Apprenticeships Funding

Gordon Marsden Excerpts

Tuesday 1st November 2016 Westminster Hall

[Gordon Marsden (Blackpool South) (Lab)]

It is a great pleasure to serve under your chairmanship, Mr Streeter. I warmly congratulate my right hon. Friend the Member for Tottenham (Mr Lammy) on an absolutely splendid speech and on the inspirational lead he has given in challenging the Government on these issues, with 55 Members across the House helping to secure this debate.

We have had an excellent, positive debate across the Chamber today, with individuals offering their experiences, the range of which I have been particularly impressed by. I warmly thank my hon. Friends from Birmingham—my hon. Friend the Member for Birmingham, Northfield (Richard Burden) and my hon. Friend the Member for Birmingham, Erdington (Jack Dromey)—and my hon. Friend the Member for Coventry South (Mr Cunningham) for their interventions, as well as my hon. Friend the Member for Liverpool, Walton (Steve Rotheram), who had very important things to say about how we should take forward apprenticeship budgets in future.

My right hon. Friend the Member for Tottenham really hit the nail on the head when he talked about the glacial pace of the Government’s response. We know this matter was left in the Minister’s in-tray to deal with when he took office, but, as my right hon. Friend said, the elephant in the room remains adult skills and night schools. The Minister will have to confront those issues, as well as clearing up the mess he was left to deal with in the first place.

I wrote to the Minister at the beginning of August when the original proposals were made, underlining then what the problems would be. I said that

“these changes have the potential to cause catastrophic consequences for young people in the most deprived areas,”

and that they

“offer a damaging lack of support for young apprentices and further weaken…attempts to widen participation and increase social mobility”.

I also said that, as a Blackpool MP as well as shadow Skills Minister, I was really concerned about getting small employers on board.

With apprenticeships—my goodness me! If wishes and exhortations and five-year plans from this Government could move mountains, we would have not 3 million apprentices by 2020, but 6 million. However, as we know, the devil is in the detail, and the Government’s attempts to use a one-size-fits-all approach have not worked.

The Minister was present at the FE Week campaign event that I hosted on 14 September. I have seldom heard in a packed Committee Room in this House as uniform a chorus of concern across the piece. Concerns are shared not only by me and my right hon. Friend but by leading figures across the sector, including the Association of Employment and Learning Providers. Those expressions of concern and the investigative work done by FE Week in putting this process together have driven the partial U-turn.

I congratulate the Minister and give him full credit for having shaken up his officials—and perhaps even shaken a few extra coppers out of the Treasury’s pockets—and for listening to the concerns. It was said of Julius Caesar that he came, saw and conquered; the Minister has come and seen but he has not yet conquered, because the devil is in the detail, as my right hon. Friend said. Plenty of questions about the proposals remain unanswered.

Let me give an example from the analysis done by FE Week since the U-turn on Monday. Before the U-turn, cuts of 27% and 50% to construction skills at level 2 were calculated; after it, the cuts still ranged from 14% to 37%, so there is little to be complacent about. Those cuts could still devastate the sector, as we have heard. In other areas, such as hairdressing and engineering, it is not necessarily good news either. The Government are struggling post-Brexit to orchestrate an industrial strategy. FE Week analysis has revealed that at levels 2 and 3, there could still be a maximum drop of 49% to 51% respectively. There is huge potential and a pressing need for high-quality apprenticeships in the service sectors, social care, leisure and visitor services, yet we know from the analytics that children’s care, learning and development—an absolutely crucial social care issue—could be cut by 42%, and hospitality and catering by up to 45%. No one has told me where the tablets from Sinai are saying how the funding will be delivered beyond year one. There are big questions about that, so will the Minister tell me what conversations he has had with the Treasury in advance of the autumn statement?

I am sure the figure of £3 billion—or £2.5 billion for England—that will eventually be raised by the apprenticeship levy will continue to be bandied around, but as we know, only £1 billion of that is new funding; £1.5 billion is going to the Treasury. I ask the Minister, when he is looking at the money we will need beyond year one, what is he already doing to knock on the Treasury’s door?

The cuts are going to hit a wide range of employers and providers, including in the third sector. I remind the Minister of a letter that he had from YMCA Training, which said that despite the disadvantage uplift, there is the loss of youth contract funding, which will not help support for the most hard-to-reach young people. Mark Dawe, the chief executive of the Association of Employment and Learning Providers, also remains to be convinced, even about the details of the current proposals. He recently commented online:

“I hope…we review the deprivation payments, as…committed”

but

“Personally I can’t see how a system allocating £600, £300 and £200 just on frameworks can equate to a system that was paying up to 32% on”

the

“funding cap…ie over £8.5k in this scenario for one learner compared to £600.”

The Minister has to address those really important issues.

We all want to know what the situation will be at the end of the year. Will we revert to the situation as it was last Monday? Will the Minister pass on to his right hon. and hon. Friends the message that it is not too early to be thinking about what they do when they have spent the £60 million? A 20% uplift for 16 to 18-year-olds is a necessary step to replace valuable funding that would have been lost under the previous proposal, but will the Minister tell us how that compares with previous measures?

As someone who, like so many in this House, has always been keen on supporting people with disabilities to progress in the world of work, I welcome the learning disabilities taskforce that was led by my parliamentary neighbour, the hon. Member for Blackpool North and Cleveleys (Paul Maynard), but it is important to stress that these issues have to be taken forward to completion, because we know that on completion disabled people will do a lot better.

The Government’s equality assessment included the aim to achieve gender parity in the working population by 2030, but I see little detail on how that is likely to be done in terms of what the Government are doing on apprenticeships funding. The Minister may want to comment on that.

For the last few months, we have, with a wide range of stakeholders, been pressing the Government for more detail on the levy. Despite last week’s revised paper, there are still issues, particularly about the digital apprenticeship delivery, that I remain to be convinced on. The Confederation of British Industry certainly is not. It said that

“six months out… major questions remain about its readiness.”

The EEF said that the

“Government must carefully prepare a final implementation plan…mindful that employers as well as Government need time to prepare for the sea change”.

How is the Minister going to reassure businesses and providers on that detail?

What is the Government’s capacity to deliver all this? As Paul Warner, the policy director of the AELP said, the Department faces “capacity challenges”. The head of the Skills Funding Agency’s technical and professional education admitted to a workshop last week that she was unsure of capacity and resources. The Government have scrapped the UK Commission for Employment and Skills; staffing levels at the SFA are down 50% from 2011; and now the Government, with their hastily thrown together Technical and Further Education Bill, are saying that the Institute for Apprenticeships will have responsibility for all technical education. That makes considerable sense, but where will the money and other resources come from?

Just last week, the Minister was asked by my hon. Friend the Member for Hove (Peter Kyle) what budget would supply funding for the costs of the Institute for Apprenticeships. He was told:

“It is expected that part of its budget will be provided by funding freed up from savings across the Department.”

Well, that is a vague response. It does not show us the money or give us the confidence to believe that the Minister will be able to take these things forward in the way we need.

Just six months out from the implementation of the levy, the Institute for Apprenticeships and Technical Education still has a shadow chief executive working two days a week. We know that there are worries about rebadging and the unintended consequences of forcing employers to reduce investment in other areas; and there are still substantial worries about small and medium-sized enterprises. The Minister still has to address those big concerns. We need to look into how large employers can help to retrain, reskill and supply a lot of those surplus apprenticeships.

In conclusion, the Government need to look at other issues, as well as this short-term stopgap. They need to look into the performance of careers and enterprise, as a lot is needed on that. They also need to look into devo-max, giving some power back to the people and areas of the country to produce the apprenticeships that our people deserve.