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.

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[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.”

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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.

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[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.