Institute for Apprenticeships and Technical Education (Transfer of Functions etc) Bill [Lords]

Janet Daby Excerpts

2nd reading
Tuesday 25th February 2025 Commons Chamber

[The Parliamentary Under-Secretary of State for Education (Janet Daby)]

It is a pleasure to close the debate. I am grateful for the contributions of Members on both sides of the House; we have heard some excellent speeches. I welcome the points and questions that have been raised, and I will go through as many as time allows.

As my right hon. Friend the Secretary of State said in her opening speech, skills are essential to our missions to drive economic growth and create opportunity. To achieve that, we need a skills system that is fit for the future. In every region, it should provide training options that lead to skilled work and give businesses the skilled workers whom they need in order to grow. I was pleased to hear from Members about the apprenticeships and vocational courses in their constituencies which have led to jobs, but most Members have also referred to significant challenges in our skills system.

Acute skills shortages are a particular issue in some areas. Skills supply does not match demand, and there is not enough business investment in skills. That, however, is what this Government inherited from the previous Conservative Government. We urgently need larger volumes of higher-quality training that meets employer needs, particularly in key sectors. For example, as we have already heard, there is an urgent need to build more homes, but a third of construction employers report finding suitable skilled staff a key challenge.

My hon. Friend the Member for Tipton and Wednesbury (Antonia Bance) mentioned levels 4 and 5 qualifications. In the UK, about 10% of adults hold them as their highest qualifications, as opposed to—shockingly—20% in Germany and 34% in Canada. We must, and this Government will, do better. Skills England, which has been delivering in shadow form since last year, is our new national body for meeting skills needs. It will simplify the skills system now and in the future, combining new functions with improvements in existing ones, within one dynamic body. In its first report, “Driving growth, widening opportunities”, Skills England highlighted the critical skills gaps that currently face the country. Across the UK, more than 2.5 million roles—almost one in 10—are in critical demand. The last Conservative Government seemed content with this, but putting it simply, this Government are not. As my hon. Friend the Member for Basingstoke (Luke Murphy) stated so well, this is about what the Bill will achieve for everyone: it is about growth.

Skills England’s initial assessment of the skills challenges in the economy, together with the “Invest 2035” Green Paper published last year and ahead of the forthcoming industrial strategy, set out how the in-demand occupations of today are also expected to grow in the future. As noted by the Secretary of State, these growth-driving sectors include the life sciences, clean energy, digital and technology, and creative industries. By addressing our skills needs, the UK has a real chance of being a world leader in these fields, but we must do this now: we must not delay. We must build a skills system that looks ahead, and we must anticipate for the future. As was put so eloquently by my hon. Friends the Members for Rochester and Strood (Lauren Edwards) and for Scarborough and Whitby (Alison Hume), Skills England will enable employers to fill our current skills gaps and the likely ones of the future. Excellently, they recognise the need to anticipate our future skills needs.

To respond directly to the points raised by the right hon. Member for East Hampshire (Damian Hinds) and the hon. Member for St Neots and Mid Cambridgeshire (Ian Sollom), users of apprenticeships, employers, providers and assessment organisations regularly complain about the time it takes to update standards and assessment plans. It will remain the default position that a group of people will prepare standards and assessment plans, but removing the requirement to use a group to prepare standards in every instance will speed up the process and reduce administrative burdens. In line with IfATE’s current processes, all new standards and those that have undergone significant revision following review will, prior to being approved, be published online to give interested parties an opportunity to comment. It will only be in the minority of cases where simple and straightforward changes are proposed that these will not be published online for comment prior to approval. However, there will still be mechanisms for users of the system to challenge where a standard or assessment plan is not working in practice and needs revising.

[Sir John Hayes]

I appreciate what the hon. Lady is saying about that, but will she in quick order set out how that will be directed either by the Secretary of State or by Skills England? We need to know not just the detail at the point of publication, but the structural needs in advance of that, so how will that be set out? Will it be set out in guidance—statutory guidance perhaps?

[Janet Daby]

The right hon. Member is absolutely right that these things need to be set out, and they will be set out. This Bill is about transferring the role of IfATE to the Secretary of State and enabling the delivery of Skills England.

Skills England will work with key partners, including employers, training providers, mayoral strategic authorities and unions to form a national picture of where skills gaps exist and how they can be addressed. It will ensure employers have the skills they need to drive economic growth while creating opportunities across the country and building a highly skilled workforce.

During this debate, I have heard Members question the need to close IfATE and establish Skills England. This Government have committed to delivering for the skills sector, and we are listening to the needs of employers. This can be seen in our reformed growth and skills offer, but we must go further to address the fragmentation of our skills system so that we can close the most persistent skills gaps. The Bill paves the way for the full establishment of Skills England by enabling the new body to take on and build out from IfATE’s work to shape apprenticeships and technical qualifications to meet the needs of employers and the economy as a whole.

The scale and urgency of the skills challenge that we face means we are setting Skills England up to have a broader strategic purpose than IfATE, including but stretching beyond the work previously undertaken by IfATE. Skills England will, for instance, provide an ongoing authoritative assessment of local, regional and national skills needs, which is absolutely needed. It will combine the best statistical data with insights from employers and other key stakeholders, and will use these insights to ensure the design of technical education and apprenticeships reflects the skill needs that have been identified, so that we can truly build a workforce fit for the future.

Labour markets and the skills required to increase productivity and economic growth vary considerably by region, and we have already heard from many Members about the different skills that are needed in their regions. Skills England will therefore also have a strong regional footprint, working closely with local skills systems so that they can tap into the comprehensive suite of training offers that it will build across the country. Skills England will also ensure that skills sit at the heart of joined-up decision making across Government. It will work closely with the Industrial Strategy Council, so that we have the skilled workforce needed to deliver a clear, long-term plan for the future economy, and with the Migration Advisory Committee, because growing the domestic skills pipeline will reduce our reliance on overseas workers.

While Skills England will have a broad and ambitious strategic agreement, it will not be able to deliver the scale of change that we need without its taking on IfATE’s important work, so the transfer of functions through the Bill is vital. The Bill does not, however, simply aim to transfer functions. It also includes a number of targeted changes intended to allow the system for designing and approving technical qualifications and apprenticeships to become more agile and responsive; we have been listening to employers, who have told us this is crucial if we are to work together to plug the skills gaps at the pace required. The Bill will provide greater flexibility when designing standards and apprenticeships plans and make processes easier to engage with, allowing experts to invest their time and expertise at the right point.

There is so much I would like to say in response to the many points that Members have made, and I apologise now for not being able to respond to the many excellent points and comments. However, there are a few very pivotal points that I do need to mention.

The Bill was amended in the House of Lords to delay its commencement by a year. It is disappointing that peers voted for a delay to the full establishment of Skills England, despite many Members of the other place supporting its aims. This Government are clear that employers need a fully functional Skills England now—as I have said, they cannot wait. The skills gaps in our economy are holding back growth and opportunity, and we need this Bill to give Skills England the key tools to tackle those gaps without delay. I cannot say that enough.

Skills England is in shadow form, and has already engaged widely, with more than 700 different partners representing thousands of individual organisations through roundtables, cross-section webinars and network events, including the Confederation of British Industry, the Federation of Small Businesses and the Institute of Directors, as well as a range of employers and representative bodies from priority sectors, including digital, life sciences, green, construction and healthcare, and we will continue to listen to the voices of experts to shape what we do.

Question put, That the amendment be made.

Institute for Apprenticeships and Technical Education (Transfer of Functions etc) Bill [ Lords ] (First sitting)

Janet Daby Excerpts

Committee stage
Thursday 13th March 2025 Public Bill Committees

[The Chair]

Welcome, everybody. I call the Minister to move the resolution of the Programming Sub-Committee.

[The Parliamentary Under-Secretary of State for Education (Janet Daby)]

It is a pleasure to serve under your chairmanship, Sir Christopher. I welcome the opportunity to further discuss and scrutinise the Bill following Second Reading, and I thank the Committee for its time and expertise. I am also grateful to Members of the other place, who have already provided considerable scrutiny while also supporting the Bill.

I rise to speak to clauses 1 to 3. Clause 1 introduces schedule 1, which transfers statutory functions from the Institute for Apprenticeships—

[The Chair]

Order. I think the hon. Lady has got the wrong end of the stick on this one. She just needs to move the resolution of the Programming Sub-Committee.

Ordered,

That—

(1) the Committee shall (in addition to its first meeting at 11.30 am on Thursday 13 March meet—

(a) at 2.00 pm on Thursday 13 March;

(b) at 11.30 am and 2.00 pm on Thursday 20 March;

(2) the proceedings shall be taken in the following order: Clause 1; Schedule 1; Clause 2; Schedule 2; Clause 3; Schedule 3; Clauses 4 to 14; new Clauses; new Schedules; remaining proceedings on the Bill;

(3) the proceedings shall (so far as not previously concluded) be brought to a conclusion at 5.00 pm on Thursday 20 March. — (Janet Daby.)

Resolved,

That, subject to the discretion of the Chair, any written evidence received by the Committee shall be reported to the House for publication.—(Janet Daby.)

Clause 1

Transfer of functions

Question proposed, That the clause stand part of the Bill.

--- Later in debate ---

[Janet Daby]

I will begin again, Sir Christopher. I rise to speak to clauses 1 to 3. Clause 1 introduces schedule 1, which transfers statutory functions from the Institute for Apprenticeships and Technical Education to the Secretary of State and makes minor and consequential amendments. It is our intention that functions currently delivered by IfATE will largely be exercised by Skills England on behalf of the Secretary of State. The functions are in chapter A1 of the Apprenticeships, Skills, Children and Learning Act 2009, and include the duty to map occupational groups, and the duty to approve and publish standards and apprenticeship assessment plans.

Under the terms of the 2009 Act, the Secretary of State will also have the power to delegate functions to other persons. We intend to establish Skills England as an executive agency of the Department for Education. Despite IfATE’s success in embedding employees in the processes for designing technical qualifications and apprenticeships, the wider skills system remains too fragmented and complex. It is insufficiently responsive to the present and future skill needs of the economy, and we have major skill gaps. Employers report that more than one third of UK vacancies in 2022 were due to skills shortages. To address this, and unlock the potential for skills that drive growth and widen opportunity, we will create a new and more ambitious organisation: Skills England.

Clause 1 will enable Skills England to take on and deliver functions currently delivered by IfATE, giving it some of the key tools it needs to tackle these challenges as part of its wider remit. Skills England will provide an authoritative assessment of skills needed in the economy, and use those data and insights to develop and maintain a comprehensive suite of technical qualifications and apprenticeships, as a result of some of the functions transferred by the Bill. It will then work with key stakeholders to ensure that the identified needs for available training are reflected in regions across the country. That will ensure that the system becomes more responsive and better able to quickly and efficiently supply the skills most needed by the economy.

Skills England will work closely with the Industrial Strategy Council, so that we have the skilled workforce needed to deliver a clear, long-term plan for the future economy. It will also work with the Migration Advisory Committee to ensure that growing the domestic skills pipeline reduces our reliance on overseas workers.

To summarise, clause 1 will enable Skills England to take on and deliver the functions currently held by IfATE, where appropriate, alongside other functions. That will address the fragmentation that is holding the skills system back and restricting improved workforce development and productivity gains. Without this clause, it would not be possible to transfer functions from IfATE to the Secretary of State so that they can be exercised broadly by Skills England in the service of employers, learners and others.

Clause 2 introduces schedule 2, which makes provision for the transfer of IfATE’s property, rights and liabilities to the Secretary of State. It will ensure the functional continuity of property, rights and liabilities, including the many contracts that are critical to the operation of the skills system. The transfer scheme that the clause makes possible will mitigate the risk of delay and a lack of service continuity, which is essential for a smooth transfer from IfATE to the Secretary of State and the subsequent creation of Skills England.

Without this clause, the co-ordination of the transfer of IfATE’s property, rights and liabilities to the Secretary of State would be less straightforward and more burdensome. Without a transfer scheme, each matter, including contracts and licences, would have to be considered and transferred individually, which would be more time-consuming and could have an impact on value for money, the continuity of services and the delivery of skills products. That could mean the reduction in the quality of service received by employers, learners and others with an interest in the skills system. The transfer scheme that the clause makes possible will mitigate the risk of delay and a lack of service continuity, creating the minimum possible disruption for system users.

Clause 3 abolishes IfATE and introduces schedule 3, which makes consequential amendments to existing primary legislation that are required as a consequence of abolishing IfATE. It essentially closes IfATE so that the Government can establish and empower Skills England. Skills England will build on IfATE’s work with employers in all sectors to shape technical education and apprenticeships.

[Josh Dean (Hertford and Stortford) (Lab)]

I recently had the pleasure of visiting some fantastic apprentices at Hertford Regional college’s campus in Ware. I know that the college will be excited about the prospect of Skills England. Can the Minister say more about how soon we can expect it to come forward?

[Janet Daby]

It sounds as though that college is doing excellent work. The Bill is part of the process of delivering Skills England. It is our intention, following the Bill’s Royal Assent, to make commencement regulations promptly to bring into force the provisions that transfer IfATE’s functions, as well as the powers to transfer its assets and liabilities to the Secretary of State and to deliver those services through Skills England.

Skills England will be very different from IfATE, as I have mentioned. It will bring IfATE’s functions together with others that are not currently in statute to identify skills needs and to work with regional partners to ensure that they are being met. By bringing together those different functions in a single organisation, we can make a more responsive skills system that acts fast on the evidence to address skills gaps, uninterrupted by organisational boundaries, administrative hurdles and imperfect data flows. That would not be possible if the key functions were split across Skills England and IfATE. Clauses 1 to 3 are essential to achieving that transformation, so I commend them to the Committee.

[Neil O’Brien (Harborough, Oadby and Wigston) (Con)]

It is a pleasure to serve under your chairmanship, Sir Christopher. The Opposition have three main concerns about the Bill, which are all relevant to this group. First, there were good reasons why standards setting was put at arm’s length and closer to employers. As we heard from Members on both sides of the House of Lords, this Bill is a centralisation. Alongside other changes that the Government are making, it risks directly damaging the status of the qualifications.

Secondly, the Government are doing several things that will make it less likely that businesses will take on apprenticeships. Rather than fixing the problems, the Government are reorganising. Skills England will be the 13th skills body in 50 years. The Government are abolishing IfATE, which was created only seven years ago. This is yet more reorganisation, rather than focusing on the real issues. IfATE will now follow a long list of predecessors, including the Manpower Services Commission, the Learning and Skills Council, the Skills Funding Agency, skills advisory panels, the UK Commission for Employment and Skills, training and enterprise councils and more, into the lengthening history of skills acronyms. We have a bad history of institutional churn in this country generally, and particularly in this area.

Thirdly, we have real concerns that this reorganisation of the machinery of government will lead to harmful delays in addressing some of the most important strategic issues that we face. Those concerns are in fact borne out by the Government’s impact assessment.

As the Minister just said, the first three clauses are all about abolishing IfATE. Clause 1 introduces schedule 1, which transfers functions from IfATE to the Secretary of State. It does not transfer them to Skills England, but to the Secretary of State.

The words “Secretary of State” appear, amazingly, 90 times in this short Bill. That is one reason why the Bill has come in for criticism from a number of different sides of politics. Instead of setting up Skills England as an independent body, which is what a lot of people—including many in the Labour party—assumed it would be, it is going to be part of the Department for Education.

In its briefing on the Bill, the Construction Industry Training Board noted that this was

“contrary to the previous characterisation of Skills England that was outlined in the…King’s Speech…and contrary to the vision for Skills England to be an independent body, established in law, with a cross-governmental role”.

Obviously, those two points are linked. If it is going to be cross-government, it is easier for it to be independent of the DFE rather than part of one Department.

The CITB makes an important point. IfATE existed to serve all employers, both public and private, and across every Department. In contrast, Skills England will be firmly part of the DFE. The chief executive officer of Skills England will be a job share between the two civil servants who currently run the post-16 skills bit of the DFE.

Likewise, the Institute of the Motor Industry, representing employers and professionals across the UK automotive sector, says in its evidence to this Committee that it has

“significant concerns about the abolition of the Institute for Apprenticeships and Technical Education…and the transfer of its functions to Skills England.”

--- Later in debate ---

I have grave reservations about what the Government are seeking to do and what they really, ultimately, are seeking to do. As with so many things that we talk about in these Committee rooms, there is a lot of commonality in what we would like to see. We would like to see every individual in our country being able to fulfil their potential. We want growth in the economy; we want productivity gains. However, I have serious doubts that this new body, which is not even a quango, is the way to get there.

[Janet Daby]

Hon. Members have given me much to think about and feed back. I remind Opposition Members that one in eight young people are not in education, employment or training, a third of vacancies in our country are due to a lack of skills, and many people are in jobs for which they are underqualified. Young people need to know that when they undertake skills training, there will be a guaranteed job at the end of the process. We are committed to ensuring growth in this country. We want to get young people into work to ensure that they succeed and progress in life. We absolutely know that what we are trying to achieve with Skills England is the right thing to do.

I will attempt to respond to the various points that hon. Members have made. There have been previous arm’s length bodies with functions partially linked to those intended for Skills England, but none provides a direct comparison, given Skills England’s distinct remit.

Establishing Skills England is a manifesto commitment, and will support the delivery of the Government’s missions. As an Executive agency, Skills England will be subject to clear requirements on governance, transparency and accountability, and Ministers will be accountable to Parliament. The Government have put in the Bill a duty for the Secretary of State to publish information about matters they will take into account in deciding whether to prepare a standard or apprenticeship assessment plan without a group of persons. This new power will therefore be subject to the same level of transparency as existing powers being transferred from IfATE.

An Executive agency is a widely used model of arm’s length body. It has a clearly defined status and must be established and governed in line with official Cabinet Office guidance. Executive agencies are appropriate for the delivery of specialised functions separate from a primarily policy-focused Department, but within a policy and resources framework set by the Department, and for delivery of services to other parts of central Government using specialist skills. The Executive agency model will give Skills England the independence to focus on the delivery of its functions at arm’s length from the Department for Education, while ensuring sufficient proximity to the Department that Skills England can quickly and efficiently inform decisions on skills policy and delivery.

Skills England is operating in shadow form and is working extremely closely with IfATE, which also currently has a base in Sanctuary Buildings—the Department for Education. Following a vigorous recruitment process, in line with civil service guidance, we have appointed Skills England’s chief executive officers. Tessa Griffiths and Sarah Maclean have been appointed co-CEOs. They are senior leaders with long-standing experience in the public sector. Tessa and Sarah have been leading Skills England while it has been in shadow form, since last summer. They have driven the rapid progress that has seen Skills England start to deliver its important work ahead of the passing of this Bill. We do not believe in delay; we want to get on with establishing Skills England as an arm’s length body.

Skills England’s being run by CEOs at civil service director level is consistent with the approach taken by IfATE and other Executive agencies of the Department for Education. It is really important that I make those points so that there is a clear understanding of what is happening.

We considered, but ultimately decided against, expanding or otherwise retaining IfATE. We want to set Skills England up to build on IfATE’s work with employers, and to shape technical education and apprenticeships, but it will be very different from IfATE. It will have a much broader remit and will be more ambitious. It will bring IfATE’s functions together with others that are not currently in statute. We need to go further and do more to identify skills needs and work with regional partners to ensure they are being met. By bringing together those different functions into a single organisation, we will really be able to accelerate change. That will help the skills system to be more responsive to emerging skills needs. We need a flexible system that acts fast on the best available evidence to address the skills gaps that threaten to hold back our country. I am sure none of us wants to do that.

IfATE has worked with employers to design over 700 occupational standards. Skills England will build on that important work and retain a strong role for employers. But the skills system in England has matured since IfATE was created in 2017, and the scale and urgency of the skills challenge that we face means we need a new approach.

The Government are committed to delivering skills for the sector, as I have already pointed out, and we are listening to the needs of employers. This can be seen in our reform, growth and skills offer. Skills England will build on the work of IfATE and employers will continue to play a critical role in the design and delivery of apprenticeships and technical education. Indeed, that is already happening. The changes being brought about through the Bill have been designed in response to employer feedback and will simply mean that employers are not overburdened by repetitive and drawn-out processes, which we know can lead to disengagement.

I welcome the written submissions from the Institute of the Motor Industry, the Association of Colleges, JTL Training and the Royal Society of Chemistry. I thank those organisations for contributing to this important debate. I completely agree with the Institute of the Motor Industry’s view that Skills England must maintain an “employer-led ethos” with “strong industry collaboration”. That is why Skills England is already working, and will continue to work, closely with industry, while also building a clear picture of the challenges facing employers, including regional skills gaps, in order to support growth in our skills sector.

It is pleasing to hear the Association of Colleges, which represents more than 98% of further education colleges, express strong support for plans to establish Skills England and recognise the critical role that Skills England will play in the Government’s broader post-16 education and skills agenda.

Although many Members of the other place support the aims of Skills England, it is disappointing that peers voted for an amendment that would delay its full establishment. The Government are clear that employers need a fully formed Skills England now; they cannot wait. That is why we have tabled amendment 1 to overturn that amendment made in the other place.

Gaps in our economy are holding back growth and opportunity. We need the Bill to give Skills England the key tools that it needs to tackle them now, and not in 12 months’ time. Skills England has been operating in shadow form since July. Due to extensive transition planning over several months, it is ready to move fast to deliver the functions made possible by the Bill. Delay simply is not an option.

With regard to whether employers can spend up to 50% of levy funds on non-apprenticeship training, I do not want to put a target or limit on flexibility. It will be led by what employers need and driven by Skills England analysis. We have already introduced flexibility through new foundation and shorter apprenticeships, and we will continue to work with employers to understand where future flexibility will be most helpful.

[Neil O’Brien]

The Minister says she does not want to set a limit, but there was a commitment from the Secretary of State that employers would be able to spend up to 50% of their funds on non-apprenticeships. That was a Labour commitment. If I understand her, it will no longer be up to 50%; it will be some other number. Or is she saying that it will be up to 100%? Which of those things is she saying?

[Janet Daby]

What I am saying is that we have already introduced flexibility and we will continue to work with employers to understand where future flexibility will be most helpful. That will be worked through with Skills England. I am happy to get the hon. Member some further information.

[Neil O’Brien]

Will the Minister give way on that point?

[Janet Daby]

No, I think I have said enough on that point.

[Neil O’Brien]

But we are completely unclear.

[The Chair]

Order. The Minister is not giving way. As the shadow Minister knows, in Committee people may speak more than once in a debate, so if he wishes to come back after the Minister has sat down, he is free to do so.

[Janet Daby]

We are not centralising regulation of technical qualifications akin to IfATE. Skills England will operate independently of the Department for Education and will continue to work with IfATE to develop occupational standards. Skills England will have a new and transformative role in the skills system and will work closely with, but not duplicate, the role of the Department or regulators such as Ofqual or the Office for Students.

--- Later in debate ---

[Neil O’Brien]

We have mysteries wrapped in mysteries here. As well as the lack of clarity about the future caused by the Bill, even in this debate on one group of clauses, we have had an extraordinary statement by the Minister. Businesses would like to know how, in just a few months’ time—next year—they will be able to spend a couple of billion pounds of their own money. This is employers’ money. Labour have oscillated between, “We will let 50% of this go on other things”, “No, we will not” and, since being in government, “We are reviewing this. This is not our policy any more.” On the Floor of the House, the Secretary of State has been saying, “No, it is absolutely our policy—50%. That is the number.” That is what she has told the House. Now we have another position—a fifth—on the spending of this money: “No, that is not the number any more.”

Employers will be jaw-to-the-floor agog at what is going on in the DFE. What is the policy? This is billions of pounds of employers’ money, in a difficult economic situation, being spent imminently, and yet the DFE cannot say—the Minister literally would not take a further question on it—what the policy is. What an extraordinary situation. What a shameful situation. Unbelievable.

We have been saying that, down the line, there might be some things to worry about in this transfer of power away from an employer-led and independent system towards the tender mercies of the DFE, but employers have got something to worry about right now. The Government do not seem to know what their own policies are. On that basis, I really do want to press clause 1 to a vote, and we will vote against it.

[Janet Daby]

We have been listening to businesses and employers, and they are absolutely telling us that they want greater flexibility in our apprenticeship systems and in how employers can spend their levy funds. We are reforming apprenticeships to deliver greater flexibility for learners and employers, including through shorter and foundation apprenticeships. I have attempted to answer the shadow Minister’s questions, but he is not satisfied. I have also offered to ensure that we get some more information. I want to make one more point: we are not putting a target or limit on flexibility; this will be led by what employers need.

[Neil O’Brien]

I am not asking for a target; that is a complete mischaracterisation. I am asking for clarity on the Government’s own policy. The Government said that that they would allow employers to take up to 50% of the money and spend it on things that were not apprenticeships. Either that is still the policy or it is no longer the policy. Which of those two things is the truth?

[Janet Daby]

I will get back to the hon. Gentleman. I will make sure there is a written response.

Institute for Apprenticeships and Technical Education (Transfer of Functions etc) Bill [ Lords ] (Second sitting)

Janet Daby Excerpts

Committee stage
Thursday 13th March 2025 Public Bill Committees

[Janet Daby (Lewisham East) (Lab)]

Through this Bill, we are making a small number of targeted improvements that enable flexibility and support employers to engage in the design of standards in an appropriate way, by focusing their time and effort where it is most needed. Clause 4 amends a requirement for occupational standards to be prepared by a group of persons, by making it subject to a power for the Secretary of State to create and update standards in circumstances where it is appropriate to do so. Clause 5 does the same in regard to the preparation of apprenticeship assessment plans.

I can assure hon. Members that the default position will remain that in the majority of cases, groups of persons will prepare standards and apprenticeship assessment plans. Only when the Secretary of State is satisfied that it is more appropriate for them to prepare a standard or assessment plan than for a group of persons to prepare it will the Secretary of State do so. To ensure transparency, the Secretary of State will publish information about matters that they will take into account when making the decision to prepare a standard or assessment plan without a group of persons.

[Damian Hinds]

Why not just do that now? How hard is it to figure out the list of criteria that might weigh on the Secretary of State’s mind? Why must we have a statement about a future statement? Why can the Government not say now what those criteria would be, before the Bill completes its passage through the House of Commons?

[Janet Daby]

As I progress, I am sure the right hon. Gentleman will understand more about why we have chosen this direction of travel. My understanding is that this is a response to an amendment from the Lords, and the Secretary of State is being as transparent and open as possible during the process. As I continue to speak, the right hon. Gentleman will understand why—

[Damian Hinds]

I may or may not.

[Janet Daby]

Indeed. I will endeavour to explain why a statement now is not the most appropriate thing. It is likely to be appropriate for the Secretary of State to use the power to prepare a standard or assessment plan in scenarios where using a group would be disproportionately onerous; where it would be unnecessary, because only simple corrections were required; or where it could create undue delays. That might include creating or updating standards to align with industry-recognised qualifications or statutory requirements.

[Neil O’Brien]

The Minister talks about using this power where there is “undue delay”. What is an undue delay? What would be too long, roughly?

[Janet Daby]

One reason why we have this Bill is because we recognise that the skillset is changing very quickly, and we in England need to keep up with that. Therefore, we must ensure that there is no delay so that people have the skills to get into the jobs that are required. We have a skill shortage and we need to respond, and the Bill enables us to do that. We want to avoid delays so that the standards can be set and things can be done in a manner that enables people to undertake the training they need.

[Neil O’Brien]

The Minister is worried about undue delays, but what is the timeframe for an undue delay? Is she worried that something will be held up by a week or a month?

[Janet Daby]

If the shadow Minister will bear with me, I will present an example scenario, from which I hope he will recognise that there could be delays in some niche situations. Scenarios in which it is likely to be appropriate for the Secretary of State to use the power to prepare a standard or assessment plan are those where using the group would be disproportionately onerous; where it would be unnecessary, because only simple corrections were required; or where it could create undue delays, as I have said. That might include creating or updating standards to align with industry-recognised qualifications or statutory requirements.

For example, the dental hygienist occupation is regulated by the General Dental Council. That means that competence is tightly defined and does not need to be separately considered by a group of persons approved by IfATE. However, the current legislation means that a group of persons must be in place to prepare the standard, despite that being unnecessary and duplicative. With regard to assessment plans, the nuclear industry provides an example of where there is strong support for apprenticeships but limited capacity to engage in the development of multiple training products simultaneously.

As I have outlined, clauses 4 and 5 make crucial changes to bring flexibility to support employers and other experts to engage in the design of apprenticeships and technical education in a proportionate way, by focusing their time and effort where it is most needed. I therefore ask the Committee to support these clauses.

Amendments 3 and 5 would prescribe in legislation a particular type of person to be included in a group of persons to prepare a standard or an assessment plan. These matters were raised several times in the other place. Our position remains clear: specifying criteria in primary legislation would introduce new and unnecessary constraints on the structure of groups, prioritising the expertise of certain types of organisation above others. It would make the process for forming groups slower and more onerous, reducing the speed with which important skills gaps are plugged. Delays are not in anyone’s interest, not least learners or employers.

The existing legislation does not include criteria on how a group is formed to prepare a standard or an assessment plan, or who specifically should form part of a group. Different expert voices have a role to play in different circumstances. IfATE is under an existing duty to publish information about matters that it will consider when deciding whether to approve groups of persons responsible for preparing a standard or an assessment plan. That, in effect, shapes how a group is convened and which types of organisations most commonly participate. This ensures that groups are inclusive and independent, and the existing duty is being transferred to the Secretary of State unchanged. Flexibility is essential to ensure that a group of persons always reflects the particular circumstances that require it to be formed.

Amendments 4 and 6 would create a statutory duty on the Secretary of State to have due regard to the reasonable requirements of industry and those who may wish to undertake training when considering whether to approve a standard or assessment plan, where it has been developed by a group of persons. The Secretary of State is already subject to a general public law duty, which requires them to take into account all the relevant considerations before taking decisions relating to the functions for which they are responsible. There is therefore already a requirement that, when executing the functions described in the Bill, the Secretary of State considers and balances the needs of different users of the system, such as those outlined in the amendments. In fact, the public law duty is broader than the factors listed in the amendments, and it includes consideration of value for money and quality.

I assure Members that the consultative approach taken by IfATE to developing standards will not change as a result of the Bill transferring functions to the Secretary of State. New standards and those that have undergone material revisions will continue to be published online for comment from any interested parties before approval, and existing duties to publish information about matters that will be considered when approving groups and standards will transfer from IfATE to the Secretary of State unamended.

Amendments 4 and 6 are therefore duplicative of existing duties on the Secretary of State, which will be fulfilled by Skills England. For those reasons, I ask the hon. Member for Harborough, Oadby and Wigston not to press the amendments.

[Neil O’Brien]

I can hear that there is a case for some of the Minister’s arguments. Where there are only minor or technical changes, I understand the point about not needing a group of people. However, I have not heard anywhere in the Minister’s comments, or in the other place, any sense that there would be some great delay or problem introduced by talking to people in industry. That shred of evidence has never been produced during this process.

But it is clear that the Minister’s intent is not just that. This will be not just be about situations where there are minor or technical changes or a very clear third party body, as in the dentistry example. There are other examples, including the tech sector, where we hear the comment, “We want to be able to do things really quickly.” I can see the attraction politically of a dynamic young Minister wanting to come up with some new whizzy thing. That is exactly where problems come in. We also heard the example about the nuclear industry, where it was said, “The industry is not able to participate in drawing up the standards for itself. Therefore, we will just crack on with it without them.” What a curious argument, and it is not a reassuring one, particularly for something as serious as the nuclear industry.

I am keen to press our amendment 4 to a vote. I hope that Ministers will reflect further on the whole run of what the Government have been doing on apprenticeships. Combined with what is happening with IfATE, that is causing a lot of concern.

[Janet Daby]

It might be helpful for the hon. Member to know that where an occupation is regulated, the requirements for assessing competence are tightly defined and cannot be deviated from. For example, for the paramedic apprenticeship, where the occupation is regulated by the Health and Care Professions Council, it is not necessary for a group in such circumstances to prepare a standard, and the process for producing an assessment plan would therefore be significantly sped up by not requiring a group of persons to form and undertake the work. Existing legislation means that a group of persons would still need to be in place in such instances, which is unnecessary and duplicative in practice.

[Neil O’Brien]

That is exactly the point I was making. In some instances, the Government can say, “Look, there is already this formal official third party”—perhaps a royal society or some part of the medical profession—“so we do not need this.” I can see why the Government would write that into legislation, but Ministers’ intent clearly goes beyond minor amendments and beyond instances where there is that other group, to instances where they will proceed without drawing up a group of people, in the interests of time or because it is a new and dynamic field. It is precisely because the Government have not defined the circumstances up front that I am keen to put our amendment 4 to a vote. I want to encourage Ministers to think more carefully about how—perhaps in the framework or elsewhere—they might, in response to the Lords amendment, more tightly define the circumstances in which they will, and more importantly will not, use the ability to go it alone. There is definitely a risk of politics getting in the way of good process and of mistakes being made that we will live to regret.

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[Damian Hinds]

Unsurprisingly, my hon. Friend makes a very good point. More generally, in legislation one obviously tries to make language as tight as possible, but subtleties in language and meaning still matter in how it gets interpreted. The way the clause is drafted—that the

“Secretary of State may prepare a standard if satisfied that it would be more appropriate”—

does not sound like a tiny number of exceptional cases. It sounds like a judgment that could be made in every case: “Do I think it is more appropriate that I do it?”, or “Do I think it is more appropriate that we get somebody else to do it?” I just ask the Minister if the Government have considered using a different formulation in the wording. It could be something like, “That each standard must be prepared by a group of persons and then approved by the Secretary of State, unless it is necessary to do otherwise for the efficient operation or continuity of those courses and those qualifications.”

[Janet Daby]

The default position will be for a group of persons, and that will always be the default position of the Secretary of State. The reason for that would be to make factual corrections, drawing on—[Interruption.] Hon. Members have mentioned this as well. Creating new standards would also be necessary in emerging occupations where there is sufficient high-quality evidence that training would be required but the occupation is not yet at a point of maturity, and where employers are able to invest sufficient time to produce the standard in the first instance, as well as for straightforward adjustments in knowledge, skills and behaviours.

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Question proposed, That the clause stand part of the Bill.

[Janet Daby]

Clause 6 amends the requirement to review technical education qualifications, standards and apprenticeship assessment plans at regular and published intervals by removing the requirement to publish information about the intervals at which reviews will be conducted.

There is no change to the broader review requirement. The Secretary of State will still be required to maintain arrangements to review approved technical education qualifications, standards and apprenticeship assessment plans with a view to determining whether they should be revised, be withdrawn or should continue to be approved. Removing the requirement to publish information about the intervals at which reviews will be conducted will allow the Secretary of State to determine when reviews of technical education qualifications, standards and apprenticeship assessment plans should be carried out based on need, rather than a fixed review point.

The clause will allow the Secretary of State to review technical education qualifications and over 700 high-quality occupational standards and apprenticeship assessment plans more frequently where occupations evolve quickly, such as in digital. That will ensure that technical education qualifications, standards and apprenticeship assessment plans are kept up to date, coherent and relevant. It will also allow the Secretary of State to take a targeted approach to reviews, tackling issues such as low achievement rates and out-of-date knowledge, behaviours and skills.

Without the clause, technical education qualifications, standards and apprenticeship assessment plans would need to be reviewed at published intervals rather than based on need. That would prevent resources being deployed effectively to ensure that technical education qualifications, standards or apprenticeship assessment plans are kept relevant and up to date as required.

For example, training providers and assessment organisations have reported difficulties with delivering the installation and maintenance electrician and domestic electrician apprenticeships. Both are focused on critical occupations in priority sectors and in delivering the Government’s home building target. In such instances, revision of the standards and assessment plans is likely to be needed before a fixed review point. The clause means that issues can be addressed quickly to support improved delivery of apprenticeships for the benefit of delivery partners and learners, and I commend it to the Committee.

[Neil O’Brien]

This is one of the strangest bits of the Bill. It is pretty baffling why the Government do not want to regularly review the approval of technical educational qualifications. Without rigorous independent oversight, there is obviously a risk that standards for technical qualifications could be lowered or might not stay as relevant as possible.

In its written evidence, the Royal Society of Chemistry stated:

“We have concerns about the removal of structured reviews of standards. The very nature of sectors such as science mean the skills required evolve quickly. Not reviewing the necessary skills that apprentices need to carry out roles will be detrimental to the workforce and certainly narrow the opportunities for those apprentices in the long term.”

We also have concerns about the clause, which deletes the requirement that things are updated “at regular intervals”. It is not the most arduous requirement of all time on Government, but regular reviews are not just a bureaucratic exercise. They guard against complacency and stagnation, and ensure that technical qualification standards stay fit for purpose. Without that, there is a risk that they become less and less relevant to the needs of employers and learners.

This also sets up a slightly strange conflict. Are the Government not placing an undue burden on those who are directly involved in the design and delivery of standards to act as their own assessors? That lack of external scrutiny could lead to a decline of trust among stakeholders, both learner and employer.

I do not understand, from what the Minister has said, why the Government think that this level of scrutiny is too much. The requirement is to update things “at regular intervals”—it does not say “every two weeks” or “every six months”. It says regularly. This is not a wild bureaucratic requirement to keep things up to date. I do not understand why this is a thing that must be zapped. As far as I can see, the only golden thread running through DFE legislation at the moment is a sort of maximisation of the power of officials and the minimisation of any constraints on them.

I do not understand why the clause is necessary. I understand that in some areas, the review might be very light touch—there might be a review and the decision is not to do anything. On Second Reading, the Minister committed to publishing information about the intervals for review. What will they be? What is the plan? If we are getting rid of the requirement for regular reviews, how often will they be? What is the process of review going to look like? Independent reviews can provide very valuable feedback to policymakers and training providers, which may not necessarily be obvious to Ministers who do not follow the ins and outs of an industry every single day.

Clause 6 risks eroding the quality of and confidence in technical education qualifications. By removing a statutory requirement for independent review, we risk reducing the rigour that that brings, as learned bodies such as the Royal Society of Chemistry have pointed out. I just do not understand what problem Ministers are trying to solve by getting rid of a simple and basic requirement to review things regularly.

[Janet Daby]

The Secretary of State will still be required to maintain arrangements to review approved technical education qualifications, standards and assessment plans, with a view to determining whether they should be revised or withdrawn and whether the qualification should continue to be approved. The current approach to review is rigid and burdensome, given the volume of standards available. More than 700 high-quality occupational standards are now available following the introduction of the first in 2014 and IfATE being established in 2017.

[Neil O’Brien]

The Minister says that this is an excessively onerous requirement. Could she give us some sense of the volume of work required as a result of this section in the 2009 Act? What does “onerous” mean? How many are having to devote how many man hours to doing what? How many people are employed purely to do what? What is the evidence that this is “onerous”?

[Janet Daby]

If the hon. Gentleman will allow me to continue a bit further, I will explain.

The current approach to review is too rigid and burdensome, given the volume of standards, assessment plans and technical education qualifications. It fails to recognise the differences in starts, achievement rates and rapid changes in skills needs, such as digital. Originally, it was expected that reviews would be carried out every three years, but with the proliferation of standards, assessment plans and technical education qualifications to review, IfATE was unable to maintain that cycle. Therefore, clause 6 will not remove the requirement of the Secretary of State to conduct reviews, but will allow them to be more targeted by prioritising reviews that are most needed rather than working to set intervals.

[Neil O’Brien]

The Government’s argument is that the requirement to review—they do not have to rewrite, just review—qualifications every three years is excessive. I wonder whether that is really excessive in the eyes of most of the users and employers involved in these schemes. Elsewhere we have seen bureaucratic collapse, with the Office for Students halting the accreditation of new higher education institutions. That is not a good thing. It is a problem that needs to be fixed, rather than an excuse to get rid of that requirement. It is the same with clause 6. The Government are making a mistake on this, but we will not vote against it.

Question put and agreed to.

Clause 6 accordingly ordered to stand part of the Bill.

Clause 7

Examinations by independent third parties

Question proposed, That the clause stand part of the Bill.

[The Chair]

With this it will be convenient to discuss clause 8 stand part.

[Janet Daby]

Clause 7 amends the 2009 Act to substitute a requirement for independent third-party examination of all new standards and assessment plans for a discretionary power for the Secretary of State to make arrangements to do so. The default position will remain that the Secretary of State will make arrangements for independent third-party examination of new standards and assessment plans prior to their approval. The clause will provide an alternative approach in certain circumstances, where obtaining third-party examination is duplicative or not necessary.

We envisage scenarios where the Secretary of State is not likely to make arrangements for an examination. For example, in highly regulated occupations in the health sector, where the regulatory requirements for occupational competence must be reflected in the occupational standard and assessment plan, third-party review would be duplicative and an inefficient use of resources. Similarly, where a regulator is directly supporting the development of the occupational standard and apprenticeship assessment plan and can assure themselves that they will meet regulatory requirements, an independent third-party examination also becomes redundant.

The option not to arrange an independent third-party review may also be deployed where employers place a high value on a professional body’s mandated qualification or key skills and behaviour learning outcomes, and the occupational standard adopts this very closely, such as the Chartered Institute of Personnel and Development and human resources standards. In such cases, an external review would be nugatory. That is also the case for emerging or highly specialised occupations, such as in the nuclear industry, where the group of persons preparing the industry represent the totality of interested parties. Without the clause, third-party examinations of all new standards and assessment plans would continue to be required in every instance, the delivery of which would not benefit the content but would act as a drain on time and resource.

--- Later in debate ---

[Damian Hinds]

Clauses 7 and 8 are grouped, and I am sure there is a reason for that, but it strikes me that they are quite different, and I want to say a word about both.

Clause 7 is about examination by independent third parties, which I think gives an opportunity to also talk about the overall principle of having independent evaluation of standards and making sure they are up to scratch. I am conscious that the hon. Member for Great Grimsby and Cleethorpes asked a question earlier, and we did not have the documentation to hand at the time, but I did not want to leave it hanging in the air. She asked specifically about whether the words that my hon. Friend the Member for Harborough, Oadby and Wigston, the shadow Minister, had used represented the exact phrase from the 2015 Ofsted report on the then apprenticeships regime. Helpfully, I have the precise words:

“Inspectors found that in a third of the 45 providers visited, apprenticeships did not provide sufficient, high-quality training that stretched the apprentices and improved their capabilities. Inspectors observed, for example, apprentices in the food production, retail and care sectors who were simply completing their apprenticeship by having existing low-level skills, such as making coffee, serving sandwiches or cleaning floors, accredited. While these activities are no doubt important to the everyday running of the businesses, as apprenticeships they do not add enough long-term value to the individual companies or tackle skills shortages effectively.

Some learners on low-level, low-quality programmes were unaware that they were even on an apprenticeship. As suggested by some learners during the survey, a question needs to be asked: are these apprenticeships worthy of the name?”

I mention that for two reasons. First, this was a question that came up. Secondly, it is very important not only that we pay close attention to this position at any one moment in time, but that we create a system that is self-regulating and that does not allow for standards to be eroded. Independence of the body setting the standards and independent third-party checking of the standards alongside leading employers, who will benefit from employing these people, is the surest way of doing that.

Clause 7 and the question about independent third parties examining occupational standards or apprenticeship assessments is a repeat of a debate we had on one of the earlier clauses. The probing arguments and challenges from us are the same as they were then. The Government say that third-party examination is not necessary in some sectors because, for example, in highly regulated occupations, the standard required is obvious—or, as the Minister said in the other place, because

“an external review would be nugatory.”

Is there not still some value in independent verification of that? And, if there is going to be verification, are not those in the sector the people best-placed to do it?

Let me turn to clause 8. It is difficult, because in this place one does not want to reveal not knowing something, but I am nonplussed by this clause because, to be honest, I really do not know what is going on. The clause is about Ofqual and about why, and in what circumstances, it may accredit a technical qualification if the Secretary of State says that it is all right for it to do so. My hon. Friend the Member for Harborough, Oadby and Wigston said it seemed most likely that the Government have in mind T-levels, and asked whether they would just spit that out. That is one possibility. My worry is the opposite—actually, let us call it a question, not a worry, and make it a neutral term.

Ofqual already has a role in regulating T-levels—I was just reading the Ofqual page about how it is regulating the technical qualification element of T-levels. Now that the Government are saying that Ofqual can do that—if the Secretary of State says it is okay—does that mean that Ofqual might stop doing that, or that its approach for T-levels will be used for some other qualifications? That would not necessarily be invalid, but it would be a move away from the vision of Lord Sainsbury, who wanted a streamlining and simplification, and a broader understanding of technical and vocational qualifications, so that there would be an apprenticeship route and there would be a college-based route. Of course, there will always be some particularly specialist qualifications or students with special needs, for example, but for the majority of cases, the college-based route—these 15 routes—would be the T-level.

I wonder if, buried in this difficult-to-penetrate text, there is something that the Committee really needs to understand, but which, right now, I do not.

[Janet Daby]

I want to emphasise that no one is seeking to erode standards. We are seeking to improve the skills system. We recognise the need to move things on and to quicken up the process. This Government are entirely committed to doing that. We recognise the skills gaps and the need to ensure that people have the skills needed to get into the employment that they need. This is a Government who have a mission for growth and breaking down barriers to opportunities.

In clauses 7 and 8 we are seeking to move along the processes to make sure our system is more flexible and agile and can respond to markets, businesses and employers. In clause 8, in terms of Ofqual, we are not trying to create a two-tier system. The Bill would remove what is an unnecessary and blanket ban on the accreditation of technical education qualifications. There are of course then options for using the new flexibilities in accreditation, which will need to be considered in the interests of employers and learners. The Secretary of State will carefully consider when it may be appropriate for Ofqual to accredit technical qualifications.

With regard to clause 7, in certain circumstances, obtaining independent third-party examination of new standards and assessment plans is unnecessary or duplicative, wasting time and resources; we may need to move things on.

[Damian Hinds]

If there is a blanket ban on Ofqual regulating technical qualifications, can the Minister explain why there is a page on gov.uk—unless someone has hacked it—entitled “Information on how Ofqual is regulating the technical qualification component of T Levels”?

[Janet Daby]

I thank the right hon. Member for raising that. Through clause 8, we are making sure that Ofqual can accredit technical qualifications where the Secretary of State deems it appropriate.

I thank Members for their contributions. Clauses 7 and 8 are essential in ensuring that Skills England has the flexibility to respond nimbly to an evolving skills system, and I therefore urge the Committee to support them.

[Neil O’Brien]

So far in the debate on clause 7, we have not heard any examples of the requirement for an independent assessment causing a long delay. I thought the Minister would give us an example of the introduction of such and such a qualification being delayed for a year because of the requirement to get an independent view on it, or qualification x being introduced 18 months later than it should have been because of the requirement for an independent examination of whether it was legit. If she has examples of any such problems, I am happy to take an intervention from her.

The requirement for independent bodies is quite a big safeguard to remove. We have the same safeguard with double belt and braces on the academic side, but for some reason it is not needed on the technical side. I do not know why, but as ever, it is not going to go to the ball.

If the Minister has any examples of the requirement causing big delays and being so awful that she has to be nimble, swashbuckling and able to bang all these things through, I would love to hear them. So far, we have heard no such examples, either in the other place or here. For that reason, I am keen to vote against clause 7 stand part.

--- Later in debate ---

[Damian Hinds]

Forgive me on that front as well, Sir Christopher. In that case, I have only two questions specifically on the amendment. My hon. Friend the Member for Harborough, Oadby and Wigston rightly asked about the public sector workforce. Specifically for the DFE, what impact do the Government expect on the postgraduate teaching apprenticeships and on persuading graduate teaching assistants to become teachers?

[Janet Daby]

Amendment 7 would require the Secretary of State’s report about the exercise of functions transferred from IfATE to include information on the impact on the provision of level 7 apprenticeships in England. The amendment would duplicate the duty in the Bill for the Secretary of State to report on the impact of the exercise of relevant functions on apprenticeships. What the amendment appears to be asking for is already in scope of the report, as described in clause 9. I also reassure Members that Skills England’s analysis and insights, which highlight skills needs in our economy, will reflect how far apprenticeships and other technical qualifications are meeting those needs on an ongoing basis.

I should be clear that Skills England will be an evidence-based, authoritative voice on skills, with a broad and ambitious remit to identify and tackle skills gaps. Although it will have a significant impact across the Government, and indeed the country, it is part of a skills system where priority skills policy, strategy and funding decisions remain for the Secretary of State and the Cabinet. Taking advice from Skills England, we will be asking more employers to step forward and fund level 7 apprenticeships. As I have said, we will set out more information shortly. I therefore ask the hon. Member for Harborough, Oadby and Wigston to withdraw his amendment.

[Neil O’Brien]

It seems like a strange argument, in response to a clause that requires the production of more evidence, to say, “It is all fine because Skills England will be so evidence-led.” That is the entire point of our amendment. I do not think the Government want to talk about what they are planning to do on level 7 apprenticeships, nor did we hear any attempt to describe what will, or will not, be done as part of the review from the Minister. Sometimes the silences in these discussions are as telling as everything else.

Quite a few of the organisations that are warning about the axing of level 7 apprenticeships also make the point, which I think is true, that this proposal will not do what Ministers hope. I think Ministers hope that it will move the resource to level 2 and 3 apprenticeships, and there is a perfectly good argument for trying to do more at those levels. That is why we brought in the 100% funding for small and medium-sized enterprises, for example, and we could go much further on that.

However, as numerous organisations and academics have pointed out, if we kibosh level 7, the first place that the money will probably go to is level 6. That is why we keep asking Ministers, without ever getting an answer, to rule out doing what they are planning to do to level 7 to level 6 as well. That is where the real money is; I think it is about 36% of all the funding, compared with 9%. I might be wrong about the exact numbers, but it is roughly that. If the Government actually want to prop up the system and offset some of the other things that they are doing, they probably will go after level 6 apprenticeships. But whenever we ask this in the Chamber or elsewhere, and say, “Will Ministers rule out kiboshing level 6 apprenticeships in the way that they are with level 7?”, we never get an answer. I invite the Minister again today to rule out axing level 6 apprenticeships in the way that they are doing with level 7.

I am very keen that we put this amendment to a vote. It is not good enough to say, “We are so evidence-led”, but then do something that is hasty, secret and is being advised against by many experts in the sector.

[Janet Daby]

Will the hon. Member give way?

[Neil O’Brien]

I would be delighted to. I hope that we will get an answer on that point about level 6: is the Minister going to rule out kiboshing level 6 in the way that she is doing with level 7?

[Janet Daby]

I just thought I would help the hon. Member with his questions. Level 6 apprenticeships are indeed a core part of our apprenticeships offer, supporting growth and opportunity. We are reforming the apprenticeship levy into a growth and skills offer to deliver greater flexibility for learners and, indeed, employers. Decisions on training and funding through the levy in future will be guided, of course, by Skills England.

--- Later in debate ---

Question proposed, That the clause stand part of the Bill.

[Janet Daby]

Clause 9 contains a duty for the Secretary of State to publish and lay before Parliament, within six months after the closure of IfATE, a report setting out which functions of the Bill are being exercised by Skills England, and the impact that the exercise of functions transferred from IfATE to the Secretary of State has on apprenticeships and technical education in England.

As I indicated on Second Reading, it is anticipated that the functions being transferred from IfATE to the Secretary of State relating to the development, approval, review and revision of apprenticeships and technical education qualifications will largely be exercised by Skills England, operating as an Executive agency. It is after having listened to, and acted on, the contributions made by peers in the other place, and their calls for greater transparency, that the Government have introduced this duty in the Bill. We have noted the broad support for Skills England throughout the passage of the Bill, and recognise that there is considerable interest in understanding exactly what it will do once it is fully formed.

This reporting requirement is in addition to a broader set of expectations placed on all Executive agencies, which Skills England will be required to meet, to provide transparency about their work and accountability for their performance. The reporting arrangements of Executive agencies are clearly defined. They must produce an annual corporate plan and an annual report, both of which will be published in respect of Skills England, subject to any commercial considerations in the corporate plan. Guidance dictates that corporate plans should include matters such as key objectives and performance targets, and assessment of current and recent performance against those targets.

Furthermore, governance arrangements for Skills England will be set out in a framework document, which is a core constitutional document that must be produced in line with guidance from HM Treasury. Skills England’s framework document will be agreed between its board and Ministers. Once finalised, it will be published online, and Ministers will deposit a copy in both Houses. Without clause 9, there would not be a requirement set out in legislation for the Secretary of State to report transparently on exactly which functions in the Bill Skills England is taking on.

[Neil O’Brien]

Clause 9 has been included because of the level of disquiet about the Bill in the House of Lords. There was literally not even a mention of Skills England in the Bill when it was introduced. We will return to this issue when we debate new clause 1 from the Liberal Democrats, and our new clauses 2 and 3, in which I seek to put Skills England on to a statutory footing, or at least to put more of a clear legislative framework around it than we have currently. All we have at the moment is this report, which is pretty thin—I will not vote against clause 9 standing part, because it is better than absolutely nothing—and the framework, which, again, is very thin.

To be honest, it is less me who should worry about that and more Ministers, because I do not get from the proposals any great clarity on what they hope Skills England will do or how it will operate. Some degree of protection could be offered not just for employers, but for Ministers. This could offer some degree of insulation from these choices, so that the process does not become entirely politicised, but we have not yet got that. I hope that this report will be positive and the making of it will encourage the Government to clarify their thinking on what they are trying to achieve and how these new institutions in the DFE will work.

We will return to this issue on new clauses 1 to 3, so I will rest my remarks there, other than to ask the Minister for a sense of what she really sees as the big opportunity. It is very easy for Ministers to say, “We are going to bring everything together, it will all be in one place and we will have a great, coherent view over the whole system.” That is hard to object to in principle, but what are they minded to do as a result? Is there a big opportunity? Is it some new category of qualification, or some overlapping of qualification? They say they are going to look at everything together, which the DFE already does. There is a Department that can give an overarching view, and there is the centre of Government that can bring together the views of all the different Departments, so what is it that Ministers really hope Skills England can offer?

The Secretary of State will provide this report six months after Royal Assent, but I am interested in hearing from the Minister what she sees as the big opportunity. Other than saying, “It will be more joined up and we will look at everything together at a high level,” is there a specific thing that Ministers are hoping to do off the back of that machinery of government? This is a big thing; the Government’s impact assessment says that it will lead to delays and a fall in starts. Ministers could say that that is acceptable because there is some big prize at the end of the road, but what is the big prize?

I will not repeat all the quotes I have read out from former Labour Ministers and Labour peers in the other place worrying about what one of them called the lack of the second half of this Bill—the lack of the bit where we get to the setting up of Skills England. In particular, Lord Blunkett said that this was not quite what he expected. He thought that we would have what was promised in the King’s Speech—a Skills England Bill to set up the new, independent Skills England as a proper arm’s length body. I will not rehash all those things here, but I encourage the Minister to give us a sense of what she thinks the big opportunity is going to be, and what she will do as a result of the creation of Skills England.

[Damian Hinds]

I apologise for my misreading of the groupings earlier, Sir Christopher. Clause 9 is the new clause inserted by the Government in response to the other place. It requires there to be a report on the exercise of the Secretary of State’s functions and for the report to be made within six months and laid before Parliament. It will cover which functions are going to be done through Skills England and the impact of the exercise of the relevant functions on apprenticeships and technical education in England.

New clause 2 proposes that all the functions of IfATE go to Skills England. The obvious question is: why not? Why would they not go to Skills England? When we come to the debate on new clause 2, there will be an opportunity for the Government to explain that to us.

We have heard a bunch of times about how there has been all this preparatory work—that it has been a long time in the making, that Skills England exists in shadow form and that the Government thought about it a great deal. Why can they not tell us now which functions are going to go to Skills England?

On the impact of the exercise of the relevant functions, is it really right for the body itself to talk about what its impact has been? Should there not be some external validation to consider the effectiveness of the body? I have three questions for the Minister. We know that the report will be laid before Parliament, but what will its status be? Will Parliament be able to debate it? Will it be binding in some way? What if this Secretary of State or a future Secretary of State takes a different view, bearing in mind that under this legislation they would be allowed to? If they take a different view, will a new report be required and will Parliament have any say in that?

[Janet Daby]

Clause 9 is about improving the reporting and transparency of Skills England. It shows this Government’s willingness to listen and work constructively with Members here and in the other place. I believe I have already outlined what Skills England will do, but for the sake of clarity, the Bill means that for the first time mean there is a single organisation responsible for identifying skills needs in our economy. It will design training that reflects employers’ skills needs, and it will work in all parts of the country so that the training available reflects national and regional priorities.

We have a skills shortage in our country and a workforce shortage. We need more people trained up to take on the jobs that are needed in our society. We want to get things moving. That is why we are bringing this Bill forward. In relation to accountability, the Secretary of State will be accountable as usual before Parliament and relevant Select Committees, as Skills England will be. On that note, I commend clause 9 to the Committee.

Question put and agreed to.

Clause 9 accordingly ordered to stand part of the Bill.

Clause 10

Power to make consequential provision

[Ian Sollom]

I beg to move amendment 8, in clause 10, page 4, line 32, at beginning insert—

“Subject to subsection (6),”.

--- Later in debate ---

[Neil O’Brien]

This is an extremely sensible amendment, which we welcome. Although I am not a liberal, one of the great strengths of the liberal tradition is its knee-jerk suspicion of centralisation. The Bill represents centralisation in many different ways. It takes lots of brakes off, and we keep hearing in our sittings that, “We must get rid of this or that form of scrutiny because we must move quickly.” The hon. Gentleman is right to be nervous about that and about the lack of limits to the consequentials off the back of the Bill. I support the amendment and hope that the Government will accept it.

[Janet Daby]

I will speak to amendments 8 and 9. Clause 10 makes provision for the Secretary of State to address any consequential effects that the Bill may have on other legislation. The Department recognises and takes seriously the important role that Parliament has in scrutinising consequential amendments. That is why it has made every possible effort to ensure that schedules 1 and 3 capture the existing legislation in scope for consequential amendments, and that existing legislation passing through Parliament this Session takes account of the provisions of the Bill.

As well as existing primary legislation, clause 10 will allow the Secretary of State to address any consequential effects this Bill may have on other Bills passing through Parliament this Session.

[Neil O’Brien]

I have a specific question. Skills England does not bring the whole skills sector together. There are other excellent bodies, for example, the Migration Advisory Committee, which has a skills component. Other bodies, such as the Construction Industry Training Board and the Engineering Industry Training Board, impose levies and have not been merged into Skills England or abolished. The Government have rejected the Farmer review’s recommendation to merge the CITB and EITB. I therefore wanted to check something with the Minister. My understanding is that the Government could use clause 10 to abolish the CITB and the EITB. I do not see any reason why they could not do that. The Minister may want to get advice about that—I appreciate that I am putting her on the spot. There is nothing to stop such large changes being made off the back of clause 10. That is one reason why we are keen on the amendment. One sees Henry VIII clauses and one cannot quite imagine how they would be used, but that is a problem because we never know what will be done under them. Will the Minister check whether my understanding is correct that the Government could do such big things off the back of clause 10? If that is not the case, I would be delighted to hear it.

[Janet Daby]

I thank the hon. Member for his intervention. Skills England is in communication with the Migration Advisory Committee and others as well. It has a broad remit as well as having a relationship with the CITB. I feel that we might be swaying outside the purpose of the Bill. I am happy to get further information if the hon. Gentleman feels that he needs some. In terms of the merger of the CITB and EITB, there are good reasons why that merger is not favoured by the Government.

As well as existing primary legislation, clause 10 will allow the Secretary of State to address any consequential effects that this Bill may have on other Bills passing through Parliament this Session. However, it is always possible that further changes may be necessary. It is therefore prudent to provide a failsafe should anything have been missed. Without it, there is a risk not just to the coherence of the legislation, but to the functioning of the system for employers and indeed learners. Should such a circumstance arise, any amendments to primary legislation will be made through the affirmative procedure.

The necessary consequential amendments to secondary legislation, which cannot be made on the face of the Bill, will be made through the negative procedure, as is customary. We have already identified amendments to secondary legislation that are needed—for example, repealing the provision in the Apprenticeships (Miscellaneous Provisions) Regulations 2017, which empowers IfATE to charge fees in relation to evaluations and apprenticeships assessments.

Amendments 8 and 9, tabled by the hon. Member for St Neots and Mid Cambridgeshire, would require regulations making consequential provisions that are subject to the negative procedure by virtue of clause 10(5) to instead be subject to the affirmative procedure for a period of six months. Given the limited and uncontroversial nature of the necessary changes, the negative procedure balances sufficient parliamentary oversight while enabling changes to be made without unduly taking up parliamentary time or risking the coherence of the skills system for learners and employers.

As Members of this House will be aware, the affirmative procedure requires debate and the approval of both Houses. That would mean that consequential amendments to existing secondary legislation would take longer, which could delay the implementation of the Bill and create incoherence across the statute book until the necessary changes are made. There is a strong precedent for delegated legislation under the negative procedure to be used to make consequential amendments to delegated legislation, and therefore the amendment seeking affirmative resolution is not necessary. For the reasons I have given, I commend the clause to the Committee and ask the hon. Member to withdraw the amendment.

[Ian Sollom]

I thank the Minister for her response. I am afraid I am not satisfied that that is sufficient and would like to push the amendment to a vote.

Question put, That the amendment be made.

Institute for Apprenticeships and Technical Education (Transfer of Functions etc) Bill [ Lords ] (Third sitting)

Janet Daby Excerpts

Committee stage
Thursday 20th March 2025 Public Bill Committees

[The Chair]

With this it will be convenient to discuss the following:

Government amendment 1.

Clause 12 stand part.

Government amendment 2.

Clause 14 stand part.

[The Parliamentary Under-Secretary of State for Education (Janet Daby)]

Government amendment 1 lets the Secretary of State make regulations that determine the date, or dates, when clauses 1 to 8 and schedules 1 to 3 come into force. The other provisions of the Bill in clauses 9 to 14 come into force on the day on which the Bill is passed.

This amendment seeks to overturn the amendment passed in the other place that places a 12-month delay between the creation of Skills England and commencement of key parts of the Bill, including the clauses that transfer functions from the Institute for Apprenticeships and Technical Education to be exercised by Skills England. It was hugely disappointing that, despite broad support for the urgent need for reform, peers in the other place voted for that delay. Reform is exactly what the Bill and Skills England will deliver. After 14 long years of complacency and neglect, this Government are driving high standards, and we have a plan for change. A delay will benefit no one.

Skills England is already operating in shadow form and, once the Bill is passed, it stands ready to become a fully operational arm’s length body. The leadership is already in place, with the chair, the vice-chair, the chief executive officer, the deputy CEO and a full team of senior civil servants already working as one. The work is well under way; Skills England reported on skill gaps in September last year. It is connecting decision making across regional and national Government, as well as working closely with training providers, trade unions and employers. It is collaborating with businesses to develop sector plans for the forthcoming industrial strategy.

Skills England is working with closely with the Migration Advisory Committee to access skills needs to identify shortages in occupations. That will help to identify and grow our domestic skills pipeline over time, which will reduce our reliance on overseas workers. We need to build our own skilled workforce, and Skills England is moving ahead. The Bill gives it some of its key tools, but there is no case for delay, and I commend Government amendment 1 to the Committee.

Government amendment 2 would remove clause 14(2) of the Bill. It is normal procedure for Bills originating in the House of Lords to require the insertion of a standard privilege amendment such as subsection (2). This formally recognises the privilege of this House to control charges on people and public funds. Therefore, in accordance with normal procedure, we now remove the privilege amendment so that any such charge is imposed by this House, rather than the House of Lords. I commend Government amendment 2 to the Committee.

Clause 11 sets out the territorial extent of the provisions contained within the Bill. This is a standard clause for all legislation. Clauses 1 to 7, clause 9 and schedule 2 extend to England and Wales. Clause 8 extends to England, Wales and Northern Ireland. Clauses 10 to 14 and schedules 1 and 3 extend to England and Wales, Scotland and Northern Ireland.

I have already touched upon clause 12 as part of Government amendment 1, which states when the provisions of the Bill will come into effect. Clause 12 should stand part of the Bill, as amended by Government amendment 1. Furthermore, as is standard practice, clause 14 gives the Bill a short title by which it may be known once it becomes an Act. The short title given is the

“Institute for Apprenticeships and Technical Education (Transfer of Functions etc) Act 2025.”

I commend clauses 11, 12 and 14 to the Committee.

[Neil O’Brien (Harborough, Oadby and Wigston) (Con)]

Clause 11 talks about the geographical extent of the Bill, which it says is England and Wales. This is a very small point, but it is worth noting that the Bill and decisions under it will actually affect other parts of the UK as well, not least because they affect degree apprenticeships and higher education. For example, the University of Strathclyde is a leading provider of graduate apprenticeships and degree apprenticeships across Scotland and England; I will return to that overlap later on.

On a more substantive note, Government amendment 1 seeks to overturn the one-year pause inserted in the House of Lords. Why did peers insert that? Why was there so much debate, and such wariness about this Bill? First, because there were good reasons that standard setting was put at arm’s length and closer to employers. We heard from all parts of the House of Lords that this Bill is a centralisation and, alongside other changes the Government are making, it will risk directly damaging the status of these qualifications.

Secondly, the Government are doing several things that will make it less likely that businesses will take on apprenticeships, starting with the Budget. Rather than fixing those problems, the Government are reorganising. Skills England will be the 13th skills body in 50 years. It is abolishing IfATE, which was created only seven years ago—yet more reorganisation, rather than a focus on the real issues.

Thirdly, peers had—and we have—real concerns that the reorganisation of the machinery of Government will lead to harmful delays in addressing some of the most important strategic issues we face. Those concerns are borne out by the Government’s impact assessment, which states that there may be a drop in apprenticeship starts while IfATE’s functions are transferred to the Secretary of State. It says:

“The transfer of function from IfATE to the DfE could potentially cause a temporary slowdown in the growth rate of new apprenticeships and technical education courses due to potential delays in the approvals process resulting from the Bill…This may disproportionately impact disadvantaged learners, who rely more heavily on these pathways for career advancement.”

Fourthly, peers inserted the delay because of concerns about what will happen as DFE tries to absorb all the staff of IfATE. Lord Blunkett, who was one of the most interesting speakers in the Lords, said:

“My fear…is that given the number of people currently transferable from IfATE, full- and part-time, which nudges 200…there is a real danger that IfATE will swamp Skills England at birth.

When two years ago I led on the learning and skills document that was a precursor to Skills England…we never envisaged that an agency inside government would have to take on the assurance and accreditation of the relevant sector standards.”

He continued:

“A Skills England that has no legislative backing and no parliamentary references but is down merely to the changing face of ministerial and departmental appointments is in danger of losing its birthright before it has got off the ground.” —[Official Report, House of Lords, 21 November 2024; Vol. 841, c. GC98.]

That argument is somewhat different from the others. His argument, as somebody sympathetic to the creation of a body like Skills England, albeit outside the Department, is that it needs time to establish its own culture and balance, and to grow and develop some roots, before the IfATE elephant steps into the Skills England rowing boat.

Since we last met as a Committee, we have received further written evidence from the Skills Federation, which brings together 18 employer-led sector skills bodies, representing more than 150,000 employers. They add their voices to the concerns. The organisation warns:

“Transfer of IfATE functions risks disruption and a focus on operational rather than strategic priorities…The movement of functions and the people that carry them out will always be challenging. It is important that the transfer is planned effectively, and the time taken to think through the implications for IfATE staff, but also the impact on the system. Compromises will no doubt have to be made to balance the need for pace with the requirement to retain operational continuity.

However, there is a key risk that transfer of functions from IfATE will become the key focus for the set-up of Skills England and less attention (and potentially resources) placed on achieving the overarching aims.”

That is a direct reinforcement of the argument that Lord Blunkett made in the Lords. It is very sensible advice to take our time.

In contrast to employers’ groups, Ministers say there is no time to wait. In truth, there is no great obstacle to the Department doing all the things it might want to do, and establishing Skills England a little bit more before that big transfer of staff, but Ministers want to take this one-year pause out of the Bill with their Government amendment 1. They would be wiser to listen to the grey-haired people in their own party, such as Lord Blunkett, but it seems they are not minded to do that.

This group also includes Government amendment 2 to remove the Lords’ privilege amendment. For the benefit of those following the proceedings, as the Minister said, the Lords automatically insert these amendments when there is legislation starting in the Lords that involves levies and taxpayers’ money, to avoid formal infringement of the Commons’ privileges over those things.

There is nothing unusual about that, but the privilege amendment is put in as a deliberate reminder that the Bill has a significant impact on spending of both levy and taxpayers’ money. The sums involved here are non-trivial—it is billions of pounds of spending, governed by IfATE today and by the Department for Education in future. The ongoing chronic uncertainty about the Government’s plans to allow employers to take money out of apprenticeships is not just damaging for business—it is damaging on a significant scale.

In the last Bill Committee sitting, the Minister promised to write to me to set out the Government’s position on the 50% flexibility. I hope she will tell me today when that letter is likely to appear, because businesses are starting to raise the alarm ever louder.

Since the Committee last met, even more businesses have come out with criticisms. Jane Gratton, the deputy director of public policy at the British Chambers of Commerce has said that the lack of clarity about the future of the growth and skills levy was creating “fresh uncertainty among businesses.” She said that some employers had told the BCC that they had put training plans on hold until they heard what alternatives would be funded in future. She called on the Government to lay out a clear timeline for reform and said that threats to cut the levy before it had even been established are “worrying and destabilising”.

Likewise, Simon Ashworth, the deputy chief executive and director of policy at the Association of Employment and Learning Providers, said:

“there’s little room for manoeuvre—scrapping level 7 apprenticeships won’t yield savings for years…Until the programme budget more closely matches the levy take, it’s imperative funding priorities are aimed at maintaining the sustainability of apprenticeship standards, rather than introducing further non-apprenticeship flexibilities.”

That is a very important warning.

This is all happening against a backdrop where other types of technical education covered by IfATE are shrinking too. I am old enough to remember when Labour MPs spent years saying that adult skills spending was not generous enough—yet yesterday we learned that the DFE is to cut adult skills budgets by 6%. Amazingly, that came out at the same time as the welfare reform Green Paper, which overshadowed it and mentioned training 18 times. In the Chamber the other day, the Secretary of State for Work and Pensions made an argument—a good argument—that it is better to get people into training rather than parking them on benefits; yet elsewhere, at the very same moment, DFE Ministers were cutting the training budget.

Skills England was supposed to bring a joined-up approach to policymaking. There is not much sign of that here. Instead, it will reinforce the concerns of those who want technical education to be more independent and employer-led.

I ask the Minister a specific question on the funding that IfATE regulates. Yesterday, we got an announcement on schools funding. The Association of School and College Leaders and the Confederation of School Trusts are warning that the funding only covers part of the costs of the national insurance increase and is leaving schools with a funding gap ranging from 10% to 35%—but at least schools are getting the funding announcement before the start of the financial year, albeit only days before.

Technical education is not so lucky. Colleges and 16-19 institutions will have to wait. They will be told their allocations this May and will be paid in September, even though they will have to start making the increased tax payments from the start of the new financial year in just a few days’ time. As James Kewin, deputy chief executive of the Sixth Form Colleges’ Association points out:

“16 to 19 funding is uncertain at the best of times, but this year colleges are also waiting for their post-16 budget grant allocations (scheduled for May) and a decision on the 10 per cent T-level uplift…This is all very late in the day”.

He is right. Once again, technical education is being treated as the poor relation.

We already know that independent training providers and specialist colleges will not get any compensation, and it is unclear how much of next month’s national insurance rise will be covered by the grant. Can the Minister stand up and reassure the sector today that all the additional costs, including those for indirectly employed staff, will be covered by the grant? Or will they, like schools, find that they have been short-changed?

I will not labour the point, but many people, including employer groups and very experienced people on the Labour side, have warned about the rush to bring these powers and functions into the Department and the effect that that will have on the Government’s own plans for Skills England. Ministers would be sensible to listen.

--- Later in debate ---

[Damian Hinds]

Of course I do, Ms Furniss. The different parts of Government that the new body will deal with include the Migration Advisory Committee, which is a well-established part of the machinery of Government but takes its commissions from the Home Secretary. This is a quote from gov.uk:

“The MAC bases all recommendations on what it sees as being in the interests of the resident population, taking account that migration has different effects on different groups.”

There will be conflicts between that aim and the aims of Skills England, and who will resolve those conflicts?

The new body will also work with the Industrial Strategy Advisory Council, which is an expert committee reporting to the Business Secretary and the Chancellor of the Exchequer; it is made up of experts, as the name suggests. Interestingly—we will perhaps come on to this in relation to some of the new clauses—the Government will legislate to establish that body

“in statute when Parliamentary time allows”,

which raises the question of why they will do so for that one and not Skills England. It suggests that there is perhaps a hierarchy of these bodies.

There is also the Labour Market Advisory Board. It reports to the DWP’s Secretary of State and its aim is to support the DWP

“to better understand the current state of the labour market, to help design policies and strategies to address key challenges”.

I will not go through all the things that it is supposed to do—[Interruption.] The Government Whip encourages me, but I would not risk your wrath, Ms Furniss, despite her best efforts.

Suffice it to say that there is again a cut-across, because of course, in terms of getting people back into work, which the DWP is focused on, there is some tension. Will Skills England be able to ask, for example, for changes in the conditionality regime operated by the DWP and the jobcentre network, to improve skill matching? Will there be better join-up between DWP work coaches and the National Careers Service?

Finally, the third thing the new body is to be responsible for is potentially the biggest and most controversial of all. In the rubric that the Government put forward, they said the new body would “identify the training” that is accessible via the growth and skills levy. I do not think they actually mean “identify”; I think they mean it will specify what is available to be paid for through the growth and skills levy. I will not go through all the arguments about the levy, but the new body will have to, and the 12 months envisaged under clause 12 would be a good time to do that. It will have to think about the levy’s real purpose and the distinction between firm-specific skills and training, sector-specific skills and training, and generic transferable skills and training. The levy’s purpose was to increase the total amount of investment in human capital in this country, to help our productivity gap and fill job vacancies, and the new body will need carry on with that purpose.

I hope I have given us a flavour—there is more—of the enormous strategic challenges and the enormous job of work for these very good people. There are some very encouraging signs in the appointments the Secretary of State has made, but what these people have to take on is enormous, and we want and need them to succeed in this endeavour. It would be far better to stage the approach, so that Skills England is established first, then takes on the great strategic roles working across Government and throughout the economy, and then, 12 months later, subsumes IfATE.

[Janet Daby]

The right hon. Member speaks of the enormous challenges; might I point out that the enormous challenges were left by the previous Government, which he was part of? The right hon. Gentleman and the hon. Member for Harborough, Oadby and Wigston were both previously in the Government, so it is only right that I set the context of the failings of the previous Government before I attempt to respond to the many, many points, views, opinions and ideas that were offered.

To put it into context, the previous Government had 14 years to deal with the skills problems and the crisis we are facing today. UK employers reported that more than a third of UK vacancies in 2022 were due to skills shortages. Would Members from the previous Government like to respond?

[Damian Hinds]

That is not really the way we do it in Parliament. You respond for the Government.

[Neil O’Brien]

We ask you a bunch of questions. I do not know whether you have noticed, but you are the Minister.

[Janet Daby]

I did not expect the Members opposite to respond anyway.

[Damian Hinds]

I am very happy to—

[The Chair]

Order. Calm down. Sit down, please.

[Janet Daby]

Across the UK, almost one in 10 of more than 2.5 million roles in critical demand—

[Neil O’Brien]

Will the Minister give way?

[Janet Daby]

I am going to make some progress first, then I will give way.

[Neil O’Brien]

She was asking us to intervene.

[Janet Daby]

More than 90% of those roles require periods of work-related training or education.

[Neil O’Brien]

Will the Minister take an intervention?

[Janet Daby]

The point I am making is that the last Government did not solve the skills shortages. The last Government held back growth and opportunity. This Government are moving forward. We want to boost skills through Skills England. The last Government prolonged uncertainty.

[Neil O’Brien]

The Minister encouraged us to intervene. One of the things Labour complained about a lot in opposition was what happened to the adult skills budget. Can the Minister confirm that the Government have just announced a 6% cut in the adult skills budget? Can she explain how that fits with the Government’s constant rhetoric—as in the welfare cuts debate just the other day—about getting people out of unemployment and into training? How will a 6% cut help to move people from welfare into training?

[Janet Daby]

Ms Furniss, I fear we are straying far away from the purpose of the Bill and what needs to be achieved.

[Neil O’Brien]

Will you answer the question? You invited the question.

--- Later in debate ---

[Janet Daby]

I will continue to respond. Skills will power this mission-driven Government.

[Neil O’Brien]

Will you answer the question?

[The Chair]

Order. Please speak through the Chair.

[Janet Daby]

This mission-driven Government have a plan for change. The need to boost Britain’s skill is crucial. We need skills to drive growth, to build homes, to deliver energy security and to build an NHS fit for the future. We want to move forward and make sure—

[Damian Hinds]

The question is how.

[Janet Daby]

Oh, there is how.

[Damian Hinds]

Go on then.

--- Later in debate ---

[Janet Daby]

I am sorry, Ms Furniss. This is very flustering.

As I said, we have had 14 years of complacency and neglect from the previous Government. Following the reforms they introduced, including the apprenticeship levy, apprenticeship starts have fallen by more than 30%. It is concerning that fewer young people are benefiting from apprenticeships. Apprenticeship starts for those under 25 are down by almost 40%. That is why, since the Prime Minister announced it in July 2024, Skills England has been operating in shadow form in preparation for full establishment.

The teams responsible for Skills England’s broader strategic functions are already operational and are establishing links with their counterparts in IfATE. By combining the analytical and regional functions, it is already delivering in shadow form. Detailed transitional planning has taken place to ensure that the functions moving to Skills England from IfATE will transition smoothly with no break in service. The planned continuity in staffing and team structures will ensure that occupational standards, apprenticeships and wider technical qualifications will continue to be approved, and T-level contracts will continue to be delivered, supported and monitored.

This approach will also ensure that Skills England maintains the vital links with employers and other partners that IfATE teams have previously established. The Minister for Skills in the other place recently met many peers and went through many of the processes and functions under the Bill. He has outlined that in a letter that is available for the Committee.

The Government are focused on establishing a coherent skills system with more flexible training options to support employers to fill skills gaps while driving growth and spreading opportunity. Businesses are backing the Government’s mission to grow the economy by breaking down barriers to opportunity for young people through our planned reforms.

[Neil O’Brien]

Speaking of gaps, I wonder whether the Minister will answer my question. Will she stand up and reassure the sector that all the additional costs, including those for indirectly employed staff, will be covered by the forthcoming national insurance contributions grant?

--- Later in debate ---

[Janet Daby]

I ask the hon. Gentleman to allow me to proceed further, because there is so much to say.

We have announced £300 million of additional revenue for further education, with £50 million available to sixth-form and further education colleges from April, to help to respond to priorities including workforce, recruitment and retention. We are offering up to £6,000 annually through the targeted retention incentive to attract and retain new teachers in critical subjects. We continue to support recruitment and retention through teacher training bursaries worth up to £31,000, tax free, in certain key subject areas. We are providing support for industry professionals to enter the FE teaching workforce through our Taking Teaching Further programme.

On Skills England’s relationship with the devolved Governments in the UK, its territorial scope is England only. The devolved authorities will be essential partners for it to ensure that our skill systems meet the skills needs of the whole UK labour market. It will be vital for us to work together openly and collaboratively. The Department for Education and shadow Skills England have engaged with the devolved Governments and the territorial offices, and there will be regular meetings.

In devolved areas, strategic authorities will play a stronger role in local skills improvement plans, working with a designated employer representative body. We are currently in the process of reviewing the geographies of LSIPs to ensure that, where possible, they align with the boundaries of devolved areas.

[Damian Hinds]

The Minister may be about to come to this, but what will be the relationship between LSIPs, and whatever strategies they draw up, and Skills England?

[Janet Daby]

As I have already said, the devolved areas will work on LSIPs with ERBs and maintain a close and strong relationship with Skills England.

LSIPs provide ongoing mechanisms through which local employers, strategic authorities, providers and other stakeholders come together to identify and address skills needs and issues. This supports Skills England’s aim to have the skilled workforce the economy needs at a national, regional and local level.

In response to the question about the impact of national insurance costs on skills and education, the Government have agreed that public sector employers will receive support in recognition of the increase in their national insurance contributions from April 2025. We are also providing £155 million for post-16 schools, academies and further education colleges. That is an increase of over £1 billion in the financial year 2025-26 for the education sector.

[Neil O’Brien]

Will the Minister promise to publish the methodology of how the figure of £155 million was arrived at? Can she reassure the sector that that sum is enough to cover all the costs of the national insurance increase, including the costs for indirectly employed staff?

[Janet Daby]

I hear what the shadow Minister is saying and will endeavour to get more information to him on those points. He asked about the flexibility of apprenticeships and levies. I wrote to the Chairs of the Committee yesterday addressing his question, but I understand that that was only yesterday.

--- Later in debate ---

[The Chair]

Please, show some respect.

[Janet Daby]

Government amendment 1 is crucial to ensure that Skills England is not unnecessarily held back. Transformation is under way—businesses and employers cannot afford to wait. Government amendment 2 is a normal procedure for Bills originating in the House of Lords. I urge the Committee to support the Government amendments and clauses 11, 12 and 14.

[Neil O’Brien]

I meant no disrespect, Ms Furniss, but the Minister promised in the previous sitting that she would write to me. She may say that the letter has been sent, but it has not arrived. It is telling that the things we are debating will be written into law and I have still not—

--- Later in debate ---

Question proposed, That the clause stand part of the Bill.

[Janet Daby]

Clause 13 contains provisions to ensure continuity and consistency of functions that are transferred from IfATE to the Secretary of State. This will allow functions already performed by IfATE to be treated as having been done by the Secretary of State. It includes a provision enabling the Secretary of State to continue things that are in the process of being done in relation to IfATE, immediately before the function was transferred. These will also ensure smooth commencement of the new legislation and transition from existing legislation. These functions may only become clear closer to when the functions are transferred.

Therefore, clause 13 includes a power to address this by way of regulations. Without this clause, there will be no statutory way of ensuring the smooth transition of the functions carried out by IfATE under the current legislation, to the Secretary of State under the new legislation.

[Neil O’Brien]

This clause is just a reminder that we are trying to make major changes to the engine of our skills system, while the engine is still running. I have already quoted from the Government impact assessment, pointing out that the impact of transition will be to slow down apprenticeship approval numbers—I will not recapitulate that. I will come back later to the challenges these changes to the engine while the engine is still running will cause.

Question put and agreed to.

Clause 13 accordingly ordered to stand part of the Bill.

Clause 14

Short title

Amendment made: 2, in clause 14, page 6, line 4, leave out subsection (2).—(Janet Daby.)

This amendment removes the Lords’ privilege amendment.

Clause 14 ordered to stand part of the Bill.

New Clause 1

Draft proposals for establishing new executive agency

“(1) Within six months of the passing of this Act, the Secretary of State must produce a report containing draft proposals for the establishment of a new executive agency, to be known as “Skills England”, responsible for the powers transferred under this Act.

(2) A copy of this Report must be laid before both Houses of Parliament.

(3) Within forty days of a Report under subsection (1) being laid, the Secretary of State must ensure resolutions are tabled, and moved, in both Houses of Parliament to approve the Government’s draft proposals.

(4) If the draft proposals are rejected by either House of Parliament, the Secretary of State must, within a period of six months, lay a report containing revised proposals before Parliament, and, within a period of forty days after laying the revised proposals, table a motion before each House of Parliament to approve the revised proposals.

(5) The Secretary of State may not establish an executive agency to carry out the functions transferred under this Act until it has secured, through a motion under subsection (3) or (4), the consent of both Houses of Parliament.

(6) If a motion under subsection (3) or (4) is approved by both Houses of Parliament, the Secretary of State must make an annual statement in each House of Parliament on the work of the agency.

(7) Within twelve months of a motion under subsection (3) or (4) being passed, the Secretary of State must lay before Parliament a report evaluating the effectiveness of the “Skills England” governance structure in delivering on the organisation's aims and objectives.”—(Ian Sollom.)

This new clause requires the Secretary of State to bring forward proposals for the executive agency, to be known as Skills England, subject to the approval of both Houses of Parliament.

Brought up, and read the First time.

--- Later in debate ---

[Janet Daby]

I thank the hon. Member for St Neots and Mid Cambridgeshire for tabling new clause 1, which would require the Secretary of State to lay draft proposals for a new executive agency, to be known as Skills England, before Parliament within six months of the Bill gaining Royal Assent.

Complexity and fragmentation within the skills systems are contributing to critical skill gaps in our economy. We need to urgently reform the delivery of skills and technical education without delay—I cannot stress that enough. After 14 years of inaction, we really need to get on with the job and build back the foundations. We plan to establish Skills England as an executive agency requiring a robust and rigorous process. That process applies across Government for all executive agencies. As with all new executive agencies, the approval of the creation of Skills England will be announced to Parliament in a written ministerial statement to both Houses. In line with other executive agencies, Skills England will be required to have robust governance arrangements and clear lines of accountability, including to Parliament. Ministers, the principal accounting officer and the chief executive will all be accountable to Parliament, and could appear before Select Committees if invited.

The broader governance and accountability framework in which Skills England will operate will be set out in the framework document. All arm’s length bodies have such a core constitutional document, which must be approved by the Treasury. The framework document will detail how Skills England will regularly report on its functions and performance, including by publishing a corporate plan and annual report.

There is a high level of interest among Skills England’s stakeholders, such as the Association of Colleges, which has expressed strong support for the plans to establish Skills England, recognising the critical role it will play in the Government’s broader post-16 education and skills agenda. We have listened to and acted on the contributions of peers in the other place, which is why we have provided even greater transparency about what Skills England will do. The Bill already requires the Secretary of State to report within six months of IfATE’s closure. The report will detail which functions are being exercised by Skills England and the impact on apprenticeships and technical education in England. The new clause is therefore not necessary.

We need to address the urgent skills challenges in our economy. There is already a robust approach to establishing and running an executive agency, and the Government have included in the Bill a legislative commitment to a report on Skills England’s functions. On that basis, I ask the hon. Member for St Neots and Mid Cambridgeshire to reconsider.

[Ian Sollom]

I thank the Minister for her response. In the interests of time—and lunch—I will not go into detail. I wish to press the new clause to a vote.

Question put, That the clause be read a Second time.

Institute for Apprenticeships and Technical Education (Transfer of Functions etc) Bill [ Lords ] (Fourth sitting)

Janet Daby Excerpts

Committee stage
Thursday 20th March 2025 Public Bill Committees

[Damian Hinds (East Hampshire) (Con)]

I rise to speak in favour of the new clause in the name of my hon. Friend the shadow Minister. He is right; of course, we have just voted on something quite similar, and that vote was lost by the classic 11 to four margin, with which we have become familiar. But that does not mean the Government cannot do this, and indeed there have been some signs and indications that they might make Skills England a fully independent body on a statutory footing. Most people talk about Skills England in their speeches, but that is not what the Bill, as introduced, does; it abolishes something without actually creating something else, and hands the powers to the Secretary of State, in whose gift it is to hand on.

There was also the question that came up last Thursday about Ofqual, and what the Bill does to that, which I do not think we were 100% clear about. I think the Minister was going to write, but I do not think I have seen that letter—that is not to say it has not come, or been sent, but I am wondering if when the Minister comes to speak, if she could confirm whether that letter has come.

There have always been two fundamental questions about the Bill and the creation of Skills England: the first is about independence, and the second is about who should set the expectations and standards for various occupations—should it be the employers in those organisations or somebody else? There is also a third point, which is relevant to independence, about the heft of this body, putting skills right at the heart of cross-departmental work, and what statutory independence would do to the status of this body.

Particularly in education and training, one of the reasons that we have independent bodies is so that everybody knows that the standards are robust, they cannot be subject to political pressure, and there cannot be a temptation to make it a bit easier to get over a hurdle to make the numbers look better. We have had that system of independence for a very long time, and do to this day, and still will in the future for academic qualifications. As I said the other day, I think independence of this body is important to underpinning parity of esteem. IfATE is legally established as a non-departmental public body, whereas Skills England will be, as things stand, an executive agency. As a non-departmental public body, IfATE does therefore have some independence from the Department for Education because its functions and responsibilities are set out in legislation approved by this Parliament, whereas Skills England, as things stand, will simply be an integral part or unit within DFE.

When Skills England was first talked about in the King’s Speech, it seemed that it would be established as an independent body. As well as my question on Ofqual, the first of my other questions to the Minister is, what has changed? If that was the intent—perhaps we have all just misread the text—what is different now, that it should not be? Finally, if it is right for the Industrial Strategy Advisory Council to be put on a statutory footing, why is it not for Skills England?

[The Parliamentary Under-Secretary of State for Education (Janet Daby)]

New clause 2 would impose a requirement on the Secretary of State to establish Skills England as a statutory body with a separate legal identity. It would transfer the functions the Secretary of State takes on under the Bill to a new body within 12 months.

The new clause would undo significant progress already made by the Government to establish Skills England. It has been operating in shadow form since July of last year. It is ready to take on the functions conferred by the Bill. I reassure Members that we considered different options for the model of arm’s length body for Skills England. It being an executive agency allows us to move fast, much faster than the previous Government did for 14 years. Skills England can take immediate action to plug the skills gaps that this Government have inherited, and we are focused on economic growth. An executive agency balances the independent Skills England’s need to deliver its functions at arm’s length from the Department with being close enough to inform decisions on skills, policy and delivery. That is good practice for all new arm’s length bodies.

The Department for Education will undertake a review of Skills England. The review will take place about 18 to 24 months after it is fully established, and that will align with the requirements of any future Cabinet Office review programme. It will consider how far Skills England is delivering its functions in the way intended; whether its mix of functions is still aligned to Government priorities; and whether there are alternative ways to deliver the Government’s objectives, including a different model of arm’s length body.

Delay, however, is not an option. We need to respond urgently to critical issues in the skills system to drive growth and spread opportunity. To encourage this Committee, in the first set of apprenticeship statistics under the new Labour Government, we saw an increase in starts, participation and achievements compared with the same period under the Tories in 2023. We remain an ambitious Labour Government. We do not dither or delay, and we urgently need reform to deliver the skills and technical education that is needed. That is what the Bill and Skills England will enable us to do.

New clause 3 would create a duty on the Secretary of State to publish an annual report setting out Skills England’s activities in the preceding year. It would also require Skills England to have regard to matters such as the quality of training and education, and value for money when performing its duties.

Well-established requirements are already placed on executive agencies for a high level of transparency and accountability in how they operate. That includes the publication of a framework document which, as I have mentioned, is a core constitutional document. It will be agreed between the Department for Education and Skills England in accordance with HM Treasury’s handbook “Managing public money”. Once finalised, it will be published online and a copy deposited in both Houses.

The Secretary of State, and Skills England acting on their behalf, is already obliged under general public law to take into account all relevant matters when exercising their functions. Those relevant matters are likely to include the ones in new clause 3. While the Bill was scrutinised in the other place, as I have said, my right hon. Friend the Baroness Smith of Malvern, shared a draft copy of the Skills England framework document with peers. She committed to include references to the need for Skills England to deliver its functions efficiently and effectively, and to ensure that training is high quality and provides good value for money.

In response to the right hon. Member for East Hampshire on Ofqual, the letter concerning Ofqual has been sent to the Chair of the Committee, and also addresses other issues raised by the hon. Member for Harborough, Oadby and Wigston last Thursday.

I am happy to repeat the commitments that I have already mentioned, but finally, I would like to say there is precedent for non-departmental public bodies being closed and their functions being reassigned to newly formed executive bodies. For example, under the previous Government in 2011, the Standards and Testing Agency was established as an executive agency taking on functions from the Qualifications and Curriculum Development Agency, a non-departmental public body, which was later closed.

[Neil O’Brien]

I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 4

Report on the impact on T levels

“(1) Within one year of the passing of this Act, the Secretary of State must publish a report on the impact of this Act on T-Levels.

(2) The report under subsection (1) must include—

(a) the involvement of Skills England in the administration of T Levels, including the curriculum and assessment methods;

(b) an assessment of the independence of the accreditation of T-Levels, specifically whether there has been any involvement of the Secretary of State in this process; and

(c) an assessment of the extent to which T-Levels are meeting local demand for skills.

(3) The report under subsection (1) must be laid before both Houses of Parliament.”—(Neil O’Brien.)

Brought up, and read the First time.

--- Later in debate ---

[Neil O’Brien]

The Minister said that the letter has been sent to the Chair, but the Chair says that she has not seen it.

[Janet Daby]

The letter addressing the issues that the hon. Member for Harborough, Oadby and Wigston and the right hon. Member for East Hampshire have raised has been sent to Sir Christopher, your co-Chair, Ms Furniss, and I am sure it will be shared in due course.

[Neil O’Brien]

It is a shame, as this is the last day of this Bill Committee. I do not know whether the letter could be produced before we finish today, but otherwise, those questions will effectively go unanswered because they have not made their way to Committee members. But this was a minor point about the interaction with clause 8 and the decision to bring Ofqual in potentially for T-levels, so I will turn squarely to T-levels now.

I was encouraged by the positive words about T-levels in the curriculum review, but it is very difficult to get a new qualification going, never mind a whole new system, which is what T-levels were intended to be in their initiation by Lord Sainsbury. After the big long debate on BTecs, Ministers in the end decided to add T-levels into the existing alphabet soup of qualifications rather than use them to replace and rationalise that system, which was the original goal of Lord Sainsbury’s project. I should declare an interest in so far as I worked on T-levels back when they were still known as Sainsbury routes. None the less it would still, despite the Ministers’ decision, be possible for them to grow and become a leading part of the system, but that would require a huge push from Ministers. It is difficult to get a new qualification going, never mind a whole new system, and it is much more likely that in the absence of a big push from Ministers that they will stagnate as an interesting, well-regarded and quality niche, but ultimately a small part of the system, which was really not what was intended.

For several years, the DFE has provided a 10% uplift to the funding rates for T-levels as a new qualification, but a couple of weeks ago the Government implied that they would stop doing that this year. They have not made a decision, and providers are now desperate for certainty on that issue. I ask the Minister directly to respond to this: will the 10% uplift be continued or not after this academic year? The sector is now making decisions about this, and urgently needs certainty. The Minister keeps saying that she wants to move fast: the providers, and I am asking her to move fast to give them the certainty on what the funding rate will be, and whether the 10% will continue, because if not, my strong sense is that many providers will conclude that it is not really a priority any more, and not worth the investment of time and resources, which are significant to get these things going. I hope the Minister can address that point, and I give her a bit of notice: will the 10% continue or not—yes or no?

The Government are notionally in a one-year “pause” on the move to replace BTecs, which should give the Government time at least to make up their mind on how they see the future of T-levels. If they want to preserve the option to be ambitious for T-levels, however, they need to keep supporting them now. Those of us who worked on their development and who still support them are not blind to the challenges. Although drop-out rates fell sharply in the last year, they are still high. Even though T-levels are meant to be a demanding qualification, we want young people to get to the end of them.

Although the huge element of work experience is a key advantage and attraction of T-levels to learners, it is expensive and hard to deliver, particularly in a way that is slick and gives clarity to students up front, rather than gives stress. I do not say this every day, but Gordon Brown was right to press the Government to be more ambitious here—

--- Later in debate ---

[The Chair]

I am told by the Clerks that this is an unusual situation. I have to say at the moment that the letter refers to clauses that have previously been debated, so I will not be allowing a debate about it. That is for your information, which you could use on Report, if you chose, to raise the matter again. I do not want you not to have the opportunity to probe further. I call the Minister to respond.

[Janet Daby]

I thank the hon. Member for Harborough, Oadby and Wigston for tabling new clauses 4 and 5 and his discussion of them. New clause 4 would impose a duty on the Secretary of State to publish a report within one year of Royal Assent, setting out the impact of the Act on T-levels. Specifically, the report would have to include information on the administration and accreditation of T-levels, and whether T-levels were meeting local demand in schools.

T-levels are indeed an excellent technical qualification for students after GCSEs; I concur with the hon. Member on that. On his question about whether the 10% uplift will be continued after this academic year, we will confirm that position in due course, and I will write to him on that point.

Thousands of T-level students have already gone on to jobs, apprenticeships and further study related to the subjects of their T-levels, and we continue to support the qualification’s growth and uptake. Indeed, three new T-levels were launched in September 2024. A new T-level in marketing will be available from September, and we will continue to support providers to deliver and upscale their T-level offers. T-levels are designed by employers based on occupational standards, and Skills England will continue the work that IfATE has been doing to set and maintain the high-quality occupational standards on which T-levels are built. Curriculum content and assessment methods are set by awarding organisations in line with these standards.

The Bill already contains a duty for the Secretary to State to publish a report setting out which of the functions being transferred are to be undertaken by Skills England and the impact on technical education and apprenticeships. The report will provide information on T-levels, given that they are an important form of technical education qualification. Ofqual is an independent regulator for technical qualifications, and is the only body with the power to accredit the qualifications. Through the Bill, we are reintroducing the potential for Ofqual to apply its accreditation power to technical qualifications, when the Secretary of State considers it to be appropriate. That will reopen the door so that the full range of regulatory options is available for technical education qualifications. That will help to ensure their quality and enhance confidence in them.

[Damian Hinds]

Fortuitously, Ms Furniss, we do now have an opportunity to ask about something in the letter, which the Minister is going through now. I am struggling a bit with this thing about, “If the Secretary of State deems it appropriate.” That is not because I question that judgment, but because I do not really understand what the intent is. What does the Minister believe will be the practical change that comes about as a result? For example, is it about more new qualifications coming in? Is it changing the balance between T-levels and other TVET qualifications?

[Janet Daby]

My understanding is that there needs to be the option for Ofqual to decide whether to inspect certain technical qualifications and whether they should be accredited. That option needs to be available. At present, it has not been happening since 2002. We continue to support the growth and uptake of T-levels, in line with identifying skill needs in the economy. Skills England will gather and publish information about local skill needs. Skills England will also assess how far available provision, including T-levels, is meeting those needs.

I turn to new clause 5, which would impose a duty on the Secretary of State to publish, within one year of Royal Assent, a report on the impact of the Act on the higher education sector in England. Higher education providers play an essential role in meeting the nation’s skill needs and supporting the growth mission. Many of the jobs and sectors that drive economic growth rely on the skills delivered by higher education providers. It is therefore vital that Skills England works closely with and supports the higher education sector as it delivers each of its three key functions. Higher education providers have a deep understanding of local skill needs and growth opportunities. That provides a rich resource for Skills England to draw on, and it builds its authoritative assessment of skills needs in the economy.

[Neil O’Brien]

I am hugely encouraged by the Minister’s recognition of the importance of these higher degree-level apprenticeships to the higher education sector. Will she undertake to write to me setting out what the impact on universities of ending level 7 apprenticeships would be? I mean primarily the financial impact, but also the impact on numbers of students. The information available in the public domain is somewhat patchy, so it would be incredibly helpful to have that at either the point the Government make a decision on level 7 apprenticeships or—even better—before. Will she write to me, so that we are at least on the same page about what the impact on universities of changes to level 7 would be?

[Janet Daby]

I think the shadow Minister is well aware, having asked similar questions many times, that more information will be coming out from the Government.

Staying on level 7 apprenticeships, we are reforming apprenticeships, tilting the system towards young people in most need of developing skills and getting a foot on the career ladder. We are cutting through the red tape by removing the 12-month requirement, to support shorter-duration apprenticeships in key sectors. That flexibility will support apprentices in areas such as the creative industries, where training does not need to take 12 months and is currently putting barriers in the way of getting apprentices into key jobs. The Prime Minister also announced the development of new foundation apprenticeships, which will align to entry-level roles in key sectors and help to bridge the gap between employees, skills, staffing shortages and young people ready to begin their careers.

Institute for Apprenticeships and Technical Education (Transfer of Functions etc) Bill [Lords]

Janet Daby Excerpts

Report stage & 3rd reading
Monday 31st March 2025 Commons Chamber

[The Parliamentary Under-Secretary of State for Education (Janet Daby)]

I thank hon. Members for their constructive engagement throughout the debate. However, from listening to the shadow Minister, the hon. Member for Harborough, Oadby and Wigston (Neil O’Brien), one would think that this was all doom and gloom, when it is actually a new season of growth and skills. We are springing into action, and I encourage him not to be stuck in the past.

As I have said before, including when we discussed the Bill in detail in Committee, it is wonderful to hear the passion that Members from across the House have for improving our skills system. It is clear that we all share a desire to better meet the skill needs of employers and learners. The Government are determined to unlock growth and spread opportunity, and the Bill will help us to deliver the change that we absolutely need.

I will start by speaking to new clause 1 before touching on the other new clauses and amendments.

[Graham Stuart (Beverley and Holderness) (Con)]

Can the Minister explain, in answer to the points made by the hon. Member for Stoke-on-Trent Central (Gareth Snell) and others, the rationale behind eliminating level 7 apprenticeships?

[Janet Daby]

Information on that will come out in due course, but if the right hon. Member gives me a little more time, I will be able to elaborate and respond to Members as I go.

New clauses 1 and 4 relate to the creation of Skills England and its legal status. New clause 1, tabled by the hon. Member for St Neots and Mid Cambridgeshire (Ian Sollom), would require the Secretary of State to lay draft proposals for a new Executive agency, to be known as Skills England, within six months of Royal Assent. New clause 4, tabled by the hon. Member for Harborough, Oadby and Wigston, would require the Secretary of State to establish Skills England as a statutory body.

Our position—that we establish Skills England as an Executive agency—remains extremely clear and is entirely in keeping with the usual process for establishing arm’s length bodies. The Department is complying with the robust and vigorous process for establishing Executive agencies, which applies across Government. The Executive agency model balances operational independence with proximity to Government. That is needed to inform policy and support delivery of the Government’s mission. That model enables us to move quickly, which is vital given the scale and urgency of the skills challenges that we face.

The Government have committed to reviewing Skills England between 18 and 24 months after it is set up. That will includes an assessment of whether the Executive agency model is enabling Skills England to deliver its objectives. That is consistent with good practice. Skills will power this mission-driven Government and our plan for change. Our approach means that we can get on with the job at hand: fixing the skills system and helping more people to get the training they need to build our homes, power our towns and cities with clean energy, and master new digital technologies.

[Chris Vince (Harlow) (Lab/Co-op)]

I thank the Minister for visiting the best town in England, Harlow, last week. Does she agree that this Bill will help benefit young people in my constituency and give them the skills that they need ?

[Janet Daby]

I absolutely agree with my hon. Friend that the Bill will help young people to gain the skills that they need—in his wonderful constituency and in many other wonderful constituencies as well.

Amendment 6 tabled by the hon. Member for Harborough, Oadby and Wigston would frustrate the complete establishment of Skills England by delaying the transfer for a full year of the functions as set out in the Bill. Members have heard the Government set out already that delay is not an option; that has been repeatedly said. They should not just take my word for it: technology training provider QA has said that this is a pivotal moment for shaping the skills system to meet the UK’s industrial and economic needs, and it is right. The complex and fragmented nature of the skills system is contributing to critical skills gaps in our economy today: opportunities are being missed today, growth is being held back by a lack of skills today, and we cannot afford to be sluggish in our pursuit of a more joined up, data-driven approach.

In the first set of apprenticeship statistics under the new Labour Government we saw an increase in starts, participation and achievement compared with the same period under the Tories in 2023, even in the constituency of the hon. Member for Harborough, Oadby and Wigston. When the Conservatives were in government, starts in his constituency fell by 13%; almost 100 fewer people were starting apprenticeships on their watch. This Government marked National Apprenticeship Week with a set of reforms going further and faster on growth, whereas under his Government a third of vacancies were due to the lack of skills. We will press on.

The British Chambers of Commerce has urged us to work at pace to establish Skills England, and we are doing exactly that. Since being set up in shadow form, Skills England has got to work. It has got to work by identifying skills gaps in the economy and building relationships with strategic authorities, employers and other groups. Indeed, Skills England has worked with mayoral, strategic authorities and other forms of regional government as well as regional organisations to ensure that regional and national skills needs are met in line with the forthcoming industrial strategy. Skills England will work closely with the Industrial Strategy Advisory Council so that we have the skilled workforce needed to deliver a clear long-term plan for the future economy, and with the Migration Advisory Committee to ensure that growing the domestic skills pipeline reduces our reliance on overseas workers. Our constituents will not thank us for sticking in the slow lane. There is no need to wait another year, and we are ready to go now.

New clauses 2 and 3 tabled by my hon. Friend the Member for Stoke-on-Trent Central (Gareth Snell) and the hon. Member for Harborough, Oadby and Wigston respectively would impose a duty on the Secretary of State to publish within one year of Royal Assent reports on the impact of the Act on T-levels and higher education. Members will be aware that we have already included in the Bill a duty for the Secretary of State to report on functions transferred from the Institute for Apprenticeships and Technical Education that will be exercised by Skills England, including their impact on technical education and apprenticeships. This report will need to be published not after a year but after six months, which is much sooner. We have therefore already made commitments to transparency in the Bill, and that was welcomed by stakeholders, including the Association of Colleges in its written evidence to the Bill Committee. We all agree that T-levels and higher education are central to fixing our skills challenges and, as I made clear in Committee, the Skills England six-month report will include necessary information on T-levels as well as technical education and apprenticeships delivered in higher education settings. The Conservative party has argued that we must avoid Skills England being overlooked and distracted from its important work. Surely, then, we should avoid forcing it to spend its first year producing more and more reports covering the same issues.

Amendments 1 and 2 were tabled by my hon. Friend the Member for Stoke-on-Trent Central and by the hon. Member for Harborough, Oadby and Wigston respectively. These amendments would also place additional reporting requirements on the Secretary of State, this time in relation to degree apprenticeships. As with T-levels and higher education, the report that the Government have committed to providing after six months will necessarily include information on apprenticeships, including degree apprenticeships. Amendment 1 is about funding for those apprenticeships. We are setting Skills England up to build the evidence and the partnerships needed to deliver change, but policy and funding decisions on skills provisions will not sit with Skills England; they will continue to sit with the Secretary of State. That is entirely right and appropriate, and nothing in the Bill changes that. We will set out more information on level 7 apprenticeships in due course.

[Gareth Snell]

If I have heard the Minister right, the first report that will come out will include aspects of the implications for higher-degree apprenticeships, but the funding decisions will still sit with the Department, as they should. Will the report refer to the funding decisions made by the Secretary of State, so that when it comes to the impact of the decisions made, we can see correlation and causation?

[Janet Daby]

I absolutely hear my hon. Friend and his concern for level 7. I do not want to stray too far from the Bill and what it seeks to achieve, but I am very happy to look at that further with him, and to get back to him.

On Sunday, it will be eight years since the levy was introduced, and only now, under a Labour Government, are employers getting the flexibilities they have been crying out for, including on maths and English, and on the length of apprenticeships. That is in response to industry needs, and recognises the needs of jobs, and the need to get young people a foot in the door, so that they can start good careers. After nine months in government, this Labour Government have cut through red tape and are driving the skills that our employers need, showing that Labour is the party of business. We are reforming apprenticeships, tilting the system towards young people most in need of developing skills, and ensuring that young people get a foot on the careers ladder.

Amendments 3 and 5 were again tabled by the hon. Member for Harborough, Oadby and Wigston. They would create a statutory duty on the Secretary of State to have due regard to the reasonable requirements of employers and individuals when considering whether to approve a standard or assessment plan where it has been developed by a group of persons. As I made clear in my response to the hon. Member in Committee, the Secretary of State is already subject to a general public law duty that requires them to take into account all relevant considerations when making decisions relating to the functions for which they are responsible. There is therefore already a requirement for the Secretary of State to balance the needs of users of the system when executing the functions described in the Bill. In fact, the public law duty is broader than the factors listed in the amendments and includes, for example, consideration of value for money and quality.

Turning lastly to amendment 4, tabled by the hon. Member for Harborough, Oadby and Wigston, it is critical that technical qualifications and apprenticeships reflect the needs of employers, and that they have confidence in them. Employers tell us that speed and flexibility are crucial if we are to work together more effectively to plug skills gaps. The precise make-up of “a group of persons” is not currently mandated in legislation. Flexibility is necessary to ensure that the membership of every group reflects the factors relevant to an occupation. Specifying in the Bill that a group must always include a particular voice would introduce new and unnecessary constraints on the structure of groups.

To conclude, this Government are committed to transforming the skills system so that it can deliver the highly skilled workforce that our country needs. Skills will power this Government’s relentless focus on delivering our mission. That is why this Government’s first piece of educational legislation paves the way for Skills England to identify and fill skills gaps.

Question put, That the clause be read a Second time.

--- Later in debate ---

[Janet Daby]

I beg to move, That the Bill be now read the Third time.

We are on a mission to deliver strong and sustainable economic growth and to break down the barriers to opportunity. Skills will power this mission-driven Government and our plan for change.

I thank Members across the House for their contributions. I especially thank members of the Bill Committee for their scrutiny; the hon. Member for Christchurch (Sir Christopher Chope) and my hon. Friend the Member for Sheffield Brightside and Hillsborough (Gill Furniss) for chairing the Committee; and my hon. Friends the Members for Newton Aycliffe and Spennymoor (Alan Strickland) and for Lewisham North (Vicky Foxcroft) for their crucial work in guiding the Bill through Committee and the other House of Commons stages.

The Bill has benefited from scrutiny both in this House and in the other place. I welcome the broad support for the creation of Skills England and its work. It is clear that we are united in our recognition of the need to develop a world-leading approach to skills. It is vital if we are to build the highly skilled workforce that we need to meet today’s challenges and grasp tomorrow’s opportunities.

We need skills to get Britain building; we need skills to deliver energy security; and we need skills to advance AI and increase productivity. We need to improve the quality and availability of training to give people from all backgrounds from across the country the power to seize opportunities and improve their lives and their family’s lives. That is why this Labour Government’s very first piece of education legislation will pave the way for Skills England.

According to employers, over one third of vacancies in 2022 were due to skills shortages. This must change. We need to move fast to identify and plug skills gaps in the economy. The Bill is a crucial step in delivering this change. Skills England will combine for the first time insight into skills gaps with the development of technical education to meet the gaps, and the network will ensure that skills needs can be tackled across the country. Skills England is already making a difference. It is changing the way skills gaps are identified and how key organisations are working together to fill them.

This Government are ready to go. As soon as the Bill passes, Skills England stands ready to take forward its work as a strong, coherent, single organisation. Delay is not an option. We must act and we will act. We are acting now. I commend the Bill to the House.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the shadow Minister.