Skills Devolution (England)

Gordon Marsden Excerpts

Tuesday 23rd January 2018 Westminster Hall

[Gordon Marsden (Blackpool South) (Lab)]

It is a great pleasure to serve under your chairmanship, Mr Paisley. I congratulate my hon. Friend the Member for Hornsey and Wood Green (Catherine West) on securing the debate. It has been excellent, thoughtful, positive and full of ideas, and she has led the field.

I am afraid that I do not have time to do full justice to the multifaceted points that my hon. Friend made. She mentioned the co-design of courses and the role of local authorities and their contractors and suppliers. She put forward ambitious and interesting ideas about how we might devolve all 16-to-18 provision, and she mentioned careers funding. I am conscious from my links and discussions with various groups in London—my right hon. Friend the Member for East Ham (Stephen Timms) referred to this, too—that there is huge appetite in London for devolution, for all the reasons that she explained.

I also praise the right hon. Member for Witham (Priti Patel), who drew on local experience to inform her thoughtful comments. I was particularly interested in what she said about careers. I think she used the words “not good enough in their spread”. I do not want to criticise what the Careers & Enterprise Company is trying to do, but one of the central issues in this debate is resources—resources in the centre, and how those resources are distributed. I think that there is some common ground in the Chamber on that issue. Interestingly, she also drew on her DWP experience. In my experience, having spent a long time holding this portfolio and others, if we do not get the mix right between the Department for Education and the DWP, we will not make the progress in this area that we all want to make. That is particularly true in areas such as traineeships.

My right hon. Friend the Member for East Ham mentioned the need for urgency from the Government. He rightly drew attention to productivity issues and to ESOL, which is key. The hon. Member for Filton and Bradley Stoke (Jack Lopresti), in an interesting intervention, made the point that this debate is about not just an economic issue but a moral responsibility. On ESOL, we have a moral responsibility to refugees, people who have settled here and given their work to this country, and many other disadvantaged groups in this area.

The hon. Member for Hornchurch and Upminster (Julia Lopez) made some thoughtful comments about initiatives in her constituency and devolution for London. My hon. Friend the Member for West Bromwich West (Mr Bailey), the extremely experienced former Chair of the Business, Innovation and Skills Committee, mentioned skills shortages; the incident that he raised with respect to a lack of proper supervision points to what we have been saying for the past two years about the capacity of the Education and Skills Funding Agency and the Department to handle such things. The fallout from the machinery of government changes is still causing problems.

My hon. Friend the Member for York Central (Rachael Maskell) rightly drew attention to the skills gaps in her local economy and the importance of issues in the service sector, which I will touch on. My hon. Friend the Member for Bristol South (Karin Smyth) used her experience on the Public Accounts Committee to make some telling points, including one that she has made to me on several occasions about parents being crucial.

We are entering a period of extreme uncertainty regarding our skills base because of the challenges of Brexit, automation, cuts to the adult skills budget, and so on. If we do not have a progressive integrated policy, those things will soon make it impossible for us to build highly skilled local economies or address our productivity crisis. Research commissioned by the Local Government Association reveals that the skills gap is worsening. The LGA says that by 2024 we will lack 4 million high-skilled people to take up available jobs, and will have 2 million too many people with intermediate skills and more than 6 million too many low-skilled people. The Open University has said similar things, and the recent British Chambers of Commerce quarterly economic survey also touched on this issue.

As I said when I hosted the launch of the Learning Revolution Trust’s “Delivering skills for London” report in November, we have to accept and embrace the fact that, for many adults, working models and expectations will continue to change radically. That means that there will be more self-employment, more juggling of multiple part-time jobs, more engagement with small businesses, and more demands on individuals with more complex family structures and needs. I pay tribute to the Learning Revolution Trust for that report, which brought together colleges, council leaders and local players in just the way that they need to be brought together.

We must not forget the people who are often missed out. That report referred to the issue of employing people with disabilities—particularly learners with learning difficulties or disabilities, and people with special educational needs and disabilities. The Maynard review made really important proposals in that area. Will the Minister say specifically what collaboration and co-operation is happening in that respect, particularly with DWP and BEIS? Without their involvement, it will be difficult to take this forward. Add to that the public policy challenges for generations and our exit from the European Union—a lot has been said today about Brexit—and it is clear that the skills system needs to be one of our highest priorities if we are going to escape a shortage of labour when we leave the EU, and when people from the EU who are currently here leave. In that context, we must look at devolving skills budgets.

The Minister will know that in November, England’s seven metro mayors—four Conservative and three Labour mayors—called on the Government to devolve that power much faster. The Minister’s colleague, the West Midlands Mayor, Andy Street—I quote from the Local Government Chronicle—said:

“I believe now is the time for government to go a step further and provide us with the tools to tackle the challenges and seize the opportunities we each face.”

Such requests are piling up across the board.

The all-party parliamentary group for London’s report has been dealt with in great detail. I was privileged to speak at its launch last July. I congratulate my hon. Friend the Member for Croydon North (Mr Reed) and the hon. Member for Bromley and Chislehurst (Robert Neill) on the way that they chair the APPG. My hon. Friend the Member for Hornsey and Wood Green talked about its recommendations, so I will not repeat those, but I will say that, although the report focuses on one city, this discussion can be applied to regions across the country.

While we look at how apprenticeships are funded and how they might be part of the mix, we should explore traineeship funding at local level, too. Later today, I will meet the Association of Employment and Learning Providers and around 40 training providers to discuss a way forward for a programme that they believe the Government have neglected. We need to find ways to use traineeships as a contact point for getting on to apprenticeships and meeting local needs and demands. Another area that my hon. Friend the Member for Hornsey and Wood Green and my right hon. Friend the Member for East Ham touched on is ESOL.

We must remember when we look at local funding that European structural funds have traditionally supported the expansion of apprenticeships and small businesses in areas of the country with strong local enterprise partnerships. The Government have guaranteed funding in this area for the moment, but they have given no guarantee about what will happen when we come out of the EU. Can the Minister tell us what she and her officials are doing to make that clear to No. 10 and her colleagues in the Brexit team? The sum that is potentially available, £725 million, simply cannot be lost from the process.

This call for devolution is not new, and neither are the benefits that would come from it. Back in 2013, my hon. Friend the Member for City of Durham (Dr Blackman-Woods) and I wrote a Smith Institute pamphlet about how the Government and Whitehall had been far too slow to grasp the nexus between skills and sectoral delivery, as well as place delivery. I wrote:

“Put bluntly the age of relying on Government micromanagement and mandarins to deliver what we need in this area has reached a bit of a dead-end.”

I added that

“to encompass new low carbon and hi-tech industries…Such initiatives cannot any longer simply come out of Whitehall”.

The Minister will of course remember what Lord Heseltine said about that issue in his famous 2013 report, “No stone unturned: in pursuit of growth”.

I am hugely conscious of what we need to do for councils, such as mine in Blackpool and that of my hon. Friend the Member for York Central, that were able to create their own apprenticeships in the early 2010s but now, because of funding cuts, are not able to do so. The LGA has put forward an important vision in Work Local, which the Minister should look at as well as IPPR North’s recommendations.

Our national education service talks about how important accountability is:

“the appropriate democratic authority will set, monitor and allocate resources”.

Skills devolution is not just the smart thing to do in the community but the way forward. If local authorities, mayors and combined authorities have the capacity, competence and aptitude to take it forward, the Government need to take a far stronger and more thoughtful look at that.

[The Minister for Apprenticeships and Skills (Anne Milton)]

It is a pleasure to serve under your chairmanship, Mr Paisley. I congratulate the hon. Member for Hornsey and Wood Green (Catherine West) on securing the debate. We do not have enough time to cover everything. It has been a fantastic debate, and it is useful for me to hear from individual Members. As the shadow Minister said, there is a lot of cross-party agreement on the subject. It is not terribly party political.

The hon. Lady talked about the significant skills gap. I was recently at the WorldSkills competition and conference, and of particular note was that Ministers from about 55 countries all around the world were saying the same thing. This is not a uniquely British problem. There is a skills gap around the world. If we look ahead 10 or 20 years, we cannot think of the jobs that will be available. This is a fast-changing climate.

To give some background on how serious the situation is, the skills for life survey in 2011 reported that 43% of people were found to have literacy skills below level 2 —a good pass at GCSE—and 78% had numeracy skills below that level. Of the respondents, 15% were found to have the literacy skills of an 11-year-old or lower—an estimated 5 million people—and 49% were at that level for numeracy. Therefore, it is estimated that 17 million people have the numeracy skills of an 11-year-old or lower.

According to a 2017 Lloyds bank report, 11.5 million people in the UK are classified as not having basic digital skills. However, increasing numbers of young people are now leaving compulsory education with good standards of English and maths. In 2016, just over 71% of 19-year-olds held a level 2 qualification in both English and maths—the highest figure on record. However, we have a cohort of adults who lack those basic skills.

The hon. Lady was quite right that historically employers’ investment in skills has been poor. Employers and businesses have been bad at investing in the skills of their workforce, and the levy is one way of making sure that that is no longer the case. They pay into an account that must be used for training and assessment.

The hon. Lady also mentioned careers. I hope she has time to read the careers strategy I launched late last year—I spent a lot of time on it. Careers advice has been delivered poorly—I say that not least from my own experiences at school—and the strategy specifically mentions some of the issues she raised. She talked about patchy careers advice. What is the point of education if not to give young people the right start in life? Education is not an end in itself but a launch pad for life. We therefore need careers to become integral to what happens in schools. The largest word on the cover of the careers strategy is skills, because that is what it is about. I am not terribly fond of the word “careers”, because it invokes images that no longer apply. It is about jobs and skills.

It was a pleasure to see my right hon. Friend the Member for Witham (Priti Patel) contribute to the debate. I know how passionately she feels about this subject. As an aside, my hon. Friend the Member for Filton and Bradley Stoke (Jack Lopresti) mentioned the moral case, as did the shadow Minister. I could not feel more strongly that we have a moral imperative to get this right. It is not just about business and the skills needed; it is about making sure that people have a job path and manage to reach their potential in life. It should not matter where they come from, who they are or who they know. Everybody should have the same opportunity.

I urge Members to go into schools and talk about their careers advice, and to look at the careers strategy. There are a lot of requirements—there needs to be a lead on the governing body—and the spine that runs through the strategy is the Gatsby benchmarks.

My right hon. Friend mentioned two examples in Essex. I met a fantastic company in Essex, with 1,000 employees and 54 apprentices at any one time. That company is doing what we need employers to do. If it has a skills shortage, it recruits locally and takes apprentices from level 2 up to level 7, catering in some areas specifically for people with special needs and people on the autism spectrum. It is brilliant.

All the changes brought in have put the Institute for Apprenticeships and employers centre stage. Someone mentioned how the work is led by employers, and in a way it has been devolved to them. They, along with the IFA, can set up the new standards and fill those gaps. My right hon. Friend mentioned the training programmes needed, and that is one way of dealing with that.

Flexibility on the levy came up in the debate. Yes, I am open to extending the levy’s use, but it has been in place for less than a year. We will allow transfers. For me, the levy is something I will review constantly and see how it is spent—it will not be about having a review. What matters is not that we just get apprentices. I want high-quality apprenticeships and the money from the levy to go to where it is needed. There is a lot of money sloshing around in the system, and what matters is that it is not gamed or misspent but spent on the purpose for which it is intended.

On small and medium-sized enterprises, the Government will pay 90% of their training costs, and I believe for SMEs with fewer than 50 employees we pay 100%, so there is nothing to stop them taking on apprentices. The opportunity is there.

[Gordon Marsden]

I have personal experience of this. The Minister says that the Government pay 90% of SMEs’ costs, but that is only for 16 to 18-year-olds. It would be useful if they were to look at the market for 19 to 24-year-olds as well.

[Anne Milton]

The shadow Minister raises an important point. There are so many issues I would like to raise—I have all these lovely notes about all the things we are doing. The best response I can give to hon. Members is that it might be useful to set up, along with officials from the Department, a session to let them know what is going on and to get their feedback. That would be a useful way of moving forward, particularly on where we support SMEs, because they are an important part of every local economy.

Although I have lots of things to talk about, I have to conclude. The national retraining scheme, which we have launched, is one of them. We have put £64 million of new funding into early initiatives. I could talk about the skills advisory panels, which will be important in looking at the regional skills issues mentioned by the hon. Member for West Bromwich West (Mr Bailey). I commend what is going on at Dudley College and the local initiatives there. That is exactly the sort of scheme we want to see, and which I am seeing.

T-levels are not in place yet. I wish they were, but they are coming down the road soon. They are part of a consultation. We are also changing completely the approach to careers, and—I am skimming through my notes now—there is the devolution of 25% of the adult education budget. The areas where it is being devolved to have asked for more time, but it will be devolved in 2019-20.[Official Report, 30 January 2018, Vol. 635, c. 4MC.]

None of the skills improvements we want to see will happen through Government action alone. Schools need to see students’ future, not just a set of exam results, as mainstream to their work. Employers need to play their part in building a skilled workforce, and we need a really strong FE sector and those important, independent training providers. That is critical. Parents also need to see that what their children need is a set of skills, not only—and not always—a university degree.

Question put and agreed to.

Resolved,

That this House has considered skills devolution in England.