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.

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[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.

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[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.