Education: Contribution to Economic Growth

Lord Nash Excerpts

Thursday 5th December 2013 Lords Chamber

[The Parliamentary Under-Secretary of State for Schools (Lord Nash) (Con)]

My Lords, I thank the noble Baroness, Lady Morgan, for proposing this debate on such an important topic. She is an experienced and passionate advocate for education, from her time as a geography teacher in the early 1980s to the work that she has done as a member of the board of trustees of the Teaching Leaders charity, chair of the board of trustees of Future Leaders and chair of Ofsted.

I congratulate the right reverend Prelate the Bishop of St Albans and my noble friend Lord Sherbourne on their maiden speeches. Both spoke passionately, incisively and eloquently, and I am sure that we are all looking forward to hearing them speak on many more occasions. I also thank all noble Lords for their valuable contributions.

As the excellent charity ARK, one of our high-performing academy sponsors, which I know the noble Baroness advises, has stated, education is one of the strongest determinants of future income and social mobility. Young people with university degrees have double the earning capacity of those who leave school without qualifications. The noble Baroness, Lady Morgan, spoke about the underachievement “tail” of particularly poor children. We all know that many of our children are brought up in chaotic home lives with no systems, no structures and a background of generational worklessness. As I think noble Lords know, and I think there is consensus on this across the House, the only way in which we can break this cycle is through education. The tail is why we are changing the basic accounting measure for schools from a rather simplistic five A* to C grades, including English and maths, to a progress measure across eight subjects so that all pupils, whether they come to school performing poorly or highly, are measured on the progress that they make.

The noble Baroness also mentioned London Challenge, to which I pay tribute, as a model of collaboration. The academies programme is the structure that we are using for school-to-school support in local clusters in regional locations. A local collaborative structure is the only model that we feel works. I was delighted to hear the noble Viscount, Lord Hanworth, say that people work best when they have ownership of the processes that they are running, which is exactly what our academy programme is all about.

The right reverend Prelate the Bishop of St Albans mentioned that 82% of the schools in his diocese are good or outstanding. As I am sure he knows, that puts his diocese in the premier division of dioceses. I am extremely grateful to the Diocese of St Albans for its sponsorship of the All Saints Academy. I also pay tribute to church schools generally, which consistently outperform local authority-maintained schools and outperform on community cohesion.

As the noble Baroness, Lady Morgan, and other noble Lords have said, this debate is particularly timely as the latest PISA international comparison results were published earlier this week. These results showed that, having tumbled down the PISA tables in the first decade of this century, we have broadly maintained our pretty average, mid-20s standing out of 65 countries. For the sixth largest economy in the world, it is clear that there is a lot more that we have to do if we are to give our children the ability to compete in an increasingly competitive and diverse international market.

These results follow the shocking findings of the recently published OECD’s adult skills survey, which showed that we came joint bottom out of 24 countries in numeracy and 21st out of 24 in maths. We were the only country in the surveyed group whose school leavers’ grandparents are better educated than they are. There is a similar story with TIMSS and other statistics.

It is clear that countries with successful education systems have faster rates of economic growth, as the noble Lord, Lord Paul, referenced. A study by Hanushek and Woessmann in 2012 suggested that if the UK halved the then 50 PISA-point gap between us and Finland, it would result in a 6% boost to the level of UK GDP by 2050, worth around £90 billion in today’s money.

There is evidence that education is increasingly important across the world. Graduates are good for growth and good for the economy; the noble Baronesses, Lady Warwick, Lady Cohen, Lady Donaghy and Lady Dean, referred to the success of our university system. Looking across developed economies, a study by the National Institute of Economic and Social Research shows that countries that increased their share of graduates in the workforce saw labour productivity grow faster, as the noble Lord, Lord Liddle, referred to. In the UK, we estimate that roughly one-third of the increase in labour productivity between 1994 and 2005 was attributable to the accumulation of graduate skills in the labour force. In other words, a substantial share of the UK’s economic growth over this period was related to the expansion of higher education.

The noble Lord, Lord Liddle, referred to the graduate premium. Office for National Statistics data show that the average income for graduates levels out at £35,000, compared to £22,000 per annum for those with A-levels and £19,000 for those with merely GCSEs.

The noble Baroness, Lady Warwick, and the noble Lord, Lord Liddle, referred to funding. I must remind the House that we inherited a particularly parlous state of finances in this country and we have had some very difficult decisions to make as we seek to rectify the financial situation while protecting education budgets extremely well, particularly in relation to schools. As a result of our tighter financial controls, and as the Chancellor has today announced, the economic prospects for the country are looking up substantially.

While education is critical in building human capital, it is also important for short-term and medium-term growth. Our £18 billion capital investment programme to build new schools is stimulating construction activity across the country and supporting jobs. Free early years education for 1.3 million three and four year-olds—that is 96%—is enabling more parents to work. Education is worth around £17.5 billion to the UK export sector. My department spends almost £60 billion on education and children’s services.

However, it is not just about spending money, it is also about value for money. I am delighted to be able to tell the House that we are now building schools at half the cost of that under the Building Schools for the Future programme, more quickly and more fit for purpose. We are also running the Department for Education far more efficiently and, by 2015, will have halved the cost of running the department in real terms from just over £500 million to around £300 million, and we will have a far more efficient and effective organisation as a result.

Our ambitious educational reforms are influenced by international evidence on what works. Successful school systems prioritise the quality of teachers over the size of classes; they attract the best people into teaching; and there is greater autonomy and accountability—I pay tribute to the noble Baroness, Lady Morgan, and Sir Michael Wilshaw for the highly effective work that Ofsted does in this regard.

High-performing systems have curriculum standards that set clear and high expectations. The relationship between early education and better student outcomes is strongest in countries that offer early education to a large proportion of the population. The amount spent is less important than how those resources are used.

Pupils’ socioeconomic background still plays too big a role in attainment in England. The impact of parental education on literacy and numeracy is stronger in England than in most other countries. According to the Sutton Trust, boosting the educational outcomes of children from less educated families to match the UK average could be worth around 4% of GDP, or £60 billion, to the country’s economy.

The noble Earl, Lord Listowel and the noble Baroness, Lady Taylor, spoke about the importance of engaging parents in their children’s education. I could not agree more. Unfortunately, many parents, however hard they try to engage, are so badly educated and so immersed in worklessness that schools today have to do so much more to replace the lack of support that children get at home. The evidence is that children from middle-class families will hear different words millions of times more than children from poorer families, which is why we are focusing so much on improving early years and primary education.

We know that education is crucial to a child’s future success. Not only is that true in respect of the labour market but educated people are healthier, more innovative, less likely to commit crime and more likely to be involved in volunteering.

Our education reform programme is based on raising attainment across the board and narrowing gaps. We are prioritising the most disadvantaged children through additional funding for early years and the pupil premium; setting higher expectations of the quality of teaching and standards of education; giving our teachers more scope to make the right decisions; holding schools and colleges to account for the outcomes that they secure for their disadvantaged pupils through a robust accountability system, which I have already mentioned; and creating opportunity for more innovation in the schools system, giving head teachers more freedoms in maintained schools and driving forward growth in the number of free schools, UTCs and studio schools.

As the noble Lord, Lord Baker, mentioned, we now have 42 UTCs open or due to open. These are creating opportunities—or will do when they are full—for 30,000 young people to train as the engineers and scientists of the future, playing a crucial role in England’s long-term economic growth. In this, they are teaming up with employers such as Jaguar Land Rover, Rolls-Royce, Siemens and the National Grid. I pay tribute to the noble Lord, Lord Baker, for his tireless, relentless and energetic determination to drive this programme and to the noble Lord, Lord Adonis, who is not in his place, for getting this programme off the ground in the first place.

We also have studio schools. There are now 28 open, with 13 more due to open shortly. They bring together academic and vocational education and employment, with over 400 employers, including M&S, Sony, Barclays and the BBC as well as many smaller businesses, involved.

My noble friend Lord Sherbourne set out another crucial factor in the future competitiveness of our children—modern languages. He highlighted many of the reforms that we have made in this area and made a compelling case for these changes, and I thank him for it. As he said, the English baccalaureate is already encouraging more young people to take a language at GCSE level. The increase is 16% in 2013 in pupils taking MFL at GCSE. Studying languages is about choice and we are making £3.1 million available in funding for Routes into Languages, a consortium of universities working together with schools and colleges to enthuse and encourage people to study languages to support a new three-year student demand-raising programme. Through the free schools programme we have opened the Bilingual Primary School in Brighton, which is delivering the curriculum in both English and Spanish, and the Judith Kerr Primary School in Southwark, where the curriculum is being delivered in both English and German, while in pre-opening there is the Bromley Bilingual school, which will teach French and English through immersion, and the Marco Polo Academy, which will teach English and Mandarin using immersion methods.

I thank my noble friend Lord Storey for his encouraging words about what we are doing about languages in primary schools. Strong and robust vocational education is essential for the future. More and more young people are taking vocational courses; we have seen a 200% increase over the past 10 years. As my noble friend Lord Baker said, the fact that we have such a high number of NEETs, stubbornly stuck at around 1 million, has to change. We need to repair the broken link between qualifications and training between British industry and employers and universities. The most able students must have confidence that the vocational qualifications are of the highest standard.

The noble Baroness, Lady Morgan, spoke about the importance of raising the status of vocational courses, and that is why we commissioned the report by Professor Alison Wolf on vocational education. We have followed all her excellent recommendations. We have already reformed vocational qualifications at 14, we are in the process of consulting on reforming 16-to-19 vocational qualifications and we have introduced Techbacc. In the past, skills training has been bureaucratic, top-down and complex. The funding of the system has been done through large numbers of people rather than focusing on value. Successive Governments have made the education system for vocational qualification accountable to funding bodies instead of to their customers, learners, businesses and the wider local community.

Under this Government we have ended top-down bureaucracy in FE colleges and supported a massive expansion in apprenticeships programmes, which we are focusing on making of higher quality and of longer duration. However, none of this means anything unless our young people are engaging with education, and we are planning to spend £7.4 million in 2013-14 to fund an education and training place for every 16 or 17 year-old who wants one, and we are raising the participation age.

Our higher education system is a huge success story, as a number of noble Lords have mentioned. We attract large numbers of international students and researchers who bring revenue, expertise and stimulate growth. Our strongest universities are among the best in the world. Education is a valuable and growing export sector worth about £17.5 billion in 2011. About 26,000 international students at over 1,200 UK independent schools contribute £685 million in fees, and around 1.4 million pupils studied at nearly 3,000 British schools overseas, contributing nearly £10 billion in fees. There is a strong overseas demand for educational products and services, including support in building, staffing and inspecting overseas schools. There is also growing interest in developing technical and higher vocational skills.

In the summer we published our education export strategy, which will ensure that British schools, universities, colleges and education businesses continue to stay ahead in the global education market worth about £1 trillion. The noble Baroness, Lady Donaghy, talked about the Institute of Education, which I would be delighted to visit. I was delighted to hear the noble Baroness refer to the World Bank report mentioning the importance of acquiring knowledge and the processing of information, which is why we are increasing the content in our curriculum. I was also delighted to hear her mention the importance of providing incentives so that the stronger teachers can get better paid, which is what performance-related pay is all about. I am beginning to sense the makings of a consensus across the House on the future of education, and perhaps we can begin to see the end of the stone-throwing era.

I agree with the noble Baroness, Lady Dean, about the importance of raising aspirations for our pupils, particularly those from less privileged backgrounds. The noble Baroness, Lady Taylor, talked about those films in the 1960s. I can particularly remember one with Tom Courtenay. I cannot recall what it was called but it made a vivid impression on my mind.

We must open the door to education much wider for employers. As the noble Lord, Lord Mawson, said, we must provide our pupils with a clear line of sight to the workplace. I have been struck when talking to students about their work experience and visiting places of work; talking to people from the workplace has raised their heads and their ambitions. I look forward to meeting him to see if we can unblock the logjam to which he referred.

I agree with the noble Lord, Lord Graham, that schools should widen their connections with the local community. In my own school we have an active programme of raising aspirations, engaging with community voluntary groups, professions and businesses, which has had a remarkable effect on the aspirations of the children.

The noble Baroness, Lady Taylor, talked about prescription and the freedom to teach. As the noble Baroness, Lady Morgan, knows, one of the things that we in this Government have been very strong on is being much less prescriptive. We have had many conversations with Ofsted about how teachers should teach so that they can teach in the way that they think is best to make progress for their pupils.

Ensuring that all our children receive the best educational outcomes is a priority not just for me, my department and my right honourable friend the Secretary of State for Education but for the whole country, and I am sure that there is consensus across the House about this. In concluding, I again congratulate the right reverend Prelate the Bishop of St Albans and my noble friend Lord Sherbourne on their excellent maiden speeches, and I am grateful to all noble Lords for their contributions to this debate. I thank the noble Baroness, Lady Morgan, for allowing us to discuss these most important matters.