Skills and Post-16 Education Bill [HL]

Debate between Lord Baker of Dorking and Lord Aberdare

Committee stage
Monday 19th July 2021 Lords Chamber

[Lord Baker of Dorking (Con)]

My Lords, I warmly support the amendment moved by my colleague and noble and learned friend Lord Clarke of Nottingham. We are both members of the House of Lords Select Committee on Youth Unemployment, as are the noble Lord, Lord Layard, who is a supporter of this amendment, and the noble Lord, Lord Storey, who speaks for the Liberals. We are exploring all ways in which we can improve skills training in our country, which is pretty dismal at the moment and compares very badly with many European countries.

One aspect that the Government boast of is the lifetime guarantee. This affects in particular those people who do not have A-levels and decide in their 30s, 40s or 50s that they would like to take an A-level course. To do that they will have to pay a course fee of about £5,000 to £6,000 a year, for which they may require a loan. As they are studying, they could not apply for the minimum wage or universal credit so, if they are unemployed, they would almost certainly have to take out a maintenance loan of another £6,000 or £7,000. So we would be asking unemployed people to pay £12,000 to acquire an A-level qualification that, had they stayed at school, they would have got for free. It is simply outrageous and unacceptable, and it makes a complete farce of what a lifetime guarantee is.

I am very hopeful that the Government will accept this amendment. Why am I hopeful? Well, about four weeks ago, the Government announced a skills fund on which they are going to spend about £2.5 billion. They suggested four items on which the fund could be based, the first of which was £93 million for free A-levels. They have now said that they want to go into consultation on the skills fund, which means that those original four proposals are on ice. I suggest that they should think very carefully and put the first item back in. That would be a way for the Government to fund this. Can the Minister tell us whether the four items of expenditure on the skills fund are on ice? They have spent most of the £2 billion among them.

I would go further than my noble and learned friend has done. If you go to an FE college at 18 and you get to level 3, you will want, if you are able enough, to go on to level 4, the higher national certificate, or level 5, the higher national diploma. This is where the main skills gap in our country is. If you analyse the skills gap in digital, in engineering or in the creative industries, you see that it is greatest at levels 4 and 5. These are two qualifications just below degree level—you would describe those taking them as high-quality technicians—and we have a huge skills gap in that area. We should be promoting levels 4 and 5.

A course at level 4, which currently costs about £6,000 or £7,000, should be free. If an unemployed person is doing that, they will not be able to claim the living wage or universal credit, so they will need a maintenance grant of probably £6,000 or £7,000. So someone who wants to study at level 4 today for whom the alternative is unemployment has to find a loan of £12,000, which by the time they finish will be £15,000. I do not think that is at all reasonable. Strangely enough, neither did the Department for Education about nine or 10 months ago, because it put to the Treasury the proposal that level 4 should be free for unemployed youngsters, as should level 5, the higher national degree, which is just below level 6—a degree. The Government should consider this proposal and I hope our Select Committee will consider it as well. We have to stimulate real growth at levels 4 and 5. If we do not, our country will fall behind technologically.

I am sure the Government will accept my noble and learned friend Lord Clarke’s proposal today because it would be totally illogical and unfair not to accept it, but I hope they will think a little wider and broader because we have to upskill our country and catch up with Germany, Austria and the Netherlands. We are so far behind. This is a moment at which we can make significant changes for generations of young people to come.

[Lord Aberdare (CB)]

My Lords, I support both amendments in this group. I put my name down mainly to speak on Amendment 76, which has been so powerfully moved by the noble and learned Lord, Lord Clarke of Nottingham, and to focus on Section 3, about apprenticeship funding for young people before the age of 25, which is badly needed.

The question I am asking myself is, how will this affect the overall funding of apprenticeships and how will it help to deliver, as stated by the noble Lord, Lord Baker of Dorking, a stronger focus on levels 4 and 5 as well? Where are those apprenticeships going to come from, and what is going to persuade employers to provide those opportunities? Many employers, of course, have limited capacity to take on new staff, particularly young people coming directly from education without previous working experience, however much they might wish to do so if they could. The result has been that those employers tend to use their levy funds to upskill or reskill existing employees—although, as I have mentioned before, even that may use up only a limited proportion of their available levy funds. That creates yet another incentive for them to recast what training they need in the form of apprenticeships where they can.

So, I strongly support the amendment. My question is, where are those apprenticeships going to come from and what impact are they going to have on the ability of employers to focus on reskilling and upskilling at the same time? I suspect that a significant number of apprenticeships for young people are likely to come from SMEs, yet many are put off from offering apprenticeships because of the bureaucracy involved and a lack of time and resources to manage the process, despite the generous incentives available. I encourage the Government to look at offering specific, more generous incentives to SMEs to take on young people aged 25 or under for level 2 or 3 apprenticeships, including help with their administration and simplified arrangements for fee-paying employers to transfer part of their levy funds to SMEs for this specific purpose. There are such arrangements but they do not seem to be as effective as one might hope.

I always fail to understand why there cannot be more specific support and encouragement for apprenticeship training agencies to run apprenticeship programmes for SMEs, perhaps as a specific element of the local skills improvement plan for a particular area. That would seem a useful way in which an LSIP could contribute to the take-up of apprenticeships in its area, specifically among SMEs and new entrants to the job market, and maybe with a slight slightly broader applicability of the apprenticeship levy than it currently has.

I very much support the provisions in Amendment 80 putting the lifetime skills guarantee on a statutory footing. One of these days, I look forward to hearing an explanation of why the skills guarantee is “lifetime” and the learning entitlement is “lifelong” and what the difference may be; it would make many lives much easier if we just used one term. I hope the Government will accept the amendment of the noble and learned Lord, Lord Clarke, in particular and explain how they want to achieve a better balance between younger apprenticeships and level 4 and 5 apprenticeships, for example.