Newcastle Upon Tyne, North Tyneside and Northumberland Combined Authority (Adult Education Functions) Order 2019

Lord Agnew of Oulton Excerpts

Tuesday 1st October 2019 Lords Chamber

Moved by

[Lord Agnew of Oulton]

That the draft Order laid before the House on 22 July be approved.

[The Parliamentary Under-Secretary of State, Department for Education (Lord Agnew of Oulton) (Con)]

My Lords, this order will provide for the transfer of certain adult education functions and associated adult education budget to the combined authority and provides an opportunity for it to help its residents to reach their potential in life and contribute to the growth of the region.

As noble Lords will be aware, six orders are already in force in relation to the combined authorities of Greater Manchester, Liverpool City Region, West of England, West Midlands, Tees Valley and Cambridgeshire and Peterborough for the academic year 2019-20. In 2018, a devolution deal was agreed between the Government and this combined authority. We made the commitment to fully devolve the adult education budget. This order will deliver on that commitment.

The order is made under the Local Democracy, Economic Development and Construction Act 2009 and will transfer certain adult education functions of the Secretary of State, which are set out in the Apprenticeships, Skills, Children and Learning Act 2009, to the combined authority for the academic year 2020-21 and thereafter. This transfer does not include the functions in so far as they relate to apprenticeships or those subject to adult detention.

Across England, the adult education budget, as part of the adult skills system, seeks to improve productivity, employment and social inclusion. It provides vital support to help adults, including those furthest from learning and the labour market, gain the skills they need for work, an apprenticeship or further learning. From August of this year, approximately 50% of the AEB has now been devolved to six combined authorities and delegated to the Mayor of London under separate powers.

The AEB supports three legal entitlements to full funding for eligible adult learners aged 19-plus, without the equivalent of a GCSE pass in English and/or maths and for young people aged 19 to 23 without a first full level 2 or first full level 3. The funding enables most flexible tailored programmes of learning to be made available to help eligible learners engage in learning, build confidence and/or enhance their wellbeing.

People are working longer. The OECD has reported that the average age of exit from the labour market is at its highest since 1970. Automation and technological change will increasingly change sectors and occupations. As people work longer and jobs change, they need to be able to adapt to changes in the labour market in order to stay and progress in employment. This means that the adult skills and lifelong learning education or training that people undertake once they leave formal full-time education becomes more and more important.

Post-16 education plays a crucial part in supporting future economic growth. In respect of leaving the EU, it is important that our homegrown workforce is skilled and able to make the most of the new opportunities that come our way. Devolution of the relevant functions and the associated adult education budget forms a key part of these reforms.

The Government are committed to ensuring that local areas have an active role in shaping the skills provision that is available in their area in order to meet their specific local economic challenges. In particular, departments across government, including the Department for Education, are working with the combined authorities and local enterprise partnerships covering England to help them develop their local industrial strategies. This has allowed us to prioritise the support required in their local economies, including adult skills and lifelong learning.

The DfE has set out expectations for local skills advisory panels behind local industrial strategies to ensure they are informed by robust skills needs analysis. SAPs aim to bring together local employers and skills providers, including colleges, independent training providers and universities, to influence local skills provision by providing high-quality analysis of local labour markets.

The order will transfer certain adult education functions of the Secretary of State in the Apprenticeships Skills, Children and Learning Act 2009 to the combined authority in relation to its area and enable the transfer of the relevant part of the AEB to the combined authority. In particular, the following functions will be exercisable by the combined authority instead of by the Secretary of State in relation to its area: Section 86, which relates to education and training for persons aged 19 or over; Section 87, which relates to learning aims for such persons and provision of facilities; and Section 88, which relates to the payment of tuition fees for such persons.

Conditions are set with relation to the transferred functions; in particular, that the combined authority must have regard to guidance issued by the Secretary of State and must adopt eligibility rules in accordance with any direction of the Secretary of State.

The DfE will transfer the relevant part of the AEB to the combined authority to undertake the functions. It will be the combined authority’s responsibility to manage the overall AEB allocation efficiently and effectively to ensure that it delivers for local residents. Prior to this, the department has considered a business case from the combined authority for implementation funding in preparation for the transfer of functions. Through evaluation of the case, the department has agreed to provide appropriate implementation funding to support the combined authority’s preparations and ensure that they can effectively prepare taking on those functions.

From academic year 2020-21, the combined authority will be responsible for providing funding for statutory entitlements for eligible learners in maths and English, up to and including level 2; first full level 2, which is learners aged 19 to 23; first full level 3 qualification—that is, learners aged 19 to 23—and the forthcoming digital skills entitlement. The combined authority will be able to shape the adult education provision that is available to its residents and ensure that the provision best meets local needs.

We talk about the northern powerhouse, and I think we can agree that skills is an essential driver for economic growth in any region. Devolution gives the combined authority the opportunity to address the skills challenges that it faces and to enhance economic growth in its area. The economy of the combined authority is founded on a strong tradition in manufacturing and engineering excellence. Although there has been a transition to a predominantly service-based economy, manufacturing continues to play an important role in both employment and defining the ongoing characteristics of communities. The scale of the challenges faced by the combined authority is significant, most particularly consistently higher unemployment than the national average, lower productivity than the national average, social inequality with pockets of deprivation and a lack of job opportunities in some areas.

Through the order, the combined authority can deliver a step change as part of its strategic skills plan by offering a second chance to learners aged 19 to 23 through first full level 3 academic or vocational programmes and by commissioning providers to deliver a curriculum mix that reflects the changing nature of the local economy and the skills needs in the area, including job vacancy-led programmes. Without this order, the combined authority would be much more limited in how it could address such challenges for its residents and bring about greater prosperity in its region. I beg to move.

[Lord Beecham (Lab)]

My Lords, I refer to my interests as a Newcastle city councillor and as a vice-president of the Local Government Association.

For an area such as the north-east with high levels of unemployment, enhancing the availability of adult education is an important objective. The more our residents acquire skills and education, the greater will be their confidence and that of employers in the region or contemplating investing in it.

It is a matter of regret that this order is confined to the three North of Tyne authorities, given in particular the proximity of Gateshead and South Tyneside—that is not a choice of government; it is unfortunately a factor in the local government world of the north-east. Ideally, the authority should include the whole north-east region, sharing as it does many of the same needs, not least given the likely impact of Brexit should we be unfortunate enough to suffer the Prime Minister’s resolve to leave without the deal that he purports to be pursuing.

The current adult education budget for the authorities concerned is £22.7 million. Do the Government envisage increasing that budget and, if so, by how much and over what period? How does it compare per capita with other combined authorities or other individual local authorities providing adult education?

The North of Tyne Combined Authority intends to use the opportunity to make its own decisions in targeting resources and providing its residents,

“with the skills, education and confidence to benefit from the opportunities that will follow”.

Drawing on the adult education budget, it aims to drive up educational standards by working with post-16 pupils and skills and training providers, and it sees it contributing to the north-east strategic plan and the local industrial strategy.

The combined authority has developed a strategic skills plan and is engaging with the providers of adult education. It has declared its expectation that providers will develop the curriculum and support they offer and focus on learning progression. The combined authority would like to see the Government go further, with a commitment to devolve other functions, especially an educational achievement challenge for the area, as exemplified in London between and 2003 and 2011. Perhaps the noble Lord will indicate whether that is something he would regard as worth pursuing.

The combined authority also seeks greater flexibility in the local provision of skills for residents and businesses. Will the Minister look sympathetically into these suggestions? Can he confirm that budgets will be maintained or, even better, enhanced, given the needs of the area, and will capital funding be protected or enhanced? Will the apprenticeship levy be reformed with a view to regional oversight of a more flexible skills levy?

Important though the provisions of this order are, we must not forget the enormous pressure our schools are under following years of cuts and the effective displacement of local authorities from the provision of the education service, and the enhanced role for academies, many of which have proved to fail their pupils and the communities they were supposed to serve. This was highlighted for me earlier this year when I approached a school in the ward I represent on the city council about a possible grant from a local charity. Expecting a request for something extra, I was dismayed by a request with which to buy books.

School budgets are under enormous pressure, as are staff members. The ratio of staff to pupil numbers has fallen, the proportion of staff making it to retirement has halved and working hours have lengthened. In Newcastle, in the period 2015 to 2019, 74 schools out of 85 have suffered cuts to per-pupil funding of £24.4 million, or a loss per-pupil average of £259. Unaccountable academies, many of which have failed abysmally, dominate the provision of the service in the area.

Welcome though the provisions of this order are, the Government have failed for nearly a decade to protect a key service—key to the life chances of our children and to the future of our economy and our country. Adult education should not be seen as a means of repairing the failings of an underfunded and overstretched school system. Having said that, I repeat the welcome for this provision, but it has to be seen in the context in which it takes place.

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[Lord Watson of Invergowrie (Lab)]

I thank the Minister for introducing this order. As he said, it is of course similar to orders relating to six other combined authorities which we considered in your Lordships’ House almost exactly a year ago. I do not intend to repeat what I said then—at least, not at the same length. I will repeat, however, that the devolution of powers and funding for adult education that this order introduces are welcome. I very much hope that it enhances the provision of adult education in the north-east.

I thank my noble friend Lord Beecham for his local knowledge and for setting out the region’s funding cuts—sustained over the past decade—and what the new combined authority will face as a result. Much effective adult education provision is delivered locally, in line with the needs of communities. As the accompanying Explanatory Memorandum states, the transfer of those functions will assist in providing local areas with a role in,

“managing and shaping their own economic prosperity”.

Spending on education and adult learning needs to be seen as an investment for the long term. To achieve a sustainable supply of skills with the flexibility needed to meet the ever-evolving needs of business, industry and the public sector, the UK must maximise the potential of its existing workforce. That means that all adults of working age, whatever their background or location, need every opportunity to upskill and/or reskill. Learning and earning will make the biggest and quickest difference for the learners themselves, to their families, and to the communities they live in, as well as to employers and the wider economy itself.

A year ago, I referred to the possible unintended consequences of this transition from centralised to devolved funding. I highlighted the case of the Workers’ Educational Association, a long-established and hugely respected organisation of 116 years’ standing and the UK’s largest voluntary sector provider of adult education. I said then and I repeat now that I need to declare an interest of sorts, as the WEA was my first employer after leaving university. More than 25% of the WEA’s 48,000 students are in the combined authority areas, and many of them are from deprived communities that are furthest from the labour market. The devolution of funding could have the unintended consequence of diminishing this provision rather than enhancing it.

In last year’s debate, the Minister recognised the work being done by the WEA and stated that it,

“has a major role to play in delivering adult education and fostering a culture of lifelong adult learning … It is vital that providers such as the WEA make contact with the MCAs”—

the combined authorities—

“and support them so that the local economy and workforce have the skills and expertise that they need for the future. We have provided some guidance to the MCAs for the transitional years”.—[Official Report, 24/10/18; col. GC 85.]

I regret to say that, one year on, some of the WEA’s fears have been confirmed. The organisation has adapted to the new landscape by securing grants and contracts in most devolved areas, though this has not been without the loss of provision in several areas either because it was unsuccessful in its bids, or the new contracts did not support the same range of provision as the organisation previously delivered. As a national provider delivering locally, it remains in a difficult position, seeking multiple grants and contracts against different criteria, often on a year-by-year basis. It should surely be of benefit to combined authorities to acknowledge the level and impact of existing national provision in their area, not only as regards the WEA, and to seek a degree of continuity and gradual transition. It would help if the Government too acknowledged the role of national providers, thus safeguarding against the unintended consequence of destabilising provision, which is already having an impact on local authorities.

I want to raise a matter relating to the Explanatory Memorandum. Paragraph 12.1, under the heading “Impact”, states that:

“There is no significant impact on business, charities or voluntary bodies”.


It would be helpful—indeed instructive—if the Minister were to explain how such a statement could be included when, in paragraph 10.1, the memorandum states that no consultation was carried out. On what basis was it therefore determined that there was,

“no significant impact on business, charities or voluntary bodies”?

I ask this because the WEA is one of Britain’s biggest charities and a voluntary body. It was not asked what the likely impact would be, although of course it made its representations and concerns known to the DfE in advance of the orders introduced last year. It is clear that the impact of this and the previous orders is certainly “significant” as regards its ability to continue its established delivery of adult education.

The meaning of “significant” is of course subjective. Can the Minister say whether his officials assessed the effect on providers such as the WEA and deemed that effect to be not significant? If so, we should be told what criteria were used and at what level the impact would have been deemed significant. I do not expect him to provide these answers today, but I ask him to write to me setting out explanations. For devolution to be fully effective, support must be offered to the full range of providers—local and national—especially those already working with the most disadvantaged.

As the Open University has reported, the real casualties from the 2012 funding changes in higher education have been part-time students in England, whose numbers have since dropped by around 60%. Those who have been most deterred from study by the trebling of tuition fees are not those aged 18 entering full-time higher education but older, especially disadvantaged students. It is apparent that the biggest reason for the decline is the fees and funding policy in England because the scale of the decline in England, where tuition fees are much higher, is two and a half times greater than in other parts of the UK.

The key question regarding the future delivery of adult education concerns how much funding will transfer and how that will affect the ability of the combined authorities to deliver a full provision. The transitional funding in preparation for the full implementation of this order is not clear. The Minister said there was £6 million available in funding for the six combined authorities that were the subject of orders last year for 2019-20 and 2020-21, funded nationally by the Education and Skills Funding Agency. The combined authority for the north-east opted to begin its transition from academic year 2020-21, so will it also receive transitional funding for two years, including for 2021-22? How much will be made available annually?

The spending review announced £400 million for further education, which was widely welcomed within a sector that had been starved of adequate funding over the previous decade. Yesterday we had the unexpected announcement by the Secretary of State of £120 million for eight new institutes of technology. That was without consultation with the FE sector, which is already performing much of what he seems to envisage, so why reinvent the wheel? Simply fund FE colleges adequately and they will do the job that is necessary. But I am afraid that we now seem to have a rather macho Secretary of State who thinks that the role of Cabinet Minister is not demanding enough, so he has abolished the post of Minister of State for Apprenticeships and Skills and subsumed that remit within his own. I have never been a Cabinet Minister but I am fairly confident that it is a full-time job. I am equally confident that any previous Minister of State for Apprenticeships and Skills would contend that that too is a full-time job. To downgrade that post and bury it within the Secretary of State’s own portfolio demeans the importance of the skills agenda and the need to expand it, rather than the opposite. Labour will certainly reinstate the Minister of State post, while ensuring that apprenticeships and skills have the funding and the direction needed to play their part in building the economy that the country needs.

I may have departed somewhat from the order, but my final remarks are directly related to the devolution of adult education functions. The last thing required is mixed messages about how we ensure that we provide for the sustainable supply of flexible skills to which I referred earlier. This order is one part of the jigsaw, which is why we welcome it, but much more needs to be done.

[Lord Agnew of Oulton]

My Lords, I thank all noble Lords for their contributions to this discussion on the statutory instrument. I will endeavour to answer as many of the questions as I can.

The noble Lord, Lord Beecham, asked a number of questions on the size of the combined authority region itself. This came out of the devolution deal that was agreed in that part of the country. I am not familiar with the local politics in that part of the world, but there are some fairly fierce rivalries, and the area that we ended up with was about as good as could be created at the time. On the size of the allocated funding for this region and the plans for the future, that will be part of the spending review, and the details will be announced once we are aware of them ourselves. On the devolution of other functions, we are very much taking an incremental approach. We want to make sure that the functions we have devolved are improved upon, and if local authorities or combined authorities prove that they are good at it, I am sure that we will have a debate about whether more can move in the future. However, at this stage, we want to make this work.

The same applies to the apprenticeship levy, which will maintain as a central function. To answer the noble Baroness, Lady Garden, because this is a relatively new and very profound change to the way apprenticeships work, we wanted to make sure that it was run centrally until we had ironed out all the glitches. Again, I am sure that this will come up for discussion in the future.

On schools funding, I take issue with the noble Lord, Lord Beecham, on his rather gloomy view of the position. As I am sure he is aware, we announced a dramatic increase in schools funding only a few weeks ago of some £14 billion over the next three years—which I think is one of the largest single uplifts in funding for 10 or 15 years. That is before we take into account another £4.5 billion which is going into the teachers’ pension scheme contributions for schools.

I should be very happy to look at the case of the individual school to which the noble Lord referred, which claimed that it could not afford adequate books for its pupils. As the Minister responsible for academies, I spend a great deal of time ensuring that schools are run properly, and perhaps may be able to shine a light on any issues in that particular school. The noble Lord is also somewhat unenthusiastic about academies. There have indeed been failures there, but it is worth reminding the House that the whole point of academies was to tackle entrenched underperformance in local authority schools that often had gone on for 10 or 20 years. Indeed, schools that I took over from the local authority where my academy trust operated had been failing for 15 or 20 years. In the academies programme, we move much more quickly if the academy trust proves unable to sort out the challenges that it undertook in the first place.

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[Lord Watson of Invergowrie]

I am intrigued by the noble Lord’s comments. I unreservedly withdraw any suggestion that the Secretary of State might be acting in a macho manner—but it seems that somebody was. Can he enlighten us as to whose decision it was? If it was not the Prime Minister, my adjective might remain appropriate.

[Lord Agnew of Oulton]

I am afraid I am going to have to disappoint the noble Lord. Those decisions were taken above my pay grade. I can assure him that the further education brief is given full support and impact in the department. I will need to write to the noble Lord on some of his more technical questions around transitional funding and so on, but I will be very happy to do that. We will continue with a watching brief on how this devolution is rolling out.

I reiterate that the order needs to be introduced to allow the combined authority to work with providers to tailor adult education provision for the academic year 2020-21. It will give residents the opportunity to reach their potential, improve their earnings and gain progression, and it will allow the system to deliver in a more flexible and responsive way and have the agility required to sustain a flexible economy. I commend the order to the House.

Motion agreed.