Apprenticeships Funding

Debate between Helen Whately and David Lammy

Tuesday 1st November 2016 Westminster Hall

[Mr Lammy]

I encourage the hon. Lady to get into the detail, because that may not be the picture after the cuts that are coming. She may also have seen that the axe is, sadly, falling heavily on disadvantaged areas. I do not know whether there are pockets of deprivation in her constituency, but that is an underlying theme in this debate.

[Helen Whately (Faversham and Mid Kent) (Con)]

Will the right hon. Gentleman give way?

[Mr Lammy]

I will not. I ought to make some progress, because I am conscious that many Members wish to speak.

The national picture is also worrying. Analysis by FE Week of the new funding rates found that children’s care, learning and development apprenticeships now face cuts of between 27% and 42%, compared with between 36% and 56% in August. Hospitality and catering funding will now be cut by between 34% and 45%, compared with between 41% and 60% in August. As the principal of the College of Haringey, Enfield and North East London told me, those cuts will only make it harder to get young people into apprenticeships.

Even after the Government’s U-turn, nine out of the 10 most popular apprenticeships still face cuts ranging from 14% to 51%. The best case scenario is average cuts of 27%; the worst case scenario is average cuts of 43%. The Department for Education was presented with that analysis last Thursday morning, less than 48 hours after it published details of the cuts on the gov.uk website, yet no response has been forthcoming. I look forward to hearing what the Minister has to say about the detail of the range of those cuts—after all, he has had plenty of time to prepare.

[Helen Whately]

Will the right hon. Gentleman give way?

[Mr Lammy]

I will not at this stage.

I now turn to the disadvantage uplift—the additional funding to support disadvantaged areas that I referred to earlier. That was quietly scrapped completely in the proposals published in August. Last week’s statement promised a

“simplified version of the current system of support for people from disadvantaged areas”,

yet the Minister has told FE Week that that is guaranteed only for one year, while the Department undertakes a review to work out how best to support disadvantaged young people to undertake apprenticeships. One year? Why does it take so long to work out what needs to be done for disadvantaged young people? It is clear: give them an opportunity! It is quite straightforward, and that requires resources.

What does this mean? Will Parliament be told what is going on or will Members of Parliament have to find out through the media? It sounds to me like more cuts will come in a year’s time. Will the Minister confirm today what will happen to support for disadvantaged areas in 12 months’ time? Will the support be maintained or cut? If it is to be cut, may I reassure him that I will be back here, along with many other Members of Parliament, to oppose that once again?

On Tuesday, the Secretary of State told Parliament:

“Apprenticeships transform lives and are vital in making this a country that works for everyone.”

Apparently, the changes made since August

“will ensure apprenticeships are high quality…and provide opportunities for millions more people.”—[Official Report, 25 October 2016; Vol. 616, c. 6WS.]

If the Government are serious about social mobility, will the Minister explain today why the Government are pushing ahead with cuts of anything between 27% and 45% for nine of the 10 most popular apprenticeships? Does he have a response for Paul Warner of the Association of Employment and Learning Providers, who warned:

“It is completely self-defeating to cut funding, because that is just preventing disadvantaged young people from getting on”?

The apprenticeship levy will raise £3 billion from large employers and will replace all current Treasury funding of apprenticeships. If the Government are making a saving by passing the cost of funding apprenticeships to the private sector through the levy, why cannot the Treasury give some of that money back to reverse the funding rate cuts and provide support for disadvantaged areas? I hope the Minister will be able to explain.

It is also important to look at the context in which the cuts are happening. The Brexit vote was underpinned by people living in our post-industrial towns in the north and the midlands and in our seaside towns, who are feeling left behind and left out of economic growth. Youth unemployment stands at 13.7%, with 624,000 people aged between 16 and 24 unemployed; more than 100,000 of them have been unemployed for at least a year. The unemployment rate for 16 and 17-year-olds is a staggering 27.7%. It is interesting to look at other countries. Relative to population size, we are doing worse than Slovakia, worse than Hungary, worse than Ireland, Poland, Portugal, the United States, Canada, Australia, Estonia and New Zealand. We are doing four times worse than Germany, three times worse than the Czech Republic and twice as badly as Japan, Denmark and Sweden in terms of the proportion of our young people who are not in education, employment or training.

Last year, the Treasury found that

“the UK’s skills weaknesses…are of such long standing, and such intractability, that only the most radical action can address them.”

I ask the Minister: is this the radical action that his Treasury was talking about?

[Mr Lammy]

Unless the hon. Gentleman is suggesting that the figures I just quoted are wrong, we should not be happy with the picture of youth unemployment in our country. Many Members in the Chamber are well aware of the young people walking our streets literally because there is not enough to do. I might just remind him that I have seen two riots in a generation, so I know something about idle hands making very dangerous work indeed. We need to put these young people to work. We need apprenticeships for them. We need more than rhetoric from the Government, and we certainly do not need cuts in this part of the economy.

The Royal Institution of Chartered Surveyors has warned that

“we are in the grip of our worst construction skills crisis in almost 20 years.”

That skills crisis will hold back big infrastructure and house building projects. Post-16 education was cut by 14% between 2010 and 2015 and last year the Public Accounts Committee warned of a “financial meltdown” in further education.

Further education is just about on its knees. Most of the Members in this House grew up in a period when they could go into an FE college that was open well into the evening, not just for young people but for adults—adults could also get into FE and skill up. I ask hon. Members to find me an FE college open past 8 o’clock in the evening where an adult can skill up and I will give them a beer. It is not happening! We should not be having a debate in Britain about grammar schools; we should be having a debate about night schools. Bring back night schools! Instead, we see cuts in funding for young people and no mention of the importance of adult education in an economy that will be more reliant on talent on its own shores in the coming years.

[Helen Whately]

I agree with the right hon. Gentleman that vocational education is incredibly important for young people and the economy, but will he bring a little more balance into his argument and recognise that since 2010-11 vocational education has improved? The UK has made progress in international rankings such as PwC’s recently published young workers index and in 2020 we will spend double what was spent on apprenticeships in 2010.

[Mr Lammy]

I would rather not rely on PwC reports, if the hon. Lady will forgive me. I would rather rely on what I see happening in the country. We have a lot more to do. I gently remind the hon. Lady, who is a new Member, that having been Minister for Skills in the previous Labour Government I am well aware of how Labour lifted apprenticeships from their dismantling under the Tories. We were down to 5,000 apprenticeships across this country, and completion and success rates were on the floor. It was the Labour Government who lifted up apprenticeships, put all the effort in and grew them to a figure by the time we left office. Now, unsurprisingly, this Government are about to dismantle them.

The National Audit Office found that the Department for Education must do more to ensure that all apprenticeships meet basic quality requirements and that the Department had not even set out how an increase in apprenticeship numbers will deliver improvements in productivity. There are real concerns that some employers are hiring staff as apprentices to undercut the minimum wage of £5.55 an hour for 18 to 20-year-olds and pay them the apprentice minimum wage of £3.40 an hour. One in five apprentices reported that they had not received any formal training at all and Ofsted reports found that 49% of apprenticeship programmes require improvement or are inadequate. The Government’s own “Post-16 Skills Plan”, published in July, states that

“Reforming the skills system is one of the most important challenges we face as a country. Getting it right is crucial to our future prosperity, and to the life chances of millions of people.”

Why is further education and skills training more generally always the poor relation of higher education? Why did it take a huge campaign by the sector and Labour Members even to bring this debate to the House?

Announcements on higher education are pre-briefed to the Sunday papers, together with opinion pieces from the Prime Minister and TV interviews, while apprenticeships funding cuts are snuck out of the back door on a Friday afternoon in the middle of the summer recess in the hope that no one will see them. In a written statement placed before Parliament last Thursday, the Secretary of State committed the Government to a

“fundamental mission of social reform to deliver our vision of an education system that works for everyone”

as part of delivering on

“the Government’s vision for an economy that works for all”.—[Official Report, 27 October 2016; Vol. 616, c. 16-17WS.]

I therefore ask the Minister a simple question: can he explain today how cuts in apprenticeships funding of 30%, 40% or even 50% fit into that mission to deliver an education system and an economy that works for all and not just for the privileged few?