFS, because the Government had been doing all these other things for years in that area. I did not agree with him, but he had a point. The point about this measure is that although we are not exactly in the stone age when it comes to access and participation, we are certainly nowhere near as far down the line as in higher education.

Amendment 10 continues that theme, but in more specific fashion. It would require the Government to specify in its apprenticeship targets the proportion of new apprenticeship starts for those who were looked-after children, and for people with disabilities. It would ensure that the Institute for Apprenticeships and Technical Education increased the number of apprenticeship starts by care leavers and people with disabilities, so it is linked to the strategy arguments for access and participation that we put in amendment 9.

It is curious how targets are sometimes set; the Government already have targets to increase the proportion of black and minority ethnic apprentices by 20%. It might make sense for them to do the same for people with disabilities and care leavers, though I do not say what the proportion should be. We also seek clarification from the Minister on the progress on the BME targets, if he has those figures to hand. Those targets were set under the previous Government and were never formally incorporated in legislation. It would be helpful if the Minister could confirm that the Government were still working to meet those targets. My right hon. Friend the Member for Tottenham (Mr Lammy), having fought the good fight, with others, on apprenticeship funding in disadvantaged areas—the Minister listened to his arguments—has also been pressing on these issues due to the nature of his constituency.

The Government’s apprenticeship funding proposals last month recognised that 19 to 24-year-old apprentices who had previously been in care, or who had a local education authority health and care plan, might need extra support. The majority of respondents to the Government survey supported that, with more than twice as many agreeing with the proposal than disagreed: 53% to 26%.

I make a more generic observation that it would be helpful for the Minister to consider: in recent years, in debates on apprenticeships and where they should be focused, a dichotomy has often been proposed between adult apprenticeships for those who are over 24, and apprenticeships for those who are 16 to 18-year-olds, with a greater focus on the latter. I have sometimes felt that we needed to shine more light on 19 to 24-year-olds generally as a target area, because that range often includes people who have had all sorts of problems, sometimes of their own making, and sometimes absolutely not; I am thinking of family circumstances and issues of bereavement, and a number of them have been carers. I know of nearly 1,000 young people in Blackpool who are actively caring for family members.

I have always taken the view that the 19-to-24 range is a crucial cohort from which we should be recruiting apprentices. Even though those young people might have fallen by the wayside before 19 for whatever reason, they often bring with them zeal, experience of hard knocks, and a desire to do even better during the apprenticeship period. That is particularly important. Of course, the Government have recognised the importance of looked-after young people by extending the remit of their care plans up to the age of 25. I pay tribute to the Minister for Vulnerable Children and Families for that. It is a good start, but it is important to guarantee that every necessary step is then taken to ensure access and opportunity for care leavers.

Looked-after children achieve less highly at GCSE than their counterparts and often miss out on parts of education. There may be a history of abuse in their background.

[Kelvin Hopkins (Luton North) (Lab)]

I am interested in my hon. Friend’s comments on looked-after children. They may have been held back in education not because of a lack of ability, but because of their disturbed personal circumstances. Given a secure environment, they can in fact progress, probably more rapidly than others, and become very effective employees and good citizens.

[Gordon Marsden]

My hon. Friend is absolutely right. He raises a whole subset of questions that we cannot go into this afternoon about the strength of support in schools for young people in those circumstances. That ties in with what I was coming on to say. The Special Educational Consortium, which has submitted evidence to the Committee, along with Barnardo’s, has made some important points. There are real challenges, because less than half of disabled people are in employment, compared with 80% of the non-disabled population, and only 5.8% of adults with a learning disability who are known to local authorities are in a job, which underlines the importance of the Maynard review. On top of that, the proportion of apprentices with learning disabilities has decreased: it was 11% in 2010-11 and is only 8% now. But the good news is that for all apprentices, the success rate of completing their frameworks has risen considerably, and that is true for those with disabilities as well.

The climate for advice on apprenticeships for those with disabilities has declined markedly. Jobcentre Plus’s own disability employment service has a ratio of only one adviser providing support for every 600 disabled people, which was a key cause of concern highlighted by a Work and Pensions Committee inquiry in 2014. In answer to a written question in October 2015, Ministers revealed that the number of jobcentres employing at least one full-time equivalent disability employment adviser had fallen from 226 in 2011 to just 90 in 2015. The Minister may be familiar with the comprehensive Little and Holland review that in 2012 made some 20 recommendations in this policy area. We are not here today to solve the problems of the Department for Work and Pensions or jobcentres, but all that underlines the importance of those targets being firmly in the mind of the institute and, indeed, in the minds of the Minister and his colleagues.

--- Later in debate ---

On representation, I will reflect on what the hon. Gentleman said, but it is important that the Secretary of State has a power to direct the institute, especially in terms of technical education. It is the duty of the institute to represent everybody, as the legislation sets out. I hope that the hon. Gentleman will feel reassured enough to withdraw the amendments, noting that I will reflect on what he said.

[Gordon Marsden]

I thank the Minister for that positive and thoughtful set of responses. I agree with him on the issue of disabilities. I have had disability in my own family; how disability is defined and classified is not necessarily whether someone is in a wheelchair. We do not need to go into all of that—we all know that. If the Minister is saying that one should not have a target for people with, in inverted commas, “disability”, I would agree with him.

There is one point that he has not replied to, but he does not need to come back to me on it now; he could perhaps write to me. The reason for tabling the amendment was that I understood that the Government already had a set target in relation to black, Asian and minority ethnic people. If that is the case, it is important that we at least consider whether that should be balanced against other targets. Perhaps we need to consider whether we should have targets in the first place, but if that target exists, and the institute comes in without other targets for other people, people will inevitably draw certain conclusions. They may be completely erroneous conclusions, but people may draw them.

Having said that, I am encouraged by what the Minister said. I too will reflect on what we have said. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Gordon Marsden]

I beg to move amendment 11, in schedule 1, page 22, line 14, at end insert

“following consultation with institutions, students and employers, and their representatives”.

This amendment would ensure that the Government must consult with institutions, students and employers, and their representatives before making changes to the “occupational categories” or “routes”.

The amendment would ensure that the Government consult with institutions, students, employers and their representatives before making changes to the occupational categories or routes. You were not with us this morning, Ms Dorries, but we had quite a detailed discussion around occupational categories and routes, so I will try not to repeat the arguments that we had—people can read them in Hansard.

If there are concerns and controversies about the different routes—for instance, about whether the service sector is adequately represented in the existing routes—that gives even more force to the argument that there should be as broad a consultative and collaborative process as possible. It should not hold up the processes; I am conscious that consultations can go on and on endlessly.

As it stands, the Bill enables the Secretary of State to propose categories for those routes without any further input. It simply requires the Secretary of State to notify the IFA of any changes. I say to the Minister what I said to his counterpart on the Higher Education and Research Bill: although I genuinely have every confidence in his wish to consult, and, for that matter, in the Secretary of State’s wish to consult, we are setting down legislation that will last for a significant number of years, so we have to be careful that we do not hook everything on to the whim of a Secretary of State. After all—we made this argument about the Higher Education and Research Bill—if a new institution is to succeed, it has to have the active and enthusiastic participation of as many of the people who are affected by it as possible. A consultation with institutions, students, employers and their representatives is a necessary part of the process.

A further point is that there is a balance to be struck —the Minister will be well aware of this, because it is a continuing and intensifying debate—between the bespoke skills that are needed for immediate jobs and the enabling skills for more generic future employment. There will always be a tension between the needs of an employer and the needs of an employee—they might be a student or an apprentice—in whichever skills area. After all, in the 21st century we will not all have, as my father was promised before the second world war, a job for life.

We will probably see young people who—I am sure we have all used this phrase, one way or another—do five careers during their lifetime, two of which have not yet been thought of. It is therefore even more important that we have that broad process of ongoing consultation about how generic, as opposed to bespoke, skills should be, so that not only do we get the skills that we need for the future, but young people and adults wanting to return to work or start a new career get the skills that they need.

[Robert Halfon]

I welcome the opportunity to debate the amendment, and understand why Opposition Members support it. It is important to understand the purpose of occupational categories, which we refer to as routes in the technical education reforms we are putting in place, and how they relate to the overall system we are developing. The routes are the main ways that learners will find their way around the new system. They provide clear and accurate signposts to the new qualifications.

Lord Sainsbury’s report proposed a system that has

“employer-designed standards...at its heart”,

which is what we have created. He urged that there be a common framework of standards, covering both apprenticeships and college-based provision. Those standards are the basis of the new technical education system we have created. In essence, the standards are the knowledge, skills and behaviours required to perform the occupation.

Presentationally, it does not help to have hundreds of different standards, completely distinct from one another. It is better to group them together to make it easier for people to understand how to navigate through the system. The routes give us a mechanism to do that. I shall not go through it again, but on Second Reading I set out how, if someone went down the engineering route, that would be reflected if they then chose a different branch of engineering.

Earlier, we discussed best practice overseas—I think the hon. Member for Luton North mentioned it—and our system does reflect international best practice. It was reviewed with employers, academics and professional bodies as the Sainsbury panel developed its proposals. The routes are each based on evidence-based occupational maps, on which we have to consult widely. The institute will take on board a wide range of views when developing the occupational mapping, which will then feed into the shape of the routes. It will have to help to ensure that the routes are aligned with the needs of the economy and the industrial strategy, so that young people and adults can make the choices they need to make when they move into skilled technical occupations.

Route panels—panels of professionals—and employers have been consulted to ensure that the institute gets it right, so it is not necessary to consult on the routes separately. Nevertheless, there will of course be an ongoing need to keep the route structure under review—it is flexible—and to continue to listen to the feedback from stakeholders. In view of that, I hope that the hon. Gentleman will feel reassured enough to withdraw the amendment.

[Gordon Marsden]

I thank the Minister for that explanation, which is helpful. I hear what he says, but I am still not entirely reassured. I understand the process; indeed, I understand the process laid out by Lord Sainsbury in the skills plan. The point I was trying to make, and to which I referred this morning when I discussed the responses from the Association of Employment and Learning Providers and various others, is that there remains considerable unease—I will put it no more strongly than that—about whether the routes cover a large enough area of the skills or sectors we will need for the future. That is separate from the issue I raised about enabling skills.

I am not rubbishing the existing routes at all, but the matter needs to be thought about and watched very carefully. I can understand what the Minister is saying about not having everything chopped into silos, but I would not want him to think that certain areas, particularly the service sector, can be ignored just because he has been told that this is the route to follow. Nevertheless, it was a probing amendment. I was interested in what the Minister had to say, and we can always return to the matter on Report if we are not happy. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Ordered, That further consideration be now adjourned. —(David Evennett.)

Technical and Further Education Bill (Fifth sitting)

Gordon Marsden Excerpts

Committee Debate: 5th sitting: House of Commons
Tuesday 29th November 2016 Public Bill Committees

[The Chair]

Members may remove their jackets during the sitting. Would everyone ensure that all electronic devices are turned off or switched to silent? The selection list for today’s sittings is available in the room. I have used my discretion to select amendments that were tabled only on Friday, for which the usual period of notice has therefore not been given, as I am satisfied that it was not practicable for Committee members to consider fully the policy statement supplied by the Government on Wednesday in time to table amendments before the deadline. I remind Members that we will consider the clauses and schedules in the order set out in the programme motion that was agreed last Tuesday, which is set out at the end of the amendment paper. We will now resume consideration of schedule 1.

Schedule 1

The Institute for Apprenticeships and Technical Education

[Gordon Marsden (Blackpool South) (Lab)]

I beg to move amendment 12, in schedule 1, page 23, line 6, at end insert—

‘(4A) The Institute must, in approving the group of persons specified in subsection (3), have regard to the desirability of the group’s members between them having experience of—

(a) representing or promoting the interests of individual students and apprentices, or students and apprentices generally;

(b) providing technical and further education;

(c) providing apprenticeships;

(d) at least one relevant trade union official;

(e) employing those who have completed technical and further education courses or apprenticeships; and

(f) any additional knowledge or profession that the Institute considers relevant.”

This amendment would ensure that the groups formed to set standards for the “routes” in technical and further education have relevant experience and include students in the process.

[The Chair]

With this it will be convenient to discuss the following:

Amendment 28, in schedule 1, page 23, line 6, at end insert—

‘(4A) The Institute, in carrying out its functions under this section, must show due regard for broad representation and diversity amongst the group of persons preparing each standard, including—

(a) gender and

(b) the representation of both large and small employers.”

Amendment 13, in schedule 1, page 23, line 20, at end insert—

(c) information about matters that it takes into account when deciding whether or not to convene a group of persons to prepare a standard for the purposes of subsection (6).”

This amendment would require the Institute to publish information about its reasons for convening, or choosing not to convene, a group of persons to prepare a standard for an occupation.

[Gordon Marsden]

It is a great pleasure to serve under your chairmanship, Ms Dorries. I express our thanks for the latitude given with regard to the amendments tabled on Friday, which is very welcome.

The commonality in these amendments is that they are designed to ensure that those who are involved in setting the standards for routes in technical and further education have relevant experience and that, where possible, students are included in the process. Amendment 13 would require the Institute for Apprenticeships and Technical Education to publish information about its reasons for convening or choosing not to convene a group of persons to prepare a standard for an occupation.

The skills plan consistently talks about the institute being employer-led, with college-based learning being decided by employer groups. That is precisely why further education colleges, other training providers and learners are an essential component of the roll-out and delivery of standards and assessments. I cannot emphasise enough how essential it is for the groups formed to set standards for the routes in technical and further education to have wide-ranging representation, including all key components of apprenticeship creation and delivery. The Minister will no doubt have heard several times—if he has not, I am sure he will in future—the term “co-creation” or “co-production”, which has come from many of the people in those groups.

Our vision for apprenticeships, which I hope the Government share, requires input from further education providers and colleges, and especially universities, given the crucial role of higher skills and degree apprenticeships. I will not labour the point that I made previously about how important it is, particularly in the context of higher skills and degree apprenticeships, that there is good read-across and co-operation between the office for students and the new institute, as well as the relevant trade unions, which have key experience, to ensure a broad outlook on new frameworks and accreditations. We believe that including apprentices and learners in that process is vital.

A representative of the National Society of Apprentices, which Members will know is associated with the National Union of Students, was scheduled to give evidence to the Committee last Tuesday, but unfortunately she was unable to attend because of illness. However, the National Society of Apprentices has said:

“At the moment, apprentices have no real opportunities to improve their education. Although most students going through the ‘traditional’ education system at college or university are able to give feedback through their class representative system, similar structures do not exist for apprentices.”

There is also the Industry Apprentice Council—I referred to it in a previous sitting—which is strongly supported by EAL and the Science, Engineering, Manufacturing and Technologies Alliance. Of course, there are other groups, such as the valuable group that Lindsay McCurdy and her colleagues convene, particularly around Apprenticeship Week, which involves a large number of different sorts of apprentices. Apprentices should be able to influence the way in which their training is developed and carried out. After all, they know from the frontline what has been helpful and successful for them and what has not. I hope that the Minister, who has been very passionate in his support of both apprenticeships and apprentices, appreciates that point.

It is also quite unclear what role there will be in the institute for workforce representatives and trade unions. I think it is appropriate to talk about that on a day when the Government, and particularly the Prime Minister, have again signalled their strong interest in making sure that, in some shape or form—the details will obviously have to be hammered out—there should be more workforce representatives involved in companies.

The TUC has said that it is crucial that

“Trade unions must be given a central role in setting and monitoring quality standards”

for technical education. After all, that is common practice in leading European economies with high-quality skill systems in place. Those systems are largely based on a social partnership model, which involves employers and unions agreeing standards and best practice at both national and sectoral level. Social partnerships have been key to the success of high-quality vocational routes in other countries, so I suggest that we would do well to take that lesson into account for our reforms of technical education. With particular regard to amendment 12, we might make a start in considering the composition of the groups formed to set standards for the routes. That is why I think it is important to give some form of direction to the new institute and its board of directors on that matter.

All the issues involved in getting the right sort of broad-based input are extremely important, because we have to get the routes right. We welcome the detailed and thoughtful proposals of the Sainsbury group. The Government are now, after some dithering, taking a new approach to the wilderness that has so far characterised aspects of skills policy, particularly in the technical and vocational areas. However, the devil is in the detail, and a number of stakeholders believe that the skills plan is not without fault. I mentioned in a previous sitting that the Opposition share the concerns of groups such as the Association of Employment and Learning Providers, and various others that we have quoted, about the potentially limited scope of the routes. I also spoke about the crucial role of the service sector, which will potentially provide huge numbers of apprentices with jobs and make sure that they are not left out of the process.

The Sainsbury review was clear that only jobs with technical aspects will be included within the 15 routes. I do not know whether the Minister was present at the recent Association of Colleges conference, as I was—I was not actually there when Lord Sainsbury spoke, but I read his remarks. I think there was some concern that he was—dismissive is perhaps the wrong word—too light on the importance of a significant number of jobs that are non-technical occupations, which currently lie outside the scope of these routes. I want to make it clear that we are not criticising the initial number of 15, and we are not necessarily arguing for the creation of lots more routes, but we are saying that, as this process develops, it is important that the Government generally, and the new institute in particular, pay attention to those jobs and to that training. We have to consider carefully the impact of workforce development in those sectors.

That brings me to amendment 13, which would

“require the Institute to publish information about its reasons for convening, or choosing not to convene, a group of persons to prepare a standard”.

The amendment’s underlying principle is transparency, because it is important to be able to monitor who is preparing the standards, in order to ensure that those standards will meet all of the requirements. However, it is also important as a signal of confidence to the broad range of stakeholders, who will not necessarily be directly involved in preparing the standards. The setting up of the new institute will be a busy period. With so many organisations involved in the process, transparency is crucial to provide students with the best available standards and to keep the rest of the stakeholders well informed.

I must again raise the vexed issue of capacity: the capacity of employers to put what they need to into the process, but also the capacity of the institute for oversight of quality assessment. We will move on to that when considering another aspect of the Bill. I just observe for the moment that the phraseology used in the guidance to the Green Paper is that there will be other options available, including Ofqual, professional bodies and others, and that some or all of those bodies may charge for doing it—or presumably not charge.

With those variables and parameters, there is inevitably some doubt about capacity, elasticity and the unpredictability of delivery from the new institute, certainly in the first couple of years, because other providers and options might have been taken up in the process of preparing standards. That inevitably raises concerns about whether the numbers for the new institute, as provisionally set out by Peter Lauener and confirmed by the Minister, will be adequate or what process there will be for boosting them if this somewhat variable geometry about who might take up the institute, as opposed to Ofqual and others, comes to pass.

Those are important issues and, again, a number of different agencies have commented on them. I draw the Minister’s attention to the written evidence submitted by the Association of Employment and Learning Providers, which states:

“Through its proposed funding mechanisms, the Government is encouraging employers and providers to move from Apprenticeship frameworks to standards by reducing the prices payable for frameworks, even though many standards are not yet in place. This makes it very difficult for providers to judge and therefore plan whether future provision will be viable. As has been reported in the sector press, apprentices have also started on Apprenticeships under a new standard without an EPA being in place, which means they have no means to complete it.”

That is the AELP’s view. I am not necessarily saying that I share it; I am just saying that this is one of the issues out there. It continues:

“The situation is exacerbated by the Government’s insistence that employers can negotiate with providers on the price of training and assessment.”

I would not necessarily agree with the AELP on that point—not in every detail—but the essence of what it says is this:

“Reform proposals may not currently be giving sufficient weight to the input of stakeholders and the concerns of and about learners, which must be rectified by the inclusion of stakeholder representatives on the Board of the Institute. We are therefore supportive in principle of the amendments to Schedule 1 of the Bill which have been tabled jointly by Gordon Marsden MP and Mike Kane MP.”

The AELP makes the strong point that the number of standards being developed, and the investment in time and resource required to develop them, could be leading to

“‘employer fatigue’ and a drop in employer engagement.”

We have also had written evidence from the Centre for Vocational Education Research. I know that the Government Whip is deeply interested in the bona fides of people who submit evidence to Committees.

[The Lord Commissioner of Her Majesty’s Treasury (David Evennett)]

Absolutely.

[Gordon Marsden]

We had a lively exchange on the issue when the Higher Education and Research Bill was in Committee. For the sake of the Whip, and indeed the whole Committee, let me explain that this evidence was prepared by the Centre for Vocational Education Research, whose people are stuffed full of qualifications from the London School of Economics. Even better—we cannot get much better than this—the Centre for Vocational Education Research is funded by the Department for Education and was launched in 2015. It states in its written evidence:

“An employer-led body as proposed by the Bill, in particular in the more competitive labour market of the UK, which does not engage with all relevant stakeholders, will not be able to achieve similar outcomes”

as they do in

“coordinated market economies…in Scandinavian and Western European countries”.

It states that the institute needs to

“bring together all relevant actors beyond the Department for Education and employers.”

It references unions,

“because of their role in life-long learning in the workplace”.

It also states:

“Associations of colleges and learning providers need a clear role in the Institute, and student associations and associations concerned with the interests of particular groups”—

I will not dwell on this now, Ms Dorries, because this will come up with one of our later amendments—

“also need to be involved from the start.”

It suggests that:

“Careers advice and…employment services…essential to balance short and long-term supply and demand in the labour market, need to be similarly engaged.”

That is the view of the Centre for Vocational Education Research, which touches on the three amendments.

I again underline a point made in the evidence submitted by the TUC, which specifically referred to the important role of the union learning fund. This year is the 10th anniversary of the official establishment of the union learning fund. The TUC commissioned an evaluation by academics at Leeds University Business School and the University of Exeter, based on surveys of employees engaged in training through the ULF and their employers. I will refer to two or three of the key findings. Over two thirds of learners with no previous qualification attained their first qualification as a result of engaging in union-led training. Four in five employees said that they had developed skills that they could transfer to a new job. And two in three said that those made them more effective in their current job.

Equally importantly, half of the employers said that

“their staff were more committed as a result of unions facilitating training and development opportunities.”

Separate analysis showed:

“Union-led training delivers an estimated net contribution to the economy of more than £1.4 billion as a result of a boost to jobs, wages and productivity.”

Those are also cogent points for broadening representation.

Finally, amendment 28 asked for the institute to show

“due regard for broad representation and diversity amongst the group of persons preparing each standard, including—

(a) gender and

(b) the representation of both large and small employers.”

For both your information, Ms Dorries, and the information of the Minister, this is a probing amendment, so we did not intend to include a list of all the potential groups that might be included; that would not have been appropriate at this stage. The reasons why we have highlighted those two are fairly obvious, I hope. First, the gender issue has already bulked large in our conversations in Committee. Secondly, because of the key role of large and, in particular, small employers—the Minister will know about the discussions on the delivery of the apprenticeship levy—it is crucial that those groups are involved.

The Minister sang the praises of the Apprenticeship Delivery Board the other day. It may be a fine body, but it was actually made up of members drawn from a relatively narrow section of business and, incidentally, had only one woman among its number. There was no role for others, such as further education providers, universities, trade unions and local authorities. There has been some progress with the number of women on the ADB—it has increased to three—but it is important that those lessons are taken on to a broad representation and diversity being found among the group of persons preparing each standard.

--- Later in debate ---

[The Minister for Apprenticeships and Skills (Robert Halfon)]

I am grateful to the hon. Member for Blackpool South for tabling the amendment, and to him and the hon. Member for Luton North for what they have just said. I fully understand the concerns regarding the group of persons convened by the Institute for Apprenticeships and Technical Education to develop the standards, and I agree that the reforms to technical education should be informed by a balanced and diverse range of industry professionals. I also share the view that the institute should have a clear and transparent rationale for bringing together groups of persons to develop the standards.

I wish to comment on some of the issues raised by the hon. Member for Blackpool South. On apprentices and education, he will know that, as part of the reforms we have introduced, apprentices have not only to do the full-time, on-the-job training that is their apprenticeship, but to spend a significant amount of time at an educational institution, whether a private provider or an FE college. That offers them the education they need while they are earning.

Apprentices are able to give feedback to the employer and the provider. At the beginning of the apprenticeship, all parties have to sign a commitment setting out the roles and responsibilities, which include the giving and receiving of feedback. The apprentice is also able to give feedback during the review of the standard and assessment plans, and we can include that in terms of the guidance note from the Secretary of State.

[Gordon Marsden]

That is very encouraging. I know that that feedback process takes place; as I say, it has been welcomed by the various groups. I do not want to make things over-bureaucratic, but is there going to be a formal, or at least easily understandable, mechanism whereby apprentices can feed in—either as a group or as individuals?

[The Chair]

Order. Mr Marsden, could you rise when you speak?

[Gordon Marsden]

I am sorry, Ms Dorries. If the Minister is not in a position to say anything more on that today, I would welcome a note to the Committee at some point.

[Robert Halfon]

I will provide one, but I am always against very formulaic structures; things need to be flexible. The fact is that we give the opportunity for the apprentice to feed back at every step of the way, and the agreement has to be signed by the employer and the apprentice when the latter starts.

On the representation of small businesses, the hon. Gentleman will know that the trailblazer groups—there are roughly 10 employer organisations altogether—have to have a minimum of two businesses with fewer than 50 employers. We envisage that the employer panels will be the same. I am happy to reflect on that being included in the remit letter for the institute. We are also investing taxpayers’ money in huge incentives to encourage small businesses to hire apprentices and to encourage providers to take people on. We are doing everything possible to use taxpayer investment to ensure that small businesses hire apprentices and that providers do provide.

I would like as much as possible to be done by FE colleges, and I would be delighted if they took on more apprenticeship training. That is happening slowly, but I think they would be very willing. I have seen it happening in my own constituency of Harlow: whenever there is an issue to do with a company wanting an apprentice, Harlow College will be there, ready to advise the employer on what should be done and to offer training if it is required.

On the wider issue of the technical routes, I disagree with the hon. Gentleman. I shall set out the context of the problems we face. I have been quite open in admitting that we have a huge skills deficit in this country. The OECD said in 2012 that 20% of young people lacked basic skills. By 2020, the UK is set to be 28th out of 33 OECD countries for intermediate and technical skills. We are way behind.

The whole purpose of the reforms and the legislation—this is why Lord Sainsbury has supported them—is to ensure that we have state-of-the-art technical education for young people that transforms our skills deficit. People who do not want to do one of those 15 state-of-the-art routes, for technical and professional education, will have different options through other applied general qualifications and the academic route. The reforms focus on occupations that require the acquisition of a substantial body of technical knowledge and a set of practical skills that are valued by industry and that address employers’ needs and our huge skills deficit. I am glad that the hon. Member for Blackpool South quoted the Centre for Vocational Education Research, which my Whip guarantees is a blue-chip organisation.

[Robert Halfon]

Indeed. The centre says:

“We welcome the Report…led by Lord Sainsbury…the subsequent Post-16 Skills Plan”—

by the Government—

“and the measures contained in this Bill. The recommendations are consistent with our findings”.

It continues, and this is the whole point of the argument:

“Part of the problem is undoubtedly the confusing array of options, with uncertain pathways, that are on offer for young people after age 16. There must be a system that students, teachers, parents and employers…understand. Otherwise it is difficult for young people to be matched up with courses that are suitable for them and for employers to understand what qualifications actually mean.”

[Gordon Marsden]

I understand the Minister’s points, and I tried to make it clear that I am not asking for a huge response—we do not want to end up like the wax in a lava lamp, which starts off as a great base and goes up to the top before, after some time, becoming big again. I understand the need not to have duplication, but the AELP and others made a particular point about the service sector. Is the Minister not concerned that, if the Government are not careful, they will be, by excluding a large part of the service sector, in danger of sending out a binary message that certain sorts of occupations are valued and others are not?

[Robert Halfon]

No, because this is about technical and professional education. There are 15 routes, and people have many other ways of doing the vital training for the other areas that the hon. Gentleman mentions. People can do an individual apprenticeship, they can do part of the Government’s training scheme or they can do work experience. This is about addressing our skills deficit and, similar to what happens in other countries, ensuring that we have the technical education that our country needs.

On capacity, the institute will ensure that arrangements are in place for evaluating assessments. There are different options for employers and others to develop the standards. We will discuss the assessments later, but I will set out the current figures on apprenticeship assessment. On standards, some 61% of all apprentice starts have an end-point assessment organisation available to them, whether or not they are close to needing an end-point assessment. That figure rises to 94% for all apprentice starts, including those who are expected to reach the gateway—the end of their apprenticeship—within the next 12 months, where an organisation is close to being put on the register. We are considering a number of options and we will discuss them later, but the situation is not as bleak as has been said in respect of the assessment organisations and what is being planned and done.

The hon. Gentleman addressed the levy and the autumn statement, and I am pleased to say that we will still have £2.5 billion available for the levy, regardless of the announcements in the autumn statement. The Government are determined to create an apprenticeship nation, and by 2020 the spending will have doubled to £2.5 billion. We have discussed the providers, but I am happy to reflect on action that could be taken to ensure that SMEs are offering training that is relevant to their apprentices. I am pleased by the response from the providers so far.

The amendment raises other issues of concern. We need to learn from previous models, but there is a risk that requiring specific representation on the panels may not always be appropriate and may result in standards that do not have labour market currency. The purpose of the reform is quality, not quantity. If the panels try to do too much to please too many different groups, ultimately they might not support young people and adults in getting high-quality technical education to progress into skilled employment. The problem is that there is a proliferation of qualifications.

I agree that the groups should be as representative as possible, however. The Sainsbury report makes it clear that the institute will be best placed to ensure that the right people are brought together to develop the standards. Institute staff with expertise in specific occupational areas will know which employers and other stakeholders are suitable to develop standards that are representative of the occupations within the specific routes. The institute is independent. It should be for the institute to manage the composition of groups, and we should not constrain that process.

As for the approval of the groups that are not convened, it is for the groups to come together to put proposals to the institute. That has been the hallmark of the employer-led reforms, which, again, have been based on best practice in other countries. The groups should be flexible enough to reflect the requirements of specific occupations. In some occupations, such as blacksmithing, there are few large employers, while there may be other occupations in which there are no smaller employers or in which there is a bias towards a particular gender. On that point, I remind the Committee that 53% of apprentices are women, which shows that we are making significant progress, although of course we need to do a lot more to get women into STEM—science, technology, engineering and maths—and other key areas.

There are other ways in which views can be taken into account through the institute’s wider structure. Crucially, each route will have its own panel making decisions about the provision within that route. Standards will also be subject to peer review, the purpose of which is to ensure that the proposals meet wider needs. The institute’s board is open to applicants with a wide variety of interests. We hope to announce the composition of the board—genuinely—in the very near future. I firmly believe that once that announcement has been made, the hon. Member for Blackpool South will agree that there is important representation.

--- Later in debate ---

We hope the employers will continue to come together—and many have—as trailblazers to develop the new standards. If that does not happen, as I say, the institute will be able to convene the most appropriate and representative group of persons, as I described in relation to the previous two amendments. As it is the occupational map, and not other factors, that determines whether a group of persons is convened, there is no additional information to be published. However, the occupational maps and the approved standards will be published.

[Gordon Marsden]

Good.

[Robert Halfon]

Absolutely. They will be available on the institute’s website. The institute will publish information so that employers and others know what is required to gain approval to become a trailblazer group. Amendment 13 is therefore unnecessary, because the need for a standard in the absence of a trailblazer group should be the only trigger for the institute to convene a panel. Where the institute convenes a group to develop a standard, its approval of that group is implicit.

In light of that information, I hope that hon. Members agree with this approach. Designing the system around clearly identifiable occupations, and bringing together employers and others to identify the skills, knowledge and behaviours needed for those occupations, will ensure the new system genuinely meets the needs of employers and technical education. I hope the hon. Member will feel reassured enough to withdraw the amendment.

[Gordon Marsden]

I am very grateful to the Minister for going into detail and for the thoughtful and measured way in which he responded on the three amendments. It is a very techie but extraordinarily important area to get right. The intervention by my hon. Friend the Member for Luton North about the chair was particularly apt in that respect, and I am glad the Minister recognises those points.

I am interested to hear the Minister say that £2.5 billion will still be made available for England. Presumably, that means there will be less available for Scotland, Wales and Northern Ireland. If I am wrong on that matter, I ask him please to come back to me. It was quite clear in the autumn statement that the figure was £2.8 billion, so I just assumed that it would go down to £2.3 billion. If the Minister assures me that it is £2.5 billion, that is obviously good news for England.

We share a view on the direction of travel with the routes, but I am not as sanguine about what the Minister said about the technical side. We will reflect on that. I am pleased that he has given more detail on the occupational standards and that he has addressed the SME and gender issues. Again, we may have a further discussion at some point about the mechanisms in that respect. On the whole, he has given a positive and reasonable response. We can always come back to these issues on Report, if necessary. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Gordon Marsden]

I beg to move amendment 14, in schedule 1, page 24, line 6, leave out “as it considers appropriate”.

This amendment would require the Institute to publish apprenticeship assessment plans for all standards.

The Minister may want to say the same sorts of things on amendment 14 as he touched on under amendment 13. Nevertheless, I rise to move the amendment because it would require the institute to publish apprenticeship assessment plans for all standards. I hear what the Minister says about numbers and everything else. I shall reflect on that and drill down into the detail. However, recent analysis shows—this, of course, is real-time experience—that there are no approved awarding organisations for over 40% of learner starts on the new apprentice standards. Number crunching on the Government data that were published in October suggests that that applied to 1,790 or 42% of the total number of starts so far on the employer-developed programmes.

I accept, as I am sure will the Minister—it must make him tear his hair out at times—that because moving from frameworks to standards is an iterative process, there will be complications. There will be stats that do not appear to fit, and all the rest of it. I am not criticising the fact that there will be an element of confusion. However, those apprentices on the standards will have to pass end-point assessments for the first time, so those assessments have to be carried out by organisations that have been cleared for the task by Government or the Skills Funding Agency-registered apprentice assessment organisations.

I come back to my opening remarks on the previous group of amendments about the degree of uncertainty that still exists about how this will settle down in terms of what the institute does as opposed to other well established bodies such as Ofqual. Because of that, it is important that we have transparency on who is being cleared and who is doing the clearing.

The Minister may be familiar with the observations of Dr Susan Pember, who stood down as the civil service head of further education and skills investment in February 2013. I am very familiar with Dr Pember. On one famous occasion, when we had challenged the Government on various things, she said that we had been challenging them too much. The Minster’s predecessor, the right hon. Member for South Holland and The Deepings (Mr Hayes), said that we were absolutely right and that that was the role of the Opposition. Dr Pember has said:

“It is diabolical to let an apprentice start a programme without explaining not only what the end test will contain, but where it will be, what shape it will take and who will be the organisation—

that is the key point—

“to oversee and manage the process.”

We are told that the Department for Education—the Minister can contradict this if he wishes and it would be very pleasant were he able to do so accurately—is still struggling to recruit enough of those assessment organisations. Indeed, one of its spokespersons said:

“We know there is more work to be done to ensure we have the range and breadth of high quality assessment organisations we need.”

We are also concerned that the slowness with which this process has been taken forward has meant that students have not started on some apprenticeship standards for two years after they were launched. I appreciate that this refers to matters that took place not on the Minister’s watch, but it will colour and inform what people think about what the new institute does and what guidance the new institute is given in this respect by Ministers. The backstory, as it were, is an important one.

FE Week has looked at the latest Skills Funding Agency data, specifically the first standards that were given Government sign-off in 2014. It found that there were no starts at all in that academic year, or in 2015, while low numbers of students were recorded in several others. There may be an element here of what I described in a previous sitting as the very slow process of taking these trailblazers though. On that occasion, I alluded to the issues raised by the Transport Committee about the time it had taken to passport various standards that were developed in the maritime sector into the required frameworks for the SFA.

The National Skills Academy for Food & Drink took a lead role in developing one of the apprenticeships that ended up having no learners for food and drink maintenance engineers. Its chief executive frankly blamed the Government. She said that employers involved with the trailblazer group led by the NSAFD, which developed the standard, had been

“frustrated by the evolutionary nature of the government’s decision making process for approval. We were advised at the start that this new and innovative approach was called ‘open policy-making’… Unfortunately policy implementation does not lend itself well to this approach and valuable employer time and effort has been spent unpicking decisions made as policy decisions have firmed up. This has led to redrafting, reworking and lost time, such that the industry has written to the new skills minister, requesting that the Department for Education implements a far more structured and clear process for the future.”

That refers to things that have happened historically in the last couple of years, but the Minister will understand why, on the basis of that, we are keen to make sure that the institute publishes all of its apprenticeship assessment plans for such standards in a timely fashion. Will the Minister, if he is able to, tell us what is the status of his response to the NSAFD on that issue? Its chief executive, Justine Fosh, said that the standard had not been ready for apprenticeship starts until the beginning of this academic year, but that

“at least 60 students I know of”

have started since September.

That is only one example, but as this process strengthens and multiplies, as it needs to do to meet all the Government targets, the Government will have to pay close attention to this issue of capacity and this iterative process, otherwise they will find themselves in a logjam of standards approvals as early as the middle of next year. That is the point at which any Government of any political persuasion, when they have the Opposition or other stakeholders bearing down on them, might be tempted to cut corners. We do not want to see corners cut, but we, like the stakeholders, want to see what progress is taking place in real time. That is why we have put amendment 14 before the Committee today.

[Robert Halfon]

The hon. Gentleman said that there was a slow process in taking the trailblazers through. We have committed to carrying out all Government checks and approval processes within six weeks. The average development time is one year. The policy has changed over time and the employer groups have had to make amendments at times.

Under previous amendments, I set out the position on the 61% of all apprentice starting standards. That rises to 94% of apprentice starts, including those that are expected to reach their gateway. We have had some difficulties relating to low volume apprenticeship standards and we are considering recommending a targeted procurement organisation for a bundle of these standards. We are doing everything possible to make sure that the proper assessment organisation is in place.

The amendment recommends that all published standards must be accompanied by an assessment plan. The legislation already allows for the institute to publish assessment plans for standards as it considers appropriate. The flexibility on this is intentional. Our objective is that the Institute for Apprenticeships will assume responsibility for college-based technical education. At that point, standards will apply to both apprenticeships and the college-based routes, but assessment plans will still only apply to apprenticeships. College-based technical education will be tested in a different way because it is taught in a different way, even though it may be testing similar outcomes. It will be up to the panels to decide how each college-based course should be tested, but the proposals have to be scrutinised and approved by the institute. There will be some standards that are not appropriate for apprenticeships and that will be used only for the college-based routes; it is therefore unnecessary to develop and publish a plan for those standards. I hope the hon. Gentleman is reassured enough to withdraw the amendment.

[Gordon Marsden]

I am grateful to the Minister for his explanation and for his candour in admitting that there is still some way to go on the issue of capacity. I welcome what he said about procurement organisation. I am prepared to withdraw the amendment, although I would like to reflect on the Minister’s point about college-based technical education being best tested in a different way. A different way may be appropriate, but one would not want it to be seen as different in terms of quality. Is he able to say today—if not, perhaps he can write a note—whether more details of how that process will operate will be published? I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Gordon Marsden]

I beg to move amendment 15, in schedule 1, page 24, line 20, at end insert

“and must include the following representatives—

(a) a number of employers which, taken together, comprise a broad range of employer within the given occupation;

(b) at least one relevant trade union official;

(c) at least one person engaged in delivering relevant education at the level of the standard being assessed; and

(d) at least one person who can represent or promote the interests of students.”

This amendment would ensure that groups developing apprenticeship assessment plans include adequate representation of all relevant stakeholders.

[The Chair]

With this it will be convenient to discuss amendment 16, in schedule 1, page 24, line 37, at end insert—

(c) information about matters that it takes into account when deciding whether or not to convene a group of persons to prepare an apprenticeship assessment plan for the purposes of subsection (9)”

This amendment ensures the Institute must publish information about its reasons for convening, or choosing not to convene, a group of persons to prepare an apprenticeship assessment plan in respect of a standard.

--- Later in debate ---

[Gordon Marsden]

The amendments take us back to the heart of the principle that we think should be guiding the establishment of this institute. There is no broad difference between the intentions of the Minister and indeed the Government about the need to involve a broad range of stakeholders. The issue is perhaps—though I hope not—how we create mechanisms that effectively deliver that process. The Minister and you, Ms Dorries, will be familiar with the proverb, “If wishes were horses, beggars would ride.” I am not suggesting that the Government want to put in place a beggarly structure for the institute, although some of the issues around capacity still need to be resolved. It is fundamental to make sure that groups developing apprenticeship assessments have adequate representatives of all relevant stakeholders. I do not think we can simply do that by saying, “We can leave it up to the individual groups.”

I have served on enough Committees in this House to know the danger of prescribing particular quotas for people from certain areas. I am not going to take us too far down memory lane, but in the early 2000s, when the then Government were developing policies on further education, we had lively debates on some of the new structures and whether, for example, there should be a trade union person on every area council. I am acutely conscious of the dangers of tokenism in quotas.

[Kelvin Hopkins]

I understand the point my hon. Friend is making, but surely the sensible way forward is to have broad guidance, either in the Bill or in subsequent secondary legislation.

[Gordon Marsden]

My hon. Friend is absolutely right. He has huge experience in this area and in the structures that have come and gone. It is about getting the balance right. I come back to something I said on Second Reading: when one is establishing new institutions, it is important not just to set frameworks and assessments but to set the tone. It is the tone that will determine whether the Government, or in this instance the institute, get the buy-in and involvement that will make that institute a success.

When we discussed the issue of capacity, the Minister was absolutely right to say, “Well, it’s not simply a question of who’s on the board. It’s all the various other groups of people who are involved on the various sub-groups, and all the rest of it.” However, the buy-in will depend upon those groups feeling that it is made very clear in the Bill that there is a place for them. As I say, it does not have to be a sort of automatic quota-type thing, but it has to reflect something solid and positive.

We had a relatively lengthy discussion of this principle under the Higher Education and Research Bill, in relation to the office for students and who in that new office should be involved from the student body. The thing that got the headlines was about putting students on the office for students board, but the amendments that were tabled during discussion of that Bill referred to other bodies as well, such as the assessment groups.

That discussion is relevant to the present one because the issues are broadly similar, with the exception that in the higher education world the principles and the organisations that allow involvement by other stakeholders have been far more developed than they have been in the technical education world. Therefore, we think it is very important that matters such as the contribution of other stakeholders to the assessment process, as well as trade unions, colleges and providers, should be put in the Bill. In the Higher Education and Research Bill Committee, the Minister’s colleague said, “Well, yes, it’s really important that all these things happen,” but they had to happen miraculously, without being put in that Bill. The Committee divided and the Government had their way, but I am glad to say that the Universities Minister went away, reflected, and tabled an amendment on Report which, although it did not give us everything that we and other stakeholders might have wanted, established the broad principle that students should be involved on the board.

I ask the Minister today to think carefully about this issue in the context of other advice that he might have received from elsewhere. I also say to him that it is much better at this stage to send that signal to stakeholders, some of whom are already concerned about whether they are part of this great step forward, than it is to shelter behind the idea of, “Well, we don’t want quotas, so we don’t want to have at least one person who comes from a broad range of employers in a given occupation, or at least one relevant person from the trade unions, or at least one person who can represent or promote the interests of students.”

Getting the tone right at the beginning is absolutely crucial to get the buy-in that everyone who wants this institute to be a success needs. If the institute is going to be accretive in its first year, when it will deal principally with apprenticeships, and in the second year it will take on the elements for technical education, then the Government have time to put the practical implications of this amendment into practice. There does not have to be a big bang, and then officials will say, “Well, how do we identify these people? How do we do it?” That is the point of amendment 15.

As with amendments 16 and 14, we still regard it as imperative to see who is assembled to prepare an apprenticeship assessment plan. It is also valuable to be able to experience that process in real time and to see what it takes to introduce and check assessment plans. Those are the principles underlying an addition to the Bill that is modest, but extremely important in setting the tone and sending the message about all the good and generous things that the Minister talked about only a few minutes ago such as inclusion and ensuring that all talents are taken on board. If faces are set against the measure, there will be much disappointment among stakeholders.

We and the Government want the institute to start off with that broad co-operation—not co-operation through gritted teeth, with people saying, “This is what you’re doing as a Government, so we’d better knuckle down and get on with it.” We want people to say, “Yes, they’ve got it right. We want them to go forward with this.” Amendment 15, which is a modest proposal, would be a great benefit in that respect. That is why we are moving these amendments.

[Kelvin Hopkins]

I will speak briefly in support of my hon. Friend. The reality is that those who have become chief executives and chairs of organisations—those with leading roles—are frequently strong characters who want their own way. Some will not want to include in their organisations and structures people who are likely to challenge them. I have seen at least one notorious leader—he has now left, I am pleased to say—who wanted his own way. He would have liked acquiescent, docile and amenable people in his organisation, not people who put alternative points of view, which is actually often a healthy thing. In this place, we want people to put forward alternative points of view and have a range of opinions, even within parties, so that we get things right. We can make mistakes if we allow a wilful leader to have their own way without ever being questioned, let alone challenged.

My hon. Friend is right. We do not want to cause problems within these bodies, but it is important that a range of insights into what is being done is represented within them. I have concerns about giving too much power and freedom to wilful individuals who may not wish to be constrained by having, for example, a trade unionist on the board. Indeed, there are those who will not want a trade unionist on a body, whether that body is a board or a committee deciding on apprenticeships. I strongly support my hon. Friend and hope that the Minister can be persuaded.

--- Later in debate ---

[Robert Halfon]

I thank the hon. Gentleman for his comment but I think the issue is about how to create that representation. That will be the point of discussion between us.

In the institute, we have designed an organisation that will be able to carry out apprenticeship functions independent of Government, so that the decisions have credibility with employers. The Enterprise Act 2016 gave it autonomy in determining who should be approved to develop each standard and related assessment plan. The idea was to ensure that it had the flexibility to respond differently to different sectors and ensure that the groups are representative. Although it is right that the institute is independent and can make its own choices about how it operates, it is incredibly important that the Secretary of State is still able to give it guidance through a written statutory notice. The institute must have regard to the statutory notice and must justify its actions if it chooses to disregard the advice.

We will shortly consult on the draft of that guidance and that will provide advice on who the group of persons should be. I very much want to encourage the institute to ensure that others, beyond employers, with relevant knowledge and experience are included. As I said in the previous debate, that would be professional bodies, other sector experts, FE providers, other providers and assessment organisations. I strongly encourage hon. Members of all parties to engage in the consultation and give their views.

On amendment 16, I appreciate the interest in ensuring that the institute must be transparent in why it convenes groups and develops an assessment plan. It is essential that we avoid the proliferation of new standards and assessment plans, learning from the experience of previous apprenticeship frameworks. The whole purpose of the reforms is to ensure quality over quantity.

I am sure that hon. Members are aware that in formal technical education, standards form the basis of both apprenticeships and college-based technical education courses. With reference to the previous debate, the quality will the same whether it is the assessment of an apprenticeship or classroom-based education. It just reflects the nature of the different delivery between apprenticeships and college-based courses. Quality is everything; it is the whole purpose of the reforms.

In addition to employer demand, the need for the standard will be informed by the occupational maps. There will be an occupational map for each category, and the maps will be underpinned by labour market information. That is the best way to provide an evidence-based road map for all the provision within each route. The institute must ensure that standards exist for all skilled occupations that need them. Where an approved group of employers and other persons is not available, the institute will be able to convene a group to develop a standard and an assessment plan where necessary, but the occupational map must be the primary factor for determining whether a group of employers is convened. The occupational maps, as well as the approved standards, will be available on the website. The institute can convene a group to develop a standard only if one has not come forward organically, motivated by employer demand. The only other criterion that the institute will use to convene a panel itself is the occupational map, which is publicly available. Therefore, the information that the amendment requests is unnecessary.

The amendment could also have the effect of requiring the institute to publish its set of criteria for who should form the group of persons who will develop the assessment plan. As I said response to amendment 15, it is up to the institute as an independent organisation to decide the detail of how it carries out its functions, but I will reflect seriously on what has been said. I believe in strong representation in all parts of the institute, and we can suggest that it be part of the Secretary of State’s guidance to the institute. For that reason, I hope that hon. Members will feel reassured enough to withdraw the amendment.

[Gordon Marsden]

The Minister, with thoughtfulness and detail, has taken much the same view on amendment 16 as he took on amendment 15, and I will do the same. I heard what he had to say. It is one of those issues on which we agree to disagree, but as he said, we will have the opportunity to pursue it when the guidance is issued. On that basis, I am content to withdraw amendment 16.

On amendment 15, I have listened carefully to the Minister’s measured and thoughtful response. We are not disputing that the process must be employer-led. That is why we particularly say in the amendment

“a number of employers which, taken together, comprise a broad range of employer within the given occupation”.

That is the issue: there must be somebody in that group who knows their stuff.

This might be a fundamental philosophical difference between us. I find it odd that the Government should so set their face against putting in the Bill the principle that there should be a trade union representative, or indeed someone who could represent the interests of students or apprentices. I was tempted on that basis to press the amendment to a vote, but I will not. I have heard what the Minister said. We will wait to see the guidance, and we will want to contribute to it. As I said, we can always return to the matter on Report. With some reluctance, but recognising his bona fides in the matter, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Gordon Marsden]

I beg to move amendment 29, in schedule 1, page 25, line 17, at end insert—

‘(5) Regulations under subsection (4) shall be laid before Parliament and shall be subject to the affirmative resolution procedure.”

Heaven forfend that I should criticise groupings, but what I have to say to amendment 29 is probably very similar to what I will say to amendments 31 and 33. It is an important principle when setting up a new organisation that, at least during the first year or couple of years, it should make the process of regulation as transparent and open as possible. I say this with no disparagement or criticism of the Minister and the current Administration, but Governments of all descriptions have an enormous tendency not to do so when they set up new things.

To return to the point made by my hon. Friend the Member for Luton North about the need to have people testing and refining the arguments, it is easy to say, “Let’s have it done according to the negative procedure. After all, this legislation is only delegated and passported in, mainly from the Apprenticeships, Skills, Children and Learning Act 2009.” Before anybody says, “That was done under a Labour Government,” I will say yes, it was done under a Labour Government, and when I sat on Committees under that Labour Government, I regularly criticised the Government’s use of the negative procedure, especially when we set up new institutions. Famously, I and colleagues demanded that the Labour Government did not use that procedure for the casino in Blackpool, and we had to have a full hour and a half of debate on the Floor of the House. I think that, in those circumstances, I did my duty to both my constituency and parliamentary transparency. That is the principle behind why we are saying in amendments 29, 31 and 33 that regulation should be subject to the affirmative procedure.

The affirmative procedure, as you well know, Ms Dorries, is not the most onerous of burdens on Ministers and civil servants. It merely guarantees that there will be often quite limited discussion among a group like this one in a Committee Room. As the Minister will recognise, in those proceedings, even if the measures are not pushed to a vote, sometimes things are said and done that cause Ministers to reflect, to go away and to improve legislation, and, in this case, to improve the directions. The other point to be made—

[The Chair]

Mr Marsden, I did not want to disturb you in full flow, but it has just been pointed out to me that the grouping of these amendments is provisional. Would it be convenient for you, while you are in full flow, to speak also to amendments 31 and 33 to save time later? Then I will not call them.

[Gordon Marsden]

Absolutely. Ms Dorries, you make the point that all three amendments are designed to respond to that proposal. Having sweated blood over getting it, I want to refer to the famous policy statement for clause 1. From page 5, that gives the justifications for the Government’s proposals to treat these three areas according to the negative procedure. I am looking carefully at what is said about section A2B on page 7, section A3A on page 8 and paragraph 33 on page 8; those three sections relate to the three amendments we have tabled to change to the affirmative procedure.

In the commentary on paragraph 33, the policy statement says:

“Justification for procedure: this is essentially an administrative transitional provision to allow for the work…to continue by the Institute.”

On section A3A, it says:

“This is consistent with the existing power in relation to apprenticeships…and for which regulations have already been made and laid using the negative procedure”.

On section A2B, which relates to the first of our amendments, it also says:

“It is considered that a regulation making power subject to Parliamentary scrutiny is appropriate and provides flexibility…when new functions and procedures are being used for the first time.”

It talks about the amount of the fees chargeable in relation to particular assessments, what an appropriate fee is and all the rest.

Ms Dorries, we would be mad—I certainly would be—to want to have a major debate on, or to put in the Bill, what should or should not be prescribed for fee charges, in terms of the new evaluation of apprenticeship assessments. People would think we were bonkers. However, the principle of how to administer that, and particularly whether there should be charges or not—a live issue at the moment, being represented to us in briefing documents from various sectors—is quite important.

It is important that there is a set formula saying that this will be debated in a Delegated Legislation Committee, on a statutory instrument of some description, on the affirmative principle. Again, that gives support and value, and sends out that signal of inclusion to the stakeholders who will be significantly affected by the results of those affirmative resolutions or the negative procedures. That particularly applies to training organisations, which will be significantly affected and challenged by the changes—at least, that is what they have all said in their representations to us. That is to say not that the changes are bad or wrong, but simply that they are significant enough to be carried out through the affirmative rather than negative procedure.

--- Later in debate ---

[Robert Halfon]

I thank the hon. Gentleman for his scrutiny. I need to explain the context of why we have chosen to go down this route. We have had a lot of discussion about the quality and evaluation of apprenticeship assessments. Ensuring consistency between assessments will mean that an apprentice can be sure that, wherever they obtain their apprenticeship, they are being judged on a fair and equal basis.

Our aim is that the institute should work to ensure that an apprentice in Hull and an engineering apprentice in Blackpool both have consistent and high-quality assessment. The power that allows the institute to charge for its role in reviewing assessments is critical to enabling it to discharge its function of evaluating assessments effectively.

Other organisations approved by the institute to carry out a quality assurance role in relation to apprenticeship assessments, such as professional bodies, are likely to charge. If the institute were unable to charge, there would be an increased incentive for employers to use the institute instead of the other options, and the extra running costs would ultimately fall on the taxpayer. It follows that, like other organisations, the institute should be able to charge for its work and to recover all its costs.

Importantly, the specific fee is likely to be adjusted over time for a range of reasons, such as to reflect any changes in the institute’s approach to carrying out evaluations and as assessments are updated and altered. Additionally, as the Committee will appreciate, the institute is still finalising the operational detail on how it will carry out some of its functions, including the evaluation of assessments, which we have just debated.

The actual amount that the institute will need to charge is not known. It is conceivable, although it has not been decided, that there could be different fees in different cases to take into account the cost of evaluation in different sectors. I reassure the Committee that the policy is that organisations should be able to charge only to cover their costs. We will make that clear to the institute in the guidance letter. Of course, the institute will be able to charge only if authorised to do so, and subject to the restrictions set out in the regulations.

It is likely that the fees would need to be reviewed quite frequently to ensure that they were appropriate, which is why hon. Members will welcome the provision to allow for the introduction of a statutory instrument without requiring Parliament to debate the matter each time a fee changes. The negative procedure ensures that the fee levels can be updated relatively quickly, if necessary, thus protecting the taxpayer from unwanted financial risk. The procedure is consistent with the Secretary of State’s approach to charging fees for certificating framework-based apprenticeships and, more recently, for English apprenticeship certificates—we are doing that in parallel. Even so, as the hon. Member for Blackpool South pointed out, regulations tabled under the negative procedure can still be debated in Parliament. If there were real demand, scrutiny could still be achieved.

Amendment 31 raises the same issue. I agree that any matter left to secondary legislation requires scrutiny, but the negative procedure provides for sufficient parliamentary scrutiny and would enable debate if the secondary legislation was prayed against. In the event that the institute wishes to introduce an application or process, or to update the fee levels, the negative procedure allows for that to be done as quickly as possible, which is consistent with the Secretary of State’s approach to apprenticeships.

As the institute is not yet established, flexibility is needed to prescribe the most appropriate method. We may also wish to seek advice from the institute and others on what those measures should be. I confirm that, at most, the fees should cover all the costs connected with carrying out the function.

I turn to amendment 33. The Secretary of State has powers to make arrangements to develop new technical education provision. The Bill would allow the Secretary of State to transfer those powers to the institute to ensure continuity. I hope it will reassure the hon. Member for Blackpool South and his colleagues if I give a broad overview. We are progressing the arrangements that we are putting in place before the institute takes on its wider responsibility.

The hon. Gentleman will know that creating this new technical education provision is a complex process. Although we are committed to taking through the reforms quickly, and particularly to establishing all 15 technical education routes as soon as possible, we recognise that certain lead-in times are required for reform. The Government plan to phase the reforms in progressively; development will commence before the institute remit is expanded in April 2018.

We have already talked about the occupational maps and the routes to identify occupations. We know that employers will play an especially important role in assessing the standards, including articulating the knowledge, skills and behaviours needed. I assure hon. Members that the negative procedure provides sufficient parliamentary scrutiny. We have thought carefully about the right balance of primary and secondary legislation and about which procedure to use for secondary legislation. We have set out the rationale in the delegated powers memo for the Delegated Powers and Regulatory Reform Committee in the other place and I look forward to reflecting on that Committee’s response. I hope that the hon. Member for Blackpool South will feel reassured enough to withdraw the amendment.

[Gordon Marsden]

Again, I am grateful to the Minister for the thoughtful and measured way in which he has put his point of view. I entirely accept everything he has said about the need to move carefully and about the fact that there may be variations in charges and that we may have to return to them frequently.

However, none of that undermines the essential argument that this is a new Bill that is taking on new stuff. We believe—I am afraid that history teaches us lessons in this respect—that it is far safer for the Bill to specify the affirmative procedure than the negative procedure. Although I appreciate the Minister’s remarks, I regret to say that we wish to press the amendment to a vote.

Question put, That the amendment be made.

Division 1

Ayes: 5

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Labour: 5

Noes: 8

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Conservative: 7

[Gordon Marsden]

I beg to move amendment 30, page 27, line 3, at end insert—

“A2DD Directions: consultation

Directions given to the Institute by the Secretary of State under this Act shall be subject to—

(a) periodic review, and

(b) consultation by the Institute with—

(i) organisations representing the teaching professions,

(ii) further education bodies and provider organisations,

(iii) employers and employers’ organisations,

(iv) awarding bodies, and

(v) organisations representing students and apprentices.”

Broadly speaking, amendment 30 continues the theme of our other amendments this morning. It is interesting to move the amendment after the Minister’s useful exegesis of the role of the Secretary of State and of the relationship between the Secretary of State and the institute, because it is that relationship that the amendment seeks to probe further. The Government’s policy statement gives those further powers to the Secretary of State, in particular in relation to matters concerning technical education.

Technical and Further Education Bill (Sixth sitting)

Gordon Marsden Excerpts

Committee Debate: 6th sitting: House of Commons
Tuesday 29th November 2016 Public Bill Committees

[The Minister for Apprenticeships and Skills (Robert Halfon)]

I will pick up on a number of points that have been raised before talking about the main substance of the amendment. A key recommendation of the Sainsbury report, No. 8, stated:

“While it is right for the Institute for Apprenticeships to be delegated wide-ranging autonomy across its operational brief, responsibility for key strategic decisions must be reserved for the Secretary of State. Crucially these decisions include those relating to the shape of the overall national system of technical education”.

The Secretary of State will obviously consult when making her decision, and she needs to ensure that any directions are reasonable and include all relevant factors, which means that the Government consult and listen where appropriate. Under public law duties, a Secretary of State has to act reasonably and fairly.

The hon. Member for Blackpool South mentioned City & Guilds, which stated:

“The City & Guilds Group fully supports the Government’s policy drive to improve the skills of the UK workforce and improve the transition for those entering employment from education and training. We see much merit in the Post-16 Skills Plan, and look forward to continuing to work with the Government and the new IATE to improve the quality and esteem of vocational and technical education in the UK.”

The hon. Gentleman also talked about the timescales. We will publish an implementation plan in due course—a real “due course”—which will set out the timeline for delivering the technical education reform set out in Lord Sainsbury’s independent plan and the Government’s post-16 plan. It will demonstrate firmly how we are to ensure that the institute will be able to deliver its functions according to the plan’s timescales.

As I said all the way through this morning’s sitting, the whole purpose of establishing the Institute for Apprenticeships—now to be the Institute for Apprenticeships and Technical Education—is to give employers a clear and independent voice. I understand that it must be strange at first sight that the Bill gives the Secretary of State powers to issue directions to the institute in respect of its responsibilities for technical education qualifications and the steps towards occupational competence, but the limitation in the amendment is neither necessary nor desirable, and I want to set out why.

I have mentioned Lord Sainsbury, who touched on this again in oral evidence to the Committee. We are including the direction provision in the Bill because it ensures that although the institute has real responsibility for developing and operating the technical education system flexibly, that will be in an overall strategic context guided by the Secretary of State. The Committee might be concerned that we did not include a similar power in respect of apprenticeships and the institute, but the two cases differ substantially. There is a stronger relationship between technical education and the education system as a whole—apprenticeships form part of that—particularly as it relates to young people, than is the case with apprenticeships individually.

To make it clearer, let me describe the circumstances in which we envisage that the direction power may be used. They could include a national requirement for all qualifications taken by 16 to 18-year-old students to include a specific core skill or knowledge. Or they could reflect reforms to other parts of the system, such as a change in the structure of A-levels or in the length of the academic year, which might have a strong impact on the shape of technical education provision. Many issues covered by the directions are likely already to be subject to specific consultation before they are put in place, such as the consultations that take place on A-level subject content. The direction power simply enables the Secretary of State to ensure that her wider policy responsibilities are given effect throughout the system.

[Gordon Marsden (Blackpool South) (Lab)]

I intervene on the Minister at this point to clarify that the point of the amendment, and the argument I made, was not to question in any way the ability, legality or desirability of the Secretary of State having an ongoing, one-to-one relationship with the institute. The point was that the aggregate of those instructions, if they are not tempered—that is the way I want to look at it—by a periodic review or consultation with the sorts of organisations that we have talked about, could cause not a chasm but a gap between what one set of people know and what another set know. I entirely understand the Minister’s point about making these decisions based on technical things, but that is the purpose of the amendment. The purpose was not to question in any way the desirability of the Secretary of State having that one-to-one relationship.

[Robert Halfon]

As I mentioned previously, it is highly likely that the Secretary of State, when issuing a strategic direction, will have a full and thorough consultation. We want to make sure that the Government are able to exercise overall strategic control where necessary and without delay.

The amendment relates to additional consultation on, and review of, directions issued to the institute, rather than the principle of the direction-making power itself. We have just agreed that those directions are likely to deal with changes to the education system as a whole, for which consistency of implementation is of primary importance. Consultation and review relating to only part of the system—the institute’s responsibilities for technical education—seems to have little practical value and, we think, might cause considerable delay, which could put coherent and consistent implementation of strategic measures in peril.

There might be other cases in which the Secretary of State would need to intervene quickly, for example before arrangements for particular qualifications are finalised. We therefore believe that the Secretary of State should be able to exercise a direction power of the kind the Sainsbury panel had in mind, without a specific requirement for additional consultation and review, even though it is unlikely that there would be no consultation when that directional power was given. I therefore hope that the hon. Gentleman will agree to withdraw the amendment.

[Gordon Marsden]

I have heard what the Minister has to say on this matter. Again, I make the point that we are concerned about the aggregate process, and it is that process that prompted this probing amendment. The Minister mentioned the implementation plan, which raises another issue that was brought to us by a number of different people. The Minister and I swapped quotes from City & Guilds, but the original comment I made was what City & Guilds said about the timetable. The implementation plan, which he says will give the timeline in due course, is welcome, and may well allay some of the concerns that others have had and which we have tried to reflect in the amendment. If that is the case—in due course—we will be satisfied. I therefore beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[The Chair]

Mr Marsden, do you wish to move amendment 31 formally?

[Gordon Marsden]

Ms Dorries, we do not intend to move either amendment 31 or amendment 33. We have established the principle with the first vote, and I do not see the need to detain the Committee any longer on that.

[The Chair]

Thank you.

[Gordon Marsden]

I beg to move amendment 17, in schedule 1, page 29, line 34, at end insert—

“(1A) In paragraph 2(1) of (membership of the Institute), after subparagraph (c) insert—

“(d) but at least one of the members appointed under paragraph 2(1)(c) must have recent experience of undertaking an apprenticeship, or of representing or promoting the interests of apprentices; and

(e) at least one of the members appointed under paragraph 2(1)(c) must have recent experience of undertaking a technical and further education course, or of representing or promoting the interests of students undertaking a technical and further education course.””.

This amendment would ensure that apprentices and learners are represented on the board of the Institute for Apprenticeships and Technical Education.

[The Chair]

With this it will be convenient to discuss amendment 32, in schedule 1, page 29, line 34, at end add—

“(1A) In paragraph 2, after subsection (2) insert—

“(3) The appointment of the Chair and Chief Executive shall be subject to a confirmation hearing by the appropriate select committee or committees of the House of Commons.””.

[Gordon Marsden]

We now come to what is essentially the last of the amendments to schedule 1 that we will pursue. It has been designed to broaden both the prospective and the actual membership of the Institute for Apprenticeships and Technical Education. Although we have dealt in earlier amendments with how apprentices, and indeed students, get represented, amendment 17 is the most specific.

The Minister will understand that we wish to insert sub-paragraphs (d) and (e) precisely to reflect what he and I have been talking about, which is that the situation of people undertaking FE and technical courses can be somewhat different in outcome and process from that of apprentices. It is important to make that distinction. There is a certain element of déjà vu here, because we discussed the same issue at the start of the year. I will not repeat the whole saga, but before the Government drafted the provision this was very similar wording to that in our model for the new institute. As my hon. Friend the Member for Cardiff West (Kevin Brennan) noted during the passage of the Enterprise Bill 2016, on which he led for the Opposition in Committee, the Institute for Apprenticeships did not—and for that matter does not—have any clear mechanisms for ensuring that apprentices and learners are able to contribute their experiences via the board, or the institute, to inform the work of their new regulator.

In this morning’s sitting the Minister and I discussed the nature of feedback, and it seemed that he thought it was more rigorous than I did, but we will let that pass. However, this is a question not so much of feedback—which is important—as of sending out a sign that there is proper representation. The institute must be broadly based. It cannot simply be employer-led, however important that may be; it should be guided and structured by them, and we will see in due course what the appointments to the board reflect. The idea that there is a board with no apprentice presence on it is as daft as it would have been in the Higher Education and Research Bill to have the office for students without a student representative. In one way, although we can gloss it, it is as simple as that.

From what Peter Lauener said in his oral evidence, and indeed from what the Minister himself has said, appointments to the institute’s board may or may not be imminent, happening in due course, at hand or whatever phraseology we want to use, but I do not think that I can overemphasise how essential it is for it to have wide-ranging representation, to include all the key components of apprenticeship creation and delivery.

I have referred, in relation to previous amendments, to the active participation of various groups of apprentices and their willingness to take up the challenge. These include the National Union of Students, with its own National Society of Apprentices, the Industry Apprentice Council, from whose excellent survey I quoted last week, and other groups such as that of Lindsay McCurdy. After all, in National Apprenticeship Week every year—an offshoot, of course, of the creation of the National Apprenticeship Service under the previous Labour Government—we all go around, as Members of Parliament, shaking hands, having photographs taken and saying how marvellous it is to hear apprentices’ life stories and initiatives. Next year the board will be established and the institute will take a legal rather than shadow form. It would seem odd then to go out and talk to apprentices and students at FE and technical colleges and have them say, “It’s nice that you have come to see us, hear my life story and take my photograph, but why have we got no representation on the board of the institute?” Perhaps the Minister would like to think about that for a moment.

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[The Chair]

That is enough now, Mr Marsden.

[Gordon Marsden]

We have a weaker version of that. The Education Committee interviewed the chief inspector-designate of Ofsted and was not satisfied, but the Secretary of State was satisfied and that process went ahead. Amendment 17 is not proposing some form of constitutional innovation; it is something that goes on already.

Sometimes the Minister or the Secretary of State agrees with the view of the Select Committee and sometimes, if the Select Committee has said no, they do not. I do not have a problem with that. In terms of raising the profile of the institute, which is surely what we all want to do in the run-up to its formal launch in the spring, this would be a very useful measure for the Government to agree, which would send out a signal.

As I said, this is a probing amendment. If the Minister were to say, “It is probably more appropriate for just one of them—the chair or the chief executive—to have it,” we would not argue with that. Agreeing to this measure would send out an important signal about how important the Government consider this issue to be. The Select Committees have already shown interest in apprenticeships, technical education legislation and the apprenticeships levy, as the Minister well knows because he has been before them, so I cannot believe that they would not be happy to perform this duty. That is the basis on which we tabled the amendment.

[Kelvin Hopkins (Luton North) (Lab)]

I support what my hon. Friend says about amendment 17. It is very important to have representation by an apprentice or someone who has recently been an apprentice, so the board gets feedback from someone who has been on the receiving end of the experience, rather than just from people who think they know about it, but may not know it all. An apprentice who has spent considerable time going through the system will have a lot to offer to the board, so that is very important.

It is important to have members of the board who are different from the rest of the board. In the past, having one woman on a board—nowadays, we have many more than that, I am glad to say—made a difference to the nature of the discussions. Having representatives from minority communities on boards makes a difference by broadening the discussions and making them better. Assumptions that might have been made if the board were made up of small “c” conservatives and middle-aged white men in suits—I am one of them—can be challenged. We see too many people like me, and not enough of other people—[Interruption.] I said people like me, not necessarily me personally. It is important to recognise that there are other voices and other views, and the way to get those views represented is to have such people on the boards. Having at least one apprentice on a board is a good idea, although it should be someone who is experienced—someone who is coming to the end of their course or has just completed it, not someone who is at the beginning of their course. I strongly support what my hon. Friend said, and I hope the Government take cognisance of his views.

Turning to amendment 32, I have chaired two confirmation hearings and I sat on a committee interviewing an appointee before they went for their confirmation hearing. I think it is an extremely good exercise that has improved the quality of the appointments in recent years, so I very much welcome it. Occasionally, the people have not been ideal for the job and have chosen to stand down before going right through the process; I think that shows wisdom. Sometimes the Government and Ministers have been reluctant to let go of appointments, but they have now done so, and I think they are pleased with the job that Select Committees have done on confirmation hearings. I really do think that this would be a very good idea.

It is particularly important to have confirmation hearings for the chair, although perhaps the chair should deal with the chief executive. The confirmation hearings I chaired were to do with that role. It might not have been a chair—it might have been a director or something—but we were essentially interviewing for the chair role. It was extremely interesting and very useful, and I think that in each of those hearings we got the right result. I support amendment 32 in principle, even if my hon. Friend does not press it to a vote.

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[Gordon Marsden]

I will treat the Minister’s two responses separately. On amendment 32, which deals with the appointment of the chair and chief executive, yes, there is always the argument that because we are speeding towards setting the institute up—I do not criticise that—there is not time for a confirmation process. I hope that I do not misrepresent him, but I think that is the gist of what he said.

All these things are contextualised. I do not want to open old wounds, but the Institute for Apprenticeships has not had a great record with shadow chief executives—not because of their calibre, but simply because of the time for which the first stayed and the fact that the second, Peter Lauener, is doing the job two days a week. To be blunt, that has aroused scepticism—or to put it positively, a wish to be reassured—among stakeholders across the board about whoever the new chief executive is. It seems to me that an appointment hearing would be neither inappropriate nor unreasonable.

The Minister cannot have it both ways. He tried to persuade me the other day that I did not need to worry too much about the institute having only 60 employees because an enormous number of other people were doing things, but if that is the case, it is a rather more significant organisation than the Minister’s bald figures and comments suggest. To be frank, I am not sure that is the strongest of arguments.

[Kelvin Hopkins]

There is not necessarily a correlation between the importance of an institution and the number of people involved. Some institutions may be quite small but extremely important. As my hon. Friend says, size is not so significant.

[Gordon Marsden]

My hon. Friend may well be right. Significance is the important thing, and I just think a confirmation hearing would be appropriate for a new organisation such as this. As the Minister said, such a hearing may well take place in some shape or form with a Select Committee anyway, but we will see. We will not press amendment 32 to a vote at this point, but we reserve the right to return to it on Report.

Let me turn to amendment 17. I listened carefully to what the Minister said in addition to his point about the proposed apprentice panel to report directly to the board, and I am bound to say—this is an instant comment, not a considered reflection—that I think that is a positive and enlightened approach. It addresses many of the issues that concern us and I think will concern apprentices, and although the devil is always in the detail, it could be an elegant way of squaring the circle, to use the Minister’s phrase. We will see how things go and wait to see the list of appointments.

Incidentally, our proposed amendments are not comments on individuals. I always take the view that we are making legislation for a generation and we have to make it for all individuals. Having said that, I am particularly encouraged and pleased with the Minister’s response. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the schedule be the First schedule to the Bill.

[The Chair]

With this it will be convenient to discuss the following:

New clause 3—Report on quality outcomes of completed apprenticeships—

“(1) The Institute for Apprenticeships and Technical Education shall report on an annual basis to the Secretary of State on quality outcomes of completed apprenticeships.

(2) The report under subsection (1) shall include information on—

(a) job outcomes of individuals who have completed an apprenticeship,

(b) average annualised earnings of individuals one year after completing an apprenticeship,

(c) numbers of individuals who have completed an apprenticeship who progress to higher stages of education,

(d) satisfaction rates of individuals who complete an apprenticeship on the quality of that apprenticeship, and

(e) satisfaction rates of employers who hire individuals who complete an apprenticeship with the outcome of that apprenticeship.

(3) The Secretary of State shall lay a copy of the report before Parliament.”.

This new clause would require the Secretary of State to report to Parliament annually on specified quality outcomes of completed apprenticeships.

New clause 4—Institute for Apprenticeships and Technical Education: duty to promote awareness—

“(1) It shall be a duty of the Institute to promote awareness of—

(a) occupations, and

(b) steps by which people may become competent to work in occupations.

(2) In promoting awareness under subsection (1)(b), the Institute shall give due weight to—

(a) apprenticeships, and

(b) technical education qualifications.”.

New clause 5—The Institute: duty to consult—

“(1) The Institute shall consult on a regular basis on—

(a) the development and progress of standards and assessment plans, and

(b) the delivery of apprentice end point assessments.

(2) Consultation under subsection (1) shall be carried out with—

(a) further education bodies and provider organisations

(b) awarding bodies

(c) organisations representing employers, and

(d) organisations representing students and apprentices.”.

Ms Brabin, as you tabled a new clause in this group, it would be nice if you were to lead the debate.

[The Chair]

Mr Marsden, would you like to speak?

[Gordon Marsden]

On a point of order, Ms Dorries. May I clarify that we are having a debate on all three new clauses and schedule 1 stand part, so it would be appropriate for me to speak to all of those?

[The Chair]

It would now, yes. I called Ms Brabin first because I thought it would be nice, for a change.

[Tracy Brabin]

Thank you, Ms Dorries—a female voice in the room.

[Gordon Marsden]

Yes, I thought so, too. May I congratulate my hon. Friend—I think it is the first time she has spoken in Committee—on a lively and inspiring presentation? The issue of careers guidance is not new, but I will not go through its whole history. She was right to make those points, and the examples she gave of what appears to be there in principle but is not in practice were all too symptomatic of the difficulties the Government have had until relatively recently—I will be fair—in addressing the problem.

We had a lengthy period under the coalition Government and even at the start of this one where they were running rapidly to catch up with what had become a disastrous position in careers advice and guidance in schools, with work experience no longer required in the curriculum at key stage 4. An array of organisations—everyone from the CBI to the Federation of Small Businesses—complained and continue to complain. When the Government attempted to respond to some of the many cuts that virtually dismantled much careers advice in local authorities and schools—the Connexions programme was maimed beyond repair—to be fair, for post-24s they did do quite a lot in terms of online guidance and so on, but for under-24s they had done precious little, and my hon. Friend’s investigations suggest that even that is not in the best of nick at the moment, if I can put it that way.

We still await a formal strategy from the Government on careers advice and further reports on how the money allocated to the Careers & Enterprise Company will be spent and distributed. To be fair, as I have said previously, the Careers & Enterprise Company is beginning to do some useful work, but it is hampered by the sheer volume of stuff that needs to be done. The Industry Apprentice Council report to which I have referred previously makes that point as well. My hon. Friend the Member for Batley and Spen is right to raise the issue with the Minister in this way and at this time. As I said, I accept the Minister’s bona fides in this area and his wish to do something about it, but we need to see it taken forward.

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[Gordon Marsden]

I understand the Minister’s point, and I, likewise, would not want to lumber the institute with the responsibility for all those things. Will he give us an assurance, because he said these things occur from time to time, that there will be, at some point during an annual cycle, what I can only describe as a “state of the nation” report? That report could actually bring these various things—not necessarily all of them—together, so that not only stakeholders but Parliament will have a clear picture of what has happened over the past year.

[Robert Halfon]

I will reflect on what the hon. Gentleman has said. I reiterate the point that a lot of that is done already. We have monthly and annual announcements of all kinds of data to do with apprenticeships and skills. I always ask about destinations because I think they are incredibly important. I am glad that surveys show, for example, that more than 90% of apprentices get into work afterwards, either by staying in place or entering other employment. That is an incredibly important destination statistic.

On new clause 5, the principle of consultation, which we have mentioned quite a lot today, is already a key feature of the current Institute for Apprenticeships. The institute has a statutory duty under the Enterprise Act 2016 to undertake its functions with regard to industry, commerce, finance, the professions and other employers regarding education and training within the institute’s remit. Even more importantly, the institute must also undertake its functions with regard to those who may wish to undertake education and training that is within the institute’s remit—the apprentices themselves.

More specifically, the institute also already has a statutory responsibility to ensure that all draft standards and assessment plans are subject to third-party scrutiny before they can be considered for approval, and it must take account of the findings and conclusions of those carrying out that independent review. The bodies and organisations listed in the new clause are already covered by that existing legislation, and the institute must have regard to them in all functions, not only the specific function set out in the new clause. That approach will also apply to the functions that the Bill plans to give to the expanded IFATE.

The consultative principles that will underpin the institute have already been evidenced. Antony Jenkins, the shadow chair, has held a series of roundtables with a wide range of external organisations to hear how they think the institute should operate. Later this year the shadow institute will publish a full consultation on the operational plan for the institute, setting out its core functions and proposals for how it will deliver them.

The Department also plans to publish a draft for the consultation of a statutory strategic guidance document, which it will issue to the institute next year. That will include the steers that the Government expect the institute to have regard to. It will ensure that the institute consults all those with an interest when carrying out its functions. I therefore hope that the hon. Members will be reassured and will not press the new clauses.

I will come to an overview of schedule 1 but will begin by answering some of the key questions the hon. Member for Blackpool South asked. Although the 19 to 24-year-old NEET figure increased by 0.8% in July to September, he will know that the overall trend has been down over the years. The figure for 16 to 18-year-olds fell by 1.5% compared with the same quarter in 2015.

The hon. Gentleman also asked about the clarity of a single awarding body—the Wolf report body. Of course, we looked at that but the Wolf report, as the hon. Gentleman will know, identified that a large proportion of vocational qualifications offered very little value to employers, young people and adult learners. The whole purpose is to remove thousands of poor-quality qualifications that were not valued by employers.

The proliferation of qualifications was partly down to the awarding organisations’ competition for market share within the existing system. Following Lord Sainsbury’s recommendations, we are bringing the system into line with the best in the world to ensure excellence in technical education provision and having a single awarding body per qualification model. It is strange that the hon. Gentleman should argue for competition while I am doing the opposite but we live in a topsy-turvy world. We are not being driven by competition in the market, with the adverse effects that that brought. Innovation will be driven by the awarding body competition for the market through winning exclusive licences.

[Gordon Marsden]

We may live in a topsy-turvy world but, on balance, we are a little less gung-ho about competition than the Minister’s colleague, the Minister for Universities, Science, Research and Innovation, was on the Higher Education and Research Bill Committee. However, that was not the point I was going to make.

The point I want to make is that there is a distinction. I made it clear that I was putting forward the concerns of a number of the awarding organisations that they put to us in evidence. There is a clear difference between letting 1,000 flowers wither because they are of poor quality, and coming down to a single qualification point. I made the observation in one of the papers that the suggestion had been made that there might be two or three. There was no suggestion that there should be no dilution; simply that a monopoly position was possibly unwise, not least because one of the awarding companies might one day go bust.

[Robert Halfon]

I will reflect on that but the whole purpose is to ensure quality and simplification. Once it is agreed to have another one, then there is another and another and so on. I think we are right to follow the recommendations of Lord Sainsbury and Baroness Wolf.

[Robert Halfon]

I will find out what the Careers & Enterprise Company is doing in Leeds and in the hon. Lady’s constituency. It will be involved with the LEP, but it has not been there for a long time; it is a recent creation. It has been working to identify the spots where we need help the most. I will look into what is happening and write to the hon. Lady.

On the copyright issue, the content of qualifications will be determined by employers, with the support of the institute. That is very different from the current system, where awarding organisations develop qualifications in subjects or sectors of their choosing. In some cases that is with the involvement of employers, but not always. The new technical qualification will be based on the skills, knowledge and behaviours that employers have identified as requirements for particular occupations. As the content of the qualifications will be determined with the institute’s oversight, it is perfectly reasonable and appropriate that copyright for relevant course documents should rest with the institute.

On the relationship between the framework and the new standards, the same organisations can deliver assessments for frameworks and new standards as long as they meet the criteria for assessment organisations for standards and are admitted on to the register of assessment organisations. The same position exists for training. Providers can offer training for both but need to meet the criteria and get on to the provider register.

When I was talking about careers, I forgot to talk about the investment we are putting into training, which the hon. Member for Blackpool South mentioned. The hon. Member for Batley and Spen gave examples of constituents who are not getting apprenticeships and described the low take-up. For those people, we potentially offer traineeships. We have spent £50 million on that. Many of those people—over 19%—are people with learning difficulties and disabilities.

In terms of Ofqual and Ofsted, I see it not as a problem but as a bonus that there are all these qualification organisations out there, maintaining the quality of apprenticeships and technical education. As the hon. Member for Blackpool South knows, Ofqual and Ofsted are responsible for different elements of the system; Ofqual regulates qualifications and Ofsted regulates the trainers and providers. The institute will regulate the quality of standards and assessment plans. I do not think that is a problem. It is a good thing that all those bodies are there, to ensure we get the quality technical education and apprenticeships we need.

[Gordon Marsden]

I will reflect on what the Minister said. Even if it is a good thing that there is a plurality of opportunities, I will reiterate two points. First, it does not make the judgment of what capacity the institute may need when competing in this marketplace any easier. Secondly, I hope the Minister will understand and accept that there are enough difficult organograms out there already in further and technical education without creating one with lots of little dotted lines here, there and everywhere. If he is going to maintain that position, it is important that lines of responsibility and why they work are clearly explained to stakeholders and employers.

[Robert Halfon]

The hon. Gentleman makes a fair point and I will reflect on what he has said, but I think it will be set out clearly. We are considering how the new technical education qualification should be regulated. The regulatory approach will need to be designed specifically for new qualifications and in the light of the institute’s contract management function. Ofqual remains the qualifications regulator.

I am pleased to turn now to the schedule and give an overview of what the Bill seeks to do. We have discussed much of it today. The schedule seeks to extend the remit of the Institute for Apprenticeships to give it responsibility for implementing reforms that we believe will raise the quality of college-based technical education. The reforms will result in technical education courses that are designed around employers’ needs, support young people and adults to secure sustained employment and meet the needs of our economy.

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Question proposed, That the clause stand part of the Bill.

[Gordon Marsden]

I rise to speak to clause 2 in particular, and to comment on the subsequent clauses that are also a statement of where this is going. It is important, in this context, to reflect—this will be very important when we come to the next part of the Bill—on why this clause is in the Bill in the first place.

[The Chair]

Mr Marsden, may I make it clear that, if you are speaking to clauses subsequent to clause 2, no amendments have been tabled for clauses 3 to 12 either? We understand that neither the Opposition Front-Bench team, nor the Minister, wish to speak to these clauses. Is that correct?

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[Gordon Marsden]

As I was saying, on clauses 2 to 12—we will obviously proceed to the second part of the Bill, which deals, in schedule 3, with the important issue of the innovation of education administrators—it is important to understand why the Government have to address these issues at this time. The reality is that these insolvency rules are important to protect, above all, students and those in colleges. Colleges are crucial for providing further education nationally and have an important local presence. When colleges have financial difficulties, that can affect many stakeholders, including students, employers, lenders, the funding and oversight bodies and the local communities in which they are situated. Colleges are, quintessentially, locally based and respond to local employment and skill needs. That is why they have been successful over the years in being able to adapt, sometimes in a rather more nimble fashion than universities—although there are community-based universities that resemble FE colleges in their output and remit more than they do traditional universities.

The reality is that the FE sector has experienced a prolonged period of funding cuts. The House of Commons Library briefing shows the scale of the reduction in funding: in adult further education and skills, funding fell from a 2010 baseline of

“£3.18 billion to £2.94 billion in 2015-16, a reduction of 8% in cash terms or 14% in real terms.”

The financial health of the FE college sector has been declining since 2010-11. There was a deficit in the sector in 2013 for the first time, and 110 colleges recorded an operating deficit. The number of colleges assessed by the Skills Funding Agency as having inadequate financial health rose from 12 to 29 in the same period. That decline in the sector’s financial health is one of the things that has fuelled what the Government have said here today.

We have already referred to the searing report produced by the National Audit Office in 2015, and I do not intend to go into detail on that again. It is obvious, and not an open secret, that the Treasury has insisted on a robust insolvency scheme as part of the quid pro quo for the additional funding that has gone into the sector. That is the reason for the profusion of these clauses in the Bill.

[Mr Ranil Jayawardena (North East Hampshire) (Con)]

Is it not also true that, from the evidence received, banks would welcome this certainty? The position for them is currently unclear, and that could help them lend more to the sector, which is invaluable in helping our students.

[Gordon Marsden]

I thank the hon. Gentleman for his intervention, and for the penetrating questions he put to the witnesses. Hopefully that will be a by-product of the process, and that is entirely right. I am also bound to observe that there are other factors pushing it down this route. One of those other factors is the underlying financial weakness of the sector. When the further education commissioner gave evidence—he talked of 82 or 84 colleges in a merger position—he was, to be blunt, far more optimistic and gung-ho about the outcome of those mergers than I would be. From memory, some other members of the Committee expressed a different point of view. The truth of mergers is that they do not always work out well, and this was commented on by Mr Pretty from the Collab Group. He made those observations based on his own experience. There are a number of factors here. Changing priorities in public funding is a reduction, it is how some colleges have struggled with large debts or partially completed capital investment projects. The latter partly reflects weaknesses in the planning and financing of capital projects under the former Learning and Skills Council.

[Kelvin Hopkins]

Two or three points were made about mergers during our evidence sessions. One was that it is not just a question of scale. Sometimes colleges are not enormous, but they still work well separately. Sometimes mergers take place where a weak college is merged with a strong college, which turns them into a joint weak college, not a joint strong college. So there are all sorts of possibilities, probabilities and problems with mergers, and they should be judged carefully on their own merits.

[Gordon Marsden]

My hon. Friend is right, and what he says is underpinned by his great experience in this area. I am not saying that every area review that produces merger proposals will automatically result in colleges finding themselves in a financially weaker position and therefore more in need of the insolvency clauses in the Bill than otherwise, but it is part and parcel of that aspect.

It is not just FE colleges feeling the strain. It was helpful to have the presence of the Sixth Form Colleges Association in the evidence session. It, too, mentioned courses having to be dropped as a result of funding pressures. Three quarters of colleges have limited the size of their study programmes and more than a third do not believe that next year’s funding will be sufficient to provide the support for educationally or economically disadvantaged students.

In my neck of the woods, as well as the excellent FE college, Blackpool and the Fylde College, which the Minister visited, is Blackpool Sixth Form College, which is also an excellent college that has, over the years, done splendid work on the vocational side, in traditional qualifications and with the previous Aiming Higher programmes. Although the college is outside of my constituency—it is just in the constituency of the hon. Member for Wyre and Preston North (Mr Wallace)—it takes students from three or four constituencies. It has done splendid work, but the previous principal and the current principal have had to juggle the finances very carefully indeed to complete some of the programmes they wanted to do for the college and for the physical infrastructure. Sometimes the physical infrastructure of such colleges is 30 or 40 years old, and needs renewing.

I am reflecting on the various factors that give rise to the clauses we are passing into legislation. I want to focus us on the detailed conversations we will have when we move on. The picture of fragility that I described makes it even more important that the insolvency clauses and the position of the educational administrator, which we will talk about in considerable detail in due course, are a real answer to this problem, rather than something that sounds good on paper but does not do the business in practice.

[Kelvin Hopkins]

I have some experience in these matters. There have been funding pressures in all spheres of post-16 education, although not necessarily in universities, which seem to be well funded compared with other areas. In spite of the fact that there are advantages of scale in producing wide ranges of subjects in whatever qualification one is taking, some of the smaller subjects are, even now, dying. We are getting to a point where subjects such as modern European languages are being lost entirely from an area because no college or school will teach them any more. That is tragic. We should be creating more variety of opportunity in technical and academic education, not less.

My second major speech when I first came into this place was about funding for sixth-form colleges and the fact that they did a superb job. I said that funding constraints were in danger of killing the goose that lays the golden eggs: the sixth-form college sector. They do a fabulous job and I know from experience that we should have created more of them. Sadly, a view was held that we should create lots of schools with small, less efficient sixth forms with much narrower subject ranges, instead of sixth-form colleges. I think that went in entirely the wrong direction. I hope that I can persuade the Minister and others that we ought to look more favourably on sixth-form colleges and FE colleges if we are to make serious advances in educating and training our young people better than we have done in the recent past.

--- Later in debate ---

Despite the funding pressures, we have protected the base rate of funding at £4,000 per student for all types of providers until 2020. We know that the proportion of 16 to 18-year-olds in education or work-based learning is at a record high. We have maintained the funding for core adult skills participation budgets in cash terms at £1.5 billion. If you include the advanced learner loans and the apprenticeships, the adult education budget will have increased in real terms by 30% by 2020.

[Gordon Marsden]

I have two observations: first, “protecting” is an interesting word when we are talking cash terms as they are not real terms. By 2020 inflation may have eaten into that figure. Secondly, the hon. Gentleman mentions the advanced learning loans, but are they not sums of money out there to be offered—and at the moment, only 50% of them have been taken up?

[Robert Halfon]

Yes, but it is still a Government expenditure item and its aim is to help more people take part in education.

Overall, the Department for Education plans to invest £7 billion in 2016-17 to fund education and training places for 16 to 19-year-olds. The area reviews will support those colleges that want to merge—no one is being forced to merge—and we will provide financial support where appropriate to help them do so. We are confident about the programme and we will deliver strong, sustainable colleges for the future. Mergers do not necessarily mean that provision in a local area will end. It will be up to the colleges to decide whether to keep a campus or site open.

The clause is probably the least technical of the Bill’s insolvency-related clauses. It explains that part 2 is about the insolvency of further education bodies and, in summarising what is covered by chapters 2 to 7, sets the scene for what we will debate over the coming sittings. Underneath the simple clause is the Government’s commitment to ensuring that every young person has the opportunity to achieve their full potential and to succeed.

The Secretary of State talked about the Government’s commitment to building a further education sector capable of delivering these skills and that is why we are supporting colleges through the area review to take whatever steps are needed to transform themselves into providers of the highest quality teaching. We are providing them with the opportunity to ensure they are in a strong and sustainable financial position for the future.

Once the area review recommendations have been implemented, the Government has been clear that we will no longer provide exceptional financial support to colleges that find themselves in financial difficulties. We will draw a line under what has become an implicit understanding among creditors and some educational institutions that those who fall into extreme financial difficulty will be able to rely on the taxpayer to make good the shortfall.

The provisions in the Bill will send a clear message to colleges that, to deliver excellence in teaching and leadership, they need to ensure that they have strong and robust financial controls in place. The commissioner who gave evidence said that, where there had been significant problems, much had been down to leadership and financial management. Why is it that so many colleges are doing extremely well, the college of the hon. Member for Blackpool South being an example?

Any college or creditor in extreme financial difficulties cannot look to the Government as the bank of mum and dad for a bail-out. The bank of mum and dad—the taxpayer—will be shut, because we have a duty to give taxpayer value.

Although we expect a college insolvency to be a rare thing, we cannot say it will never happen. That is why the measures the Bill introduces will ensure existing insolvency procedures apply to further education bodies, whereas ordinary insolvency procedures would offer protection only to creditors.

If I summed up this part of the Bill in a few words, it would be about protection, insurance, prudence and caution. Through the Bill we will introduce a special administration regime for the sector that ensures that, in the unlikely event that a college become insolvent, the Secretary of State or Welsh Ministers will be able to take action to protect the interests of the learners.

That is at the heart of the Bill: protecting learners and ensuring that colleges are cautious about borrowing and banks are cautious and prudent about lending. Young people entering a college expect to complete their studies, leaving with the skills that they need to move forward in their lives. That is the purpose of the SAR and I urge that the clause stand part of the Bill.

Question put and agreed to.

Clause 2 accordingly ordered to stand part of the Bill.

Clauses 3 to 12 ordered to stand part of the Bill.

Ordered, That further consideration be now adjourned. —(David Evennett.)

Technical and Further Education Bill (Seventh sitting)

Gordon Marsden Excerpts

Committee Debate: 7th sitting: House of Commons
Thursday 1st December 2016 Public Bill Committees

[The Minister for Apprenticeships and Skills (Robert Halfon)]

It is a pleasure to serve under your chairmanship again, Mr Bailey. The clause is the first in chapter 4, which deals with the regime at the heart of the insolvency measures in the Bill. In this chapter, we make provision for the special administration regime that will make sure that students attending further education bodies in England and Wales are protected should that body fail. Hon. Members will be aware that the regime has been broadly welcomed by all, and I am grateful to the hon. Member for Blackpool South for welcoming it previously. That is not to say that there are no points of concern for stakeholders, but I hope to address those as we work our way through the clauses.

The clause sets out the when, the who and the what of the regime, which will be formally known as education administration. First, the when: the regime can be used when

“a further education body is unable to pay its debts or is likely to become unable to pay its debts”—

in other words, when an FE body is insolvent, based on the well established definition in the Insolvency Act 2000. Secondly, the who: an education administrator can be appointed by the court only on the application of the Secretary of State or Welsh Ministers, depending on where the FE body is based. Thirdly, the what: the education administrator will be responsible for managing the FE body’s

“affairs, business and property with a view to avoiding or minimising disruption to the studies of existing students.”

Each of those features is set out in more detail in subsequent clauses. I look forward to debating them with members of the Committee.

Question put and agreed to.

Clause 13 accordingly ordered to stand part of the Bill.

Clause 14

Objective of education administration

[Gordon Marsden (Blackpool South) (Lab)]

I beg to move amendment 1, in clause 14, page 8, line 4, at end insert—

“(3) Before an education administrator may perform functions specified in subsection (2), they must ensure an appropriate assessment is made and published of the impact of performing such functions, including, but not restricted, to—

(a) the impact on the quality of education provided to existing students of the further education body;

(b) the capacity of another body or institution to undertake any additional functions or provide education to additional students;

(c) the infrastructure of the local area, in particular transport;

(d) any impact on the travel arrangements of students to another body or institution; and,

(e) any financial impact on those students or any such impact on their travel arrangements, and what measures need to be taken to mitigate them.

(4) The Secretary of State shall make regulations to specify suitable bodies for making the assessments at subsection (3).”.

This amendment would ensure that an appropriate assessment is made of any potential impacts on students and their education, if an education administrator puts a further education body into “special administration” and takes action such as transferring students to another institution or keeps an insolvent institution open for existing students. This amendment would also require the Secretary of State to specify suitable bodies to perform such assessments.

[The Chair]

With this it will be convenient to discuss amendment 2, in clause 14, page 8, line 4, at end insert—

“(3) The education administrator shall not make any decisions required by subsection (2) without consulting—

(a) existing students of the further education body;

(b) existing staff of the further education body

(c) all recognised trade unions at the further education body.”.

This amendment would ensure that all relevant stakeholders are fully consulted about decisions taken by the education administrator in respect of the future of the further education institution.

[Gordon Marsden]

Good morning, Mr Bailey. It is a great pleasure to serve under your chairmanship. The Minister is right to say that we welcome the concept of the insolvency regime. We think it is necessary in the context that I talked about at the end of the last session, so we do not intend to oppose the principle of it in any shape or form. However, as the Minister has observed, we intend to probe—more sharply on some aspects than others.

If I may, Mr Bailey, I will speak to the two amendments we have tabled separately; although they are linked, they have rather different focuses and emphases. Amendment 1 aims to ensure that an appropriate assessment is made of any potential impacts on students and their education if an education administrator puts a further education body into special administration and takes action such as transferring students to another institution, or keeps an insolvent institution open for existing students. We recognise that the decision whether to transfer students to another institution or to keep an insolvent institution open for existing students is fraught with potential difficulty and will certainly demand great skill and finesse on the part of the education administrator. The Minister may wish to bear that in mind when we consider later Opposition amendments, which will probe him a little more on the nature, experience and qualifications of the education administrator.

The crux of the amendment relates to some of the matters we discussed when considering similar provisions in the Higher Education and Research Bill. The amendment would ensure that the entitlement that the Bill gives students to continue their education works in practice. We know that cases of colleges failing or other crises have arisen both in FE and in HE. I do not want to exaggerate those issues, because I take on board the points made by the Association of Colleges and other college organisations that the vast majority of FE colleges conduct their affairs in a very wholesome and satisfactory fashion, as my hon. Friend the Member for Luton North has mentioned previously.

[Kelvin Hopkins (Luton North) (Lab)]

Amendment 1 is very simple and I hope the Government will be minded to accept it in some form. Have we had any response, contribution or advice from the Association of Colleges or the Sixth Form Colleges Association? Do they broadly agree with the Government’s proposals? Are they agreeable to our amendment?

[Gordon Marsden]

My hon. Friend is right that we need to get support from those organisations. The AOC has raised particular issues relating to later Opposition amendments, such as amendment 34 to clause 15. Some of those concerns will be explored when we consider those amendments.

The ambitions of the special administration provisions are noble, but amendment 1 is intended to serve as a safeguard against any unintended consequences. As we know, even isolated incidents of colleges that hit the headlines can have a deleterious effect on the sector. The sector is in a delicate state at the moment—I will not put it any stronger than that—so if this provision is needed, we should do what we can to avoid problems with the impact on students and education.

As far as I understand it—I say that with due modesty, because some of this is quite technical—the education administrator will be given four options for supporting students to continue their education if their college becomes insolvent: selling assets to keep a college afloat; bringing in another body to take on functions of the college; transferring students to another college; and keeping the college

“going until existing students have completed their studies”.

That last phrase is rather ambiguous, and it would be good to hear the Minister’s thoughts on it. Whether in his response to the amendment or later this morning, it would be useful to hear whether there are any thoughts on the timeframe of that option.

All the options are sensible. I do not think that any member of the Committee would suggest that they should not be pursued by the education administrator if students’ education were put in jeopardy by insolvency, but there are questions about the finessing of those options, about which option the administrator thinks it best to pursue, and about the timeframes. Again, the Minister may want to say something about potential timeframes as we go along. Sometimes the education administrator might need to use more than one of those four options, perhaps at different points in the process. Our amendment addresses what that will mean for students in those different circumstances. To do that, we propose that an assessment be made of the impact of the administrator’s decision on students and the local community, enabling any negative impacts to be appropriately mitigated.

We are realistic. We know that sometimes difficult situations bubble up over a long period of time and there are amber warnings, but sometimes, because some of the problems have been concealed, they blow up very rapidly and hit the headlines. Ministers, the new institute or, indeed, the Skills Funding Agency may have to move swiftly in such circumstances. We understand that. We do not want this to become an over-bureaucratic, long-winded, time-consuming process, but we believe that a definitive assessment is needed somewhere in the process.

We have several concerns. If an administrator keeps a college going so that existing students can finish, for example, one can see the potential benefits for the students. While it will depend on the nature of their contract—the University and College Union and others have previously raised concerns that the FE sector is becoming a mélange of shorter term contracts—there will be lecturers and staff on contracts of significant duration, and it would be understandable, perhaps highly probable, that they would seek to leave. After all, the involvement of an education administrator is essentially a sign of a potentially failed college and that their employer, at least in the way that he, she or it employs them, will either close or change in the near future. Any exodus of staff in such circumstances could have untold impacts on the quality of education that students receive. We, and I am sure the students at such colleges, want to know what transitional measures are envisaged to maintain the delicate balance needed to protect the quality of education that students receive at a college that is being kept open on life support. That is option 1.

Option 2 is an administrator deciding to begin selling off college assets to address the insolvency issues, or just to keep the college afloat. What protections will there be so that resources that are integral to a learner’s studies will not be sold off? I understand that it is impossible to make an absolute judgment in every case on whether an administrator should do one or the other. It will obviously depend on the individual circumstances and assets and so on, but computers and ICT—I think “digital services” is the more up-to-date term—spring to mind. Often worth a significant sum, they may be an attractive asset that is easy to sell quickly for a good taking; on the other hand, selling them off could leave less equipment to share between the college’s remaining students, which would have a negative impact on their learning experience.

Additionally, the area reviews and mergers need to be thought about in great detail. In our evidence session I traded questions with the FE commissioner on the impact of that. He takes a more sanguine view of that process than the Committee and I do, but time will tell. What we know is that in circumstances where learners need to be transferred to another college—that does not necessarily mean that the whole body will close, as someone suggested—the college building could continue but, for whatever reason, the students in a particular department or area are transferred to another college, possibly for economies of scale. It is not necessarily that one particular college is closed and absorbed into another.

[Kelvin Hopkins]

These events would be of great concern to students and staff alike if they happened, but we hope they will not and we will try to ensure that they do not. However, if there are to be changes, would it not be wise—or essential—to make sure they take place during the long summer vacation, so that they do not disrupt students in the middle of courses during in the academic year?

[Gordon Marsden]

My hon. Friend, as always, makes a good and practical point. I have two observations. One is that crises cannot always be managed and sometimes they blow up from nowhere. My other observation is that among the pressures on FE colleges these days is the fact that the long summer break is becoming less long. That is true for FE students as well as other students. However, my hon. Friend’s general point is absolutely right and needs to be taken into account.

There are plenty of questions to be answered for students. How close to their home and their old college would the new college or facility—it may not be a completely new college—be? How much more expensive and time consuming would it be to get there? We know that college students have to spend a considerable amount of money on travel and we know that the mechanisms for supporting them are highly variable, particularly with local authorities’ discretionary spending being cut to the bone in a range of areas. There is already a risk of making some education and courses inaccessible for the less well-off.

What financial support does the Minister envisage might be available to help such students to access education at a new institution if it turns out that the challenges are considerably greater? For example, would the new college have the capacity to respond to any influx of new students? As I have indicated, insolvency might result in some students finding themselves forced to travel longer distances to continue their studies, but there is no reference in the Bill to mechanisms by which they might be supported or compensated. I understand that that is not something that should necessarily go into the Bill, but while I appreciate that a lot of things must be worked out, it is a bit worrying that it seems that, even at this stage, not much thought is being given to some of these issues. If it is, I apologise.

Mergers between colleges can be harmful to the social fabric and social mobility, particularly for young people in rural and suburban areas, and might force them to travel 30 or 40 miles to college. I raised this point in Westminster Hall about a year ago with the Minister’s predecessor, who seemed to be somewhat miffed that I referred to his predecessor, the right hon. Member for South Holland and The Deepings (Mr Hayes), being decidedly agnostic about the prospect of mergers. That was the case, however, and it was because the right hon. Gentleman’s constituency is very rural, so he has a lot of knowledge and concern about the issue.

We must make a distinction between the geographical situation when there is insolvency and the mechanisms to deal with it. For example, when two colleges merge in a suburban or rural setting, the implications for the ability to maintain courses, and thus viability, will be significant if issues such as travel loom large and make it impossible for existing students to go there or for future students to want to go there. Even in urban areas—parts of Greater Manchester, for example—public transport is not necessarily good. In my constituency, travelling west to east or east to west on public transport tends to be more difficult than going north to south. There is a range of concerns.

We have seen during the ongoing area review process that the Government have encouraged colleges either to merge or to close. The new FE commissioner said in evidence that provision at levels 1 and 2 in particular needs to be as local as possible to learners, whether in an urban or a rural area, but he accepted that if people do not have the wherewithal to travel, they will not be able to do so. Shakira Martin of the NUS said in the evidence session:

“It is also not clear how the Government will make sure that the education the student receives in the college is kept open and to a high-quality standard. For example, the area review process may have unintended impacts. There will be fewer colleges, further apart. How will travel costs and access”—

time is an issue as well, not simply cost—

“be addressed?”––[Official Report, Technical and Further Education Public Bill Committee, 22 November 2016; c. 51, Q69.]

In evidence, Bev Robinson, the principal and chief executive of Blackpool and The Fylde College, who was a member of—[Interruption.]

[The Chair]

Order. There is a Division in the House.

--- Later in debate ---

On resuming—

[Gordon Marsden]

I was talking about how travel costs and access would be dealt with and I was about to quote the comments of a witness, Bev Robinson, the principal and chief executive of Blackpool and The Fylde College. She said:

“I would wish to make sure that learning within a reasonable travel-to-learn pattern was protected as well as students.”––[Official Report, Technical and Further Education Public Bill Committee, 22 November 2016; c. 51, Q70.]

I see nothing in the Bill about where the funding to support this process will come from, and Ministers have not said a great deal about it.

Research released in 2015 by the National Union of Students and the AOC showed that only 49% of further education students can always afford their travel costs. The average travel time for those surveyed was two hours and 48 minutes a day, for an average distance of 11 miles. Many young people—about 40%—rely on financial support from parents or guardians for travel costs. The problem is of course exacerbated by the lack of national funding schemes to get young people to college. Even the minority of councils that offered discounted travel for young people on a discretionary basis are now less likely to do so, following major Government cuts. The amendment would require those matters to be considered so that appropriate measures could be put in place, although such issues are difficult to legislate for and there are unknown consequential effects. Invoking education administration powers may affect students, but that is precisely the point of the amendment: it would ensure that whatever impacts the powers have in practice, they are assessed within the local circumstances of the college in which the powers are needed. That is an important part of the education administrator’s responsibilities.

If students have to travel longer distances to college, incurring higher costs, it strengthens our argument that education maintenance allowance should be reintroduced to help cover those expenses.

[Kelvin Hopkins]

My hon. Friend makes a very strong point. For poorer students travel to colleges is expensive even now, particularly in sparsely populated rural areas. The closure of a college in one town and having to go to a town many miles further on will cause great difficulty in financial terms and in terms of the time spent travelling and the reliability of public transport.

[Gordon Marsden]

My hon. Friend again makes a very good point. It underlines our concerns and why we think such issues need to be taken into account.

Amendment 2 is designed to ensure that, within the circumstances in which the process takes place, all relevant stakeholders are fully consulted about decisions taken by the education administrator in respect of the future of the institution. This touches on a theme not dissimilar to that which we discussed during the debates on schedule 1 to the Higher Education and Research Bill, where consultation with staff and students was a high priority.

The amendment would ensure that there is full consultation with various bodies or groups representing further education staff and students. Members of the Committee might ask, “Is this necessary? Surely the students and the student body are bound to be informed,” but I have to say—Members may have experience of this—that is supposed to be the case when businesses fail and companies go bust or when something cataclysmic happens, but often workers or employees are not kept in the loop. We should legislate for the worst scenarios and the worst employers, not for the best.

It is important that the education administrator should consider representations from relevant stakeholders such as students and staff, as they have invested two or three years of their time and money in studying and their livelihoods will depend on the institution in question. It is surely not too much to ask that the education administrator should have the responsibility placed on him or her to consider those representations, too.

The other group it is vital to consult are recognised trade unions at the further education body. The positive influence of unions on training and skills in the workplace and in colleges is another key reason why unions should be consulted. Research by Unionlearn has shown, as I have mentioned before, that the union effect on skills across the whole economy is significant and has strengthened in recent years. I am obviously referring to the training that goes on at work, but often the trade union representatives who operate in a college will be either union learning reps themselves or closely associated with union learning reps. That point needs to be made. On the union learning fund, an independent evaluation has demonstrated a range of new findings about the positive impact of union learning for both employers and employees. That also has a bearing on the necessity and advisability of consulting the recognised trade unions at the further education college in question.

I will finish with those remarks, but I ask that the Minister gives some thought to both amendments. These are things that should happen, and by making the amendments we would ensure that they do happen.

[Robert Halfon]

I thank the hon. Gentleman for his thoughtful amendments. I will comment on a few of the points he made, then go into the substance of the amendments.

The hon. Gentleman will know that the AOC, the Sixth Form Colleges Association and the Collab Group work closely with the Government and will continue to do so as we develop secondary legislation to address their concerns. On trade unions, I will come on to the general point about consultation, but first let me quote the TUC:

“Whilst the TUC continues to express concerns about the financial pressures colleges are facing due to the major cuts to the sector…we do welcome the new safeguards that will enable students to complete their courses in the event of a college becoming insolvent.”

In addition, we have committed £12 million to Unionlearn.

The hon. Gentleman asked where the funding was coming from. Crucially, clause 25 states that the Secretary of State will have the power to fund special administration as long as the funding is for the purpose of achieving a special objective through either a grant or a loan, and the decision on funding will obviously be taken on a case-by-case basis. The whole purpose of the education administrator is to speed things up. If we look at this in a general context, at the moment there is no protection; there is nothing. We are creating a protection regime for students with the purpose of ensuring that the education administrator acts quickly.

The hon. Gentleman talked about an exodus of staff. If colleges reach such a situation, it is likely that there will have been some kind of intervention, perhaps by the FE commissioner, way in advance. I do not think that would suddenly come about just because of the insolvency regime. All staff will be subject to statutory legislation on terms of employment and so on. That is worth noting. There cannot be a one-size-fits-all solution.

I am talking as though these circumstances will arise regularly. They will not. The whole purpose of the SAR is, as I said last week, to be an insurance against the worst possible outcome, which I think, given what is happening with the area reviews, will be very rare indeed.

[Gordon Marsden]

I understand that this will have to be done on a case-by-case basis, but has the amount of money that might be needed in a calendar year to deal with this been assessed? Obviously, it will have to be agreed with the Treasury. The Minister says he does not think this scenario is likely, given the area reviews. I hope he is right, but I am very conscious that the FE commissioner said the number of colleges that may merge on this basis might be in the 80s. Surely there might be problems with at least some of those, and surely that should have been taken into account.

[Robert Halfon]

There is a substantial restructuring fund, which I believe is about £756 million. As I say, funding of a SAR has to be done on a case-by-case basis because every case will be completely different. It will be up to the education administrator to decide how to proceed. The hon. Gentleman mentioned the different options.

--- Later in debate ---

[Robert Halfon]

My hon. Friend has it exactly right. He asked that question in our evidence sessions, and one of the banks said, “No, our whole purpose is to act in the interest of the lenders.” The whole purpose of this provision, however, is to act in the students’ interest. Creditors will get a fair deal, but one that is in the interest of students.

I will come on to transfer schemes in a minute. The area review mergers are different, but it is important to quote Richard Atkins, the FE Commissioner, from the evidence session. He said:

“Mergers do not necessarily mean the closure of sites, so they do not mean the end of provision for students locally. Clearly, in rural areas, for example, the history of the sector has been that provision has not gone even when there have been mergers. When Truro and Penwith came together, that did not end provision in Penzance. In fact, it regenerated the provision in Penzance to a higher standard. You can see that across the country.”

I accept he is talking about area reviews, but he went on to say:

“The idea that you close provision down in a particular district, borough or town is not something I would be in favour of at all. I would be looking for merger solutions that bring together back-room services, avoid duplication and so on.”––[Official Report, Technical and Further Education Public Bill Committee, 22 November 2016; c. 26, Q34.]

This will not always be the case, but it is important to say that a merger does not necessarily mean the closure of provision in an area.

[Gordon Marsden]

I entirely accept what the Minister has just said, but at the risk of over-stressing the point, decisions about transferring students can affect the closure of courses. The closure of courses is not necessarily the same as closing a site, but it can have a deleterious effect on an area. One can think of a college where lots of people are doing accountancy and that course becomes no longer available in that town, even though the college is still going to be there. That is the only point I want to make. The issue is broader than simply saying, “You either close the college or you don’t.” There is a suite of potential impacts there.

[Robert Halfon]

I accept that completely, but I was just trying to again make the point that currently if a college has financial difficulties, it can close a particular bit of provision and no one has any guarantees whatever. This measure will change that.

On the transfer schemes, it is important to talk about the statutory duties. We all know that under the Education Act 1996, the Secretary of State has a general duty to promote education and exercise his or her powers

“with a view to…improving standards, encouraging diversity and increasing opportunities for choice.”

Local authorities have a duty to ensure that their areas have sufficient education and training provision. They also have a duty to publish a transport statement setting out what arrangements they consider necessary to support young people to access education or training.

The hon. Gentleman mentioned education maintenance allowance. We took the view that we want to give funds to those who most need it, and the problem with the education maintenance allowance was that it went to everyone. It was paid to 45% of all 16 to 18-year-olds in further education and it was not income-related, which is why we introduced the 16-to-19 bursary fund.

[Gordon Marsden]

I hesitate to cross swords with the Minister but I think that is factually not entirely correct. The education maintenance allowance came in at least two—I think were three—different tiers. The top tier, which from memory was about £30 a week, was specifically focused in many cases on travel. I do not wish to move outside of the scope of the amendment, Mr Bailey, but it is important to make this point: subsequent assessments of the impact on students who had had it taken away showed significantly that the travel aspect of the different elements was most well regarded. I am not here to open up a debate about EMA—we have given our points of view—but it is important for the Minister to take those points on board.

[Robert Halfon]

I do, but an independent evaluation found that only about one in 10 of those who received EMA said that they would not be able to participate without it. That is why we introduced the 16-to-19 bursary fund—to ensure that the money goes to those who need it—which amounts to £177 million for 2015-16. That is why, as the hon. Gentleman knows, I campaigned successfully with the hon. Member for Scunthorpe (Nic Dakin) for free school meals for students from disadvantaged backgrounds in FE colleges. The Government are spending £39 million on that. That is separate from the £500 million that is given to the FE sector to spend on what FE bodies like, but primarily for helping the disadvantaged. The Government are doing everything that they can to ensure that those in need are getting the right support.

Let me move on to the substance of the amendment. We want to be sure that, as far as possible, if their college finds itself in financial distress students are able to continue their studies with little or no disruption. The clause does that by setting out the overarching objective for the education administration: to “avoid or minimise disruption” to the students.

The hon. Member for Blackpool South noted that the special objective can be achieved in a number of ways, and we do not believe that one size fits all. It could be done by rescuing the body as a going concern, with a new principal and governors if necessary; by merging with another body, perhaps another college nearby; by keeping the college open to teach out the existing students; or by arranging for students to transfer to another college to complete their studies. That list is not exhaustive, nor is it intended to be prescriptive. There may be other options, and those are not intended to be mutually exclusive. Occasionally some students might be transferred to another college and others taught out. It will be for the education administrator to decide what is best, based on the circumstances of each case.

I appreciate the suggestions made by the hon. Gentleman, but I assure him that it is inconceivable that the education administrator would take decisions on how the special objective would be met without first having had conversations with a wide range of stakeholders. Let me be clear: I and the Government would expect, in an appropriate case, the education administrator to liaise with the FE commissioner—that view was shared by the FE commissioner last week in his evidence—who might be able to advise the education administrator whom they should be speaking to in addition to staff, students, local authorities and the other providers. We would expect that the EA, in seeking to fulfil the special objective to avoid or minimise disruption to students’ studies, would seek to satisfy themselves that, as far as possible, the quality of the education or training that students have been receiving at the college is maintained. That may be achieved by transferring students to another provider or by continuing to teach them in the FE body until they complete their courses.

We expect the education administrator to take travel distances into account when considering the transfer of students to another provider, on the basis that the special objective is about avoiding or minimising disruption to the studies of existing students. Where possible he may choose to take into account the generally used guideline of travel for learners of no more than 75 minutes to and from their place of study, even though the FE commissioner observed to the Committee that some—not all; not those who are not able to—learners are happy to travel considerable distances for the right provision.

I understand the concerns that amendment 1 seeks to address in relation to additional transport-related costs for students in the event that they are transferred to another body. For those who are transferred, there may be scope for the EA to set up a scheme to cover some or more of the additional travel costs from any funding provided by the Secretary of State or Welsh Ministers, as I highlighted a moment ago in terms of clause 25. Although there is no obligation on FE bodies to provide student transport, it is open for them to use the resources that are available to best support their students because, as I mentioned, disadvantage funding is not ring-fenced. Where students attract such funding, FE bodies can decide upon the most appropriate offer for their students. Often they do give those students free transport.

The education administrator will want to be sure that in deciding the right option for dealing with the particular body in insolvency, they have assessed a wide range of factors, including those set out in the amendment, calling on advice and input as necessary from those best placed to help. It is therefore unnecessary for the Secretary of State to make regulations to specify “suitable bodies” for making the assessments described in the hon. Gentleman’s amendment.

We are keen to strike the balance between a fair and thorough process that generates well thought through conclusions, and a system that is not so rigid that it ends up working against the interests of students by being drawn out and cumbersome. The hon. Gentleman observed that himself. The longer it takes to end the education administration, the longer students face uncertainty and possible disruption. The number of FE bodies and their different circumstances mean that there would be no single solution in the event of an insolvency, and the education administrator needs the flexibility to be able to do what is right in the circumstances.

As the hon. Member for Batley and Spen said in the evidence session on 22 November, we need to give students certainty about what will happen as quickly as possible; that is as much true for the staff, and for the creditors. Of course, if students, or anyone else, are unhappy with the EA’s actions, they can bring their concerns to the attention of the Secretary of State, or the Welsh Ministers, who have the power to be able to challenge the education administrator through the courts if the EA is not carrying out their functions for the purposes of achieving the special objective or the objective relating to the creditors.

I recognise the intention behind the amendments and believe that, as much as possible, the Bill covers the issues that the hon. Gentleman has raised. I hope that he is reassured enough to withdraw the amendment.

[Gordon Marsden]

I am grateful to the Minister for the detail that he has gone into. It is particularly useful that he made the point about there being scope for the EA to get supplementary funding in certain circumstances. That is welcome. We may want to look again at this issue on Report, but at the moment I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 14 ordered to stand part of the Bill.

Clause 15

Education administration order

[Gordon Marsden]

I beg to move amendment 34, in clause 15, page 8, line 11, at end insert

“and has relevant experience and knowledge of the further education sector.”

To ensure that the education administrator has experience and knowledge of the further education sector so that decisions made are not exclusively in the context of insolvency and takes into account the needs of students.

I am pleased to move the amendment, because it enables us—I hope in a positive fashion—to probe further about the important role of the education administrator. As I said earlier, and notwithstanding what the Minister has said about the general welcome that the Association of Colleges and other bodies have given to these provisions, the association is keen to probe further in this area, and we have taken many of its points on board in drafting the amendment. The purpose of the amendment is to ensure so far as possible that the education administrator has experience and knowledge of the further education sector—that may sound like a no-brainer, but we nevertheless need to make the point—so decisions are not made exclusively in the context of insolvency but take into account the needs of students.

This is not a criticism, but the first time I went through the Bill in detail, I was conscious that there would inevitably be a tension—a creative one, I hope—between a traditional insolvency process and the needs of students. The Minister has rightly emphasised firmly that students will be the priority, but the devil is in the detail and there are sometimes even more devils in the process, as was interestingly illustrated in our evidence session with the representatives of the banks. The hon. Member for North East Hampshire pressed them on this point, but I also saw it from the other point of view. There will always be that tension, because although the education administrator has a primary responsibility, he or she has dual responsibilities. Other clauses make that clear, so we will come to it when we look at those.

The Government foresee that this regime will be used rarely. It was helpful to have Mr Harris from Ernst and Young at the evidence session, because he had specific experience in other sectors, including energy, health and railways. The Association of Colleges points out that the idea of protecting

“a public service while creating a financial framework to govern the independent organisations that provide them”

is not entirely new and can be summarised as:

“the service continues; the service provider may not.”

The AOC wants to emphasise, as both the Minister and I have referred to, that the

“vast majority of colleges have strong governance, professional management and sound finances”,

but the fact is—we will not go into the detail or cross swords about this again today—that

“the sector is under increasing financial pressure mainly as a result of government spending cuts, and questions remain over where responsibility in this area lies.”

The association also notes that the Bill will give

“the Secretary of State the power to appoint a special administrator who will have duties not just towards the college’s creditors (banks, Local Government Pension Scheme, staff and suppliers) but also a duty to avoid or minimize disruption to the studies of existing students as a whole.”

As I understand it—the Minister will correct me if I am wrong—the education administrator is required to be an insolvency practitioner, yet there is a tension, as I have mentioned, because a critical part of their role is to protect student interests rather than simply those of financial creditors. It is therefore essential that the criteria for appointing the EA include experience and knowledge of education administration, so that they can make decisions in the context strongly of an educational institution with the needs of students at the forefront. It would therefore be worth clarifying the criteria for when an EA is appointed and whether a specific action will trigger that.

With the amendment, we are also probing what the relationship between the education administrator and the further education commissioner will be. The Bill does not make clear what interaction there will be between the EA and the FE commissioner, who will intervene or at what point, although I accept that the Minister has already alluded to the circumstances in which the FE commissioner might become involved. Although we recognise that FE commissioner is not a statutory post, it might be useful to have more clarification—not necessarily today, but in a guidance document or whatever at some point—of what the relationship will be and at what point interactions between the two post holders will take place.

It is worth emphasising that Bev Robinson, who as well as being a principal served on the Sainsbury panel, said in the evidence session:

“I welcome the idea of an education administrator with hopefully an FE background”—

we can interpret “FE background” as we wish—

“but it might benefit from having clarity around the different roles of the different people in play—for example, the FE commissioner: how that would work.”––[Official Report, Technical and Further Education Public Bill Committee, 22 November 2016; c. 51, Q70.]

I have made the more general point about the plethora of organisations in this area and referred to it perhaps slightly unkindly as an alphabet soup—that is what it sometimes looks like—in the context of the creation of the new institute, but even if we leave aside the new institute, there is already a complex landscape for financial oversight. There are currently four different Government bodies with that role. They are the Education Funding Agency, the Skills Funding Agency, the FE commissioner and the transaction unit. All those bodies, I am assured, report to the joint SFA-EFA chief executive, who is at present Peter Lauener, but they all use differing measures of financial performance. That is, to put it mildly, an aspect of inconsistency, which I and the AOC believe will need to be resolved by 2018, because it is likely that if that complexity continues—I am thinking particularly of the issues with differing measures of financial performance—it could slow down the investment and other decisions that the education administrator might need to make in the event of insolvency and, as I think both the Minister and I have agreed, in circumstances whose urgency will vary considerably.

I am interested in what further the Minister has to offer us in terms of how experience and knowledge of the sector is to be gained. Perhaps he will also, if he is able to at this stage, comment on the relationship between the administrator and the FE commissioner and the issues that I have raised about the landscape for financial oversight.

--- Later in debate ---

[Robert Halfon]

My hon. Friend is exactly right, but the crucial thing—I must mention this at almost every opportunity—is that it is unlike when I have seen receivers come in in my constituency who just care about the creditors. If I may just speak personally for a moment, I remember being in a hotel with the staff, some of whom lived on the premises, and the receiver literally said they had to leave on that day, when they had lived there for a long time. This situation is completely different. The whole purpose of this measure is that that kind of individual will not be involved. There will be somebody who has to fulfil the special objective of protecting the students.

[Gordon Marsden]

I accept that, and for the avoidance of any doubt, and with respect to what the hon. Member for North East Hampshire has just said, I did not at any stage query the fact that it would need to be an insolvency practitioner. The Minister is saying some reassuring things. The only point I would gently make to him is that there is a difference between saying that someone has to acquire a set of skills that might be tested by some mechanism or other, and having a sense of—I think Stephen Harris talked about a “pastoral element”; perhaps I would have said “empathy”, which is possibly the same thing. I am sure that aspect has given the AOC some pause for thought, because I do not know—perhaps the Minister does—how many insolvency experts have the admirable background of the gentleman he met.

[Robert Halfon]

The gentleman I met has a direct background, but as Stephen Harris said, that is not necessarily a requirement. However, it is inconceivable that the individuals involved will not have access or that they will not be working with all the relevant institutions. Having said that, they have to be first and foremost an insolvency practitioner, according to the law, but with the special objective.

Given that, I hope that the hon. Gentleman is more reassured and will agree to withdraw the amendment.

[Gordon Marsden]

We have had a helpful exchange and it has been useful to probe on this issue and in particular the relationship with the Education Funding Agency. The one point the Minister has not answered—I do not ask him to come back on it now, but it would be useful if he produced a note—is the point that I raised about the different measures of financial performance.

[Robert Halfon]

If the hon. Gentleman is happy for me to do that, I will. We will always require different information to test different issues, for different institution types or in different circumstances. There is a continuous improvement process for the systems and processes for identifying financial risk. The whole function of the area review process is to use it, where relevant, to review the financial management processes. I hope that answers his question some way.

[Gordon Marsden]

I am not entirely sure that it does, but I will not pursue the matter. However, these are technical issues and ones that I am sure the AOC and others may wish to take up with the Minister in a less formal capacity.

I am reassured by what the Minister has said today so far. The organisations may wish to probe further on some of the details, but I am happy to beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 15 ordered to stand part of the Bill.

Clauses 16 to 21 ordered to stand part of the Bill.

Clause 22

General functions of education administrator

[Gordon Marsden]

I beg to move amendment 3, in clause 22, page 10, line 6, leave out “for the” and insert “with the primary”.

This amendment would ensure that the primary concern of the education administrator is the special education administration objective, that is minimising disruption to learners.

[The Chair]

With this it will be convenient to discuss amendment 4, in clause 22, page 10, line 7, leave out “(if possible)”.

This amendment would ensure that the primary concern of the education administrator is the special education administration objective, that is minimising disruption to learners.

[Gordon Marsden]

The amendments are again intended to probe the primary concern of the education administrator. They are relatively terse because they remove particular references and lines. Before I comment on them, I will make the point about why we are concerned and then talk about the broader issues.

Amendment 3 expresses our belief that it is important to say that the education administration objective is the primary purpose. The Minister has given strong indications, notwithstanding the nature of the education administrator’s position and background, but we think it is important to say that the primary concern should be the special education administration objective, minimising disruption to learners.

With regard to amendment 4, I have sat on a number of Delegated Legislation Committees and, to be honest, I do not think I have ever seen such a meandering and imprecise phrase in brackets as “if possible”. That could cover a multitude of sins. That is not the sort of draftsmanship that one normally expects to see in a Bill of this nature, and that, too, makes us concerned to ensure that the education administration objective is the primary concern.

This is not just an issue that concerns us. The Association of School and College Leaders raised a number of questions about the education administrator in its written evidence to the Committee. It states:

“The proposed mechanism itself gives rise to numerous concerns and uncertainties.”

It refers to the powers that have been transferred to the education administrator, such as whether he or she can

“dissolve a corporation established by Act of Parliament”.

We may touch on some of those points later. It goes on to raise the issue we discussed earlier with amendment 34 about the licensed insolvency practitioner. It also asks

“what lines of responsibility there would be during that period over matters such as safeguarding. If that were found to be inadequate, who would then have oversight…?”

Would that be the education administrator? If so, what would the implications be for the college in question?

The Government’s own consultation response document raised issues surrounding the need for further protection of learners. The House of Commons Library briefing reports:

“Of particular interest to respondents was the proposed introduction of the SAR, and the special objective that would require the education administrator to avoid or minimise disruption of the studies of the existing students, and ensure that it became unnecessary for the FE body to remain in education administration for that purpose. Although many respondents were supportive of the need and ‘ambition’ for the special objective, almost two-thirds questioned whether it sufficiently reflected the needs of learners and creditors.”

I assume that means the issue that the Minister and I have been discussing about where the balance is between those two separate processes. For example, the Association of Teachers and Lecturers stated in its response that the proposed SAR, in focusing on students as consumers, did not recognise

“the individual and societal benefits of further education”

or

“the instability and disruption to learners and their studies that they will inevitably experience as a result of their college going into administration.”

The Minister may disagree with those assessments, but they shine a light on the concerns among people who teach in colleges of this nature, so they are germane to the amendments that we have tabled.

Last week’s evidence session with the banks was particularly concerning in relation to the lack of information on finances and their ability to lend in future—hence some of the questions I asked.

[Mr Jayawardena]

I respect the point that the hon. Gentleman is making, but he mentioned, in reference to subsection (2), a lack of clarity. Is it not true that the objective of education administration is set out very clearly in clause 14? It sets out that learners come first, ensuring that it becomes unnecessary wherever possible for the body to remain in education administration. However, on even rarer occasions it might be necessary for people to act in a different way in order to put learners first. That is what the Bill is trying to achieve.

[Gordon Marsden]

I know that is what the Bill is trying to achieve; the question that we are here to decide is whether the Bill, as drafted, actually achieves that. I do not want to trade clauses with the hon. Gentleman, so I will only say, as I have observed previously, that clauses 14 and 22, although they deal with different aspects of the functions of the education administrator, are somewhat ambiguous in that respect. I will not take up the Committee’s time, but I refer the hon. Gentleman to the explanatory notes to both clauses. He will see that there is some tension there, which is why we are probing in the way that we are.

We must take into account the pressures that the administrator will face. It was particularly interesting to hear what Richard Meddelton from Lloyds said. As we know, Lloyds is an extremely important player in the college funding world. He said:

“As a lender, the ranking—again, it is unclear at the moment—may well sit behind a creditor. In addition, as we interpret it, even as a secured creditor the security could be transferred into a separate entity.”––[Official Report, Technical and Further Education Public Bill Committee, 22 November 2016; c. 41-42, Q48.]

Richard Robinson said:

“The issue is that it does not specify where that ranking lies. That, for us, is very important. Although it could rank at the back, it could also rank ahead of us.”––[Official Report, Technical and Further Education Public Bill Committee, 22 November 2016; c. 48, Q65.]

[Mr Jayawardena]

rose—

[Gordon Marsden]

If the hon. Gentleman will allow me to finish the quotation, I will happily let him intervene.

Richard Meddelton went on to say that

“under the current system if we have security, we have priority. The reality is that we have viewed it as quasi-Government because in the past—obviously the past is no prediction of the future—that money has been forthcoming”.––[Official Report, Technical and Further Education Public Bill Committee, 22 November 2016; c. 42, Q49.]

The banks have concerns about how the insolvency framework will work for them in financial terms. That will inevitably affect what the education administrator can do to fulfil the broader function that the Minister made.

[Mr Jayawardena]

I thank the hon. Gentleman for reminding us of the evidence we heard. Again, as we are discussing Lloyds, I refer Members to my entry in the Register of Members’ Financial Interests. Did Lloyds not also say, though, that at the moment they are not necessarily able to say that they would protect learners first, so in that respect this is a good thing for learners? However, the other banks, particularly Santander, said that the certainty would allow them to lend more. One bank does not necessarily speak for all.

[Gordon Marsden]

I accept that. I would only observe that Lloyds, as we know, is a particularly large and extremely important lender to colleges.

To sum up, although I will refer to these issues in relation to future amendments, we want to hear more detail on them from the Minister. On that point, I will conclude my remarks.

Ordered, That the debate be now adjourned.—(David Evennett.)

Technical and Further Education Bill (Eighth sitting)

Gordon Marsden Excerpts

Committee Debate: 8th sitting: House of Commons
Thursday 1st December 2016 Public Bill Committees

[The Minister for Apprenticeships and Skills (Robert Halfon)]

I will answer one or two of the questions asked by the hon. Member for Blackpool South. If I understood correctly, he was asking about safeguarding. I assure him that the statutory obligations that apply to colleges will transfer to the special administrator during the special administration period.

The hon. Gentleman mentioned one bank. To clarify, the chap from Santander, Gareth Jones, told the Committee in evidence:

“On the Bill and the proposed insolvency regime, we are actually supportive of the clarity that they provide.”

He also said that

“we are still…looking to grow our exposure to the sector and grow our lending book.”––[Official Report, Technical and Further Education Public Bill Committee, 22 November 2016; c. 38, Q41.]

Later, he said:

“From a risk perspective, when we assess the underlying risk of a transaction, there has always been that uncertainty and we have had to make assumptions in the background. If the Bill is passed, the certainty it will provide is positive for us.”––[Official Report, Technical and Further Education Public Bill Committee, 22 November 2016; c. 41, Q46.]

Different banks have different views on the issue.

Clause 5 and schedule 3 allow the education administrator to dissolve a statutory corporation if no property is left for the creditors’ book, which will usually be after students have had benefit protections from the special objective. The hon. Gentleman will know that there is a special provision in the Bill to protect students with special educational needs, which is important. The education administrator is additionally bound by the duties that apply to the college in relation to SEN students. There is no protection at the moment—nothing.

[Gordon Marsden (Blackpool South) (Lab)]

This relates to the point we discussed earlier. It is not so much about cost as about distance. The Minister said earlier that the provisions currently allow students to transfer on the basis of up to 75 minutes’ travel time. This cannot be included in the Bill—we are all planning for the worst and hoping for the best—but it should be taken into account that if, for the sake of argument, a college with a significant number of SEN students goes insolvent, it might be possible to ensure that any transport provided is disability friendly. If a college with a relatively small number of SEN students goes insolvent and those students have to travel a fairly long way, it would create additional difficulties. I am not asking for anything to be put in the Bill, but I ask him to take that into account in the guidance notes.

[Robert Halfon]

I will reflect on that important point, but the Bill makes it clear that the administrator has to protect not only students, but special needs students. The administrator will be under the same obligations as the college in relation to the Equality Act 2010. That is an important part of the Bill.

My hon. Friend the Member for North East Hampshire said that clause 14 is one of the most important in the Bill. Clause 22 is equally important, and it should be considered not in isolation, but in conjunction with clause 14. It is the backbone of the special administrative regime and distinguishes it from ordinary administrative processes. While clause 14 enshrines the overriding purpose of the special administrative regime—the protection of students through the special objective—clause 22 gives the education administrator the power to manage the FE body’s affairs, business and property, and it places a requirement on the education administrator to carry out their functions for the purpose of achieving that objective.

Clause 14 makes it clear that student protection is the primary purpose of the special administrative regime. Reading clauses 14 and 22 together makes it clear that the education administrator’s primary purpose is to achieve the special objective. I hope that explanation reassures the hon. Member for Blackpool South and that he will agree to withdraw the amendment.

[Gordon Marsden]

I am grateful for the Minister’s remarks and for our short exchange on the situation for SEN students. I am particularly grateful to him for emphasising the relationship between clauses 14 and 22. It is important that he has stated in Committee the primary purpose of the education administrator; if in future there are any doubts or concerns about the interpretation of the clause, that will be an important point. I thank him for his response and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Gordon Marsden]

I beg to move amendment 5, in clause 22, page 10, line 7, at end insert—

“(2A) The education administrator may, in performing his or her functions for the purpose of achieving the objective of the education administration, request information, advice or guidance from practitioners with an understanding of education regarding the management of a further education body.”.

This amendment would allow an education administrator who, under the eligibility outlined in clause 15, might not necessarily be an education specialist to supplement his or her knowledge.

The amendment pursues an issue that we have already discussed, but in the context of the experience or knowledge of higher education that the education administrator will need. The Minister and I had a useful exchange about the capacity of the education administrator to reach out, either within an organisation or peripherally to it. The amendment would allow an education administrator who meets the eligibility guidelines outlined in clause 15, but might not necessarily be an education specialist, to supplement his or her knowledge.

Our friends in the National Union of Students were particularly anxious for the amendment to be tabled, and we have taken their points on board. As the Minister will know, the NUS has welcomed the provisions that relate to insolvency, but it, too, is nervous—well, “nervous” is perhaps the wrong word, but it is certainly concerned. It believes that the process should be underlined as strongly as possible and that, in the twists and turns of what will inevitably be a fraught and taut process for all concerned, the administrator should be able to take further advice, even if he or she has some past experience. The amendment would make it clear that the educational administrator may seek that advice.

The Bill does not require the person appointed to deal with the college’s insolvency to know anything about colleges or the FE sector; under clause 15, they need only be an insolvency practitioner. We do not dissent from that, because we have already had a conversation about it and we are entirely reassured by the points that the Minister has made. However, the education administrator will have substantial powers over the future of an education body and its students, and indeed over the education body’s management, as clause 22(1) sets out.

Bearing in mind that the period of time for which they might have to manage the FE body’s affairs will be somewhat elastic, it would seem sensible to ensure that the administrator can get advice from people who actually know how to run an FE body. Better still, obviously, would be to have an administrator who was either very close to or within the FE sector. That was the intention behind amendment 34. After all, the Bill is designed to recognise that context, which is why it includes the education objective and entitles learners to continue their studies. Amendment 5 would just ensure that the Bill makes that provision and allows the education administrator access to whatever information and advice they may need to fulfil their duties. I am sure that the Minister wishes that to be the case. We suggest that it is a fairly obvious point—the Association of Colleges and the NUS think so—but it is not obvious in the Bill currently.

Without straying beyond the narrow lines of the amendment, I merely say to the Minister that there are many options for practitioners who could be called upon with an understanding of further education management. That could include chairmen or governors of FE bodies, former FE commissioners, or perhaps even retired people from those areas or from awarding bodies. Will the Minister give us some further details about whom he imagines an education administrator might wish to consult? Whatever avenue he wants to go down to assure us in that respect, it is important that the administrator has the advice of experts to make the correct call.

[Kelvin Hopkins (Luton North) (Lab)]

I will be very brief. I support my hon. Friend. One of the problems for the FE sector and, even more, for sixth-form colleges is that the whole sector has been bedevilled by decisions being made by people who are unfamiliar with those sectors. Many people involved in politics have come through a school or university environment; they have not been through further education. Many areas do not have sixth-form colleges, so people are not quite sure what they are. It is important that we have people with knowledge of the sector—educationally and organisationally —to make judgments on these matters. I just wanted to support my hon. Friend with those few words.

--- Later in debate ---

[Gordon Marsden]

I have heard what the Minister has said and I will be happy to withdraw the amendment. I have just one observation at this stage, as we have had two or three conversations on these sorts of issues. He said he would reflect on the matter. He might want to reflect on whether it would be useful, for the assistance of all the bodies concerned, if at some point—ideally while the Bill is still in the House of Commons—we were to have broader guidance notes on some of the issues that we have raised today. It would therefore all be in one place from which those bodies could take comfort and reassurance. Having said that, I am more than happy to beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Gordon Marsden]

I beg to move amendment 6, in clause 22, page 10, line 10, leave out “have special educational needs” and insert—

“(a) have special educational needs;

(b) are care leavers;

(c) are parents;

(d) are carers, carers of children, or young carers, as defined by the Care Act 2014; and,

(e) have other particular needs that may be determined by the appropriate national authority.”

This amendment would make provisions for the particular needs of additional groups of existing students to be considered by an education administrator in pursuing the objective of an education administration.

Having touched on the issues of special needs, we want to probe a little further and more broadly beyond what has been said. The Minister has already given strong assurances on the general issue of special educational needs, but he will be aware of particular circumstances affecting some categories of people who take the big step, given their experiences, of engaging with further education. I am sure that everyone would agree that we do not want those groups of people, in particular, to be disadvantaged, and we certainly do not want them to suffer more disadvantage than students ordinarily would in the circumstances.

I accept that lists can be invidious, but we feel that care leavers, parents, and

“carers, carers of children, or young carers, as defined by the Care Act 2014”

are three groups that may be particularly vulnerable to disruption in their studies, as we have discussed. The amendment is designed to signal to the administrator the importance of taking those groups into account.

[Kelvin Hopkins]

Earlier my hon. Friend made a point about distance of travel. Groups such as parents and those with caring responsibilities will definitely be affected by travel over longer distances. I am sure that he has that in mind.

[Gordon Marsden]

My hon. Friend is right. He has read not only my mind, but my postbag. Only half an hour before coming here I received an email from Unison, which raised some of those issues with respect to its members who fit into one or two of the categories in question. It made precisely that point about distance, which I was anxious to make in my exchange with the Minister about the education maintenance allowance. It was not simply about cost; it was also about time.

[Tracy Brabin (Batley and Spen) (Lab)]

I have spent time with care leavers and foster families in Kirklees, and they are an incredibly vulnerable group of people with a lot of chaos in their lives. They are five times less likely to get five good GCSEs and eight times more likely to be excluded from school, and obviously they are less likely to go to university or, we assume, start an apprenticeship. They need extra support, and so do their families. Certainly, when they are moved around, which sometimes happens, they need extra support with transport and so on.

[Gordon Marsden]

I am grateful to my hon. Friend for underlining that point and giving that practical example of a personal issue. Perhaps I can be forgiven for mentioning that the shadow Secretary of State, my hon. Friend the Member for Ashton-under-Lyne (Angela Rayner), has herself strongly expressed how crucial further education was to her during her teens. She said on Second Reading that she would not have been there to present our view on the Bill had she not had that experience, when she was in that vulnerable situation as a teenager.

There are groups of people who must particularly be thought about in this context. We discussed care leavers on another occasion, and the difficulties that many of them face, but it seems particularly appropriate to discuss them again in the context of the amendment. In their apprenticeship funding proposals last month, the Government recognised that apprentices aged 19 to 24 who had previously been in care, or who had had a local authority education, health and care plan, might need extra support. The majority of respondents to their survey supported that—more than twice as many providers agreed with the proposal than disagreed. The Government have pledged in the proposals to give extra funding to employers who take on someone who was previously in care or had a local authority education, health and care plan. We applaud that as a good start, but it is important to think about legislating further and to guarantee that other necessary steps are taken to ensure that access and opportunity are available to care leavers.

Looked-after children often achieve less highly at GCSE, as my hon. Friends have noted, partly because they may have a chaotic family background or a history of abuse. The Special Educational Consortium stated in written evidence that young people who have a care plan at age 15 are more than twice as likely not to be in education, employment or training at 18. Barnardo’s said:

“These young people often leave school with few or no qualifications and need alternative options outside of the school environment if they are to achieve their potential. Some need provision that allows them to catch up on what they have missed. These young people also often want the option of practical-based learning that clearly links to a real job.”

While we are on the subject of care leavers, how does the Minister envisage the proposals to support apprentices, and the proposals that we would like to see taken on board more generally in respect of care leavers, linking up with the work done in the children’s services section of the Department for Education? In particular, what discussions has he had about the Bill with his hon. Friend the Minister for Vulnerable Children and Families, the hon. Member for Crewe and Nantwich (Edward Timpson), or his officials? I have credited him before for the assiduousness with which that part of the Department introduced the responsibility up to the age of 25.

The amendment also includes parents and carers, who for numerous reasons might be particularly affected by changes to their study arrangements. They may have particular arrangements for their children or dependants that might not be addressed by simply transferring them to another college. What happens if the college to which they are transferred is not as near to their children’s school? What if the new institution’s timetabling disrupts routines for those they care for, or their ability to be there for their children? What if potential increases in travel costs negatively affect the carefully planned budgets of those with caring responsibilities, affecting both their access to education and the care that they can provide to their own children and loved ones?

There will be others with particular needs, which is why the amendment has flexibility built into it to accommodate them. For all those reasons, the education administrator’s decisions must be carefully thought through, so we feel that it is important to require the administrator to do so. I know that there is a school of thought that says any decent education administrator, given the background, qualifications, empathy and pastoral issues to which the Minister referred, would do so, but I do not think that it reflects doubt about the good intentions of particular people in particular circumstances to say that they might be beset by a series of difficult decisions and priorities, probably within a relatively constrained period of time. It does not indicate that people would not think about the groups concerned. It is important in that pressurised situation that they are reminded of the importance of those particular groups. That is the basis on which we have brought forward the amendment.

As my hon. Friends have said, those groups already face challenges and barriers to education that it can be difficult for others even to imagine. I can imagine some of it. That is not from the perspective of being a teacher or tutor in further education, but from my perspective of having been a part-time course tutor with the Open University for nearly 20 years. I do not think I had many care leavers, but I certainly had people who were carers and who came into other distinct categories. I marvelled at the determination with which they took forward their studies under some trying and difficult circumstances. I believe that our proposal is the right thing to do, and I would welcome the Minister’s thoughts on whether the Bill needs to say rather more about the particular needs of these groups of students.

[Robert Halfon]

I am going to do the opposite to the hon. Gentleman: I will talk about the broad thrust and then answer the specific issues. I thank him again for his thoughtful contribution. I have already explained that we are introducing protection for students in the unlikely event that their college or provider becomes insolvent. The special objective will require the education administrator to take action to avoid or minimise disruption to their studies, by whatever means they consider appropriate.

However, the Government recognise that the education administrator might find it harder to find, or will need to think more carefully about, suitable alternative provision for those students with special educational needs, compared with the general student body. We do not want those students to be disproportionately affected by the exceptional event of college or provider insolvency, which is why we have placed a requirement on the education administrator —set out in clause 22(3)—to have particular regard to their needs.

We have had a lot of preliminary discussions about SEN students, because two thirds of care leavers are SEN students. We included provision for SEN in the Bill because of the particular difficulties such students face. There might be the need for specialist equipment or adaptations to teaching, or there might be a transport issue, and it is a requirement that the education administrator considers those in developing their proposals.

[Gordon Marsden]

Will the Minister give way?

[Robert Halfon]

I will answer the hon. Gentleman’s points. If he wants to raise a different point, I am happy to answer it, but I ask him to have faith in me. I have tried to answer questions as much as I can all the way through.

[Gordon Marsden]

I am not suggesting that the Minister has not.

[The Chair]

Order. I would be grateful if Members confined themselves to the established procedures for interventions, rather than carrying out conversations.

--- Later in debate ---

[Gordon Marsden]

The Minister has been very helpful, and I appreciate that, but before he concludes, I have a definitional question that I think relates to what he has been saying. Subsection (7) refers to “special educational provision” and subsection (6) refers to a student with “special educational needs”. I have heard everything he has said about young carers, but is it his understanding that young carers or care leavers would automatically come under those categories? I know this is a narrow point, but it is quite important, because it influences whether further definition is necessary in the Bill.

[Robert Halfon]

No. It applies only to what is classed in statutory terms as an SEN student. That is why I have acknowledged that college insolvency is disruptive, especially to SEN students and care leavers. By the way, I should say that it was very gracious of the hon. Gentleman to mention the apprentice funding to make sure that care leavers are employed as apprentices, which is something I care deeply about. I am glad that he acknowledged that funding.

I want more time to reflect on what more might be done in the context of a college insolvency, to ensure that the Government live up to their promise of being an effective corporate parent. I will reflect on that.

[Gordon Marsden]

I am grateful to the Minister for that and for his promise to reflect on this issue and on the catch-alls in the clause as drafted. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

[Gordon Marsden]

Briefly, we have had some useful exchanges on the amendments, which I have been content to withdraw. I am broadly very pleased and satisfied with the points the Minister has made.

However, as I have said before, if this process—the Bill, the new institute, the new insolvency clauses—is to be a success, it is incumbent upon us to take as large a group of people from across the stakeholders with us as possible. I want to refer to a couple of issues that the Association of School and College Leaders and the Association of Employment and Learning Providers have raised in their written evidence. As the Minister knows, the ASCL in particular is quite critical of part 2 of the Bill because it thinks it is the result of rushed consultation. That is for others to judge, but the point it makes in its written evidence, which I would like a response to, is this:

“FE and sixth form colleges were created as exempt charities by Act of Parliament… As such college corporations cannot resolve to remove their charitable status. ASCL…is concerned that applying aspects of the Insolvency Act that applies to companies runs the risk of jeopardising that status. The Charities Commission does not appear on the list of those consulted…The primary duty of a corporation/governing body is to maintain the solvency of its college. Where it fails in that duty by negligence or worse, the Charities Commission has the power to investigate and bar governors/trustees from further service.”

If the Minister is able to, I would ask him to address that issue from the ASCL.

The AELP makes another point about the status of colleges. It believes that

“this reclassification should be reviewed by the ONS. This is not merely a technical point. Some colleges have reportedly used their current ‘independent’ status to resist Area Review proposals which is well within their right. However, when AELP has argued that the Government is using a form of state aid to assist colleges…we have been told by the SFA that colleges are ‘community assets’ which justifies the further injection of public funding. The insolvency measures in this Bill would…appear to place colleges very much back in the public sector.”

It says that this has become a “murky area”.

Those are two specific observations from two important stakeholders in the area. In the context of the clause, given everything else that we have been talking about in terms of the general function of the educational administrator, I would be grateful if the Minister would comment on those points.

[Robert Halfon]

I will give a brief response. The Charity Commission does not appear in the list of respondents because it did not submit a formal written response. However, we worked very closely with it during the development of the proposals in the Bill.

Charities that are companies and charitable incorporated organisations are all covered by insolvency legislation, and the Company Directors Disqualification Act 1986 regime for disqualification applies to those organisations. The Charity Commission has been fully supportive of the approach that we have taken and sees it as being in line with the approach taken for trustees of charitable companies and charitable incorporated organisations.

With regard to the AELP, the process of implementing a SAR would not automatically mean reclassification for an individual college, let alone the entire sector, because the Government would not be directly influencing the college’s corporate policy.

Question put and agreed to.

Clause 22 accordingly ordered to stand part of the Bill.

Clause 23

Transfer schemes

[Gordon Marsden]

I beg to move amendment 7, in clause 23, page 10, line 31, at end insert—

“(2) The education administrator may not transfer assets of any further education body to a private company where he or she considers that more than half of the funding of the acquisition of the asset came from public funds.”.

This amendment would ensure further education bodies with a track record of accruing assets publicly, could not be transferred to a private company.

We come to an amendment that is longer than the clause it seeks to amend. That might suggest that the amendment is otiose, but I do not think it is; I think the clause ought to have been expanded a little more— but then I would say that. I want to focus some attention, at a certain length, on this issue. On our side of the Committee, that raises some really big issues about what would happen to the transfer of assets from a further education body to a private company.

Information produced by the Department for Business, Innovation and Skills on the dissolution of an FE corporation specified that assets should be transferred only to charitable bodies:

“The Secretary of State and the CESF are concerned with the appropriate use of those capital assets that have been acquired/developed/redeveloped with public funding and the conditions for their transfer and usage…FE corporations are advised to undertake early discussions with the Skills Funding Agency to identify the relevant assets and any potential repayment of some, or all of the associated grant or proceeds of sale…The regulations include a requirement that the FE Corporation publish the proposed arrangements for the transfer of the property, rights and liabilities of the FE Corporation…The Dissolution of Further Education Corporations and Sixth Form Colleges Corporations (Prescribed Bodies) Regulations 2012”—

that would have been an interesting secondary legislation Committee to sit on—

“lists the bodies to which an FE Corporation can transfer its property rights and liabilities upon its dissolution. It is expected that all transfers should be made to charitable bodies, and for the purpose of education.”

It is on that point that I want to focus my remarks on the amendment. The document continues:

“Where the bodies are not charities then it must be transferred in accordance with the charitable purposes of the trust.”

It then links to a whole list of prescribed bodies to which assets could be transferred, including sixth-form colleges and governing bodies.

The point I start from is that to say it is “expected” that all transfers should be made to charitable bodies is not the same as saying it is “required”.

[Kelvin Hopkins]

My hon. Friend makes a good point. Is the stronger case not that such properties should be transferred back to local authorities? That is where the property came from in the first place.

[Gordon Marsden]

My hon. Friend makes an interesting point, and possibly opens up a new area for policy discussion in certain political parties. The reality of the situation is that in practical terms most local authorities would struggle to take on those responsibilities at the moment, but he is absolutely right to make the point—I will expand on it—on the genesis of the assets.

Given the genesis of those assets and their development over the years, we need to look with extraordinary care at any circumstances in which they might go into the private sector. Incidentally, that does not necessarily mean that we are saying that the bona fides of the private sector potential acquirers are bad. We simply recognise the fact that it would be the transfer of something that is largely of public value into the private sector without taking any account of the genesis and development.

I want to explain why I think this issue is so important. When colleges were incorporated in 1992, it took them formally outside the aegis of local authorities, as my hon. Friend the Member for Luton North said, but we have to take into account that that asset base of building in many cases was built up with local authority support and funding over a 20 or 30-year period.

The Minister has visited my local college, Blackpool and The Fylde College. I think he went to the Bispham campus, which is right at the other end of town and not in my constituency. When he arrived, the Bispham campus no doubt looked nice and shiny and new, but it did incorporate—I am not sure how much it still incorporates—buildings and elements that go right back to the 1950s and 1960s. Indeed, when the Building Colleges for the Future process was taking place in the 2000s, that was one of the arguments for demolishing that building and relocating it in the centre of town. It did not happen for a variety of reasons. At the time I was rather annoyed that it did not happen, but nevertheless I am just illustrating the point that many of the buildings that we are talking about have accreted their estate either on an active financial basis or by the ceding of lands by local authorities and other organisations.

Apart from that, over the years since then large sums of public money have often gone directly to support and build the estates of FE colleges. In the 2000s, the then Labour Government brought forward the major programme of Building Colleges for the Future. Despite the fact that the programme was curtailed and certain places, including my own, missed out on the final stages, it was a commitment of literally hundreds of millions of pounds—other Members in the House got their completely new college and everything that went with it—and that is without taking account of the other areas of non-private sector funding. Sometimes that was through very complex relationships that might involve lottery-associated bids. Sometimes it was through the significant sums of money put in under the old regional development agencies. As I know well, having shadowed the regional growth funds in my previous portfolio, sometimes it was through regional growth fund developments, and sometimes there are offshoots of European structural funds. It is important to remember all of that.

--- Later in debate ---

[Robert Halfon]

We are looking at cases of insolvency. We have the protection of students at heart, but we also want to be fair to creditors. I am passionate about the Bill because I believe it assures the protection of students, but I acknowledge that we have to be fair to creditors as well, and I do not think that would be the case if we did what the hon. Gentleman suggests, although in an ideal world that would of course be a lovely thing to be able to do.

The FE body itself cannot be sold. It is a statutory body. If it is insolvent and must therefore close, the protection of students must come first; the sale of the asset would be to protect students first and creditors second.

[Gordon Marsden]

I am listening carefully to the Minister. He has just said that the FE body cannot be sold and the assets must be dealt with in the way that he has described. The problem is that this is not necessarily a question of the FE body being sold. For the sake of argument, to take the example that my hon. Friend the Member for Luton North used, there may be an asset with substantial land attached that was originally a public asset, and that could be disposed of as part and parcel of the process of trying to resolve an insolvency without that actually involving the dissolution of the FE body. I am not a lawyer, but it seems to me that there is nothing in principle to stop that happening. In those circumstances, a part-asset could be transferred that was not the whole of the FE body but perhaps represented tens of millions of pounds of value.

[Robert Halfon]

The assets currently are not publicly owned; they are owned by the FE body, which has significant operational independence, and are for the educational purposes of the FE body. Valuable land that is sold in the way that the hon. Gentleman describes has to be sold for the purpose of the special objective. I am involved at the moment in a case where an institution wants to sell for housing land that is, in my view, meant to be for FE use. He probably knows the case. We are clear that that land is for the educational purposes of the students. That is our belief.

I have covered most of the hon. Gentleman’s points. I would not be so down on private providers; there are examples of good private providers. Let us take the example of SEN students, whom we talked about earlier. It may be better for those students if the education administrator were able to transfer the students and facilities to a private body if that was the only one available. That would minimise the disruption to them, and their studies could continue uninterrupted at the same location. Sometimes, to have the private sector involved is a good thing, as long as private organisations, as I say, are properly inspected and registered and have a good record of education. I hope that I have been able to assure the hon. Gentleman that there will be no haemorrhaging of publicly funded assets to the private sector and he will agree to withdraw his amendment.

[Gordon Marsden]

The Minister has been characteristically courteous. If I were able to take his reassurance as the end of the matter, I would, but unfortunately it is not the end of the matter. I will make a few brief points.

The Minister says that the proportion of public assets that might be disposed of to the private sector in the event of a college insolvency as a total is very small, percentage-wise. We could trade figures on what that percentage might be, but none of us knows. The fact of the matter is that it is about the area where that happens and the impact there. A college that has tens of millions of pounds’ worth of assets built up in a particular area and is crucial to the local community may be basically forwarded on to a private provider.

I accept what the Minister said; we are not saying that all private providers are bad or are leeches, but that is not the issue at stake. The issue at stake is whether private providers should be allowed automatically to take on valuable assets that have been accrued via the public sector in the event of an insolvency. The Minister said himself that it is not about private providers, but he also said that transfers could include private education providers.

In terms of real-life events, private providers are well equipped normally with lawyers and accountants. Who will monitor the detail of this? Will it be a slightly harassed education administrator? Will it be officials in the Minister’s Department? I doubt it.

[Kelvin Hopkins]

As a member of a local authority many years ago, I saw the representatives of a town shopping centre—an asset that was owned by the council but rented on a long-term basis—who were skilled financial advisers, run rings around the local authority treasurers, who just could not cope with the power ranged against them. We have to be very careful, because when big money is involved, companies will get the best brains to ensure they win.

[Gordon Marsden]

My hon. Friend is absolutely right. If it were not for the track record of problems in the FE sector over the past three to four years that I have described, we might be more sanguine, but this is a really important principle that should be established on the face of the Bill. I am afraid that on this occasion, I will not withdraw the amendment and will press it to a vote.

Question put, That the amendment be made.

--- Later in debate ---

Question proposed, That the clause stand part of the Bill.

[Gordon Marsden]

I rise to speak very briefly about this clause and clause 37, both of which I want to put in the context of the broad policy statement that we have been given on part 2 of the Bill, which is pertinent to many of the questions that we and people in the sector have been asking about the capacity of the DFE and the institute to expand the remit of the Bill. That is no less true in the context of the insolvency proceedings than it is in the remainder of the Bill.

Page 4 of the policy statement says that it has not been possible to prepare draft regulations during the passage of the Bill—I feel somewhat conflicted about this, because part of me is rather glad that we did not have to consider the regulations, which may, and I quote, run to hundreds of pages in total. Instead, the Government have prepared a series of detailed notes describing every delegated power and setting out how they plan to use them. According to the Government, it was not possible to produce the full list of the regulations for us now. I say gently that they will have to be produced at some point, even if not for the delectation of members of this Committee. Does that not raise questions about the capacity of the Department? What happens when the Bill becomes an Act? Who will have the capacity to draft the regulations then? I hope the Minister does not think that is an entirely flippant comment. The assurances we have been given about capacity throughout the passage of the Bill do not appear to be piecing together.

[Robert Halfon]

I assure the hon. Gentleman that the regulations will be published; the problem is that there are many pages of insolvency legislation. That is why we were unable to publish them in time for the Committee and why we issued the policy statement. They will be published, but it takes quite a long time.

[Gordon Marsden]

I entirely understand that. I was not suggesting that people are slothing on the job; I was merely making the reasonable point that the Bill necessarily involves a lot of administrative time—I put it no stronger than that—and that raises in my mind some ongoing concerns about the capacity, either of the Department or of some of its institutions, to take some of these things forward. I will leave it at that.

[Kelvin Hopkins]

I just want to say that I am deeply disappointed that we cannot discuss the regulations in detail. Perhaps I am alone in that.

[Gordon Marsden]

All I can say is that my hon. Friend is a shining example to us all. He shames us deeply.

Let me make my own brief and pathetic response to clause 30, in the context of the Stakhanovite task that my hon. Friend has just suggested we undertake. I have a practical question for the Minister. On clause 31, the policy note talks about the way in which the power will be used to make decisions. For simplicity, I say to the Minister that although I am making this point specifically about clause 30—it affects chapter 4, which is very important because it is the special administration chapter —my question is generic and may be relevant to other clauses as well. It is very straightforward. When these revised instruments and regulation-making powers are brought forward, will there be consultation in any shape or form with the various stakeholders—FE bodies, the Association of Colleges, the Collab Group and others?

That is not for the sake of consultation itself. There have been occasions in the past, although I am not suggesting in this particular Department or area, when the lack of such consultation on detailed regulations between representative bodies—it normally has to be done at that level—and officials from the Department has produced anomalies that subsequently have to be rectified. It would be interesting to hear if the Minister can offer any reassurance on that.

[Robert Halfon]

I thank the hon. Gentleman for his remarks. On Tuesday, the hon. Member for Luton North suggested that he might have been a banker, and today he talks about being an expert on delegated legislation on insolvency. I believe the latter more than the former. Knowing the kind of person he is, he is probably about the only person who could get his head round all the different delegated powers.

The clause modifies the power to make rules under sections 4 and 1 of the Insolvency Act 1986. It allows detailed rules about the education administration for FE bodies to be made in the same way as they are for companies. The power only permits rules to be made to give effect to the chapter of the Bill that establishes an SAR or FE bodies, and the rules cannot be made for any wider purpose. Clause 5 deals with the rules needed for other insolvency procedures for FE colleges. It applies the company insolvency rules and allows us to modify them as necessary.

To answer the question from the hon. Member for Blackpool South, there has been a significant amount of consultation already, and there will be full consultation all the way through. We have to; these things cannot be done without it. I want to reassure him that that will absolutely happen. On those grounds, I hope the clause is acceptable to the Committee.

Question put and agreed to.

Clause 30 accordingly ordered to stand part of the Bill.

Clauses 31 to 36 ordered to stand part of the Bill.

Clause 37

Disqualification of officers

[Gordon Marsden]

I beg to move amendment 8, in clause 37, page 18, line 14, at end insert—

‘(1A) The Secretary of State must ensure the list of disqualified officers is made publicly available.”

This amendment would ensure that a list of disqualified officers was publicly available.

The amendment is fairly straightforward, so I will not detain the Committee long. Again, we hope that these situations will be very rare, and we certainly hope it will be very rare that people are disqualified as a result of them. However, if disqualified people are involved, the principle of transparency is extremely important. This is a probing amendment, to find out how this might be effective.

Perhaps it is worth mentioning what the explanatory notes say about clause 37:

“This clause gives the Secretary of State the power, in relation to further education corporations and sixth form college corporations, to make regulations that have the same or similar effect to the Company Directors Disqualification Act 1986. This will mean that, like company directors, members (i.e. governors) of those corporations can be disqualified from acting as such in the future and the power allows the Secretary of State to make provision so that when a person is disqualified as a director of a company they can also be prohibited from acting as a member of a further education corporation or sixth form college corporation.”

I repeat that we all hope and assume that these occurrences will be irregular. However, would it not be logical for the list of disqualified officers to be made publicly available, to ensure transparency and to allow colleges to easily assess applicants to their own corporations in the future?

[Kelvin Hopkins]

I support the amendment. In my experience of life, it is often the rogues who are most plausible and we have to have lists of people to make sure that people do not get through the net, move to a different part of the country and take up a job, before we find out that they have twice been a rogue, not just once.

[Robert Halfon]

The disqualified officers to whom the amendment refers are those members of an FE body that is a statutory corporation who have been disqualified by the court on the grounds that they have been found liable by the court of wrongful or fraudulent trading or other similar offences under the Insolvency Act 1986 as applied by the Bill. Wrongful and fraudulent trading are provisions of insolvency law that will be applied to governors and others involved in running FE bodies that are statutory corporations in the same way as they apply to directors of, and those who run, companies. That is the purpose of the amendment.

It is right that a list is kept of those individuals who have been disqualified and that such a list is available to the public, so that it is evident which individuals should not be appointed as governors of colleges in the future. However, there is no need to provide for that specifically in the Bill. There is provision in the Company Directors Disqualification Act 1986 for a register of disqualification orders to be kept by the Secretary of State and for that register to be open to inspection—as we continue to refer to that Act, I propose that we use its acronym, the CDDA.

Clause 37 will allow us to replicate provisions of the CDDA; therefore it already allows us to achieve what hon. Members seek with the amendment. I have made it clear that I intend to consult on secondary legislation made under the Bill. That includes regulations made under clause 37, so it will be transparent that we will include a provision in regulations that is the same as, or similar to, the provision that exists in the CDDA, modifying it as necessary to make it work effectively for disqualified members of college corporations. On those grounds, I hope that the hon. Member for Blackpool South will feel able to withdraw the amendment.

[Gordon Marsden]

I thank the Minister for that explanation of the procedure and situation. I am satisfied and beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 37 ordered to stand part of the Bill.

Clause 38

Information for Secretary of State about further education

[Robert Halfon]

I beg to move amendment 18, in clause 38, page 18, line 38, leave out subsection (2).

This amendment removes the restriction on the Secretary of State obtaining information for purposes connected with the education of certain people aged under 25. The way that section 54 of the Further and Higher Education Act 1992 is currently framed allows that information to be obtained so the amendment preserves this aspect of the current law.

--- Later in debate ---

[Gordon Marsden]

I thank the Minister for that explanation, in particular on subsection (2), which I had circled and was going to ask him about. He has now answered the question, so we have no problems with the clause. Indeed, it is very important, at a time when the Government continue to embark on devolution initiatives in this area, that a national database should be maintained.

The only observation that I would make—I think this view would be shared by a number of my colleagues—is that the process that is going ahead is somewhat piecemeal and somewhat curious in its restrictions. Some of us might like to see rather more rapid action, and rather broader and more ambitious ways of ensuring that, in the future, not simply adult skills but a much broader range of issues are devolved. However, that is outside the scope of the Government’s amendment and the clause, which we are very happy to support.

Amendment 18 agreed to.

Amendment made: 19, in clause 38, page 19, line 9, leave out “(4)” and insert “(3)”.—(Robert Halfon.)

This amendment is consequential on amendment 18.

Clause 38, as amended, ordered to stand part of the Bill.

Clauses 39 to 45 ordered to stand part of the Bill.

New Clause 1

Further education bodies: senior management

“A further education body shall be required to include in its senior management team a person or persons with professional financial qualifications having specific responsibility for oversight of financial management in the body.”—(Kelvin Hopkins.)

Brought up, and read the First time.

[Kelvin Hopkins]

I beg to move, That the clause be read a Second time.

[Kelvin Hopkins]

It is a pleasure to rise to speak to these new clauses, which I drafted myself and are borne of my own experience in college governance and teaching. That is particularly the case for new clause 1, which is about having internal experts with professional qualifications who would suffer severe reputational damage if they did not make sure that the college accounts and financial matters were all in order.

When I was chair of governors of what was then Luton College of Higher Education—it became the University of Luton and then the University of Bedfordshire —the principal decided that the accounts were not really up to scratch, and so spent a summer going through every detail of the college’s finances. He found many thousands of pounds unaccounted for, which he was then able to use to the benefit of the college. He happened to be a graduate in mathematics, which meant that he was at least numerate and could deal with accountancy, but accountancy is a specific skill.

As a student, I was taught economics by a former Treasury official whose next-door neighbour was an elderly lady who wanted him to deal with her accounts. He had to explain that an economist is not an accountant; it is a very precise skill and not something that one can just pick up at will. My closest university friend was a professor of accountancy. I know only too well that accountancy is a professional skill that needs great minds. I also understand that some of the people with the highest IQs in our country are accountants. Clearly accountants are important people, and it is important to have them involved.

At Luton Sixth-Form College, one of the deputy principals is a qualified chartered accountant. She is a superb member of staff who makes absolutely sure that all the forecasts and all the financial details are under control. We have been guided by her for many years now. It makes us feel at ease. We know that the finances are well under control, well understood and thoroughly explained to us on all occasions. Many years ago, before she was employed, I was on the finance and general purposes committee, and I remember the problems I had just getting to grips with it, and I am a numerate person with a degree that includes economics and maths. It was difficult stuff, but we had some good accountants on the governing body.

This is an important issue. If one wants to avoid insolvency, the best thing to do is ensure that one has someone with the skills to ensure one does not get into that situation in the first place, and that alarm bells are rung. As governors and politicians and Government Members, we are all well aware of what the problems are. If a principal is wilful and wants to do things beyond what they should be doing, and they have a weak financial adviser without professional qualifications, they will get away with it. There is also the question of competence; a principal may not be competent at dealing with accountancy.

Accountancy is extremely important. It sounds very boring, but I am glad that accountants are there. I would not want to have the responsibility of making decisions on financial matters without the advice of serious professionals. I have no doubt that some members of the Committee are qualified in accountancy. I am not asking Members to put their hands up, but they are about.

I have been a governor of Luton Sixth-Form College for 23 years continuously. I was also a governor there for two years in a previous period. I have been comforted by the fact that we have always had at least two qualified accountants on the governing body who can question and check the accounts and assure us that they are right, that we are not making mistakes, and that the college is in good financial order, especially when we are under pressure. We are under financial pressure; there has been the VAT issue, which I will not go into now, but we have debated it on many occasions. It is a great comfort and reassurance that we have professionals sitting on the governing body who can look at an account, make sense of it, and ensure that we are doing the right thing. It is not just a question of numeracy, which I have; it is about the specific skill of accountancy.

New clauses 1 and 2 would make a very valuable addition to the Bill. I hope that the Government will accept them or build requirements of that kind into the Bill to ensure that colleges are well governed and well managed in financial matters.

[Gordon Marsden]

I congratulate my hon. Friend on speaking to the new clause with his customary insight and from past experience, which are powerful advocates for the mechanisms he proposes. There are not many vehicles in the House for the regular praising of accountants. I am tempted to say that if we were in the middle ages and my hon. Friend, with the passing of years, were to pass away, he might be subject to a posthumous cult of the patron saint of accountants. The serious point is that everything my hon. Friend said is valid. Whether what he proposes is done in a formal way, as he suggests, or by strong direction, the Government would do well to take on board his proposals.

[Robert Halfon]

I thank the hon. Member for Luton North for the new clauses and for his wise contributions throughout the Committee. Rather than the role of banker, I think he has taken on the role of the Gandalf of the technical education and further education sector. There will therefore be no danger of his passing as the hon. Member for Blackpool South described.

The hon. Member for Luton North has tabled two important new clauses. In an ideal world it would be a good thing if all or even some members of governing bodies had important financial qualifications, but I remind him that the head of Blackpool and The Fylde College, when asked about that, said:

“I am thinking of the unintended consequences. It is very easy to say that we can dictate exactly the constitution of a governing body, but if we are looking at further education corporations across the country, some of them are very different. My own, for example, is an outstanding college.”—

I have seen it for myself, and it certainly is—

“We are very strong financially…we benefit from the mix and balance that we have on the board: we benefit from our business community and from two very able students on the board. I am hesitant about mandating exactly what that board would look like, because it varies by college. If, for example, I were a land-based college, I might want a slightly different mix, so I am hesitant about fully supporting that.”––[Official Report, Technical and Further Education Public Bill Committee, 22 November 2016; c. 60, Q80.]

When I asked her about the best way to achieve what she had done, she said what is needed is an expert to manage finances: not necessarily, dare I say it, someone with an educational background—we were talking about the education administrator earlier—but someone with a good understanding of finances. Where colleges are doing better even with all the financial pressures, I suspect that is because they have brilliant financial teams as well as the brilliant leadership of the principals and the advice of the governing body.

It is the governing body of the college that is best placed to ensure that effective management is in place that meets the needs of the college, but it must be the principal who puts her team in who has the day-to-day responsibilities. When colleges fail, as the hon. Gentleman will know, the proper intervention system is in place, with the education commissioner and suchlike.

The introduction of the insolvency regime will change a lot of this anyway, and it will serve to emphasise the importance of sound financial management. Although the Government are committed to the protection of learners, corporations are ultimately responsible for ensuring the financial health of their institutions.

I am wary of imposing such a measure, but I have a lot of genuine sympathy with the hon. Gentleman’s intentions. I commit to continue working with the sector to strengthen the financial acumen of governing bodies and the capability of financial directors. That will protect the interests of not only the colleges, learners and employers in the local communities but the taxpayer, which is incredibly important. On that basis, I hope the hon. Gentleman will withdraw the motion.

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[Robert Halfon]

On a point of order, Mr Bailey. As we have reached the end of the Bill—in Committee, at least—I would like to put several things on the record. First, I thank the Opposition for the incredibly thoughtful and serious way in which they have dealt with the Bill. Where I have said that I will reflect on things, I really mean that. I particularly congratulate my opposite number, the hon. Member for Blackpool South, given that he has just come out of another huge Bill; he did this Bill almost straightaway. His capacity for knowledge is extraordinary. What the hon. Member for Batley and Spen said about careers is particularly important, and I also thank the hon. Member for Luton North for his contributions.

May I also thank you and your team, Mr Bailey, and my Government colleagues, who have been incredibly helpful and supportive? Finally, I mentioned capacity—over the past couple of weeks, the incredible officials and many others have worked day and night to get this Bill to the House and into Committee, and I am hugely grateful to them.

[Gordon Marsden]

Further to that point of order, Mr Bailey. May I associate myself with the Minister’s thanks to you and Ms Dorries? You have chaired fairly and lightly. I also thank your team—particularly the Public Bill Clerks, to whom the Opposition are always indebted, given that we do not have the Government’s resources.

May I thank my own superb team for everything that they have done? I am sorry that my on-the-ball Whip, my hon. Friend the Member for Kingston upon Hull East, is unable to be with us today, but he is at the forefront of industrial progress celebrating Siemens wind farms finally coming to fruition in his constituency, so he has a good excuse. I am grateful to all of my team, in which we have two relatively new Members—particularly my hon. Friend the Member for Batley and Spen—and I thank my hon. Friend the Member for Wythenshawe and Sale East for deputising.

I also thank the Minister and his team. He has been generous and prepared to listen and think carefully and constructively, and we welcome that. We look forward to some of the amendments we have withdrawn perhaps re-emerging in further information from him before Report stage. We are delighted to have taken part in this process and grateful for his contributions and constructivity.

Bill, as amended, to be reported.

Technical and Further Education Bill

Gordon Marsden Excerpts

3rd reading: House of Commons & Legislative Grand Committee: House of Commons & Report stage: House of Commons
Monday 9th January 2017 Commons Chamber

[Gordon Marsden (Blackpool South) (Lab)]

I beg to move, That the clause be read a Second time.

[Mr Speaker]

With this it will be convenient to discuss the following:

New clause 2—Representative panels—

‘(1) The Institute for Apprenticeships and Technical Education shall establish—

(a) a panel of persons undertaking approved English apprenticeships; and

(b) a panel of persons undertaking study towards approved technical education qualifications.

(2) A panel under subsection (1)(a) shall be established by 1 April 2017 and shall advise the Board of the Institute on all matters concerning approved English apprenticeships.

(3) A panel under subsection (1)(b) shall be established by 1 April 2018 and shall advise the Board of the Institute on all matters concerning technical education qualifications.’

This new clause would establish representative panels of apprentices and of learners in technical education who are not doing apprenticeships.

New clause 4—Careers education: duty to publish strategy—

‘(1) The Secretary of State shall publish a strategy for the purposes of improving careers education for persons receiving education or training—

(a) in the course of an approved English apprenticeship;

(b) for the purposes of an approved technical education qualification; or

(c) for the purposes of approved steps towards occupational competence.

(2) The strategy shall be laid before Parliament.

(3) The strategy shall specify provisions under which the Secretary of State will seek to—

(a) ensure that persons receiving education or training under subsection (1) receive information, advice and guidance relating to their future careers, and that such information, advice and guidance is delivered in a way which meets each person’s needs and is impartial;

(b) ensure that such information, advice and guidance may be taken into account by relevant authorities and partners to meet the needs of local or combined authority areas;

(c) ensure parity of esteem between technical, further and higher education; and

(d) monitor the outcomes of such information, advice and guidance for recipients.

(4) The provisions specified in subsection (3) shall have specific regard to particular needs of different groups of persons receiving education or training under subsection (1), including—

(a) persons with special educational needs;

(b) care leavers;

(c) persons of different ethnicities;

(d) carers, carers of children, or young carers, as defined by the Care Act 2014; and

(e) persons who have other particular needs that may be determined by the Secretary of State.

(5) The strategy shall include guidance for the purposes of improving careers education, to which the following bodies shall have regard—

(a) the Office for Standards in Education, Children‘s Services and Skills;

(b) the Institute for Apprenticeships and Technical Education; and

(c) the Office for Students.

(6) The Secretary of State shall by regulations designate relevant authorities and partners for the purposes of subsection (3)(b).

(7) The Secretary of State may by regulations designate—

(a) further groups of persons under subsection (4)(e); and

(b) further national authorities or bodies under subsection (5).

(8) Regulations made under this section—

(a) shall be made by statutory instrument; and

(b) may not be made unless a draft has been laid before and approved by a resolution of each House of Parliament.

(9) For the purposes of this section, “careers education” means education about different careers and occupations and potential courses or qualifications to attain those careers and occupations.’

This new clause would establish a statutory requirement for the Government to produce a strategy on careers education, which shall be taken to be the “Careers Strategy”.

Amendment 4, in schedule 1, page 21, line 13, at end insert—

‘(4) The Institute for Apprenticeships and Technical Education in performing its functions must have regard to the need to promote equality of opportunity in connection with access to, and participation in, education or training provided in a form specified in subsection (6).’

This amendment would ensure that the Institute for Apprenticeships and Technical Education must have due regard for widening access and participation.

Amendment 5, page 21, line 13, at end insert—

‘(4) The Institute for Apprenticeships and Technical Education in performing its functions must co-operate with the Apprenticeship Delivery Board on progression into, and delivery of, apprenticeships.’

This amendment would ensure that the Institute has a duty to co-operate with the Apprenticeship Delivery Board.

Amendment 6, page 21, line 13, at end insert—

‘2A After section ZA2 (general duties) insert—

“ZA2A Expenditure by the Institute

In the discharge of its duties and functions under this Chapter, the Institute shall in any one year expend a sum no less than the sum projected to be raised under the Apprenticeship Levy in that year.”’

Amendment 7, page 22, line 2, after “to” insert “state-funded”.

Amendment 8, page 22, line 23, at end insert—

‘(1A) In making determinations under subsection (1)(a) on occupations relating to apprenticeships, the Institute shall attach particular importance to the needs of apprentices aged between 16 and 24.’.

This amendment would ensure the mapping of occupation groups has particular regard for people aged 16-24 taking apprenticeships.

Amendment 9, page 23, line 2, at end insert—

‘(2A) Outcomes under subsection (2)(b) shall include recognised technical qualifications.’.

This amendment would ensure that all apprenticeship standards include a recognised technical qualification.

Amendment 10, page 28, line 6, leave out “course document” and insert

“standard or technical assessment design specification”.

Amendment 11, page 28, line 9, leave out “another person” and insert “other persons”.

Amendment 12, page 28, line 10, leave out “another person” and insert “other persons”.

Amendment 13, page 28, line 12, leave out section A2IA(4).

Amendment 14, page 28, line 17, after “education” insert “route”.

Amendment 15, page 28, line 28, after “education” insert “route”.

Amendment 17, page 28, line 30, leave out section A3A(2)(c).

Amendment 16, page 28, line 32, after “education” insert “route”.

Amendment 18, page 28, line 39, after “Ofsted” insert “, the QAA”.

Amendment 19, page 29, line 1, after “Ofsted” insert “, the QAA”.

Amendment 20, page 29, line 3, after “England,” insert

“including those offered by Higher Education Institutions,”.

Amendment 21, page 29, line 13, at end insert—

‘“QAA” means the Quality Assurance Agency for Higher Education.’

Amendments 18, 19, 20 and 21 would ensure that the QAA would be included in the list of organisations required to share information and that degree apprenticeships were fully covered by this requirement.

[Gordon Marsden]

Mr Speaker, may I, on behalf of everybody in the Chamber, wish you, the Deputy Speakers—one of them is taking your place as I speak—and all your officials a very happy new year, and the same to all Members of the House?

The issue we are pursuing this evening is whether this will be a happier new year for apprentices and the new Institute for Apprenticeships and Technical Education. The Government will know that the Opposition have been broadly supportive of the process that they are bringing forward, although it was somewhat forced upon them when their original mechanism, which was to get many of these things through in the academies Bill, was shipwrecked—the academies Bill mark 2 proved to be no more popular with some of their Back Benchers than the academies Bill mark 1. We therefore got a fairly rapid notice of the Technical and Further Education Bill before Christmas.

Having said that, we had a good Committee stage and I want to pay tribute to the Minister for his conviviality and the constructive way in which he responded to us. Of course, as the old saying goes, fine words butter no parsnips, but I hope that by the end of this evening we will have at least a few parsnips buttered.

[Rob Marris (Wolverhampton South West) (Lab)]

A whole meal.

[Gordon Marsden]

Possibly a full meal, for those of a vegetarian instinct.

[Kelvin Hopkins (Luton North) (Lab)]

My hon. Friend and I, and indeed other Members, tabled a number of amendments in Committee that the Government do not appear to have taken on board. They were not pressed at the time, but we had hoped that the Government would bring some of them forward as their own amendments. Is he somewhat disappointed by that?

[Gordon Marsden]

I am always slightly disappointed when intimations of progress in Committee are not met with specifics on Report. Of course, the Government have the opportunity this evening, in commenting on our amendments, to do something about it, and indeed to accept some of them in principle. If they think that the amendments are defective but the basic principle is fine, they should take them on board.

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[David Rutley (Macclesfield) (Con)]

I know the hon. Gentleman feels passionately about the subject, but does he not also agree with the fact that the Government have an overarching approach to careers advice, notwithstanding the Careers & Enterprise Company? It could be difficult to put arrangements that only apply to technical education into this Bill when there is a much broader issue at stake that the Government are tackling at a strategic level.

[Gordon Marsden]

I hear what the hon. Gentleman is saying. It is true, of course—but this is outwith the discussion that we are able to have this evening—that careers advice and education in this Bill does not start at 16 or at the remit of the DFE. It starts much earlier. If the hon. Gentleman is saying that that is an argument for doing nothing within the limited scope of the Bill, I do not agree. We need to do something. I would like to see the overarching structures that he mentioned but, unfortunately, at the moment I would be quite happy to see a limited overarching structure for the area that we are discussing. The challenge for the Minister is to talk about the £90 million that the Government have allocated to the Careers & Enterprise Company over the course of this Parliament, how it will be spent, how it is being distributed and whether it is adequate.

There are some damning statistics in the report produced by the Institute for Apprenticeships under the aegis of Semta. As the Minister knows, the proportion of respondents saying that their careers advice and guidance was poor or very poor has remained high across all sectors in all surveys from 2014 to 2016. The report says:

“Worryingly, this year 94 survey respondents, 6% of the total, said they had not received any careers IAG at all.”

When we discussed the matter in Committee, those were the sorts of statistics that were available to us. I said—perfectly fairly, I thought—that, although the Careers & Enterprise Company was beginning to make progress, I did not believe that it was yet able to do the necessary coverage because it is heavily reliant on volunteers. Early in December, we learnt that the company does not cater to every college in the country, including the whole of London. There are not just a few cold spots, but whole cold areas. There is a postcode lottery for FE coverage, with 15 local enterprise partnerships not covered and London completely absent.

The chief executive of the CEC, Claudia Harris, confirmed that the company did not work with any of the capital’s 44 FE and sixth-form colleges. During an interview with FE Week, she blamed the lack of coverage on “ramp-up”—I think that is what lesser mortals would call the rolling out of pilots, but I await a definition from the Minister. Now, I am not laying the blame at the door of the Careers & Enterprise Company; the Government are expecting it to do too much with too little, and they should probably also think again about having a company that is so heavily reliant on volunteers to carry out these tasks.

--- Later in debate ---

[Rob Marris]

I apologise somewhat for interrupting my hon. Friend’s magnificent speech. Part of the problem with the apprenticeship levy is that the Government are all over the place on it. I talked to a major supermarket chain that has employees in Scotland and whose payroll is of sufficient magnitude that it will have to pay the apprenticeship levy, but because of devolution there is no guarantee that, in Scotland, its apprenticeship levy funding will in fact be used for apprenticeships. That may be the case in Wales and Northern Ireland as well—I know not. This may go some way towards explaining the gap that my hon. Friend has put his finger on very acutely about where the money is going. The reason is that it is matter for the Treasury, which has not yet got to grips with devolution.

[Gordon Marsden]

My hon. Friend, as usual, makes a very interesting and succinct point. If I were not constrained by talking about this amendment, we could have some very interesting conversations about how the devolution situation is panning out, but I need to stick to my last.

The other point that is germane to this amendment is the coming Budget. We now know that the Budget will be in the first week of March, so issues about what the rate and the threshold of the apprenticeship levy might be after its first year obviously come to mind. The former Chief Secretary to the Treasury, after much prompting and questioning during the previous Administration of David Cameron, said that

“the government will keep the apprenticeship levy under review.”

So, as we all know, it could go up and of course, theoretically, go down. The level at which it is set, and how much companies get back from it, will be crucial in deciding whether it is a success or a flop. Given that it is only eight weeks until Budget day, what conversations has the Minister had with the Treasury to make sure that it gets the balance right? The more we hear—I said this in May and say it again today—about how the levy will now need to fund the top-up, the devolved Administrations, English and maths at level 2, disadvantaged learners, incentive payments and non-levy payers, the more it seems inevitable that the Government will end up increasing it.

--- Later in debate ---

[Rob Marris]

I am a little bemused by this amendment, although I think I understand it. It seems to me that it would be desirable, certainly within England, if not within the United Kingdom, to have a national framework of standards such that the framework should not simply apply to qualifications that were obtained through a state-funded institution but be spread more broadly. Perhaps my hon. Friend could say a little more about his approach.

[Gordon Marsden]

My hon. Friend is right to raise the issue of a national framework. Various research reports over many years indicate that the privately funded training market has been exceeding the publicly funded one by considerable amounts, and that includes specialist management training, IT vendor qualifications, and project and programme management. The Government may need to look a bit more carefully at how this process is going to move forward. I absolutely agree about the need to have an overarching national framework, which we do not currently have.

Amendment 8 would ensure that the mapping of occupation groups had particular regard to people aged 16 to 24. This is crucial, because many apprenticeship training providers are reporting that, under the new levy system, employers are deciding to choose apprentices aged over 19 rather than 16 to 18-year-olds, particularly with regard to the new standards. Employers say that there is very little incentive left for them to take on younger learners, especially in the higher funding bands where a £1,000 employer incentive is a small fraction of the overall funding available. As the Minister will know, the Association of Employment and Learning Providers, which has, up until now, predominantly delivered apprenticeships to 16 to 18-year-olds, is seeing the majority of its business switch from this age group to older individuals.



If one looks at Lord Sainsbury’s comments and the skills plan commentary in relation to the changes in funding giving parity to older learners, one can see that the majority of apprentices in this age band are already 18, with little effort to change that through careers support. Perhaps that is the Government’s plan. If so, the Government need to be honest and to tell us that; if not, something needs to change as otherwise we are in danger of ending up with fewer apprenticeship opportunities for 16 to 18-year-olds.

I want to quote to the Minister some recent remarks of JTL, a training provider. About the new system, it says:

“Our employers say that under the new system when the traditional age differentials in funding rates are removed, they would sooner employ young people aged 19 and over. Some 16- and 17-year-olds aren’t allowed on site due to health and safety rules, and many of them have yet to pass their driving test, but the present funding makes it still worthwhile to take them on. Remove the incentive and employers will switch back to recruiting older apprentices.”

It went on to say—I hope the Minister will give this point careful thought, given the emphasis on STEM—that the

“so-called £1,000 incentive for employers to recruit 16- to 18-year-olds simply doesn’t work for STEM sectors. Our level three apprenticeships typically last four years, meaning the incentive equates to a mere £5 per week, which is of no interest to employers given the additional challenges of younger employees.”

That is a timely new year reminder to the Minister that the concessions he made after the Save Our Apprenticeships campaign, with which our party was very pleased to be involved—as he knows, the campaign involved a very broad range of people, whom he met and to whom promised changes—have not solved the problem. The concessions applied a temporary sticking plaster to the problem, and it remains to be seen how long it will stick. Coming on top of the continued lack of certainties about the new structures for apprenticeships and the delayed consultation, there must be concern about the fragility of the Government’s performance in the 16-to-18 area. In FE sectors, such as mine in Blackpool, we desperately need to get such young people skilled apprenticeships, which means looking for them now.

As I am sure the Minister knows, the AELP has raised the issue that a framework of only 15 routes across technical education might create an elitist system of education that denies many young people a work-based route to level 2 or 3. We remain concerned about that, given that so many young people in the service sector are not likely to be automatically covered. I know that there have been conversations saying that this is not really about apprenticeships, but about technical education. Whether it is about apprenticeships or technical education, however, young people in Blackpool and everywhere else need good training, whether from the service sector or the manufacturing sector. I would have thought that focusing on that would make a major contribution to this Government’s social justice agenda and even, arguably, to anticipating the impact of Brexit if controls on migrant labour are introduced. It is important to have a skills strategy that is inclusive, and this is a perfect opportunity to create such a coherent, inclusive strategy that covers a wide range of different abilities and aptitudes and that strives for excellence. That is what amendment 8 intends to do.

I want to talk briefly to amendment 9, which is about all apprenticeship standards needing to include a recognised technical qualification. As the Minister will know, it is not only we who have been concerned about this; a range of organisations—most recently, AELP—has been concerned about the omission of qualifications from some of the new standards. The investment in time and resource is leading to employer fatigue in some areas, and there is a lack of engagement. According to AELP, just under 50% of the current standards released still do not include a mandatory qualification. One alternative solution is our proposed amendment, which would make the whole apprenticeship, rather than simply its components, into a recognised qualification.

I want to move on to amendment 10, which I will group with amendments 11 to 16 and, indeed, amendments 18 to 21. Amendment 10 is about the need to change the title of “course document” to

“standard or technical assessment design specification”.

That would ensure that copyright was acquired only at a level equivalent to apprenticeships. It is argued that underpinning occupational standards and technical assessment design specifications that are the equivalent of assessment plans is all that is needed for Crown copyright. City and Guilds has specifically raised with us the issue of the imposition of acquired copyright in evidence, as have other groups.

We have tabled the amendments because there is concern that imposing acquired copyright is one of the most significant risks to the future vitality of the technical education market in the UK. I accept that this is a complex and technical area, but the Minister needs to look at it carefully. It is not simply a question of existing providers wanting to set in stone a form of protectionism; it is about intellectual property, and where intellectual property starts and ends. The concern of many providers is that there has been a degree of mission creep in that respect in the way in which the Bill has been drafted. From a pragmatic point of view, I must say that if the broader definition of what the institute has to do on copyright remains in the Bill, even more resources may be required to police it, and I have already mentioned that there is a lack of such support. We need to look at these important issues.

The concern that each technical level will have only one awarding organisation has been raised by both the Centre for the Study of Market Reform of Education and NCFE. NCFE has said that, as currently set out, with some of the technical levels going to only one awarding organisation, having one would be unfortunate, but—to misquote Oscar Wilde—to have two might be beneficial. That would provide competition and enable providers to switch quickly in the event of problems, without the multiplication issues that have caused problems and difficulties elsewhere. NCFE has said, more in sorrow than in anger, that the

“current proposals do not seem to recognise the great expertise in designing and assessing Technical and Professional Education qualifications that already exists within Awarding Organisations.”

Our amendments 11 to 16 are consequential on amendment 9. Under an exclusive licensing model, the licence holder for a particular qualification may assume a quasi-monopoly position for the duration of the contracts. That is one of the reasons why the proposals are designed to move away from that principle. It seems to us that the principle should be that there needs to be a rationalisation of the operations of awarding organisations, but not necessarily to the point of having single operators on a licence, given the monopoly and single point of failure issues alongside all the intellectual property rights and Crown copyright ones. I repeat to the Minister that this is a complicated area and I appreciate that it is not easy to get the balance right, but I urge him to think very carefully about some of the representations that have been made and, if he is not able to do anything about them tonight, to at least bring forward solutions in the other place.

The final area on which I want to comment briefly—I have talked about routes and all the rest—is the Quality Assurance Agency for Higher Education. Amendments 18 to 21 would ensure that the QAA was included in the list of organisations required to share information, and that degree apprenticeships were fully covered by such a requirement. Ofsted should have the authority to inspect every apprenticeship. We welcome the growth in degree apprenticeships and expect many more under the levy, but some are not genuinely work-based learning and are a rebranding of more vocationally biased degrees. Stricter monitoring is therefore needed. We argue that the involvement of the QAA is very important in this respect. It is vital that apprenticeships are just that: proper apprenticeships, with which Ofsted and Ofqual need to be well and properly engaged.

I am aware that the Opposition amendments have had to be discussed in considerable detail and some are technical, but the broad thrust of what we are trying to do is: first, to ask the Government to act on their commitments in Committee; and, secondly, to go further than that and make the rhetoric around social mobility and widening participation a reality. The only way to do that is to improve the Bill with the amendments we have tabled this evening.

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[Gordon Marsden]

I thank the Minister for giving way with his customary courtesy. I just want to be absolutely clear about the implications of the wording of the document. Is he giving an assurance on the Floor of the House that the panel will be set up by April, that he will review the panel’s progress and whether it has the right form and structure, and that if he thinks it does not have the right form or structure he will replace it with something equally valuable in representing the views of apprenticeships to the board of the institute?

[Robert Halfon]

I am pleased to give the hon. Gentleman that guarantee. The panel will be set up by April. I believe it would be pointless to have an Institute for Apprenticeships and Technical Education without proper apprentice representation, but I want to see what the best format is. I am sure it will work and be a success, but I just want, as I said, to see how it pans out. We expect the institute then to do something similar for technical education students.

I agree with the motivation behind the amendment, but I am concerned about enshrining the establishment of panels in legislation. I do not want to put the institute in a constant straitjacket of legislative red tape that reflects every good idea there may be on how best to fulfil its responsibilities. I therefore think the amendment is unnecessary and would undermine the institute’s power to regulate its own governance and perform its duty.

On new clause 4, the hon. Member for Batley and Spen (Tracy Brabin) made a remarkable speech in Committee on a careers strategy. She cares passionately about this, as I do, but I think we do have meat on the bones. It is not just words. The hon. Member for Blackpool South talked about budgets. We are spending £90 million, which includes the work of the Careers & Enterprise Company. A separate £77 million is being spent on National Careers Service guidance just this year. I am going further. I am looking at a careers strategy from the beginning to ensure that we address our skills needs, and to look at how we can help the most disadvantaged. I am looking at how we can ensure widespread and quality provision, and how that leads to jobs and security. I will set out my plans on careers over the coming weeks.

On the investment in the Careers & Enterprise Company, the hon. Gentleman seemed to suggest that there was no activity in London. I have been to a school in east London supported by the Careers & Enterprise Company and the local enterprise partnership. It is doing remarkable work. Some 1,300 advisers are connecting schools and colleges. They are slowly creating a way to connect with 250,000 students in 75% of the cold spots around the country. There is also money for mentoring. He talked about a famine. I would not say there is a feast, but substantive and serious funds are going in. I could spend a lot of time listing the different moneys, but if he looks at this carefully and fairly, he will see the work that the Careers & Enterprise Company is doing.

We will monitor carefully the impact of our work. In January 2017, destination data will be included in national performance tables for the first time, ensuring an even sharper focus on the success of schools and colleges in supporting their students. Before my time, we legislated to ensure that schools gave independent careers advice on skills and apprenticeships—that was done by my predecessor. Work is being done in schools. I welcome the hon. Gentleman’s thoughtfulness in proposing the new clause, but it is my view that it is not necessary because of the action we are taking, the careers plans I am developing and the money that is being spent, which I have highlighted.

As the hon. Gentleman said, amendment 4 would require the institute to have regard to the need to promote equality of opportunity. I welcome the opportunity to debate that. I know why he tabled the amendment and why it is important. It is crucial to widen access and participation, and to ensure that apprenticeships and technical education are accessible to all, which is why I was glad that, for this year, we have our £60 million fund to help to encourage apprenticeships in the most deprived areas of our country.

I reassure the House that the Institute for Apprenticeships and Technical Education will have to have due regard to widening access and participation. We carried out an equalities impact assessment before publishing the post-16 skills plan, which concluded that the reforms are likely to have a positive impact on individuals with protected characteristics, in particular those with special educational needs or disability, those with prior attainment and those who are economically disadvantaged. The economic assessment concluded that all learners would benefit from the proposed technical education reforms, which will give people access to high-quality technical education courses.

I believe that the need to promote equality of opportunity in connection with access to and participation in further and technical education already exists in legislation under sections 149 and 150 of the Equality Act 2010. It is expressly set out in section ZA2 of the Apprenticeships, Skills, Children and Learning Act 2009 that the institute must have regard to

“the reasonable requirements of persons who may wish to undertake education and training within”

its “remit”. The Secretary of State has the power to provide the institute with further guidance under that section. I hope that that explanation gives the hon. Gentleman confidence. I am committed to ensuring that people of all backgrounds have equal opportunities. As he will know, over Christmas we removed the need for apprentices who have serious hearing difficulties to do functional English—they can do sign language instead. That is an example my commitment, as is the extra funding we are giving to employers and providers to get more apprentices who are disabled.

--- Later in debate ---

[Tracy Brabin (Batley and Spen) (Lab)]

New clause 4 deals with careers education provision in technical and further education, and I want to build on the words of my hon. Friend the Member for Wolverhampton South West (Rob Marris). As the Minister knows from our time spent together on the Bill Committee, this issue is of particular interest to me, and I would like to thank him for the courtesy that he has extended in explaining what the Department is doing in this area, and for introducing me to the Careers & Enterprise Company. I also thank him for his keen interest in improving careers education. After due consideration, however, I feel that the new clause is necessary and that it will complement the work that is already under way. There have been a lot of warm words and verbal support, but not including careers education provision in this legislation is an enormous missed opportunity.

The Bill will shake up the technical and further education sector considerably, and accepting the new clause would show how important career planning is to the House and to the Government. During private meetings before the Bill went into Committee, real concerns were raised with me about the lack of careers education provision in our colleges. It has been stressed that the lack of advice available is such that, without explicit legislation on careers guidance, the matter will be nudged even further towards the back of the priorities queue. Resources in our colleges are overstretched, and I was disappointed to hear that in one institution a receptionist with no specialist qualifications or training had been asked to give careers guidance. The problem of a lack of careers guidance is stark. It has been brought to the attention of the Department by the co-Chairs of the Sub-Committee on Education, Skills and the Economy. In its report, the Sub-Committee states:

“Ministers appear to be burying their heads in the sand while careers guidance fails young people, especially those from disadvantaged backgrounds, and exacerbates the country’s skills gap.”

It is clear that we cannot rely on warm words and reassurances alone. We must have provisions in writing and in legislation, because we have an obligation to our learners. As we know, the world of work that our young people are entering is changing really fast. The sector in which an apprentice starts their learning will have transformed enormously by the time they reach their last year. Access to guidance and advice should not be left behind when they step into a career. It should be more agile and responsive to the skills and experience they are picking up. It is those opportunities that new clause 4 would seize, including an opportunity for a strategy to be laid before the House that was specialised for further and technical education, that was ongoing, and that provided parity of esteem between technical, further and higher education, using the expertise of the new Institute for Apprenticeships and Technical Education. This is a huge opportunity that is too good to miss.

[Gordon Marsden]

I thank all those who have spoken. I particularly thank the Minister for confirming that the implications of what we asked for in new clause 2 will be satisfied by the Government, which is an important concession or confirmation, depending on how he wishes to look at it. Whatever it is, we thank him for it.

I will withdraw new clause 1 but, as shown not least by the powerful speeches by my hon. Friends the Members for Gedling (Vernon Coaker) and for Batley and Spen (Tracy Brabin) and others, it is a huge missed opportunity that the Government are not including the strategy in the Bill. I mean no disrespect to the Minister and his personal qualities, but we believe that the strategy needs to be embodied for the foreseeable future in the Bill. On that basis, we will be pressing new clause 4 to a vote.

I beg to ask leave to withdraw the clause.

Clause, by leave, withdrawn.

New Clause 4

Careers education: duty to publish strategy

“‘(1) The Secretary of State shall publish a strategy for the purposes of improving careers education for persons receiving education or training—

(a) in the course of an approved English apprenticeship;

(b) for the purposes of an approved technical education qualification; or

(c) for the purposes of approved steps towards occupational competence.

(2) The strategy shall be laid before Parliament.

(3) The strategy shall specify provisions under which the Secretary of State will seek to—

(a) ensure that persons receiving education or training under subsection (1) receive information, advice and guidance relating to their future careers, and that such information, advice and guidance is delivered in a way which meets each person’s needs and is impartial;

(b) ensure that such information, advice and guidance may be taken into account by relevant authorities and partners to meet the needs of local or combined authority areas;

(c) ensure parity of esteem between technical, further and higher education; and

(d) monitor the outcomes of such information, advice and guidance for recipients.

(4) The provisions specified in subsection (3) shall have specific regard to particular needs of different groups of persons receiving education or training under subsection (1), including—

(a) persons with special educational needs;

(b) care leavers;

(c) persons of different ethnicities;

(d) carers, carers of children, or young carers, as defined by the Care Act 2014; and

(e) persons who have other particular needs that may be determined by the Secretary of State.

(5) The strategy shall include guidance for the purposes of improving careers education, to which the following bodies shall have regard—

(a) the Office for Standards in Education, Children‘s Services and Skills;

(b) the Institute for Apprenticeships and Technical Education; and

(c) the Office for Students.

(6) The Secretary of State shall by regulations designate relevant authorities and partners for the purposes of subsection (3)(b).

(7) The Secretary of State may by regulations designate—

(a) further groups of persons under subsection (4)(e); and

(b) further national authorities or bodies under subsection (5).

(8) Regulations made under this section—

(a) shall be made by statutory instrument; and

(b) may not be made unless a draft has been laid before and approved by a resolution of each House of Parliament.

(9) For the purposes of this section, “careers education” means education about different careers and occupations and potential courses or qualifications to attain those careers and occupations.’” —(Gordon Marsden.)

This new clause would establish a statutory requirement for the Government to produce a strategy on careers education, which shall be taken to be the “Careers Strategy”.

Brought up, and read the First time.

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

--- Later in debate ---

Objective of education administration

[Gordon Marsden]

I beg to move amendment 1, page 8, line 4, at end add—

‘(3) Before an education administrator may perform functions specified in subsection (2), they must ensure an appropriate assessment is made and published of the impact of performing such functions, including, but not restricted, to—

(a) the impact on the quality of education provided to existing students of the further education body;

(b) the capacity of another body or institution to undertake any additional functions or provide education to additional students;

(c) the infrastructure of the local area, in particular transport;

(d) the ability of students to travel to another body or institution; and

(e) any financial impact on those students, including the cost of travel by students to attend another body or institution, and steps to mitigate those impacts.

(4) The Secretary of State shall make regulations to specify suitable bodies for making the assessments at subsection (3).

(5) Regulations made under subsection (4)—

(a) shall be made by statutory instrument; and

(b) shall be subject to annulment in pursuance of a resolution of either House of Parliament.”

This amendment would ensure that an appropriate assessment is made of any potential impacts on students and their education, if an education administrator puts a further education body into “special administration” and takes action such as transferring students to another institution or keeps an insolvent institution open for existing students. This amendment would also require the Secretary of State to specify suitable bodies to perform such assessments.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

With this it will be convenient to discuss the following:

Amendment 2, in clause 18, page 9, line 15, at end insert—

“(e) suspend the Office for Students protection action for students.”

This amendment would give the court the power to suspend Office for Students’ student protection action for the period of insolvency in which the education administrator has responsibility for the management of an FE body .

Amendment 3, in clause 28, page 13, line 2, at end insert—

‘(1A) Sums guaranteed under subsection (1) shall include statutory pension obligations payable to staff employed by a further education body subject to an education administration order.”

This amendment would ensure that staff employed by an FE college continue to accrue statutory Teachers Pension Scheme and Local Government Pension Scheme pension obligations? during an education administration.

Amendment 22, in schedule 2, page 30, line 39, at end insert—

“3A The education administrator may not transfer assets of any further education body to a for-profit private company where he or she considers that more than half of the funding of the acquisition of the asset came from public funds.”

This amendment would ensure further education bodies with a track record of accruing assets publicly, could not be transferred to a for-profit private company.

[Gordon Marsden]

May I wish you a happy new year, Mr Deputy Speaker?

We turn to the extremely important part of the Bill, which is one of the reasons why the Bill is in the form it is. I shall deal with that in a moment or two when discussing amendments 2 and 3. First, I wish to focus on the importance of clause 14 and of the Government’s welcome introduction into the Bill of the role of the education administrator. Although we welcome that, we want to probe, as we did in Committee, just how it is going to work in practice, and that is the purpose of amendment 1. It is extremely important to remember the end product we are all aiming at. We hope—and I believe, as I am sure the Minister does—that the number of occasions when the detailed insolvency provisions laid out in the second part of the Bill will be required will be as few as possible. Shortly, I will suggest why I think they are particularly necessary and deal with some of the related issues.

This amendment would ensure that an appropriate assessment is made of any potential impact on students and their education if an education administrator puts a further education body into special administration and takes action such as transferring students to another institution or keeps an insolvent institution open for existing students. It would also require the Secretary of State to specify suitable bodies to perform such assessments. The amendment has been tabled at the urging of the National Society of Apprentices and it touches on an area where the Minister and I have common ground: the importance of understanding what the end product of this new education administrator is all about. He or she is there to provide protections and support that would not be available in a traditional insolvency process. That is extremely important in terms of the position of young people, particularly those who might be at college as part of their apprenticeship or of other training.

I wish to speak particularly to the proposed new subsections 3(c), 3(d) and 3(e) set out in our amendment. One thing that the NSOA’s research has shown—this was in 2014 and the figure may well have increased since—is that apprentices spend, on average, about £24 a week on travel, which equates to a quarter of the salary of an apprentice earning the apprentice national minimum wage. Additional research has indicated that some young people were choosing the apprenticeships they could afford to get to, rather than those they were keen to do. In the light of the area review process in England and the creation of fewer, more resilient colleges, we are concerned about the impact on those potential apprentices in terms of their travel time between provider, employer and home. We have had our disagreements with the Government over that review process and will doubtless continue to probe them strongly on it.

The Opposition believe it is important that the Institute for Apprenticeships and Technical Education takes a clear and early lead role in encouraging local authorities and transport companies to ensure that all young people, including apprentices, are covered by travel concessions. Without a high-profile champion for their needs, apprentices can too often be excluded from such concessions, because apprenticeships are perceived as employment rather than education and are excluded from the relevant definitions. The crux of the amendment is to ensure that the entitlement that the Bill gives to students to continue their education works in practice. The ambitions of the provisions on special administration are noble; the amendment is intended to be a safeguard against any unintended consequences.

--- Later in debate ---

[Rob Marris]

My hon. Friend is much more familiar with the Bill than I am. On the clarity that he seeks to introduce by this amendment, does he share my concern—perhaps he does not, because he knows the Bill better—that it is not clear in the Bill what an education administrator is? I know that he or she will be an officer of the court and that they will carry out certain functions. Training is central to what we are talking about on the Bill, yet I cannot see anything that says there has to be certain qualifications for an education administrator. It is a bit fuzzy.

[Gordon Marsden]

As usual, my hon. Friend is perceptive. If we had the time and if it was within the scope of this amendment, I would acquaint him with the debates in Committee during which we discussed that matter at some length. Although we have not moved any more specific amendments in that area—obviously, this is something for the other place—the Minister needs to reflect further on what, if anything, needs to be put in the Bill to answer perfectly legitimate and important questions such as the one my hon. Friend has just asked.

There are a number of effects that the invocation of these education administration powers may have on students, but that is precisely the point of the amendment: to ensure that whatever impacts these powers have in practice, they are assessed within the local circumstances of the colleges in which those changes are needed.

Let me turn now to amendment 2, with which I hope the Minister will have some sympathy. Again, if he not happy with its structure, perhaps we can juggle with it. The amendment would give the court the power to suspend student protection action by the office for students for the period of insolvency in which the education administrator has responsibility for the management of an FE body.

The Association of Colleges is particularly keen to see amendment 2 addressed. It is concerned that the insolvency regime is being introduced at the same time as a separate protection regime takes place in higher education under the control of the new office for students—that Bill has entered its Committee stage in the other place only today. We have some sympathy with its belief that the Government have missed an opportunity to introduce a joint legal regime, covering both further and higher education corporations. However, we are where we are, and that is the basis on which this proposal is being put tonight, so this Bill needs to be amended to remove duplication between the HE intervention regime and the FE regime. This affects colleges that want to maintain or develop their HE provision, which is an important part of the system and which involves up to 150,000 students. I feel strongly about this because it affects my local college, Blackpool and the Fylde College, which has up to 1,000 students.

We have two Government Bills creating two separate control systems with two sets of obligations on colleges. Ministers will say that special administration and the OFS powers will be used only in exceptional cases, but, inevitably, colleges will have to prepare for the worst. If they have higher education provision, they will need to boilerplate—double insulate—their finances to satisfy the organisations with which they deal. This could make it a lot more expensive to run HE provision than it needs to be. The purpose of the amendment is to confirm that the OFS regime will be suspended during a special administration.

I wish to speak briefly to amendment 3, which addresses the need to ensure that staff who are employed by an FE college continue to accrue statutory teachers’ pension scheme and local government pension scheme obligations during an education administration. This issue has been raised not just by the Association of Colleges, but by the University and College Union. Colleges employ large numbers of staff and not all of them are teachers. In addition to caretakers, catering staff and cleaners, they employ learning support assistants, IT technicians and administrators. On Second Reading, we made a point of emphasising that, just as with universities, it is not simply teachers, administrators and bureaucrats who keep these institutions going. The same is true of FE colleges. We would be appalled if, as a result of any of these issues, people’s pension rights or their potential pension rights were affected.

We believe that there are more than 70,000 people in colleges who are not teachers and who are eligible in law to membership of the local government pension scheme. There is some evidence that the Bill has raised concern among those running local government pension schemes and that it is already resulting in additional financial demands on colleges. We do not think that it is the Government’s intention to use the process to renege on debts to the LGPS, because that would simply pass on the costs to all the other employers, including councils themselves, but colleges have no choice in law about whether to offer LGPS membership. The fact is that they do provide access to decent pensions for 70,000 people, and the purpose of the amendment is simply to clarify that staff employed by an FE college continue to accrue those obligations and that the Government will ensure that any additional debt accrued is covered. That would ensure that statutory TPS and LGPS pension obligations are suspended but that employed staff can continue to accrue entitlements, but that that does not result in penalty interest, which is written into TPS and LGPS rules once they recommence.

In case the Minister thinks that this is only a hypothetical issue, it is worth making the point—the UCU has done so—that there are already real concerns about pension scheme deficits in certain colleges, and that the regulation, if the issue is not addressed, could cause alarm with lenders and raise interest rates, which could of course negate the stated aim for the introduction of insolvency regulations and preclude the increased confidence in the insolvency scenario that the Government and we are very keen to see.

[Rob Marris]

May I assure my hon. Friend that the Minister is well aware of that scenario, because my local college, the City of Wolverhampton College, has a big pension problem, and when I have discussed it with him he has been extremely helpful in trying to resolve it?

[Gordon Marsden]

I am grateful to my hon. Friend for that intervention, because he has provided a specific example of precisely the issue that has led us to table the amendment.

Amendment 22—I give notice that we will be pressing it to a vote—would ensure that further education bodies with a track record of accruing assets publicly could not be transferred to a for-profit private company. We had a significant discussion about that in Committee. For the benefit of those who were not in Committee, and indeed those who were, I will try to summarise it as briefly as possible, because I think that the principle is extraordinarily important.

The current situation raises some significant questions about what would happen to the transfer of assets. The information states that assets should be transferred only to charitable bodies, and it is on that point that I wish to focus my remarks. Where the bodies are not charities, assets must be transferred in accordance with the charitable purpose of the trust. It then links to a list of prescribed bodies to which assets could be transferred, including sixth-form colleges and governing bodies. The point that I am making is that it is expected that all transfers should be made to charitable bodies, but that is not the same as saying that that is required.

When colleges were incorporated in 1992, it took them formally outside the aegis of local authorities. My hon. Friend the Member for Luton North (Kelvin Hopkins) spoke eloquently about that in Committee. We have to take into account that the asset base in many cases was built up with local authority support and funding over 20 or 30 years. I reminded the Minister in Committee about my own local college, Blackpool and the Fylde College, which he has visited. He went to the Bispham campus, which has buildings and elements that go right back to the 1950s and ’60s. When the Building Colleges for the Future process took place in 2000, we did not get the new college that we hoped we would for a variety of reasons to do with where we were in the food chain. Nevertheless, I am illustrating that the estates of many buildings we are talking about have been accrued either on an active financial basis or by the ceding of land by local authorities and other organisations.

[Catherine West (Hornsey and Wood Green) (Lab)]

Does my hon. Friend agree that there is a particular issue in higher value areas, where it may be tempting to build some more flats on public land that should actually be used for the common good?

[Gordon Marsden]

My hon. Friend has a double qualification to speak on the subject: as the Member of Parliament for the constituency she represents and through her previous career as a distinguished local government leader in London. She knows whereof she speaks and she is absolutely right that the problem is accentuated in those areas.

Money has come in over the years including pre-1992 and in the major Building Colleges for the Future programme that the Labour Government introduced in the 2000s. Then, of course, significant sums of money were put in by regional development agencies and sometimes through regional growth fund developments and offshoots of European structural funding. As I said, FE colleges deliver not just FE, but higher education. If 10% to 12% of total HE provision is being delivered by FE colleges, it is really important that we do not lose that position.

I do not want to rehearse—indeed, we do not have time to tonight—the arguments that were made in 2011 about the private for-profit sector training coming in and being involved with various equity funds whose investment platforms were very much focused on a broad area. However, I would say, as many in the sector would, that although the private equity funding sector can be extremely profitable and useful, it is based on a relatively short-term view of providing management and initial capital to buy other companies and then taking them off the public share markets. It is entirely reasonable for us to be concerned about the possible disposal of lands with significant amounts of public assets. The question is not simply whether it is a good thing to transfer a significant number of public sector assets to a private provider, but what the financial guarantees are. More importantly, there are issues regarding the nature of the body and the guarantees to the students and the people employed there if such organisations use the insolvency to take on those colleges.

Ministers may talk about guarantees for staff under TUPE, but I am sure that hon. Members realise that TUPE does not offer protection forever and a day. I have had significant experience of that in my constituency in Blackpool over the years with people who have been outsourced from the civil service and TUPE-ed into other organisations that have then passed on to someone else, at which point those people’s automatic rights and security of tenure have almost become extinguished. Those are our concerns and they are not irrelevant. They are concerns of pragmatics and of principle. It is not as though there have not been concerns in the area previously.

In December 2014, the Public Accounts Committee severely quizzed officials from the Department for Business, Innovation and Skills, which then had responsibility for the matter, about why private providers were allowed to engage in untrammelled expansion without proper quality checks. In February 2015, the Committee published a report that said that BIS has repeatedly ignored advice from the Higher Education Funding Council for England about vast sums of public money going to for-profit colleges without due process and consideration. There is the potential, as Martin Doel, the former chief executive of the Association of Colleges, said, for private organisations to

“asset strip colleges’ buildings and facilities”

or “pick” assets.

So, for the avoidance of doubt, we are not saying that we would oppose any private sector takeover of a college in any circumstances; we are saying that the education administrator will have to make a judgment. We are also saying that, without the protection in this amendment, the potential for the things I have described to happen would be very high, and that is why we are determined to press the amendment this evening.

[Robert Halfon]

I thank the hon. Member for Blackpool South (Gordon Marsden) again for his amendments. I will begin by discussing amendment 1, which affects clause 14. I have to stress that, in the unlikely event that an FE body becomes insolvent, we want to ensure that any disruption to students’ studies is avoided or minimised as far as possible. It will be for the education administrator to deal with that, and according to the relevant clause in the Bill, they will be an insolvency practitioner—they are likely to come from one of the bigger companies and to have education experience. It will be the same system as with insolvent companies.

The education administrator will decide how the special objective will best be achieved. Clause 14(2) does no more than suggest ways in which that might be done. The education administrator will need to consider the specific circumstances of any insolvency and then determine the most appropriate approach. It is inconceivable that they would draw up proposals for achieving the special objective without having had discussions with a wide range of stakeholders, such as the Further Education Commissioner, student bodies and others, and without considering a wide range of pertinent issues.

Our expectation is that that will include discussions with the key stakeholders, local authorities and others. Where appropriate, it may also involve—I brought this up in Committee—a conversation with the care leaver’s personal adviser. We discussed in Committee the additional personal and pastoral support that care leavers might need. I undertook to consider the matter further, and I hope the hon. Member for Luton North (Kelvin Hopkins) will be pleased that we are keeping the promise we made in Committee. We will ensure that the guidance to local authorities on their corporate parenting responsibilities, being introduced through the Children and Social Work Bill, includes advice on the role of personal advisers in the event of a college insolvency affecting a young person for whom they are responsible.

We expect the education administrator, in developing their proposals, to take account of the quality of alternative provision and, if it is necessary for students to complete their studies in other locations, to consider the impact of travel distances. The hon. Member for Blackpool South will be aware that we provide funding to colleges to support disadvantaged and vulnerable young people. In addition to the disadvantage funding for post-16 places—£550 million in 2016-17—which can be used to subsidise college buses, there is also the 16-to-19 bursary fund and the fund for the particularly vulnerable. Colleges will be able to offer this funding to eligible students who transfer to them under a special administrative regime. There may be scope for the education administrator to set up a scheme to cover some or all of the additional travel costs if students do have to travel to another location.

In Committee, the hon. Gentleman said:

“We do not want this to become”

a

“long-winded, time-consuming process”—[Official Report, Technical and Further Education Public Bill Committee, 1 December 2016; c. 174.]

I share that view. It is in the interests of students and staff to have certainty as soon as possible about what will happen. Requiring formal assessments to be carried out in the way proposed by the amendment would lengthen the process and reduce the education administrator’s discretion to find the best way of achieving the special objective. That is not to say that we do not agree that these issues are important, but I have shown that they are at the front of the education administrator’s mind.

On amendment 2, I understand the issue about double protection and why the hon. Gentleman has tabled the amendment. The amendment is unnecessary because the court, on hearing an education administration application, already has the discretion to make any interim order it thinks appropriate. If it is necessary or appropriate to make an order relating to an existing student protection plan, the court has the power to do that under the Bill.

On pensions, we have followed as far as possible the provisions of the ordinary administration regime that exists for company insolvencies. We propose to adopt similar provisions for college insolvencies, which, as I say, will be very rare indeed. As with any administration, once the administrator has adopted the employment contracts of the staff they decide to keep on, they are personally liable for the costs of those individuals, such as their salary and their pension contributions. They would take on the appointment only if they were confident that sufficient funds were available to meet the costs. Some pension contributions will continue to be made and benefits accrue. Some staff may be made redundant, whether at the start of the education administration or subsequently, but this will of course be in accordance with statutory employment rights. For these staff, contributions to the pension fund will end once they are no longer employed by the body, but this is no different from the position of any other person leaving their employer’s pension scheme. It is important to be clear, however, that the benefits individuals have accrued in the scheme prior to the end of their employment will not be lost.

I accept that the hon. Gentleman feels very strongly about the transfer issue. FE colleges are statutory corporations with very significant freedoms to deal with their own assets. A solvent college is free to transfer property to any person or organisation it chooses. In order to benefit, the college would of course expect to receive value when transferring an asset to a third party, and in general this would mean transferring at market value, although this depends on the nature of the transaction as a whole. In this case, however, we are talking only about a situation where a college has failed financially and is insolvent—an extreme case.

I need to make it clear to the hon. Gentleman that there are four vital protections that act as a quadruple lock to safeguard assets that belong to the college, which may well have been paid for with money from the public purse but have to be dealt with because the college is insolvent. First, unlike solvent, operational colleges that wish to transfer property, if the education administrator decides to make a transfer scheme, they are restricted as to whom they can transfer the assets. These bodies are prescribed in the secondary legislation made under section 27B of the Further and Higher Education Act 1992. They are public sector bodies with educational functions. In addition, transfers can be made to private companies, but the company must be established for purposes that include the provision of educational facilities.

Secondly, just as with any other action of the education administrator, any transfer scheme must be for the purposes of achieving the special objective of avoiding or minimising disruption to students’ studies. Thirdly, creditors have a general right to challenge should they consider that the education administrator is selling things “on the cheap”, for example. Finally, the Secretary of State or Welsh Ministers must approve the proposed transfer scheme. Any approval will include, among other matters, consideration of whether it is for the purposes of achieving the special objective. I believe that the quadruple lock answers the hon. Gentleman’s concerns.

I thank the hon. Gentleman for his amendments, and thank other hon. Members for their contributions to the debate. I hope that my response has reassured him, and the House, on his underlying concerns. I therefore ask that the amendments are not pressed to a Division.

[Gordon Marsden]

I have listened carefully to what the Minister has said and taken note of his views and the proposals he has made. On that basis, we are prepared to withdraw amendment 1.

On amendments 2 and 3, I heard the reassurances that the Minister has given, but when the Bill reaches the other place there needs to be a further examination of the very important issues around the pension schemes. I am not entirely convinced that the assurances, which I am sure have been made in good faith, will actually do the business.

As regards amendment 22, I thank the Minister for his explanation of what he described as the quadruple lock, but I am afraid, not least because of seeing past practice, that we have to plan in this Bill not for the best circumstances but for the worst. This is also a really important issue of public policy that we should establish within the Bill. On that basis, we wish to press amendment 22 to a vote. I beg to ask leave to withdraw amendment 1.

Amendment, by leave, withdrawn.



Schedule 2

Education administration: transfer schemes

Amendment proposed: 22, page 30, line 39, at end insert—

“3A The education administrator may not transfer assets of any further education body to a for-profit private company where he or she considers that more than half of the funding of the acquisition of the asset came from public funds.”—(Gordon Marsden.)

This amendment would ensure further education bodies with a track record of accruing assets publicly, could not be transferred to a for-profit private company.

Question put, That the amendment be made.

--- Later in debate ---

[Gordon Marsden]

May I associate myself with the Minister’s comments in thanking the officials and all Committee members? I particularly thank my Labour colleagues, who did sterling work in supporting us on the Front Bench in Committee. May I also commend the support that the Public Bill Committee gave to us? The role of the Opposition in challenging the Government on these matters is sometimes equivalent to that of David taking on Goliath; we do manage occasionally to get a few slingshots in, and I am grateful on this occasion they have not incapacitated the Minister concerned.

This is an important Bill with some important provisions, which is why we have not opposed it on Second Reading or on Third Reading tonight. However, that does not mean that we do not continue to have profound concerns about its implementation, process and progress. That was indicated in the excellent, although relatively truncated, debate we had on the amendments, in the contributions of my hon. Friends the Members for Wolverhampton South West (Rob Marris), for Luton North (Kelvin Hopkins), who is still here, for Gedling (Vernon Coaker), who gave an inspiring speech on the need for us to have vocational passions, and for Batley and Spen (Tracy Brabin), a relatively new Member of the House. All of them talked about practical issues such as implementation, about which we still have real concerns. This is not just a matter of formulae. For a long time—indeed, until it was almost too late—there were no links between higher education and further education in the way envisaged when the previous higher and further education legislation was brought forward.

I ask the Minister to reflect on a matter that is perhaps even more important. We have had a spirited discussion today about whether we need to have a strategy for careers advice in the Bill. We still believe that we do, and we think the Minister has missed a trick in that respect. The inclusion of such a strategy would have entrenched his position and his passion for careers advice, rather than diminishing it. The broader issue, however, is that the things that the Minister and everyone else would like to see happen are not solely a matter for the Department for Education. I know that he is as passionate about delivering traineeships as I am, but to do that we need to build structures and links between the DFE and the Department for Work and Pensions and to reach a concordance over the 16-hour law and other things. If the Government want to deliver careers advice, there will need to be a similar engagement and balancing act between the DWP and the Department for Business, Energy and Industrial Strategy. These things cannot just be left in one particular box.

I pay tribute to the Minister for the passion that he has shown on apprenticeships, but the fact is that apprentices are still handicapped by a number of things on which the Government have yet to prove their bona fides. That includes issues relating to GCSEs in English and maths. I have heard encouraging words on that from the Secretary of State and the Minister, but they have not yet nailed that issue down and it will not go away unless there is a satisfactory solution to the often soul-destroying requirement to retake GCSEs in those subjects.

Apprentices do not work and exist in a vacuum. The question of how their families are supported—through child benefit and in other ways—needs to be looked at, not just by the Department for Education but by other Departments as well. If that does not happen, there will be a real problem. Our new clause on this matter was ruled not to be within the scope of the Bill, but this is still a really important issue.

Mention was made in passing of devolution. I do not want to go into that issue much further tonight, but the Government need to think very clearly about it. They are going ahead with the devo-max process for combined authorities, yet the structures in the Bill do not reflect the reality of what the delivery of adult education, and possibly apprenticeships, will be like. Personally, I do not think that we can have a proper long-term skills strategy on a localised basis without taking apprenticeships into account as well as adult education. That point has not been addressed in the Bill.

The Minister has talked about insolvencies, and I associate myself with his view that it is a minority issue in regard to further education colleges. Let us pray that it continues to be so. However, it is worth remembering that the Bill is being introduced in the context of a period of profound funding cuts in the FE sector. The Government need to address the fact that that is the context in which they have decided to introduce this standalone Technical and Further Education Bill. The Minister also mentioned travel support. I note in passing that if the Government had taken up our proposals on education maintenance allowance, the process might perhaps have been speedier.

I want to return to the question of how the provisions will be delivered, and the timescale involved. It is three months until the apprenticeship levy funding kicks in. We still do not know who the new chief executive of the institute will be, and we do not know about the board. We have had some progress on those issues today, but we are told, for example, that the Skills Funding Agency will stay in charge of the new register of apprenticeships, which raises genuine bewilderment among many people out there—the Minister will have seen the comments made to FE Week in the past couple of days on this subject—as to why it is not Ofqual, if not IFATE, that is administering the register of approved apprenticeship assessment organisations. Is the real reason why the SFA is doing this because it is basically the civil service and that it would give a reserve power to Ministers to micromanage? It is not a question of what the Minister might do but what some of his successors might do.

Those important issues will need to be reflected on in the other place. Two key issues still remain. Will the funding and the staffing numbers that were dragged out of the Government when Peter Lauener spoke to the Committee be adequate for all the responsibilities? I would say that it is doubtful at this stage. How arm’s length or genuinely independent of judgment will the new institute be, or will Whitehall still be micromanaging the strings? Those are not just petty issues. They are issues that, if not resolved properly, will not gain the full-hearted consent of stakeholders, providers and all the people whom the Minister needs, and we all need, in order to meet the targets and to make his aspirations and my aspirations for apprenticeships for the next generation a reality.

Question put and agreed to.

Bill accordingly read the Third time, and passed.

Technical and Further Education Bill

Gordon Marsden Excerpts

Ping Pong: House of Commons
Wednesday 19th April 2017 Commons Chamber

I ask hon. Members to support the Government on these amendments.

[Gordon Marsden (Blackpool South) (Lab)]

I am grateful to the Minister for his considered exposition of the Government’s position, particularly regarding the amendments, with which we are not in dispute. I shall say something about Lords amendment 2 after turning to Lords amendment 1. We welcome the Government’s changes, particularly those to the technical parts of the Bill. The devil is in the detail, and we do not always get these things right first time around. I am grateful to the Government for reflecting on that.

I particularly take on board what the Minister said about care leavers and local authorities. Without straying outside the narrow confines of today’s discussions, may I say that I hope that the recent debates in the House on the Children and Social Work Bill, in which my hon. Friend the Member for South Shields (Mrs Lewell-Buck) played a strong, positive and constructive part, have been a useful focus for the Minister and his Department in tabling the amendments that he has spoken to today. I am grateful to him for that.

I am also grateful for the widened information sharing in schedule 1. As the Minister knows, I have described the present structure as a bit of an alphabet soup. To strain the analogy, I hope that this change will enable us to fish some of the letters out of the soup and make them work together a little easier than they would otherwise have done.

As the Minister says, the issue in Lords amendment 1could be regarded as one of financial privilege. I accept that he has great interest in matters of financial support and the rest of it. I hope that he understands that I have never, in any shape or form, and in any of the Committee sittings in which we have debated, disavowed his good intentions and commitment to issues of equality. But, of course, warm words of themselves do not necessarily carry through the projects that we all want to see. When he says that most apprenticeships have benefits, one has to ask about the fate of people who do not get those benefits. He says that this proposal will cost £200 million but, as he said, we are already committing £60 million to training providers, so I am not sure that that is a strong or powerful argument.

[Charlie Elphicke (Dover) (Con)]

Will the hon. Gentleman give way?

[Gordon Marsden]

I will give way in a little while. I want to make some progress on the main issue before giving way to the hon. Gentleman.

I am proud of the fact that the noble Lords considered the matter addressed in amendment 1, which I support, in considerable detail. In doing so, they revealed how much further the Government needed to go and, in my view, still need to go. In February, The Times Educational Supplement published an eloquent chart that spelled out in graphic detail the current gap in support between students and apprentices. It showed that apprentices have no access to care to learn grants, and that their families have no access to universal credit and council tax credit. Most trenchant and relevant when it comes to amendment 1, they have no access to child benefit.

Amendment 1 would enable families eligible for child benefit to receive it for children aged under 20 who are undertaking apprenticeships. The Opposition understand, as I am sure Government Members do, that it is not simply about the benefit itself, but the doors that that benefit opens to other benefits.

[Charlie Elphicke]

I have listened carefully to the hon. Gentleman’s argument, which seems to involve a spending commitment of £200 million. How would he pay for that?

[Gordon Marsden]

First, we do not recognise that figure of £200 million. Secondly, as I have said, the Government are already committing £60 million to training providers, so I really do not know why the hon. Gentleman is raising the issue of £200 million, which would be aggregated over a period of time.

[Charlie Elphicke]

Will the hon. Gentleman give way?

[Gordon Marsden]

No, I will not give way again. The hon. Gentleman has had one go. I want to make progress.

The amendment calls for the Secretary of State to use regulations to make provision to ensure that apprentices are regarded as being involved in approved education or training. The Government’s apprenticeships programme has seen the introduction of the Institute for Apprenticeships and the apprenticeship levy this month, while setting the target of 3 million apprenticeships by 2020. However, many commentators have continued to raise real question marks about the potential quality of those new apprenticeships. It is really important that in reducing the growing skills gap in this country apprentices are not given a raw deal. My noble Friend Lord Watson spelled this out vividly in the House of Lords when he said:

“Why should families suffer as we seek to train young people desperately needed to fill the skills gaps that I mentioned earlier?”—[Official Report, House of Lords, 27 March 2017; Vol. 782, c. 361.]

We simply ask that question.

I am well aware—we discussed this in Committee in this place and it was also discussed in the other place—that apprenticeships are not currently classed as approved educational training by the Department for Work and Pensions. That is one of the reasons we have raised this issue so many times. The Minister needs to reflect on the situation of apprentices who live with parents and whose families could lose out by more than £1,000 a year through not being able to access child benefit, and could lose more than £3,200 a year under universal credit. If the Government want to reach this target, it cannot be in anyone’s interest for doors to be closed to young people keen to take up and embark on an apprenticeship.

The predecessor Government—perhaps this has not been heard so much under this Government—were very fond of the concept of “nudge” to achieve results, but, as I have said on other occasions, people can be nudged away from things as well as towards them. In some circumstances, parents may prevent young people from taking up apprenticeships because the economic consequences for the family of loss of benefit payments in various forms could be considerable. Their lordships made this point in their debate on 27 February. Baroness Garden noted that

“only 10% of apprenticeships are taken up by young people on free school meals”,

adding that

“the loss of child benefit”

was

“a significant penalty.”—[Official Report, House of Lords, 27 February 2017; Vol. 779, c. GC99.]

Baroness Wolf spoke very strongly when she said, echoing the Minister, that there needs to be genuine parity if the Government want to fulfil a holistic vision.

As I have said, the exclusions printed in The Times Educational Supplement justify the anger and disappointment of the National Union of Students and apprenticeship organisations, which feel that they are being treated like second-class citizens. I accept that, as the Minister said, some apprentices are being paid well above the minimum rate, but research has shown that some apprentices earn as little as £3.50 an hour.

[Charlie Elphicke]

Since the hon. Gentleman is talking about financial matters again, will he return to my earlier intervention when he said that he did recognise the figure of £200 million? How much would his policy cost?

--- Later in debate ---

[Gordon Marsden]

As I say, those issues would be taken forward over a five-year period. The £200 million figure that the Minister quoted has not been recognised, and I do not intend to engage with it any further because no further detail has been given to us on this point.

[Charlie Elphicke]

rose—

[Gordon Marsden]

No, I am sorry, but I am not going to give way again. The hon. Gentleman has had two shouts and he is out. [Interruption.] I am going to continue, so he can stop chuntering.

This will inevitably have a negative effect on the family income in circumstances where the household budget is not covered by the earnings in an apprentice’s salary, given that the apprentice minimum wage is barely over £3 an hour. The National Society of Apprentices made that point in its submission to the Committee, saying:

“It seems inconsistent that apprentices are continually excluded from definitions of ‘approved’ learners, when apprenticeships are increasingly assuming their place in the government’s holistic view of education and skills”.

If apprenticeships are to be seen as a top-tier option, then the benefits should be top tier too. University students receive assistance from a range of sources, from accessing finance to discounted rates on council tax. Apprentices currently do not receive many of those benefits. Their lordships believe, and we agree, that the system must be changed so that both groups are treated equally.

[Robert Halfon]

I thank the hon. Gentleman for the way in which he is approaching these amendments. He mentioned that some apprentices were paid more than the apprentice minimum wage. Is he aware that 82% of apprentices are paid at or above the appropriate level of the national minimum wage or national living wage?

[Gordon Marsden]

Those figures come from the Minister’s Department, and I am not going to dispute them on this occasion. We are trying to set, in legislation, provisions that will be valid for five, 10 or 15 years. It seems far more appropriate to have a principle under which everybody has equal access. We can trade figures all day about whether this is acceptable or whether it is 10%, 15%, 20% or 25% of apprentices who are not in this position. I do not believe that we should go down this route, and Members of the House of Lords agreed when they passed this amendment.

Shakira Martin, the NUS vice-president for FE, says:

“If apprenticeships are going to be the silver bullet to create a high-skilled economy for the future, the government has to go further than rhetoric and genuinely support apprentices financially to succeed.”

In support of this amendment, the Learning and Work Institute has said:

“There are currently participation penalties for low income and disadvantaged young people who take an apprenticeship compared to an academic pathway. This amendment would help towards treating apprentices and students in further and higher education equally in the support and benefits system.”

The Government’s decision to exclude apprenticeships from the category of approved education or training will serve as a deterrent to young people, particularly those from disadvantaged backgrounds. Together with that, and without any change to the category that apprentices are placed in by the DWP—FE has to accept that, as things stand at the moment—the Government are providing a severe financial disincentive for young people to enter into an apprenticeship as opposed to other routes of education. The National Society of Apprentices agrees.

In the other place, the Minister’s colleague, Baroness Buscombe, said that there would be discussions about this issue with colleagues in the Department for Work and Pensions, but that did not happen. The Minister has told me on previous occasions that this needed to be addressed and discussed with other Departments, but that has not happened. This is a Government who are long on rhetoric but short on delivery, and it is young people and their families who are suffering. The Government are now blocking a modest proposal from the House of the Lords to begin to remedy their inability to do joined-up government.

[Robert Halfon]

The hon. Gentleman will know that, as I have mentioned before, we are carrying out a social mobility review of a whole range of issues, from benefits to incentives to providers and employers, to get more apprentices from disadvantaged backgrounds. It is entirely wrong to say that we are not doing so, as a significant amount of work is going into these areas.

[Gordon Marsden]

I am grateful to the Minister. The broader perspective of social mobility is a perfectly reasonable way of going forward. However, to be honest, particularly at a time such as today when we are moving to a general election, I think that most people would be interested in some movement—some jam now rather than a promise of jam possibly in future from the social mobility study. I will come on to talk about other areas where, I am afraid, the Government have moved at, to put it at its kindest, a reasonably glacial pace. That is one of the reasons I am not terribly impressed by the Minister’s argument, although, as I say, I understand and appreciate his commitment to trying to do something.

I want to speak in support of the second part of the amendment, which talks about opening benefits to care leavers by opening up access to a bursary that has traditionally been available only to university students. Young people in local authority care who move into higher education can apply for a one-off bursary of £2,000 from their local authority, and the amendment would enable care leavers who take up apprenticeships to access the same financial support.

I remind the Minister of what the Children’s Society has said. Every year, around 11,000 young people aged 16 or over leave the care of their local authority and begin the difficult transition out of care and into adulthood—to be fair to him, he recognised that in his opening remarks—and my hon. Friend the Member for South Shields tabled an amendment to the Children and Social Work Bill to provide such a local offer to care leavers. The Government have a golden opportunity to follow up on that by focusing on support that could be provided by the DWP. I am at a loss to understand why the Government are ignoring this possibility. They could make provision from the apprenticeship levy for local authorities to administer a £2,000 grant to all care leavers.

When care leavers move into independent living they often begin to manage their own budget fully for the first time, and that move may take place earlier for them than for others in their peer group. Remember that a care leaver in year one of an apprenticeship may be, and often is, earning as little as £3.40 an hour before being able to transition to a higher wage in the second year. Evidence from their services and research has revealed how challenging care leavers may find it to manage that budget, because of a lack of financial support and education. As a result, young carers frequently fall into debt and financial difficulty. The Minister really needs to put himself in their shoes. The Minister for Vulnerable Children and Families, the hon. Member for Crewe and Nantwich (Edward Timpson), could tell us all, from his own family’s perspective, how vulnerable young people who come from disturbed and difficult family backgrounds can be.

The question remains: why are the Government not prepared to retain this amendment? Fine words are all very well, but you may know, Madam Deputy Speaker, that according to the old Tudor proverb, “Fine words butter no parsnips”. Just what are the bureaucratic arguments for doing nothing to support hard-working young people and their families—and, even more so, those who do not have families to support them—to fulfil their hopes of better times via an apprenticeship? We talk about parity of esteem between HE students and apprentices, but some of these young people, because of their circumstances, struggle to have a strong sense of self-esteem.

Why have the Government not moved on this? Once again, why have the consultations with the DWP not taken place? Was the Minister nobbled by No. 10 trusties or by those in his own Department, in the same way as Department for Education Ministers seem to have led us down the garden path of reforms to GCSE resits only to slam the door shut? I say as gently as I can to the Minister that if the Government do not retain the amendment, people will know that the Government’s rhetoric has been somewhat hollow, and apprentices and their families will suffer.

I join the Minister in supporting amendment 2, which was carried in the Lords, and I also want to talk about amendment 6. The lack of parity of esteem for apprentices starts at an early age, and, as my hon. Friend the Member for Gateshead (Ian Mearns) illustrated in his useful and constructive exchange with the Minister, the rhetoric on careers advice still does not match the painful reality that faces many young people.

The reality is that careers advice has been devastated over the last Parliament and since 2010, certainly at a local level, and young people who want to take a vocational and apprenticeship route are in danger of being short-changed again in their careers advice. Despite the work of the Careers & Enterprise Company, which is still in its infancy, support in schools remains poor. Careers England—the trade body for careers advice and guidance—and the Career Development Institute have confirmed to me recently that in their view, nothing has greatly changed. They estimate that only a third of schools can adequately deliver careers advice. Taken alongside the shortage of careers advisers and the fact that the remaining advisers earn far less than they used to, it adds up to a very difficult position.

That is one of the reasons why last November the co-chairs of the Sub-Committee on Education, Skills and the Economy, the hon. Member for Stroud (Neil Carmichael) and my hon. Friend the Member for Hartlepool (Mr Wright), said that the Government had been complacent over careers advice. They said:

“The Government’s lack of action to address failings in careers provision is unacceptable and its response to our report smacks of complacency.”

I know that the Minister challenges that strongly, and I know that he has put on record that the Government are working towards a thorough careers strategy in that respect. But we have to deal with the situation as it is today, not with what it might be under a careers strategy developed by whatever Government are around at the end of the year.

In the survey conducted by the Industry Apprentice Council last year, just 42% of respondents found out about apprenticeships from school or college, and using one’s own initiative remained by far the most common way for a young person to discover apprenticeships. The council also said that there needed to be a change in careers information, advice and guidance because the proportion of respondents who said that theirs had been very poor remained high across the three surveys.

That is why the House of Lords has produced these two quite detailed and comprehensive amendments; those overall issues are not being addressed. Strong careers guidance is critical to promoting apprenticeships in schools. If we are to make a success of the institute, it is crucial that young people are alerted early enough in their school life to the importance and attraction of technical routes. That is one of the things that amendment 2 from the other House, which we supported, makes very clear.

If the Minister does not think that the Lords amendment on careers advice is necessary, perhaps he would like to explain just how and when the Government are going to get a grip on the existing fractured landscape of careers advice revealed by his own Department. Last month—it was not bedtime reading, so I will not be surprised if hon. Members have not read it—the Department for Education published a research report, “An economic evaluation of the National Careers Service”. The report was produced by London Economics, which was originally commissioned by the former Department for Business, Innovation and Skills to evaluate the impact of the National Careers Service.

The National Careers Service has changed considerably during the five years since it was introduced by the Minister’s predecessor, the right hon. Member for South Holland and The Deepings (Mr Hayes). I had the benefit of discussions with him at the time, and he was very clear when it started that the National Careers Service would principally be for the over-24s. That process has changed. I am not necessarily criticising that, but the process has certainly migrated in an unplanned fashion. The National Careers Service website says that anyone aged 13 and over can have access to the data, and that adults aged 19 and over can have access to one-to-one support. The problem is that only 15% to 22% of the customers—again, I am taking statistics from a report that the Government have commissioned—were referred by Jobcentre Plus, while the remainder were self-referring. Does that not speak volumes about the lack of joined-up government between the Department for Education and the Department for Work and Pensions?

[Ian Mearns]

In some respects, my hon. Friend is actually being generous to the Government. I do not believe that the careers service as it existed has been decimated; I believe it has been laid waste by the Government’s policy since 2010. We really need to get back to youngsters having independent and impartial advice and guidance on their future career available to them. Without such independence and impartiality, we could unfortunately get back to having those with vested interests giving advice to young people. I remember the late Malcolm Wicks referring to this in the 1990s, when he said that much of the advice given to young people about their future careers was akin to pensions mis-selling because the service was packed with vested interests.

[Gordon Marsden]

My hon. Friend makes a very important and valuable point, as he did earlier to the Minister, and we certainly need to think very hard about those things.

As I have said, the National Careers Service process has migrated substantially, which may not in itself be a bad thing. I genuinely want to know from the Minister what connectivity there is between the National Careers Service and the Careers & Enterprise Company if the coverage starts as early as age 13. I would really like to know what the connectivity is in that process.

The very disappointing fact is that, as the impact report says, researchers were

“unable to identify a positive impact of the National Careers Service on employment or benefit dependency outcomes”.

Arguably, those outcomes are its main purpose. This is another example of why it is essential for the Government to act on the careers strategy, and of why their failure so far to do so makes Lords amendments 2 and 6 so important. With the expansion of apprenticeships and the addition of technical education to the institute, it will be even more important for students and apprentices to have all the information that they need to make informed decisions.

Young people who get the best careers advice in college or schools are more likely to be able to seek out the better apprenticeships. That is why I warmly welcome Lords amendment 2, Lord Baker’s amendment, which had our support and cross-party support. It would ensure that schools have to provide access to advice about apprenticeships. Why does that matter? It matters because, as my hon. Friend has said, knowledge in general is power, and unbiased knowledge is very important indeed. Incidentally, that is also why my hon. Friend the Member for Scunthorpe (Nic Dakin) introduced a ten-minute rule Bill to require schools to give access to their premises to representatives of post-16 education institutions to enable them to provide pupils with advice and guidance.

All of that is why Lords amendment 6 is also important. I am encouraged by the fact that the new chief inspector, Amanda Spielman, to whom I have spoken recently, is sympathetic to Ofsted making a much stronger case for ensuring that apprenticeships rate more highly in the information provided in schools. Incidentally, the Lords have already pointed out that that will require Ofsted to have more resources; my noble Friend Lord Watson pointed that out on Report on 27 March. If we do not get integration between the Careers & Enterprise Company and the National Careers Service, what we ask Ofsted to do will not work. Just what is the Minister’s response to these arguments? Why are the National Careers Service and the Careers & Enterprise Company apparently working on different lines? If he does not want to accept Lords amendment 6, what guarantees can he give to this House or to noble Lords that the necessary work will be done?

[John Pugh (Southport) (LD)]

I want to speak very briefly on the Government motion to disagree with Lords amendment 6 and Government amendment (a) in lieu, as much as anything else to probe what amendment (a) will achieve. As a preface to that, let me give an impression of what the noble Lord Storey sought to achieve with Lords amendment 6. We have all acknowledged during the course of the debate so far that careers advice is incredibly variable and has been for some considerable time. Lord Storey tried to set in place a mechanism for monitoring careers advice so that we know precisely how good or how bad, and how valuable or useless, it actually is.

In Committee stage in the Lords, Lord Nash described careers advice as always having been “pretty poor”. There was, of course, an Ofsted report in 2013 that established that three quarters of schools were not providing effective advice or, as the hon. Member for Gateshead (Ian Mearns) pointed out, impartial advice. It said that the guidance given to schools was not sufficiently explicit, employers were not engaging in many cases and the National Careers Service was not effectively promoted. A key conclusion of the Ofsted report was that schools’ advice should be assessed when taking into account general school leadership, or sector leadership in the case of further education—Lords amendment 6 also applies to the FE sector.

I think that the Minister accepts all that, and I know that he has produced a variation on Lords amendment 6. I would like him to satisfy me and the House that it complies with what the Lords intended in their amendment.