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.