Apprenticeships and Skills Policy

Gordon Marsden Excerpts

Tuesday 8th January 2019 Westminster Hall

[Gordon Marsden (Blackpool South) (Lab)]

It is a delight to serve under your chairmanship, Sir David, and if it is not too late, I wish you and everyone here a happy new year. We have had a superbly balanced and broad-ranging debate. We must thank my hon. Friend the Member for Bradford South (Judith Cummins) not simply, as she put it, for making this a wide-ranging debate, but for her strong and important points. She gave a powerful critique of the current apprenticeship programme, and outlined the direction in which it needs to go to assist somewhere such as Bradford, which, as many have said, has a fantastic history but needs a powerful future as well.

I was impressed by the huge range of contributions from colleagues across the House. The hon. Member for Henley (John Howell) spoke about the importance of work placements. After a voyage around his witticisms, my hon. Friend the Member for Ealing North (Stephen Pound) found more fertile ground in horticulture, for which we thank him. The hon. Member for North East Derbyshire (Lee Rowley) rightly spoke about the need to look to the future and different sorts of skills, and showed an intelligent understanding of where the tensions are between such skill sets. My ever-forceful colleague, my hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy), talked about apprenticeship pathways to get to degree apprenticeships and spoke strongly about the importance of level 2 in terms of progression—I shall come to that later in my remarks.

My hon. Friend the Member for Warrington South (Faisal Rashid) raised concerns about how the Government will have a lost generation if they do not properly prepare for apprenticeships, and said that the Institute for Apprenticeships should be focused on outcomes and be supported. My hon. Friend the Member for Coatbridge, Chryston and Bellshill (Hugh Gaffney) spoke about the importance of ethnic minorities not missing out in Scotland, and he raised some significant concerns. Finally, the hon. Member for Motherwell and Wishaw (Marion Fellows) shared her experiences as a former FE tutor and lecturer and spoke about the need to promote modern apprenticeships. All those contributions have added to this debate.

We know that we are entering a period of extreme uncertainty regarding our skills base because of a cocktail of challenges: Brexit, automation—I take that point from the hon. Member for North East Derbyshire, which is why I said “challenge” rather than “problem”, but it nevertheless focuses our minds strongly—and the damage already done by the neglect of older as well as younger people in adult education, the dramatic fall in take-up by adult learners, and cuts to the adult skills budget. If we are now faced with the impending scenario of a no-deal Brexit, the need for home-grown skills is strengthened yet further.

Despite consistent warnings from ourselves, and the university and FE sectors, the Government have been neglectful of the impending damage—especially through the drift to no deal—that Brexit could cause to our world-class FE colleges and universities, and to skills as a whole. This is an issue for FE in particular, because of the deep engagement of community projects that are funded via the EU. Thousands of UK jobs, and tens of millions of pounds that the UK earns from our EU links with universities, further education colleges and training providers, are in jeopardy as a result. The Government need to get to grips urgently with spelling out how their shared prosperity fund will replace the funding from the European Social Fund and the Research Development Fund, on which our community-focused higher education institutions and colleges so rely.

What is the Department for Education doing—the Minister will have heard me speak about this before—to ensure that the needs of skills and apprenticeships are at the top table? Why have we seen so little proactivity? The Secretary of State seems to have thought that Erasmus was a second-level issue. That is what I have been told, but I hope the Minister will reassure us that it is not a second-level issue, because it is crucial to the skills processes that we need, whether in Bradford or Blackpool.

The already growing skills shortages in areas such as the health service are becoming catastrophic. We heard the national health service plans yesterday. That was all well and good, but the unanimous comment in the media has been about where the 100,000 extra jobs will come from. Where will those people come from if we do not have a progressive, integrated policy? We have a Department—it is new year, so I will try to be charitable to the Minister—that is struggling with the consequences of nursing bursaries being scrapped. I entirely support the Royal College of Nursing’s campaign in this area, and have heard from constituents who have been seconded via the NHS to Blackpool hospital about some of their concerns. We have world-class colleges and providers, but they are being consistently let down by cuts to budgets and funding streams. Unfortunately, apart from the eventual money pledged for the introduction of T-levels, there has been no reversal to those damaging reductions made by the Government.

The Minister urged MPs and the sector to lobby before the Chancellor’s Budget. They did, but they got precisely nowhere. It is imperative that we use apprenticeships and our skills network to help people be trained, but we have to fund them properly. We are being told to look at the spending review, but as the former Minister David Willetts observed on Saturday, when talking about the Augar review, the chances at the moment of the Chancellor focusing his eye on education as opposed to the NHS appear to be minimal.

Fine words we have had plenty of, but they butter no parsnips. That is particularly important in smaller towns and cities, such as Bradford, Blackpool and many of the places that Members who have spoken today represent, the people of which feel that they have been let down. We hear rumours that the Augar recommendations will pin all hopes and money on the cut in university fees. I sincerely hope that the Minister, in whatever capacity she is able to, will raise her voice against the focus simply on higher education, to the detriment of further education.

One of the potential avenues that we need to explore to achieve all that is, of course, the devolved skills and adult education budget implications. There are clear opportunities via those new structures that could be utilised, and should be, if we are to have proper progression in the devolution of adult skills funding. We need a much bigger debate about the devolution of broader apprenticeships than we have had so far.

We need proper infrastructure and long-term thinking. The Government have been poleaxed by Brexit, and are looking only to scrape to 2020 in their funding and policies. While they do that, our new national education service will look at devolving apprenticeships and other skills funding, not just the adult education budget, and our lifelong learning commission will expose and explore new ways of collaborating on the ground with the third sector and the unions to get those skills up and running.

Skills devolution is not just a smart thing to do economically; it is the right thing to do for community growth and cohesion. If apprenticeships are to have strong, positive outcomes for local economies and workforces, far more young people need to get to the starting place to begin with. It is important to grasp the potential for high-quality apprenticeships in the service sector. As others have said, that means supporting our small and medium-sized enterprises and starts at level 2, and ensuring a properly funded and promoted traineeship programme.

We have been banging on about that to a succession of Government Skills Ministers for two years; the current Minister is the third to hear me speak on it. The latest statistics from the Department for Education show a significant drop in level 2 apprenticeships—just 161,000 starts at level 2 in 2017, down from 260,000. The proportion of overall starts has fallen to its lowest level yet. As Mark Dawe of the Association of Employment and Learning Providers said,

“major mistakes in the implementation of the levy have resulted in a serious undermining of the government’s social mobility agenda”.

He also said:

“Level two starts are now the biggest issue we face”.

I can only make reference to the briefing that Members have had from the British Hospitality Association about the importance of progression in that area from level 2 and onwards. Recently I was glad to welcome representatives of Stonegate to Parliament, and a person in my constituency who has gone from being a barperson to running the newly refurbished Manchester hotel, which will be reopened shortly.

Level 2 apprenticeships have fallen, but we have seen a huge rise in management apprenticeships. I do not know what the real story is there. Does the Minister? Has the Government’s failure on level 2 been a market consequence of the way that they sold the levy? I do not know; perhaps the Minister can enlighten us. What we know from the Sutton Trust is that about a third of those apprenticeships are converting existing employees and skills. If that is the case, we are in an even more dire position than the Government’s figures show.

Anything that simply rebadges or validates normal training will not get us where we need to go. To create that step change we must ensure that people can get to the starting point, because level 3 is one of the most telling points for SMEs or self-employment. Whether someone is a hairdresser—I hope that the Minister has managed to get the Secretary of State off the unfortunate prejudices about hairdressing in his Battersea speech—a social care provider, a brickie, an electrician or a plumber, those are the people we need, and the skills that we need. Level 3 is a de facto licence to practise. That is why it is so important that the Government should not neglect traineeships.

There are issues regarding the overspend. The Minister knows that the Institute for Apprenticeship’s chief financial officer recently presented a forecast of a £500 million overspend. Can she tell us whether those figures are accurate? The Education Committee published an all-round critique of the Government’s apprenticeship record, and highlighted the importance of not only apprenticeships, but apprentices. That is a long-overdue priority for the Government. I know that the Minister agrees about the importance of world skills, skills competitions and skills champions. She has banged on about it, and it is very good that she has, but her Department has not always seemed to share the same enthusiasm for taking on board the opinions of apprentices. I urge her to do so, and to utilise the talents of IFA’s panel.

That is the right way to promote the social mobility that we will need in the 2020s, when bespoke skills and enabling ones will have to combine in people’s lives with more traditional qualifications. We need to encourage young people to take up their curiosity for future jobs and apprenticeships at a much earlier age. We have been saying that for some time. It needs hardwiring into careers advice to go beyond the Baker clause and to have a sustained, holistic strategy.

The Government’s consistent failure to support under-represented groups, whether black, Asian and minority ethnic, people with disabilities or care leavers, has to be addressed. We would address it directly by giving it strong positioning in our new national education service. We have been very clear that if we are to get to the right position on T-levels, they cannot be seen simply as a competitor with A-levels. The Sainsbury review pointed in the right direction in that area, but unfortunately the Government have ignored that holistic approach and turned it into a beauty contest.

The concerns that we have heard today about regulations not being fulfilled in key new pathways—employers say they are not currently—and there not being the number of work placements illustrate the point. It is important that we get T-levels going properly, but they must be part of a broader strategy. That is the problem with so much of what the Government have told us. We are not short of potential “ladders of opportunity”, as the Minister’s predecessor, the right hon. Member for Harlow (Robert Halfon), put it, but we now need more resources, simplifications and long-term strategies—not the short-term targets that have tied the Government in knots and led to the issues that my hon. Friend the Member for Bradford South raised in this excellent debate.

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

It is a pleasure to serve under you today, Sir David. I wish all hon. Members a happy new year. I say to the shadow Minister that I do not feel tied up in knots.

[Gordon Marsden]

Not personally.

[Anne Milton]

Not personally, certainly. I feel quite clear about what I am trying to achieve. I congratulate the hon. Member for Bradford South (Judith Cummins) on securing the debate. I wish I had more time, but I do not. I will debate this matter weekly if that is what Members want, because there could be nothing more important for the productivity and success not just of this country, but of individuals.

I am incredibly fortunate in my job. I get to see so many young people who are passionate and incredibly enthusiastic about the careers that they get through apprenticeships. Their sense of enthusiasm strengthens my faith that we are on the right road. It tells us not only that the direction of travel is right and that parity of esteem between the academic and technical routes is achievable, but that apprenticeships open an alternative door that would not otherwise exist for people—often bright and very gifted young people, but also older people—for whom school and exams did not work.

T-levels and apprenticeships will form the basis of our new technical offer, building the skills of the population. They will be mirror images—one predominantly work-based and the other predominantly study-based, but both leading to skilled employment and opportunities for further study up to and beyond degree level, through apprenticeships or otherwise.

The hon. Member for Bradford South is absolutely right that Bradford is a great city, but 15% with no qualifications is quite a shocking figure in comparison with the national average. She raised the issue of apprenticeships not being worth the paper they were written on, but that was what sat behind all the reforms. We have brought in money from the levy, protected the term, mandated 20% off-the-job training and introduced end-point assessment.

The hon. Lady is right that apprenticeship starts are down, but this is not just about numbers; it is about quality. Before the reforms, a lot of people doing apprenticeships did not even know that they were on them. It was a way of bringing in cheap labour, and we wanted to change that. It is not surprising that the starts went down to begin with, because it was a very big change, but they are now rising, and that rise has been significant at level 4, level 5 and above. I urge the hon. Lady and her businesses in Bradford to contact the National Apprenticeship Service, which I know will be very happy to work with her and with businesses locally.

We are bringing non-levy paying small and medium-sized enterprises into the apprenticeship system. I assure the hon. Lady that I am working closely with the Federation of Small Businesses to ensure that we get it right for SMEs, which often find it quite difficult to navigate the new system. I point out that the money raised by the levy is available for redistribution to non-levy payers, so money raised through the levy in London might well end up being redistributed to smaller employers in Bradford, Hull or anywhere else in the country. From April, large levy payers will be able to transfer 25% of their levy pot without restriction, so the hon. Member for Kingston upon Hull West and Hessle (Emma Hardy) might like to have a word with hon. Members for London constituencies to see whether that money can be redistributed.

The hon. Member for Bradford South also mentioned the risk to workers from automation. Some 35% of jobs are set to go in the next 10 years, so the Chancellor has announced the national retraining scheme, a joint venture between the TUC, the CBI and the Government to ensure that we can upskill lower-skilled workers. We are doing much to ensure that this works, especially for workers who may have had a bad experience of education or for whom undertaking more training might cause practical as well as financial problems. We need to ensure that lower-skilled workers get the skills they need and that business gets them as well.

I am glad that my hon. Friend the Member for Henley (John Howell) has lots of university degrees to make up for the fact that unfortunately I do not have any. He is right that schools play a critical role, but schools do not work for everyone, and apprenticeships are often a vital route for young and older people to get a second chance.

I praise the role of unionlearn, which I should have mentioned earlier and which often offers excellent in-work training. The Government give it quite a substantial amount of money, and it will be important to the national retraining scheme. I must also mention work experience, because the 45 to 60-day industry placement is a critical part of the new T-levels. The careers strategy has the Gatsby benchmarks at its heart, so that schools can measure their success. Meaningful encounters with the world of work are an important part of that, and the Careers and Enterprise Company is doing a great job of linking schools to local employers.

Doing a school exam or maths homework makes sense if students can see the jobs that will be out there when they leave school—otherwise it is just another exam or another boring class. For those going into a career in STEM—Science, technology, engineering and maths—there is nothing not to like about apprenticeships, which give the skills and work experience needed. Some engineering companies have cut their graduate schemes and are now offering only apprenticeships at level 2 and up to level 3.

The hon. Member for Ealing North (Stephen Pound) made me smile, as he always does, and mentioned horticulture and landscaping. Only today, I saw some fantastic examples of the apprenticeships that the national parks are offering. I would be very happy to work with him and the all-party gardening and horticulture group. Landscaping is one of the disciplines tested at the WorldSkills competition, which I was privileged to see in Abu Dhabi. He might like to visit the WorldSkills website and see the amazing work of landscapers at the competition.

My hon. Friend the Member for North East Derbyshire (Lee Rowley) spoke about the skills gap, which the skills advisory panels will be looking at to give us a clearer picture. The reason why apprenticeships are getting such traction is that employers want more than just knowledge; they want skills as well. Many are moving away from graduate schemes, because a degree apprenticeship, for instance, combines both knowledge and skills.

[Gordon Marsden]

Will the Minister give way?

[Anne Milton]

Yes, but briefly, because the hon. Gentleman is taking my time.

[Gordon Marsden]

I am grateful. The Minister mentions the skills advisory panels; the reason why we need them is that in the previous Parliament the Government abolished the UK Commission for Employment and Skills. Does the Minister regret that the commission is no longer there to give the Department a holistic view?

[Anne Milton]

I do not have regrets. What matters is what we do next, and that we make sure we identify the skills we need. In case I do not have time later, let me note that the hon. Gentleman mentioned devolving skills budgets. In fact, skills budgets are devolved down to the lowest possible level: to local employers. Firms in Bradford and Hull—the levy payers—have the money at their disposal, and we will redistribute it to SMEs.

Time is short, and I do not have time to mention everything, but the hon. Member for Kingston upon Hull West and Hessle mentioned nursing, a perfect example of the pathway for progression that I want to see from level 2 right up to level 6. In construction, an employer in Gosport has done a wonderful map that shows young people where they can progress—right up to project manager and beyond. When I was in Bristol, where a lot of work is being done on diversity in apprenticeships, I saw what looked like a tube map, where people can see where they can get on and off their route. Of course, people can go in other directions: they might well do a level 2 in business admin and then go into nursing or end up doing a level 6 in a completely different discipline. That is exactly the area that I want to concentrate on. I spent a lot of time getting business working with the levy and getting the system up and running, but now what matters to me is progression.

With respect to the drop in level 2 apprenticeships, which was mentioned earlier, we are not absolutely sure what is behind the figures. Some 90%[Official Report, 9 January 2019, Vol. 652, c. 6MC.] of starts are still at levels 2 and 3, and of course employment is high, but we need to dig deeper. What matters to me is the people I meet, like the young man I met who got chucked out of college twice, got a level 2 apprenticeship with Virgin Media, skipped level 3, did a level 4—