Technical and Further Education Bill

Lord Nash Excerpts

2nd reading (Hansard): House of Lords
Wednesday 1st February 2017 Lords Chamber

Moved by

[Lord Nash]

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

My Lords, first, I express my gratitude to noble Lords who have already attended meetings with me and the Minister for Apprenticeships and Skills, Robert Halfon, or who have met with officials from my department to discuss the Bill. Across those meetings, there has been support for the principles underpinning the Bill. I welcome this and look forward to working with noble Lords to scrutinise the detail of the Bill to ensure that it meets our shared ambitions.

The Technical and Further Education Bill aims to build a high-quality technical education system that rivals the best in the world, providing the core skills our country needs to thrive. The measures in the technical education part of the Bill take forward the recommendations made in the independent review by the noble Lord, Lord Sainsbury of Turville, and indeed support the work of the noble Baroness, Lady Wolf of Dulwich, to increase the prestige and value of technical education. Currently, the technical option is undervalued —the poor relation to its academic cousin. Too often, those choosing technical education find that it does not provide a clear route to employment or equip them with the skills they need to get the job they aspire to.

The measures in the Bill will work to provide a genuine choice between a technical or academic route, whereby people can feel confident that either route will equip them for sustained employment. Indeed, when the noble Lord, Lord Sainsbury of Turville, gave evidence in the first committee session during the Bill’s passage through the other place, he talked of the international lessons to be learned about parity of esteem between technical and academic routes:

“In most of the successful countries you find the two routes are equally well valued, so there is not a problem of the technical education route being considered inferior. You can have these two routes and both of them be highly valued”.—[Official Report, Commons, Technical and Further Education Bill Committee, 22/11/16; col. 13.]


That is what we are trying to achieve.

The technical education measures in the Bill extend the role of the Institute for Apprenticeships to give it responsibility for classroom-based technical education in addition to apprenticeships. It will be renamed the Institute for Apprenticeships and Technical Education. The institute will put employers at the heart of the technical education system, empowering them to identify the knowledge, skills and behaviours needed for particular occupations. This fundamental shift in the way that technical training courses are designed will enable people to get themselves into employment and provide our country with the skilled workforce it needs.

Part 2 sets out, for the first time, a clear process to be followed in the unlikely event of a further education college insolvency. These measures were carefully developed through consultation over the summer of last year. They apply the normal insolvency procedures to colleges, and in so doing provide much needed clarity for creditors, which they have welcomed. But, importantly, the Bill puts in place protections for students through the introduction of a special administration regime that will have the special objective of avoiding or minimising disruption to the studies of existing students at affected colleges. These measures will ensure that students are protected if a college becomes insolvent.

That is not to say that we expect this process to be regularly used. The current programme of area reviews is well under way, working to put the further education sector on a better and more sustainable financial footing for the future. Part of the review process is to encourage colleges to consider needs and provision locally. That will help to ensure that the right provision is available in the right places. As I said, we do not anticipate that the proposed insolvency regime will be used often, but it is necessary to introduce greater rigour to the further education sector. We forecast that we will have spent approaching £140 million propping up failing colleges by March this year—money we can ill afford to spend.

Being clear that we will no longer bail out colleges that become insolvent will encourage improved financial management in FE colleges which may have performed less well in the past. We know from schools that, often, those running poorly financially also do so educationally, so we can expect to see a further benefit in improved educational performance.

Part 3 includes a measure to amend existing legislation to ensure that, after the devolution of further education functions and the adult education budget to a combined authority, FE providers and others will continue to submit relevant information to the national data system. This will ensure the continued availability of relevant data needed to make intelligent and strategic policy decisions about investment in further education.

The Bill received constructive challenge in the other place and, although it was not amended, we made changes to our approach outside the Bill on the basis of that challenge. I welcome the further scrutiny that this Chamber will provide, and I look forward to hearing the views of noble Lords as the Bill makes progress through your Lordships’ House. The reforms in it will ensure that we improve the skills base in our country, increase economic productivity and protect students, while encouraging greater rigour regarding the finances of the further education sector. I beg to move.

--- Later in debate ---

[Lord Nash]

My Lords, we have heard many expert contributions from noble Lords with considerable collective experience of education, which I found extremely helpful. My colleague Mr Halfon, the Minister for Apprenticeships and Skills, has been present throughout the debate and has already told me that he found the contributions very thoughtful. I am sure he also found the debate very instructive. I have no doubt that the scrutiny this House will provide will further strengthen the Bill. As I said, I am very grateful for the points that have been made. I will respond to as many as time will allow, and write to noble Lords on those points that I cannot cover. I look forward to discussing the issues further in Committee.

A number of noble Lords raised the important question of status. I agree that we desperately need to raise the status of technical education, and ultimately to achieve parity with academic routes. We have a long way to go to achieve this, although I believe that the Bill is part of what the noble Baroness, Lady Wolf, called a serious reversal of the current situation. Many noble Lords, including the noble Baroness, Lady Wolf, the right reverend Prelate the Bishop of Norwich, my noble friend Lord Leigh, the noble Lord, Lord Watson, and my noble friend Lord Lucas raised the important question of quality. The core aim of the apprenticeship reform programme is to improve the quality of apprenticeships in England. All reformed apprenticeships will be based on a standard which has been designed by employers, giving them the opportunity to set out the skills, knowledge and behaviours that their apprentices will need to be fully competent. Over 490 standards have either been developed or are in development, involving 215 groups of employers. Instead of being assessed through a number of small, low-quality qualifications throughout the apprenticeship, in future apprentices will be tested at the end of their apprenticeship by a new rigorous assessment, also developed by employers, to really test that they can do the job. No one will be able to pass their apprenticeship unless they have met this new high bar. We have introduced new quality criteria which providers have to meet before they can be approved to deliver training as part of an apprenticeship, and Ofsted, HEFCE and QAA will continue to quality assure the training as it is delivered. The Skills Funding Agency will also continue to monitor outcomes and intervene where it has concerns.

A number of noble Lords, including the noble Baroness, Lady Morris, and the noble Lord, Lord Hunt, raised the potential problem of being fixated on targets. The 3 million target is an important galvanising force and a statement of intent but our reforms are absolutely about quality, not just quantity. Good progress is being made on the set-up of the institute and we fully expect it to be able to carry out its apprenticeship functions from April this year. Last week, we announced the institute’s board members. I am extremely grateful to my noble friend Lord Baker for his very high praise for the board members. We have also published the institute’s draft operational plan, which sets out how it will carry out its functions. This follows the publication for consultation earlier this year of the Secretary of State’s draft strategic guidance letter to the institute for 2017-18, which outlines the policy parameters within which the institute should operate. The recruitment of the senior team is going well. The interim chief executive and deputy chief executive are in place, six permanent deputy director roles have been filled and all will be in post in April, and a permanent chair will be announced very shortly. Job advertisements for the chairs of the institute’s route panels are out now, and interviews will take place before the end of the year.

A number of noble Lords asked whether the institute will have adequate resources. The final size and structure of the institute is still to be determined, but we expect that around 60 to 80 staff members will be appointed. I am sure that my noble friend Lord Leigh will be pleased to hear about the appointment of Paul Cadman to the board of the institute. He is the CEO of a training provider.

The noble Baroness, Lady Morris, the noble Lord, Lord Hunt, the right reverend Prelate the Bishop of Norwich and others talked about overlap with other bodies. We are confident that the institute will have a clear and distinct role in technical education. Instead of embarking on a mammoth merger of the different bodies, the Government are asking Ofsted, Ofqual, HEFCE and the QAA to work together collaboratively towards a common goal. We have explained in our draft strategic guidance for the institute that we will expect it to play a leadership role in the context of apprenticeships, including establishing a quality partnership group. This is also referred to in the institute’s draft operational plan published last week. To ensure the roles are distinct and transparent, we are preparing an accountability statement that will make the bodies’ responsibilities clear and avoid overlap or gaps.

A number of noble Lords, including the noble Lord, Lord Watson, raised the point about representation. The shadow institute is establishing route panels, which will be aligned to the technical education routes—which are groups of occupations—and will review and approve proposals for new occupational standards and the standards and assessment plans themselves.

The noble Lord, Lord Aberdare, asked about the constitution of the panels. They will be largely made up of institute staff but will include a range of experts with knowledge of the occupations within a particular route and could include employers, academics, professional bodies, sector and trade organisations, and national colleges or other training providers. The institute is also required by legislation to ensure that all standards and assessment plans have been subject to independent, third-party scrutiny. The draft strategic guidance sent to the institute sets out that it should involve a wide range of interested parties in this process.

A number of noble Lords, including the noble Lord, Lord Addington, my noble friend Lady Stedman-Scott and the noble Earl, Lord Listowel, raised the question of technical education for vulnerable students. Technical routes will be fair and accessible to young people with SEND and care leavers, and reasonable adjustments will be made to enable them to take part and succeed. When such young people cannot access a route because of prior attainment, they will have a “transition year”, which will be flexible and tailored to individual need, with additional support to ensure that care leavers and young people with SEND complete their courses and move on to the next stage of their learning. This “transition year” will help young people from all backgrounds, ability levels and personal circumstances to gain the skills they need to enter employment.

My noble friend Lord Leigh and the noble Lord, Lord Aberdare, raised the question of representation of apprentices. To ensure that the institute represents the views and interests of apprentices, it will establish an apprentice panel by 1 April, which will report and make recommendations directly to the board. This panel will be made up of apprentices from different occupations and experiences, and it will decide for itself what issues it will focus on.

On copyright, which was raised by my noble friend Lord Lucas, the noble Lord, Lord Aberdare, the noble Baroness, Lady Garden, and others, under the reforms it is our intention that there will be one qualification per occupation or group of occupations. Employers and other professionals will play a significant role in determining the content of the new qualifications, with the support and input of the institute. The institute will have the final say over approving these qualifications and their content. It is therefore appropriate that copyright for relevant course documents should rest with the institute. The institute is empowered to grant any person, including that organisation, a licence to use the qualification for a specified period or potentially to be used for other markets; that is, internationally. As a public body, the institute is under a duty to act fairly and transparently.

We recognise that this is a significant departure from the current system, whereby awarding organisations are free to decide on the qualifications they offer and on their content. We know that copyright is an important feature of the current system. However, I reassure noble Lords and awarding organisations that the copyright measures in the Bill are not intended to disadvantage them. To make sure that the new system is fair and transparent—and that it remains an attractive commercial proposition—we want to work with awarding organisations and others. We want to hear their views on these arrangements; for example, what the length of a contract should be or exactly which documents should be the subject of copyright. It is instrumental to the reforms that the institute, rather than organisations, dictates the content of the qualification. We believe that this will help drive up competition and keep the market active. Organisations whose qualifications were not approved in one round will be able to improve their qualification and its delivery and bid in another round. They would be prevented from doing so if copyright were not vested in the institute.

A number of noble Lords, including my noble friend Lord Lucas, raised the point about the single awarding body. To bring the system in line with the best in the world and ensure excellence in technical education, the noble Lord, Lord Sainsbury, recommended a single awarding organisation per qualification. The proliferation of qualifications has in the past led, as we all know, to a race to the bottom and a decline in standards.

The noble Baroness, Lady Garden, asked about certificates, as did my noble friend Lord Lucas and the noble Lord, Lord Aberdare. The institute will have overall responsibility for apprenticeship certificates. It will work with the SFA to design a high-quality apprenticeship certificate that will be awarded to learners who successfully complete their training. Every apprentice will receive the same design, and in time, learners who pass an approved classroom-based course will also receive a similar institute-designed certificate. The institute is by no means an awarding organisation, and a certificate will be given only when the assessment organisation has confirmed that the apprentice has passed their end-point assessment and this has been validated by the SFA.

Approving certificates for standards will be much less bureaucratic than for frameworks; indeed, the SFA took on responsibility for the certification of apprenticeship standards at the start of this year, and the cost will be covered by the employer, not the apprentice.

My noble friends Lord Baker and Lady Stedman-Scott and the noble Lord, Lord Hunt, asked about pupils moving at 14. Young people can choose to focus on technical education at various ages and stages. Between the ages of 14 and 16, young people can study technical awards alongside their GCSEs, and of course they can enrol at a UTC, to which a number of noble Lords referred.

I am grateful for the endorsement by the noble Baroness, Lady Wolf, of the insolvency measures in the Bill. I will reflect on how we might consider the independent provider sector and how best to protect students—a point my noble friend Lord Lucas also made. HE and FE sectors have different characteristics, so it follows that they might need different approaches to student protection in the event of insolvency. The Higher Education and Research Bill requires student protection plans to be put in place by providers. Both SPPs and the special administration regime have the same objective of student protection, albeit by different means. The likelihood of insolvency of independent training providers is low; the SFA oversees a rigorous process through approving and monitoring independent providers, which subject financial returns to the SFA. Independent providers eligible to offer student loans are subject to the SFA’s policy on intervention, which is triggered by Ofsted inspection or not meeting SFA standards. We have put into intervention that it may have to take remedial action, with the potential effects on learners taken into account. As companies, independent training providers are already subject to insolvency law and, like public providers, private providers are already subject to obligations in their funding agreements which they have with the Government, which require them to protect the interests of students.

On more detail on private providers, the noble Lords, Lord Watson and Lord Aberdare, raised the question of the private sector from slightly different directions, as one might expect. The private sector already provides a significant amount of education and training very effectively. It is true that transfers can be made to private companies. However, I recognise the concern that assets which may have been paid for by the taxpayer, and for the purposes of providing education, should not then be transferred to the private sector on the cheap. I reassure noble Lords this is not the case. The Bill provides four key protections, acting as a quadruple lock, should the education administrator deem it necessary to make a transfer scheme for the property, rights or liabilities of an insolvent FE body.

First, the education administrator is restricted in who they can transfer the assets to. These bodies are prescribed in secondary legislation and are public sector bodies with educational functions, colleges and similar public-funded educational bodies. Transfers may be made to private companies, but if so, the company must be established for the purposes, which include the provision of educational facilities or services. Secondly, any transfer scheme must be for the purposes of achieving the special objective; that is, it must avoid or minimise disruption to students. Thirdly, creditors have a right of challenge should they consider that the education administrator is not working to fulfil the objective of achieving the best result for creditors as a whole, so far as is consistent with that special objective with regard to students. Finally, the Secretary of State or Welsh Ministers must approve the proposed transfer scheme. Any approval will include, among other matters, consideration of whether it is for the purposes of achieving the special objective.

The noble Lords, Lord Watson and Lord Young, mentioned the IFA’s assertion that most money raised through the levy will not be spent on apprenticeships. We disagree with this. By 2019-20, spending on apprenticeships will be £2.5 billion, and we are confident in the extensive research that demonstrates the real economic benefits that apprenticeships deliver.

[Lord Watson of Invergowrie]

When the issue was discussed on Report in the other place, the question was raised as to whether the Treasury might keep part of the money raised through the levy. I do not think that I am being unfair to the Minister for Apprenticeships and Skills when I say that he did not answer that question clearly on Report. Can the Minister give us an assurance now that all the money will stay in the sector, not with the Treasury?

[Lord Nash]

I will write to the noble Lord about that, checking carefully before I respond.

I was very interested to hear from the noble Baroness, Lady Cohen of Pimlico, about her involvement with the Cambridge UTC and the Parkside educational trust MAT, and about the advantages. For the very reasons that she mentioned, it is our policy to encourage all UTCs to join MATs. On her point about the evaluation of UTCs and the fact that apprenticeships are not recognised in outcomes, this is something that we are looking at very closely at the moment. She also made the point that institutes should not approve degree apprenticeships. Degree apprenticeship standards are currently approved by my department. I can reassure her that, although the institute will take on this approval function, it will not be responsible for investigating or engaging with individual universities. However, it will of course work with the Office for Students in the future.

Many noble Lords raised the important matter of careers and careers advice. We take this extremely seriously. That is why the industrial strategy set out that we will publish, later this year, a comprehensive strategy for careers information, advice and guidance across all ages, expanding the quantity and quality of careers advice. As my noble friend Lord Lucas rightly pointed out, the development of careers leadership in schools and colleges will be an important element of this.

We are investing £90 million in this Parliament to improve the quality and coverage of careers advice for young people, and the Careers & Enterprise Company continues its excellent work. I echo the praise expressed by the noble Lord, Lord Aberdare, for this organisation, which is very ably run by Claudia Harris. Picking up on the point made by the noble Lord, Lord Storey, about the importance of careers education, the advisers will also support schools and colleges to develop comprehensive strategies. However, more needs to be done to inform pupils of their options. We have recently agreed to institute a requirement for local authorities to write to the parents of year 9 students, informing them of the existence of UTCs, further education colleges and studio schools that offer courses for students starting at the age of 14.

My noble friend Lady Pidding made a good point about the need to do more to promote apprenticeships. We launched a new apprenticeships communications campaign in May last year, promoting the benefits of apprenticeships for young people. It builds on the previous successful Get In Go Far campaign. National Apprenticeship Week 2017 will take place in March, celebrating the positive impact of apprenticeships and traineeships.

As the noble Lord, Lord Watson, said, getting careers advice right is an important area—as the Minister, my honourable friend Robert Halfon, noted in his careers speech on Monday. I look forward to hearing more from noble Lords in Committee, including my noble friend Lord Baker, about approaches to strengthening careers advice.

My noble friend Lord Baker talked about maths, as did the noble Earl, Lord Listowel. We now have maths hubs and are supporting many maths programmes, such as Singapore maths and Shanghai maths. Over the last few years there has been a substantial increase in the number of pupils taking maths GCSEs and A-levels. My noble friend Lord Baker talked about the skills gap in STEM subjects and computing. We have introduced coding and computing into the curriculum for the first time. He said that there were just over 60,000 pupils taking computing at GCSE. I accept that that is a small number, but it is from a standing start. I pay tribute to my noble friend’s engagement in the digital economy through UTCs.

My noble friend Lord Lucas talked about schools having a dedicated person to engage with the world of work. I consider that to be very important. I know that before the last election the noble Lord, Lord Adonis, had the idea that this should be the case in every school. We are not as prescriptive as that, but certainly it happens in my schools. I think it is very important that schools try to find the money in their budget to do that because, when you see the effect of pupils’ engagement with the world of work, the payback is obvious. Regarding the school sector’s engagement with the world of work, we have certainly found that the door is wide open, with businesses and the professions being extremely willing to help.

The noble Baroness, Lady Morris, talked about the importance of flexibility, and I entirely agree. A framework of routes will ensure that choices are clearer for young people. She also raised concerns about assessment and the approach to assessment for apprentices, and I look forward to discussing this with her further in Committee. We recognise that there is more to do to ensure the breadth of the high-quality assessment organisations that we need, but we have been making good progress through the register for assessment organisations, run by the Skills Funding Agency.

The noble Lord, Lord Watson, asked why less money was spent on post-16 education. The best predictor of attainment at age 19 is attainment at age 16, and that is why we prioritise school funding. As we all know, students have many more pastoral issues, which are expensive to deal with, in the earlier years.

The noble Lord, Lord Hunt, referred to the governance of FE colleges. We talked about this when we met yesterday, and I have already discussed it with my ministerial colleague, Robert Halfon. For the academies programme, we have started something called Academy Ambassadors, recruiting pro bono non-executive directors from businesses and the professions to the boards of multi-academy trusts. As of this morning, we have already made 417 appointments, which is quite a pro bono movement up and down the country. I have discussed with my fellow Minister the possibility of encouraging FE colleges which need further support on their boards to engage with this programme.

The noble Baroness, Lady Garden, asked whether craft, creative and service skills are intended to be covered by technical education. The answer is that they are. The noble Lord, Lord Storey, talked about the relevance of courses, rather than students just doing courses that are popular. Of course, our destination data and data on jobs and pay rates, as well as on payback from courses for students, will in future enable students to make much more informed decisions.

My noble friend Lord Leigh asked about spending on adult education. The total spending power of the FE sector to support adult and 19-plus participation will be £3.4 billion by 2019-20. In cash terms, this is an increase of 40% compared with 2015-16. Within the £3.4 billion, the Government have maintained funding for the adult education budget, which supports adult skills participation in cash terms at £1.5 billion.

My noble friend Lord Baker used some statistics from Davos which were very persuasive. Industry and all of us are aware of these issues. They create an urgency, but I am as hopeful as the noble Baroness, Lady Morris, that this is the moment when we start to reverse the trend that we have all discussed today.

Today’s debate has been thoughtful and enlightening, and I look forward to further discussions. The noble Baroness, Lady Morris, said—

[Lord Young of Norwood Green]

I asked about the application of the levy and the involvement of SMEs in apprenticeships. I do not know whether the Minister is intending to address those points.

[Lord Nash]

I do not have time now, but I will write to the noble Lord on those points.

The noble Baroness, Lady Morris, said that the Bill looked like somebody who had lost their best friend. I think that it has found a number of new friends during this debate. As I said, I will write in response to the points that I have not covered. That letter will be sent to all noble Lords, with a copy placed in the House Library, alongside policy statements explaining the delegated powers set out in the Bill. I should also be very happy to meet noble Lords to discuss the Bill, along with my ministerial colleagues and officials, if they would find that useful. We are listening and will reflect on the important points raised today, and I look forward to more detailed scrutiny in Committee.

Bill read a second time and committed to a Grand Committee.

Technical and Further Education Bill

Lord Nash Excerpts

Committee: 1st sitting (Hansard): House of Lords
Wednesday 22nd February 2017 Grand Committee

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

My Lords, I am grateful to the noble Lords, Lord Watson and Lord Hunt, for these four amendments. I am delighted to discuss matters relating to how we will ensure that the quality of technical education and apprenticeships is improved, as this is as the heart of our reforms. I echo what was said by the noble Baroness, Lady Morris, and the noble Lord, Lord Aberdare, about the importance of improving the reputation and the esteem of apprenticeships and technical qualifications. On the point made by the noble Baroness, Lady Morris, and the noble Lord, Lord Young of Norwood Green, about the target of 3 million, I say, as I believe I did on the Floor of the House, that 3 million is the target but standards and quality must come first. The institute does not have a statutory responsibility to meet the target, but a statutory responsibility to have regard to quality.

Regarding Amendment 1, it is of course critical that reporting measures are in place to enable us to assess how well the programme is achieving quality outcomes. I agree, therefore, with the spirit of this amendment, which proposes that this type of information be monitored, measured and reviewed regularly. However, we do not need the amendment to achieve that aim. This amendment was discussed in Committee and on Report in other place, and the Minister of State for Apprenticeships and Skills gave a sound justification for why such an amendment is unnecessary.

The institute will be required to report on its activities annually under the Enterprise Act 2016 and the report must be placed before Parliament. This will include information on how the institute has responded to the statutory guidance provided to it by the Secretary of State. In addition, the Enterprise Act includes provisions enabling the Secretary of State to request information from the institute on any other topic she deems appropriate. The information set out in the amendment is already collected and published by the Secretary of State on the performance of the FE sector, which includes apprenticeships. To inform its activities, we would expect the institute to make good use of these data in its annual report, when it assesses its performance and impact each year. Indeed, the shadow institute has explained in its draft operational plan that it,

“will make more use of learner, employer and wider economy outcome data when reviewing the success of standards”.

The institute’s core role is to oversee and quality assure the development of standards and assessment plans for use in delivering apprenticeships and, we expect, from April 2018, college-based technical education. Much of the information that this amendment proposes that the institute should provide goes well beyond what is in scope of its remit. It would not therefore be appropriate for the institute to be asked to provide this type of information; it would be an unnecessary duplication of effort given that this information is already collected and published by the Secretary of State. It is right that Government collect and monitor this information, but where this falls outside the remit of the institute, it cannot reasonably be expected to provide it.

On the point raised by the noble Lord, Lord Young of Norwood Green, about Ofsted’s resources, we have had detailed discussions with Ofsted and it is confident that it has enough resources to deliver against the current remit, including apprenticeships up to level 5, based on a risk-based approach. If its role expands, we will obviously discuss the resourcing level again. The noble Baroness, Lady Cohen, asked if she had got it right; I think she basically had but, to be clear, the IFA will approve all apprenticeships and funding for degree apprenticeships comes from the levy, like all others, and is subject to SFA rules. The Office for Students will have a role in regulation of HEIs but not in the approval of standards. If that is not clear, I shall try to set it out in writing so that it is clear to everybody, including myself.

[Lord Young of Norwood Green]

I listened carefully to what the Minister said about the role of Ofsted and a risk-based approach. I shall try to define that. If I were Ofsted, I might think, “Do I need to worry too much about a Rolls-Royce apprenticeship, a BT one, or whatever?”—literally, not metaphorically. I could probably say that I would have a look at them but they are not at the top of my list. But if I was looking at an area where the numbers are very high—for instance, carers—that would worry me as there is a high turnover. I do not necessarily expect the Minister to have the answer now but would welcome more clarification on a risk-based approach.

If we look at the last time Ofsted said it was dissatisfied with a range of apprenticeships, to be fair the Minister responded to that and got rid of what were not really apprenticeships anyway. There was the six-month scenario. I would welcome further clarification so that we understand what is meant by the risk-based approach and the statement made by the Minister that Ofsted is confident it can ensure quality throughout the range of apprenticeships.

We welcome what the Minister said about the target, which he said even more explicitly here, but maybe my memory deceives me. It is welcome that the Minister places that emphasis on it.

[Lord Nash]

I am grateful to the noble Lord. I am meeting Ofsted shortly, either next week or the week after. I will certainly dig deeper into the issue so we can explain more what we mean by a risk-based approach.

The noble Baroness, Lady Donaghy, asked who takes the final decision about judging quality. The institute takes the final decision on whether the standard of assessment plan is high-quality enough, but obviously the market—in terms of whether employers will deliver these apprenticeships and whether the apprenticeships will be taken up—will be another good test of how good they are.

I fully understand the importance of Amendment 4 and agree that there should be appropriate measures to ensure that standards are in place and the quality of further education technical qualifications is maintained. The core role of the Institute for Apprenticeships and Technical Education from April 2017 is to oversee and quality assure the development of standards and assessment plans for use in delivering apprenticeships, as I said, and, from 2018, college-based technical education. The institute will be required to report on its activities annually.

In developing these standards, consultation is a key feature of the institute. It already has a statutory duty to undertake its functions with regard to industry, commerce, finance, the professions and other employers regarding education and training within the institute’s remit. It must also ensure that the standards, assessment plans and, from 2018, technical education qualifications represent good value for money and are of appropriate quality. Also, in her strategic guidance, the Secretary of State may set out specific areas for the institute to take into consideration when performing its functions. When carrying out its core functions, the institute will need to consider the wider skills market, and will be expected to make good use of the data on outcomes made available to it through public data sources and surveys, and to explain in its annual report how it has deployed them.

Turning to Amendment 5, I agree that ensuring high-quality training provision is a very important part of our apprenticeship reforms, but I am not convinced that this amendment is desirable or necessary. It would introduce an additional scheme to regulate the quality of teaching in further education institutions. We believe that it is unnecessary to require in legislation for the Office for Students to run a quality assessment scheme in this case. The change proposed in the amendment would be a significant increase in the scope of the office, expanding its remit into, for example, apprenticeships, other than degree apprenticeships, and technical education at level 3. While I appreciate the noble Lord’s motivation, Ofsted already fulfils this function. Given the diversity of FE provision and providers and the overlap with schools in terms of provision at 16 to 18, the Government believe that Ofsted should continue to have the lead role in quality oversight for teaching in FE institutions to ensure continuity. I therefore believe that the proposed new scheme is unnecessary and duplicative and would lead to confusion.

Amendment 19 would require the institute to publish an apprenticeship assessment plan for each standard that it approved. As currently drafted, the Bill would allow the institute to decide whether an assessment plan is appropriate for each standard. This is to reflect its proposed future role in relation to technical education. While all standards can be used for both apprenticeships and technical education qualifications, some will be developed specifically for the college-based route and would be inappropriate for an apprenticeship, because of the nature of the occupation and the knowledge, skills and behaviours that need to be acquired. Technical education qualifications are not tested through an apprenticeship end-point assessment and therefore do not need an assessment plan. This amendment would therefore require something that was not necessary.

Lastly, let me deal with the understandable concern of the noble Lord, Lord Watson, about enforcing the low pay rules. HMRC is a strong enforcement body, which can and does take action to enforce the minimum wage for apprenticeships.

I hope that the noble Lord will feel reassured enough on the basis of my explanation not to press these four amendments.

[Lord Lucas (Con)]

My Lords, I am grateful to my noble friend for that answer, but could he enlarge on what he said about how parents can have the confidence to encourage their child to do an apprenticeship? As I understand it, the IFATE is the body that will say whether an apprenticeship has been set up right. I would be grateful for my noble friend’s thoughts on how many such apprenticeships it has to cover, how often it will review them and what staff it intends to allocate to that job. I will come back to this frequently, because I am astonished that the IFATE thinks that it can do its work with 80 people.

Secondly, am I right in thinking that the IFATE also looks at the design of delivery—the whole process by which an apprenticeship will be delivered? Over how many instances of that does it think it will have oversight and what resources does it intend to devote to it? What burden of work does the IFATE think it has in this area and with what regularity does it expect to carry out its reviews?

Perhaps my noble friend could also enlarge on what he said about Ofsted. Ofsted is a pretty variable visitor to schools. To some it will come every six months and to others it will come every 16 years. Given that we are in a pretty unmapped part of the world, I hope that the Government are budgeting for fairly frequent Ofsted inspections to enable the reputation of this area to grow quickly. I would be grateful if my noble friend could tell me what Ofsted is planning in terms of the number of visits that it intends to make a year and the average frequency with which it expects to visit providers.

[Lord Nash]

I will write to my noble friend about that.

[Lord Watson of Invergowrie]

My Lords, I thank all noble Lords who have contributed to this lively debate. It is important that the Minister in his response began by saying—I wrote it down—that the 3 million target is a target but quality comes first, and that the institute is not responsible for meeting the target but for ensuring quality. Those words will be well received, and to have them in written in Hansard will be a comfort to many people. However, that is the aim and it has to be followed through to ensure that apprenticeships achieve what everyone in this room would want them to achieve.

There seem to be three primary aims for apprenticeships, at this time anyway. One is that the aforementioned word “quality” must be everywhere. The second is that they are able to produce young people, and perhaps not-so-young people, equipped to fill the skills gaps in the economy that we know are there. The third aim is that apprenticeships and everything surrounding them should ensure what my noble friend Lady Morris said: that they have public confidence and that parents in particular are not just willing but knowledgeable enough to guide their sons and daughters into apprenticeships with the confidence that they will get something worth while out of them. If that public confidence is not there, the 3 million target will not be met. I therefore hope that those three aims will be met as a result of the institute being reformed.

The Minister mentioned Ofsted. The noble Lord, Lord Lucas, covered some of the points I wanted to make but the Minister said Ofsted tells him that it has sufficient resources. I am tempted to say that it would, would it not? However, with a new head of Ofsted, I should have thought that this was a time to increase resources to take account of increased responsibilities and duties. There will clearly be far more apprenticeships than there have been. If Ofsted has the work deriving from Bill added to its ability to inspect schools—some are inspected rarely—it is hard to see how that can be done without additional resources. The Minister did not mention additional resources and I suspect that is because there may not be any, but it would be helpful if he could clarify the point about Ofsted. It is difficult for us to take on board that Ofsted could suddenly adopt extra responsibilities without additional resources.

The Minister also mentioned the Office for Students, particularly in respect of Amendment 5. He did not believe that it was appropriate for the OfS to have the regulating duty set out in that amendment and that the body’s role was regulating higher education. I agree that Ofsted will have the lead role but that does not preclude the OfS. I must ask the Minister for clarification because—with due deference to my noble friend Lady Donaghy—there are five acronyms in the letter he issued today for bodies involved in apprenticeships and technical education. The OfS is not one of them, yet it has some role in the provisions of the Bill. If Ofsted is going to take the lead role, it impacts on the resources argument. We need some clarification of what the OfS is expected to do.

I must also ask about another comment the Minister made in his response. He said that Ofsted had sufficient resources up to level 5. However, the chart at the back end of the letter we received today said that Ofsted inspects the quality of training for level 2 to level 3 apprenticeships. Perhaps that can be clarified because the two comments do not sit easily together.

The points made by my noble friend Lord Young, a former skills Minister, about the importance of safeguarding quality, and the Minister’s acceptance of the basis of these amendments, particularly Amendment 1, are important. I thank the noble Lord, Lord Aberdare, for his enthusiastic welcome. It is good to have cross-party support in these situations.

To some extent, the Minister has answered the points that we put to him. Some concerns remain, not least about who will be doing what. He seeks refuge in HMRC being the answer to enforcing the national minimum wage and apprenticeship rates. In my experience, HMRC is unable to enforce the national minimum wage for adults, again because of a lack of resources. I do not think much attention has historically been given to apprenticeships, and clearly much more should be, as recommended in the report from the Low Pay Commission, which I outlined earlier. But you cannot just add additional duties to public bodies without giving them the resources to make sure they can meet those. However, we have covered most of the points in some depth. On that basis, I thank the Minister for his response and beg leave to withdraw the amendment.

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[Lord Nash]

My Lords, I am grateful to the noble Lords, Lord Watson of Invergowrie and Lord Hunt of Kings Heath, for the first of four amendments relating to the important matter of careers education and guidance.

We are committed to transforming the nature of careers guidance to underpin our reforms to technical education and apprenticeships. This will give everyone the necessary skills and training to open up opportunities and jobs for their future. We set out in the industrial strategy Green Paper that we will publish a comprehensive careers strategy for all ages. The Minister, Robert Halfon, set out the key principles of our approach in a speech last month. The strategy will look carefully at the role of careers provision in supporting people from primary school right through to retirement. It will look at how we can ensure widespread and high-quality support, and how that leads to jobs and security. The strategy will focus on giving people the information they need to access education and training through their working lives. This will include steps to raise the prestige of technical education and make it easier for people to apply for opportunities.

Our careers strategy will be at the heart of the Government’s focus on social justice. We want to nurture the aspirations of those who are disadvantaged and ensure that everyone, regardless of background, has the opportunity to succeed in life. I do not accept the suggestion of the noble Lord, Lord Hunt, that stripping advice away from Connexions resulted in a decline in careers education. I have spoken to many young people who engaged with Connexions and I have to say that I found few fans. As the noble Lords, Lord Storey and Lord Knight, and the noble Baroness, Lady Whitaker, acknowledged, there is no previous golden age of careers education. It has always been pretty poor. What is clear is that the more engagement with the world of work that students in school have, the more engaged they become in their studies, and the more they realise why they are at school. McKinsey carried out a good study across Europe, which concluded that one-to-one careers advice was generally of little value and that the best experience was project-based working with employers.

That is why we have made such a significant investment in this area, including £70 million or so in the Careers & Enterprise Company and nearly £80 million in the National Careers Service. The work of both organisations provides an excellent base on which to build. The National Careers Service’s website receives over 24 million visits a year and supports more than 650,000 people in community locations with face-to-face advisers. The Careers & Enterprise Company, ably run by Claudia Harris, has made a great start. As my noble friend Lord Aberdare said, it has made good progress in rolling out its enterprise adviser network. Some 1,500 schools and colleges now have an enterprise adviser, helping them connect with local employers to provide experience of the workplace for young people. The company is also scaling up the number of business mentors—a subject close to the heart of the noble Baroness, Lady Morris—who work with young people at risk of underachieving or dropping out of education. Our goal is for 25,000 young people a year to benefit from this by 2020.

We will carefully evaluate the effect that our work has on careers provision. As of January, we are including destination data in national performance tables. They will help ensure that schools and colleges place an even greater importance on helping their students transition successfully to positive destinations. We fully acknowledge the importance of strong partnership working. As we develop the Government’s careers strategy, we will work with a diverse group of stakeholders, such as the Institute for Apprenticeships.

I welcome the obvious commitment to high-quality careers provision that noble Lords have shown in proposing this new clause. The Government share that commitment. However, it is our view that because we have set out the principles of our approach to careers and have confirmed that we will publish a strategy later this year, the proposed new clause is not necessary.

The noble Baroness, Lady Morris, said that people moaned about teachers—I am not quite sure in what context. Certainly, this Government are not moaning about them in the context of careers. Teachers are busy people and it is important that they identify the passions, interests and aptitudes of their pupils, but they cannot be expected to keep up with the rapidly changing world of work and make those important links to businesses that are so necessary. The noble Lord, Lord Young of Norwood Green, said how important they were. It is important that we link schools to the world of work. That is what the Careers & Enterprise Company and its advisers are all about. I personally believe that all schools should have one person focused purely on engaging with careers, the world of work and all those wonderful, free resources available to schools, if they would only engage with them, from many charities and employers. We do this in my academy group and I recommend it. The payback in terms of pupil engagement is massive and we should engage with this model in more detail. The noble Lord, Lord Knight, asked how we might revise the various pathways and qualifications. Obviously in this rapidly changing world we need to revise them on a regular basis.

I am grateful to the noble Lords, Lord Watson and Lord Hunt, for tabling Amendment 9 and I am pleased that they share the Government’s enthusiasm for a new system that would give prospective technical education students clear information and better support throughout the application process. We consider this new system to be key to ensuring that technical education is more on a par with academic education. Therefore, it is important to get it right. While I appreciate the keenness of noble Lords to have detailed proposals for the new system as soon as possible, it is important that we take the time to explore all the options. This will allow us to ensure that the new system meets the needs of the students who use it. We are considering the scope and implications of the new system, including working with a number of key stakeholders to discuss the potential options. It is crucial that the new system can support our ambition to increase the number of people pursuing quality technical education options. This is too important to rush. We intend fully to deliver on proposals for the system as set out in the industrial strategy Green Paper published just last month, but it would not aid the development of this complex project to commit to particular timescales at this stage. For these reasons, I hope that the noble Lord will feel reassured enough to not move the amendment.

I thank my noble friend Lord Baker for tabling Amendment 11 and pay tribute to him for his work in developing the UTC programme, which is now offering young people a technical education at 48 UTCs across the country. I particularly enjoyed his unbiased commercial for them. The amendment would require schools to give education and training providers the opportunity to talk directly to pupils about the approved technical education qualifications and apprenticeships that they offer. I agree that it would strengthen the Bill by promoting technical education and apprenticeship opportunities more effectively so that young people can make more informed and confident choices at important transition points.

As a number of noble Lords have said, the range of information on education and training options that young people receive is too narrow. Ofsted’s 2013 careers survey, referred to by the noble Lord, Lord Storey, found that college-based technical education, training and apprenticeships were rarely promoted effectively. We need to address this if young people are to benefit from the Government’s ambitious skills reforms which are supported by this Bill. We want institutions to co-operate in the best interests of young people. A school that chooses not to invite a local UTC or an FE college to speak to young people denies them information about opportunities which might be better suited to their long-term career goals, and does them no favours at all.

We need to tackle the myth that apprenticeships and technical options are not suited to high-achieving pupils. A study by the Sutton Trust in 2014 found that 65% of teachers would not advise a pupil with the grades for university to pursue an apprenticeship. I agree with noble Lords that it is time to end this outdated approach. We must get away from a two-tier system of careers advice where the information that young people get from their schools fails to correct or even reinforces the impression that college-based technical education and apprenticeships are second best to academic study. Schools will be required by law to collaborate with UTCs, studio schools, further education colleges and other training providers. This will ensure that young people hear more consistently about alternatives to academic routes and are aware of all the routes to higher skills and into the workplace. This is vital if we are to set our technical education on a par with the best in the world. I thank my noble friend for this thoughtful amendment and I accept it.

Amendment 61 was spoken to by the noble Lord, Lord Storey. I begin by saying that I appreciate the intent behind this proposed new clause. Our careers strategy will not be effective unless schools and colleges are held to account for the quality of their careers provision. Ofsted has an important role to play in this regard. However, I do not believe that the amendment is necessary because the current inspection grading structure provides appropriate coverage of careers provision. Ofsted has already sharpened its approach to the inspection of careers provision. As part of standard Ofsted college inspections, inspectors make graded judgments on: effectiveness of leadership and management; quality of teaching, learning and assessment; personal development, behaviour and welfare; and pupil outcomes. Matters relating to careers provision feature in all four of these judgments.

It is important that, in reaching judgments, inspectors are able to balance their considerations on a range of aspects to form an overall view, rather than this being determined by one specific aspect of a college’s provision. Furthermore, Ofsted evaluates provision offered by the college, including 16-to-19 study programmes, apprenticeships and traineeships. Judgments about all the types of provision within the inspection framework are informed by consideration of the quality of careers provision, work experience and the development of employability skills.

Destination data are now a more significant part of college accountability. For the first time last month, destination data featured as a headline measure in 16-18 performance tables. This encourages a sharper focus on how well colleges prepare their students to make a successful transition. I hope I have provided sufficient reassurance that colleges are held to account properly for the quality of their careers provision. I urge the noble Lord to not move his amendment.

Turning to the amendment from the noble Lord, Lord Lucas, I thank him for his interest in this important matter. I agree that it is essential that the careers information, advice and guidance provided covers the full range of options available so that young people can make important choices about their future pathways. Schools and colleges must secure independent careers guidance. In doing so, they should provide access to a range of activities such as employer talks or hearing from young apprenticeship ambassadors. However, it would not be appropriate for the Government to distort the independence of careers advice and guidance by finding recruiters who promoted a single pathway over others.

The Secretary of State already has very broad powers to fund education and training. Funding for schools is provided by the EFA, and it can implement any policies that require adjustments to government funding for schools. In addition, we do not think the amendment is necessary from a legal perspective. The Secretary of State can fund matters connected to apprenticeships under Section 101A, which was inserted into the Deregulation Act 2015, and we are able to fund matters connected to technical education under Section 101B, which is provided for in the Bill. In view of what I have said, I hope the noble Lord will not move his amendment.

Lastly, I shall comment on remarks made by the noble Baroness, Lady Wolf, about the extension of the succinct five-line amendment produced by my noble friend Lord Baker. I would be happy to set up a teach-in with the draftsmen in the department as to precisely why this is necessary, but I am assured that it is. With regard to her general comment about the number of policies that she seems to be burdened with, I would be delighted to hear from her—I am sorry to see that she is not in her place—about how we might reduce these. I always welcome suggestions for reducing bureaucracy. To take a leaf out of my noble friend Lord Baker’s book, when I finish this job I think I shall try to jump on the next piece of education legislation and try to bring in a law that precis should be taught in schools again at every possible opportunity. In view of what I have said, I hope noble Lords will feel able to respectively withdraw or not move their amendments.

[Lord Hunt of Kings Heath]

My Lords, I thank the Minister for that comprehensive response. I am very pleased that he has accepted the amendment of the noble Lord, Lord Baker. Like my noble friend Lady Morris of Yardley, I pay tribute to the noble Lord, Lord Baker, and the UTC movement; I agree that UTCs are a force for good. It may have been an advert, but I thought the destination analysis that the noble Lord referred to—the fact that so much information is available—was good, and on the face of it the statistics in relation to apprenticeship and university places are impressive. All I would say to the Government is that I hope they hold their nerve in supporting UTCs in the future.

We are all agreed that we want to see quality advice given to young people and their parents. The careers strategy is going to be very important, and the Minister has set out some of the things that are going to be in it. I thought the comments of the noble Baroness, Lady Wolf, were important, because often schools are burdened by many regulations and requirements. I guess in the end it will be made clear to schools in the statute guidance issued by the Minister—succinctly, I hope—what is required, without having to go into enormous detail about how that is going to be done. I recognise that that is difficult, but we come back to the point made by the noble Lord, Lord Lucas, and my noble friend Lady Morris: we have to recognise that in the end we will want schools to wish to do it. Statutory intervention is necessary because that is not happening at the moment, but in the end we somehow have to get to a stage where schools want to do the right thing.

I agree with my noble friend that teachers are not going to be experts in careers advice—the Minister is absolutely right about that—but they can be very influential in setting the terms in which young people will listen to that careers advice. Perhaps we are mistaken: it is the teachers who should go to the Skills Show. Part of this has to be an educational programme with teachers about the opportunities for apprenticeships, alongside the links with business and employment that the noble Lord has talked about.

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[Lord Lucas]

My Lords, I support what my noble friend has said. The Government are creating a very powerful body. It will own the intellectual property in all the technical qualifications for the routes described in the Bill. There will be no other institution with any long-term interest in evolving or maintaining those qualifications or in developing a name and a reputation that parents and others can rely on. Below the Institute for Apprenticeships and Technical Education, we have a series of short-term contracts. City & Guilds—I sit on its council, which everyone knows is nothing, but at least indicates affection—will disappear at this level. There will be no City & Guilds qualifications; they will become qualifications of the institute for apprenticeships. City & Guilds, being a charity, may bid for a seven-year contract to be an awarding organisation or to look after one or two of the routes, but it will not be awarding City & Guilds qualifications, rather it will just provide a function for the institute.

We are creating something much closer to the German model. We are losing what remains of the lodestars that the British Computer Society, City & Guilds and others have been providing in terms of the name and quality of their qualifications and replacing them with a new structure. This structure needs to be more powerful and conscious of its role than it is described as being in the Bill. I would like to see the Government follow the logic of what they have produced in the Bill and create a creature which is capable of the long-term responsibilities being placed upon it. It may be that the Government need to acquire City & Guilds, which is after all a quasi-government organisation anyway. Perhaps they need to take it on board to provide the strength, history, continuity and the people needed to run the sort of thing that is being set up in the Bill, or at least to provide the engine for it. I do not see how dispensing with all that the good awarding bodies have created and providing a structure which does not have the power to do what is necessary is a safe way of proceeding with a very important part of our education system.

[Lord Nash]

My Lords, I am grateful to the noble Lords, Lord Watson and Lord Hunt, and the noble Baroness, Lady Garden, for the four amendments in this group. They address important issues relating to the Institute for Apprenticeships and Technical Education and, in particular, what functions it will have. I will address my remarks only to these four amendments and will start by responding to Amendment 6. Ensuring that new further education institutions provide high-quality provision is of course of the utmost importance. Through the area reviews process for the further education sector, we are also putting the sector on a secure financial footing by ensuring that the provider base matches student demand.

However, the institute is to be established with a very specific remit in relation to the quality of reformed apprenticeships: to set the quality criteria for the development of apprenticeship standards and assessment plans; to approve or reject proposed standards or plans and review them periodically, as appropriate; and to ensure that all end-point assessments are quality assured, including the potential to quality assure them itself. It will also advise the Government on the maximum level of government funding available for each individual apprenticeship standard. And, of course, the proposals in this Bill seek to extend its functions to technical education qualifications and related matters. It has no role at all, and is not expected to have a role, in relation to the authorisation of new further education institutions, even those that will deliver technical education qualifications in the future. It is therefore not appropriate to make this amendment to the Bill in the light of the expected remit of the institute.

I turn to Amendment 8, for which I am grateful to the noble Baroness, Lady Garden, and I wish her a happy birthday.

[Baroness Garden of Frognal]

What better way to spend it?

[Lord Nash]

I hope that she will be pleased to hear that we plan to finish at 7.45 pm, so she will have time to enjoy it and celebrate.

The amendment includes a number of functions that are essential for the institute to be able to discharge its remit effectively. However, the institute already has responsibility for carrying out the vast majority of these functions. Setting, maintaining and overseeing standards for apprenticeships and technical education is absolutely central to its role. We will also ensure strong recognition and transferability through continuing to secure the delivery of apprenticeship certificates for reformed apprenticeships which have real value and worth for the employer and the apprentice. We expect that the institute will also have some responsibility in relation to certification, working with the Skills Funding Agency in its operational role of delivering certificates. As part of this, a record of all apprenticeship completions will be kept. The institute will use this to inform a number of its functions, including the review of standards in the context of the country’s wider skills needs.

Section ZA2 of the 2009 Act, inserted by the Enterprise Act 2016, requires the institute to have regard to the reasonable requirements of those with an interest in apprenticeships. This includes many of those listed in the amendment, including employers, apprentices and technical education students. The Government are able to write to the institute with guidance to which it must have regard when carrying out its functions; this can include asking it to consult certain bodies. We have just completed a consultation exercise on the draft of the first guidance document which asked the institute to work with particular organisations, such as those listed in the amendment, when carrying out particular functions.

We share the noble Baroness’s enthusiasm for the promotion of apprenticeships in schools and colleges. Legislation is in place that requires schools to inform pupils about apprenticeships and other options. Noble Lords will be aware that we have recently announced a careers strategy and we will consider how apprenticeships can be promoted in schools and colleges as part of the development of that strategy.

Moving on to Amendment 13, I fully understand the importance of ensuring that all young people are able to access a range of suitable education and training opportunities, including technical education and apprenticeships where appropriate. I know that this concern is shared by a great number of noble Lords, some of whom made eloquent and most welcome contributions at Second Reading, including the noble Lord, Lord Addington, my noble friend Lady Stedman-Scott and the noble Earl, Lord Listowel. The key to achieving this aim is to ensure that suitable provision is available to accommodate the needs of a wide range of learners. The effect of this amendment would be to require the Institute for Apprenticeships and Technical Education, when exercising its functions, to have regard to the duty of local authorities to ensure that sufficient provision is available for all young people in their areas between the ages of 16 and 19, as well as for those young people in their areas aged 19 to 25 who are covered by an education, health and care plan.

I would like to reassure noble Lords that I am absolutely mindful of the need to ensure that the institute takes account of the needs of all learners, including those who have had a difficult start in life or who have special educational needs and disabilities. However, legal provision has already been made to ensure this. Section ZA2(1) of the 2009 Act, when it is commenced in April, will require the institute to take account of a range of factors, including the reasonable requirements of persons who wish to undertake training and education, when carrying out its functions. This will apply regardless of the type of provider serving those learners or indeed how that provision has been commissioned. As many young people as possible should be able to access technical education, which is valued by employers and has been approved by the institute. Noble Lords will also be aware that the Equality Act 2010 places a duty on public sector bodies, including the institute, to promote equality of opportunity across all forms of education and to ensure that their actions do not disadvantage those with protected characteristics, including disability, pregnancy and maternity.

Our wider reforms will also support access for those who have low prior attainment or require additional support. In particular, the transition year will provide young people aged 16 or older where their education has been delayed, with tailored catch-up provision to enable them to access the same range of education and training opportunities as their peers, getting them back on track and helping to tackle the challenges they face obtaining qualifications valuable to their future career prospects.

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[Lord Watson of Invergowrie]

I thank the Minister for that response and thank the noble Baroness, Lady Garden, for her contribution. I should have said at the start that we support the suggestions in Amendment 8. I noticed that the Minister said that most of these were already covered. That impacts on a point that I will come back to in a minute about the operational plan for the institute.

The Minister somewhat took the wind out of my sails on Amendment 6 by saying that there was no role for the institute with regard to new institutions. I take it that just the Secretary of State would have the ability to give them the green light, if that is the case. In which case, I am rather surprised that it got accepted as an amendment. None the less, I hear what the Minister says, and if that is the case, so be it.

On Amendment 14 in particular, the Minister did not answer a couple of the questions I put to him. One was the point about the percentages for categories of those underrepresented in the take-up of apprenticeships. I mentioned the 20% target for people from black and minority ethnic communities and asked whether there were plans for anything similar for women, care leavers and indeed any other underrepresented groups. I am happy for him to write to me on that. I do not suggest what the percentages should be, but these are underrepresented, so by definition it is appropriate that some action is taken to bring them more into line with other groups.

[Lord Nash]

We do not intend to have any targets, but as I said, we intend there to be the expectation that the opportunity to participate should be widely available for all students.

[Lord Watson of Invergowrie]

Yes, but that is a bit woolly. Students have always had the opportunity; the point is that certain groups are not taking it up in sufficient numbers. It would be interesting to know why black and minority ethnic people have been specifically identified, and yet others have not. If work needs to be done there to bring underrepresented groups more into the mainstream, surely the institute should concentrate particularly on that. However, that would impact on the institute’s operational plan. In the Minister’s letter today, he mentioned that the shadow institute’s draft operational plan is out for consultation but only for a few more days. He said that that will provide more detail on how the institute would be expected to deliver its role. I have not yet looked at that but I will do so. I hope that it will have something to say on broadening participation because we may wish to return to that matter on Report.

For the moment, we have covered the issues and I thank the Minister for his response. I beg leave to withdraw the amendment.

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[Lord Aberdare]

My Lords, I add only one very small point: it seems to me that part of the problem with the esteem in which some of these technical and professional qualifications are held is that they are seen in a rather narrow light. The word “technical” rather reinforces the problem. A lot of people who might be interested in creative or public sector qualifications or some others might be put off by the word “technical”, which makes it seem more narrow than it needs to be.

[Lord Nash]

My Lords, I am grateful to the noble Baroness, Lady Garden of Frognal, and the noble Lord, Lord Storey, for tabling this amendment. I understand that they wish to ensure that all technical or work-based qualifications are included within these reforms and can benefit from them. I assure them that all relevant and appropriate occupations in the economy will be covered within the technical education routes and the qualifications offered to students following these routes. However, having thought carefully about how to achieve this, we hope to address it in the following way.

Each route, of which there are currently 15, provides a framework for grouping together occupations where there are shared training requirements. Each route will have an occupational map. Each map will identify all the occupations in the scope of that route, such as the digital route or the engineering and manufacturing route. These maps are currently being developed through a robust, evidence-based process, with input from employers, employer representatives, industry professionals and professional bodies.

It is important to be clear, however, that it will not be appropriate to include some occupations within the routes. The independent panel of the noble Lord, Lord Sainsbury, established the principle, which we have adopted, that technical education must require the acquisition of both a substantial body of technical knowledge and a set of practical skills valued by industry. As the panel made clear, there are some unskilled or low-skilled occupations which do not meet this requirement, as they can be learned quickly and on the job; such as that of a retail assistant. Therefore, it is not necessary or appropriate to offer technical education qualifications to people wishing to work in one of these occupations. It would not be the best use of their time or of taxpayers’ money.

With this exception, I can assure the noble Baroness and the noble Lord that within the technical education routes there will be comprehensive coverage of the skilled occupations that are vital to the success of our economy. I can also assure them that the occupational maps will be reviewed regularly to ensure that they continue to reflect the needs of industry. We will listen to any evidence-based case from an employer who identifies a gap, if it meets the above criteria and they can demonstrate employer need and a genuine skills gap. I hope that the noble Baroness and the noble Lord will feel reassured enough to withdraw this amendment.

[Lord Hunt of Kings Heath]

Before the noble Baroness responds, I have two points. The Minister quoted from the Sainsbury review the definition of “technical” education. Why has that not found itself in the Bill? If the Sainsbury definition is going to set the boundaries of the 15 pathways, would it not have been helpful to pin it down some more? The noble Baroness, Lady Garden, is absolutely right to say that it would have been helpful to have that in the Bill.

My second point comes back to the issue raised by the noble Lord, Lord Aberdare. Sadly, in this country, “technical” does not have the status that we want it to have. You cannot legislate for that, but as we go through this it would have been interesting to hear from the Government how, in general, they think we are going to raise the status of the word “technical”, so that when young people in particular consider a technical education, they see it as something to aspire to.

[Baroness Garden of Frognal]

My Lords, I am sorry that this has become more complicated to involve occupational maps and routes. I thought it was a very simple explanation: that there are different emphases in different vocational routes, for the want of a better word. Actually, included in the routes there are such things as “hair and beauty”. There are technical elements to that, but there is a tremendous amount of personal skills and creativity also. Also included are “creative and design” and “catering and hospitality”. There are technical aspects in just about all of these, but that is not their prime activity or focus. The people who go into those sorts of fields are not doing so because they love doing technical things but because they like working with people and creating things, and doing things that are not primarily technical.

I am sorry if the word “technical” has now been downgraded, but we really are running rings round this. We apparently do not like and have abandoned the word “vocational” because it is considered downmarket. The word “technical” was supposed to raise the profile and be a lot better, but now, suddenly, here are the noble Lords, Lord Hunt and Lord Aberdare, saying that “technical” is a pretty rubbish word too. I always quite liked “work-based”, which is one of the terms that we used, as well as “practical”. There are other terms that might not be deemed quite so lower class as “technical”.

As I said, my amendment was intended simply to try to protect all those people working in fields where they think of themselves primarily not as technical but as creative, with personal skills and so on, which is what the Government are trying to include in the Bill. I accept that the Institute for Apprenticeships has to encompass all those routes too. I am sorry but I may have to bring this back on Report. We will perhaps have a discussion before then to see whether the noble Lord can think of a really upmarket word to take in all the different aspects of practical skills that we are looking for.

[Lord Nash]

I shall be delighted to have a very technical conversation with the noble Baroness about this. I heard what she said about words meaning what they mean, but I am sure that she did not quite mean what she said when she used the expression “lower class”. However, we can have a discussion about this to see whether we think that anything more needs to be done.

Technical and Further Education Bill

Lord Nash Excerpts

Committee: 2nd sitting (Hansard): House of Lords
Monday 27th February 2017 Grand Committee

[Lord Knight of Weymouth (Lab)]

My Lords, I shall speak briefly in support of this amendment. I want to remind your Lordships and the Minister that FE colleges come in a number of different guises and there are some specialist FE colleges for which this is particularly important. I am particularly a fan of the Ada Lovelace College—the newest college, I think, to be given FE status by the department—which is the National College for Digital Skills, based in Haringey. We have an acute shortage of digital skills throughout this country, including here in London, and there is a massive demand for them. If we can allow more international students to come and take advantage of studying at that college, we would do our economy and some of those young people an enormous service. I urge the Minister to listen carefully, as is his wont, and to be sympathetic to this amendment.

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

My Lords, the Committee will be aware that this issue is already being considered as part of the Higher Education and Research Bill. As a Government, we will want to consider our position across the board, and I can assure noble Lords that we are doing this. This topic is best discussed in the context of the Higher Education and Research Bill, where there will be ample opportunity to consider the issue during the forthcoming Report stage. However, I will briefly address the more specific points of the amendment.

While there are some further education colleges that have centres of expertise or offer higher level study that attract a significant number of international students, such as the one referred to by the noble Lord, Lord Knight, as a whole the number of international students in FE is much smaller than for the higher education sector. Courses are on average shorter, and delivery is more locally focused and reflects local economic priorities. Where colleges take significant numbers of international students, the issues will parallel those that have been considered through proposed amendments to the Higher Education and Research Bill.

I do not propose to repeat the arguments that my noble friend Lord Younger of Leckie made during that debate. I do wish to emphasise that we have and will continue to set no limit on the number of genuine international students who can come here. The controls in place are there to prevent abuse of the system and ensure that the reputation of the UK educational sector continues to be internationally renowned. The immigration statistics are controlled independently by the Office for National Statistics. It is not up to the Government to create the statistical definitions. Our responsibility is to set the policy, which in this case places no limit on numbers of students.

As I have said, there will be an opportunity to debate these issues further as part of the Higher Education and Research Bill, which is the more appropriate forum. In those circumstances, I hope that the noble Lord will withdraw the amendment.

[Lord Watson of Invergowrie]

I thank the two noble Lords who contributed to the debate and the Minister for his response. I agree with the noble Baroness, Lady Garden, about the positive message that this sends. That is what I was trying to get across in moving this amendment.

Equally, I accept the Minister’s use of the term “abuse of the system”. No one would be tolerant of that at all. There were such situations in the past in the case particularly of language schools. Some of them had been—to use about the kindest adjective that could be applied to them—“bogus”. Very largely, these have been driven out of the system. I would not say that there is no abuse, but there is not a great deal. Opening up the further education sector does not necessarily increase the likelihood of such abuse.

I take the Minister’s point that the Higher Education and Research Bill is the place to deal with that. Fortunately for him, he will not have to do that, but I will be returning to these subjects next week. I wanted to draw attention to the fact that, hopefully, the further education sector has the opportunity to broaden its scope a bit. Whereas local provision is what it is mainly about, there is scope to expand that and I hope that the sector will take the opportunity to do so and will not be prevented from doing so through the inability to bring students in from abroad.

With those remarks, I beg leave to withdraw this amendment.

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These sorts of things lie behind the amendment of the noble Lord, Lord Hunt. This side of the Committee is trying very hard to persuade the Government to adopt these amendments, because we are all desperately keen that this apprenticeship system should work. We are very keen to get to 3 million apprenticeships, if we can. We do not think we are taking seriously enough the role of enforcement, and which organisations are doing it.

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

I am grateful to the noble Lords, Lord Watson of Invergowrie and Lord Hunt, for this amendment. I could not help but notice that the moment the noble Baroness, Lady Donaghy, made the very inappropriate comparison with Superman that I appeared, according to the annunciator anyway, to be in two places at once, as was pointed out to me by the noble Lord, Lord Watson of Invergowrie. I am not sure that even Superman managed that, but at least I am back now.

It is essential that all the public organisations that have a role in the delivery of apprenticeships and technical education, as elucidated by the noble Lord, Lord Hunt, work together to ensure a coherent system which delivers a high-quality result.

The noble Lord asked the perfectly fair question, “Who is in charge?”. The Government will work to ensure that the system works and will keep this under review via the accountability statement, which we will share with noble Lords.

The noble Lord asked what the Minister’s role in this was. I guess, if the system does not work, Ministers will intervene to change the system, but individual bodies are responsible for their individual part of the system. The strategic guidance document will ask the institute to carry out a leadership role—a co-ordination role—across the system.

In response to the point made by the noble Lord, Lord Storey, on quality versus quantity, I repeat a point I made on the first day of Committee that our target is 3 million. We believe it is a realistic target, but quality must come first.

Paragraph 10(1)(b) of Schedule A1 to the Apprenticeships, Skills, Children and Learning Act 2009, which will be inserted into that Act by the Enterprise Act 2016, will allow the Institute for Apprenticeships to co-operate with any organisation that it deems necessary for it to carry out its specific functions. It is therefore unnecessary to include the requirement in the Bill.

The Bill includes a data-sharing provision to allow the named organisations freely to share data and information between them, to ensure that they can all deliver their functions properly. This, in addition to the legislation referred to above, is all that is needed in primary legislation to allow those bodies to work together.

In addition, the amendment would require the institute to co-operate with the named organisations but, without a similar requirement on them in return, the effect would be unbalanced. However, that is not my main point.

It is in the interests of all of the organisations named in this amendment to work well together to enable them to fulfil their statutory duties. Past experience demonstrates such a willingness. As the legislation will permit this, we see no need for a further requirement. In preparation for the launch of the institute in April this year, these organisations and others are working together to agree an accountability statement which sets out each of their separate roles and responsibilities in relation to apprenticeships. There is a very positive working relationship between them and a palpable desire to ensure the institute is a real success.

In answer to the point made by the noble Lord, Lord Young of Norwood Green, about how Ofsted will carry out its risk assessment approach, I am meeting Ofsted later this week and will discuss this with it in some detail and write to the noble Lord and copy my letter to other interested Peers. I hope that the noble Lord will feel reassured enough by what I have said to withdraw the amendment.

[Lord Hunt of Kings Heath]

My Lords, I am grateful to the Minister. We always thought that he had super powers and are glad to have confirmation of it. This debate has been helpful.

The Minister has promised an accountability statement and it would be helpful to have that before Report. He said that Ministers will intervene and, importantly, that the institute will have a leadership and co-ordinating role. One question is whether it would be helpful to have that backed up by some legislative provision to reinforce it, which is perhaps something that we can come back to.

On the question of the 3 million and quality, I hear what the Minister says. I take his point that 3 million is deliverable but that quality comes first. The question I would like to ask him is whether the Treasury and No. 10 Downing Street share that view. My experience is that, when push comes to shove, the key indicator on which his department will be held accountable will be the 3 million, rather than the quality indicator. Essentially, we are trying to give some cover to the Government to say that at the bottom line quality is more important than the numbers.

I take the point about the drafting of the amendment —that the duty should have been reciprocal—and we can probably come back to it, but this has been a very helpful short debate. I beg leave to withdraw my amendment.

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[Lord Nash]

My Lords, I am grateful to the noble Lords, Lord Watson and Lord Hunt, for their two amendments relating to issues of representation for the Institute for Apprenticeships.

With regard to Amendment 16, the institute should obviously understand the views of those people undertaking this training to ensure that it is meeting their needs, because it is the organisation responsible for apprenticeships and technical education. Section ZA2 of the 2009 Act, inserted by the Enterprise Act 2016, already requires the institute to have regard to,

“the reasonable requirements of persons who may wish to undertake education and training within”,

the institute’s remit, and to other interested persons. The institute is also required to engage interested groups as part of the review of standards and assessment plans.

The institute has purposely been established as an independent organisation, with high-level responsibilities set out in legislation but with the freedom to decide how it delivers them. It is essential for the credibility of apprenticeships and the wider apprenticeship reform programme that the institute retains as much autonomy as possible. Government can provide the institute with advice and guidance about how it could carry out its functions. It has to have regard to this advice and must provide justification if it chooses not to follow it. The Government recently consulted on a draft of their guidance to the institute for 2017-18, which includes a request for the institute to establish an apprenticeship panel to advise the board. The shadow institute has already committed to doing this by the time that it is launched and good progress is being made. Members for the first apprenticeship panel have already been shortlisted and an initial meeting is planned for March.

[Lord Watson of Invergowrie]

On that point, can the Minister say how this was done? Were applications invited?

[Lord Nash]

I will have to write to the noble Lord about that.

As well as advising the board, the first panel will decide how the panel will be run, including how future members will be recruited. The proposal is for the institute to take on responsibility for technical education from April 2018. I can confirm that it would be our intention to include a request in its guidance for 2018-19 for a panel to represent those undertaking technical education.

Amendment 18 would stipulate the make-up of the group of persons whom the institute could approve to develop a standard. In particular, it would require that the group includes a range of employers and at least one provider. I agree that it is essential that the standards that form the basis of reformed apprenticeships and new technical education qualifications are of high quality, and meet the needs of a wide range of employers and learners, but I am not convinced that this amendment is necessary. I have already explained that the institute needs to be independent from government to be able to undertake its functions with credibility. It will be well placed to make decisions about who can develop a new standard, based on a range of factors, and it is right that it should be given the flexibility to do so without the constraints that this amendment would impose.

However, in my remarks on the preceding amendment I referred to the strategic guidance providing a vehicle for government to advise the institute. The current draft of the guidance includes the recommendation on who should be able to develop standards and makes it clear that we will expect the institute to continue to ensure that standards are developed primarily by employers, but with input from others with the relevant knowledge and experience, such as professional bodies, other sector experts, providers and assessment organisations. If the institute decides not to follow the government guidance it must give reasons in its annual report, but it is crucial that, as an expert, independent organisation, it retains the ability to make decisions itself about delivery, taking into account all the relevant circumstances. We believe that our approach strikes the right balance. I hope that, on the basis of my explanation, the noble Lord will feel reassured enough to withdraw this amendment.

I thank the noble Baroness, Lady Wolf, for her Amendment 36A. I am sure it was prompted by concerns for publicly funded learners who may find themselves without a place to complete their course in the event that an independent provider shuts down. I share her concerns but just as with FE bodies, the likelihood of independent training providers becoming insolvent is low. The Skills Funding Agency has a robust entry process in place to ensure providers are capable of delivering a high-quality learning offer to loans learners. Once providers have met the entry criteria and are eligible to offer loans-funded provision to learners they are subject to a range of further measures and controls, including review of their financial health, audit, and assessment of their qualification achievement rates. Providers are also required to comply with robust funding and performance rules. A small handful of providers is facing difficulty, but the numbers affected by these cases represent less than 1% of providers operating in the advanced learner loans programme.

[Baroness Wolf of Dulwich]

If it is not necessary to have protection because not very many people get affected, why is it necessary to have it for further education colleges, which also do not fail very often?

[Lord Nash]

I will come to that in my explanation. These are private companies and it is not our role to interfere. I will elaborate in a moment.

In cases where independent providers delivering publicly funded training courses have closed down, our first priority is to support any publicly funded learners affected, ensuring they can continue their courses with minimal disruption. The SFA works closely with the SLC to ensure that, wherever possible, we identify a suitable alternative training provider or college where individuals can complete their learning. We have been doing just that in a recent case, which received a certain amount of publicity, when a provider went into liquidation in November: we have matched all the learners to alternative provision.

However, these are private companies, and it is not for the Government to involve themselves in their financial matters any more than those of other private companies. This is, essentially, the point I made in answer to the noble Baroness. We will always work to support learners affected in cases where the provider fails and it is right that we do so, in the way I have outlined. But as to whether we should have a special administration regime, we cannot make the same special and complex arrangements, which will often involve significant and additional public funding, where a private company has failed. This is, and must remain, a matter for the company and its creditors and shareholders. I hope the noble Baroness will agree, and will therefore not press her amendment.

[Lord Young of Norwood Green]

I asked how they are subject to scrutiny and accountability for the quality of service they are providing, never mind the financial side. I gave the Minister an example where I thought they would. I take the point made by the noble Lord, Lord Storey, that there are some good examples of training providers, but who scrutinises the quality of service they are actually providing? That was what I wanted to know.

[Lord Nash]

It is Ofsted.

[Baroness Wolf of Dulwich]

I am happy not to press my amendment, but I would like some clarification on why a private company which is often entirely dependent on public funding should be in some sense exempt from any requirements. This does not seem to be consistent with much of what goes on elsewhere in the public sector and what it requires of people.

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Moved by

[Lord Nash]

33: Schedule 1, page 28, line 37, leave out from beginning to end of line 13 on page 29 and insert—
““40AA Sharing of information by or with the Institute(1) The Institute for Apprenticeships and Technical Education may disclose information to a relevant person for the purpose of a relevant function of that person.(2) For disclosure of information by the Institute for the purposes of its own functions, see paragraph 10 of Schedule A1.(3) A relevant person may disclose information to the Institute for the purpose of—(a) a function of the Institute, or(b) a relevant function of that person.(4) In this section “relevant person” means—(a) Ofqual,(b) the OfS,(c) Ofsted, or(d) a prescribed person.(5) In this section “relevant function” means—(a) in relation to Ofqual, the OfS or Ofsted, a function of that body, so far as the function relates to England;(b) in relation to a prescribed person, a prescribed function of that person, so far as the function relates to England.(6) In this section—“Ofqual” means the Office of Qualifications and Examinations Regulation;“OfS” means the Office for Students;“Ofsted” means—(a) the Office for Standards in Education, Children’s Services and Skills, and (b) Her Majesty’s Chief Inspector of Education, Children’s Services and Skills.(7) Regulations under this section prescribing functions of a person may prescribe all of the person’s functions.”

[Lord Nash]

My Lords, these government amendments will allow the Secretary of State to make sure that the data-sharing gateway in new Section 40AA remains fit for purpose through regulations. The regulations can include persons to whom the institute can disclose information or who can disclose information to the institute, and the functions about which the information may be disclosed. New Section 40AA will establish data-sharing gateways between the institute and Ofsted, Ofqual, the Office for Students or any other person set out in the regulations. There is already a separate provision for the institute to share information in relation to its own functions.

The bodies with which the institute is likely to need to co-operate and share information to do its job effectively are expected to change over time. That is particularly important given the reforms in higher and technical education. For example, the Quality Assurance Agency will not be named specifically in legislation and the quality arrangements in that area may change over time. It will be important to ensure that the institute can work effectively with whatever body is designated in that case, as well as any other bodies which take on roles in relation to education and training. All the disclosures under the gateways take precedence over any non-statutory restrictions, but they would be subject to all the important safeguards in the Data Protection Act 1998.

I reassure noble Lords that I am, however, absolutely mindful of the need to ensure full parliamentary scrutiny each time the Section 40AA power is used. Although not common in relation to similar regulations, where the negative procedure will be used, it is proposed that these regulations will be subject to the affirmative procedure. In view of this, I hope that noble Lords will accept this amendment.

[Lord Lucas]

Will the DfE be able to access this data, for instance to try to understand what history at school leads to what sort of performance in technical qualifications and apprenticeships?

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[Lord Nash]

If I may answer my noble friend Lord Lucas’s point, the answer is yes under a separate provision in the Bill. On the point about the difference between relevant and prescribed, a prescribed person is somebody set out in regulations and a relevant person is set out in the Bill or in regulations.

Amendment 33 agreed.

Moved by

[Lord Nash]

34: Schedule 1, page 29, line 13, at end insert—
“27A In section 40D(3)(interpretation of Part 1A)—(a) the words from “affects” to the end become paragraph (a);(b) after that paragraph insert— “(b) authorises the disclosure of any information in contravention of any provision made by or under any Act which prevents disclosure of the information.””

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Moved by

[Lord Nash]

35: Schedule 1, page 29, line 33, at end insert—
“29A In section 262(6)(orders and regulations subject to affirmative procedure), after paragraph (aa) insert—“(aza) regulations under section 40AA;”.”

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Moved by

[Lord Nash]

36: After Clause 6, insert the following new Clause—
“Records etc
(1) The Secretary of State may by regulations make provision for or in connection with—(a) the delivery to the registrar of companies of documents that relate to the insolvency of further education bodies;(b) the registrar’s function of keeping records of information contained in such documents under section 1080(1) of the Companies Act 2006;(c) the publication of, or access to, those records or related information.(2) The regulations may, in particular, provide for any provision made by or under the following sections of the Companies Act 2006 to apply (with or without modifications) in relation to those documents or records.

Provision of Companies Act 2006	Description
sections 29 and 30	copies of resolutions etc to be forwarded to the registrar
section 859K	registration of enforcement of security
sections 1077 and 1079	public notice of receipt of certain documents
sections 1081, 1084 and 1085 to 1091	keeping and inspection of register of companies
sections 1093 to 1097	correction or removal of material on companies register
section 1104	documents relating to Welsh companies
sections 1112 to 1113	supplementary provisions

(3) The power under subsection (1) includes power—(a) to impose requirements on a person who delivers a document to the registrar in relation to the insolvency of a further education body to provide supplementary information;(b) to confer power on the registrar to make rules in accordance with section 1117 of the Companies Act 2006 imposing such requirements.(4) Provision made under this section is in addition to any applicable provision made by Part 35 of the Companies Act 2006 or elsewhere. (5) Regulations under this section are subject to the affirmative resolution procedure.(6) Section 1114(1) of the Companies Act 2006 (meaning of document etc) applies for the purposes of this section.”

[Lord Nash]

My Lords, we have tabled this amendment to ensure that should an FE body become insolvent, there will be an accessible public record of documents relevant to the insolvency procedure for that body. FE bodies that are statutory corporations are exempt charities and not companies. As such, they are not subject to filing requirements with any particular regulatory body, although they are required to keep audited accounts and to publish them, for example on their websites.

When the Bill was originally drafted, it was thought that we could rely upon certain provisions of the Companies Act 2006 so that an insolvency practitioner could file documents required by the court as part of any insolvency procedure, including education administration. However, it is now clear that specific provision is needed within the Bill to ensure that an accessible and workable file for insolvent FE bodies may be created and managed by the registrar. This amendment therefore creates a new clause to provide for exactly that and allows the Secretary of State to make regulations relating to the delivery of documents about the insolvency of FE bodies to the registrar, about the registrar’s function of keeping records of information within those documents and about the publication of and public access to such records or information.

The power in the new clause also allows the Secretary of State to permit the Registrar of Companies to make rules relating to filing requirements, such as about the form of documents to be filed. As I hope the Committee will appreciate, this amendment is necessary to permit the paperwork of an insolvency procedure for an FE body to be properly managed. I beg to move that this amendment be accepted and that the new clause stand part of the Bill.

Amendment 36 agreed.

Technical and Further Education Bill

Lord Nash Excerpts

Committee: 3rd sitting (Hansard): House of Lords
Wednesday 1st March 2017 Grand Committee

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

My Lords, I am grateful to the noble Lords, Lord Watson and Lord Hunt, for these three amendments, to the noble Lord, Lord Stevenson, for his remarks supporting them and to the noble Lord, Lord Storey, for his comments.

These amendments relate to assessing the impact of the proposed insolvency regime on further education colleges. Before I deal with individual amendments, I shall respond to some of the general points made by the noble Lord, Lord Stevenson, and if I do not cover them all I will certainly write to him. Following the area reviews, all colleges should be on a sound financial footing for the longer term. That is part of the reason behind the area reviews. These measures will not come into force until after the recommendations of the area reviews have been implemented. There will be no closures as a result of the reviews. Colleges are working together to remove overcapacity in their area and to better align their offer to local employers’ needs. Some colleges may merge as a result, but there will be no insolvencies as a direct result of the reviews.

I believe that Amendment 37 is intended to ensure that the special objective offers protection not only to existing students of an insolvent college but to those of the future. In that regard, noble Lords and I share common ground. Indeed, that is the purpose of our programme of area reviews. We are working with colleges, local authorities and other local stakeholders to ensure that FE bodies are put on a strong and resilient footing. This is the best way to safeguard the interests of all students. Delivering strong, sustainable colleges that can provide young people now and in the future with the opportunity to pursue courses right for them will offer them the opportunity to achieve their full potential.

In the unlikely event that an FE body were to become insolvent, our first priority would, rightly, be to the existing students, whose studies are likely to be directly affected. That is the purpose of the special objective. While we cannot know how the education administrator will propose to achieve the special objective in every insolvency, as that will clearly depend on the circumstances of each case, it seems likely that the preferred solution would be to find an alternative provider to take over provision at the insolvent body’s campus. That would almost certainly prove least disruptive for the students involved. However, that may not be possible or the right outcome. It might ultimately be better for existing and future students to attend other colleges where they may have access to a greater choice of course, better facilities and the like.

I recognise noble Lords’ concern that moving to a different provider might mean travelling greater distances, with a consequent increase in travel costs. While many students would be willing to travel to access the right provision—a point the FE commissioner made when he gave evidence to the Committee in the other place—there will be those for whom this would be a challenge. Colleges are already able to provide financial support to help eligible students with their travel costs, and this will extend to students transferring in from an insolvent college. In addition, the education administrator may be able to make provision for such costs where it is for the purpose of pursuing the special objective.

There is the possibility that a college that is the only FE provider in the wider area may become insolvent; for example, in a rural area such as Devon or Cornwall. Were that to happen, I assure noble Lords that the Government could not and would not ignore their wider responsibility to students in the area. No Government would leave an area without any FE provision. However, this is a matter for the Government of the day to consider, not the education administrator.

I shall now respond to Amendment 38. Clause 14 sets out the fundamental principle underpinning the special administration regime we are introducing in the Bill. In the unlikely—I must emphasise “unlikely”—event that an FE body becomes insolvent, we are acting to ensure that disruption to students’ studies is avoided or minimised as far as possible. That is the purpose of the special objective set out in subsection (1). Pursuit of that objective will govern all the actions of the education administrator. It will be for the education administrator to decide how the special objective can best be achieved. Whether it is one of the solutions suggested in subsection (2), a combination of them or something different will depend on the special circumstances of the college or FE body. Only by considering these issues will the education administrator be in a position to come to a view on the most appropriate approach. As we all know, something that might be right in one situation will not necessarily be right in another, so, in a way, I agree with Amendment 38. Noble Lords are right that there are a number of assessments that the education administrator should carry out before taking any action to achieve the special objective, including assessments of the capacity of other bodies or institutions to undertake any additional functions or provide education to additional students.

Noble Lords are right, too, that there should be discussion with those most directly affected by the decisions to be taken—the students, the staff and their unions. Where I think we differ is that I do not believe such assessments or discussions need to be prescribed in legislation. As my colleague the Minister for Apprenticeships and Skills said when this matter was debated in the other place:

“It is inconceivable that they,”


by which he meant the education administrator,

“would draw up proposals for achieving the special objective without having had discussions with a wide range of stakeholders, such as the Further Education Commissioner, student bodies and others, and without considering a wide range of pertinent issues”.—[Official Report, Commons, 9/1/17; col. 113.]

I wholeheartedly share this view. As the Minister made clear in the other place—and I do here today—it is our clear expectation that the education administrator will engage fully with those who have the knowledge and experience to aid them in developing their proposals: the commissioner, staff and students, local authorities and other providers.

When we refer to avoiding or minimising disruption to student studies, this is not just about keeping students’ timetables unchanged or ensuring that they remain at the same campus—although, in reality, this might well be the case. It is also about ensuring that where it is necessary to transfer students, factors such as those identified by noble Lords are taken into consideration. In developing their proposals, the education administrator will be expected to consider the quality of the alternative provision, as well as the impact of travel distances if students need to complete their studies at another location.

Of course, some trade-off or compromise between the different factors might be necessary, but this will be for the education administrator to address in the particular circumstances. If students find themselves having to travel to another location, I recognise that they may incur additional travel costs. Where this is the case they may be eligible, as I have said, for the 16-to-19 bursary fund, or the education administrator may consider setting up a specific scheme for them paid for by from any funding provided by the Secretary of State or Welsh Ministers.

I turn now to Amendment 39. In developing the special administration regime we have been concerned to ensure that the process should take no longer than necessary. Concerns have previously been expressed, including during debate in the other place, about the time a special administration might take. I share these concerns. However speedily the special administration is concluded, it will be too long for those involved. Staff, students and creditors will want certainty about what will happen to them at the earliest opportunity. Amendment 39, which seeks to require the education administrator to consult students, staff and the trade unions of the FE body before making any decisions on how to achieve the special objective, would inevitably lengthen the process but would be unlikely in reality to have any real benefit to the education administrator. Indeed, it may fetter his or her discretion to find the best way of achieving the special objective to the disadvantage of all concerned.

We are not disputing that the issues raised by noble Lords are important. They are. But, as I hope I have made clear, they cannot help but constitute a major element of the education administrator’s considerations in developing his or her proposals and there is therefore no need to legislate in this case. I hope the noble Lord will feel reassured enough by my explanations to withdraw the amendment.

[Lord Stevenson of Balmacara]

My Lords, I thank the noble Lord, Lord Storey, for his support for these amendments and his comments about what we are trying to achieve with them. I think that those were picked up by the Minister, and I thank him too for taking the time to go through some of the issues and recognise that they had a bearing on this, should insolvency happen. The fact that these words are now on the record is a very good thing.

We particularly recognise that where provision has to be provided at a distance under special measures, travel will become a material issue. Confirmation again that costs could be considered within that is very important. We accept that it would be wrong to tie the hands of the education administrator if, by having a list in the Bill, damage was done to how he or she approaches his or her work. I do not think that that was the intention, but I recognise the danger. The issues were engaged with by the Minister and were recorded in Hansard, which will be sufficient to ensure that these points are not ignored at the appropriate time.

We might want to come back to the question of how and on what basis the comparison between the provision made in one institution that might have to close and another will be done in practice, but that comes under the next group of amendments. For the moment, I beg leave to withdraw the amendment.

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Other issues may counterpose on the activities of those who are in further education colleges. It is not impossible that the Office for Students, which is soon to be established, may have made an order in relation to, for instance, access and protection in relation to a course that a student is taking. Would that be part of the order? I look forward to hearing from the Minister on that point. I beg to move.

[Lord Nash]

My Lords, we have seen from our recent scrutiny of the Higher Education and Research Bill that it includes provisions to ensure that those undertaking higher education courses are able to continue their learning and are protected if their provider is unable to deliver their course—perhaps, but not solely as a result of it exiting the market; the noble Lord, Lord Stevenson, referred to that. Under these proposals the Office for Students will have the flexibility to require any provider on the register to have a student protection plan in place through conditions attached to its registration. We expect that the OfS will require all approved fee-capped providers, including FE colleges, if they are higher education providers, to have plans in place. In those FE colleges with students studying HE courses, the FE students will have the benefit of being protected by the special objective in the event of the college becoming insolvent and the body being placed in education administration. Measures within the provider’s student protection plan may also be relevant and could be brought into play.

I understand that noble Lords are concerned that FE colleges offering such provision will be subject to both regimes and that this will add to the cost of running HE provision. Whether to require FE bodies to have student protection plans in place will be a matter for the Office for Students to decide. However, I agree that where an FE body is insolvent and in special administration, it would make little sense for the education administrator to be required to implement the SPP at the same time as implementing the proposals to achieve the special objective, if possible, as those proposals will extend to the very students covered by the student protection plan.

Where the Secretary of State or Welsh Ministers have decided to place an FE college in special administration, the special objective should take precedence over SPPs. In seeking to achieve the special objective, the education administrator must avoid or minimise disruption to the studies of students of the FE body as a whole, regardless of the course they are studying. There may be circumstances in which the education administrator may find it helpful to refer to the measures within the plan to inform the proposals for a particular student or groups of students, but a student protection plan might impede the education administrator’s discretion about the best way to achieve the special objective. Where this is the case, the provisions of the Bill already allow the court to make an interim order that would suspend existing student protection plans where it considers that necessary or appropriate. I hope that I have been able to reassure the noble Lord that the proposed amendment is unnecessary and that he will withdraw it.

[Lord Stevenson of Balmacara]

I thank the Minister for his response. I am glad we agree on this. I thought for a moment he was going to give me a concession, which would have been unexpected for a very broad probing amendment. He did not, but he did say that there is a power in Bill. I have been unable to find it, so if he could write to me about that, I would be grateful. I beg leave to withdraw the amendment.

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[Baroness Cohen of Pimlico]

I support what I think the amendment is about. There is a worrying set of complications, in my mind. Someone has provided the money to keep the FE college going while the special administrator decides that actually it cannot be kept going. Where does the person who provided the money rank among the creditors? We are talking about selling assets at the end of this. For a start, the bank might have a charge on those assets, in which case I guess that is the answer, but somebody has put money in to keep the business going. I have done this on behalf of the Department of Industry—we took back the money that we had put in to keep it going. What is the order of batting in relation to the local authority, or whoever it is, who put the money in to keep the institution going, and the rest of the creditors?

[Lord Nash]

My Lords, I start by saying that I recognise that the amendment is driven by noble Lords’ good intentions. They are concerned that assets that have been paid for largely by money from the taxpayer should not then find their way into the private sector at an undervalue, when they can then be sold and used to make a profit at the taxpayer’s expense. I recognise and share those concerns. FE colleges are statutory corporations with significant freedoms to deal with their own assets, but the key check on those freedoms is that any such dealing must be in the interests of the colleges’ charitable education—as the noble Lord, Lord Stevenson, said, the basis on which they have their charitable status.

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Moved by

[Lord Nash]

48: Schedule 3, page 34, line 34, after “authority,” insert—
“( ) to the director of children’s services at the local authority or combined authority in whose area the relevant institution is based, and to any other director of children’s services that the education administrator thinks appropriate,”

[Lord Nash]

My Lords, I want to explain Amendments 48 to 55, which we have tabled to Schedules 3 and 4. These reflect the commitment that my colleague, the Minister of State for Apprenticeships and Skills, gave in the other place to ensure that the needs of care leavers are provided for in the event that the FE body they attend enters educational administration. We agree that students who are care leavers and have already experienced uncertainty and disruption in their lives may well need additional support to help and reassure them during what may feel like uncertain times. Of course, it is entirely possible that, in the event of insolvency, the insolvent college will be taken over by another provider and students will be able to remain on the same campus, studying many of the same subjects. If this is not possible and students need to be transferred to other providers and possibly other courses, we want to ensure that care leavers can get the advice and guidance that they need, particularly if this encourages them to remain in further education. Having got care leavers into education—which is sometimes not easy—it is important to make sure that we retain them there.

There was debate in the other place as to whether there should be a requirement placed on the education administrator to take particular account of the needs of care leavers in much the same way as Clause 22(3) requires them to take account of the needs of students with special educational needs. As the Minister for Apprenticeships and Skills explained, the needs of care leavers are more pastoral and would, therefore, be better met by the personal advisor appointed by the local authority to support them. He committed the Government to ensuring that guidance to local authorities on their corporate parenting responsibilities would include advice to personal advisers in the event of a college insolvency affecting a young person for whom they were responsible. This amendment supports the delivery of this commitment. It ensures that support and advice is available to those who need it, by adding the director of children’s services in local authorities—or in combined authorities where relevant—to the list of those to whom the education administrator is required to send a copy of the proposals for dealing with the insolvent college. In this way, the local authority will receive formal notification of what is happening and can trigger the necessary action by personal advisers. I hope that noble Lords will agree to accept these amendments. I beg to move.

[Baroness Garden of Frognal]

My Lords, I warmly welcome these amendments. I am sure that if the noble Earl, Lord Listowel, were in his place, he would be particularly pleased to see that these were included. It is reassuring to find the director of children’s services being included in the Bill.

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Moved by

[Lord Nash]

49: Schedule 3, page 34, line 44, at end insert—
“( ) to any director of children’s services to whom the statement of proposals was sent under paragraph 49,”

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[Lord Stevenson of Balmacara]

I shall, rather sensibly, be brief because I am trying to amend a clause that I think will be deleted in the next group, so there is not much point in me trying to argue persuasively the merit of my case, although I certainly could. Since the point arises again in relation to the new Clause 37, if it is approved by the Committee, we may as well just cover it.

I do not think we are far apart on this. The question is more one of being clear about what is asked for and how it will be made available. The issue raised by the amendment is that where people are disqualified from holding office in the further education sector, there is a risk if their names are not made available because they could pop up in other colleges and might be subject to the same concerns. A list, which is quite common in other areas of insolvency, should be made available. It is not mentioned in the Bill or the new clause. When the Minister speaks, I may be advised that this will be dealt with in regulations. If so, I would be very happy at that stage to concede that this point is not required. I beg to move.

[Lord Nash]

I intend to go into the detail, which the noble Lord, Lord Stevenson, referred to, of the application of the Company Directors Disqualification Act 1986 to FE bodies when I speak to the amendment that I have tabled to amend Clause 37 by replacing it with a revised version. As we continue to refer to that Act, in this and the subsequent amendment, I propose that we use its acronym, the CDDA.

For consideration now is Amendment 57, which was tabled by the noble Lords, Lord Watson and Lord Hunt, which specifically provides that the Secretary of State must ensure that the list of disqualified officers is made publicly available. This amendment refers explicitly to disqualified officers, which we take to mean members—that is, governors—of an FE body who have been disqualified by the court having been found liable of wrongful or fraudulent trading under the Insolvency Act 1986, as applied to FE bodies that are statutory corporations by Clause 5, or of similar offences. Under Clause 5, the provisions in the Insolvency Act 1986 relating to wrongful and fraudulent trading will apply to governors and other individuals who run FE bodies in the same way as those provisions apply to directors of, and others involved in the running of, companies.

I understand noble Lords’ concerns and recognise the intent behind this amendment that a publicly searchable list of disqualified individuals should be maintained, so that it is apparent who should not be appointed as a governor of other FE bodies. However, there is already provision in the CDDA for a register of disqualification orders, which is to be open to inspection, to be kept by the Secretary of State. Therefore Clause 37, both as currently drafted and as we intend to amend it, already provides for the well-intended purpose that noble Lords are seeking to achieve. On this basis, I hope that the noble Lord will withdraw the amendment.

[Lord Stevenson of Balmacara]

I thank the Minister for his comments, which I fully accept. I beg leave to withdraw the amendment.

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Moved by

[Lord Nash]

58: Clause 37, leave out Clause 37 and insert the following new Clause—“Disqualification of officersIn the Company Directors Disqualification Act 1986, after section 22F insert—“22G Application of Act to further education bodies(1) This Act applies to further education bodies as it applies to companies.(2) Accordingly, in this Act—(a) references to a company are to be read as including references to a further education body;(b) references to a director or an officer of a company are to be read as including references to a member of a further education body;(c) any reference to the Insolvency Act 1986 is to be read as including a reference to that Act as it applies to further education bodies.(3) As they apply in relation to further education bodies, the provisions of this Act have effect with the following modifications—(a) in section 2(1), the reference to striking off is to be read as including a reference to dissolution;(b) sections 9A to 9E are to be disregarded;(c) references to any of sections 9A to 9E are to be disregarded.(4) In this section—“further education body” means—(a) a further education corporation, or(b) a sixth form college corporation;“further education corporation” means a body corporate that—(a) is established under section 15 or 16 of the Further and Higher Education Act 1992, or(b) has become a further education corporation by virtue of section 33D or 47 of that Act;“sixth form college corporation” means a body corporate—(a) designated as a sixth form college corporation under section 33A or 33B of the Further and Higher Education Act 1992, or(b) established under section 33C of that Act.”

[Lord Nash]

My Lords, the amendments we have tabled are to replace the original Clause 37 with a new version, with the intention of fully applying, rather than replicating, the CDDA to FE bodies in England and Wales. Amendment 65 to Clause 43 adds an additional clause—Clause 5, in so far as it relates to Section 426 of the Insolvency Act—to the parts of the Bill which extend to all parts of the UK.

The amendment to Clause 37 removes the delegated power to replicate the CDDA and instead applies that Act in full to FE bodies in England and Wales. This allows the court to disqualify any governors whom it finds liable to wrongdoing, not only from being governors but also from being company directors. In so doing, it fully prevents them from being able to repeat, in a different way, the mistakes they have made potentially at the expense of another FE body. This was not possible with the original drafting of the clause, which allowed us to replicate the CDDA but not fully apply it. The amendment closes a potential loophole in the legislation and more fully protects learners at FE bodies from the actions of any governor who chose to act recklessly.

Wrongful and fraudulent trading are important elements of the corporate insolvency regime, which protects creditors against wrongful conduct by directors. We are looking to achieve the same protection in our own regime for creditors of FE bodies. The responsibilities we propose for those bodies’ governors are very similar to their existing responsibilities as charity trustees. Part of that protection is the deterrent effect enshrined in and created by the CDDA regime, which goes hand in hand with the corporate insolvency regime and has done so for the past 30 years. The Charity Commission is wholly supportive of the approach we are taking and sees it as in line with the approach taken for the trustees of charitable companies and charitable incorporated organisations.

The amendment to Clause 43 provides that the provisions of the Bill which extend in their application to all the different parts of the UK include Clause 5, in so far as it relates to Section 426 of the Insolvency Act. Let me be clear: this does not mean that the FE insolvency regime would apply to FE bodies incorporated in Scotland and Northern Ireland. It would apply, as set out in Clauses 5 and 6 when read together with the definitions in Clause 3, only to those FE bodies in England and Wales established under the Further and Higher Education Act 1992.

The amendment would provide that Section 426 of the Insolvency Act extends to the whole of the UK, which would ensure co-operation between the courts of the different parts of the UK. This means that courts in different jurisdictions might be asked to co-operate on a particular case, for example over the enforcement of a charge where assets are located in a different part of the UK to the location of the insolvent FE body; or, in the case of governor disqualification, preventing a governor disqualified in England or Wales becoming a governor in another part of the UK. In view of what I have said, I hope noble Lords will agree to accept the amendments to Clauses 37 and 43.

Amendment 58 agreed.

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[Lord Stevenson of Balmacara]

My Lords, I support the amendment; it is a probing amendment in a complex area. Of course the matter is not in the hands of the Minister who is due to respond to it, because it is a matter that is jealously guarded by the Chancellor of the Exchequer, who after all is responsible for tax receipts. In my experience, the issue is very complicated, not least because of history and practice. There may be a strand of European ideology built into this as well, which may reach a conclusion in a couple of years’ time—or not, as the case may be.

The basic principles of the VAT system are very straightforward: a trading operation has to trade with the full weight of VAT on it, and expenditure on it is recouped against subsequent users and from those who purchase the goods and services provided. Those things that are not deemed to be trading do not attract VAT, but equally they cannot be redeemed against the VAT that has been incurred in the purchase and preparation of them.

As the noble Baroness, Lady Garden, said, those bodies exposed to the full weight of VAT on their non-trading activities suffer a 20% penalty for the work that they are doing, and that is money that could be properly reinvested. That is a sound case and I am sure it has exercised Ministers before. I look forward to hearing the response.

[Lord Nash]

I thank noble Lords for this amendment, which calls for a change in tax policy. It seeks to allow FE colleges to claim refunds of VAT incurred on their non-business expenditure. As noble Lords have acknowledged, tax policy is a matter for the Chancellor and the Treasury. Any tax changes are considered by the Chancellor in the normal way and announced in the context of his Budget judgment, as he will be doing next week.

I understand this call for additional funds from the Treasury for FE, but there are clear implications when thinking about such a change. It is estimated that it would cost the Exchequer about £145 million per year. That cost would have to be covered somewhere in the economy—for example, reducing public expenditure on other government priorities. In addition, the VAT treatment of FE colleges is no different from many other public bodies.

However, in view of all that the noble Baroness said about the previous Prime Minister’s comments about looking carefully at the matter, I will go back to see what further I can say by way of explanation for the status quo. I hope that in view of my comments, she will feel able to withdraw her amendment.

[Baroness Garden of Frognal]

I am grateful to the Minister for his careful looking and I thank the noble Lord, Lord Stevenson, for his support for the amendment. I beg leave to withdraw the amendment.

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[Lord Stevenson of Balmacara]

I hesitate to speak because I can see that a Division is pending and it would be nice for us to be able to finish at just the right point, but I realised when my noble friend was speaking that I was that clerk. In an earlier career, I was the clerk of an FE college. The spectre of the buccaneering principals who were around in FE at that time came crowding back, and I felt I ought to share that with the Committee. The problem was that these institutions were very often the creatures of the local authority that owned and fronted them, and there were pressures at play. The principal wanted to be the person who was the main conduit to the local authority and would not brook any interference. Absent the principal, the company secretary, who was indeed a demon of great skill and ability to maintain her position in the structure, took over and ran the place very adequately. But with the growth of corporate structures and, now, the whole question of how that must be used to mature and operate organisations of some scale and scope, I would have thought there must be a way of ensuring that, when corporate structures such as companies are established, there has to be a company secretary, and that company secretary must fulfil at least the minimum standards required of those who operate in the private sector. So there may be a way forward.

I agree entirely with what my noble friend said: the pressure to keep those who are academics—and who should be academics—away from trying to do things that they are patently unable to do, just because they happen to occupy the position of principal or vice-principal, has been an enduring theme with those who have worked in the education sector at FE and HE level. It is only recently that appropriately qualified and suitably remunerated members of that profession have been operating in the way that they should. I support the amendment.

[Lord Nash]

My Lords, I recognise the very important role played by clerks as expert advisers to governing bodies of further education institutions, and I pay tribute to the contribution by clerks and governing bodies up and down the country. As the responsibilities of those bodies increase, we must also support the development of the capability and professionalism among clerks. As the Minister responsible for governors in schools, I can completely see the importance of this matter. That is why we support the Education and Training Foundation in the delivery of a new professional development programme for clerks to be rolled out this year. Sector representative bodies also deliver a range of activities to support clerks, including a very active clerks’ network and best-practice materials. The ETF is also supporting the increased professionalism of clerks through the improving clerk to company secretary programme to take account in changing college structures and clerks’ responsibilities, whereby clerks can attain company secretary qualifications. We are supporting chairs of boards of governors through the national leaders of governance programme, where experienced chairs mentor others who need support.

There is a well-established statutory requirement for the instrument of an FE institution to make provision for there to be a clerk, and for provision for the responsibilities of that role to be set out in the instrument. That is set out in Schedule 4 to the Further and Higher Education Act 1992. This means that the importance of the clerk’s role, which I know is recognised by members of this House, is also reflected in law.

While further statutory prescription in relation to duties and responsibilities of the clerk may appear attractive, I do not believe that it is the right approach in this case. I will elaborate. The amendment proposes a few high-level matters relating to advice that clerks should provide and, as proposed, overlooks certain features that would reasonably be expected to be an important part of any clerk’s role. These include, for example, independence from the senior management team at the institution and a duty to take appropriate action if the board, the chair or one of the committees appears to be at risk of acting outside their powers or to be proposing actions that may be unlawful.

The 1992 Act sets up high-level requirements for the instrument and articles, including a requirement for there to be a clerk and for the clerk’s responsibilities to be set out in the instrument. Since 2011, colleges have not required the consent of the Secretary of State to amend their instruments. The detailed content of the instrument, including the details of the responsibilities of the clerk, now largely rests with the governing body of the FE corporation rather than with Ministers.

In my view, the existing balance between the requirements set out in legislation and the responsibilities of the governing body is the right one. We should be very careful about removing from colleges the necessary flexibility that enables governing bodies to adapt and tailor their governance arrangements to fit the circumstances of their institution. That is particularly important in a sector as varied as further education. It is obviously important to guard against the possibility that greater prescription has the unintended effect of undermining the responsibility and thus the accountability of governing bodies. The careful balance set out in the current legislation in relation to matters of governance, including in respect of the role of the clerk, remains important going forward.

Principals do not appoint board members. Governors are appointed to the board by the board itself. A good principal will have a strong interest in having a capable body. When there is a material pre-existing relationship between the principal and a member of the board, it should be declared as part of the appointment process. The Association of Colleges’ model job description states that the clerk should be independent of the senior management team and should provide unbiased advice.

We do not think this amendment would add materially to the conduct of clerking or to governing bodies of FE colleges. We believe clerking is generally working well, and the quality of clerking has undoubtedly improved significantly in recent years. However, as I have spent part of the last four years attempting, I think with some success, to raise the importance and effectiveness of governance in schools, and in view of what noble Lords have said, I will go back and investigate their concerns and see what more we might be able to do in this regard, because it is important. Legislation may be a very blunt instrument, but I will go back to look at it further.

[Lord Hunt of Kings Heath]

I am very grateful to the Minister. I beg leave to withdraw the amendment.

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Moved by

[Lord Nash]

65: Clause 43, page 20, line 4, leave out “extends” and insert “and section 5 so far as it relates to section 426 of the Insolvency Act 1986 extend”

Technical and Further Education Bill

Lord Nash Excerpts

Report stage (Hansard): House of Lords
Monday 27th March 2017 Lords Chamber

[Baroness Pidding (Con)]

My Lords, noble Lords may remember that I spoke some weeks ago on this Bill at Second Reading and described the challenges that the UK labour market will face in the coming years and decades. Such times need flexible legislation, so as not to tie the hands of government, the UK labour market and private providers. I believe that it would be a mistake to complicate and overlegislate, and then expect any improvement on the current system.

I agree with the sentiment of Amendments 14 to 16. It ought to be our duty to make sure that students are not left stranded after provider failure, through no fault of their own. However, it is my fear that these amendments may do the very opposite of their well-meant intention. I am particularly concerned by Amendment 14, explicitly subsection (3). I want to stress that however well intentioned it is to demand that private providers set contingency funds that can be used only for the purposes outlined in subsection (2), it risks placing additional financial commitments and burdens on providers unnecessarily. It would also, inevitably, deter excellent private providers from offering loan-funded courses, given these extra commitments.

Given that the Government have made a commitment to helping students affected by provider failure by providing them with alternative providers, it is my belief that this well-intentioned legislative burden is not necessary. It will simply overcomplicate the system and deter private providers from offering excellent qualifications and training.

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

My Lords, I am very pleased to be able today to speak about this legislation, which will help lay the foundations for transforming technical and further education, ensuring that all our young people have the same opportunities to travel as far as their talents may take them, move to a lifetime of sustained employment and provide the skills that British business needs. I am grateful for the remarks made by the noble Baroness, Lady Cohen. I share her sentiment: this Bill is the greatest engine of social change that can be imagined, or at least we hope that it will be. I also express my thanks to noble Lords for their continuous engagement in the Bill, which, as the noble Baroness said, has all-party support.

In Committee, we had some very interesting discussions on some of the broader aspects of the Bill, and on the operation and delivery that will turn this legislation into reality. My ministerial colleague Robert Halfon and I have found this scrutiny extremely helpful in refining our thinking for this next stage of the legislation—the transition. Minister Halfon was looking forward to being able to join today’s discussion, as he has done previously, but unfortunately has been called away as he needs to participate in the public sector apprenticeships debate.

I turn now to the first group of amendments, tabled by the noble Lords, Lord Watson and Lord Hunt. I welcome the sentiment behind this amendment: that young people who choose to take up an apprenticeship should not be financially disadvantaged and that, in particular, young people who leave care should be encouraged to enter apprenticeships. I believe, however, that we have already established sufficient safeguards and support to deliver these aims. Following a 3% increase in October last year, the national minimum wage for apprentices is now set to rise again to £3.50 an hour from April this year. Most employers pay more than this minimum. The most recent Apprenticeship Pay Survey, in 2016, estimated that the average gross hourly pay received by level 2 and 3 apprentices in England is £6.70 an hour. Moreover, apprentices receive training which, together with their paid employment, sets them up for increased earnings in the future.

[Lord Watson of Invergowrie]

I wonder whether the Minister is going to respond to the point I made about apprenticeship pay. At the beginning of the year, the Low Pay Commission reported that 18% of apprentices were not getting even the national minimum wage.

[Lord Nash]

The noble Lord has raised that before. As we discussed at that time, it is illegal to pay below the minimum wage. We and HMRC are focused on ensuring that it does not happen. We all share the noble Lord’s concern about this. I assure him that we will do everything we can to stamp out such practices.

One of the core principles of our reforms is that an apprenticeship is a genuine job. As such, apprentices are treated accordingly in the benefits system. Child benefit is intended to provide financial support to parents to help with the extra costs of raising a dependent child. It is payable to parents until the end of the academic year in which their child turns 16. After that, payment can be claimed for children up to the age of 20 if they are in approved education or training. From April this year, undertaking an apprenticeship at minimum wage will pay more than five times the maximum child benefit rate. Therefore, an apprentice’s parents are not eligible for child benefit for supporting that employed young person. These rules have been a long-standing feature of the welfare system.

Moving to paragraph (b), on extending the higher education bursary to statutory apprentices, while I understand the intentions behind the proposal, it is not correct to equate being on an apprenticeship to being in higher education, where a student is making a substantial investment in their education and has appropriate access to student finance. Apprenticeships, by contrast, are real jobs and those undertaking them are employees who earn a wage, unlike participants in HE who are students and treated as such by the benefits system. Although apprentices generally spend a fifth of their time in training, it is part of the minimum wage regulations that they are paid while undertaking that training, so I cannot share the suggestion of the noble Lord, Lord Watson, that the training equates to being in HE. They are still being paid.

Consequently, our focus continues to be on ensuring that there are incentives for employers to recruit care leavers as apprentices. An additional £1,000 is paid to employers who take on a care leaver as an apprentice, as well as their training providers. Furthermore, the funding system ensures that, for all care leavers aged under 25, the full training costs related to undertaking an apprenticeship are met by the Government in recognition of their particular vulnerabilities.

I hope that I have provided sufficient reassurance that reflects that apprenticeships are real jobs, pay a wage that is more than sufficient to offset any household income reductions through the loss of child benefit, and are funded to ensure accessibility for care leavers.

Amendments 14, 15A to 15C and 16 concern the protection of students at independent training providers in the event of their closure. I am sympathetic to the intention behind these amendments that the interests of learners must be at the heart of the system.

Turning to the detail of Amendment 14, I think that it will be helpful also to consider Amendment 15, which would amend it. As currently drafted, Amendment 14 would apply only to further education bodies, which the Bill defines as further education corporations and specialist designated institutions in England and Wales, and sixth form colleges in England. Private providers would not fall under the scope of this amendment, although we need to consider that Amendments 15A to 15C would make this change so that private providers are within scope of the amendment.

As noble Lords will be aware, the main purpose of this part of the Bill is the introduction of a special administration regime which will prioritise the needs of learners. It places an overriding obligation on the education administrator to take the action that best avoids or minimises disruption to the studies of existing learners. This will apply to all students—fee paying as well as non-fee paying. The special objective focuses, rightly, on giving learners the opportunity to continue and complete their studies having set out on their journey to gain new skills or qualifications. That is what individuals will be most concerned to achieve rather than the repayment of any money for which they have not received provision.

Of course, fee-paying students typically pay for their courses in stages, as they do via advanced learner loans, and quite often in arrears, so it is likely that the student will not be significantly—if at all—out of pocket. But, through the special objective, the education administrator will be working to identify opportunities for learners to complete their studies, whether by rescuing the college or transferring the individual to another provider, meaning that the learner can continue on their study path.

We know that noble Lords are interested in the idea of a fund or guarantee to support students in the event of private provider failure, especially where they have paid money in advance. Following recent cases highlighted in the press. I will now say a little about what we are doing to provide support for those affected. Our priority is to support learners whose providers have ceased trading. I want to make it clear that we will take every step we can to ensure that learners are given the opportunity to complete their studies, be that with their current provider if possible or with another provider. In the rare cases where providers fail, the Skills Funding Agency and the Student Loans Company work together to identify solutions for any individuals affected. They make direct contact with learners to inform them of the help they will get. I am happy to say that this is already current practice and is an integral part of the contractual arrangements between the funding agency and the provider. There are many cases where those learners who are affected are successfully transferred to alternative providers.

Students’ new providers may receive funding to deal with necessary administrative costs relating to transferred learners to ensure that they are not out of pocket. We have taken further action to protect learners due to recent cases of private providers going into liquidation. For those who have not completed their course, and while we work to make transfers happen, they will not be required to start repaying their loans during the 2017-18 tax year.

I shall now look at the detail of Amendment 16. I believe, as a number of noble Lords have said, that we should approach the regulation of independent private training providers with caution. These are mostly private profit companies and, unlike the further education bodies which are the subject of this part of the Bill, they are not part of the statutory FE sector and are created by their promoters and owners with no hand from government. They are not subject to the same intervention arrangements as the statutory sector. Furthermore, while they may receive state funding, that funding does not have the same breadth of purpose as the funding for the statutory sector and is paid on a different basis. In particular, the funding is contractual and normally paid in instalments linked to attendance, which limits the financial risk which this amendment is seeking to address.

There are around 400 private providers, of which the vast majority are financially sustainable. I am delighted to join with the noble Lord, Lord Storey, in his comment that many of them provide very good quality education.

Providers must be listed on the SFA’s register of training organisations to receive advanced learner loans funding, while successful approval includes due diligence to assess providers’ capacity to deliver contracts to the required standard and to determine whether they are financially robust. Providers delivering only loan-funded provision must have a financial health assessment rated as good or outstanding. Once on the register, the SFA closely monitors providers’ financial health and achievement rates, with providers having to comply with robust funding and performance rules.

However, I accept that there could be rare cases where a private provider fails and students suffer as a result. Although learners choose their private provider as consumers, “buyer beware” may be thought an unduly harsh response to that predicament. That is the concern which noble Lords are seeking to address through this amendment. I understand the concern, but at the moment I am not convinced that the imposition of significant new regulation on a fully private part of the sector is either a necessary or proportionate response to it.

As far as I am aware, a banking or insurance market for the guarantees referred to in the amendment does not exist and would have to be developed. We do not know whether and how fast this might happen, or at what cost. However, much more significantly, the nature of this sort of financial protection is that it puts a burden on the vast majority of healthy providers, where it is not needed, as well as on those few where it is. In aggregate terms, it would mean substantial sums of money, much of it originally public money, moving from the education sector to the insurance and financial sector, which is not necessarily what the taxpayer would want for the sake of a safety net in very rare cases of failure. Moreover, as the noble Lord, Lord Aberdare, said, it would lead inevitably to an increase in the cost of these courses.

Private providers and their representatives will also have views on this of course, and there has not been the opportunity to seek them or reflect on these matters since the amendment was laid, so we are by no means ready to accept that legislation is an appropriate response to the risk that noble Lords have helpfully highlighted. However, I would be delighted to discuss this matter further with the noble Lord, Lord Storey. We are looking into this carefully, but we need to take proper time to consider our policy response, which may not require legislation.

I will now discuss Amendment 20. I am grateful to the noble Lords, Lord Watson and Lord Hunt, for this amendment. I understand their concerns, but I hope that I can reassure them that this amendment is not necessary. The Government are doubling investment in apprenticeships because we know that they provide employers with the skills they need to grow their businesses and benefit the economy. Through the funds raised by the apprenticeship levy, we will be able to invest twice what was spent in 2010-11 in apprenticeships by 2019-20.

The institute’s responsibilities include ensuring that the quality of apprenticeships available to employers reflects employer needs and the Government’s priority for apprenticeships to be a high-quality programme. It will need to work closely with the Department for Education, employers and other stakeholders to make that happen. Its responsibilities also include advising on the pricing of apprenticeship standards to ensure that government funding supports the delivery of high-quality training. The institute will work with employers and providers to understand the cost and value of apprenticeships to inform their advice. The institute does not have responsibility for the apprenticeship budget or how much of it is spent. This resides with the Secretary of State for Education and her department’s agencies.

The Government are fully committed to comprehensive investment in apprenticeships. The apprenticeships budget is set at the spending review. That provides certainty on the forward spending profile for the duration of the Parliament, as well as ensuring affordability of the programme and that the taxpayer receives value for money.

Tying a commitment on spending explicitly to the levy receipts could mean adverse funding consequences for the programme as a whole. The 2016 Autumn Statement revised down the projections for income from the apprenticeship levy over the next five years, but this does not impact on the agreed budget that the department already has as part of the spending review settlement. For example, the provisional budget for spending on apprenticeships in 2019-20 for England and the devolved Administrations totals in excess of £2.9 billion, versus the projected levy income of £2.8 billion. Having certainty over the funding for apprenticeship training is preferable to directly linking the funding on a year-by-year basis to the wider performance of the economy. As described earlier, levels of spending will be determined by the choices that employers make.

I hope that noble Lords feel reassured enough by my responses to these amendments not to press them.

[Lord Watson of Invergowrie]

My Lords, I thank the Minister for his response and all noble Lords who have participated in this debate. On the three amendments that carry my name—our amendments to Amendment 14, in the name of the noble Lord, Lord Storey—the Minister said that we will have an opportunity to consider that further. That is to be welcomed.

On Amendment 20, I feel the Minister rather overegged the pudding. I said that I do not think the levy will be undersubscribed or short of applications. He seemed to be saying that this would depend on monetary fluctuations. The fluctuation that would concern me would be, if not enough applications for the fund came forward, what would then happen to any so-called surplus that would remain? I am not unhappy with his response. I am optimistic that the levy will be fully taken up.

I am not so optimistic about the Minister’s comments on Amendment 1 and apprentices being described as approved learners, as I think they should be. He mentioned apprentices as being employed and receiving—or at least being entitled to receive—the national minimum wage of £3.50, but that is the figure that will apply next month. For any other worker aged up to 18 the rate will be £4.05; for those aged between 18 and 20 it will be £5.60. Despite that very low level, apprentices are paid less than their peers who, for whatever reason, are not in apprenticeships but are working. I do not think that argument carries a great deal of weight.

The Minister also said that he is not willing to support extending the higher education bursary of £2,000 for apprentices to those leaving care. Surely any barriers to young people taking up apprenticeships should be removed or at the very least mitigated. On those two issues, the Minister did not show any willingness to do so. He said there were sufficient safeguards to ensure that apprentices and their families do not lose out by dint of the young person taking up an apprenticeship. That is palpably not the case. Further education colleges have already drawn to the attention of the Association of Colleges a number of cases of would-be apprentices being dissuaded from applying for—or, having applied for, then taking up—an apprenticeship when the financial consequences become clear. That is through pressures within their families. Whatever the rates in place, there are not sufficient safeguards. That deters some young people from taking up apprenticeships. That they are not regarded as approved learners is surely a glaring loophole which the Government must at some stage move to close.

I regret that the Minister has demonstrated no willingness even to acknowledge that there is an issue, far less a willingness to find a means of resolving it. We regard that as unsatisfactory. For that reason, I wish to the test the opinion of the House on Amendment 1.

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[Lord Nash]

My Lords, I am grateful to the noble Lords and the noble Baroness for the amendments on reporting issues for the institute. I start by discussing Amendment 2, tabled by the noble Lords, Lord Watson and Lord Hunt. Being able to assess how well the apprenticeship reform programme is achieving outcomes is of course essential. We need to know whether those undertaking apprenticeships or technical education qualifications are receiving the benefits that we would expect them to receive. To be able to do that, we obviously need the right information to help us make such an assessment. How the institute reports on its work is a topic that we discussed in Committee, but I remain convinced that the provisions already in the Bill are the right ones and that they are sufficient. I am sorry to disappoint the noble Lord, Lord Watson, but I therefore still do not believe that an amendment to the Bill is necessary to achieve that objective.

As I have said, the amendment was discussed in Committee and on Report in the other place, and in Committee in this place, and both the Minister of State for Apprenticeships and Skills and I have given sound justification for why it is not necessary. The institute will be required to report on its activities annually under the Enterprise Act 2016, and the report must be placed before Parliament. This will include information on how the institute has responded to the statutory guidance. In addition, the Enterprise Act includes provisions enabling the Secretary of State to request information from the institute on any topic.

The information set out in the amendment is already collected and published by the Secretary of State on the performance of the FE sector, which includes apprenticeships. In order to inform its activities, we would expect the institute to make good use of these data in its annual report when it assesses its performance and impact each year. Indeed, the shadow institute has explained in its draft operational plan that it,

“will make more use of learner, employer and wider economy outcome data when reviewing the success of standards”.

The institute’s core role is to oversee and quality-assure the development of standards and assessment plans for use in delivering apprenticeships and, we expect, from April next year, college-based technical education. Much of the information that the amendment proposes that the institute provide goes well beyond what is in scope of its remit. It would therefore be inappropriate for the institute to be asked to provide this type of information, and an unnecessary duplication of effort, given that this information is already collected and published by the Secretary of State. It is right that the Government collect and monitor that information, but where it falls outside the remit of the institute, it cannot reasonably be expected to provide it.

I turn to Amendment 3. Improving social mobility is integral to our apprenticeship reforms. The Institute for Apprenticeships is supporting this by helping to create a ladder of opportunity based on quality apprenticeships for people across the country. This ladder will ensure that, no matter where you are born or who your parents are, if you work hard and apply yourself, you can get ahead, succeed and shape your own destiny.

To support this aim it is of course critical that reporting measures are in place to enable us to assess how well the programme is achieving positive outcomes for a range of groups, including young people. I agree therefore with the spirit of the amendment, which proposes that such information is monitored, measured and reviewed regularly. However, I believe this amendment is unnecessary to achieve that.

We want an education system that works for everyone and drives social mobility by breaking the link between a person’s background and where they get to in life. Our defining challenge is to level up opportunity.

On 18 January, the Secretary of State for Education set out her three priorities: tackling geographic disadvantage; investing in long-term capacity in the system; and making sure that our education system as a whole really prepares young people and adults for career success. That is why the Government are delivering more good school places, making school funding fairer, strengthening the teaching profession, investing in improving careers education, transforming technical education and apprenticeships and opening up access to our world-class higher education system.

The Department for Education already publishes a range of data on apprenticeships through a number of reports broken down by starts, achievements, sector subject area, framework and standard, geography, gender, age, ethnicity and other diversity and disadvantage markers. These data are published as national statistics by the department and intended to provide transparency.

It would be more appropriate for the head of profession in the department to consider how and where breakdowns of disadvantage for apprenticeships data are published, in accordance with the code of practice for statistics set by the National Statistician. Additionally, the department is considering publishing new data and measures required to support the Secretary of State’s three priorities. The department is committed to publishing disadvantage measures such as the pupil premium, but needs to be free to find the most appropriate for each age group, programme and purpose.

Data are already helping our work to improve social mobility. For example, we know that 10.5% of those starting an apprenticeship in 2015-16 were from a black and minority background, and we have set an ambitious target to increase the apprenticeships started by people from BAME backgrounds by 20% by 2010. In addition, the department publishes 16-to-18 performance tables that cover classroom-based provision within schools and colleges. The 2016 performance tables were reformed to report five headline measures for students taking A-levels and vocational qualifications at a similar level. Further reforms are planned for 2017 performance tables. This includes extending the performance tables to include outcomes for students still studying at GCSE level and reporting outcomes for disadvantaged students, the definition of which is those who were in receipt of pupil premium funding in year 11. This will have the effect of linking key stage 4 pupil premium information with 16-to-19 outcomes. In 2018-19, we will include only GCSE-level equivalent qualifications that are on the technical certificates list.

The institute has been given a clearly defined role, in which it will be responsible for setting quality criteria for the development of apprenticeship standards and assessment plans—reviewing, approving or rejecting them; advising on the maximum level of government funding available for standards; and quality assuring some end-point assessments. While we expect data to be at the heart of the institute’s operations, the collection and publication of the data in this amendment goes beyond that remit and would create an undue burden on the institute, preventing it from carrying out the range of its other duties effectively.

I am grateful to the noble Baroness, Lady Garden, and the noble Lords, Lord Storey and Lord Lucas, for tabling Amendment 21. I completely agree with the spirit of the amendment, but there are already measures within the Bill that require the institute to monitor, measure, review and report on performance on a regular basis. I hope that after I have explained this further, the noble Lords and the noble Baroness will feel able not to press the amendment.

The institute will be a sustainable and long-term governance body that will support employers, individuals and others and will, among other things, uphold the quality of standards. I am grateful to my noble friend Lord Baker for his comments on the strength of the board and its governance. Although the institute will have wide-ranging autonomy across its operational brief, and will be able to carry out its functions in relation to apprenticeships independently, the Secretary of State will retain strategic oversight of the reformed technical education system and will be able to give directions and statutory guidance where appropriate. Of particular relevance to this amendment, the Secretary of State may direct the institute to prepare and send to the Secretary of State, as soon as reasonably practicable, a report on any matter relating to its functions. It may be in that context that the idea to which my noble friend Lord Baker referred, of a letter, would be most appropriate.

The institute will be required to report on its activities annually under amendments made under the Enterprise Act 2016, and that report must be placed before Parliament. This will include information on how the institute has responded to the strategic guidance provided to it by the Secretary of State. While the institute will collect and report on relevant data and information, the Secretary of State will also continue to collect and publish a range of data on the performance of the FE sector, including apprenticeships. We would expect that, to inform its activities, the institute would make good use of those data when it assesses its performance and impact each year, and compiles its annual report. The Enterprise Act has made amendments that also include provisions enabling the Secretary of State to request information from the institute on any other topic that she deems appropriate in relation to their functions in relation to apprenticeships. Through this Bill, those provisions extend to technical education.

Therefore, although ultimately the Secretary of State will retain sufficient powers to ensure that government retains overall control in relation to technical education and will provide strategic guidance in respect of both apprenticeships and technical education, we would expect that, in the exercise of its functions, the institute would assess its performance and take action to address any issues identified. I am confident that, with the governance that it has managed to line up, that should happen.

I hope that noble Lords and the noble Baroness will feel reassured enough on the basis that I have explained not to press their amendments.

[Lord Watson of Invergowrie]

I thank the Minister for his comprehensive reply—almost half the debate on this group of amendments was from his lips—which in some ways was not unencouraging. I welcome the contributions of two former Secretaries of State for Education, which are always informative. Although my noble friend Lady Morris was very supportive, the noble Lord, Lord Baker, was supportive only up to a point. He said that he did not believe this needed to be on the face of the Bill, but welcomed what Amendment 2 seeks to achieve. I noted that the Minister said it was likely that the request by the noble Lord, Lord Baker, for a letter from the Secretary of State would be taken up, and that is to be welcomed.

I also welcome the supportive contributions of the noble Baroness, Lady Garden, and the noble Lord, Lord Lucas. We are trying to make the point—expressed strongly by my noble friend Lady Morris—that the institute is just being established and needs to build its reputation. One way it will do that is by being as open and transparent as possible. The Minister said that collecting the information mentioned in Amendments 2 and 3 would be an undue burden. However, Amendment 3 provides only for the institute to ask the department for information which it already holds, which is not particularly burdensome.

The transparency mentioned in Amendment 2 is important because it will build confidence, as my noble friend Lady Morris said. Many employers and training providers—all further education colleges—as well as putative apprentices, are looking to the institute to raise the quality of apprenticeships. Why not demonstrate that as effectively as possible by both assembling and publishing the information mentioned in Amendment 2? The Minister said that the activities of the institute will be monitored, measured and reviewed but not reported on in the detail we have asked for. The Department for Education will have the information but apparently it does not want to give it to the institute to publish in its reports, which seems slightly odd.

Nevertheless, the Minister said quite a lot. I need to read his words in Hansard but he seemed to be mentioning quite a lot of benefit which will be seized on by those in the sector who have a genuine desire to make the Institute for Apprenticeships successful—to get it off to a good start and then build from there. There was certainly some positive input from the Minister, which I welcome. On that basis, I beg leave to withdraw the amendment.

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[Lord Watson of Invergowrie]

My Lords, I thank my noble friend Lord Young for moving this amendment, which I am happy to support. In broad terms, we believe that the recommendations of the Sainsbury review should be fully implemented and funded. In the short term, there are three clear funding needs from the skills plan: fair funding for colleges; costs associated with finding and managing work placements, because they involve an individualised service to young people and employers rather than education to a group; and the cost of the transition year. A two-year full-time course would be the standard model under the plan, but with the expectation that some school leavers would need to take an additional transition year. This implies a full-time three-year programme. The current 16-to-18 funding system assumes a full two years and then administers a 17.5% cut in the third year. A sensible step, therefore, would be to maintain the full rate for three years for those students taking the transition year.

In his letter to noble Lords dated 22 February, the noble Lord, Lord Nash, stated that there are currently around 3,500 vocational qualifications. Most professionals in the sector have cited a figure of more than three times that amount, but more important is how the transition to the new regime is managed and funded. The Minister also said in his letter that the reforms would be phased in progressively, with the first routes available for delivery from September 2019. That apart, the transition was not set out and the amendment in the name of my noble friend Lord Young would enable that to happen. It would be a positive move and we believe that it is incumbent on the Minister to commit to it by accepting this modest amendment.

[Lord Nash]

My Lords, I am grateful to the noble Lords, Lord Watson and Lord Young, for tabling this amendment. I fully understand their concerns and hope that I might be able to provide an explanation that will put their minds at rest. I was grateful to the noble Lord, Lord Young of Norwood Green, for his kind comments about our branding as T-levels.

We know that colleges, students and awarding organisations will need to know in good time the arrangements for existing qualifications as the new qualifications are introduced. As the noble Lord, Lord Watson, has just said, we plan for the first new technical routes to be introduced in autumn 2019, with the full range of programmes coming on stream soon after. Additional hours will be available for the new programmes as they become available and we will announce further details in due course following further engagement with employers, colleges and other key stakeholders.

In implementing the reforms, the Government will consider in consultation with the institute how best to manage the transition from legacy qualifications to new technical qualifications approved by the institute and intend to involve stakeholders and set out plans for this in due course.

Given that the new technical education routes will be subject to phased introduction, it would not be sensible or appropriate to commit to a fixed timescale for publishing detailed proposals for transition. I reassure the noble Lords, however, that once the institute has approved a new qualification, the Department for Education will consider future funding for the current, similar qualifications on a case-by-case basis. We will not withdraw funding for a student who is part way through their course. I therefore hope that the noble Lords, Lord Watson and Lord Young, will be sufficiently reassured to consider not pressing their amendment.

[Lord Young of Norwood Green]

I listened carefully to what the Minister said but am not sure that it entirely dealt with the transition process. Maybe I did not quite grasp what he said. I understand his point: I fixed upon a period of time that I thought would be sufficient for him to be able to describe to the various stakeholders how this would happen. Telling them at the end, “We’ve identified this particular new qualification”, seems a bit late in the day. It still does not seem to give the kind of reassurance that people would want: “This is the process we are to go through, how we will carry it out and how we will manage during the transition period”. I am not particularly fussed about the timing—I had to put something in there—but I am concerned about the detail of the transition process and a more detailed response would be welcome. Perhaps we will have an opportunity before Third Reading to meet again and get a more detailed assurance. In the meantime, I beg leave to withdraw the amendment.

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[Lord Young of Norwood Green]

My Lords, if you want to change attitudes in schools and colleges, one of the most powerful influences you can have is to send in their peer groups to talk to them. I met a young woman today who had taken a degree in mechanical engineering. It was interesting talking to her about what her influences had been in taking that decision. More importantly for me, when I asked her whether she was going back into schools and colleges to talk to young people about what a successful career they could establish in engineering, the answer was a very clear affirmative.

When Ofsted is carrying out an inspection, I hope it will take into account the general approach of the school. It is not just about formal careers advice, as has already been stated, but about whether they have an open mind. I take my noble friend Lady Morris’s point about the quality of speakers; obviously you want someone who can engage in a positive way. But I hope that when Ofsted looks at schools and colleges it is taking into account the links with business, business people and people who have successfully completed their apprenticeships coming into schools, and the role of women in subjects like engineering, STEM and construction in changing attitudes and making young people, and especially young women, aware that there is a wide variety of careers open to them with lots of well-rewarded career paths. That is an essential part of any careers advice.

[Lord Nash]

My Lords, I thank noble Lords for tabling the amendments, which relate to careers. I have to say I am still struggling with the concept of the noble Lord, Lord Watson, being the meat in anyone’s sandwich. He is a pretty tough piece of meat, based on my experience of sitting opposite him at the Dispatch Box. That is meant as a compliment, actually.

On Amendment 8, tabled by my noble friend Lord Lucas, Clause 2 requires schools to ensure that there is an opportunity for a range of education and training providers to talk directly to pupils about the technical education qualifications and apprenticeships that they offer. The amendment is intended to ensure that such access is extended to people who represent groups of providers, such as women in construction or manufacturing. I remember attending an event held for women in manufacturing in your Lordships’ House a few years ago. I agree that we need a degree of flexibility so that pupils hear from the person best placed to inform them about the opportunities on offer. I recognise that in some cases that may not be the provider itself but perhaps it could be an ambassador, an employer or a member of a trade association or representative body, speaking on behalf of a number of small providers.

We will publish statutory guidance that will set out more detail and make it clear that we do not wish to impose unnecessary constraints. We are placing the onus on the school to develop their own arrangements for provider access, including agreeing with providers who will attend to talk to pupils. Clause 2, both as drafted and as we intend to clarify in underpinning statutory guidance, already provides for persons acting on behalf of a number of providers to access pupils. To get really technical and legal for a moment, I queried this in terms of statutory interpretation. The legal authority for our decision to resist the amendments is found on page 1019 of Bennion on Statutory Interpretation:

“Where an enactment refers to a person it is usually taken as intended to include that person’s agent authorised either expressly or by implication”.


The earliest legal authority on this is R v Symington (1895) 4BCR 323. It follows that the words “on behalf of” in the statute would not be needed to allow a person to act on behalf of providers.

Turning to the very good point made by the noble Baroness, Lady Morris, regarding the amendment from my noble friend Lord Baker, it is certainly clear to me, and my officials have confirmed this, that the obligation on the school is to ensure that there is an opportunity for a range of education and training providers to access pupils, that they must prepare a policy statement and that that statement must include, for example, grounds for granting and refusing requests for access. Obviously it must be at the discretion of the head; if he feels that the people coming along are, frankly, not of quality and are not going to give their pupils the right advice, then it must be within the head’s remit to refuse access, provided that he is providing a range of education and training providers and has some other alternative that is better.

Amendment 9 is also in the name of my noble friend Lord Lucas. It is intended to ensure that the policy statement produced by every school will set out the circumstances in which both providers and persons acting on their behalf will be given access to pupils. The current provisions already allow for such persons to talk to pupils. As I said, we will publish statutory guidance which makes this degree of flexibility explicitly clear: the onus is on schools to liaise with providers to agree who is best placed to talk to them.

Turning to Amendment 17, which deals in more detail with Ofsted and careers advice, careers advice is a vital part of the role that every school and college must play in preparing students for the workplace. I agree entirely with the noble Lord, Lord Storey, that careers advice should start in primary school. Primary Futures does excellent work in this regard. I also agree with the noble Lord, Lord Aberdare, that the Careers & Enterprise Company, in which we are investing considerable money—£90 million—has made an excellent start.

However, the quality of the careers offer is considered carefully by Ofsted when conducting standard inspections of FE colleges. Therefore, the amendment is unnecessary. Matters relating to careers provision feature in all four graded judgements made by Ofsted inspectors. First, in judging leadership and management, inspectors take account of the extent to which learners receive thorough and impartial careers guidance to enable them to make informed choices about their current learning and future career plans. Secondly, in judging the quality of teaching, learning and assessment, inspectors consider how far learners are supported to develop their employability skills, including appropriate attitudes and behaviour for work. Thirdly, in judging students’ personal development, behaviour and welfare, inspectors consider how learners benefit from purposeful work-related learning, including external work experience. Finally, in judging outcomes, inspectors consider information about students’ destinations and the acquisition of the qualifications, skills and knowledge that will help them to progress.

Ofsted also evaluates the education and training provision offered by the college, including 16 to 19 study programmes, apprenticeships and traineeships. In making these judgments, inspectors consider the extent to which each type of provision offers tailored careers advice and work experience opportunities to students and develops their employability skills. Noble Lords made some good points about Ofsted’s approach to that, and I will certainly discuss that further with Ofsted shortly. However, I hope that what I have said about its obligation framework reassures my noble friend that colleges are held to account properly for the quality of their careers provision and that he will be able to withdraw the amendment.

[Lord Lucas]

My Lords, I am very grateful to my noble friend for his short CPD session, which I hope I shall manage to remember and will rehearse later in Hansard. Given that, I beg leave to withdraw the amendment.

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[Lord Nash]

My Lords, I am grateful for these amendments. I have made it clear that our priority in introducing the special administration regime is to ensure that the interests of students are safeguarded as far as possible. That is the purpose of the special objective, which places an overriding obligation on the education administrator to take the action that best avoids or minimises disruption to the studies of existing students. I am pleased that noble Lords recognise, and share, that objective.

I understand the noble Lord’s concern about the drafting of subsection (2), that the inclusion of the words “if possible” may be considered to cast doubt on the special objective. As he indicated, I can assure noble Lords that is not our intention. I have reflected on the noble Lord’s amendment. The regime that we are introducing is one which places students at the heart of further education, but does not demand that the education administrator achieves the impossible; nor does it disregard the interests of creditors. The words “if possible” in Clause 24(2) were intended to clarify this position, but I understand the noble Lord’s concerns that they might have the opposite effect. Let me be clear that our position remains unchanged and I am satisfied, on the advice of my lawyers, that their deletion would have no substantive effect on the application of the regime. I am therefore delighted to accept the amendment.

As for the noble Lord’s kind offer not to move Amendments 11, 12 and 13, I am delighted that he has been reassured by the letter from my noble friend Lady Vere. I assure him that the normal insolvency procedures would be followed and that there is no intention to disrupt those, apart from the overriding special objective.

Amendment 10 agreed.

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[Lord Hunt of Kings Heath (Lab)]

My Lords, we had a very interesting debate in Committee about the role of clerks in FE institutions. It is clear from our debates on the Bill that these institutions face many challenges. We have agreed that it is important to have the highest quality of people appointed to their governing bodies and that clerks can be very helpful in giving advice to them. The Minister said he would give some consideration to this and I look forward to his response. I beg to move.

[Lord Nash]

My Lords, I welcome the opportunity to continue our discussion in Committee, about the importance of good governance in FE colleges, to which the noble Lord, Lord Hunt, has referred. As I said in our earlier discussion, I fully recognise the important role played by clerks as expert advisers to governing bodies of FE institutions. As the Minister responsible for governance in schools, I have made it a priority to improve this vital area, including the important role of clerks. However, we believe that it is essentially a matter of improving practice, not legislative change, for reasons that I will outline.

We are supporting the role of clerks through development programmes run by the Education and Training Foundation. The noble Lord will also have received a copy of a letter from the Association of Colleges setting out some of the steps it is taking to strengthen governance. Hard copies of that letter are available for noble Lords today, should they wish to see it. I note from the letter that the AoC is currently undertaking a review of the existing code of practice on governance, to which many colleges adhere. I will be meeting it shortly to hear what further action it intends to take. There is clearly a strong and shared aspiration across this House for strengthening governance. The sector is keen to engage and it is only right for others, including government, to take up that invitation, and to offer the right combination of challenge and support. While legislation might appear attractive, it should not be something that is reached for without good evidence as to the nature of any problems, and full consideration of the most appropriate solutions. In an area as complex as governance, simple legislative approaches are unlikely to be effective in delivering real improvement.

The effect of the noble Lord’s amendment would be to reinstate one element of model articles for colleges that applied prior to the Education Act 2011. That would deliberately limit the freedom that colleges currently have in respect of the contents of their instrument and articles, by requiring them to retain provision in those articles regarding the role of the clerk. I have significant doubts about the efficacy of such an approach. A recent sample of the contents of the instrument and articles of 10 colleges, carried out by my officials, found that in every case the relevant documents already contained a provision similar or identical to that proposed in the amendment. If that sample is representative of the sector as a whole then it would suggest that the amendment will have no substantive effect—certainly not in terms of delivering the improvement to standards of governance which I believe is the noble Lord’s intention—particularly as all 10 colleges in the sample had been subject to intervention by the Further Education Commissioner. In many cases, the commissioner found significant failures of governance. Although I will not read out the relevant sections from the commissioner’s reports, which are published on GOV.UK, there is more than one instance of unsatisfactory clerking arrangements being a significant contributory factor. Those failures occurred despite the role of the clerk being set out in the instrument and articles.

This evidence strengthens the argument that setting out the role of the clerk in the instrument and articles, as would be required by the amendment, is by no means a guarantee of good governance in practice. Nor, unfortunately, is it an effective protection against poor governance. Our focus has to be on good practice in governance, and what more we can do to share good practice, not introducing additional box-ticking measures.

In conclusion, I stress that strengthening governance clearly remains a priority for the sector and for the Government and we will continue to drive this. In the small number of cases where there are significant failures in governance, we will continue to intervene swiftly and effectively to ensure that governing bodies are held to account, and that lessons are learned. We must continue to drive up the performance of all governing bodies. This approach strikes the right balance in helping to ensure a robust and well-governed sector that is in the best position to deliver its important mission for learners, employers, and the community. For these reasons, I believe that greater statutory prescription, as set out in the amendment, is unfortunately unlikely to be effective in achieving those goals. I therefore urge the noble Lord to withdraw the amendment.

[Lord Hunt of Kings Heath]

My Lords, as the Minister mentioned the ETF, I remind the House of my declaration that my wife is a consultant to it. I am grateful to the Minister, particularly because he is going to meet the AoC to discuss the outcome of its review. I accept that good practice is probably the best way forward. However, I hope the Government will keep up the pressure on the AoC and colleges to ensure that they employ good people who can provide robust advice. Having said that, I beg leave to withdraw the amendment.

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[Lord Nash]

My Lords, I am grateful to my noble friend Lord Lucas for this amendment, the effect of which would be to require each group of persons who develop a standard to consider whether an existing qualification ought to be included within it. Occupational standards will form the basis of both apprenticeships and technical education qualifications, and need to be suitable for each of them. The standard should include the knowledge, skills and behaviours needed to form the basis of either an apprenticeship or a technical education qualification. Including existing qualifications in addition to the knowledge, skills and behaviours would cause complications when technical education qualifications are being developed using the standard.

One of the core principles of the apprenticeship reforms is to move away from qualifications. Under the framework model, apprentices collect a number of small, often low-quality, qualifications throughout their apprenticeship which often do not give employers much reassurance about apprentices’ ability to do the job. By moving to a single end-point assessment, the apprentice will be tested on the knowledge, skills and behaviours set out in the standard and their occupational competence to do the whole job, not just a small section of it.

This amendment does not require the inclusion of qualifications in standards but it is moving the approach back towards the system that we are moving away from. Although it is no doubt something that the awarding bodies would welcome, it could actively encourage employer groups to include qualifications where they may otherwise not have done so. That is likely to be contrary to the Government’s strategic guidance for the institute. However, I can reassure my noble friend and the House that in occupations where there is a qualification that is needed for an apprenticeship—for example, to achieve a professional status—they will not need to be prompted by this Bill to consider its inclusion in the standard, which is permissible as long as they meet set criteria for an exception. This is in line with the employer-led nature of the reforms. We therefore believe that this kind of direction is not needed in such a system. I hope that my noble friend will feel reassured enough on the basis of my explanation to withdraw this amendment.

[Lord Lucas]

My Lords, I am mostly comforted by my noble friend’s reference to employer-led matters. If that indicates that if employers want a qualification and fight hard enough they will get it, that seems to me satisfactory. Therefore, I beg leave to withdraw the amendment.

--- Later in debate ---

[Baroness Garden of Frognal]

My Lords, I beg to move Amendment 23 in my name and that of my noble friend Lord Storey. The Government have introduced a raft of reforms to the apprenticeship system which they hope will contribute to the quality as well as the quantity of apprenticeships. One of the biggest departures, and among the most contentious, is the move to end-point assessment—EPA—as the sole formally recognised method of assessing an apprentice’s competence to do the job they have trained for. I am grateful to SEMTA and to Professor Lorna Unwin and Professor Alison Fuller from the Institute of Education for their work in this area and pay tribute to their expertise.

If we take the example of engineering, employers have looked to continuous assessment over three or more years, with formal qualifications used as the mechanism through which they can both assess and ensure that the full range of skills and knowledge has been learned, and that apprentices’ attainment has met national standards and earned national recognition. In overseas countries where EPA is used, it tends to be used in conjunction with other assessment and formal accreditation practices, with the assessment of skills taking place over the whole lifetime of the apprenticeship as well as in a summative form at the end of the programme and through formal qualifications. It is important that the assessment methodology is appropriate and is encouraging to the apprentice. Young people need to gain confidence as they learn that their skills are being recognised. The best way to do this is through continuous assessment. I hope that the Minister will be able to confirm that EPA will not be the only assessment used and that learners will be assessed continuously to ensure that they reach their potential and help to plug the yawning skills gap in the country. I beg to move.

[Lord Nash]

My Lords, I welcome the opportunity to discuss Amendment 23, tabled by the noble Baroness, Lady Garden, and the noble Lord, Lord Storey, which would require all apprenticeship assessment plans to include continuous assessment.

Reviewing the role of continuous assessment in apprenticeships has been a very important part of the apprenticeship reforms following the 2012 Richard review of apprenticeships. It concluded that continuous assessment throughout an apprenticeship tested only incremental progress, not whether the apprentice is fully competent at the time of completing their apprenticeship. This approach also undermines our principle of ensuring that assessment is delivered by an independent third party with nothing to gain from the outcome of the assessment. The continuous assessment model often means that the same individual trains and assesses an apprentice—a conflict of interest we have sought to avoid.

An important feature of approved English apprenticeship standards and plans is therefore the move away from this reliance on a series of small and pre-existing qualifications making up an apprenticeship, and the move instead towards a single, independent end-point assessment, which tests the apprentice in a holistic and robust way. This test at the end of the apprenticeship proves genuine employability by demonstrating that the apprentice has acquired the knowledge, skills and behaviours needed to be fully competent in their occupation. The requirements for the end-point assessment of each standard are developed by employer groups and approved by the institute to ensure that it meets the needs for that specific occupation. In view of this, I hope the noble Baroness feels reassured enough to withdraw her amendment.

[Baroness Garden of Frognal]

My Lords, I thank the Minister for his reply. He said that the same people will be testing and assessing but the likelihood is that that will be the employer, who will know the standards they wish the apprentice to reach. There is a place for end-point assessment, but it should not be the only way of assessing these skills. They are learned continuously and should be assessed continuously. However, I hear what the noble Lord says, and we need to keep this under review to make sure that we are not putting off a lot of people with practical skills, who find the end-point assessment a real barrier to learning and accreditation. Meanwhile, however, I beg leave to withdraw the amendment.

--- Later in debate ---

[Lord Hunt of Kings Heath]

There is no guarantee at all because the clerks are tight about what they will allow. The Government have to agree that they will allow us to bring it back. That is why I made the point.

[Lord Nash]

I should make it clear that if the noble Baroness and the noble Lord wish to test the temperature of the House, they should do so now.

[Baroness Garden of Frognal]

We were hoping that we could have a dialogue about this because these matters are key to the success of apprenticeships. But if that is the Minister’s approach, I beg leave to test the opinion of the House.

Technical and Further Education Bill

Lord Nash Excerpts

Report stage (Hansard - continued): House of Lords
Monday 27th March 2017 Lords Chamber

[Baroness Garden of Frognal (LD)]

My Lords, I fear that this may be something of an anti-climax after the previous excitement. Nevertheless, I wish to move Amendment 34 and speak also to Amendment 35. They have the support of the noble Lords, Lord Lucas and Lord Watson, and of my noble friend Lord Storey.

As we set out in Committee, there are quite a few questions to be asked about the institute’s power to issue technical education certificates. We understand that this will not be done by the institute but be delegated to the Skills Funding Agency. Either way, public time and money will be used to duplicate a function which is already well covered under existing systems.

This proposal was not set out in the skills plan. It potentially removes any continuing link between the awarding body and the qualification that it has produced. We are here attempting to clarify the relationship between the issuing of the proposed certificates and the qualification certificates issued by awarding organisations. Are the Government proposing to issue these “technical education certificates” alongside the awarding organisation’s certificate?

We heard earlier from the Minister that employers would pay for the certificate. It would be helpful to hear more about who makes the application. Does it come from the employer, from the training provider or from the awarding body? Is it automatically triggered by attainment of a qualification?

I do not think that we have had an assessment of the resources required by the institute, or the SFA, to authenticate, print and send out the 3 million apprenticeship certificates to meet the government target. Will the institute require the addresses of all the candidates or will they be sent to the employer or training provider to distribute?

There is a very simple solution. Government issuing of certificates is not common procedure at qualification level in any other area of the education and training system and would appear to bestow unnecessary cost, duplication and complexity on to whichever body is tasked with carrying it out. Would it not be simpler if the certificate issued by the awarding organisation also carried the logo of the institute or of the Department for Education? This has been common practice in the past, including with national vocational qualifications, and would have the benefit of adding government backing and status to a certificate already being validated, processed and issued.

I assure your Lordships that awarding bodies can produce some immensely impressive certificates to meet immensely impressive achievements. I hope that the amendment will be seen as positive and helpful. I beg to move.

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

My Lords, I am grateful to the noble Baroness, Lady Garden, and the noble Lord, Lord Lucas, for tabling these amendments. A fundamental reason for introducing the technical education reforms is to tackle the weakness in the current 16 to 19 education system caused by fragmentation and variation in the quality and value of the qualification certificates currently provided by many individual awarding organisations.

To address this, it is important that the technical education certificates are issued consistently by one entity under consistent branding so that they are recognised and understood by employers regardless of the qualification or where it was undertaken. The Bill makes provision for the Secretary of State to issue a technical education certificate to any person who has completed a technical education qualification and any other steps determined under new Section A2DB.

Those completing either an apprenticeship or a technical education course will receive a nationally awarded certificate from the Secretary of State. This will confirm that they obtained as many of the key skills and behaviours as the institute deems appropriate for a particular occupation. The technical education certificate will also recognise the other essential elements such as attainment in English and maths, completion of work placements and other route-specific qualifications. The certificate will demonstrate to employers that individuals obtained the knowledge, skills and behaviours necessary to undertake their chosen occupation. It will provide clarity for employers and support the portability and progression value of the qualifications.

As currently drafted, these amendments will allow the Secretary of State to use the DfE logo and standard wording on technical education certificates—which of course she may already do. It is also right that only the certificate should bear the department’s logo and standard wording. This will also ensure that certificates for technical education align as closely as possible with certificates for apprenticeships. However, this will not affect any arrangements that the institute entered into with an organisational consortium that is approved to deliver a technical education qualification. These arrangements are likely to include the use of their own logo or branding on any certificate that they issue in respect of that qualification.

We expect costs to be incurred in issuing the certificates. It is therefore right that the Secretary of State should be able to determine whether to charge for the first technical education certificate and a copy of it, and if so how much. This is consistent with the procedure already followed for charging for the issuing of apprenticeship certificates or supplying copies of them. Our reforms will ensure we operate a system for the future, providing a national offer that is recognised and understood by employers regardless of the qualification or where it is undertaken.

I hope that clarifies the situation for the noble Baroness. She made a point about how the institute will be aware of the addresses of recipients. That information will come via the awarding organisation to the institute. Students must apply to the Secretary of State for their certificate. If I have not answered all the points that the noble Baroness is concerned about, I am happy to discuss this with her further and to provide more information. In that spirit, I hope she will feel reassured to withdraw her amendment.

[Baroness Garden of Frognal]

I thank the Minister for his reply. I am slightly bemused because employers seem to understand very well the previous certificates that went out, with NVQ and awarding-body logos. There was not a particular confusion about the standards there. As I say, given that the awarding organisations already issue certificates, it would seem a much neater operation if it was combined into one certificate instead of having the confusion of two. I thank the noble Lord for his offer to have further discussion on this and meanwhile beg leave to withdraw the amendment.

Technical and Further Education Bill

Lord Nash Excerpts

3rd reading (Hansard): House of Lords
Tuesday 4th April 2017 Lords Chamber

Moved by

[Lord Nash]

That the Bill do now pass.

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

My Lords, before the Bill’s Third Reading draws to a close, I take this opportunity to thank all those involved for their interest in and engagement with the Bill over the past few months. There have been important contributions on the Bill from all sides of the House, and we have had very well-informed and thoughtful debates on a number of issues that are critical to ensuring the future health of our country’s technical and further education sectors. In particular, I thank noble Lords for their efforts to strengthen the areas covered by this legislation, which we will take forward when the Bill and its related policies are implemented. I very much hope that discussions continue with noble Lords about technical and further education. There is much work to be done in this area, so the expertise and wisdom of noble Lords is very welcome.

Yesterday, I met the noble Baronesses, Lady Garden and Lady Watkins, to discuss the failure of private providers and, in particular, the support given to learners affected. I thank them for discussing this issue with me. I also thank the noble Baroness, Lady Wolf, who was unable to attend but who has shared her thoughts with my officials. It is clear from our discussions that this is a matter requiring more detailed consideration before we take a view on what action is necessary. We are already taking steps to improve our monitoring of these providers. However, as I said yesterday, we will do further work to explore the scale of the issue and identify a proportionate response to ensure the right support is provided to learners in the rare instances of failure.

I am afraid there is not time to thank everyone who has been involved in the Bill during its passage through this House, but I would like to mention who I can. First, I thank my noble friends on the Government Benches, and in particular my noble friends Lady Vere and Lady Buscombe, who have provided strong support to the Bill. I also thank my noble friend Lord Baker, particularly for his amendment regarding careers advice in schools. I am grateful to my noble friend Lord Lucas for his in-depth engagement with the Bill, especially with respect to the issues of copyright and intellectual property. I pay tribute to my noble friend Lord Liverpool, whose thoughtful contributions included the important issue of the soft skills that young people need to thrive in the workplace.

I particularly thank the noble Lords, Lord Watson and Lord Storey, who have provided rigorous scrutiny and opposition alongside their colleagues the noble Lords, Lord Hunt and Lord Stevenson, and the noble Baroness, Lady Garden. I thank also the noble Baronesses, Lady Cohen, Lady Donaghy and Lady Morris, and the noble Lords, Lord Young of Norwood Green, Lord Blunkett and Lord Knight, for their thoughtful contributions. While we have disagreed on some issues, I believe we are in broad agreement about the importance of the Bill and all support its ambition to improve technical and further education.

I am grateful also to my friends on the Cross Benches for their thoughtful contributions, including the noble Lord, Lord Aberdare, the noble Earl, Lord Listowel, and the noble Baroness, Lady Watkins. In particular, I thank the noble Baroness, Lady Wolf, for her support on the Bill and her role in developing its underlying policy.

Finally, I thank policy officials and lawyers from the Department for Education and other government departments for their work on the Bill’s progress in this House.

It has been a privilege to debate this Bill with noble Lords. It will help pave the way for reforms to technical and further education. It will allow us to create a world-class technical education system that provides all young people with the opportunities they deserve, and let them secure sustained, skilled employment that serves the needs of our country, today and in the future. At the same time, the Bill’s further education insolvency regime will ensure that FE colleges are put on a secure financial footing in the long term. I commend the Bill to the House.

Technical and Further Education Bill

Lord Nash Excerpts

Ping Pong (Hansard): House of Lords
Tuesday 25th April 2017 Lords Chamber

Moved by

[Lord Nash]

That this House do not insist on its Amendment 1 to which the Commons have disagreed for their Reason 1A.

Commons Reason

1A: Because it would involve a charge on public funds, and the Commons do not offer any further Reason, trusting that this Reason may be deemed sufficient.

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

My Lords, this Bill is integral to the Government’s ambitious reforms for creating a world-class technical education system. These reforms will help to ensure that technical education in our country provides everyone with the skills and opportunities they need to succeed and gain skilled employment on a long-term basis, and at the same time they will serve the needs of our economy and reduce our skills gap. The Bill’s further education insolvency regime will also protect students at FE colleges in the event that their college faces financial difficulty.

I am very grateful for the interest and input from noble Lords across the House on the Bill, and in particular how they have helped strengthen the Bill and its related policy areas. It is quite clear that the Bill has strong cross-party support. I am glad that the Bill returns to this House for further debate on two amendments from the other place. I will deal with these amendments in turn. Given the volume of business we need to get through today, I will try to keep this brief, and I hope other noble Lords will join me in that endeavour.

Noble Lords will know that Lords Amendment 1 was rejected in the other place on the basis of financial privilege, and I request that this House respects the decision reached there. However, I would like to acknowledge the sentiment behind the amendment and to address some considerations. First, I understand that a drop in household benefits income and a shift of income from parents to a young person can be difficult to manage. However, we should give parents credit for supporting their children to enter apprenticeships and develop their own financial independence and long-term careers. The numbers testify to this: last year more than 200,000 young people under 19 were in apprenticeships.

Secondly, during the Bill’s passage, the Opposition compared the financial support available to full-time students and that available to apprentices, while giving very little attention to the matter of remuneration. Full-time students are forgoing employment and income opportunities to gain qualifications, often while paying to invest in their future. Apprenticeships are paid jobs, with high-quality free training. The 2016 apprenticeship pay survey showed that the average wage for all level 2 and 3 apprentices was £6.70 an hour. Apprentices are also increasing their future employment prospects and earnings: on average, level 2 and level 3 apprenticeships increase earnings in employment by 11% and 16% respectively.

Finally, we must target resources. The cost of the amendment is estimated at over £200 million per year by 2020. The benefits system quite rightly targets financial support towards greatest need, including for example dependants in low-income families. Benefits awards must take other sources of income into account. We also target funds carefully to support apprenticeships among key groups. We pay additional amounts to training providers in the most deprived areas. We also steer funding towards providers and employers for the youngest apprentices and for care leavers, as well as for those with learning difficulties and disabilities. As the new funding system beds in, we will continue to review how funding is targeted, including to support access to apprenticeship jobs for those from disadvantaged backgrounds.

Amendment 6A was tabled in the other place in lieu of an amendment tabled on Report by the noble Lords, Lord Storey and Lord Watson, and the noble Baroness, Lady Garden. The amendment proposes a new clause to the Bill which will require Ofsted to consider the quality of careers provision when conducting standard inspections of further education colleges. I am grateful to noble Lords and the noble Baroness for raising the issue of careers guidance in colleges and giving the Government the opportunity to consider this important matter further.

As the noble Lord, Lord Storey, explained so eloquently on Report, one of the most important things we need to do for young people is provide guidance and knowledge about careers. He rightly pointed out that this is particularly true for young people from disadvantaged backgrounds, who may not have access to networks of support to inform them about options and perhaps provide opportunities for them to do work experience. That is why it is vital that FE colleges—which take many students from areas of educational disadvantage—should make high-quality careers advice available to everyone.

Of course, there are a number of colleges already leading the way in this. Gateshead College embeds careers in all aspects of a student’s learning. JobLab provides dedicated support to help their students develop practical employment skills, and Career Coach provides labour-market data and maps out education, training and career options. I also recognise Ofsted’s commitment to evaluating the quality of careers advice and guidance in further education. Matters relating to careers provision feature in all four graded judgments that Ofsted makes when judging the overall effectiveness of a college. However, the Government are persuaded of the need to go further to ensure that young people can benefit from the best possible preparation for the workplace and acquire the skills and attributes that employers need. The amendment will send a clear signal that a high-calibre careers programme must be embedded in every college.

I hope I have reassured noble Lords that we agree wholeheartedly with the principle of the original Lords amendment. The drafting changes serve only to ensure that the amendment achieves its intended effect and that the language conforms to current legislation. The amendment now includes an explicit requirement for Ofsted to comment on the quality of the college’s careers provision in the inspection report.

I urge noble Lords to accept this amendment in lieu. It is our chance to ensure that all FE students can access the support they need to help them to achieve their full potential. As discussed earlier, I also ask noble Lords to respect the other place’s decision to reject Amendment 1 on the grounds of financial privilege. I beg to move.

[Lord Watson of Invergowrie (Lab)]

My Lords, I acknowledge that the Bill is a better one than when it began its progress through both Houses. We shall not seek to impede its journey to the statute book.

The addition of the amendment promoted by the noble Lord, Lord Baker, and others, represents an important step forward in ensuring that school pupils have explained to them the full range of options, not just those whose choice of an academic route might benefit the school’s coffers. It should not have been necessary for an amendment to be passed to secure that, because strong careers guidance is critical to promoting apprenticeships in schools. If the Government’s target for apprenticeship starts is to be achieved and sustained, as we all hope, then it is crucial that young people are alerted early enough in their school life to the importance and attraction of technical routes.

However, it is disappointing that the Government have not been willing to accept Amendment 1 passed by your Lordships on Report. The decision to exclude apprenticeships from the category of approved education or training will serve as a deterrent to some young people, particularly those from disadvantaged backgrounds. The Minister for Apprenticeships and Skills said last week:

“The crucial point is that the vast majority of level 2 and 3 apprentices are paid more than £6.30 an hour, and 90% of them go on to jobs or additional education afterwards”.—[Official Report, Commons, 19/4/17; col. 714.]


But that is not the crucial point; in fact, he has missed the point. At least 90% of university graduates go on to jobs or additional education, so there is no difference in that respect. And whether apprentices earn £3.50 an hour—the legal minimum, which, as I said on Report, not all of them get—or £6.50 an hour, their parents are still disqualified from receiving child benefit. That is the nub of the issue. Clearly, though, we have not been successful in convincing Ministers of that point.

It was interesting to read last week of the Minister for Apprenticeships and Skills, in defence of the Government’s position, coming up with a figure of some £200 million a year by 2020-21. So apprentices—the young people we need to train in order to fill the skills gaps that we know exist—are to be treated unfavourably compared to their peers who choose full-time study because of the cost. The Government can miraculously find £500 million to create new grammar schools yet cannot find £200 million to ensure that the number of apprentices from the poorest families rises from its current very low level of just 10%. If there is logic in that policy stance, it escapes me. The noble Baroness, Lady Buscombe, said in Committee that she would discuss this issue with ministerial colleagues in the DWP. By Report there had been no such meetings, and we learned from the debate in the other place last week that those meetings have still not taken place. So where did the £200 million figure appear from, if not the DWP?

In passing, I say to the Minister that I submitted a Written Question asking for the Government’s workings that produced the £200 million figure. As I understand that those Questions disappear on Dissolution, I ask him to write to me with the answer so that we can gain an understanding of the foundation on which the Government have erected the barrier to treating apprentices as “approved learners”.

On Amendment 6, initially I was dismayed that the Government were unwilling to accept the will of your Lordships’ House on careers advice in further education colleges, although that was perhaps not too surprising as the Minister told us on Report that it was not necessary. However, the Government’s amendment in lieu actually appears to be stronger than the original amendment. First, it goes further than further education colleges and refers to “FE institutions”, which of course covers all training providers on the register.

Secondly, the original amendment in the name of the noble Lord, Lord Storey, which your Lordships’ House voted for at Report, called on Ofsted to “take into account” the careers advice made available to students by colleges. Government Amendment 6A states that Ofsted must,

“comment on the careers guidance provided to relevant students at the institution”.

For that reason, I welcome Amendment 6A, as Ofsted will be obliged to be proactive in reporting what it discovers in FE colleges that it inspects. That is certainly to be welcomed, although it comes with the caveat that it will apply only to those colleges that Ofsted actually inspects. How many will be? Realistically, how many can it be?

At Report, I asked the Minister to give an assurance that Ofsted would be adequately resourced; I fear that he did not reply. Mr Marsden asked the same question of the Minister for Apprenticeships and Skills, and he did not reply, so perhaps the Minister can now tell noble Lords how many additional staff Ofsted will have to enable it to inspect as many training providers as possible out of the 2,000 likely to emerge. It cannot do that with its existing staff, and we have a right to know what additional resources Ofsted will receive to enable it to cope with large new demands. I look forward to his response on that. I suggest that he must have one because it is surely inconceivable that he and/or his officials have not met Amanda Spielman or her deputy, Paul Joyce, to discuss the resources that they will require as a direct result of the Bill.

We are now at the end of a process that has produced the Bill, which will strengthen the sector but could have achieved much more. I thank all noble Lords who have participated in our debates, as well as Ministers, who have moved some way, if not as far as we would like, during our deliberations.

[Lord Baker of Dorking (Con)]

My Lords, I thank the noble Lord, Lord Watson of Invergowrie, for deciding not to press his amendments on this case. I know how strongly he feels about it, but it will be possible to revisit that after the whole principles of apprenticeships have been set up. I think that it is generally agreed by all sides of the House that this is an important Bill and a beneficial Bill. It is a major step forward in improving the technical education of our country. It has been handled very well by the Minister and his department, and we should speed it to the statute book.

[Lord Nash]

My Lords, I have discussed the Government’s response to the two amendments that have returned to this House from the other place and asked noble Lords to agree the Motions from the other place on those two amendments. In response to the noble Lord, Lord Watson, about where the £200 million estimate came from, I can say that it is estimated by the DfE, HMRC and HM Treasury, using apprenticeship participation data and HMRC child benefit data—HMRC, not the DWP, pays child benefit—but I will still write to him on the matter he mentioned.

As for Ofsted, I have personally discussed this with it. It is satisfied that it is adequately resourced at the moment, but we will keep this under review. As I said, the Bill has strong cross-party support. Several noble Lords from across the House have mentioned that previous Governments have attempted unsuccessfully to raise the status of technical education—I remember a particularly powerful speech by the noble Baroness, Lady Morris, on this—but I am confident that under the leadership of Minister Halfon, who I am delighted to see is in the House today, we will seize this opportunity to raise the status of technical education in this country.

I thank again all noble Lords for their participation on this Bill. I am absolutely sure that the legislation is in much better shape thanks to their scrutiny, as always. I commend the Bill to the House.

Motion A agreed.

--- Later in debate ---

Moved by

[Lord Nash]

That this House do not insist on its Amendment 6 and do agree with the Commons in their Amendment 6A in lieu.

Commons Amendment in lieu

6A: Page 19, line 5, at end insert—
“Careers advice in further education institutions: Ofsted inspection
(1) Section 125 of the Education and Inspections Act 2006 (inspection of further education institutions) is amended as follows.
(2) In subsection (4) (matters to be dealt with in inspection report), after paragraph (a) (but before the “and” at the end) insert—
“(aa) must, in a case where it relates to an institution within the further education sector, comment on the careers guidance provided to relevant students at the institution,”.
(3) After subsection (7) insert—
“(8) In this section—
“careers guidance” includes guidance about undertaking any training, education, employment or occupation;
“relevant student” means a student—
(a) who is aged under 19, or
(b) who is aged 19 or over and is someone for whom an EHC plan is maintained.””