Draft Public Sector Apprenticeship Targets Regulations 2017

Gordon Marsden Excerpts

Monday 27th March 2017 General Committees

[Gordon Marsden (Blackpool South) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Nuttall, and to respond to the Minister’s speech. As he said, there has been cross-party consensus on this issue. We are broadly in support of the principle. How could we not be? The Minister made it clear that the Government are drawing on the 2009 Act, which was passed under a Labour Government, in inserting these proposals for targets. That was of a piece with our proposals on procurement in the 2010-15 period, which the Government, after some scepticism under the coalition, have now come round to taking forward.

We welcome the principle, but we are dealing with a very diverse collection of public bodies, not to mention the varieties of Government Department that will have to deal with this measure. As the Minister said, bodies in the scope of the regulations include Government Departments, local authorities, NHS trusts, fire and police services and local authority-maintained schools. The Houses of Parliament, further education colleges, the BBC, Channel 4 and the Post Office are exempt from the requirements. I will leave hon. Members to wonder about the criteria on which those bodies were grouped. Perhaps the Minister would like to confirm why they were exempted.

This measure is clearly a big deal for the Government. As I understand it, they expect that 16.2% of the 3 million apprenticeship starts they have pledged to deliver by 2020 will come from the public sector, because that is the percentage of public sector workers in the total workforce. As the Minister was good enough to acknowledge, the proposals have not been without questioning and some criticism. The Institute for Fiscal Studies said that, as currently devised,

“the focus on targets will distort policy and lead to the inefficient use of public money.”

It also said that

“This potentially costly policy is largely designed to hit the government’s target for 3 million new apprentices, not as a way to increase the quality of public services. It should be removed”

and that the one-size-fits-all approach to large public sector employers in England is

“clearly not a sensible way to encourage more apprenticeships, or to help deliver efficient public services.”

Some might think that is a sweeping—and possibly sharp—judgment. However, no matter how good the intentions are, we are led to ask some significant questions about whether the broad sweep of that delivery will do quite what the Government intend. I will focus my questions on the process and particular pinch-points in that area.

One such pinch-point was identified by the Local Government Association—again, these are specific issues in specific places on which the Minister might like to respond. In particular, the London boroughs made the point that they would have to increase their creation of apprenticeships by more than 570% to meet the target. The general secretary of the National Association of Head Teachers said that the target was

“unrealistic in the current climate.”

That is the important point: it is about putting the aspiration alongside what Government Departments can deliver in the current climate, and what local government can deliver. Of course, that may vary between local government areas in the same way as it does between Departments, depending on whether funding is more protected or otherwise from the Treasury.

Again—this has been a feature of the criticism of some delegated legislation proposed in recent months—there has been criticism of the lack of an impact assessment for this measure, because, as the Local Government Association said, it seems

“likely to impose significant costs on local authorities in terms of workforce planning, administration…and compliance with apprenticeship quality standards.”

As the Minister indicated, the Government’s response did acknowledge those concerns, but they largely rejected any proposals to counter them—though he touched on a number of mitigation measures. Schools will continue to be included in the apprenticeship target, which, as I understand it, will continue to be based on headcount rather than full-time equivalent numbers.

It has taken some time to develop the process. My hon. Friend the Member for Cardiff West (Kevin Brennan), the then Business, Industry and Skills shadow Minister, had a lively exchange with the then Small Businesses Minister, the right hon. Member for Broxtowe (Anna Soubry), on the matter in a Bill Committee in February 2016. On that occasion, he said that measuring by full-time equivalent would ensure that any mandatory target for the public sector reflected the actual size of the workforce. She said that, during consultations, she would look at whether full-time equivalent should be used instead of headcount. However, as we have heard, ultimately, that option was rejected.

In that Bill Committee, Labour Members raised other issues. My hon. Friend talked in particular about whether local authorities should be allowed to include apprenticeships generated in their supply chains. I do not want to stray from the focus of this Committee, but there is an interesting echo there of the discussion we are having about how widely firms and businesses should be allowed to look at other factors to cover some of their apprenticeship levy costs. In that Bill Committee, my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) asked—I do not think the Government have addressed this—whether excluding supply chains may encourage local authorities to keep services in-house when they could find better cost-value in outsourcing.

May I point out to the Minister, not that I think he is unaware of it, that the response of the supply chain, both in the public sector and the private sector, to Government initiatives, whether this initiative or the apprenticeship levy, is critical. In many sectors, as he will know, the effect of involving the supply chain, and many of the small businesses that go with it, can be twofold, threefold and, in some cases, fourfold that of a large employer. Therefore, there are still some significant questions to be addressed in that regard. It would be helpful if, in his response, he touched on that and the continuing concerns.

I go back some time in this place, so I remember well the controversy in the early to mid-2000s about the Labour Government’s Train to Gain programme, which members of the Conservative party, which was then in opposition, were highly critical of. Indeed, the Select Committee on which I served looked at some of those issues and whether Train to Gain had encouraged employers simply to rebadge existing employees. I am not suggesting that that will automatically be the effect of this initiative, but it is the case that there are some challenging targets to be met not only in London schools, where it is more difficult to rebadge existing employees as apprentices, but in other large public bodies, not excluding Government Departments.

If I were of a mischievous frame of mind and if episodes were still being made of “Yes Minister”, an interesting episode might be written on the challenges of various Government Departments to compete with other Government Departments. I say that in jest, but it is a serious point. In implementing this measure, the Government need to be careful that people are not rebadged for their existing training. The Government need to ensure that the apprenticeship contribution is a genuine, new contribution that empowers those individuals in the public sector not simply—the Minister will have heard me comment on this before—in terms of the bespoke skills that they need for the job they are doing in the public sector at that point, but in terms of the more analytical skills that they will need—this is particularly true for the large number of women in the sector—as the way in which we deliver services and administer things in the public sector begins to change. That is true in general terms, as well as in terms of the specifics about automation, which we have read quite a lot about recently.

The Minister spoke about the targets and the particular focus he wanted to have. I know he feels strongly about this issue, and I applaud him for that. He talked about the £60 million for local government to support apprenticeships in deprived areas. I ask him, as always, what scope will there be to increase that further? Those deprived areas and the local bodies in those areas—particularly local councils—have often been hit the hardest in that respect.

The Government may or may not go along with what I was speaking about in Birmingham at the FE Week conference last Thursday. I said that we want to consider committing ourselves to targets for increasing the number of apprenticeships for people with disabilities, care leavers and particularly—this is a new suggestion—veterans. I know from my own experience, as chair of the all-party parliamentary veterans group, that a number of younger leavers from the armed forces are leaving with skills that are not easily passportable into civvy street or recognised, and in some cases are leaving with very poor skills. That is an area to look at. Perhaps the Minister can tell us how that could tie into public sector apprenticeship targets.

How will the Government encourage and incentivise local authorities to increase their apprenticeship starts amid a series of cuts to funding? The figures are bleak. The Local Government Association has estimated that councils will face an overall funding shortfall of £5.8 billion by 2020, and budgets have been cut by £18 billion in real terms since 2010. My own local authority in Blackpool has taken some of the biggest hits for a small unitary. This is not simply an argument about the Labour party’s position on cuts as opposed to the Conservative party’s position. If Government are not careful, this will impair and undercut the impact of what they are trying to do.

Some three years ago, I was privileged to work with my hon. Friend the Member for City of Durham (Dr Blackman-Woods), who is now in our party’s Communities and Local Government Front-Bench team, on a pamphlet with the Smith Institute called “Apprenticeships—how local government is making a difference”. In that pamphlet, we cited a number of local authorities that were doing some very good stuff. In 2013, Lewisham Council was offering 74 apprenticeships for its 2013 intake. My own council in Blackpool was employing 45 apprentices, as well as a further 47 apprentices with its partners in the construction industry. Newcastle City Council was maintaining its commitment to apprenticeships, with a target of 500 new ones. Plymouth City Council, which is smaller, was nevertheless employing 49 young apprentices and 21 adult apprentices. In that year, it met and exceeded the Government’s target of 2.3% of the workforce being apprentices, because its figure was equivalent to 2.6% of the workforce.

The question I have for the Minister is not where are the snows of yesteryear, but where are those apprenticeships now? Many of them, sadly, have gone because those local authorities, which were very ambitious and took that forward, have simply not had the financial base—particularly given the doubts as to what the financial base will be by 2020, in terms of the variability of benefiting from retaining business rates—to continue pressing on that. If the Minister wants local government to walk the walk, as well as him talking the talk, he has to take up that issue with his colleagues in DCLG.

I have already said that we still believe that the target should, in most cases, be based on full-time equivalent—FTE. What ability will the Minister have to monitor how effective that is and how it is taken forward? I am conscious that the target is very ambitious and will involve a lot of ambitious monitoring. Who, in Government, will do that monitoring? The Minister will probably know what is coming, but anything to do with apprenticeships could be monitored, in theory, by the Skills Funding Agency, by the Institute for Apprenticeships, which will launch next month—I have said on a number of occasions that I, and many others, have concerns about its capacity and numbers—or by another body. I invite the Minister to tell us who will be doing the nuts and bolts of monitoring what happens between various Departments, for example.

The Minister talked about publishing information on take-up: how will the Government address that, regarding Departments and the other public bodies—the smorgasbord of organisations that produce their accounts at different times? He also mentioned the standards and cited a couple of positive and encouraging examples of Departments collaborating to produce particular apprenticeships and particular standards—there were always going to be one or two good examples. How will the Minister monitor particularly closely—perhaps this is an issue for the Cabinet Office as well—the performance and delivery of those areas?

As I have said, Labour Members approve of the direction of travel of the regulations, which is why we will not oppose them, but the devil, as the Minister will no doubt tire of hearing from me, is in the detail. Our questions, and the Government’s asks of the many public bodies, some of which are extremely vulnerable in a local context, need to be responded to.

--- Later in debate ---

[Robert Halfon]

FE colleges are corporations or companies, for the most part; universities are regarded as independent bodies and were not seen as in the public sector or managed in the same way. However, there may be universities subject to the levy, depending on their wage bill, so they will be required to have apprenticeships or the levy will be used to fund apprenticeships elsewhere.

An impact assessment was done for the whole Enterprise Act 2016. Neither an impact assessment nor an equalities impact assessment was prepared for the regulation, because the measure affects only publicly funded bodies, with no costs to business. The Better Regulation Executive confirmed that no impact assessment is required in relation to the regulations but, as I have said, one was done for the whole Act.

The hon. Member for Blackpool South asked whether a number of areas in public services would be able to have apprenticeships, and perhaps I can give some examples, beginning with the national health service. The public sector target is 27,500 new apprentice starts for 2017-18. That is estimated to deliver 100,000 apprentices in the course of the Parliament. The information from Health Education England is that almost 20,000 apprentices were employed in the NHS in 2015 and 2016. I have met many healthcare apprentices when visiting colleges and apprenticeship training providers. We are developing pathway apprentice standards—level 2 healthcare support worker leading to level 6 nursing apprenticeship.

I recognise that schools are a difficult issue. First, it is important for councils to share their levy pot fairly. We have issued guidance to schools. The Department for Communities and Local Government is keen that the levy pot should be shared fairly. The whole purpose of the levy is to change behaviour and create an apprenticeship and skills nation. Why cannot a teaching assistant in a school do a teaching assistant apprenticeship, a cook in a school do a hospitality and catering apprenticeship, or someone who is doing business administration do a business administration apprenticeship?

[Gordon Marsden]

The right hon. Gentleman is responding with particular examples to what I said about problems and pressures for schools. None of those is a bad example, but the issue is whether the apprenticeships will lead to any progression or improvement in career status. I am concerned, as others may be too, about whether, particularly in strained financial circumstances, schools will rebadge people doing existing relatively low-level jobs—I put it mildly—to achieve the target.

[Robert Halfon]

There is an important point here. I have acknowledged in the past that there will always be some gaming of the system and I accept that once the levy comes in we will not know how much, for a while. However, if someone is doing a teaching assistant job why should they not be offered an apprenticeship and a skill? They certainly will not be able to progress without a skill. With a skill and an apprenticeship they will have a much better chance of progressing. If someone is a school cook, why not give them the chance to do a hospitality and catering apprenticeship?

Draft Immigration Skills Charge Regulations 2017

Gordon Marsden Excerpts

Wednesday 22nd March 2017 General Committees

[Gordon Marsden (Blackpool South) (Lab)]

It is a great pleasure to serve under your chairmanship, Mr Streeter. It is also only appropriate to congratulate the Minister on his birthday.

We support the broad principle of the regulations. We support everything that the Minister has said about the need to change behaviour and to skill up, and we support the analysis in the policy background in paragraphs 7.1 and 7.3 of the explanatory memorandum. The Minister is absolutely right to say that the skills gap has been a continuing problem, although it is not a new problem. Governments of all persuasions have not succeeded in addressing it for a period of 25 years, so it was not unreasonable that the Government should have embarked on this process in, presumably, 2014-15.

The Minister has gone through the details and done everything he is supposed to do. However, we want to ask some fairly probing questions this morning about the detail. The Minister knows that I often say the devil is in the detail, and there is a lot of detail in the explanatory memorandum on which the Committee will need some substantive answers. Of course, it is not just a question of detail, but a question of chronology.

Perhaps the Minister will tell us when the regulations were first mooted between the Home Office and the then Department. We know from the policy background in the document that the charge was announced by the then Prime Minister, David Cameron, in May 2015. As the Minister has said, the MAC endorsed it in January 2016 and the charge is due to be introduced on 6 April 2017. In that period of time we have had Brexit, which alters the context of the regulations substantially.

The charge relates, of course, to the issue of migrant workers from non-EU countries and allows for the recruitment of skilled workers, to be specific, from outside the European economic area. The reality is that the implications of Brexit mean that the context in which the Government introduced the charges and the Migration Advisory Committee put forward its recommendations has utterly changed. That is not an argument for rejecting the regulations, but it is an argument for saying that we have to look substantially more closely at the impact that Brexit will have on our ability to have skilled workers who, by the time the charge has come fully into effect, may include skilled workers from the EU, of which we will no longer be a part. That is the context in which my comments will be made.

I will begin by picking up one or two points from the Minister’s speech. He used gentler language than I would when he talked about the Migration Advisory Committee, because I would say that it ignored the views of the majority of consultees. I take slight issue with the Minister. Perhaps neither of us is in a completely good position to make a thorough judgment because we were not there at the time and we were not looking at the context of the Migration Advisory Committee’s work, but I suspect that the concern of many of the stakeholders and employers was not simply about cost, although cost is obviously important. They might have had other concerns. Given the detail of what the regulations will require from employers or would-be sponsors, they might have had concerns about the sheer volume of quite complex regulatory procedures that they will have to comply with in this process.

If the Minister does not mind my saying so, there was some confusion in our Whips Office when we saw the explanatory memorandum today, because initially I was not going to be granted the privilege of addressing you, Mr Streeter, from 8.55 in the morning; that opportunity was due to go to my right hon. Friend the Member for Hackney North and Stoke Newington (Ms Abbott), the shadow Home Secretary. I am sorry that you do not have the shadow Home Secretary, Mr Streeter; you have got me.

[Robert Halfon]

A much better option.

[Gordon Marsden]

I could not possibly comment.

That is just an illustration of how closely woven these regulations are with the perfectly reasonable policy objectives of the Home Office. However, I have to say, and I think this point is germane, that looking at the detail of the regulations, we can see that they will be a significant burden—administratively, apart from anything else. The Minister mentioned small employers and the regulations will be a particular burden on them, but I will talk about that a little more in a few moments.

The Minister said that enough time had been given for people to prepare for the introduction of the regulations. There is a great gift in Government for making an argument out of necessity and there is a little element of that here. It has taken two years to bring the regulations together. We can look at that either way: either we can say that they are the product of mature, concerned deliberation, or we can say that all the upheavals in the Conservative party and the Conservative Government over the last 12 months, including getting a new leader, a new Prime Minister, and having to deal with Brexit, may have had something to do with it.

Nevertheless, we are debating the regulations here today. We often forget this, but it is not unwise from time to time to prick the Government and officials on this point: we are debating here today something that will be implemented in 10 days’ time. That is one of the issues, especially with a particularly complex set of instruments such as these regulations. It would have been beneficial—I will say no more than that—for this House and indeed the other place, which debated the regulations yesterday, to have seen them two or three months earlier. Anyway, we are where we are.

I have some specific questions for the Minister about the explanatory memorandum. Paragraph 7.5 says that there is a large degree of uncertainty around the potential income raised by the charge. It then makes the point that a number of assumptions have been made in taking all the different factors into account.

The Minister will be relieved to know that I am not going to ask him for the statistical basis or analysis on which his officials prepared those estimates and assumptions. Having been a Parliamentary Private Secretary, I am well aware of the ways in which they will have done that: there will have been a pessimistic view and an optimistic view. Members can judge for themselves whether the £100 million represents the pessimistic view or the optimistic view.

I want to draw attention to the number of assumptions that have been made, which are dealt with subsequently in the regulations. That makes the argument for being very careful about unintended consequences arising as a result of the legislation, the principle of which, I repeat, we support. That is what paragraph 7.5 says.

Again, I draw Members’ attention to the detail—I will not go through it—in paragraphs 7.8 and 7.9, which spell out the complexities of these regulations for employers. There is the sponsor licence, the certificate, the sponsorship providing evidence, and so on. Behind those bland sentences is a raft of bureaucracy that many companies, particularly those having to fill gaps fairly rapidly, will struggle to deal with.

I notice in the explanatory memorandum that it will not be the Minister’s Department administering this process, but the Home Office. The Home Office, perfectly reasonably, will get a fee that is, from memory, 1% of the £100 million—if that is incorrect, the Minister can tell me. I know the ways of interdepartmental dealings in these matters. What guarantees can the Minister give us that his colleagues in the Home Office will not come calling for more money for their administrative processes if they prove to be far more laborious and time-consuming than these bland regulations suggest? If that were the case, the £100 million—the figure given as the potential benefit for the skills process—would rapidly begin to shrivel.

My second question for the Minister in that respect is how his Department plans to use the money that eventually comes to him after the top-slicing from the Home Office, whatever it may be, in the skills sector to do precisely the sort of thing he said, perfectly reasonably, that he wanted to do.

I want to emphasise again the issues around the consultation process. The memorandum says:

“The Government considered the Committee’s recommendations before announcing the rate and scope of the charge”.

That is civil service speak for largely ignoring it. The Minister was more candid; I have given my views on what the problems were. That is done and dusted, but what concerns me more is paragraph 8.4, which says:

“A full public consultation has not taken place.”

The Minister observed that, but it would be helpful if he outlined the reasons why a full public consultation has not taken place.

Specifically, in terms of both the public and private sectors’ response, it would be helpful to know what consultations took place with large, or indeed small, business organisations. What consultations were there with the Confederation of British Industry, the Institute of Directors or the sector skills councils for the groups that will be most affected, according to the table on page 6? In the context of what the Minister said about the issues for small business, was there consultation with the Federation of Small Businesses? The table at paragraph 10.4 on page 6 shows the five sectors that will account for the majority of sponsored skilled visa applications, according to the Home Office’s own immigration statistics from February 2017. It is striking that by far and away the largest of the top five categories listed is information and communication, with 23,358 sponsored skilled visa applications in the period that the Home Office assessed.

Everybody knows that we are going hell for leather—and perfectly reasonably so—to enter the digital age. The Digital Economy Bill has just concluded its passage through the House of Lords. Has any consideration been given to the potentially harmful impact on that process if things do not go quite as smoothly as the regulations suggest? Specifically, what consultations has the Minister’s Department had with colleagues in the Cabinet Office and what is now the Department for Business, Energy and Industrial Strategy—both of which would be adversely affected in the digital areas if the regulations did not produce what they said on the tin—and what was the response? If we simply go through the detail of what the Government have put forward in their explanatory memorandum, we see that various issues and problems are already looming.

The Minister and his colleagues have been very helpful, and I pay tribute to him for holding an information session last week. I was not able to attend, but my assistant was, and he provided very helpful information. However, I have a couple of questions about what was said. My understanding from the meeting and from the memorandum is that there are no plans to extend the charge for the European economic area, but I want to put my question again: what will happen if in the future EU citizens become necessarily eligible for tier 2 visas?

I have already mentioned the issue of how the Minister and his Department intend to spend the money, so I will not dwell on that again. The charge is about incentivising existing employers. In theory, if it is successful, at some point the skills charge will not be necessary. Has the Minister’s Department done any modelling or made any assessment of the nudge impact, which I think is perhaps the right way of describing what the Minister said the purpose of this was?

I have touched on the issue of statistics, which are extraordinarily important for Government to be able to make judgments not only about how to introduce a policy but about how to administer it. Sad to say, but the Government’s closure of the UK Commission for Employment and Skills last year, which routinely did analysis and collection of statistics, means that we no longer have a single body with a national overview of the skills gaps that the Minister referred to. I therefore want to ask—this is absolutely crucial for him to convince and persuade not only the Committee, but the majority of employers who will participate in the process—how his Department and his officials will identify the skills gaps and decide how much of the £100 million they will prioritise for which areas.

I have already mentioned Brexit and I will return to it in the context of the regulations at the end, but I also want to raise the implications they will have for the NHS and the healthcare sector. Again, the chart in paragraph 10.4 identifies human health and social work activities. I hope the Minister’s Home Office colleagues have made him aware of a letter sent by the British Medical Association and the Royal College of Nursing to the Home Secretary on Friday 10 March regarding the impact of the charge on the health and social care workforce. In that letter they asked the Home Secretary to exempt the NHS and the wider health and social care system from the charge.

The British Medical Association and the Royal College of Nursing quoted two particular statistics that the Minister may or may not wish to challenge. They said that £3.5 million would be taken out of the NHS budget if the charge was applied to doctors who were granted tier 2 general visas from August 2014 to August 2015. They also made the point that if the charge had been applied to registered nurses, the health and social care system would have lost £655,000 in 2014-15, rising to £2.1 million in 2015-16. Of course, those are “What ifs?” and hypotheticals, but they nevertheless give some indication of why the BMA and the Royal College of Nursing are so concerned.

I do not want to quote at length from the detailed letter that the BMA and the Royal College of Nursing sent to the Home Secretary, but there are a couple of key points. The Minister talked about wanting to get moving on this, get skills coming in and get people trained, all of which I agree with. However, the chair of the BMA and the general secretary of the Royal College of Nursing rightly reminded the Home Secretary and her officials of the gestation time of this process. They said:

“While the health secretary has outlined proposals to expand the supply of UK trained doctors to reduce the NHS’s reliance on doctors from overseas, the length of time taken to train a senior doctor will mean that the NHS will continue to be reliant upon doctors from the EU and overseas in the short to medium term to fill vacant posts.”

They also said:

“Checks and balances are already in place to ensure posts are first offered to UK and EU nationals through the resident labour market test. It is unfair therefore, to penalise health and social care employers for recruiting a doctor or a nurse on a tier 2 visa”.

I do not intend to go into the broader debate around health service training and skills, because that would be outwith the purposes of the regulations, but those comments certainly ought to send a message to the Minister and to Home Office officials and the Home Secretary, who will have to bear the responsibility. Although the Minister and his Department will benefit from this—I mean this in the nicest possible way—they are the bag carrier for the Home Office in this matter.

It is important to look at the practicals. It is not irrelevant to give a brief example from my own constituency. My local hospital, Blackpool Victoria hospital, in common with many other hospitals, is finding it extraordinarily difficult to recruit at the moment. It has just had to hire 80 medical staff from the Philippines. Some people might say, “Well, they should have been doing more to retrain, reskill and bring people on board,” but the reality of attracting staff to coastal or suburban places that have more challenges than university-led or city centre hospitals is significant. Given the town the Minister represents, I venture to say that he will know of those issues, in terms of the competition between small-town areas and city centres. Those are really important issues that will need to be taken into consideration in implementing these regulations.

My hon. Friend Lord Watson of Invergowrie, speaking for our party in the other place yesterday on these regulations, identified potential problems coming from science, technology, engineering and maths teachers not being exempt. Will the Minister look carefully at that and respond? I do not believe that his hon. Friend, the Minister responsible in the other place, gave a response, although I stand to be corrected.

In that debate my hon. Friend also suggested a sunset clause, whether formal or informal, for the regulations. I urge the Minister to look seriously at that. This is a bold initiative, but it is nevertheless full of a series of untested variables that could be even more prone than usual to the law of unintended consequences. The Government themselves have admitted, in paragraph 7.5, the complexity of the regulations. I am sure that officials will sometimes say, “A sunset clause is unnecessary.” They might say that in the context of the fact that we are told in paragraph 12.1 of the explanatory memorandum, which refers to monitoring and review:

“The Department for Education will keep the operation of the charge under review, with support from, amongst others, the Home Office. This will include reviewing the policy after 12 months’ operations.”

It is not clear to me whether that means reviewing the policy as a whole or in the context of the charges and tariffs that have been produced for it. I would be grateful for clarification on that matter from the Minister.

One of the reasons why we thought long and hard about whether we would not oppose these regulations is that we believe the regulations have to be monitored extremely carefully, for all the reasons I have described. If the Minister is not minded, or not able, to apply a sunset clause to them, we need at the very least to have an annual review brought to Parliament that says where there have been problems or where there is potential for tweaking the policy.

I repeat what I said at the beginning. We are in broad support of the process, which is a process and a set of suggestions that we considered as a party in opposition and discussed before the 2015 election, so it would not be right for us to oppose the regulations on this occasion. However, our abstention comes with a big caveat to the Minister to take note of all the things that I have said and that my noble Friend said in the other place yesterday. I give notice today that we, and my colleagues in the shadow Home Office team, will very vigilantly pursue the process and the implementation of the regulations. There is also a role for the Chairs of the Select Committee on Education and the Select Committee on Business, Energy and Industrial Strategy, so I will be sending a copy of my remarks and those of my noble Friend in the other place to them too.

--- Later in debate ---

[Robert Halfon]

I thank all the shadow spokespeople and my hon. Friend the Member for Sleaford and North Hykeham—who I am delighted to see in her place, having won the by-election—for their thoughtful and considered questions. I will try to answer as many as possible.

I would like to make a wider point, following what the hon. Member for Aberdeen North said about our putting up the drawbridge. There is nothing of the sort. This is very much part of our genuine policy on skills reform, including the apprenticeship levy, the Sainsbury reforms and the £500 million announced in the Budget to support further education. All that is about building a skills and apprenticeships nation, because we have a huge skills deficit in our country.

The leader of the Labour party often criticises Conservatives for cutting corporation tax, which we have done in order to increase jobs and ensure that companies can invest in capital. We believe we have to share the burden of paying for skills with big business and big organisations and the hard-pressed taxpayer. That is the Conservative approach.

I am a huge believer in overseas development and overseas aid. I also believe in soft power. I have fantastic Filipino nurses in Harlow. However, every time we take someone from a poorer country and do not develop our own people’s skills, we are making that country poorer, not richer, because that doctor from India or the Philippines is lost to that country and is doing service here. We are not only not skilling our own population but causing damage to poorer countries that desperately need those skills. I believe in soft power, but this is about reforms to skills.

I am happy to apologise about the timing. As the hon. Member for Blackpool South kindly acknowledged, the measure was first announced in 2015 and was debated in Parliament in 2016. We wanted to bring it in earlier. It is genuinely the case that Brexit, the new Government and trying to get it right have meant a delay, for which we apologise. It has not been as ideal as it might have. As the hon. Gentleman acknowledged, there have been many external factors.

To be clear in terms of Brexit, this charge will be paid by UK employers who recruit skilled workers from outside the European Economic Area through the tier 2 general visa. There are no plans to apply a charge to employers when they recruit EU nationals. Primary legislation would need amending to extend the charge to workers from Europe and we have no plans to do that.

[Gordon Marsden]

I am grateful to the Minister for his apology. I want to make it clear that I entirely exempt him from what were not criticisms but observations of the process. I appreciate that he had to use the words “no plans”, but will the Government categorically confirm that, if we withdraw from the EU without any trade agreement, the position will not affect the employment of EU nationals and that they will not be treated in the same way as those affected by this instrument?

[Robert Halfon]

First, the immigration skills charge is purely to do with those outside the European Economic Area and there are no plans to apply the charge to EU nationals. We would have to amend primary legislation. When we leave the EU, we will be able to take steps to control EU immigration, but the precise way that is to happen has not been determined. The immigration charge is purely to do with people from outside the European Economic Area and there are no plans to apply that to the EU. The Home Office Minister is in another debate today at the same time; otherwise, I am sure he would have been able to confirm that.

The hon. Gentleman referred to our sending a conflicting message about being open for business, a point that was also made by the other shadow spokeswomen. We remain open to attracting the brightest and best from overseas. As I set out in my opening remarks, the exemptions to the immigration skills charge show the commitment, supporting global knowledge and the exchange of skills. However, we must have the right skills domestically and we are way behind.

The vote to leave the EU demonstrated the importance of making the economy work for people of all backgrounds, in all areas of the country. The fact is that British individuals in our country are losing out because of the decisions of employers instead to recruit people, often from poorer countries. That is why we introduced the immigration skills charge.

The consultation was done by the Migration Advisory Committee. It undertook a thorough review and consulted widely. It issued a public call for evidence, receiving 251 written submissions and meeting representatives from 200-plus public and private sector employers. I will happily send a list of every single one to members of the Committee, if they would like—I do not have it on me today. Our job is to listen to the views of the Migration Advisory Committee and we followed its recommendations. There was a consultation, but it was done by that specific, respected body and the people on it.

In terms of the fee, the Department for Education is paying IT development costs of about £600,000 in 2016-17. That is not coming from the income raised from the charge. The small ongoing administration costs are approximately 1%. As I said in my opening remarks, the money is going into the Consolidated Fund, but it will be spent on skills. We are discussing with various people how that money should be spent. I would hope that it will sustain, for example, the institute of technology colleges and/or the lifelong learning and so on that we announced, but it will be spent on skills.

The hon. Member for Blackpool South asked about the stats and the closure of the UKCES. The reason I go on about the “Nightmare on Skills Street”, as I describe it, is because the Department and many other bodies collect a huge range of statistics about skills and apprenticeships and social disadvantage. The reason why we have the skills and apprenticeships priorities that we do—widespread, quality provision, social mobility and addressing our skills needs, particularly of women in STEM—is all the data and the analysis going on in the Department, with the Skills Funding Agency and many other organisations.

Let me turn to the public sector and the health service, which were raised by my hon. Friend the Member for Sleaford and North Hykeham and the Opposition spokesman. We need to put this into context. The number of doctors, nurses and teachers recruited through a tier 2 visa route—the thing we are talking about today—is low. The MAC’s report found that 3,600 certificates of sponsorship were used for doctors and 2,600 for nurses for the year ending August 2015. In terms of teachers, the same report showed that 164 certificates of sponsorship were used for science teachers and 10 for teachers of Mandarin in 2015. Let me put that in context. The use of tier 2 visas is relatively low in terms of the whole number.

Draft Industrial Training Levy (Engineering Construction Industry Training Board) Order 2017

Gordon Marsden Excerpts

Tuesday 21st March 2017 General Committees

[Gordon Marsden (Blackpool South) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Alan. Since tomorrow is the Minister’s birthday, I offer him a rare and mild pre-birthday treat by saying that we do not intend to oppose the order—and for very good reasons.

I was about to say that the origin of this levy is lost in the midst of time, but considering I was 10 when it was introduced, perhaps that is not the best way of putting it. I looked at the date—1964—and wondered whether this was a final gasp of the 13 years of Tory misrule, as it was called at the time, or possibly the first fruits of Harold Wilson’s revolutionary white heat. Moving on from history, the point about the order, the ECITB and its associated board, the Construction Industry Training Board, is that they have been an excellent example over more than 50 years of bodies in the industry coming together voluntarily to work with Government to make progress. This arrangement and one or two others survived the potential culls of the Thatcher years, and so it comes back to us today for the latest iteration, reflecting what the ECITB wants to do or feels it needs to do in the context of the introduction of the apprenticeship levy.

I am grateful to the right hon. Member for Wokingham for intervening and thereby enabling the Minister to point out that the two levies are complementary. He will know, as I do—I am sure we have both had conversations with the ECITB and the CITB—that after the announcement on the apprenticeship levy, those bodies had certain questions about how the two measures would rub along. Indeed, they had to have fairly significant and useful discussions with their members. The question has been resolved, as far as I am aware, to their satisfaction and to the satisfaction of most of their members, as indicated by the participation rates that the Minister mentioned.

One might say that in some ways this was employer-led avant la lettre. It embodies some of the things the Government want to do to put employers in the driving seat. It is also important because it relates not simply to apprenticeship training but broader training. If there is one little thing that I want to say to the Minister, it is that in the full flush of waiting for the apprenticeship levy to kick off and for the new Institute for Apprenticeships to be launched—I know there is nothing he can do about this, but it is being launched on April fool’s day—it is really important that we do not regard training in this country simply as a one-trick pony that is for apprenticeships. There is all sorts of training to be done. As the Minister knows, and as we have talked about in previous engagements, the needs, particularly in adult skills, are very great indeed.

I welcome the order. As the Minister said, the construction industry has a very good record of taking on people from disadvantaged backgrounds; he gave figures on people with disabilities. I only have two questions. First, I see in the associated explanatory memorandum that the order is paralleled by an order for the CITB in 2015. I assume that both arrangements are triennial. I suppose the obvious question to the Minister is: does he anticipate that the CITB will be coming back in due course to have its levy order renewed? Since I notice that the order extends to England, Wales and Scotland, my second question is simply whether the appropriate and usual consultations with the devolved Administrations have taken place.

Oral Answers to Questions

Gordon Marsden Excerpts

Monday 20th March 2017 Commons Chamber

[Robert Halfon]

I could not have put it better myself; my hon. Friend is exactly right, and I congratulate Dyson. What is happening with that company and elsewhere in the country, with the investment the Government are putting into skills—the £500 million extra announced last week, and the £40 million for pilots in lifelong learning and studying—show that we are investing. We are putting our money where our mouth is and building a skills and apprenticeship nation.

[Gordon Marsden (Blackpool South) (Lab)]

The Budget timetable, which saves the Treasury £400 million—we did not hear that from the Minister—is now a double whammy for learners. It delays until 2019 and jeopardises Lord Sainsbury’s technical skills agenda, and it hits disabled and disadvantaged and distance learners, as the Open University warned the Department for Education it would. With a 30% drop in part-time learning since 2011, why is the Department planning to cut support for distance learners even further, as the Office for Budget Responsibility revealed in section A.22 of its Budget document?

[Robert Halfon]

I am amazed by the hon. Gentleman’s question. I thought he would rise to celebrate the £500 million extra we are spending on further education, the £2.5 billion we will be spending on apprenticeships by 2020, or the £40 million on pilots for lifelong learning. By 2020, there will be more funding for adult education than at any time in England’s history. We have a record of which we can be proud; it is time the hon. Gentleman supported us.

Apprentices: Financial Support

Gordon Marsden Excerpts

Wednesday 8th March 2017 Westminster Hall

[Gordon Marsden (Blackpool South) (Lab)]

It is a great pleasure to serve under your chairmanship, Ms Ryan, and to speak in this debate in the middle of National Apprenticeship Week. I begin by paying warm tribute to my hon. Friend the Member for Luton North (Kelvin Hopkins) and congratulating him on securing the debate. He has modestly mentioned before, and again today, his experience in this area. Colleagues who served with him on the Public Bill Committee for the Technical and Further Education Bill—new colleagues in particular— will have recognised his breadth, depth and wealth of experience in this area, having been an FE tutor, a governor, and a chair of the all-party group on further education and lifelong learning. Latterly, as the Minister and I know, his contributions in that Bill Committee were excellent.

I am delighted to take part in the debate. This week is an opportunity for all MPs, regardless of party, to celebrate the tens of thousands of individual successes—from young beginners to older workers acquiring new skills, and the successes of the colleges, training providers and employers who inspire them. I was privileged to speak yesterday at the celebration of apprenticeships conference, which was organised by Lindsay McCurdy and her team from Apprenticeships 4 England to pay tribute to the huge number of talented and hard-working apprentices up and down the country.

[Kelvin Hopkins]

I thank my hon. Friend for his kind words. When apprenticeships are successful, many apprentices go on to have highly skilled jobs, overtaking even those who have been to university, including graduates, and they are ahead both in promotions and earnings by the time university students get started.

[Gordon Marsden]

My hon. Friend makes an excellent point, which could reverberate usefully around the Chambers of this place thanks to individual MPs and Ministers—I know that the Minister who is here today talks about that frequently. Those who pursue that route of learning while they are earning, to use that phrase, can be enormously successful.

As Members know—including those of us who have sat on Select Committees, where we listen to hours and hours of discussion, debate and evidence—sometimes little things stick with us. I remember well something that happened 10 years ago, although the illustration is still relevant. I worked on a Select Committee inquiry comparing apprenticeships with higher education. We heard from a young man who worked at BAE Systems. He was not my constituent but came from a neighbouring constituency. I will not mention his school—it was outside Preston—but he said, “When I was at my secondary school, most of my mates ended up going to university and I did not feel that I either could or would. They used to say that I was a bit of thicko, but I got this apprenticeship with BAE Systems.” He spoke about where he was in the process, and of course BAE Systems supported him through his degree. He also said, “I will have the last laugh on them, because I will come out with a very skilled job and a degree, and no student debt.”

Today is not the day for me to engage in discussing spiralling student debt, least of all with a Minister who is not responsible for it, but that point is important. The more that the costs of higher education rise, the more important it is to get the message across to people that it is not a question of having apprenticeships or higher education. The two can dovetail extremely well, but to do so, people need the financial support and encouragement that we are debating today.

I was very happy to speak at the celebration of apprenticeships conference. On Monday I also met people from the motor industry, which has been effective and successful in this regard. We talked about the sector skills council that is associated with it—the Institute of the Motor Industry—and the Society of Motor Manufacturers and Traders. The industry has been very successful in supporting Government programmes such as the apprenticeship trailblazers, and in giving apprentices support—sometimes financial support and sometimes information, advice and guidance. There are some very bright sparks in a number of different sectors.

[Kelvin Hopkins]

My hon. Friend mentions the motor industry. Vauxhall is a leader in that industry, and I know Vauxhall well, being from Luton. In recent years it has encouraged young people from local schools and colleges to tour the factory to see what life is like in manufacturing, and it has recruited new apprentices. Vauxhall found that its workforce was ageing, but now it is getting younger again, because it is taking in many more young apprentices and is showing the way forward for positive companies. If other companies were as positive as Vauxhall, we might do rather better.

[Gordon Marsden]

My hon. Friend makes an excellent point. It is about the process involved, and I will talk later about the barriers to doing that sort of thing that young people experience in schools, for instance. It is important that various sectors act.

I have talked about the importance of the motor industry, but there is also the service industry. That raises questions not only about support but about the many opportunities available. I mentioned Apprenticeships 4 England and Lindsay McCurdy. Last year she brought a great bunch of apprentices, including a talented group of young apprentice hairdressers from Michaeljohn Training in Manchester, to a meeting that I sponsored in one of the Select Committee rooms. As an apprenticeship week present, they presented me with a very lifelike model head—I still have it on my office shelf—to demonstrate their skills in colouring and styling. One of these days, if I am feeling mischievous, I suppose I might ginger up the occasional official or other policy maker who seems to think that the route to successful jobs and apprenticeships is simply through higher-level manufacturing, digital or technical areas. The truth is that if we are to achieve the 3 million target, which the Minister and his colleagues are so keen to hit, and really expand the opportunities for young people, we will need the service sectors just as much as we need manufacturing and other sectors.

Oppositions do not get much opportunity to blow their own trumpet about success stories, so I shall. I am very proud of the fact that the last Labour Government introduced the National Apprenticeship Service and, indeed, National Apprenticeship Week in 2008. They also revived apprenticeships, taking them from 65,000 starts in 1996-97 to 279,700 by 2009-10. Those increases have continued under successive Governments.

The last Labour Government also linked the creation of apprenticeship placements to public sector contracts across a range of Departments and projects, including Crossrail. Such infrastructure projects will remain a crucial conduit for apprenticeship expansion, as I have said. As well as financial support, informal encouragement is extremely important for widening the diversity of the apprentices who take part in those great projects. I was fortunate enough to see that two years ago when I went down the construction tunnel at Farringdon and saw some of the people working on it. They were young Londoners, including a couple of young women and a young man from a BME community who had started off selling ad space and was now proud of his tunnelling qualifications. It is worth remembering that 60% of the construction work on Crossrail is outside London, so there is a lot of scope in the supply chain for many more opportunities for young people. Projects such as Crossrail and its commitment need to become a vital part of our regeneration and productivity across the UK.

[Karin Smyth (Bristol South) (Lab)]

My hon. Friend makes an excellent point. Closer to home, I was able to visit the cellars of this very place to see the amount of work that is needed on the restoration and renewal project for Parliament. A great range of people across the country contributed to building this great building. There are immense opportunities for apprentices to be involved in the restoration project across the country and learn new skills that we have lost. That needs to be a key part of the project.

[Gordon Marsden]

My hon. Friend makes an excellent and highly relevant comment. I remember having the same experience many years ago when I served on the Advisory Committee on Works of Art, looking into the repair of stuff in this place. The project is important because a lot of bespoke skills will be needed, not least those relating to architecture. There are some very challenging issues—logistics, wiring and God knows what else—that will potentially engage a whole gamut of people.

That is what it is all about; it is about economic impact, but it is also about improving the careers and life chances of hundreds of thousands of young people—and, indeed, older people. We talk a lot about apprenticeships, but we have not always talked enough about apprentices and their individual issues and challenges. The need to increase the focus on improving access and social mobility, which I know the Minister feels strongly about, as I do, is a crucial part of the equation.

My hon. Friend the Member for Luton North has already referred to the Government’s continuing failure to address or understand apprenticeships. The fact that the Department for Work and Pensions does not class apprenticeships as approved education or training is leaving many individuals and families thousands of pounds worse off. I pay tribute to a survey that appeared in The Times Educational Supplement on 10 February under the headline “Apprentices ‘treated like second-class citizens’”. It was carried out by the National Union of Students, via the National Society of Apprenticeships, which it sponsors.

My hon. Friend read an important but slightly dispiriting list of the ways in which apprentices are financially disadvantaged in comparison with students. If the Government hope to reduce the growing skills gap in this country with a push to create 3 million apprenticeships, why are apprentices and apprenticeships not included as approved education or training? There has been spirited discussion about that in the House of Lords recently, which I will come on to shortly. The Government need to make progress on this.

The Times Educational Supplement article states:

“Research by the NUS and TES has revealed that…some apprentices earn as little as £3.40 an hour”.

That figure will rise to £3.50 in April. There is a separate issue, which we probably do not have time to discuss in detail today, about how many more employers could go the extra mile, over and above the existing rate. That rate can sometimes be particularly difficult for younger apprentices to exist on, given their personal family circumstances.

[Kelvin Hopkins]

I hope my hon. Friend does not mind my interrupting his flow. He talks about companies; one of the problems with companies, particularly small companies, is that they sometimes have short lifespans and then apprentices are lost. The great advantage of big projects such as Crossrail—which I, too, have visited and been impressed by—is that they give long-term certainty to apprentices, who spend a long time doing a job and then come out with a lot of experience and with high skills that set them up for the future. We have to try to focus apprenticeships on those areas in particular, so that apprentices do not lose out and suddenly find themselves unemployed and having to get a job without skills.

[Gordon Marsden]

I hear what my hon. Friend says. He is absolutely right about the contribution that larger employers and large long-term projects can make. However, we are all products of our individual constituency circumstances and experiences. My experience as a Member of Parliament in Blackpool is that, although a lot of people go and work for large organisations outside Blackpool, such as BAE Systems, there are also a huge number of very small businesses and microbusinesses. In my experience, if we can engage small and medium-sized employers, particularly in areas where there is a close-knit SME community—there are obstacles to doing so, such as hiding the wiring for them and ensuring that there is back-office support, but they are outwith the debate—those SMEs are sometimes the best advocates for other colleagues and small businesses taking them on board. I think it is about both, not either/or, but my hon. Friend is absolutely right to point out the importance of the support that can be given by those organisations and the supply chains that contribute to them.

The article about NUS research states:

“Disadvantaged apprentices are missing out on thousands of pounds in support available to students”.

The National Society of Apprentices took up that point in its written evidence to the Technical and Further Education Bill, which stated that

“upon taking up an apprenticeship, a young person’s family will become ineligible to claim child benefit and child tax credits. This will inevitably have a negative impact on that family’s household budget, which is not covered by the earnings made by an apprentice’s salary given the apprentice minimum wage is barely over £3 per hour”,

as it was at the time.

Shakira Martin, the extremely active and feisty—I say that with approval—NUS vice-president for further education, has elaborated on that point. The article quotes her as saying that

“the idea that apprenticeships were a desirable way to ‘earn while you learn’ was ‘far from the truth’”.

She said:

“Apprentices are treated like second-class citizens, as workers and as learners. Financial support like Care to Learn [for apprentice parents], and Child Tax Credits for parents of apprentices, is not available…If apprenticeships are going to be the silver bullet to create a high-skilled economy for the future, the government has to…support apprentices financially to succeed.”

Otherwise, we will fail to capitalise on the benefit of expansion.

In the update that it circulated to Members today before the debate, the NUS elaborated on that point: “Apprentices are not necessarily eligible for council tax exemptions in the same way as other students. While those paid under £195 a week are exempt, many are unaware of this. Often councils do not advertise this discount on their website, and we are increasingly becoming aware of apprentices being wrongly charged council tax. Additionally, one of the implications of the apprenticeship reforms is that fewer apprentices will be eligible for this discount, not because they are being paid more, but rather”—this is a really important point that I would like the Minister to grasp—“because apprenticeships are no longer required to include a qualification which is necessary for the exemption. Apprentices earning over this amount are obliged to pay council tax.”

I referred earlier to the fact I had spoken at an event on Monday organised by the Society of Motor Manufacturers and Traders, the Sector Skills Council for Science, Engineering and Manufacturing Technologies, and the Institute of the Motor Industry. That event was preceded by a seminar in which there was discussion of all aspects of the apprenticeship levy, the introduction of the Institute for Apprenticeships and so on. One thing that came out, both in informal conversations and in the speeches that were made at that event, was how worried and concerned a body of employers remain about the issue of qualifications not being properly included, from their perspective, in the new standards that have come out of the skills plan and the Sainsbury review. That is a vexed issue, and I would not expect the Minister to want to dilate in detail on it today, but if he has not heard about it already from people in the industry, I am sure that he will hear about it presently.

I do not want to go on too long about this particular aspect, but it is crucial. I refer again to the debate held in the Lords on 27 February as part of the proceedings in Grand Committee on the Technical and Further Education Bill. My colleague, Lord Watson of Invergowrie, pressed the Government on this issue and tabled an amendment. Baroness Buscombe, the Front-Bench spokesperson who spoke on behalf of the Minister in the other place, said that some of the issues that had been raised were outwith the scope of the Department for Education. She was right; they are, because they are Department for Work and Pensions issues, and indeed the issues around council tax are for the Department for Communities and Local Government. Of course, that does not stop Ministers in either House having discussions with their colleagues in other Departments.

Baroness Buscombe also said that she could not change the definition of apprentices. As one or two Members of the Lords asked, if the Government cannot change it, who can? Perhaps the Minister could change it. If he cannot do so, or does not feel that it is his role to do so, powers could be given to the Institute for Apprenticeships so that it could change the definition, either by an amendment in the Lords, or in the Commons if any amendments come back from the Lords for us to discuss further on the Floor of the House. Or, I would argue, that could be done by delegated legislation. I will leave it at that, but I would like the Minister to consider some of those issues, because they are quite significant.

The Association of Colleges is also concerned about the discrepancy between the current national minimum hourly wage rates of £7.20 for those aged 25 and over and only £3.40 an hour for apprentices. Someone aged 22 in the first year of an apprenticeship is entitled only to that apprenticeship rate, whereas in any other area they would be entitled to the minimum hourly rate of £6.95 for 21 to 24-year-olds. That is a disincentive, which is an issue we really need to take on board. I think the Minister and I share common ground on this, but I believe that attracting more 19 to 24-year-olds into apprenticeships is extremely important, because many of them have life skills that 16 to 19-year-olds do not possess. However, many of them have had difficult circumstances that have meant they have not been potential apprentices. If they come from that sort of background, the financial disincentive—the disparity that I have set out—is really significant.

The National Society of Apprentices has said that the existence of a low apprenticeship national minimum wage is unnecessary and complicated for both apprentice and employer. It says that it is possible for someone to be on three different minimum rates during a four-year apprenticeship. That increases the risk of accidental underpayment of apprentices—that is a concern for employers—and apprentices have said that it demeans the value of the work that they contribute.

The Minister will be relieved to know that I am coming to the end of my section on finance issues. Of course, this is a good day to discuss finance, because we have the Budget coming up later. There may be nothing in the Budget about these issues—I am not expecting a last-minute conversion between now and half-past 1—but in all seriousness, they will continue to concern people, and I hope that he, his colleagues and indeed all of us will continue to press the Treasury hard on them.

As I said, the Government have talked about their apprenticeship programme being as inclusive as possible, which means that we must ensure that the most disadvantaged young people are not put off becoming apprentices. However, a report published by the Learning and Work Institute this week says issues to do with that expansion are not being addressed as strongly as they need to be. Particularly in respect of black and minority ethnic young people and care leavers, we tabled amendments to both the Higher Education Bill—that is outwith this morning’s discussion—and the Technical and Further Education Bill. Those amendments would have ensured that the new Institute for Apprenticeships set targets for improving access to apprenticeships and progression within them. After all, the Office for Students has a mandated responsibility for addressing access issues under the Higher Education Bill, so why does the Institute for Apprenticeships not have a similar responsibility? The Learning and Work Institute has called for the new Institute for Apprenticeships to have that responsibility, and we wholeheartedly agree.

There is also the issue of how people are put off becoming apprentices because of their low-income background. Teach First said in its progress report in 2016 that in every region in England, young people from a low-income background were less likely than their wealthier peers to become apprentices, and it suggested that financial barriers for those from low-income backgrounds were part of that. That is consistent with the finding reported by the Social Mobility Commission that youngsters from poor families took up only 10% of apprenticeships even though they accounted for 13% of those completing GCSEs.

In its briefing for this debate, the AOC said that it fears that the Government’s existing approach to financial support means that many young people from disadvantaged backgrounds face barriers to accessing apprenticeships, which is a disincentive for them in applying for apprenticeships in the first place.

I want to touch on gender issues, which is appropriate on International Women’s Day. The AOC has said that women continue to struggle financially on apprenticeships. A recent report by the Young Women’s Trust showed that women receive an average of £4.82 an hour compared with the male average of £5.85. According to a survey by the Association of Employment and Learning Providers, the proportion of apprentices reporting an increase in pay continues to be dominated by men. Unsurprisingly, therefore, the Young Women’s Trust was concerned by the fact that 16% of women were out of work after their apprenticeship compared with 6% of men. It said that the differences in occupational segregation by gender have hardly changed in more than a decade. For example, the proportion of construction apprentices who are female has only risen from 1% to 2%.

[Kelvin Hopkins]

Of course, one of the problems is that some of the apprenticeships leading on to higher-paid work tend to be dominated by men. However, as my hon. Friend may know, there has been a campaign recently, including a meeting last week, to promote the idea of women in engineering. Does he agree that the Government ought to encourage more women to go into such areas, where they can develop skills and earn much more money?

[Gordon Marsden]

I absolutely agree. To be fair to the Government, I think they have said that on a number of occasions. Nevertheless, if the perception of a pay gap continues, with associated career blockages, into the 2020s, that will play havoc with our aspirations to get far more women into those careers in the first place. That is why in the last apprenticeships debate I asked the Minister about the Government’s equality analysis of the funding changes to apprenticeships last autumn and how we will track improvements in apprenticeships.

People from black, Asian and minority ethnic backgrounds are also under-represented. I know that the recent McGregor-Smith review underlined that point. However, I would like the Minister to say whether it is still the Government’s target to increase BAME apprenticeships by 20%, which was the target set by the previous Government. That is important given the issues we are discussing today.

I do not have time to deal with care leavers in great detail, but when care leavers move into independent living, they often begin to manage their own budget fully for the first time. There are concerns that because of a lack of financial education and financial support, those young care leavers are frequently falling into debt and financial difficulty.

The Minister and I have both talked about the importance of traineeships, but the Government have been silent so far on what we can do to look at the negatives that still exist in the system. We need to know what progress the Department is making on the issue with the Department for Work and Pensions. A major stumbling block for the Minister’s predecessors has been the brokering of a cross-departmental deal that would enable traineeships to be more accessible and inviting for young people and employers. That goes to issues around clawback and jobseeker’s allowance, which I do not intend to talk in detail about today.

Finally, I want briefly to address travel costs. My hon. Friend the Member for Luton North touched on the issue significantly in his speech. The hon. Member for Central Suffolk and North Ipswich (Dr Poulter) made excellent points about the particular problems in rural areas, and our colleagues from the Democratic Unionist party made some good points on that as well. There are two or three areas where financial support is most at risk. We have heard the statistics about £24 a week being spent on travel, which is about a quarter of the salary of an apprentice, if they are earning the national minimum wage.

In the light of the area review process and the creation of the so-called fewer, more resilient colleges, the National Society of Apprentices is concerned that travel time will be too much for some apprentices, which will impede access to certain roles. That echoes some of the issues that the hon. Gentleman and others have talked about. That is why we tried to make changes to the Technical and Further Education Bill in Committee and on Report to enable the institute to take on board the need to improve travel concessions. We have pledged to restore the principles of the education maintenance allowance, which provided so much support for young people’s travel costs in pursuing their studies. Apprentices remain a significant proportion of those affected, with approximately 360,000 at colleges being in that category.

There are other issues and scenarios to consider. What will happen if colleges become insolvent or training providers go bust? The insolvency issue has been an important part of the Technical and Further Education Bill. Where the challenge of college insolvency occurs—hopefully it will be infrequent—that could pile up extra travel time costs for apprentices who have to change their place of study as a result. More recently, the Minister and I attended the session organised by FE Week, so he will know that there have been concerns about large providers going out of business, leaving apprentices with huge loan debts to pay and no qualifications. How do the Government plan to compensate them? I have raised those issues with the Government and the Minister, and he is aware of them.

Careers advice has been touched on, and it is an important issue. It is not directly important for financial support, but young people who get the best careers advice in college or school are more likely to be able to seek out the better apprenticeships, with better support and everything that goes with it.

[Kelvin Hopkins]

The problem with careers advice has been significant for many years. Does my hon. Friend agree that just making young people aware of the possibilities when they are very young—possibly at primary school, but certainly at secondary school—is very important?

[Gordon Marsden]

I absolutely agree. That is why I warmly welcome Lord Baker’s amendment to the Technical and Further Education Bill, which would ensure that schools have to give access to advice about apprenticeships. I also fully support the ten-minute rule Bill tabled by my hon. Friend the Member for Scunthorpe (Nic Dakin)—he was with us briefly at the start of the debate—which would allow businesses and FE providers to go into schools and let students know about the opportunities. I am encouraged by the fact that the new Ofsted chief inspector, Amanda Spielman, who I have spoken to recently, is sympathetic to Ofsted making a much stronger case in ensuring that apprenticeships rate higher in the information given in schools.

Why does that matter for financial support? It matters because in general, knowledge is power. Advance knowledge enables those who have it to be a step ahead in getting better apprenticeships. There will always be excellent employers and sharp would-be apprentices who will be able to access some of the funding, but if we want to make a step change, we have to have major change across Government in how apprenticeships are treated legally and financially. All of us want to make that progress, but it is time to tackle the shortcomings that put so many off apprenticeships or cause them to be dispirited or in trouble and therefore drop out. That must surely be a good thing to do, not simply for National Apprenticeship Week, but for all the year round.

--- Later in debate ---

[Robert Halfon]

I accept the premise of my hon. Friend’s question. I have been to rural areas to meet apprentices, and the younger ones in particular say that the cost of transport is a problem. We are looking at that as part of the social mobility review for apprentices. Again, if those apprentices were just going to an FE college they would not be earning any money, and if they were at university they would have to have a loan. At least they are earning, and the vast majority of them are earning more than the apprentice minimum wage. We have to strike a fair balance between the needs of the people my hon. Friend describes, which are very real, and fairness to taxpayers on low incomes, in terms of the overall costs and benefits. It is open to colleges to give apprentices bursary funding to help them with bus travel, and many do so.

[Gordon Marsden]

On the review—this is the first I have heard of it, but I welcome it—I urge the Minister, in connection with the points I made earlier, to look not only within the Department but at some of the broader issues, such as the 16-hour rule and the relationship with the Department for Work and Pensions.

[Robert Halfon]

We announced the review in November last year, with that final announcement on the levy. I am working closely with my hon. Friend the Minister for Employment at the DWP. I cannot say that we will come up with a magic solution, or that there is a magic funding pot, but there are other issues, such as those to do with benefits and so on—for example, if a single parent were working in a coffee shop but wanted to do a teaching assistant apprenticeship and the wage was literally the minimum of £3.40. We are looking at all those, although I hope that when universal credit comes through fully it will deal with some of the problems. As I say, we are committed to that. We also have a £60 million fund.

In addition, the National Union of Students has its Apprentice extra card. I helped to launch it and worked with the scheme in the previous Parliament when I was a Back Bencher. My predecessor, my right hon. Friend the Member for South Holland and The Deepings (Mr Hayes), attended the launch. Apprentices, as young people under 25, are also entitled to some rail discounts and so on.

The hon. Member for Blackpool South talked about traineeships, to which I am very committed. We have spent more than £50 million on them. There were more than 24,000 traineeship starts between August 2015 and July 2016. Fifty per cent. of trainees progress into apprenticeships and 94% of employers consider traineeships an effective way of increasing young people’s chances. Traineeships are part of the £5.4 billion 16-to-19 budget funded by the Skills Funding Agency. It is also important to note that almost 20% of those who do traineeships have learning difficulties or disabilities. I think that is a wonderful figure. We would like to increase it further, but it is pretty high already.

We also still have the target to increase black and minority ethnic take-up of apprenticeships by 20%, and we have said that publicly. We are doing everything possible to increase apprenticeships in the public sector, with a new 2.3% target. I have been asked about apprentices with disabilities and we are working hard to implement the recommendations of the Maynard taskforce, led by my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard). We agreed with everything it suggested and our aim is to have full implementation by April 2018.

I thank the hon. Member for Blackpool South for mentioning council tax. I will discuss those matters with my counterparts in the Department for Communities and Local Government, especially if, as he says, apprentices are not getting rebates to which they are entitled. I will look into what we can do about that.

Before I conclude, I apologise, Ms Ryan. I should have said at the beginning of my speech that it is a pleasure to serve under your chairmanship.

Yes, we have a lot of work to do. The hon. Member for Luton North has highlighted how we need to continue to work on quality, to ensure that those 3 million apprentices have quality apprenticeships. He is right to highlight that we need to do everything possible to help the socially disadvantaged. I am not saying that we have all the answers, but the statistics show—the numbers show, not just me—that we are helping. The individual stories show that we are helping in human as well as numbers terms. Whenever I go around the country, I speak to as many people as possible. Almost every Thursday I go around colleges and meet apprentices. This week, had it not been for this important debate, I would probably have been in a college early this morning, before the Budget. We are investing in the skills and the quality, and we are creating and doing everything possible to create a ladder of opportunity to ensure that apprentices from all backgrounds may climb it to the jobs, security and prosperity they need.

Oral Answers to Questions

Gordon Marsden Excerpts

Monday 6th February 2017 Commons Chamber

[Robert Halfon]

I am delighted to see my hon. Friend in her place. Not only do I offer my huge congratulations to Havering College; I would be pleased to visit with my hon. Friend.

[Gordon Marsden (Blackpool South) (Lab)]

The Minister quoted the statistics for 2015-16, but the proportion of apprenticeships for under 19-year-olds, compared with those for older apprentices, was basically stagnant at just 26% compared with 25.2% the previous year: only one in four of all apprenticeships. The latest stats—for the first quarter—show that numbers for 16 to 18-year-olds are getting worse, with 58,190 compared with 63,200 the previous year, which is a drop of 8%. With the head of engineering training provider JTL saying that Government funding changes could cut its apprenticeships for 16 to 18-year-old by two thirds, and thousands of youngsters blocked from getting apprenticeships by being on the treadmill of GCSE English and maths resits that only one in four of them passes, where is the Government’s beef for 16 to 18-year-olds, instead of motherhood and apple pie?

[Robert Halfon]

I am amazed by the hon. Gentleman’s question. He often does not see the apprentice wood for the apprentice trees. We now have the highest number of apprenticeships on record in our island’s history at 899,000, with more than 780,000 apprenticeship starts since May 2015. We are investing millions in ensuring that employers and providers hire apprentices. We have a record to be proud of.

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.

--- Later in debate ---

[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.

--- Later in debate ---

[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.

Oral Answers to Questions

Gordon Marsden Excerpts

Monday 19th December 2016 Commons Chamber

[Robert Halfon]

I find it interesting, given that the hon. Lady’s party’s position is to campaign for more powers to go from Westminster to Scotland, that she would rather have funding decisions made by an authority in the European Union than by one in Scotland. Having said that, she will know that the Chancellor has announced that the Treasury will guarantee structural and investment funding bids that are signed before the UK leaves the EU. This includes funding for projects agreed after the autumn statement, provided that they represent good value for money and are in line with the Government’s strategic priorities, even if they continue beyond the UK’s departure from the EU.

[Gordon Marsden (Blackpool South) (Lab)]

Our further education colleges benefit hugely from European structural funds such as the European social fund, as has been mentioned. The Government told me in February that the Skills Funding Agency had received £725 million from the European social fund, and that in 2014-15, £120 million went directly to FE colleges from European funding. That money guarantees thousands of apprenticeships, jobs and new skills. Can the Minister guarantee that the Government will replace that £120 million after Brexit? Will FE colleges that provide higher education courses then get the same Government guarantees on replacement funding as universities?

[Robert Halfon]

I had hoped that, in the spirit of Christmas, the hon. Gentleman might have welcomed the 900,000 apprenticeship participation figure, the highest on record in our island’s history. As I have said, access to European funding is just one aspect of college business that will be impacted by the decision to leave the European Union. We are considering all the aspects of how FE colleges could be affected. It is also worth noting that, by 2020, the adult FE budget will be the highest in the nation’s history if we include apprenticeships and adult learner loans in the budget as a whole.

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.

--- Later in debate ---

[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.