Skills and Post-16 Education Bill [HL]

Lord Russell of Liverpool Excerpts

Committee stage
Thursday 15th July 2021 Lords Chamber

[The Deputy Chairman of Committees (Lord Russell of Liverpool) (CB)]

We now come to the group beginning with Amendment 27. Anyone wishing to press this or anything else in the group to a Division must make that clear in the debate. Before I call the noble Lord, Lord Aberdare, I inform the House that the noble Lords, Lord Rooker and Lord Adonis, have withdrawn from speaking on this group. I ask those after them to be prepared for when they are called, please.

Amendment 27

Moved by

--- Later in debate ---

Clauses 3 and 4 agreed.

[The Deputy Chairman of Committees (Lord Russell of Liverpool) (CB)]

We now come to the group consisting of Amendment 39. Anyone wishing to press this amendment to a Division must make that clear in debate. As I did in the last group, I point out that the noble Lords, Lord Adonis, Lord Baker of Dorking and Lord Liddle, have all withdrawn from this group. I call the noble Lord, Lord Addington.

Amendment 39

Moved by

--- Later in debate ---

I hope that, by the end of this discussion, we will have started to find out a little more about the Government’s direction and the use of this very useful pot of money, because if you really want to make this a tax on businesses with turnovers of more than £3 million, let us just call it a tax. Let us take the money back and put it into colleges in the normal way. There really is not any point in having this label on this institution if it does not function. If we are going to have an effective training levy, taking out apprenticeships might be the best start for it, so that you are not actually tied to that, and doing something else with it. I hope that, by the end of this debate, we will have a clearer idea of the future direction of this because this really is starting to damage the idea of apprenticeships more than it actually helps. I beg to move.

[The Deputy Chairman of Committees (Lord Russell of Liverpool) (CB)]

I call the noble Lord, Lord Young of Norwood Green. No? I call the noble Baroness, Lady Neville-Rolfe.

[Baroness Neville-Rolfe (Con)]

My Lords, it is an unexpected pleasure to follow the noble Lord, Lord Addington, with his straight talking. I rise to support the noble Lord, Lord Storey, in introducing a greater degree of flexibility in the use of employers apprenticeship levy funds.

I am particularly glad to see the involvement of the noble Lord, Lord Aberdare, who brings practical experience of what works from running a training business and of the red tape—my words, not his—of complying with regulatory conditions, which I fear this Bill increases too much. The backdrop to all this is a dramatic fall in apprenticeship numbers in recent years—exactly the opposite of what we wanted and promised to achieve. A great deal of effort has been put into improving the quality and level of apprenticeships but I fear that, perversely, this has excluded many who would have benefited from the discipline and recognition of a successful apprenticeship, for example in my old industry of retail. However, my noble friend the Minister may have a better explanation for the decline and be able to reassure us that the fall has come to an end.

I was at the birth of the apprenticeship levy as the Minister who took the legislation, the child of Nick Boles, through our House. As noble Lords may have sensed earlier, I am passionate about apprenticeships, which were beginning to be a lost art, but I did have some carefully disguised doubts about the design of the arrangements for administering the levy. The system is a bureaucratic one and was led by education, rather than employers, so bigger employers paid a substantial levy. This often came off their existing training budgets; they were then unable to fix their training into the mould laid down by the Civil Service, so the levy ended up as a tax.

Perhaps my noble friend the Minister can explain why things are better now. In particular, where a company has surplus levy credits, can these be allocated to their supply chain or pledged to other companies without the levy payer having to become responsible in any way for the training in that other firm? That requirement was a real barrier to good practice and spreading the levy into the supply chain. What is the current cap on the new arrangements in percentage or other terms? Has the inevitable move to digital made the system more efficient, with fewer requirements to keep unnecessary records for inspection and more trust in employers to lead and train their apprentices? Or have more requirements been laid down in the digital world because, in theory, it is so very easy?

Amendment 39 seems to suggest that the levy funds could be diverted in other ways, which I might be more concerned about if it led to pressure for a rise in the levy. Companies can ill afford a levy increase at present, especially those whose training budgets have been hit hard by Covid. Before we reach Report, I would like to understand better what is planned for apprenticeships. Apprenticeships provide a passport to mobility from one job to a better one. They provide a route to advancement to people who do not need or want to go to university and incur debt doing so. If we could massively increase their numbers and their status on the German model, that would contribute to happiness and to growth.

[Lord Aberdare (CB)]

My Lords, it is a great pleasure to follow the noble Baroness, Lady Neville-Rolfe. I suspect that her knowledge of apprenticeships is far greater than mine and I appreciate her remarks. I also strongly agree with everything that the noble Lord, Lord Addington, said at the beginning of this debate.

I have added my name to this important amendment because apprenticeships need to be an integral part of the new skills and education system which the Government are rightly seeking to create. They are employer-led and job-focused, and they cover all levels, from GCSEs up to degree level. Through the levy, they provide a mechanism whereby employers contribute to the cost of skills training—where, at times, they have been less than forthcoming.

However, as we have heard, there is a widespread recognition that the levy is not working as well as it should. Relatively few employers are able to use more than a small proportion of their levy funds. Even for major employers in the energy and utilities sector, it is only just over 50%. So, to maximise the funding they can recoup, they tend to use a high proportion of the funds for apprenticeships that are about upskilling or reskilling existing employees, rather than taking on or training new, young apprentices. This is perfectly understandable and, of course, reskilling and upskilling are good things to do—but the result is that the number of 16 to 25 year-old apprentices has not grown nearly as much as the number of over-25s. Although there are mechanisms for employers to transfer up to 25% of their levy funds to other employers who can use them, the process seems overcomplicated and take-up has been pretty low.

At the same time as levy payers are unable to use all their levy funds—with much of the unused funding going back to the Treasury—there appears to be a shortage of apprenticeship funding for non-levy payers. So the impact of the levy on the total funding available for skills training has been rather less than might have been hoped. It is not even clear whether the total amount of funding going into apprenticeships is significantly greater than before the levy was introduced.

The word that crops up most often in discussions with employers about the levy is “inflexible”. As I have said, apprenticeships will surely be a significant element of LSIPs and they need to be properly integrated. I have felt for some time that it would make sense to recast the apprenticeship levy as a wider skills levy—perhaps with a lower payment threshold to bring more employers into the net of contributing towards training. But, at least, if employers in an LSIP area are not able to use all their levy funds, why should it not be possible for those funds to be used for other, defined LSIP training priorities? In any case, what is needed is a review of the apprenticeship levy system in the light of experience to date. It must be clear how it relates to the wider post-16 education and skills system, as set out in the White Paper and now in this Bill.

Amendment 39 does no more than encourage the Secretary of State to conduct such a review. In my view, that is the answer to the argument that it does not belong in this Bill. Well, it does belong in this Bill—it is fundamental to it—and the review is to ensure that levy funds are used in a way that is integrated with the priorities of local skills plans and properly reflects employers’ needs. Of course, such a review must not reduce the amount of funding available for the apprenticeships that are so badly needed. It should seek to maximise the funding available from the levy and to optimise its use in pursuing local and national skills priorities. I look forward to the Minister telling us how this will be achieved—but the review proposed by the amendment in the name of the noble Lord, Lord Storey, would be a very good place to start.

[The Deputy Chairman of Committees (Lord Russell of Liverpool) (CB)]

We will go back to the noble Lord, Lord Young of Norwood Green, to see whether he wishes to participate.

[Lord Young of Norwood Green (Lab) [V]]

Thank you, my Lords. I apologise that, on the previous occasion, I committed the offence of forgetting to unmute.

I am aware—as are many other noble Lords—of the deficiencies of the apprenticeship levy. However, as the noble Lord, Lord Addington, almost said, we should be careful before we throw the baby out with the bathwater. It has done a lot of good. It has focused employers’ minds on the importance of apprenticeships. We have an Institute for Apprenticeships which is involving employers in creating new standards. I agree with the noble Baroness who said that there was a need for reform. But a consultative process is going on. I ought to have declared my interest as a national apprenticeship ambassador.

Employers already have the ability to use apprenticeship levy money to support not just supply chain companies but other companies outside their supply chain, and there has been a better take-up of that. Indeed, the Government have made more of the apprenticeship levy available. My concern at the moment is that, if we are really looking for growth in apprenticeships, this needs to be in the area of small and medium enterprises, especially in small and micro companies. Those companies frequently complain that the administration is too complicated, and that they find it a burden. We should bear in mind that many are saying, “Look, I’m struggling just to keep my business afloat and now you want me to take on an apprentice”. My response is to be understanding We need to work on helping them to remove some of that administrative and basic training burden. I also say to them, “Look, having a young person whose digital skills might be a lot more advanced than yours can often be of benefit to your company”.

I agree that some of the apprenticeship levy money has been spent in the wrong place. My concern is the 16 to 18 group, where the levels of youth unemployment are exceedingly high. I have already acknowledged the work of the job coaches, but more needs to be done on that front. So I am in favour of reform of the apprenticeship levy. I do not think that we should call it something else. We are just beginning to see a much better understanding by both parents and potential apprentices of the value of apprenticeships. I was interested in a recent development. UCAS, which used to be the clearing house just for those interested in going to university, has now opened another portal where people will be made aware of apprenticeship routes and vacancies. So reform is needed, but I still think that the basic concept is right. There are always areas where things could be improved, perhaps including the role of the Institute for Apprentices.

The apprenticeship levy is a bit like the curate’s egg—good in parts. I think the Government are aware of that, which is why there is a consultative process. I welcome the opportunity for the Committee to have this debate.

--- Later in debate ---

[Lord Willetts (Con) [V]]

I will speak to Amendment 54 in my name. I reflect some of the concerns that have already been expressed by the noble Lords, Lord Watson and Lord Blunkett. It goes back to the very significant powers being provided to IfATE in the Bill, especially the simple and stark statement:

“The Institute may withdraw approval of a technical education qualification.”


I understand the need for that power. I would not justify every technical qualification currently in existence, but it is a significant power and I think we all want to know how it will be exercised and under what constraints. My anxiety is that power may be exercised in a way that does not serve the long-term interests of the economy or individual learners. For example, the Government have invested a lot in T-levels. I very much hope that T-levels will succeed. However, it would be tempting, if T-levels were not quite achieving lift off at the speed that was hoped. to close down the alternatives in order to drive people, not through personal choice, into T-levels. That would be very regrettable.

We also know that the Government believe in trying to divide young people into the sheep and the goats—the two routes. They are either going for a qualification that leads directly to skilled employment or one that leads to further study. Sadly, life is not that tidy, nor is the modern economy. There are enormous overlaps between the paths and there are qualifications that straddle that divide of which the BTEC—already referred to by the noble Lord, Lord Blunkett—is a conspicuous example. It would be a great pity if BTECs lost out simply because they have an employment value as well as being accepted by universities.

I say to Ministers that expecting young people to give up on the option of university if they go for T-levels seems to me the wrong way of trying to promote them. In reality, young people do not want to close off their options. Of course they have a subsequent decision to take, and I agree with the noble Lord, Lord Flight, that they must have vocational options in apprenticeships, but expecting them to take a course that explicitly makes that impossible for them will not improve and encourage the take-up of T-levels.

Finally, we have to think of employers. Those of us who are veterans of these education and skills debates know how frustrated employers are by frequent changes in qualifications and frequent changes in the systems. Some qualifications, such as BTECs, have gradually achieved acceptance over decades. Employers are familiar with them and it would be very dangerous for IfATE simply to defund them when employers have become familiar with them and trust them.

All my amendment really does is ask the Minister to set out a process of consultation to be followed. The Minister has on several occasions during this Committee stage—and I commend her on what she has been saying—made it very clear how keen she is on a role for employer representative bodies. Would it not be a natural, logical result of the Government’s own approach that employer representative bodies should be consulted before IfATE exercises the powers that are being given to it?

I hope that as well as the designated employer representative bodies, the public consultation might also involve others, such as LEPs. I am not totally clear why LEPs appear to have fallen out of favour; they have a good understanding of the local economy and would be an obvious group to consult. There are also colleges—it is noticeable how the Association of Colleges has expressed some of its concerns about these powers—and students, whose choices we must trust. I very much hope that the Minister will accept that these powers need to be used in a way that reflects the needs of employers and the choices and preferences of individuals and that therefore the framework for consultation is entirely consistent with the underlying philosophy which she has been expounding.

[The Deputy Chairman of Committees (Lord Russell of Liverpool) (CB)]

The noble Lord, Lord Adonis, has withdrawn, so I call the noble Lord, Lord Baker of Dorking.

[Lord Baker of Dorking (Con) [V]]

My Lords, I shall speak to the amendment that my noble friend Lord Willetts has just spoken to and the comments made by the noble Lord, Lord Blunkett, concerning T-levels. This gives us an opportunity to discuss T-levels, probably for the first time.

The Bill gives the Institute for Apprenticeships far too great a power in that it can decide, without any constraints, to abolish a qualification. In the past, this has lain with Ministers. Some Ministers have used it in a very absolute way and done it without consultation, while some have consulted. The power to cancel qualifications was probably seen best in Michael Gove when he abolished all technical qualifications in 2012, which determined the curriculum of all schools thereafter. It determined the basis of EBacc and Progress 8. The cancellation of qualifications is a very important political, as well as an educational, issue.

The Government are now promoting T-levels as the technical qualification at 18. I do not think they will ever abolish A-levels because no T-level that has been announced so far has been required to guarantee A-level maths as the level of maths at that level. There will be many engineering and manufacturing companies that will still require someone who is 18 to have passed A-level maths.

The practice under which T-levels has been established is that each subject has to be 20% practical and 80% academic. That is quite a small element for a technical qualification. At university technical colleges, students from 14 to 16 do 40% practical and 60% academic. When they become 16, they do 60% practical and 40% academic because by that time they will have mastered a series of tools and machinery—drilling machinery, turning machinery, lasers and all the very complicated equipment of engineering companies. They will have also learned to make things with their hands doing projects. The noble Lord, Lord Blunkett, asked whether the engineering T-level will give students that degree of experience at 18. It seems highly unlikely that it will not.

There is a digital T-level. We are trying to make it work in UTCs, and we are still experimenting with it. Once again, the general feeling is that it is very academically based with far too much concentration on coding and not digital skills, which are much wider than coding and relate to things such as cybersecurity, artificial intelligence and robotics. T-levels will succeed only if they are accepted by two groups: universities at one end and industry at the other.

For decades, industry has been accustomed to BTECs. Engineering and manufacturing companies up and down the country know exactly what they will get for a BTEC qualification or a BTEC extended diploma. In fact, the extended diploma is so important that it is one of the two subjects that industry requires to be provided to appoint an advanced or higher apprenticeship. Two qualifications are needed: A-level in maths, physics or chemistry and a BTEC extended diploma. This means that employers know that the students whom they employ will have had wide experience of using tools and machinery, making and designing things and problem solving. I have no idea whether that can be provided by the T-level engineering, but, if it is only 20% technical, I would have thought that the chances are slender.

My other point is that, technical qualifications have to be very wide, not narrow; they are not as narrow as academic qualifications. Over the years, industry has recognised their quality. The bedding in of T-levels will take some time. Not only universities but also businesses will have to see whether they are in fact providing the degree of technical expertise that they require. That will take some years to establish. Therefore, I hope that we have less talk of abolishing BTECs early on in order to give preference to T-levels before people really know what constitutes a successful T-level and what does not.

[The Deputy Chairman of Committees (Lord Russell of Liverpool) (CB)]

The noble Baroness, Lady Fox, and the noble Lord, Lord Young, have both withdrawn, so I call the noble Baroness, Lady Neville-Rolfe.

[Baroness Neville-Rolfe (Con)]

My Lords it is a pleasure to follow my noble friend Lord Baker of Dorking, who has done so much to keep the candle burning for technical and vocational education through many difficult times. This group on the role of the Institute for Apprenticeships and Technical Education is one of the most important and it has widened out in discussion.

In considering these amendments, I would like to understand more about the leadership of the institute and its level of independence from the department. I would like to know the extent of business representation, which has barely had a mention in that context, and understand any plans to change its governance or composition as the Government’s very welcome new emphasis on skills and post-16 education takes shape. How does it compare to the set-up in Germany, Switzerland or Austria? My concern is that it is much less employer-based and flexible than the arrangements that I have encountered there, but I would of course be happy to be proved wrong.

Is small business, the backbone of British innovation, properly involved? I agree with the comments of the noble Lord, Lord Watson, on the importance of encouraging small business apprenticeships. Will there be a culture of simplicity and speed, or is this a very bureaucratic organisation, as, I am afraid, the impact assessment suggests? It would be helpful to have an answer on some or all of these points today or, if it is easier, in writing.

With his Amendment 55, the noble Lord, Lord Watson, is I believe right to explore the issue of charging for approval of qualifications, pointing out that the deterrent effect on providers might be a problem. That might lose us useful innovation and competition in the provision of qualifications. Should this not in fact be a public service, rather than a charged-for service, as I suspect it is in universities?

I also support the simple Amendments 51 and 53 of the noble Lord, Lord Blunkett, which probe plans to cancel some qualifications to avoid duplication. It is always a great pleasure to hear from him and to be reminded that he is a brilliant product of vocational education. Against a background of declining achievements in technical education, is the proposed moratorium wise? Could we hear which employers are likely to be affected? We have heard quite a bit about individual qualifications, but what kind of employers are likely to be affected? For example, I recall that at Tesco we were able to frame qualifications in a way that suited our work patterns and needs, and we helped many thousands of apprentices to get on and indeed rise up within the retail sector. Is that kind of arrangement now at risk? One of the reasons why I loved working there with my public sector background was that it was a great provider of opportunity for some of the most disadvantaged in the land.

--- Later in debate ---

[Lord Lucas (Con) [V]]

My Lords, I very much share the concerns of the noble Lord, Lord Blunkett, and my noble friends Lord Willetts and Lord Baker in particular.

The last legislation that we had in this area was the Technical and Further Education Act. There was a belief then in the perfection of the new—almost a post-modern belief that destruction was the necessary precursor to success. The Government had just destroyed the sector skills councils and they have not yet managed to recreate the complex relations and understandings that led to their successes. In the run-up to the technical education Bill, the Bill team said they thought that this would probably result in the destruction of City and Guilds, as if that institution and all its reputation and quality had no value for the future in the face of their newly-created ideas. Now we seem to be destroying the local enterprise partnerships, which in many areas have established a pattern of understanding and reputation that has enabled projects to be undertaken that would have been very hard otherwise.

I do not share this disdain for the old; I think that it is best to work with it where we can. As the noble Lord, Lord Blunkett, pointed out, the reputation that qualifications have built up with employers is a thing of great value. It means that employers know what they are getting but it also means that, when a young person gets that qualification, it is something with strong currency. People know exactly what to expect. It has a high reputation and is a highly tradeable asset.

This is not yet true of T-levels. As noble Lords may know, I have run the Good Schools Guide for many years. I cannot yet imagine advising a parent to let their child do a T-level. It still seems a misconception that you should have to spend the whole of your sixth form years doing this one qualification to the exclusion of everything else. If one is aiming for parity of esteem then it ought to be through the route of being able to mix academic and other qualifications. As the noble Lord, Lord Baker, said, that would allow the technical qualifications to be heavily technical to carry the sorts of skills an employer is looking for, rather than being overly general and not directed towards making someone instantly employable when they come out of school.

Doubtless we are all going to put a lot of effort into making things succeed. We are where we are; we have to make the best of where we have got to. But to give powers to IfATE and others to continue on a path of destruction without consultation and care, and in particular to give them the direction of this Bill without the permission of employers seems wrongheaded. I very much hope that, between those who have proposed amendments to this Bill, we will get something on Report that will help change the Bill’s direction.

[The Deputy Chairman of Committees (Lord Russell of Liverpool) (CB)]

The noble Lord, Lord Liddle, has withdrawn, so I call the noble Lord, Lord Addington.

[Lord Addington (LD)]

My Lords, this is one of those occasions where I thought I knew what I was going to say before the debate started, but I have changed my mind—or, at least, my words—considerably having listened. When the Minister replies to this, I feel that the audience behind her might be the most worrying. I suggest that when the noble Lords, Lord Willetts and Lord Baker, are saying “beware of this”, any sensible Minister would listen. I know the noble Baroness falls into that category.

The Minister has to pay attention to what has been said. Everybody here said, “We are not sure what you are doing yet”. T-levels may sound neat, but we do not quite know what they are. Are they doing something else? Are they a replacement? I think it was the noble Lord, Lord Willetts, who asked if they are replacing BTECs, which are an established way forward and allow flexibility, university entrance and other qualifications. That is the sort of thing we want, especially as we are giving more power to level 4 and 5 qualifications, which is overly due. Can we have some assurance that there is no government thinking that T-levels will be used to replace all this? They will simply not lead to these places; they cannot.

Other institutions with qualifications which are understood and known, such as City & Guilds—if I do not mention City & Guilds, I fear that my noble friend might well have a few words with me afterwards—will be saying, “Everybody knows what these are.” If you are going to bring in T-levels, do it slowly and make sure that you are adapting them to take over these functions. A one-off exam at this age cannot do what these do because they do wonderful and flexible things. A few employers cannot find their way around them, but others can. You could simplify them a little and not sweep them away to do something else.

I will not follow the noble Lord, Lord Lucas, into his very intellectual comments about the destruction of post-modernism because we have quite enough on our plates without thinking about the centre of Glasgow and its planning issues. But I hope that when the Minister answers she will say that we are not getting rid of all of these good and established things straightaway, just because we have a lovely new toy that sounded good when we first put it forward. T-levels, I am afraid, will have to earn their stripes. They may become something that replaces or works into the rest of it, but further education deals with a diverse range of subjects and paths. It will never be that straightforward. I look forward to the Minister’s response and do not envy her task.

--- Later in debate ---

Clauses 9 to 13 agreed.

[The Deputy Chairman of Committees (Lord Russell of Liverpool) (CB)]

My Lords, we now come to the group consisting of Amendment 59. Anyone wishing to press this amendment to a Division must make that clear in the debate. The Committee should know that the noble Lords, Lord Adonis, Lord Young and Lord Liddle, have all withdrawn.

Amendment 59

Moved by

--- Later in debate ---

Amendments 60 and 61 not moved.

[The Deputy Chairman of Committees (Lord Russell of Liverpool) (CB)]

We now come to the group consisting of Amendment 62. Anyone wishing to press this amendment to a Division must make that clear in debate. Before I call the noble Lord, Lord Addington, I inform the House that, again, the noble Lords, Lord Adonis, Lord Young and Lord Liddle, have all withdrawn.

Amendment 62

Moved by