Skills and Post-16 Education Bill [HL]

Lord Storey Excerpts

Report stage
Tuesday 12th October 2021 Lords Chamber

At this stage in the Bill’s passage, it would be most helpful if the Minister could indicate how the review of the current trailblazer pilots could be used to inform the Government’s evolving view of how ERBs might best operate, with specific reference to the amendments I have outlined and what future discussions with the right reverend Prelate the Bishop of Durham and other interested Peers might be a fruitful way of following up these issues. We even suggest that the Government might adopt the amendments themselves, since hope is considered one of the virtues on these and, indeed, other Benches.

[Lord Storey (LD)]

My Lords, before speaking to the amendment of the noble Lord, Lord Watson, to which I added my name, I thank the noble Baroness, Lady Berridge, for the work she did on this Bill and wish her well.

The noble Lord, Lord Watson, uses the word “integrated”; I would use “partnership”. What the Government are trying to achieve, which we want to achieve, will fail if we do not get the local skills improvement plan right. To do that, we must have a partnership of people. A key factor in that must be the local combined authorities. It is not just me saying that. Your Lordships may remember when a former Chancellor, George Osborne, set up combined authorities. He said that they were a “devolution revolution” and gave them extra powers involving the provision of skills training, business support and economic development.

Indeed, the powers of the Liverpool City Region Combined Authority, where I live, include apprenticeships, grants for employers, an adult skills budget, post-16 FE and oversight of skills and advisory panels. Combined authorities have a wealth of experience, yet we are pushing them to the side. We are marginalising them. I just do not get it at all. It is not just me saying that, or the combined authorities saying that, or Peers saying that. It is interesting to see that message coming loud and clear from employers themselves. You have only to look at the comments from the Food and Drink Federation, which has again said that it is really important that there is a partnership across all areas.

Interestingly, the Energy & Utility Skills Partnership talks about the need to look not just at local skills but at those skills which are nationwide and at how they will be swept up or dealt with if there is just a local focus. I hope that when she responds the Minister will be positive. I agree with the noble Lord, Lord Lucas, that when this goes to the Commons it will be sensible enough to realise what we have said, and that changes will be made if we are able to give it those changes.

I end by saying how much I support Amendment 19 from the right reverend Prelate the Bishop of Durham. He is right to say that if we are to have these representative employer bodies, they must have a record of showing that they care about diversity, equality and disability and that should be an important hallmark of these bodies. If that amendment is not agreed, I am sure that if the Government saw a body set up that was not equal or concerned about diversity and disability, they would have the sense to step in.

[Lord Aberdare (CB)]

My Lords, I, too, have added my name to Amendment 11, tabled by the noble Lord, Lord Watson, and to the amendment to it, Amendment 12. I shall speak also to my Amendments 14, 18 and 21, which are mainly concerned with the overall coherence and effectiveness of the skills systems of which this Bill will be such a major part. Many aspects of that system lie outside the Bill as drafted, but are essential for it to achieve its aims, so Amendment 11 and my amendments seek to fill some of the more important gaps that need to be addressed in the Bill. Others will no doubt be covered in the forthcoming guidance for employer representative bodies, which I have been no more successful than the noble Lord, Lord Watson, in absorbing since I received it this morning.

The amendment tabled by the noble Lord, Lord Watson, lists a range of bodies whose views rightly need to be taken into account in LSIPs. My Amendment 12 adds two more categories to the list: bodies providing careers information, advice and guidance and independent training providers. I have previously expressed my view that the importance of high-quality careers guidance should be more explicitly covered in the Bill. Every LSIP should surely take account of the status of careers guidance provision in its area through drawing on the views of those responsible for it, including careers hubs and careers leaders in local education institutions. Seeking to ensure that all schools and colleges in its area are meeting the eight Gatsby careers benchmarks and complying fully with the requirements of the Baker clause as, I hope, amended by the Bill.

Given the importance of informing young people about their career choices and options early on, will the Minister tell us how the Government are ensuring that chambers of commerce currently delivering trailblazer LSIPs are engaging with local careers hubs to ensure that careers provision in schools is aligned with local labour market skills needs?

Could she also say whether there are any plans for a new careers strategy, to revive the terrific impetus provided by the previous one in improving the careers situation, and what the Government are doing to ensure that careers hubs will be an established part of the future careers landscape right across England, with sufficient funding to support careers activities in schools and colleges and enough qualified careers professionals to deliver them? Finding those professionals seems an increasing problem for some schools.

My Amendment 12 would also add independent training providers. I will spare noble Lords a repeat of my spiel on independent training providers, but I do believe that no LSIP can afford not to take account of their role in meeting the skills needs of its area.

My Amendments 14 and 18 seek to ensure that LSIPs take account of UK-wide standards developed by national employer groups, picking up on what the noble Lord, Lord Storey, said. Either of the two might meet the need, although the first relates to the actual content of an LSIP, and the second to the characteristics of the employer representative body which develops it. I apologise to your Lordships if this seems like trying to get two amendments for the price of one.

There will be many areas of technology where there is a pressing need for LSIPs to upskill and reskill the existing workforce in their area but there are no associated apprenticeship standards; for example, because they would not support a full year of study. Examples include some of the key green technologies, such as installation of ground source heat pumps or electric car charging points. In the absence of formal standards, LSIPs will need to assure themselves that training provision and assessment is of the right quality and meets agreed industry standards. This assurance could be provided by recognised national not-for-profit employer bodies representing specific sectors, such as the Energy & Utility Skills Partnership, again mentioned by the noble Lord, Lord Storey, for whose briefing I am grateful. I would welcome the Minister’s views on how this need might be met and whether she might consider establishing a reasonably short list of recognised sectoral employer bodies capable of supporting LSIPs in this respect.

Amendment 21 addresses a related issue. The Bill says remarkably little about accountability and reporting requirements of employer representative bodies, apart from developing their LSIPs in a form that the Secretary of State is prepared to approve and publish. Perhaps the Minister could say something about how the subsequent progress and implementation of the plans will be reported and monitored; how information from LSIPs across the country will be aggregated to assess their impact on national skills needs and objectives; and how the Secretary of State will determine whether the new arrangements in specific LSIP areas are working as intended, bearing in mind the point that noble Lord, Lord Adonis, and others have made, that chambers of commerce in England vary considerably in size, scope and capacity, and may not always be the right body to lead ERBs.

Amendment 21 addresses only one specific aspect of this broader issue of reporting accountability and two-way flows of information between local plan areas and the centre. The amendment would ensure that the Institute for Apprenticeships and Technical Education has access, via reports from ERBs, to information on the activities and outcomes of the upskilling and reskilling programmes being pursued through their LSIPs, to inform its own work in identifying and approving needed apprenticeship standards and other technical qualifications for the future.

I do not anticipate pressing any of my amendments to a vote, but if the noble Lord, Lord Watson, decides to seek the opinion of the House on his Amendment 11, I shall gladly support him.

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Moved by

[Lord Storey]

34: After Clause 7, insert the following new Clause—
“Review of apprenticeship levy
The Secretary of State may request a review of the apprenticeship levy to—(a) ensure eligible costs are sufficient to enable apprenticeship standards to fully meet the demands of their occupation in relation to specific industries in the sector; and(b) provide the opportunity for coordinated pre-apprenticeship training and industry experience to broaden diversity and inclusion.”Member’s explanatory statement
The purpose of this amendment is to create flexibility in the eligible use of employers’ apprenticeship levy funds and to ensure there is wider diversity and inclusion in apprenticeships.

[Lord Storey (LD)]

My Lords, apprenticeships have been a really important development, particularly for young people. We saw at the beginning of the development of apprenticeships how young people felt that this was an important way to develop their skills and career prospects. For young people, it meant no student debt and more experience—20% on study and the rest on practical training—but in recent years, we have seen a massive decline in apprenticeships for young people, not just because of Covid. Current rates of employer-funded training for 16 and 17 year-olds are at their lowest levels since the 1980s. Just 3% of young people took up an apprenticeship in 2020 and only 2% of those were employer-funded training: it is almost back to the future.

Obviously, the pandemic and staying in education has had an effect, but the IFS concluded that there are fewer policy reforms or initiatives to arrest that decline in work experience among 16 to 17 year-olds. That is the area that we need to talk about, to look at and to be flexible about. Apprenticeship, like other routes of technical education, suffers from entrenched negative perceptions, biases and stereotypes in comparison to an academic route. Apprenticeship providers of high quality that lead to high earnings and better employment outcomes need to be stressed.

The Government have set a target that all public bodies should take on 250 apprenticeships with no age bracket, but the National Audit Office report found that employers were simply using money on existing professional development courses. Will the Government look again at how those targets might be honed more to young people because there is no age limit on them?

Of course, experienced workers should upskill or retrain, but apprenticeships should be prioritised for young people. The Government should look at employers and at receiving funds from the apprenticeship levy, using a substantial part of it on young people who began apprenticeships at levels 2 and 3, before the age of 25. We now need to refocus on the under 25s. We need to be ambitious, particularly with how we use the levy. The LGA—I declare an interest as a vice-president —has asked for more flexibility, for example by allowing a proportion of levy funds to be used to subsidise apprenticeship wages.

As we have discussed before, any of the apprenticeship that is unused of course goes back to the Treasury. The Energy & Utilities Skills Partnership did a survey of its membership and found that 54% of the levy was unspent and going back to the Treasury. What a waste for the education sector and for skills and vocational education. Why are we allowing that to happen? We could unlock that logjam by ensuring that we use that money in more flexible ways—there are plenty of examples.

My amendment highlights the issue of young people from ethnic minority backgrounds, who, quite frankly, have not been taking up apprenticeship opportunities. We need to understand why, and how we can encourage them to do that. By being flexible, we can perhaps make that happen. I hope that Members will support this amendment.

[Lord Aberdare (CB)]

My Lords, I have added my name to Amendment 34 of the noble Lord, Lord Storey, because of the key role that apprenticeships have to play in meeting the UK’s skills challenges, as pointed out earlier by my noble friend Lord Bird. However, as it stands, the policy is not working as well as it should or could, as pointed out by the noble Lord, Lord Adonis, and indeed the noble Lord, Lord Storey.

I was about to regale your Lordships with the results of a survey carried out by the energy and utilities sector, but that has already been done on my behalf, so noble Lords will be glad to hear that my speech will be even shorter. However, this illustrates that greater flexibility in the use of levy funds could actually increase the use of apprenticeships to deliver competences needed in that sector, for example through supporting pre-apprentice training initiatives in schools to increase the diversity and inclusiveness of new entrants.

Extra flexibility might allow some of the available levy funds to be used for approved high-quality shorter courses—less than one year long—or for apprenticeship-related costs outside the training itself, which might help in the perennial challenge of encouraging smaller firms to offer apprenticeships. This simple amendment merely gives the Secretary of State the power to request a much-needed review of the apprenticeship levy to ensure that it is working effectively in terms of the level of funding available for different apprenticeship standards and the opportunity to link policy on the levy more closely to other aspects of the overall skills programme. Even if the Government do not accept this amendment, I hope the Minister may say something about how they will respond to the widespread perception that the levy as it stands is not playing as effective a part in addressing the skills challenge as it should.

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[Baroness Chisholm of Owlpen (Con)]

I offer many apologies to the noble Lord, Lord Watson. It was so rude of me. I am afraid my tummy overtook my brain, not for the first time.

Apprenticeships are at the heart of the Government’s skills ambition. Given Covid-19’s impact on our economy, apprenticeships are as important as ever in helping businesses to recruit the right people and develop the skills they need.

I want to take a few minutes to outline the principles of the apprenticeship levy and funding as I think that will help to respond to some of the points made. The apprenticeship levy has put apprenticeship funding on a sustainable footing and means that this year £2.5 billion is available to support apprenticeships. The levy has been set at a level to fund apprenticeship training and assessment in all employers—both those who pay the levy and those who do not.

As my noble friend Lady Penn explained in Committee, the funds available to levy- paying employers through their apprenticeship service accounts

“are not the same … as the Department for Education’s … apprenticeships budget.”—[Official Report, 15/7/21; col. 2025.]

This budget also funds additional payments made to employers and providers with apprentices aged 16 to 18. It funds the £3,000 incentive that can be claimed by employers hiring new apprentices. I should like to highlight to noble Lords that these incentives were recently extended by the Chancellor of the Exchequer until the end of January 2022, helping more employers to invest in apprenticeships as we recover from the pandemic.

This is one example showing that the apprenticeships programme is dynamic and responsive to both employers and the wider economic context. In addition, we are delivering a set of improvements and flexibilities that will make apprenticeships work better for employers in all sectors and give employers greater opportunities to make full use of their levy funds. Importantly, we also continue to listen to employers and adapt apprenticeships to better meet their needs. Work is under way to deliver a package of improvements which responds directly to employer feedback so that they can make greater use of the apprenticeship funds.

I think the noble Lord, Lord Storey, will be pleased to hear that, first, we are introducing a new service to make it easier for employers who pay the apprenticeship levy to transfer funds in their accounts to other employers. Large employers are able to pledge funds for transfers and other employers will be able to apply to receive these funds, helping both to benefit from transfers. Secondly, we are helping employers choose more innovative training models, such as front-loaded training and accelerated apprenticeships, which will help apprentices with relevant skills and experience to complete their training more quickly. Finally, we are supporting sectors of the economy which have more flexible working patterns, such as the creative industries. We will shortly launch a £7 million fund to help organisations in England set up and expand new flexi-job apprenticeship schemes.

I should also like to say a little about how we are supporting individuals into apprenticeships. We have introduced accelerated apprenticeships, which will reduce the duration of an apprenticeship for individuals coming from certain T-levels, skills boot camps and occupational traineeships where they have acquired substantial prior learning. This will join up skills opportunities and make them more appealing to both employers and individuals. We are undertaking the largest ever expansion of the traineeship programme for 16 to 24 year-olds, supporting more young people to move into apprenticeships and work. As over 30% of all traineeship starts are by learners from black, Asian and minority ethnic backgrounds, and over 20% of traineeship starts are from learners with learning difficulties or disabilities, our investment will also help to broaden diversity and inclusion. I hope the noble Lord will agree that there are some positive steps we are taking.

The noble Lord, Lord Storey, asked if the programme has shifted from older people. More than half—53%—of all apprenticeship starts continue to be by young people under the age of 25. This compares to 56% in 2015-16, prior to our reforms. As well as supporting young people into employment, it is important to recognise the role apprenticeships play in upskilling and reskilling people throughout their lifetimes. I hope I have made the noble Lord, Lord Storey, happy with what I have said and that he will therefore feel comfortable withdrawing his amendment.

[Lord Storey (LD)]

I think you have made Lord Storey very happy. I felt at one stage like I was in a sort of parallel universe when I was speaking—with people walking past, it was very strange. I reassure the noble Lord, Lord Watson, that I was not proposing that levy funds be used for wages. I was saying that we should be innovative in how we use the levy and that might mean increasing the amount of money we give to apprenticeships.

I was pleased to hear from the Minister about the package of improvements and new models of working. Flexibility is really important. We are all committed to the notion of apprenticeships, but we have to make the wider community and society realise how valuable they are. Maybe we could start in Parliament itself. I wonder how many apprenticeships for 16 to 24 year-olds there are in the House of Lords. Are there any? Perhaps not. Let us say straightaway that we will introduce some apprenticeships in our House. That would be a real start. I beg to withdraw this amendment.

Amendment 34 withdrawn.