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.