Technical and Further Education Bill

Lord Watson of Invergowrie Excerpts

2nd reading (Hansard): House of Lords
Wednesday 1st February 2017 Lords Chamber

[Lord Watson of Invergowrie (Lab)]

My Lords, it is a pleasure to welcome back the noble Lord, Lord Nash. We have missed his wit, his repartee and his general joie de vivre during the long hours that we have spent on the Higher Education and Research Bill. However, perhaps we should acknowledge his skills at delegation, because he has certainly dodged a bullet with that monster of a Bill and its 500-plus amendments.

I also welcome for the first time the noble Baroness, Lady Vere, to her position as a Whip on an education Bill. We know that she has the credentials but she has a hard act to follow: the last noble Baroness to hold that position used it as a launch pad directly into the Cabinet—so there is no pressure there.

We turn to our consideration of a Bill that is rather more modest than the one to which I have just referred, although not in terms of its aims, because it is hoped that it will have far-reaching consequences for those young people largely outwith the scope of the Higher Education and Research Bill. We are broadly supportive of what the Bill aims to achieve, although we believe that it will benefit from being strengthened in several areas. Labour presided over a significant expansion of further education, allowing thousands of young people across the UK to develop new skills and gain valuable qualifications. We continue to believe in the value of apprenticeships and that students should be able to choose from a range of quality courses.

The Bill contains proposals to implement measures contained in the post-16 skills plan, as the Minister said, and it also allows for an insolvency regime and anticipates the devolution of the adult education budget to combined authorities. All that is well and good but none of those issues can be divorced from the current financial health of the sector. By the sector, I mean post-16 education and training in general, which is very much the poor relation when compared with the funding directed at 11 to 16 year-olds and, indeed, higher education. The average funding per student in the sixth forms of schools and academies and in sixth-form colleges is now 20% less per pupil than the funding received to educate each 11 to 16-year-old and 47% less than the average university tuition fee. Perhaps the Minister can explain why it should cost so much less to educate a 16 to 18 year-old than a 15 year-old or a 19 year-old.

Despite what the Minister said in his opening remarks, the facts are that the sector is inadequately funded. Over the past five years, funding has seen a real-terms reduction of 14%. The allocation for 2015-16 fell further as a result of the 2015 summer budget, which reduced the non-apprenticeship part of the adult skills budget by an additional 3.9%. The worry is that the ongoing area reviews could move beyond the mergers announced so far and lead to actual further education college closures.

However, it is not only further education colleges that are feeling the strain. Last September, the Sixth Form Colleges Association reported that two-thirds had dropped courses as a result of funding pressures and three-quarters had limited the size of their study programmes. Eighteen months ago, the National Audit Office reported that more than 100 colleges had run a deficit in 2013-14. No doubt that was a major motivation for the Government in framing Chapter 2 of the Bill, which deals in some detail with the consequences of insolvency—however unlikely, as the Minister said, that may be, as I certainly hope is the case.

The Bill takes an important new step in outlining the college-specific insolvency regime and should bring greater certainty through a clear legal framework. Having a new type of administrator with responsibility for handling cases and to work to protect the interests of students is important. During insolvency, colleges would either be kept going or students would be transferred to an alternative provider, but we would like assurances that the proceedings do not disproportionately impact on students from low-income backgrounds, nor deprive teaching staff of a fair redundancy deal or access to their pensions.

The question is: why should such provisions be necessary? Prevention is surely always better than cure, and we believe that it would have been much more sensible, and indeed far sighted, had the Government decided to fund the sector adequately—on even, say, 75% of the rate per student in the higher education sector—rather than needing to prepare a large supply of sticking plasters ready to apply if and when accidents happen.

Although the Minister may dismiss criticism from these Benches, he cannot so easily do that with regard to non-political bodies such as the Institute for Fiscal Studies. Two days ago, that body warned that the Government’s target to increase the number of apprentices risks being “poor value for money”, suggesting that increasing the number of apprenticeships could come at the expense of quality. It expressed concern that the apprenticeship levy and its targets risk repeating the mistakes of recent decades by encouraging employers and training providers to relabel current activity and seek subsidy rather than seeking the best training. These are serious concerns that we believe the Government need to address.

As I stated earlier, further education is the poor relation in education. I take no pleasure in saying that it seems to be the poor relation in your Lordships’ House too. Only 17 Back-Benchers have thought it worth while participating in this debate. Two months ago, five times that number took part in the Second Reading of the Higher Education and Research Bill, most, it has to be said, prefacing their remarks by declaring interests if not as practising academics then as chancellors, masters, members of court or holders of other senior positions in institutions. I mean no disrespect to noble Lords in the Chamber when I wonder how many will be required to do likewise today. However, we do have among us two former Secretaries of State for Education, as well as the redoubtable noble Baroness, Lady Wolf, whose reports of 2011 and 2016 contain much sage advice.

The Minister will no doubt refer me to the figures mentioned by the Government on what is being spent on apprenticeships. A figure of £1.5 billion is not to be dismissed—and we do not dismiss it—and of course the apprenticeship levy is expected to realise a further £2.9 billion by 2020. However, I have to say in passing that, although we on these Benches applaud the Government’s initiative in introducing the levy, few employers have done likewise. It is at least interesting to speculate what would have happened had a Labour Chancellor made that decision. I suspect we would have been labelled “anti-business” by the Government’s friends in the media. However, despite squeals from some employers, it seems that the Mail, the Telegraph and the Sun have been strangely uncritical.

The institute will have responsibility for the regulation of all technical learning and for implementing the post-16 skills plan and the 15 technical routes, stemming from the report by the noble Lord, Lord Sainsbury. But will the institute have adequate resources? It has not even come into operation yet but already it will have its remit increased from April 2018. Various major players in the sector, such as the Association of Colleges, the Sixth Form Colleges Association and the University and College Union, have concerns as to whether it will have the capacity to manage its new responsibilities effectively. It will be required to improve access and quality in the apprenticeship programme, while redesigning technical qualifications and establishing the employer panels. At the last count, the institute had 40 employees. Even with the best will in the world and a great deal of overtime, that seems a tall order. The Minister would ease many of the concerns by assuring noble Lords that additional resources, not least staff, will be made available to the institute.

There is also the issue of a crowded field when it comes to oversight. The Bill provides for roles for the institute, Ofsted, Ofqual and the Office for Students. Ofqual regulates English and maths qualifications, which will form an important part of the technical education programmes regulated by the institute, which also has overlaps with the OfS and Ofsted. These issues will need to be resolved, and we will look to progress that in Committee.

Further, there is the question of representation on the institute’s board. We do not question the proposal that it should be employer-led, but there should also be a presence from the sector itself, in the form of the colleges, the staff who work in them and those who are learning—both apprentices and students. The institute will be required to establish an apprentice panel and, next year, a technical students panel. The mechanism for doing so remains to be agreed, but these panels will be ideally placed to have a representative on the institute board. Again, these are issues that will exercise us in Committee.

Clause 23 and Schedule 2 make provision for the transfer of college property and assets in the event of administration. Colleges and their estates are significant public assets which we believe should remain in the public sector for the benefit of local communities. We require assurances from the Minister that public assets will not be transferred to private, for-profit companies. This issue is one that he will recall me raising with him with regard to academies, and the potential pitfalls are similar. Academies are permitted to dispose of public land only with the express permission of the Secretary of State, and I anticipate the Minister will offer similar assurance as regards colleges. But we will seek additional protection to ensure that public assets are kept in public ownership. One means of achieving that could be to give the local authority special status as having a significant interest in the continuation of education in its area.

We know that careers advice in schools is rarely of the standard necessary to give young people the full range of options open to them. Too often, schools simply want as many of their students as possible to go on to university because it looks good in the figures they present to the Department for Education. However, it ignores the fact that for many young people a vocational or technical route is much more appropriate and probably more rewarding in both senses of the word.

There is also a need for further education students to receive careers advice and I have looked to see what the Bill has to say on that. A word search produced precisely nothing. I checked the Explanatory Notes—nothing. How can that be? A careers and enterprise company was established by the Government with a £90 million budget for this parliamentary term to provide this sort of advice. It has a remit for further education as well as schools and yet many colleges are not covered by it, and none in London. Why is coverage not universal? Surely that is the ultimate aim. We need a timescale for that to happen and it should be quick. I hope the Minister will be able to answer that question in his closing remarks but, if not, again he will be invited to answer it in Committee.

One word that appears regularly throughout the Bill is “regulations”. It seems that every Bill we consider with a connection to education has that word running through it like a stick of Blackpool rock. Here we have provisions for the Government to issue regulations on a variety of topics, from disqualification of further education college governors to the fees that can be charged by the institute, and from college insolvencies to the transfer of property and other assets. I have said consistently in the past that much too much legislation is of a secondary nature and we shall see what the Delegated Powers and Regulatory Reform Committee of your Lordships’ House has to say about this Bill. On past form it can be anticipated that it will not be enamoured of it.

There is so much background available on apprenticeships and technical education that it is difficult to keep abreast of it. Only last week we had the latest entry into that territory in the shape of the industrial strategy White Paper and the suggestion that there should be technical universities, whatever that might turn out to be. I wonder whether the noble Lord, Lord Baker, had a wry chuckle when he heard that, given his role in establishing city technical colleges three decades ago. As ever, I await his contribution with great interest.

We shall adopt a constructive approach to the Bill in Committee. In presenting Labour’s case for a stronger technical and further education sector, our Front Bench team want to shape the Bill so that it increases the options available to students and delivers the safeguards needed to allow colleges to deliver quality teaching. The sector and those it prepares for working life deserve nothing less.

--- Later in debate ---

[Lord Nash]

My Lords, we have heard many expert contributions from noble Lords with considerable collective experience of education, which I found extremely helpful. My colleague Mr Halfon, the Minister for Apprenticeships and Skills, has been present throughout the debate and has already told me that he found the contributions very thoughtful. I am sure he also found the debate very instructive. I have no doubt that the scrutiny this House will provide will further strengthen the Bill. As I said, I am very grateful for the points that have been made. I will respond to as many as time will allow, and write to noble Lords on those points that I cannot cover. I look forward to discussing the issues further in Committee.

A number of noble Lords raised the important question of status. I agree that we desperately need to raise the status of technical education, and ultimately to achieve parity with academic routes. We have a long way to go to achieve this, although I believe that the Bill is part of what the noble Baroness, Lady Wolf, called a serious reversal of the current situation. Many noble Lords, including the noble Baroness, Lady Wolf, the right reverend Prelate the Bishop of Norwich, my noble friend Lord Leigh, the noble Lord, Lord Watson, and my noble friend Lord Lucas raised the important question of quality. The core aim of the apprenticeship reform programme is to improve the quality of apprenticeships in England. All reformed apprenticeships will be based on a standard which has been designed by employers, giving them the opportunity to set out the skills, knowledge and behaviours that their apprentices will need to be fully competent. Over 490 standards have either been developed or are in development, involving 215 groups of employers. Instead of being assessed through a number of small, low-quality qualifications throughout the apprenticeship, in future apprentices will be tested at the end of their apprenticeship by a new rigorous assessment, also developed by employers, to really test that they can do the job. No one will be able to pass their apprenticeship unless they have met this new high bar. We have introduced new quality criteria which providers have to meet before they can be approved to deliver training as part of an apprenticeship, and Ofsted, HEFCE and QAA will continue to quality assure the training as it is delivered. The Skills Funding Agency will also continue to monitor outcomes and intervene where it has concerns.

A number of noble Lords, including the noble Baroness, Lady Morris, and the noble Lord, Lord Hunt, raised the potential problem of being fixated on targets. The 3 million target is an important galvanising force and a statement of intent but our reforms are absolutely about quality, not just quantity. Good progress is being made on the set-up of the institute and we fully expect it to be able to carry out its apprenticeship functions from April this year. Last week, we announced the institute’s board members. I am extremely grateful to my noble friend Lord Baker for his very high praise for the board members. We have also published the institute’s draft operational plan, which sets out how it will carry out its functions. This follows the publication for consultation earlier this year of the Secretary of State’s draft strategic guidance letter to the institute for 2017-18, which outlines the policy parameters within which the institute should operate. The recruitment of the senior team is going well. The interim chief executive and deputy chief executive are in place, six permanent deputy director roles have been filled and all will be in post in April, and a permanent chair will be announced very shortly. Job advertisements for the chairs of the institute’s route panels are out now, and interviews will take place before the end of the year.

A number of noble Lords asked whether the institute will have adequate resources. The final size and structure of the institute is still to be determined, but we expect that around 60 to 80 staff members will be appointed. I am sure that my noble friend Lord Leigh will be pleased to hear about the appointment of Paul Cadman to the board of the institute. He is the CEO of a training provider.

The noble Baroness, Lady Morris, the noble Lord, Lord Hunt, the right reverend Prelate the Bishop of Norwich and others talked about overlap with other bodies. We are confident that the institute will have a clear and distinct role in technical education. Instead of embarking on a mammoth merger of the different bodies, the Government are asking Ofsted, Ofqual, HEFCE and the QAA to work together collaboratively towards a common goal. We have explained in our draft strategic guidance for the institute that we will expect it to play a leadership role in the context of apprenticeships, including establishing a quality partnership group. This is also referred to in the institute’s draft operational plan published last week. To ensure the roles are distinct and transparent, we are preparing an accountability statement that will make the bodies’ responsibilities clear and avoid overlap or gaps.

A number of noble Lords, including the noble Lord, Lord Watson, raised the point about representation. The shadow institute is establishing route panels, which will be aligned to the technical education routes—which are groups of occupations—and will review and approve proposals for new occupational standards and the standards and assessment plans themselves.

The noble Lord, Lord Aberdare, asked about the constitution of the panels. They will be largely made up of institute staff but will include a range of experts with knowledge of the occupations within a particular route and could include employers, academics, professional bodies, sector and trade organisations, and national colleges or other training providers. The institute is also required by legislation to ensure that all standards and assessment plans have been subject to independent, third-party scrutiny. The draft strategic guidance sent to the institute sets out that it should involve a wide range of interested parties in this process.

A number of noble Lords, including the noble Lord, Lord Addington, my noble friend Lady Stedman-Scott and the noble Earl, Lord Listowel, raised the question of technical education for vulnerable students. Technical routes will be fair and accessible to young people with SEND and care leavers, and reasonable adjustments will be made to enable them to take part and succeed. When such young people cannot access a route because of prior attainment, they will have a “transition year”, which will be flexible and tailored to individual need, with additional support to ensure that care leavers and young people with SEND complete their courses and move on to the next stage of their learning. This “transition year” will help young people from all backgrounds, ability levels and personal circumstances to gain the skills they need to enter employment.

My noble friend Lord Leigh and the noble Lord, Lord Aberdare, raised the question of representation of apprentices. To ensure that the institute represents the views and interests of apprentices, it will establish an apprentice panel by 1 April, which will report and make recommendations directly to the board. This panel will be made up of apprentices from different occupations and experiences, and it will decide for itself what issues it will focus on.

On copyright, which was raised by my noble friend Lord Lucas, the noble Lord, Lord Aberdare, the noble Baroness, Lady Garden, and others, under the reforms it is our intention that there will be one qualification per occupation or group of occupations. Employers and other professionals will play a significant role in determining the content of the new qualifications, with the support and input of the institute. The institute will have the final say over approving these qualifications and their content. It is therefore appropriate that copyright for relevant course documents should rest with the institute. The institute is empowered to grant any person, including that organisation, a licence to use the qualification for a specified period or potentially to be used for other markets; that is, internationally. As a public body, the institute is under a duty to act fairly and transparently.

We recognise that this is a significant departure from the current system, whereby awarding organisations are free to decide on the qualifications they offer and on their content. We know that copyright is an important feature of the current system. However, I reassure noble Lords and awarding organisations that the copyright measures in the Bill are not intended to disadvantage them. To make sure that the new system is fair and transparent—and that it remains an attractive commercial proposition—we want to work with awarding organisations and others. We want to hear their views on these arrangements; for example, what the length of a contract should be or exactly which documents should be the subject of copyright. It is instrumental to the reforms that the institute, rather than organisations, dictates the content of the qualification. We believe that this will help drive up competition and keep the market active. Organisations whose qualifications were not approved in one round will be able to improve their qualification and its delivery and bid in another round. They would be prevented from doing so if copyright were not vested in the institute.

A number of noble Lords, including my noble friend Lord Lucas, raised the point about the single awarding body. To bring the system in line with the best in the world and ensure excellence in technical education, the noble Lord, Lord Sainsbury, recommended a single awarding organisation per qualification. The proliferation of qualifications has in the past led, as we all know, to a race to the bottom and a decline in standards.

The noble Baroness, Lady Garden, asked about certificates, as did my noble friend Lord Lucas and the noble Lord, Lord Aberdare. The institute will have overall responsibility for apprenticeship certificates. It will work with the SFA to design a high-quality apprenticeship certificate that will be awarded to learners who successfully complete their training. Every apprentice will receive the same design, and in time, learners who pass an approved classroom-based course will also receive a similar institute-designed certificate. The institute is by no means an awarding organisation, and a certificate will be given only when the assessment organisation has confirmed that the apprentice has passed their end-point assessment and this has been validated by the SFA.

Approving certificates for standards will be much less bureaucratic than for frameworks; indeed, the SFA took on responsibility for the certification of apprenticeship standards at the start of this year, and the cost will be covered by the employer, not the apprentice.

My noble friends Lord Baker and Lady Stedman-Scott and the noble Lord, Lord Hunt, asked about pupils moving at 14. Young people can choose to focus on technical education at various ages and stages. Between the ages of 14 and 16, young people can study technical awards alongside their GCSEs, and of course they can enrol at a UTC, to which a number of noble Lords referred.

I am grateful for the endorsement by the noble Baroness, Lady Wolf, of the insolvency measures in the Bill. I will reflect on how we might consider the independent provider sector and how best to protect students—a point my noble friend Lord Lucas also made. HE and FE sectors have different characteristics, so it follows that they might need different approaches to student protection in the event of insolvency. The Higher Education and Research Bill requires student protection plans to be put in place by providers. Both SPPs and the special administration regime have the same objective of student protection, albeit by different means. The likelihood of insolvency of independent training providers is low; the SFA oversees a rigorous process through approving and monitoring independent providers, which subject financial returns to the SFA. Independent providers eligible to offer student loans are subject to the SFA’s policy on intervention, which is triggered by Ofsted inspection or not meeting SFA standards. We have put into intervention that it may have to take remedial action, with the potential effects on learners taken into account. As companies, independent training providers are already subject to insolvency law and, like public providers, private providers are already subject to obligations in their funding agreements which they have with the Government, which require them to protect the interests of students.

On more detail on private providers, the noble Lords, Lord Watson and Lord Aberdare, raised the question of the private sector from slightly different directions, as one might expect. The private sector already provides a significant amount of education and training very effectively. It is true that transfers can be made to private companies. However, I recognise the concern that assets which may have been paid for by the taxpayer, and for the purposes of providing education, should not then be transferred to the private sector on the cheap. I reassure noble Lords this is not the case. The Bill provides four key protections, acting as a quadruple lock, should the education administrator deem it necessary to make a transfer scheme for the property, rights or liabilities of an insolvent FE body.

First, the education administrator is restricted in who they can transfer the assets to. These bodies are prescribed in secondary legislation and are public sector bodies with educational functions, colleges and similar public-funded educational bodies. Transfers may be made to private companies, but if so, the company must be established for the purposes, which include the provision of educational facilities or services. Secondly, any transfer scheme must be for the purposes of achieving the special objective; that is, it must avoid or minimise disruption to students. Thirdly, creditors have a right of challenge should they consider that the education administrator is not working to fulfil the objective of achieving the best result for creditors as a whole, so far as is consistent with that special objective with regard to students. Finally, the Secretary of State or Welsh Ministers must approve the proposed transfer scheme. Any approval will include, among other matters, consideration of whether it is for the purposes of achieving the special objective.

The noble Lords, Lord Watson and Lord Young, mentioned the IFA’s assertion that most money raised through the levy will not be spent on apprenticeships. We disagree with this. By 2019-20, spending on apprenticeships will be £2.5 billion, and we are confident in the extensive research that demonstrates the real economic benefits that apprenticeships deliver.

[Lord Watson of Invergowrie]

When the issue was discussed on Report in the other place, the question was raised as to whether the Treasury might keep part of the money raised through the levy. I do not think that I am being unfair to the Minister for Apprenticeships and Skills when I say that he did not answer that question clearly on Report. Can the Minister give us an assurance now that all the money will stay in the sector, not with the Treasury?

[Lord Nash]

I will write to the noble Lord about that, checking carefully before I respond.

I was very interested to hear from the noble Baroness, Lady Cohen of Pimlico, about her involvement with the Cambridge UTC and the Parkside educational trust MAT, and about the advantages. For the very reasons that she mentioned, it is our policy to encourage all UTCs to join MATs. On her point about the evaluation of UTCs and the fact that apprenticeships are not recognised in outcomes, this is something that we are looking at very closely at the moment. She also made the point that institutes should not approve degree apprenticeships. Degree apprenticeship standards are currently approved by my department. I can reassure her that, although the institute will take on this approval function, it will not be responsible for investigating or engaging with individual universities. However, it will of course work with the Office for Students in the future.

Many noble Lords raised the important matter of careers and careers advice. We take this extremely seriously. That is why the industrial strategy set out that we will publish, later this year, a comprehensive strategy for careers information, advice and guidance across all ages, expanding the quantity and quality of careers advice. As my noble friend Lord Lucas rightly pointed out, the development of careers leadership in schools and colleges will be an important element of this.

We are investing £90 million in this Parliament to improve the quality and coverage of careers advice for young people, and the Careers & Enterprise Company continues its excellent work. I echo the praise expressed by the noble Lord, Lord Aberdare, for this organisation, which is very ably run by Claudia Harris. Picking up on the point made by the noble Lord, Lord Storey, about the importance of careers education, the advisers will also support schools and colleges to develop comprehensive strategies. However, more needs to be done to inform pupils of their options. We have recently agreed to institute a requirement for local authorities to write to the parents of year 9 students, informing them of the existence of UTCs, further education colleges and studio schools that offer courses for students starting at the age of 14.

My noble friend Lady Pidding made a good point about the need to do more to promote apprenticeships. We launched a new apprenticeships communications campaign in May last year, promoting the benefits of apprenticeships for young people. It builds on the previous successful Get In Go Far campaign. National Apprenticeship Week 2017 will take place in March, celebrating the positive impact of apprenticeships and traineeships.

As the noble Lord, Lord Watson, said, getting careers advice right is an important area—as the Minister, my honourable friend Robert Halfon, noted in his careers speech on Monday. I look forward to hearing more from noble Lords in Committee, including my noble friend Lord Baker, about approaches to strengthening careers advice.

My noble friend Lord Baker talked about maths, as did the noble Earl, Lord Listowel. We now have maths hubs and are supporting many maths programmes, such as Singapore maths and Shanghai maths. Over the last few years there has been a substantial increase in the number of pupils taking maths GCSEs and A-levels. My noble friend Lord Baker talked about the skills gap in STEM subjects and computing. We have introduced coding and computing into the curriculum for the first time. He said that there were just over 60,000 pupils taking computing at GCSE. I accept that that is a small number, but it is from a standing start. I pay tribute to my noble friend’s engagement in the digital economy through UTCs.

My noble friend Lord Lucas talked about schools having a dedicated person to engage with the world of work. I consider that to be very important. I know that before the last election the noble Lord, Lord Adonis, had the idea that this should be the case in every school. We are not as prescriptive as that, but certainly it happens in my schools. I think it is very important that schools try to find the money in their budget to do that because, when you see the effect of pupils’ engagement with the world of work, the payback is obvious. Regarding the school sector’s engagement with the world of work, we have certainly found that the door is wide open, with businesses and the professions being extremely willing to help.

The noble Baroness, Lady Morris, talked about the importance of flexibility, and I entirely agree. A framework of routes will ensure that choices are clearer for young people. She also raised concerns about assessment and the approach to assessment for apprentices, and I look forward to discussing this with her further in Committee. We recognise that there is more to do to ensure the breadth of the high-quality assessment organisations that we need, but we have been making good progress through the register for assessment organisations, run by the Skills Funding Agency.

The noble Lord, Lord Watson, asked why less money was spent on post-16 education. The best predictor of attainment at age 19 is attainment at age 16, and that is why we prioritise school funding. As we all know, students have many more pastoral issues, which are expensive to deal with, in the earlier years.

The noble Lord, Lord Hunt, referred to the governance of FE colleges. We talked about this when we met yesterday, and I have already discussed it with my ministerial colleague, Robert Halfon. For the academies programme, we have started something called Academy Ambassadors, recruiting pro bono non-executive directors from businesses and the professions to the boards of multi-academy trusts. As of this morning, we have already made 417 appointments, which is quite a pro bono movement up and down the country. I have discussed with my fellow Minister the possibility of encouraging FE colleges which need further support on their boards to engage with this programme.

The noble Baroness, Lady Garden, asked whether craft, creative and service skills are intended to be covered by technical education. The answer is that they are. The noble Lord, Lord Storey, talked about the relevance of courses, rather than students just doing courses that are popular. Of course, our destination data and data on jobs and pay rates, as well as on payback from courses for students, will in future enable students to make much more informed decisions.

My noble friend Lord Leigh asked about spending on adult education. The total spending power of the FE sector to support adult and 19-plus participation will be £3.4 billion by 2019-20. In cash terms, this is an increase of 40% compared with 2015-16. Within the £3.4 billion, the Government have maintained funding for the adult education budget, which supports adult skills participation in cash terms at £1.5 billion.

My noble friend Lord Baker used some statistics from Davos which were very persuasive. Industry and all of us are aware of these issues. They create an urgency, but I am as hopeful as the noble Baroness, Lady Morris, that this is the moment when we start to reverse the trend that we have all discussed today.

Today’s debate has been thoughtful and enlightening, and I look forward to further discussions. The noble Baroness, Lady Morris, said—

Technical and Further Education Bill

Lord Watson of Invergowrie Excerpts

Committee: 1st sitting (Hansard): House of Lords
Wednesday 22nd February 2017 Grand Committee

Moved by

[Lord Watson of Invergowrie]

1: After Clause 1, insert the following new Clause—
“Report on quality outcomes of completed apprenticeships
(1) The Institute for Apprenticeships and Technical Education must report on an annual basis to the Secretary of State on quality outcomes of completed apprenticeships.(2) A report under subsection (1) must include information on—(a) job outcomes of individuals who have completed an apprenticeship;(b) average annualised earnings of individuals one year after completing an apprenticeship;(c) numbers of individuals who have completed an apprenticeship who progress to higher stages of education;(d) satisfaction rates of individuals who complete an apprenticeship with the quality of that apprenticeship; and(e) satisfaction rates of employers, who hire individuals who complete an apprenticeship, with the outcome of that apprenticeship.(3) The Secretary of State must lay a copy of any report under subsection (1) before each House of Parliament.”

[Lord Watson of Invergowrie (Lab)]

My Lords, as we embark on three days of Committee on the Technical and Further Education Bill, I must admit that I have been caught slightly unawares by the changed groupings that have been issued, further to those circulated yesterday. So I may have to edit as I go along on some of those to which I shall speak.

Be that as it may, the first group comprises Amendments 1, 4, 5 and 19—though not Amendment 17, as I had thought—and is mainly about the quality of outcomes. That concerns not only the input to but the outcomes of the apprenticeships that are a central part of the Bill. I say “outcomes” because outputs and outcomes are not necessarily the same thing, a point we want to stress with Amendment 1. Despite some progress in recent years, the situation for those young people who remain not in employment, education or training remains of some concern and we cannot be complacent about the job that still needs to be done to deal with many of the 16 to 24 year-olds in what is known as the NEET category.

As my noble friend Lord Hunt and I said at Second Reading, the focus for the Government’s target of 3 million apprenticeships must be high standards, not simply a concentration on meeting what was, after all, rather an arbitrary figure. Ministers must now choose either to honour their pledge to increase the quality of apprenticeship training or allow themselves to be consumed by the need to hit those targets. Last year the Public Accounts Committee emphasised the need for the Government to be unrelenting in their focus on the quality of apprenticeships and we believe that this is very much the key. While the temptation may exist to water down apprenticeship standards to hit the 3 million target, such short-termism would ultimately prove counterproductive. Unless there is an increase in quality, people will continue to look down their noses at apprenticeships and technical education when they should be viewed with the same respect as other forms of further education, such as university degrees.

Young people themselves are very keen to ensure that their apprenticeships are marked by quality. In last year’s Industry Apprentice Council survey, their main concern was quality because industry apprentices rightly see their apprenticeships as badges of honour—as, it is to be hoped, do their employers. It was satisfying to learn that nearly nine out of 10 level 2 and 3 apprentices were satisfied with their apprenticeships, but with such an increase planned it is essential that the satisfaction rate is maintained.

Given the new routes and standards for technical education and apprenticeship expansion, it is vital to track the outcomes for each group. The last two years’ apprenticeship evaluations showed small increases in the proportion that had completed their apprenticeships and were in work, but monitoring those trends is important. Related to that is monitoring progression and pay, which is not just important but very important. Apprentices have talked about a number of positive impacts in the workplace, but that does not always translate into pay or promotion benefits. Some 46% of apprentices received a pay rise after completing their apprenticeship and 50% had been promoted. Both figures represented an increase, and we certainly hope that trend will continue because it is important that young people who have worked hard to complete their apprenticeships are made to feel that it has been worth while. If they do not have that sense, perhaps because they feel that they have to some extent been exploited, demoralisation can set in, and that can dissuade the next cohort.

This issue was highlighted in last month’s report by the Low Pay Commission, which revealed that 18% of apprentices were being paid less than their legal entitlement. It is vital that these headlines do not act as a deterrent for non-graduate groups going into professions, and do not deter future young people from taking up apprenticeships. We believe that when the apprenticeship levy comes into force in April, tackling issues concerning exploitation should be a priority for the new Institute for Apprenticeships and Technical Education.

Preventing such misbehaviour will require a strong regulator with power to punish instances of non-compliance on minimum pay. I repeat: this is a legal entitlement and there should be no exceptions under any circumstances. I accept that the Government very much hold to that view and I am certain that the institute will be told that it is an important part of its operation. Without that, the potential for further long-term harm to the reputation of apprenticeships is considerable. Research undertaken last year by the Association of Chartered Certified Accountants showed that apprenticeships face something of an image problem among many 16 to 18 year-olds. More than half the young people polled thought that apprenticeship routes would lead to their earning less over the course of their careers than if they studied at university. Apprenticeships are still seen as the poor relation when compared to traditional forms of higher education. If the Bill achieves anything by helping to reduce that perception, it will, in that sense alone, have been something of a success.

The duties that we place on the institute by the amendment are not onerous. Surely the Secretary of State would expect nothing less than an annual report from the institute on the quality of outcomes of completed apprenticeships. My question is: why not include that provision in the Bill? It follows, particularly while the Government are in pursuit of the 3 million target, that Parliament should have the opportunity to receive and debate the report. If the Government are serious about quality trumping quantity—I have done it again and I no longer feel comfortable using that word; I should have said “quality triumphing over quantity”—we should ensure maximum transparency in that regard.

Those sentiments dovetail with our Amendment 4 on standards and are a natural fit with new Section ZA11 on page 22 of the Bill, which sets out how the institute should publish standards in relation to the 15 occupations highlighted by my noble friend Lord Sainsbury in his seminal report. It is, of course, important to differentiate between quality and standards—terms that are often wrongly used interchangeably. It will be for the institute to set and maintain standards, while Ofsted and, in respect of maths and English, Ofqual, will have the task of ensuring that quality is widely established and then maintained. It is to be hoped that all the organisations charged with oversight will not overlap too much. I say “too much” because some overlap is preferable to gaps being allowed to develop through which who knows what might fall. To a significant extent, this is a question of resources and it will be the Government’s duty to ensure that staffing levels and resources of other kinds are not held at levels that restrict the effectiveness of any of the oversight bodies, particularly the institute.

Some surprise has been expressed by organisations in the sector at what Amendment 5 is intended to achieve. Let me be clear: first and foremost, it is concerned with achieving the best quality of teaching in further education institutions. No one would gainsay that, but before one can claim quality, one must have a means of measuring it. That is not to say that no measurement is currently undertaken, nor have there been suggestions that teaching quality in further education is poor. However, the detail we have is less than is available in higher education and, as noble Lords will know, when the teaching excellence framework is introduced in universities, the level of scrutiny will increase. We believe simply that, warts and all, the use of some sort of metrics would be advantageous, and Amendment 5 is not prescriptive as to what they might be. We simply call on the Secretary of State to bring forward a scheme to be operated by the Quality Assessment Committee of the Office for Students to ensure good-quality teaching in the further education sector. We also advocate a simple pass/fail outcome, with no suggestion of the cumbersome and ultimately unhelpful gold, silver and bronze scheme suggested for higher education. This would assist in achieving consistent levels of quality, with a broader aim of allowing the sector to build a relatively focused group of qualifications that carry the recognisability and acceptance of GCSEs and A-levels. People know what they are getting with those qualifications and the ultimate aim should be for something similar to develop with technical qualifications.

Finally, Amendment 19 would require the institute to publish apprenticeship assessment plans for all standards. Recent analysis of real-time experience shows that number-crunching on the government figures published last October suggested that there are no approved awarding organisations for over 40% of learner starts on the new apprentice standards. That is surely a matter for concern, although moving from a framework to standards involves moving down a road that will not, by any means, always be smooth. But apprentices on the standards will have to face end-point assessments for the first time and those assessments have to be carried out by organisations that have been cleared for the task by government or Skills Funding Agency-registered apprentice assessment organisations. Is the Minister confident that this will happen and that it will happen evenly across the country?

There is a degree of uncertainty about how this will evolve and what role the institute will have in relation to, say, Ofqual. Because of that it is important that we have transparency on who is being cleared and who is doing the clearing. As this process strengthens and multiplies, as it needs to do to meet all the government targets, the Government will have to pay close attention to the issue of capacity; otherwise, they will find themselves in a logjam of standards approvals as early as the middle of next year. That is the point at which any Government of any political persuasion, when they have the Opposition and other stakeholders bearing down on them, might be tempted to cut corners. Clearly, we do not want to see that but, like other stakeholders, we want to see what progress is taking place in real time. That is why we have tabled these amendments. I beg to move.

[Baroness Morris of Yardley (Lab)]

My Lords, I was not going to speak this early but I support these amendments. The desire across all parties in the Committee to achieve high standards in apprenticeships is unquestioned. We know that is what needs to be done. We know that is what we have failed to do in the past. I think the jury is still out on whether or not the Bill will achieve that.

We know from experience that new structures do not always achieve the ends that we want. There is a real danger in politics that because structures are the things we can control, that is where we put our emphasis. It is the one thing we can do. We do not teach, we do not mark, we do not assess; we can give funding and we can build structures. Sometimes there is a danger that we persuade ourselves that as long as in our mind and on paper the structure looks right, all will be well and things will be delivered. The education system is littered with gaps between the intentions of the structures and the reality of what is being delivered to children and young people. If you look at any part of our education and skills system, nowhere is that more the case than in skills and apprenticeships. We do not have a strong basis on which to build. We are not building on a record of high standards.

To be honest, you have to be as old as I am to remember the day when apprenticeships were generally thought of by the public as being high-quality training that did young boys and girls good in terms of the opportunities they had for life. Anyone a bit younger than me has an impression of an apprenticeship as being second best, not wanted—perhaps okay for someone else’s child but certainly not for mine.

Throughout the Bill the testing of whether we have done enough to ensure high standards is crucial to what happens in the future. The Government have a real quandary about how to deal with it—whether to go for the 3 million target or for standards. I feel certain that at some point along the line those two really good ambitions—nothing wrong with either of them—will come into conflict with each other. It is important as we go through the Bill that we put in some measures to make sure we are monitoring the standards and outputs of these new structures that we are putting into place.

Amendments 1 and 4 do that. Why would we not want to know what is happening to people who have taken the initial apprenticeship route? Why would we not want to know what employers think of people they might recruit? Why would we not want to know what the students themselves thought of their apprenticeships? I do not doubt for a moment that the Government have plans for how to get that feedback. Indeed, I know that to be the case because they are not silly; of course they will want feedback.

My noble friend on the Front Bench made a crucial comment: this is as much about building trust with the public and the people involved in apprenticeships, both employers and users, as it is about anything else. It is not enough for the Government to collect the statistics and then amend structures or legislation on the back of them. This is not a highly charged Bill politically and there is a great deal of good will across both Houses of Parliament to make sure it succeeds. Our joint endeavour is to build confidence and trust among teachers, parents, employers and learners. Even if the Minister wants to amend it in some way, because we could have lots of arguments about the detail of the information to be collected, this is a reasonable amendment. Its aim and thrust would stand us in good stead in the Bill we are now considering and I support it.

--- Later in debate ---

[Lord Nash]

I will write to my noble friend about that.

[Lord Watson of Invergowrie]

My Lords, I thank all noble Lords who have contributed to this lively debate. It is important that the Minister in his response began by saying—I wrote it down—that the 3 million target is a target but quality comes first, and that the institute is not responsible for meeting the target but for ensuring quality. Those words will be well received, and to have them in written in Hansard will be a comfort to many people. However, that is the aim and it has to be followed through to ensure that apprenticeships achieve what everyone in this room would want them to achieve.

There seem to be three primary aims for apprenticeships, at this time anyway. One is that the aforementioned word “quality” must be everywhere. The second is that they are able to produce young people, and perhaps not-so-young people, equipped to fill the skills gaps in the economy that we know are there. The third aim is that apprenticeships and everything surrounding them should ensure what my noble friend Lady Morris said: that they have public confidence and that parents in particular are not just willing but knowledgeable enough to guide their sons and daughters into apprenticeships with the confidence that they will get something worth while out of them. If that public confidence is not there, the 3 million target will not be met. I therefore hope that those three aims will be met as a result of the institute being reformed.

The Minister mentioned Ofsted. The noble Lord, Lord Lucas, covered some of the points I wanted to make but the Minister said Ofsted tells him that it has sufficient resources. I am tempted to say that it would, would it not? However, with a new head of Ofsted, I should have thought that this was a time to increase resources to take account of increased responsibilities and duties. There will clearly be far more apprenticeships than there have been. If Ofsted has the work deriving from Bill added to its ability to inspect schools—some are inspected rarely—it is hard to see how that can be done without additional resources. The Minister did not mention additional resources and I suspect that is because there may not be any, but it would be helpful if he could clarify the point about Ofsted. It is difficult for us to take on board that Ofsted could suddenly adopt extra responsibilities without additional resources.

The Minister also mentioned the Office for Students, particularly in respect of Amendment 5. He did not believe that it was appropriate for the OfS to have the regulating duty set out in that amendment and that the body’s role was regulating higher education. I agree that Ofsted will have the lead role but that does not preclude the OfS. I must ask the Minister for clarification because—with due deference to my noble friend Lady Donaghy—there are five acronyms in the letter he issued today for bodies involved in apprenticeships and technical education. The OfS is not one of them, yet it has some role in the provisions of the Bill. If Ofsted is going to take the lead role, it impacts on the resources argument. We need some clarification of what the OfS is expected to do.

I must also ask about another comment the Minister made in his response. He said that Ofsted had sufficient resources up to level 5. However, the chart at the back end of the letter we received today said that Ofsted inspects the quality of training for level 2 to level 3 apprenticeships. Perhaps that can be clarified because the two comments do not sit easily together.

The points made by my noble friend Lord Young, a former skills Minister, about the importance of safeguarding quality, and the Minister’s acceptance of the basis of these amendments, particularly Amendment 1, are important. I thank the noble Lord, Lord Aberdare, for his enthusiastic welcome. It is good to have cross-party support in these situations.

To some extent, the Minister has answered the points that we put to him. Some concerns remain, not least about who will be doing what. He seeks refuge in HMRC being the answer to enforcing the national minimum wage and apprenticeship rates. In my experience, HMRC is unable to enforce the national minimum wage for adults, again because of a lack of resources. I do not think much attention has historically been given to apprenticeships, and clearly much more should be, as recommended in the report from the Low Pay Commission, which I outlined earlier. But you cannot just add additional duties to public bodies without giving them the resources to make sure they can meet those. However, we have covered most of the points in some depth. On that basis, I thank the Minister for his response and beg leave to withdraw the amendment.

Amendment 1 withdrawn.

--- Later in debate ---

Moved by

[Lord Watson of Invergowrie]

3: After Clause 1, insert the following new Clause—
“Institutional autonomy and academic freedom
(1) The Secretary of State, in issuing guidance and directions, and the Institute for Apprenticeships and Technical Education, in performing its functions, have a duty to uphold the principle of institutional autonomy for English further education institutions.(2) In this section “institutional autonomy” means—(a) the autonomy of English further education institutions—(i) to determine which courses to teach, the contents of particular courses and the manner in which they are taught, supervised and assessed,(ii) to determine the criteria for the selection, appointment, promotion, remuneration, and dismissal of academic staff; and to apply those criteria in particular cases,(iii) to determine the criteria for the admission of students and to apply those criteria in particular cases, and(iv) to constitute and to govern themselves in a manner which they deem appropriate for their purposes, subject to legal requirements relating to the corporate form and purposes that they may adopt; and(b) the freedom of academic staff within the law—(i) to question and test received wisdom, and (ii) to put forward new ideas and controversial or unpopular opinions, without placing themselves in jeopardy of losing jobs or any privileges they may have at an institution.(3) All persons or bodies exercising powers under this Act are under a duty to protect the principle of academic freedom in accordance with subsection (2)(b).”

--- Later in debate ---

[Lord Watson of Invergowrie]

My Lords, I hope that this group of amendments will take rather less time than the previous group.

[Lord Baker of Dorking]

Have we passed Amendment 11?

[Lord Baker of Dorking]

Yes, of course. I am anticipating—sorry. I will have to wait.

[Lord Watson of Invergowrie]

The noble Lord, Lord Baker is, of course, a novice at these procedures; or perhaps, like me, he is still getting his breath back following the words “I accept” from the Minister, which were much welcomed.

This is a probing amendment and, to some extent, a read-across from the Higher Education and Research Bill. It is pretty much self-explanatory, although that does not mean I can resist the temptation to say a few words. Almost three decades have passed since the Education Reform Act 1988 ended the tenure that had long been enjoyed by British academics, but an amendment to that legislation protected in law the freedom of academics to question and test received wisdom and to put forward new ideas and controversial and occasionally unpopular opinions without placing themselves in jeopardy of losing their jobs or the privileges they may have had at their institution. That right that should apply across the board to all academics, whether in higher or further education. I accept that this is an issue of more concern in higher education, but increasing staff insecurity in further education colleges and other further education providers leads us to believe that the principles that apply in higher education should also apply in further education.

The Minister may well say that academic freedom is already established by common practice, but that is not the view of teaching organisations. This amendment applies to the Secretary of State in issuing guidance and directions, and to the institution in performing its functions, giving them a duty to uphold the principles of academic freedom and institutional autonomy. It is not a draconian measure; it merely states unequivocally that institutions have the right to determine which courses to teach and who they appoint to teach them, and that academic staff have the right to speak freely about how their institution is run, what courses should be pursued and how, and to advance unconventional or perhaps unpopular opinions. Such expressions should not impact on the job security of academic staff, and for that reason we believe they have the right to have such protections clearly set out in the Bill.

Amendment 3 would also incorporate the human rights to freedom of expression, assembly, thought and belief. It is unfortunate that this amendment is necessary but, given the threats felt by universities as a result of the dramatic changes being introduced to the sector by the Higher Education and Research Bill, who is to say that providers in the further education sector will not sooner or later experience a similar feeling of threat? Forewarned is forearmed, which is why this issue must at least be highlighted today.

Freedom of speech is the subject of Amendment 7. It, too, is a provision that ought not to be necessary, but the hard facts are that it is necessary. Recent events, particularly in some educational institutions involving Jewish students or staff, demonstrate that for some people freedom of speech can and does become unlawful speech. My view on this goes back to my days as a student activist, some four decades ago, and is that a demand to no-platform a particular speaker is wrong. I have never believed that you deny someone a platform simply because you disagree with them. Even if you disagree vehemently with what they are saying, my response is that you should take them on by argument, but when that kind of speech enters the world of racism, misogyny, homophobia or threatening behaviour, it contravenes the law, and the law should intervene.

It is unfortunate that these matters have to be aired, but I believe they should be. They are matters of concern in the further education sector as well as the higher education sector. I hope the Minister will take them on board and given them due consideration. I beg to move.

[Baroness Garden of Frognal]

My Lords, I support these amendments. We had extensive discussions on these issues during the passage of the Higher Education and Research Bill, and they are no less relevant to further education colleges. Institutional autonomy is as important for colleges, where the people who work in them really know what works for their pupils and students, and academic staff having the freedom to question and test received wisdom is just as important for colleges as it is for universities. So is freedom of speech and preventing unlawful speech, which seems an increasing aspect of student life these days. In a way, it is almost more relevant for colleges as they have such a wide variety of students under their roofs. Both these amendments are entirely relevant to this Bill.

--- Later in debate ---

However, the sector has not told us that preventing unlawful speech is a problem. Introducing a new standard would risk unnecessary confusion, and could create caution and risk-aversion which would stifle free speech. Further education providers will continue to be subject to the existing freedom of speech duty. On unlawful speech, we can best protect staff and students by working with them to implement existing legislation rather than by introducing additional legislation. I hope the noble Lord will therefore feel able to withdraw this amendment.

[Lord Watson of Invergowrie]

I thank all noble Lords who spoke on this group and I welcome the noble Baroness to her first stint on the Front Bench in Grand Committee. I thank her for a thoughtful and detailed response. There are one or two points that I want to come back on. First, I accept what she said on Amendment 3; she gave a considerable amount of detail on the legislation that covers what we were seeking to achieve, and I and others will want to look at that. On that basis, she may well have dealt effectively with the issues of institutional autonomy and so on.

However, I am not so convinced by the noble Baroness’s arguments in respect of Amendment 7 on free speech, particularly when she said that introducing the provisions of this new clause could in fact stifle free speech. I find that rather a strange concept to get my head round. I noted down certain comments: she mentioned that it would require further education colleges to change policies and practices and that they have not identified problems. I would value a letter from her explaining some of her comments, such as why that would be what she termed a “disproportionate burden”—how so? She also said that it would involve colleges addressing matters that could be outwith their control, including attendees at a particular event. Any event on the premises of a college becomes its responsibility, even if the college has not organised it. If it has allowed the property to be used then it is ultimately responsible for what happens there at a meeting. I do not see how colleges can escape that and I do not see that it would be a disproportionate burden. In any case, colleges have to do basically what the amendment says—that is, ensure that,

“students, staff and invited speakers are able to practise freedom of speech within the law”.

I would therefore value some explanation of the noble Baroness’s reasoning in saying that she finds Amendment 7 unacceptable. If it is not a problem, that does not necessarily mean that nothing needs to be done. I think that this amendment would strengthen the ability of further education colleges and providers, if appropriate, to ensure that their premises were safe havens—places where people could express themselves freely and be able to engage in debate, at all times within the law. If the noble Baroness could provide a bit of additional information on that in a letter, it would be much appreciated. However, for the moment, I beg leave to withdraw.

Amendment 3 withdrawn.

--- Later in debate ---

Moved by

[Lord Watson of Invergowrie]

6: After Clause 1, insert the following new Clause—
“New further education institutions
The Institute for Apprenticeships and Technical Education must not recommend to the Secretary of State the authorisation of a new further education institution unless—(a) the provider has been established for a minimum of four years with satisfactory validation arrangements in place;(b) the Quality Assessment Committee is assured that the provider is able to maintain the required standard expected for the granting of approved qualifications for the duration of the authorisation; and(c) the Institute for Apprenticeships and Technical Education is assured that the provider operates in the public interest and in the interest of students.”

[Lord Watson of Invergowrie]

I should say at the start that I am not quite sure why Amendments 6 and 8 have been grouped but, as they say, we are where we are.

Noble Lords may feel it a little odd that, in a Bill very largely concerned with assisting further education colleges that have slipped into insolvency, we find an amendment seeking to address new further education institutions. I am being upbeat here: it is to be hoped that the time will arrive when the Government of the day fund the further education sector adequately and the post-16 skills plan and the 15 occupational routes for apprentices are successful, so that the sector will be seen as attractive to new entrants. That is the situation in higher education and safeguards have had to be built in in anticipation of an influx of more new entrants. It may well be the case that a so-called challenger institution will seek to establish itself in the further education sector and, when that happens, the sector needs to be prepared.

It is no more than reasonable that, before the institute recommends to the Secretary of State that a new further education institution be admitted, that institution should be able to demonstrate that satisfactory validation arrangements have been in place for a minimum of four years. Noble Lords may be aware that the Higher Education and Research Bill suggests that new entrants should be able to be given, albeit temporarily, degree-awarding powers from day one. We strongly believe that that is not appropriate and that there has to be an amount of time in which an institution has shown its ability not just to operate as a business but to provide students with everything that they are entitled to expect when they sign up for courses. That is what is behind the mention of a minimum of four years in the amendment.

The Minister may say that this is unnecessary, but he said at Second Reading that he did not envisage the insolvency procedures being used other than in very rare cases. With 28 out of 45 clauses in the Bill concerned with insolvency, methinks he may have protested too much. None the less, reasonable man that I am, I am prepared to give him the benefit of the doubt and accept that these clauses may well prove necessary from time to time and that we need them. In return, I hope he will be willing to accept that Amendment 6 envisages a situation that may prove equally necessary in the future, and I await his response on that point with interest.

Amendments 13 and 14 are concerned with broadening access to post-school education or training, and Amendment 14 is specifically about equality of opportunity. The Learning and Work Institute gave evidence to the Public Bill Committee in another place in which it said that people with disabilities and learning difficulties and people from black and minority ethnic backgrounds had been under-represented in apprenticeships for many years. The introduction of the institute offers an opportunity to make a real difference by improving access to apprenticeships for traditionally under-represented groups.

The Government already have targets to increase the proportion of BME apprentices by 20%. Perhaps the Minister can say whether the intention is to do the same—not necessarily in terms of the percentage but in setting targets—for people with disabilities and those leaving care. Giving the institute a duty to widen access and participation would be beneficial for all parties. Only 50% of disabled people have a job, compared with eight in 10 able-bodied people. The Government have stated their aim of halving the level of unemployment among people with disabilities, so we believe that this offers an opportunity to use apprenticeships as a step towards narrowing that gap.

When it is fully established, we believe that the institute should consider as a priority what can be done for groups which are under-represented, not only women, those from black and minority ethnic backgrounds or those leaving care but also those who leave school with no qualifications at all. During consideration of this Bill in another place, the Minister for Schools, Mr Robert Halfon, talked about traineeships and the possibility of them forming an introductory route into apprenticeships. Traineeships would be particularly appropriate for the groups of people I have mentioned when it comes to promoting equality of opportunity for access and participation. Traineeships are also appropriate for retraining, particularly as the institute has now been given additional responsibility for technical education. I hope that the Minister will follow that up with his colleagues to consider what might be achieved. I beg to move.

[Baroness Garden of Frognal]

My Lords, I wish to speak to Amendment 8 in this group, which covers some of the same ground that we have already addressed. It seems appropriate, in setting up this new institute, to specify what it is supposed to do—its functions and duties. I have rather optimistically put its “additional” functions and duties because, looking through the Bill, it is difficult to see any clarity on what its functions and duties actually are. However, the role it will play in apprenticeship standards is obviously set out clearly in the Bill. I have added certification, although I think there is a later amendment on this aspect, which perhaps we should address at that point because I do not think it is as straightforward as it appears. It is particularly important that the institute should have an overview of where the skills shortages are and be in a position to divert funding and encourage participation to address those shortages.

The second part of the amendment deals with promotion and consultation. As we have discussed on previous amendments, having set up the new institute, surely it is only right that it should have a role in promoting apprenticeships and work-based skills. It would be a pretty poor body if it did not support the qualifications it has been set up to oversee, and we have such a long way to go. We have already discussed careers education, advice and guidance quite comprehensively, but we have heard from school leavers many accounts of the difficulties they face if they want to pursue the apprenticeship route rather than the university one.

There are steps that the Government could take, as we have already heard from the noble Lords, Lord Hunt and Lord Young, and the noble Baroness, Lady Morris. One would be to expand the measurements for school league tables to include vocational and practical achievement alongside academic results. Currently, schools get public recognition purely on their academic results, so obviously there is a lot of pressure on them to make sure that youngsters are diverted on to those routes regardless of where their aptitudes lie. They could also encourage schools to celebrate their students who leave to take up apprenticeships with the same enthusiasm they give to their university entrants. One can see on school noticeboards long lists showing how many students have gone on to university, and it would be cheering to read alongside them that a certain number went on to take up apprenticeships. However, schools do not seem to take that on board as something to celebrate. Instead, they keep trying to dissuade bright young people from seeking out apprenticeships, as we discussed when we were considering careers advice.

There was too little consultation with stakeholders before the Bill was drafted. It is difficult to believe that, in a rare further education Bill, they would have chosen that a major part of it—more than 30 clauses—should be devoted to the insolvency and financial difficulties of further education bodies. What a negative view of the sector when there are so many positive aspects of further education that could have been assisted through legislation. Even before the Bill has become law, this is having an impact. We are already hearing that, because of these provisions, banks and other financial organisations are treating colleges with some suspicion. The biggest area of current concern for colleges is the impact on local government pension scheme funds. What was the rationale in casting doubt on colleges, which will be one of the main providers of the qualifications the Government have said they wish to promote? With so many doubts being cast on the viability of the providers, how will that help to generate the 3 million apprenticeships being sought? There appear to be only sticks and no carrots from the Government.

The current situation requires very expensive financial consultants filling in enormous spreadsheets and application forms to the transaction unit—time and resources that could be spent more constructively. It may be better to have an orderly college insolvency regime that colleges hardly ever use than continuing the risk of a disorderly one, but why make it such a large part of the Bill? Which of the stakeholders supported this part of the Bill?

--- Later in debate ---

I hope that my responses to these four amendments provide noble Lords with sufficient reassurance about our plans for the institute and its functions that they will withdraw or not move their amendments.

[Lord Watson of Invergowrie]

I thank the Minister for that response and thank the noble Baroness, Lady Garden, for her contribution. I should have said at the start that we support the suggestions in Amendment 8. I noticed that the Minister said that most of these were already covered. That impacts on a point that I will come back to in a minute about the operational plan for the institute.

The Minister somewhat took the wind out of my sails on Amendment 6 by saying that there was no role for the institute with regard to new institutions. I take it that just the Secretary of State would have the ability to give them the green light, if that is the case. In which case, I am rather surprised that it got accepted as an amendment. None the less, I hear what the Minister says, and if that is the case, so be it.

On Amendment 14 in particular, the Minister did not answer a couple of the questions I put to him. One was the point about the percentages for categories of those underrepresented in the take-up of apprenticeships. I mentioned the 20% target for people from black and minority ethnic communities and asked whether there were plans for anything similar for women, care leavers and indeed any other underrepresented groups. I am happy for him to write to me on that. I do not suggest what the percentages should be, but these are underrepresented, so by definition it is appropriate that some action is taken to bring them more into line with other groups.

[Lord Nash]

We do not intend to have any targets, but as I said, we intend there to be the expectation that the opportunity to participate should be widely available for all students.

[Lord Watson of Invergowrie]

Yes, but that is a bit woolly. Students have always had the opportunity; the point is that certain groups are not taking it up in sufficient numbers. It would be interesting to know why black and minority ethnic people have been specifically identified, and yet others have not. If work needs to be done there to bring underrepresented groups more into the mainstream, surely the institute should concentrate particularly on that. However, that would impact on the institute’s operational plan. In the Minister’s letter today, he mentioned that the shadow institute’s draft operational plan is out for consultation but only for a few more days. He said that that will provide more detail on how the institute would be expected to deliver its role. I have not yet looked at that but I will do so. I hope that it will have something to say on broadening participation because we may wish to return to that matter on Report.

For the moment, we have covered the issues and I thank the Minister for his response. I beg leave to withdraw the amendment.

Amendment 6 withdrawn.

Technical and Further Education Bill

Lord Watson of Invergowrie Excerpts

Committee: 2nd sitting (Hansard): House of Lords
Monday 27th February 2017 Grand Committee

Moved by

[Lord Watson of Invergowrie]

12: After Clause 1, insert the following new Clause—
“International students and staff
(1) The Secretary of State has a duty to encourage international students to attend further education providers covered by this Act.(2) The Secretary of State shall ensure that no student who has received an offer to study at such a further education provider shall be treated for public policy purposes as a long term migrant to the UK, for the duration of their studies at such an establishment.(3) Persons, who are not British citizens, who receive an offer to study as a student or who receive an offer of employment as a member of academic staff at a further education provider, shall not, in respect of that course of study, or that employment, be subject to more restrictive immigration controls or conditions than were in force for a person in their position on the day on which this Act was passed.”

[Lord Watson of Invergowrie (Lab)]

My Lords, it is fair to say that the question of international students is, to put it mildly, a somewhat thorny one. I do not want to draw parallels too closely with the higher education sector, but there is no reason why the further education sector should not seek to attract more students, and indeed staff, from overseas. The debates that have taken place on the Higher Education and Research Bill suggest that the Government do not fully appreciate the value to many institutions of the contributions made by students from abroad, and I am not just talking in financial terms. The financial contribution is of course important to the further education sector, but no less so is the general contribution made by the presence of students from other countries. Despite the result of the referendum, we do not—and, I would say, must not ever allow ourselves to—live in a world of our own, unwilling to acknowledge or embrace the benefits that flow from interacting with those from other countries and cultures.

There is not a consistency of view regarding the value of those benefits. The Foreign Secretary is a man with whom, I must say, I rarely see eye to eye, but I was at one with him when he said in a recent speech that overseas students should be excluded from the immigration statistics. That is certainly the position of the Labour Party, and I know that it is shared by many others across your Lordships’ House and much further afield. Of course, Mr Johnson was not espousing government policy and he was overruled by 10 Downing Street, but on this occasion certainly he was right. It is common sense to treat international students as a benefit to, and not a burden on, this country.

Amendment 12 would place the onus on the Secretary of State to encourage international students. She could of course delegate that role, and might usefully do so, to the institute. Some further education colleges already reach out and have a presence in other countries—some more successfully than others, it must be said—so this is an area in which there is surely room for expansion. It should be made widely known, particularly when government Ministers are abroad, that applications to further education colleges by young people or by those who want to teach in FE colleges would be welcomed. Students may use this provision as a means to gain the qualifications needed to enter higher education, or teaching staff may use it to broaden their expertise, but whatever the reason, as we close the doors to the European Union, we should be opening them wide to many other countries. This amendment offers a means of doing so by highlighting what further education providers have to offer internationally, and I hope that the Minister will accept it in that light.

[Baroness Garden of Frognal (LD)]

My Lords, I support this amendment and entirely agree with the noble Lord, Lord Watson, on the importance of signalling to international students and staff that they are welcome. Not only are they welcome, they are invaluable in providing teaching skills that we are unable to provide from UK citizens and in bolstering student places in both quality and quantity.

Through this Bill, we would hope to send out positive messages to those from other countries that we are open for business, that we shall honour any commitments to staff or students and that we shall minimise the immigration conditions for all bona fide students and staff who wish to come to our further education colleges or providers. These measures are particularly important now in respect of EU nationals, who play such a significant part in the success of our further and higher education institutions and who are feeling particularly beleaguered and undervalued at the moment, but they are important too for the much wider international community. I hope that the Minister is able to accept this amendment.

[The Parliamentary Under-Secretary of State, Department for Education (Lord Nash) (Con)]

My Lords, the Committee will be aware that this issue is already being considered as part of the Higher Education and Research Bill. As a Government, we will want to consider our position across the board, and I can assure noble Lords that we are doing this. This topic is best discussed in the context of the Higher Education and Research Bill, where there will be ample opportunity to consider the issue during the forthcoming Report stage. However, I will briefly address the more specific points of the amendment.

While there are some further education colleges that have centres of expertise or offer higher level study that attract a significant number of international students, such as the one referred to by the noble Lord, Lord Knight, as a whole the number of international students in FE is much smaller than for the higher education sector. Courses are on average shorter, and delivery is more locally focused and reflects local economic priorities. Where colleges take significant numbers of international students, the issues will parallel those that have been considered through proposed amendments to the Higher Education and Research Bill.

I do not propose to repeat the arguments that my noble friend Lord Younger of Leckie made during that debate. I do wish to emphasise that we have and will continue to set no limit on the number of genuine international students who can come here. The controls in place are there to prevent abuse of the system and ensure that the reputation of the UK educational sector continues to be internationally renowned. The immigration statistics are controlled independently by the Office for National Statistics. It is not up to the Government to create the statistical definitions. Our responsibility is to set the policy, which in this case places no limit on numbers of students.

As I have said, there will be an opportunity to debate these issues further as part of the Higher Education and Research Bill, which is the more appropriate forum. In those circumstances, I hope that the noble Lord will withdraw the amendment.

[Lord Watson of Invergowrie]

I thank the two noble Lords who contributed to the debate and the Minister for his response. I agree with the noble Baroness, Lady Garden, about the positive message that this sends. That is what I was trying to get across in moving this amendment.

Equally, I accept the Minister’s use of the term “abuse of the system”. No one would be tolerant of that at all. There were such situations in the past in the case particularly of language schools. Some of them had been—to use about the kindest adjective that could be applied to them—“bogus”. Very largely, these have been driven out of the system. I would not say that there is no abuse, but there is not a great deal. Opening up the further education sector does not necessarily increase the likelihood of such abuse.

I take the Minister’s point that the Higher Education and Research Bill is the place to deal with that. Fortunately for him, he will not have to do that, but I will be returning to these subjects next week. I wanted to draw attention to the fact that, hopefully, the further education sector has the opportunity to broaden its scope a bit. Whereas local provision is what it is mainly about, there is scope to expand that and I hope that the sector will take the opportunity to do so and will not be prevented from doing so through the inability to bring students in from abroad.

With those remarks, I beg leave to withdraw this amendment.

Amendment 12 withdrawn.

Moved by

[Lord Watson of Invergowrie]

12A: After Clause 1, insert the following new Clause—
“Apprentices as qualifying young persons for the purposes of child benefit
(1) The Child Benefit (General) Regulations 2006 are amended as follows.(2) In Regulation 3 (education and training condition)—(a) after paragraph (2)(a) insert—“(aa) is undertaking a statutory apprenticeship as defined under section A11 of the Apprenticeships, Skills, Children and Learning Act 2009 (only statutory apprenticeships to be described as apprenticeships);”;(b) in paragraph (4) after “(2)(a)” insert “, (2)(aa),”.”

[Lord Watson of Invergowrie]

My Lords, this proposed new clause may not at first sight seem as if it is appropriate for this Bill or for the scope of the Department for Education. I would concede the second point, but not the first, and I hope that I can demonstrate that that is not a contradiction in terms. The new clause would enable families eligible for child benefit to receive that benefit for children aged under 20 who are undertaking apprenticeships.

The landscape of apprenticeships is changing, and from April the introduction of the levy will mean a greater focus on giving young people key skills and up-skilling current employees. Apprenticeships are receiving greater support from government than for generations, and the numbers of young people starting them are increasing exponentially. So it felt odd to read in a survey that more than 90% of 18 to 24 year- olds were not interested in starting an apprenticeship. It seems that apprenticeships still have a significant image problem. The survey results showed that not just young people but two-thirds of people aged over 55 thought that going to university would always be a much better career option. The biggest reason for this was said to be poor careers advice being given at school.

That is not the only reason why young people may be discouraged. In some cases, their parents may actually prevent them taking up apprenticeships because of the economic consequences. In one sense at least, apprentices are treated as second-class citizens, with those from the most disadvantaged backgrounds being denied thousands of pounds of financial support that is available for college and university students, according to a survey carried out by the National Union of Students. The research, which that body carried out in conjunction with the Times Educational Supplement, revealed that apprentices are also excluded from a number of means of support available to their counterparts in further education institutions.

In April, the apprentice national minimum wage will increase by a whopping 10%—I am sorry, I wish it were by that, but it is by 10p to £3.50 an hour. A college student with one child could be eligible for more than £10,000 a year in financial support and their families could receive thousands more. Apprentices, including those on the minimum wage earning as little as £7,000 a year, are not entitled to any of this. As well as being ineligible for Care to Learn childcare grants—again, unlike further education students— some apprentices also miss out on travel discounts, council tax exemptions and student bank account packages.

The reason is that apprenticeships are not classed as approved education or training by the Department for Work and Pensions. This means that, in the case of apprentices who live with their parents, their families could lose out by more than £1,000 a year in child benefit. Families receiving universal credit could lose more than £3,200 a year. Why should families suffer as we seek to train the young people desperately needed to fill the skill gaps in the economy? University students receive assistance from a range of sources, from accessing finance to discounted rates on council tax. Apprentices currently receive none of these benefits. The system must be changed so that both are treated equally and there is genuine parity of esteem between students and apprentices.

A large number of examples of apprentices being unable either to take up their apprenticeship or to complete it have been reported by further education colleges to the Association of Colleges. I would like to highlight one case involving a young man aged 16 at the time, who was enrolled in a full-time carpentry and joinery programme at New College Durham. He came from a disadvantaged area within County Durham, where he lived with his mother, a single parent, and his half-sister. From the outset of the programme, he made it clear that he was very keen to transfer to an apprenticeship and enquired weekly at the apprenticeship office about possible vacancies. Within a matter of weeks, he was offered a work trial with one of the employers with whom the college worked. The employer told the college that he was pleased with the commitment and work ethic demonstrated by the young man and offered him an apprenticeship, which was enthusiastically accepted. Soon after starting it, though, the college received a phone call from the employer saying that he would not continue to employ the young man, as his mother had been in contact to say that she would lose her housing benefit due to her son being classified as employed. Despite his disappointment, the young man continued on the full-time programme and completed his level 1 diploma but, understandably, the employer was disgruntled due to the wasted time and effort and stipulated that he would not again interview a potential apprentice from a welfare-dependent background. That really is a sad story.

We need to bear in mind such situations when we think about the extension of apprenticeships. Barriers surely should not be put in the way of young people who genuinely want to start an apprenticeship and see it through, better themselves and help the economy in broader terms. As the National Society of Apprentices said in its submission to the Public Bill Committee in another place, “It seems inconsistent—to put it mildly—

“that apprentices are continually excluded from definitions of ‘approved’ learners, when apprenticeships are increasingly assuming their place in the government’s holistic view of education and skills (which this Bill itself represents through unifying apprenticeships with technical education)”.

To repeat, there should be genuine parity between all educational and apprenticeship routes.

The risk of losing out financially can and does deter some of the most disadvantaged young people from becoming apprentices. The Government need to act to close this loophole and, although I accept that it is not within the Minister’s gift to do so, I suggest that he might at least signify his understanding of the position in which some apprentices find themselves—many of them from the kind of backgrounds where we are trying to attract more apprentices than is currently the case. That would help to reach the Government’s target of 3 million apprentices by 2020 and to ensure that every young person attracted to starting an apprenticeship was not prevented from doing so for financial reasons. I beg to move.

--- Later in debate ---

[Baroness Buscombe]

My Lords, the difficulty is that the definition of a job is a question for Parliament.

[Lord Watson of Invergowrie]

I thank the Minister for her response and all colleagues who have spoken in the debate. I particularly welcome the support of the noble Baroness, Lady Garden, and the noble Lord, Lord Storey. One of them mentioned social mobility, which is an important point. It is within the scope of the Government’s overall objective to increase social mobility; it is mentioned often enough. I do not see how it can be outwith the scope of the Bill, as the Minister said, because we are able to discuss it today.

There is no point in repeating a lot of the points that have been made, but I certainly take the issue about an approved form of learning, which my noble friend Lord Young mentioned; it needs to be clarified. Will the Minister write to noble Lords on that point?

The noble Baroness, Lady Buscombe, perhaps did not fully hear my noble friend Lord Blunkett when he asked whether we could meet with the Minister separately to discuss the issue. It was not just with the Minister but with his opposite number in the Department for Work and Pensions as well to see what might be achieved on this. I accept the Minister said that more or less nothing could be achieved, but we are going to meet, so let us broaden the meeting so that we have somebody who has experience of those matters and we can go into them in greater detail.

My noble friend Lady Donaghy has a great deal of experience in these matters, as noble Lords will know. However, I am not sure that her metaphors stand close scrutiny of the very urbane Minister—leaping over barriers and banging heads together is not quite his modus operandi, and I will not go anywhere near the Superman reference. However, I think the Minister can at least open up channels for discussion on this. We would certainly need to have those discussions before Report.

At this stage, it is our intention to return to the matter because, at the end of the day, we want to increase the number of apprenticeships from all backgrounds. We need to increase the overall number, but many are being put off for reasons that will not be assuaged by the figures quoted by the noble Baroness, Lady Buscombe, and we have to find a way round this. With those comments, I beg leave to withdraw the amendment.

Amendment 12A withdrawn.

--- Later in debate ---

Moved by

[Lord Watson of Invergowrie]

16: Schedule 1, page 21, line 13, at end insert—
“( ) After subsection (6), insert—“(6A) In performing its functions, the Institute must make provision to ensure that those undertaking education, training or apprenticeships as specified within subsection (6) have representation within its structures, which may include but shall not be limited to establishing—(a) a panel of persons undertaking approved English apprenticeships to inform and advise the Board of the Institute; and(b) a panel of persons undertaking study towards approved technical education qualifications to inform and advise the Board of the Institute.””

[Lord Watson of Invergowrie]

My Lords, I shall speak to Amendments 16 and 18, which deal with the issue of representation within the structures of the institute.

Apprentices should be able to influence the way in which their training is developed and delivered. From the front line, they know what has been and is being helpful to and successful for them and, equally importantly, what is not. I hope that the Minister, who has been clear in his support of apprenticeships and apprentices, appreciates that point. The National Society of Apprentices has said:

“At the moment, apprentices have no real opportunities to improve their education. Although most students going through the ‘traditional’ education system at college or university are able to give feedback through their class representative system, similar structures do not exist for apprentices”.


I might add that students can also give feedback through the National Student Survey.

The panels that we know are to be established for apprentices and technical education students were the subject of considerable debate in another place, in the Public Bill Committee. The Minister of State for Skills, Mr Halfon, was clear that he was in favour of them. He gave assurances related to them and the assurances were taken on board. As things stand, they will not be enshrined in the legislation.

We believe that to ensure that a future Secretary of State or Government less welcoming to the needs of those groups of young people cannot sweep away their right to a channel of communication, which is what it is, rather than representation, they are entitled to representation in some form. The rationale behind this amendment, at its most basic, is that it is better to have and not need than to need and not have. The concerns of those directly involved should have a means of being conveyed. At the moment, other than those panels—and we do not know how and when they will be established—nothing else is on offer.

Amendment 18 concerns the need to have a wide range of types of employer involved in setting the standards for the 15 occupation routes. The fear is that, because only employers with a wage bill in excess of £3 million will pay the apprenticeship levy, they will be the most prominent employers involved. Certainly, they will be spread across the sectors and the 15 occupations. That is self-evident. The question is what types of employer—not just the largest—there will be.

What about small and medium-size enterprises? They are very prominent in providing apprenticeships. Many of them feel that they have been marginalised in the current drive towards expansion. Whether that is the case, that is how many view recent developments. Whether the Government achieve their target of 3 million apprenticeship starts will ultimately depend on how many SMEs contribute to meeting that target. They are a vital part of the economy and should not be undervalued by government. If their needs are not factored in and they feel their voice is not being heard in the corridors of power, particularly when standards are being prepared, we can legitimately ask how they can be expected to play their part in this brave new world with enthusiasm. We might also say that of our other major employers—local authorities, for instance. They will be playing a significant role, I hope, in this, and they have to be borne in mind. It is about widening the base of employers involved in setting standards.

Referring to the Government’s proposals for reform of the sector, in giving evidence to the Public Bill Committee, the Association of Employment and Learning Providers stated:

“Reform proposals may not currently be giving sufficient weight to the input of stakeholders and the concerns of and about learners, which must be rectified by the inclusion of stakeholder representatives on the Board of the Institute”.


I am never quite comfortable with the word “stakeholder”, but I get the point that the association is trying to make.

I therefore supported in principle the amendment similar to this amendment that was submitted by the Opposition in another place. The arguments made then stand now, because although we are not advocating a place on the board of the institute—we would, if we thought it was achievable—we are seeking that a duty be placed on the institute to allow representation within its structures for those directly involved in delivering apprenticeships and technical education. If the institute’s foundations would be shaken by such representation, the foundations are by no means sufficiently robust. I beg to move.

[Lord Knight of Weymouth]

This is an important amendment. I very much enjoyed the exchange at Oral Questions today in which the noble Lord, Lord Prior, responded for the Government on the importance of employee engagement. I felt he really understands how important it is in the private sector and, in some ways most surprisingly, in the public sector, particularly from his comments about junior doctors. In that spirit, obviously I hope that apprentices—who, as we have discussed this afternoon, are employees—will enjoy employee engagement with their employers, even though they are apprentices. It is equally important that the institute feels that it is accountable to learners and that the accountability of the institute is not more upwards to the Government than it is to employers and learners.

As I said last week in this Committee, I have general concerns that the dynamic, rapidly changing nature of the labour market presents ongoing challenges to the institute. I was set a challenge by my noble friend Lord Hunt to come up with a solution to some of that before Report. I have been mulling on that and may have at least the beginnings of a solution, but I shall wait to surprise the Minister with it at some future date. The point remains that, if the institute does not have within its structure a way of listening acutely to the learner experience, of assessing the relevance of the qualification in the labour market for learners not only while they are going through their apprenticeship but in the months immediately after they have completed it, and of being accountable to employers of all sizes, as my noble friend pointed out, I worry that our efforts in this Committee to try to help and advise the Government in making the institute a success will be in vain because it will too quickly become out of touch and out of date.

--- Later in debate ---

[Lord Nash]

My Lords, I am grateful to the noble Lords, Lord Watson and Lord Hunt, for their two amendments relating to issues of representation for the Institute for Apprenticeships.

With regard to Amendment 16, the institute should obviously understand the views of those people undertaking this training to ensure that it is meeting their needs, because it is the organisation responsible for apprenticeships and technical education. Section ZA2 of the 2009 Act, inserted by the Enterprise Act 2016, already requires the institute to have regard to,

“the reasonable requirements of persons who may wish to undertake education and training within”,

the institute’s remit, and to other interested persons. The institute is also required to engage interested groups as part of the review of standards and assessment plans.

The institute has purposely been established as an independent organisation, with high-level responsibilities set out in legislation but with the freedom to decide how it delivers them. It is essential for the credibility of apprenticeships and the wider apprenticeship reform programme that the institute retains as much autonomy as possible. Government can provide the institute with advice and guidance about how it could carry out its functions. It has to have regard to this advice and must provide justification if it chooses not to follow it. The Government recently consulted on a draft of their guidance to the institute for 2017-18, which includes a request for the institute to establish an apprenticeship panel to advise the board. The shadow institute has already committed to doing this by the time that it is launched and good progress is being made. Members for the first apprenticeship panel have already been shortlisted and an initial meeting is planned for March.

[Lord Watson of Invergowrie]

On that point, can the Minister say how this was done? Were applications invited?

[Lord Nash]

I will have to write to the noble Lord about that.

As well as advising the board, the first panel will decide how the panel will be run, including how future members will be recruited. The proposal is for the institute to take on responsibility for technical education from April 2018. I can confirm that it would be our intention to include a request in its guidance for 2018-19 for a panel to represent those undertaking technical education.

Amendment 18 would stipulate the make-up of the group of persons whom the institute could approve to develop a standard. In particular, it would require that the group includes a range of employers and at least one provider. I agree that it is essential that the standards that form the basis of reformed apprenticeships and new technical education qualifications are of high quality, and meet the needs of a wide range of employers and learners, but I am not convinced that this amendment is necessary. I have already explained that the institute needs to be independent from government to be able to undertake its functions with credibility. It will be well placed to make decisions about who can develop a new standard, based on a range of factors, and it is right that it should be given the flexibility to do so without the constraints that this amendment would impose.

However, in my remarks on the preceding amendment I referred to the strategic guidance providing a vehicle for government to advise the institute. The current draft of the guidance includes the recommendation on who should be able to develop standards and makes it clear that we will expect the institute to continue to ensure that standards are developed primarily by employers, but with input from others with the relevant knowledge and experience, such as professional bodies, other sector experts, providers and assessment organisations. If the institute decides not to follow the government guidance it must give reasons in its annual report, but it is crucial that, as an expert, independent organisation, it retains the ability to make decisions itself about delivery, taking into account all the relevant circumstances. We believe that our approach strikes the right balance. I hope that, on the basis of my explanation, the noble Lord will feel reassured enough to withdraw this amendment.

I thank the noble Baroness, Lady Wolf, for her Amendment 36A. I am sure it was prompted by concerns for publicly funded learners who may find themselves without a place to complete their course in the event that an independent provider shuts down. I share her concerns but just as with FE bodies, the likelihood of independent training providers becoming insolvent is low. The Skills Funding Agency has a robust entry process in place to ensure providers are capable of delivering a high-quality learning offer to loans learners. Once providers have met the entry criteria and are eligible to offer loans-funded provision to learners they are subject to a range of further measures and controls, including review of their financial health, audit, and assessment of their qualification achievement rates. Providers are also required to comply with robust funding and performance rules. A small handful of providers is facing difficulty, but the numbers affected by these cases represent less than 1% of providers operating in the advanced learner loans programme.

--- Later in debate ---

[Baroness Wolf of Dulwich]

I am happy not to press my amendment, but I would like some clarification on why a private company which is often entirely dependent on public funding should be in some sense exempt from any requirements. This does not seem to be consistent with much of what goes on elsewhere in the public sector and what it requires of people.

[Lord Watson of Invergowrie]

I think the Minister has sat down now and that the point made by the noble Baroness, Lady Wolf, is very pertinent. From what has been said over the past half-hour or so, it is likely that we will return to this subject on Report. I have no doubt that the Minister and his officials will be looking at this in greater detail because the question of accountability is very important. Whether or not these are corporations, they are, as the noble Baroness, Lady Wolf, said, dealing with public money.

My noble friend Lady Cohen asked what recourse students have if they are dissatisfied. The Minister did not answer that point. Again, this comes down to accountability. People have to have some come back if they do not get what they thought they were getting. I am talking about situations that fall short of the provider collapsing into insolvency. Many people may feel that they are getting an inferior product and that has to be something that can be followed up.

I take the Minister’s point in respect of Amendments 16 and 18 about the institute being independent and having the freedom to decide how it delivers. However, he went on to say that there would be two panels: one for students and one for apprentices. That is what our Amendment 16 asks for and it goes no further, other than to say that it need not be limited to those two panels. The Minister has conceded the point, as did his colleague Robert Halfon in another place, as I said earlier. We knew that, but it would be helpful to have a commitment because—we say this in respect of many pieces of legislation—we may get a commitment from Ministers now, but what about the Ministers or Government who follow them? There is nothing to fall back on should views change. That is why it is important on occasions such as this to have it written into the legislation.

The same could be said about Amendment 18 on employers. The Minister said—I wrote it down—that there would be a range of employers. We are asking for almost the same wording,

“a number of employers who, taken together, comprise a broad range of employer types”.

We are surely talking about the same thing and I do not understand the reluctance. The Minister clearly wants to see a broad range; so do we.

I think we might want to revisit these matters because we are capable of reaching a situation where both sides are satisfied. We want to make sure that this works and works well: that the boards are representative and that the standards set are proper and reached with the full support of the sector. They have to be acceptable to employers within each of the 15 occupational groups and seen to be representative of their needs. We have a bit of common ground but there is some ground yet to be made up before we reach what either side might find a satisfactory outcome. At this stage, I beg leave to withdraw the amendment.

Amendment 16 withdrawn.

--- Later in debate ---

[Baroness Garden of Frognal]

My Lords, we now move on to the question of certificates, which has been raised already this afternoon. There are quite a few questions to be asked about the institute’s power to issue technical education certificates. This is another significant proposal and was not canvased in the skills plan. The proposal potentially removes any continuing link between the awarding organisation and the qualification that it has produced.

The amendment seeks clarity on the relationship between the issuing of the proposed certificates and the qualification certificates issued by the awarding organisations. Will these technical education qualifications be alongside the awarding organisation certificate? The Minister said that employers would pay for this certificate. Does that mean that the submission for it would come from the employer, the training provider or the awarding body? What assessment has been made of the resources required by the institute to authenticate, print and send out the 3 million apprenticeship certificates to meet the government target? Will the institute require the addresses of all the candidates, or will they be sent to the employer or training provider to distribute?

Government issuing of certificates is not common procedure at qualification level in any other area of the education and training system and would appear to bestow unnecessary cost, duplication and complexity on the Department for Education and/or the institute. Would it not be simpler if the certificate issued by the awarding organisation also carried the logo of the institute or of the Department for Education? The amendment proposes the much simpler solution of adding the backing and status of the institute or DfE to a certificate which has already been validated, processed and issued. I beg to move.

[Lord Watson of Invergowrie]

My Lords, I have added my name to this amendment, and the Labour Benches support the remarks made by the noble Baroness, Lady Garden of Frognal. She has a great deal of experience in the field of technical qualifications, so I have little meaningful to add. In earlier debates on the Bill, I have said that I hope to see a situation develop which leads to a small and relatively focused group of technical education qualifications. GCSEs and A-levels are instantly and universally recognised and accepted; I want to see something similar for technical education certificates. The current plethora of qualifications means that too few are understood, far less valued, and that diminishes the hard work that young people put into gaining them. How dispiriting it must be to emerge successfully from the end-point assessment only to find that the qualification gained is not widely recognised or transferrable to other employers.

Allowing the use of the DfE logo and consistent wording would standardise the technical education certificates issued, make it clear that they are overseen by the Department for Education and thus have a value transferrable throughout England. That measure is long overdue.

[Lord Lucas]

My Lords, I will speak to Amendment 32. I am trying to follow up on Second Reading and make a couple of suggestions to the Government which I hope are helpful.

First, if they have got this system of issuing certificates, they should make sure that, at the same time, they get the ability to communicate with apprentices. If I were in government, I would use this as a means of making sure that quality was being delivered, by sending questionnaires out to apprentices as a means of improving the quality of apprenticeships by asking what needed to be done better, particularly by asking them a couple of years after their apprenticeship what, with the benefit of experience, might have been improved. I would also use it as a way of getting information with which to celebrate the schools that apprentices went to. Schools pay far too little attention to the apprentices they have educated, mostly because they do not know anything about them. With university it is there; it is easy; it happens immediately. Apprenticeship information is not gathered in the same way; it is not celebrated by schools or made available to them. There are lots of things that the Government could do on the back of having the ability to communicate and I encourage them to give themselves that.

Secondly—I am echoing what is being said in Amendment 31—let us give these young people something really worth having, something to which they can put their name. The point of GCSEs and A-levels is that they are recognised. If we are taking away the plethora of sometimes well-valued names that attach themselves to technical qualifications, let us create a name and be able to give young people some letters to put after their name, such as BA—I do not actually know what these letters should be, but they should be something that say that the young person has done this and have got the right to this. I am not a wordsmith to create this, but once they are not an apprentice they are nothing—they are a former apprentice; it is like being a former priest, something suspicious. We should give them something that celebrates what they have achieved, in the same way that we do for people who have followed the academic path.

--- Later in debate ---

[Lord Lucas]

Will the DfE be able to access this data, for instance to try to understand what history at school leads to what sort of performance in technical qualifications and apprenticeships?

[Lord Watson of Invergowrie]

My Lords, I welcome these amendments and want to say just a brief word about them, and in particular about Amendment 33.

On Report in another place Labour raised the issue of introducing the Quality Assurance Agency as a body to whom the institute can communicate information. The Minister, Mr Halfon, resisted at that time, saying that it depended on developments in the Higher Education and Research Bill. That Bill is still under way, but things have clearly moved on and the Minister has had second thoughts because we are pleased to hear that the Government now want to empower the institute to exchange information with all bodies with which it might need to do business, apparently without worrying about data protection legislation.

I would like one point of clarification on that. The amendment to Schedule 1 refers to “a relevant person” —we understand that a “person” is an organisation—and lists Ofqual, the OfS and Ofsted and then “a prescribed person”. The Quality Assurance Agency would be a prescribed person. When the Minister replies, will he specify the difference between somebody who is “relevant” and somebody who is “prescribed”? Presumably a prescribed person is not irrelevant but is not relevant.

The Minister and his colleagues are adopting the Opposition’s wider view of the role of the institute. Will he say which persons or bodies he and his colleagues have in mind to add, apart from the QAA, to which he referred? An obvious one is local government which can provide a bridge between school education and the world of work. Local government still retains various statutory duties for 16 to 18 year-olds, including duties under the Education Act 1996 in respect of ensuring education and training for persons over compulsory school age and of encouraging employers to participate in the provision of education and training for young people. The Minister may be aware that local authorities have duties in respect of young people with special educational needs and disabilities for whom the local authority maintains an education, health and care plan and for care leavers up to the age of 25. I should have said the Minister will be aware; it is a bit unfair to say he may be.

I also note that government Amendments 48 to 54, which we shall consider on Wednesday, make the local authority director of children’s services a person who must be informed about the insolvency of an FE college because, according to the Government’s explanation, such colleges will be educating care leavers, and the local authority needs to know to ensure that the local authority–appointed personal advisers to the care leavers know of the insolvency.

There are numerous reasons for local government to be involved. Perhaps the Minister will make a statement—I will be perfectly happy for it to be on Wednesday—about the anticipated roles of the local authority and the institute and how they will interact.

Technical and Further Education Bill

Lord Watson of Invergowrie Excerpts

Committee: 3rd sitting (Hansard): House of Lords
Wednesday 1st March 2017 Grand Committee

Moved by

[Lord Watson of Invergowrie]

56: Clause 28, page 13, line 2, at end insert—
“( ) Sums guaranteed under subsection (1) shall include statutory pension obligations payable to staff employed by a further education body subject to an education administration order.”

[Lord Watson of Invergowrie (Lab)]

My Lords, Amendment 56 would ensure that staff employed by an FE college continued to accrue statutory teachers’ pension scheme and local government pension scheme pension obligations during an education administration. The first of those is self-explanatory, and FE colleges are legally obliged to offer either that or LGPS membership to their staff. The latter is the scheme for the large number of so-called support staff, from learning support assistants, caretakers and catering staff to administrators, cleaners and IT technicians. It would be completely unacceptable if, as a result of an insolvency, staff pension rights or their potential pension rights were to be adversely affected.

When this amendment was considered on Report in another place, the Minister, Mr Halfon, said:

“As with any administration, once the administrator has adopted the employment contracts of the staff they decide to keep on, they are personally liable for the costs of those ?individuals, such as their salary and their pension contributions. They would take on the appointment only if they were confident that sufficient funds were available to meet the costs. Some pension contributions will continue to be made and benefits accrue”.—[Official Report, Commons, 9/1/17; col. 115.]


Although that sounds like a firm commitment, it has not assuaged those with staff directly involved in colleges—namely, the Association of Colleges and the University and College Union. If that is what the Government understand the position to be, I suggest they can have no objection to placing it in the Bill. The Minister in the other place did not provide a reason why that could not be undertaken, and I hope the Minister today will state the case one way or the other.

There are wider issues regarding pensions relating to the Bill. There is concern within the FE sector that the insolvency regime outlined in the Bill is already discouraging partnership and investment by making banks hesitant to lend to colleges. Some colleges are facing issues with proposed mergers arising from area reviews because of difficulties with bank lending linked to local government pension scheme liabilities, which now have to be shown on colleges’ balance sheets.

The area reviews under way are aimed at rationalising the FE sector. That process has been more problematic than it might have been, but at least no colleges have been closed thus far. A number have been merged and often that has worked well, with both partners approaching the future with greater confidence. However, that has not always been the case. For various reasons some projected mergers have not been completed, and one such example is currently the subject of some controversy. Other than to say that they are based in the same city, I will not identify the colleges because that might serve to exacerbate an already difficult situation, but the major stumbling block in that case is the pension scheme, more so at one college than the other. The local LGPS has changed the colleges’ deficit repayment terms from a 22-year plan with no interest to a 10-year plan with an interest rate of 4.3%. As a result, banks are refusing to advance the necessary funds to allow the mergers to go ahead. Essentially the increasing potential for colleges to become insolvent and the proposals within the Bill mean that colleges are now being viewed as high-risk employers, making both pension schemes and banks look on them less favourably and undermining area review outcomes where these have otherwise been agreed.

I have already mentioned the two schemes that apply. When incorporation began some 25 years ago and colleges were removed from local authority control, part of the deal was that by regulation they were obliged to offer one of the schemes as appropriate to existing staff. For new staff, colleges have often held contracts of employment with a wholly owned subsidiary company that may or may not be part of either the teachers’ pay pension scheme or the local government pension scheme—more often, for obvious reasons, it has been “may not”. So, provided that a college keeps paying for current staff, pension costs in respect of new staff will slowly be reduced as they are put on significantly worse pension schemes.

The college area review process has caused problems because often the local fund of the local government pension scheme requires the scheme’s debts to be met by the new entity. This becomes more complicated where mergers cross local authority borders, involving different strands of the LGPS. Differing LGPS regions have significantly different policies on past service deficits, and impose differing contribution rates. They might even insist upon any deficits being paid off in full.

An example of this has been brought to my attention by Sandwell College in West Bromwich. The West Midlands local government pension fund has notified all colleges in its region that, because of its interpretation of the Bill, it intends to increase the risk banding of all colleges. Sandwell College has been rated financially outstanding by both the DfE and the SFA and, in the area review, the further education commissioner decided that it should remain a viable independent institution. Despite all that, the West Midlands pension fund still believes that, because of the insolvency regime that forms the bulk of the Bill, Sandwell College is now at high risk, when it is palpably is not.

--- Later in debate ---

[Baroness Buscombe]

I thank all noble Lords who have taken part in this important debate and will do my very best to reply and, I hope, reassure—notwithstanding that I think that noble Lords accept that some of the important issues raised go beyond the scope of the amendment.

I recognise the well-intentioned purpose of the amendment, which is to ensure that those staff employed by a further education body in education administration continue to accrue their pension entitlements. I hope to reassure the Committee that pension rights will be protected in the unlikely event that the further education body becomes insolvent and is placed in education administration.

In developing the special administration regime, the Committee will see that we have sought to mirror many of the provisions that exist in the ordinary administration regime that applies in the event of a company insolvency. As noble Lords will know, in an ordinary company administration, the administrator has 14 days to decide whether to adopt staff contracts. Those who continue to be employed by the company will continue to be paid in accordance with the contract, including payment by the company of any pension contributions that fall due. These payments are an expense of the administration and continue until the staff are transferred to a new employer, if the business is sold to a new owner, as is often the case, or until their contract is terminated. We propose to adopt similar provisions for an education administration.

We have been clear that, for the education administration to be successful—for the special objective to be achieved—it will be necessary for the Government to provide funding to achieve the special objective: for example, to allow the college to continue to operate while the education administrator prepares his proposals for the college’s future. The Bill provides at Clause 25 powers for the Secretary of State or Welsh Ministers to provide that funding, where necessary, whether through loans or grants. In addition, the Secretary of State or Welsh Ministers may choose, where they consider it appropriate, to give indemnities under Clause 26, or guarantees under Clause 28, during the education administration.

Any funding provided under Clause 25 can be used to meet the cost of the education administration, including ongoing staff salaries and associated contributions, such as employer pension contributions. For as long as pension contributions are being made in accordance with staff contracts, pension entitlements will continue to accrue. The education administration changes nothing in this regard. However, once contributions cease, so too will the accrual of benefits. This would happen where staff were made redundant during the education administration. As with any employer pension scheme, once an individual’s employment ends they can no longer continue to pay into that scheme, but that does not mean that the benefits individuals have accrued in the scheme at that point are lost. Although they can no longer be added to, the benefits accrued will remain in the scheme and increase, as provided for by the terms of the scheme. Individuals will be able to access these benefits as and when the terms permit.

I believe that the way in which the regime will operate in practice means that the amendment is unnecessary. The Secretary of State may not provide a guarantee during an education administration, whereas it is almost inevitable that the Secretary of State or Welsh Ministers will provide funding through a loan or grant during an education administration. This funding will enable the continued operation of the further education body, and this in turn will mean that pension contributions continue to be made for all staff, whether teachers, caretakers, cleaners or support staff. I hope that that gives some reassurance.

I turn to some of the wider issues raised by the noble Lord, Lord Watson, and the noble Baroness, Lady Cohen. Further education colleges report that they are seeing a marked increase in the risks attached to their LGPS pension deficits. The question is: what are we going to do to counteract that? Further education bodies underwent the triennial revaluation of their LGPS pension deficit positions last year, and are still in the process of receiving and reviewing their results. We are aware of the outcome of a few, but not the majority, of the positions of colleges across England. The picture we have is mixed, with some coming out with results better than anticipated, and a minority even seeing their deficit repayment cost reduced for the forthcoming period. Others are seeing their costs increased. In some cases, that may be because they did not increase substantially in the previous revaluation period. There is residual adjustment being made in this period.

The assessment of repayment obligations is a function of many factors, including fund performance, the size of the deficit and fund managers’ overall analysis of the financial position of the relevant college. Reports from colleges received so far suggest that in only a few cases has a pension fund’s assessment of the risk of further education insolvency specifically contributed to revaluations with significantly increased repayment costs. Further education bodies have freedoms and flexibilities in law to be financially and operationally independent of government and are therefore classified by the ONS as private sector. Pension revaluations are a matter for negotiation between individual FE colleges and their pension fund, and final revaluations are normally based on a variety of factors as assessed by actuaries.

The noble Lord, Lord Watson, mentioned Sandwell, and I shall reference that and West Midlands. Only two of the 91 LGPS pension funds expressed in response to our consultation that the special objective in the insolvency regime was inappropriately formulated, one—which was actually West Midlands—suggesting that creditor protection should be placed on a par with learner protection and the other suggesting that creditor protection should be prioritised over learners. The others that responded to the consultation supported the premise of learner protection or were silent on the point.

As was set out in our response to the consultation, it is right that learner protection is prioritised and that approach is widely supported, even by other creditors. That is the point of the special objective. A few pension funds also questioned not limiting the length of the time for a SAR. We are clear that this is so as to not constrain the education administrator. In reality, an education administration may well last a similar length of time to an ordinary administration. Ordinary company administrations often last at least 12 months and then are often extended for a further 12 months or so, so an education administration lasting this length of time would not be unusual for insolvency proceedings. Several pension funds, as well as other creditors, sought greater certainty on how a SAR would be funded, and the Government responded by providing additional flexibility in the funding power set out in the Bill, removing the requirement that loans from government be made on a basis of priority to other creditors. So the Government can choose, in each individual case, to pay for the costs of the SAR up front by a loan and to not require that loan to be repaid unless any funds remained after other creditors had been paid out, meaning that the assets normally available to creditors remain available to creditors in the usual priority. This will be a matter to be decided case by case, but it does not appear that all pension funds have taken this change from the stricter position in normal insolvency into account in their assessment of the risk.

With regard to the wider issues, which go beyond the scope of the amendment, I hope that I have been able to reassure noble Lords. If there are issues outstanding, I shall write to noble Lords and place a copy in the Library for the benefit of all. On that basis, I hope that the noble Lord withdraws his amendment.

[Lord Watson of Invergowrie]

I thank the noble Baroness for that comprehensive response. On the first part of the response relating to the amendment, to a significant extent she repeated the words of Mr Halfon in another place but, equally, she repeated his failure to give a reason why this should not be in the Bill. She said that the Government propose to adopt similar provisions—

[Baroness Buscombe]

I may not be able to reassure the noble Lord, but we simply do not feel that it is necessary to have this in the Bill.

[Lord Watson of Invergowrie]

Yes, but that is not giving a reason. The proposal is very important, and it fits in with the provisions in Clauses 25 to 28. No harm can be done in having it in the Bill; if it gives reassurance to those working within the sector, I would suggest that, in the absence of any reason not to do it, that should be sufficient reason for it to be included.

I accept that the other points that I raised were beyond the scope of the amendment, and I thank the Minister for indulging me in her response. I praise the perspicacity of the officials sitting behind her, who obviously had an answer pretty much prepared, without knowing that I was going to raise these issues. Maybe it just came off the top of their heads—but either way it was impressive and very detailed.

I will want to take some time to consider what the Minister said. There may well be a case for seeking a report from the Government Actuary on funds that have acted strangely because, if I heard her correctly, she said that two out of 91 funds have suggested that they foresee problems as a result of the provisions of the Bill. I had not realised that it was that narrow. There is still the potential for other funds to adopt a similar position. Perhaps they are holding fire until the Bill becomes law. Can the matter be referred to the Government Actuary for a report on the potential outcome as well as the actual outcomes? At the moment, it seems that problems are being created for some colleges. If they are mainly in the West Midlands, so be it, but the point is that it could happen elsewhere. Will she look at that possibility? On the basis of what she has said to me, we will decide whether to revisit this issue. I beg leave to withdraw the amendment.

Amendment 56 withdrawn.

Technical and Further Education Bill

Lord Watson of Invergowrie Excerpts

Report stage (Hansard): House of Lords
Monday 27th March 2017 Lords Chamber

Moved by

[Lord Watson of Invergowrie]

1: After Clause 1, insert the following new Clause—
“Financial support for students undertaking apprenticeships
(1) The Secretary of State must by regulations made by statutory instrument make provision for—(a) making a person undertaking a statutory apprenticeship, as defined under section A11 of the Apprenticeships, Skills, Children and Learning Act 2009, a qualifying young person for the purposes of child benefit; and(b) extending the Higher Education Bursary provided for by section 23C(5A) of the Children Act 1989 to a person who is a former relevant child undertaking a statutory apprenticeship, as defined under section A11 of the Apprenticeships, Skills, Children and Learning Act 2009.(2) Statutory instruments under subsection (1) are subject to the affirmative resolution procedure.”

[Lord Watson of Invergowrie (Lab)]

My Lords, in the absence of noble Lords who have business other than the Technical and Further Education Bill to consider this afternoon, I shall move Amendment 1 and speak to other amendments in the group.

The proposed new clause was devised after debate in Committee and would enable families eligible for child benefit to receive it for children aged under 20 who are undertaking apprenticeships. It is slightly disappointing that it is necessary to debate the matter again on Report. The noble Baroness, Lady Buscombe, offered to set up a meeting with Ministers from both the Department for Education and the Department for Work and Pensions, but I regret that no such meeting has materialised, so here we are. We have altered our approach in the amendment to call for the Secretary of State to use regulations to make provision to ensure that apprentices are regarded as being involved in approved education or training.

We are now just five days away from the creation of the Institute for Apprenticeships, the introduction of the apprenticeship levy and a changed landscape of technical education as the Government attempt to address the skills gap inherent in the economy. To achieve success in that, they have set the ambitious target of 3 million apprenticeship starts by 2020. I am certainly not critical of that target—it is better to aim high—but if it is to be reached, it cannot be in anyone’s interest for doors to be closed to young people keen to embark on an apprenticeship, but that is what is happening, at least for those from families reliant on some form of social security. In some circumstances, parents may prevent young people taking up apprenticeships because the economic consequences for the family of loss of benefit payments in various forms could be considerable.

This concerns a relatively small number of young people—primarily those from the most disadvantaged backgrounds—but it touches on a broader issue: that of apprentices being treated like second-class citizens in comparison with their peers who choose to pursue courses at further education colleges or universities. Apprentices are denied thousands of pounds in financial support available to college or university students, and are excluded from other means of support available to their counterparts in further education institutions. This is on the basis that they are employed and thus in receipt of wages.

It might be instructive for noble Lords who are unaware of it to learn that next week, the national minimum wage for apprentices aged under 19 increases to £3.50 an hour—considerably less than for other workers of the same age. Even then, as reported by the Low Pay Commission in January this year, 18% of apprentices said that they were being paid less than their legal entitlement. Even that legal entitlement, based on a 37-hour week, equates to about £6,900 a year—interestingly, precisely the maximum amount of the maintenance loan available to students living at home. The student year lasts only 30 weeks, leaving them able to work full-time, should they choose, for the remaining 22 weeks—apart, that is, from the paid employment that many students are already forced to find during term time. Those earnings do not disqualify a student’s family from benefits, and the amendment is intended to achieve parity of esteem of all post-school young people who are setting out on a route of learning designed to equip them with the skills for a productive working life.

However, in addition to being ineligible for Care to Learn childcare grants, unlike further education students, some apprentices also missed out on travel discounts, council tax exemptions and student bank account packages. The reason is that apprenticeships are not classed as approved education or training by the Department for Work and Pensions, but apprentices must spend at least 20% of their contracted work hours off the job—or at least, they will after 1 April—which means at a college or with a training provider. What is an apprentice supposedly doing in such situations if he or she is not receiving approved education or training?

In the case of apprentices who live with their parents, the families could lose out by more than £1,000 a year in child benefit. Families receiving universal credit could lose more than £3,000. Why should families suffer as we seek to train young people desperately needed to fill the skills gaps that I mentioned earlier? University students receive assistance from a range of sources. Apprentices currently do not receive many of these benefits and are continually excluded from definitions of approved learners. How can an apprenticeship not be regarded as an approved form of learning? The Bill is aimed at unifying apprenticeships with technical education, yet obstacles have been placed in a way that will prevent the aim being fully achieved. The system must be changed so that apprentices and students are treated equally, and there is genuine parity of esteem between all educational and apprenticeship routes.

--- Later in debate ---

[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.

--- Later in debate ---

Moved by

[Lord Watson of Invergowrie]

2: After Clause 1, insert the following new Clause—
“Report on quality outcomes of completed apprenticeships
(1) The Institute for Apprenticeships and Technical Education must report on an annual basis to the Secretary of State on quality outcomes of completed apprenticeships.(2) A report under subsection (1) must include information on—(a) job outcomes of persons who have completed an apprenticeship;(b) average annualised earnings of persons one year after completing an apprenticeship;(c) numbers of persons who have completed an apprenticeship who progress to higher stages of education;(d) satisfaction rates of persons who complete an apprenticeship with the quality of that apprenticeship; and(e) satisfaction rates of employers which hire persons who have completed an apprenticeship, with the outcome of that apprenticeship.(3) The Secretary of State must lay a copy of any report under subsection (1) before each House of Parliament.”

--- Later in debate ---

[Lord Watson of Invergowrie]

My Lords, again, this is an issue that we considered in Committee. Indeed, it was also discussed in another place. But the fact that we continue to seek a greater level of reporting surely makes it clear to the Minister that we do not accept the responses given by him and his honourable friend the Skills Minister, Mr Halfon. We do not resubmit amendments without believing that they would enhance the Bill. I stress that there is no political point-scoring involved in amendments such as this. The Minister will know that when his arguments convince us—as, indeed, from time to time they do—we do not return to matters that have been taken as far as they usefully can be. But we do not believe that to be the case here.

The amendment is largely self-explanatory so I shall not rehearse the arguments that I used previously, but quality of outcomes will be absolutely key to the extent to which the skills gaps in the economy are able to be filled by UK workers trained for these jobs— initially in the decade ahead but also far beyond that point. The duties that would be placed on the institute by Amendment 2 are hardly onerous. The Minister stated in Committee that they are unnecessary as the Enterprise Act 2016 will require the institute to report on its activities annually. Of course that is the case—but not to the level of detail that we seek here.

The institute is about to come into being and will need some time to find its feet. But the Department for Education’s own website states that, according to the Bill, the institute will ensure, inter alia,

“high quality standards and assessment plans, which will lead to high quality apprenticeships”.

The extent to which the institute is successful will depend on assessing the job outcomes of those completing apprenticeships and the earnings that will result from those or from moving on to higher education. The rationale for the amendment is to go further than the basic reporting required by the Enterprise Act and to make public the extent to which both apprentices and employers believe that training and levels of employability are being strengthened and deepened as a result of the new landscape.

Surely the Secretary of State would expect nothing less than an annual report from the institute on the quality of outcomes from completed apprenticeships. So we ask, why not have that in the Bill? It follows, particularly when the Government are in pursuit of their target of 3 million starts by 2020, that Parliament should have the opportunity to receive and debate the report. If the Government want quality rather than quantity to be the driver, as they say they do, they should welcome the maximum amount of transparency in that regard. The fact that the amendment will require the institute to collect information from the department should be a positive and should be welcomed by the Government as a sign that it is meeting expectations. That is what Amendment 2 is designed to achieve.

Amendment 3 also requires reporting by the institute. I hope that the Minister will not again tell noble Lords that it is not necessary. Noble Lords will note that we are not asking the institute to do anything more than request from the department information which the department already holds. The purpose of doing so is to ensure that the institute is achieving success in turning round the situation identified by the Government’s Social Mobility and Child Poverty Commission, as it was then known, a year ago. It warned that the Government’s drive on apprenticeships was failing to deliver for young people and pointed out that almost all the recent increase in apprenticeship starts related to people over the age of 24, with the number of young people starting apprenticeships showing little change since 2010.

It also noted that, unlike academic courses, youth apprenticeships typically do not represent a step up. Most A-level-age apprentices do GCSE-level apprenticeships and almost all—97%—university-age apprentices do apprenticeships at A-level equivalent or lower. The commission also highlighted that most youth apprenticeships are in sectors such as health and social care, business administration, and hospitality and catering, which are characterised by low pay and, often, poor progression.

The Commission on Social Mobility also welcomed the Government’s efforts to improve the quality as well as the number of apprenticeships but said that there needed to be a real focus on improving the quality of apprenticeships for young people. It called on the Government to increase the number of young people doing higher apprenticeships to 30,000 by 2020 compared to the present 4,200 19 to 24 year-olds. It also called for a UCAS-style apprenticeship gateway that would give young people much better information on what apprenticeships are available—and, crucially, where they might lead.

Some advantages will be identified as a result of the establishment of the institute, but throughout the passage of the Bill here and in another place we have heard many fears expressed that the drive to 3 million apprenticeship starts risks double or even triple-counting some apprentices. There is a need for improved data transparency so that it is clear how many apprenticeships the starts data relate to. That is what the amendment seeks to achieve and why it makes the connection with those in receipt of the pupil premium, so as to be able to monitor the effect that completed apprenticeships have on young people’s lives in comparison with their more advantaged counterparts.

The Government consistently say that they are committed to social mobility. On that basis, I would say to them that they should embrace this opportunity to demonstrate the success of that aim. I beg to move.

[Baroness Garden of Frognal (LD)]

My Lords, I will speak to Amendment 21 in this group, which is in my name and those of my noble friend Lord Storey and the noble Lord, Lord Lucas, and add my support to Amendments 2 and 3 to which the noble Lord, Lord Watson, has just spoken. Our amendment came out of discussions with the CBI, which has a great deal of interest and expertise in the future of apprenticeships—indeed, its engagement is vital to the success of this scheme. It expressed the concerns of its members that the new institute will need monitoring and overview, particularly in its early days.

The amendment aims to ensure that there is regular reporting back to the Secretary of State on the quality of apprenticeships and technical education, calling for,

“a response … containing any actions to be taken as a result”.

Those “any actions” are particularly important because having action plans in response will surely make the difference. There needs to be ongoing communication. There is a weight of responsibility on the institute and high expectations that it will be a real engine for change and will counter generations of undervaluing practical, work-based skills. We need to ensure that there is transparency and accountability from the Government over the quality of technical and further education, and this amendment would help to ensure that the very welcome focus on the technical and further education sector is not lost after the Bill passes into law. I look forward to a positive response from the Minister.

--- Later in debate ---

[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.

Amendment 2 withdrawn.

--- Later in debate ---

That is the basis for the amendments. I argue that in a way they are complementary and I think that they build on the debate that we had in Committee. I trust that the Minister will receive them sympathetically and I look forward to his response.

[Lord Watson of Invergowrie]

My Lords, I thank my noble friend Lord Young of Norwood Green for submitting these amendments. I have added my name to Amendment 4. I do not think there is a great deal to add to what he has said, but some of this impacts on the arguments that I advanced on the previous group of amendments. It is about accessibility of information and careers advice on apprenticeships. It is also about the institute being seen as an open and accessible organisation. I think we all agree that we want it to meet its aims and to do so as successfully and quickly as possible. Asking it to provide information and to report to Parliament is not radical; it is about building the sort of confidence that I referred to on the previous group of amendments.

Monitoring how many small and medium-sized enterprises employ apprentices is also important because those employers will be key to the Government reaching their target of 3 million starts by 2020. Quite possibly this will be included in the list of categories mentioned by the Minister in his response to me on the last group of amendments, and perhaps he could say something about that in his reply. To some extent, SMEs have been the elephant in the room: they have not been referred to in our consideration of the Bill to anything like the extent they should have. They will play a very important part in apprenticeships—in small numbers, inevitably, and company by company—but overall they will make an important contribution.

I agree it is important that not just the number of apprenticeship starts but, as my noble friend Lord Young said, the number of employers taking on apprentices are listed. If those figures are not collected, how can the network being established by the institute be measured? The kind of information that I refer to will surely be collected, so I ask the Minister: why would the institute not make it publicly available and do so willingly?

I would like to add to what my noble friend Lord Young said by mentioning the apprentice contract and, to some extent, its status. He talked about complaints and the need for a helpline when apprentices need to pass on their concern about the quality of the apprenticeship being offered. There is no regulator in this sector and I ask the Minister whether the apprenticeship contract will be subject to the Consumer Rights Act 2015. The contract will be fully entered into by both parties, and that Act will play a part in the higher education sector as a result of the Bill before your Lordships’ House. A preliminary investigation led to universities being required for the first time to produce information on the cost of courses and so on, and that would be helpful. If the Minister cannot reply immediately, I shall be quite happy to receive a letter on the status of the apprentice contract and whether it will be subject to the Consumer Rights Act 2015.

[Lord Lucas]

My Lords, I would certainly like an apprentice who is having a hard time getting what they want or a proper education, particularly in an SME, to be able to communicate that, and unless there is an established route for them to do so, as described in the amendment of the noble Lord, Lord Young of Norwood Green, it will be very difficult to ask someone to invent one. There needs to be someone the apprentice can talk to first; otherwise, it will be just too difficult and we will never get to know the quality of the apprenticeship. Anything that became a regular reporting mechanism might well take up a lot of time but not produce any good. However, something should be in place so that, when things are really going wrong, the person at the wrong end of that can have a voice. It seems to me that that is worth including.

--- Later in debate ---

[Baroness Garden of Frognal]

The noble Lord, Lord Young, has tempted me, because I, too, bear the scars of the diploma, GNVQ and various other misguided projects of different Governments. He is quite right that my Amendment 28, which is in the next group, will be relevant here, too. I urge the Minister to consider just how sizeable this task is. We should not demolish existing vocational qualifications—as we were calling them—because many of them have great reputations and have served people well. If we are to build a new bright tomorrow for such qualifications, we need to use all the tools that we already have, which are serving the country well, and expand them into the next range of T-level qualifications.

[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.

--- Later in debate ---

[Lord Baker of Dorking]

My noble friend Lord Lucas’s amendments are an addition to the clause that I introduced in Committee, but quite a useful one. The purpose of the clause is to ensure that schools have a duty to accept—and cannot reject—various people going in and talking to students at the ages of 13, 16, and 18 about the various types of training and education they provide, which is the most effective way to improve careers advice. I have sat through several Governments who have tried to create careers advice by legislation, and it just does not work. You cannot expect many teachers to know a great deal about life outside because they leave school, go to a teacher training college and then go back to school. You have to have real, live people going into schools and talking about what life is like in a factory or a business complex and offering the opportunities—and we will now have this.

In September this year, for the first time, not only the heads of university technical colleges but those of studio schools, career colleges and FE colleges, as well as apprenticeship providers, will have a right to go and speak to 13, 16 and 18 year-olds and explain to them the opportunities that are available to them other than just getting three A-levels and going to university. That is a major change. I strongly support the amendments in the name of my noble friend Lord Lucas. Groups such as Women in Engineering spend a lot time trying to persuade more women to get into engineering. We have courses in the UTC movement to persuade more girls to go into engineering, and the numbers are going up all the time: we sometimes get over 20% or 30% girls. We like that because when a girl decides to be an engineer, she is usually very determined and confident, and in many cases the brightest member of the team. This will help in all of that, so I support it. Careers advice in FE colleges is largely an unknown area, frankly, and they should certainly improve their advice. But they have the advantage of being able to go in and talk to schools from September of this year.

[Lord Watson of Invergowrie]

My Lords, with Amendment 17, I am in the slightly alarming position of being the meat in a Liberal Democrat sandwich as far as the Marshalled List is concerned. This of course is a follow-on from the very valuable amendment to which the noble Lord, Lord Baker, just referred, which now forms Clause 2 of the Bill. We have just further benefited from his wisdom with his remarks on this amendment. I wholly concur with his view that there is a need not so much to improve as to establish careers advice in further education colleges. I very much agree also with the comments of the noble Lord, Lord Storey, in introducing this group of amendments about this being about preparation for careers rather than just giving information.

The quality of what colleges are able to provide is key to so many young people, but much will depend on the ability of Ofsted to carry out inspections of FE colleges to make this amendment effective. It rather surprised me in the debate that followed the announcement of which providers had been successful in gaining access to the register of apprentice training providers last week that before the register came into force, there were 793 apprenticeship providers. The register has nearly doubled that, with 1,473 organisations now in the frame for inspection when the register goes live in May. But that is not the extent of the burden being placed on Ofsted and its responsibility to inspect, because the process for applying to the register is due to take place four times every year, and it is expected that the number will soon rise perhaps to well over 2,000. It was quite instructive that when asked about the implications of this, Ofsted’s new chief inspector, Amanda Spielman, responded:

“It is a huge challenge”.


I think she was being politic because she must have real concerns. Unless the Government plan to increase Ofsted’s resources to enable it to inspect the new environment effectively, there will be very real gaps, which will be a huge shame.

I hope the amendment will be taken seriously by Ministers. It is important that the very least they do is recognise that there has to be a proper system of careers advice being offered by colleges to ensure that young people get the start in life that they deserve.

--- Later in debate ---

We have had a comforting exchange or two with the Government since Committee and they say that they want to maintain the awarding organisations. That is great, but it cannot be done with the way in which IP is written into the Bill at the moment—or at least the way that it appears to be written in on the surface. Either the Bill has some hidden flexibilities and the relationship proposed in the amendments could be achieved—how that could be eludes me, but I am always happy to be educated—or we need something to loosen the bonds a bit so that, when the Bill leaves this House, we can be confident that it allows for a real commercial, practical arrangement with awarding organisations that will leave them strong, long-term guardians of quality and builders of high-quality assessment and qualification systems. These have a great reputation around the world, as do other parts of our education system, and we should not chuck them in the bin just because we have generated a set of fears which are, to my mind, needless.

[Lord Watson of Invergowrie]

My Lords, I wish to say a few words about this group. My name appears on seven of the nine amendments before your Lordships, but I want to speak only on the question of copyright. The noble Baroness, Lady Garden, spoke to this group most effectively and I will not attempt to repeat any of her remarks because that is not necessary, but intellectual property is an important issue and we believe it must be protected.

I am aware that the Government have quoted the OECD as stating that the area of course development is not suitable for the market. It is perhaps counterintuitive for a socialist such as myself to criticise the Government for turning their back on the market in favour of introducing a monopoly. However, on this occasion I have to say—perhaps somewhat grudgingly—that I believe the Government are wrong, as there appears to be no convincing answer to the question raised by noble Lords in Committee as to what would happen if an awarding organisation failed and ultimately collapsed. The Government appear to have no plan B for such a situation, which is a very real matter for concern, not just for noble Lords but for awarding organisations.

Equally, the universally respected City & Guilds has highlighted significant concerns about its future. I think it is fair to say that at various stages in our deliberations on the Bill noble Lords have commented on the need to have qualifications and awarding organisations with some immediate recognition among the population in general. If you went out on to the street and did a vox pop asking people what City & Guilds were, you would get a pretty high proportion giving a reasonably accurate assessment of it. Therefore, I do not think that we should enter lightly into a situation where City & Guilds could be compromised. The organisation has written to noble Lords—as indeed the Minister may have seen—setting out a worst-case scenario, which could mean the end of City & Guilds as an awarding organisation in England and could signal the end of it as an awarding organisation in the devolved nations and internationally. It has also pointed out the potential negative impact on it as an apprenticeship awarding organisation due to a diminished role in the technical education route.

We believe that that should not be allowed to happen. The Bill could be amended but still achieve the aims of the Government’s skills plan through the Institute for Apprenticeships retaining copyright of the occupational standards and common qualification design criteria but allowing licensed qualification providers to retain copyright of the individual qualifications, as mentioned by the noble Baroness, Lady Garden, and the associated assessment materials.

The amendments in this group would provide some safeguards. I hope that the Minister will appreciate the spirit in which they are presented by noble Lords from across the three main political parties and take them on board, undertaking at least to come back at Third Reading with some proposals to mitigate those concerns.

[Baroness Vere of Norbiton]

My Lords, I am grateful to the noble Baroness and the noble Lords for tabling these amendments. I understand their concerns and hope that I might be able to provide an explanation that will put their mind at rest.

All these amendments relate to the copyright measures in Schedule 1. I know that how we implement the copyright measures is a cause for concern for awarding organisations, but it is important to understand that we would not be proposing these measures were they not vital for the success of the technical education reforms. I reassure noble Lords, on the record, that the legislation as set out in the Bill ensures that there is already a substantial amount of flexibility in how to implement the new system.

I should also say that it is not our intention to introduce legislation that disadvantages awarding organisations. They make a huge contribution and play a vital role in our technical education system, and we will continue to work with them to implement the reforms in the most appropriate and sensible manner. That work is ongoing and we are working with stakeholders to develop a commercial strategy that sets out in more detail how we will ensure a competitive and well-managed market for technical education qualifications. The Bill as drafted already allows us to do this.

I will take each amendment in turn. Amendment 24 would mean that the Institute for Apprenticeships could approve a technical qualification only when it had identified documents relating to,

“standards and common qualification criteria”,

and that these documents should be subject to the copyright transfer. As drafted, the legislation requires that copyright should apply to “relevant course documents”, by which we mean documents relating to the teaching and assessment of the qualifications. The Bill allows the institute the flexibility to define what is meant by “relevant course documents”. This will form part of the ongoing work to determine exactly how the measures will be implemented.

If the institute does not own the copyright for relevant course documents that are central to the delivery and assessment of a qualification, the reforms to technical education will be substantially undermined. There are a number of reasons for this. First, the new qualifications will be based on occupational standards and outline qualification content that have been developed by employers as convened by the institute. The institute will own the copyright for these. Documents relating to the teaching and assessment of qualifications that are developed by the awarding organisations will be extensions of these original documents.

Furthermore, the licensing model will succeed only if there is continuity in the system. Our intention is that, at the end of a licence period—and indeed if an organisation happens to fall into financial difficulties—there will be a new organisation, and the incoming organisation should not have to develop a completely new set of qualification documents, when the existing documents are likely to continue to be relevant or require only minor updating. In addition, it would simply not be a good use of taxpayers’ money to be paying for the development of a full suite of new materials every few years. Indeed, this defeats one of the aims of these reforms. The institute will make sure that the terms of the licence reflect the costs of developing and delivering a qualification. We have a duty to make sure that our skills system works in the interests of students and employers, and we have a responsibility to do so in the most cost-effective manner.

Amendment 25 would require the institute to make appropriate inquiries into the persons entitled to a right or interest in any copyright that could transfer. While I appreciate the intention behind the proposed changes, I hope to persuade noble Lords that it is unnecessary. New Section A2DA allows the institute, if it considers it appropriate, to approve a technical education qualification. As the legislation is currently drafted, the copyright of relevant course documents would transfer to the institute.

We recognise that there might be multiple contributors to the development of a technical education qualification, and that they are likely to want a say in matters that relate to their particular part. It would clearly be impracticable for the institute to obtain the individual consent of multiple contributors—it may not know the identity of many and they may have been subcontractors. We therefore expect that the organisation granted a licence to deliver a qualification would ensure that the authors of documents have given their consent.

The provisions as drafted already allow for the intention behind the amendment to be achieved. It requires that the institute is satisfied that each person who it thinks is entitled to a right or interest in the copyright agrees to that right or interest being transferred to the institute. We expect this to be part of the licensing arrangements too. We do not think the institute could not be satisfied that persons have agreed to the transfer unless it has received the information, which may necessitate an inquiry. Therefore, the amendment does not add anything.

Amendment 26 would replace “transferred” with “assigned”. Taken in isolation, we accept that this is unlikely to have any material effect on the proposed measures relating to copyright. However, the measure makes a similar provision to the transfer of copyright for relevant course documents as we have already done for the transfer of standards and apprenticeship assessment plans. The use of the term “transferred” in both measures is therefore designed to assure the reader that these provisions are consistent with each other.

We anticipate that the institute will hold an open competition inviting organisations to submit outline proposals to develop a qualification against pre-set criteria. Once the qualification is developed in line with the institute’s requirements, full approval would be granted with certain terms and conditions attached, including in relation to copyright of the documents defined as “relevant course documents”. The contract is likely to be a concession agreement, whereby the successful organisation enters into an agreement with the institute to have the exclusive right to offer the qualification for the duration of the contract period. At the end of the approval period, the institute would run another open competition, giving both the incumbent and other organisations the opportunity to put forward a bid.

Technical and Further Education Bill

Lord Watson of Invergowrie Excerpts

3rd reading (Hansard): House of Lords
Tuesday 4th April 2017 Lords Chamber

[Baroness Garden of Frognal (LD)]

My Lords, from the Liberal Democrat Benches I add our thanks to the Minister, the noble Baronesses, Lady Vere and Lady Buscombe, and the Bill team for their engagement, briefings and meetings in the course of the Bill’s passage.

We were grateful that the Government accepted the amendment of the noble Lord, Lord Baker, early on, which promised more movement than we subsequently achieved, but we hope that those amendments agreed by the House will be confirmed by the Commons when the Bill returns to it, particularly that of my noble friend Lord Storey on careers advice in FE colleges. We also welcome the movement on private providers and I thank the Minister for the meeting yesterday on that.

Perhaps as a result of the Bill we might hear more about the EBacc including more creative and technical subjects, to promote practical skills in the school timetable. It is surely in order that skills should be raised as early as possible in the schools programme, to open opportunities at an early stage to young people whose enthusiasms lie that way.

As the Minister is aware, we still have considerable concerns that some of the measures in the Bill will damage the chances for the Institute for Apprenticeships and Technical Education to be as effective as it needs to be. Among them is the issue of copyright, which will impede the awarding bodies in giving the wholehearted co-operation they might wish to give. I am grateful that we have a meeting with officials and others to discuss this in greater detail and hope that the Government might find a way forward before the Bill becomes law which does not prevent some of the most expert champions of practical, technical education from playing their full part.

There are other issues, such as single awarding bodies, consortia and certification which we would wish to continue to discuss and monitor. There is a deal of complexity in the model that the Government are proposing, and complexity does not help to promote the skills agenda.

In wishing the institute every success in its ambitious aims, we would also wish to check that it has the framework and the resources to raise the profile and standards of technical work-based achievement. We hope that it will continue to consult and take advice from those who have many years of experience in this sector—employers, awarding bodies, trainers and lecturers—who have ensured brilliant achievements by many people in skills areas. We only have to think of the UK’s successes in world skills competitions, for instance, and of some of our great entrepreneurs and leaders who began their careers through a skills-based route to see that we are not starting from scratch.

However, there is a mounting skills gap. In the interests of the country, the community and the individual learners, we have to hope that this Bill and the institute fulfil the high expectations placed upon them.

Once again, I express the thanks of these Benches for the way in which scrutiny has been conducted.

[Lord Watson of Invergowrie (Lab)]

My Lords, I have not written a speech but, if I had, it would have been more or less word for word what the noble Baroness, Lady Garden, has just said. That is probably an embarrassment to her, but there we are.

The Bill is not the heaviest we have dealt with or will deal with, but it has dealt with important matters. We have all recorded our disappointment that so much of it was to do with the insolvency angle, some of which has caused difficulties to further education colleges, bank loans and, potentially, pensions, but they will have to be dealt with down the line.

The fact that the Institute for Apprenticeships was established a few days ago is a welcome sign. I agree with my noble friend Lord Young that it was disappointing that the letter dated 30 March from the noble Baroness, Lady Vere, did not go into enough detail on what we were looking for in our amendment last week on the institute. However, it will develop and will become the Institute for Apprenticeships and Technical Education in a year’s time and we look forward to that.

I will say a word to the Minister which reflects the report to which my noble friend Lord Young referred. The business last week of the House of Commons sub-committee on education is worth reading. I do not agree with all of it but it highlighted the point—which was also raised by these Benches and other noble Lords over the past few weeks—that it is essential that the 3 million target does not allow quantity to trump quality. It is the quality of the apprenticeships that are provided in the years to come that will decide whether or not this is a success. We have to keep banging that drum. I know from what he has said that the Minister believes that as well. We will have to make sure that it happens.

I thank all those involved in the Bill. The Public Bill Office, as ever, has been extremely helpful. The Minister and the noble Baronesses, Lady Vere and Lady Buscombe, have been, if not accommodating in Committee, helpful in the briefings that we have had. The Minister’s officials and the meetings they set up have been useful in giving a better understanding of the Bill, its intentions, and how we might work with it or frame amendments to try and change it. I finish by thanking my colleagues, my noble friends Lord Stevenson and Lord Hunt. The Minister has a vast array and army of officials behind him but we have only one person—Dan Stevens, the legislative and political adviser for our team. He has been a tireless worker on what was his first Bill and I can pay him no greater compliment than to say that you would not know it.

Bill passed and returned to the Commons with amendments.

Technical and Further Education Bill

Lord Watson of Invergowrie Excerpts

Ping Pong (Hansard): House of Lords
Tuesday 25th April 2017 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Education (Lord Nash) (Con)]

My Lords, this Bill is integral to the Government’s ambitious reforms for creating a world-class technical education system. These reforms will help to ensure that technical education in our country provides everyone with the skills and opportunities they need to succeed and gain skilled employment on a long-term basis, and at the same time they will serve the needs of our economy and reduce our skills gap. The Bill’s further education insolvency regime will also protect students at FE colleges in the event that their college faces financial difficulty.

I am very grateful for the interest and input from noble Lords across the House on the Bill, and in particular how they have helped strengthen the Bill and its related policy areas. It is quite clear that the Bill has strong cross-party support. I am glad that the Bill returns to this House for further debate on two amendments from the other place. I will deal with these amendments in turn. Given the volume of business we need to get through today, I will try to keep this brief, and I hope other noble Lords will join me in that endeavour.

Noble Lords will know that Lords Amendment 1 was rejected in the other place on the basis of financial privilege, and I request that this House respects the decision reached there. However, I would like to acknowledge the sentiment behind the amendment and to address some considerations. First, I understand that a drop in household benefits income and a shift of income from parents to a young person can be difficult to manage. However, we should give parents credit for supporting their children to enter apprenticeships and develop their own financial independence and long-term careers. The numbers testify to this: last year more than 200,000 young people under 19 were in apprenticeships.

Secondly, during the Bill’s passage, the Opposition compared the financial support available to full-time students and that available to apprentices, while giving very little attention to the matter of remuneration. Full-time students are forgoing employment and income opportunities to gain qualifications, often while paying to invest in their future. Apprenticeships are paid jobs, with high-quality free training. The 2016 apprenticeship pay survey showed that the average wage for all level 2 and 3 apprentices was £6.70 an hour. Apprentices are also increasing their future employment prospects and earnings: on average, level 2 and level 3 apprenticeships increase earnings in employment by 11% and 16% respectively.

Finally, we must target resources. The cost of the amendment is estimated at over £200 million per year by 2020. The benefits system quite rightly targets financial support towards greatest need, including for example dependants in low-income families. Benefits awards must take other sources of income into account. We also target funds carefully to support apprenticeships among key groups. We pay additional amounts to training providers in the most deprived areas. We also steer funding towards providers and employers for the youngest apprentices and for care leavers, as well as for those with learning difficulties and disabilities. As the new funding system beds in, we will continue to review how funding is targeted, including to support access to apprenticeship jobs for those from disadvantaged backgrounds.

Amendment 6A was tabled in the other place in lieu of an amendment tabled on Report by the noble Lords, Lord Storey and Lord Watson, and the noble Baroness, Lady Garden. The amendment proposes a new clause to the Bill which will require Ofsted to consider the quality of careers provision when conducting standard inspections of further education colleges. I am grateful to noble Lords and the noble Baroness for raising the issue of careers guidance in colleges and giving the Government the opportunity to consider this important matter further.

As the noble Lord, Lord Storey, explained so eloquently on Report, one of the most important things we need to do for young people is provide guidance and knowledge about careers. He rightly pointed out that this is particularly true for young people from disadvantaged backgrounds, who may not have access to networks of support to inform them about options and perhaps provide opportunities for them to do work experience. That is why it is vital that FE colleges—which take many students from areas of educational disadvantage—should make high-quality careers advice available to everyone.

Of course, there are a number of colleges already leading the way in this. Gateshead College embeds careers in all aspects of a student’s learning. JobLab provides dedicated support to help their students develop practical employment skills, and Career Coach provides labour-market data and maps out education, training and career options. I also recognise Ofsted’s commitment to evaluating the quality of careers advice and guidance in further education. Matters relating to careers provision feature in all four graded judgments that Ofsted makes when judging the overall effectiveness of a college. However, the Government are persuaded of the need to go further to ensure that young people can benefit from the best possible preparation for the workplace and acquire the skills and attributes that employers need. The amendment will send a clear signal that a high-calibre careers programme must be embedded in every college.

I hope I have reassured noble Lords that we agree wholeheartedly with the principle of the original Lords amendment. The drafting changes serve only to ensure that the amendment achieves its intended effect and that the language conforms to current legislation. The amendment now includes an explicit requirement for Ofsted to comment on the quality of the college’s careers provision in the inspection report.

I urge noble Lords to accept this amendment in lieu. It is our chance to ensure that all FE students can access the support they need to help them to achieve their full potential. As discussed earlier, I also ask noble Lords to respect the other place’s decision to reject Amendment 1 on the grounds of financial privilege. I beg to move.

[Lord Watson of Invergowrie (Lab)]

My Lords, I acknowledge that the Bill is a better one than when it began its progress through both Houses. We shall not seek to impede its journey to the statute book.

The addition of the amendment promoted by the noble Lord, Lord Baker, and others, represents an important step forward in ensuring that school pupils have explained to them the full range of options, not just those whose choice of an academic route might benefit the school’s coffers. It should not have been necessary for an amendment to be passed to secure that, because strong careers guidance is critical to promoting apprenticeships in schools. If the Government’s target for apprenticeship starts is to be achieved and sustained, as we all hope, then it is crucial that young people are alerted early enough in their school life to the importance and attraction of technical routes.

However, it is disappointing that the Government have not been willing to accept Amendment 1 passed by your Lordships on Report. The decision to exclude apprenticeships from the category of approved education or training will serve as a deterrent to some young people, particularly those from disadvantaged backgrounds. The Minister for Apprenticeships and Skills said last week:

“The crucial point is that the vast majority of level 2 and 3 apprentices are paid more than £6.30 an hour, and 90% of them go on to jobs or additional education afterwards”.—[Official Report, Commons, 19/4/17; col. 714.]


But that is not the crucial point; in fact, he has missed the point. At least 90% of university graduates go on to jobs or additional education, so there is no difference in that respect. And whether apprentices earn £3.50 an hour—the legal minimum, which, as I said on Report, not all of them get—or £6.50 an hour, their parents are still disqualified from receiving child benefit. That is the nub of the issue. Clearly, though, we have not been successful in convincing Ministers of that point.

It was interesting to read last week of the Minister for Apprenticeships and Skills, in defence of the Government’s position, coming up with a figure of some £200 million a year by 2020-21. So apprentices—the young people we need to train in order to fill the skills gaps that we know exist—are to be treated unfavourably compared to their peers who choose full-time study because of the cost. The Government can miraculously find £500 million to create new grammar schools yet cannot find £200 million to ensure that the number of apprentices from the poorest families rises from its current very low level of just 10%. If there is logic in that policy stance, it escapes me. The noble Baroness, Lady Buscombe, said in Committee that she would discuss this issue with ministerial colleagues in the DWP. By Report there had been no such meetings, and we learned from the debate in the other place last week that those meetings have still not taken place. So where did the £200 million figure appear from, if not the DWP?

In passing, I say to the Minister that I submitted a Written Question asking for the Government’s workings that produced the £200 million figure. As I understand that those Questions disappear on Dissolution, I ask him to write to me with the answer so that we can gain an understanding of the foundation on which the Government have erected the barrier to treating apprentices as “approved learners”.

On Amendment 6, initially I was dismayed that the Government were unwilling to accept the will of your Lordships’ House on careers advice in further education colleges, although that was perhaps not too surprising as the Minister told us on Report that it was not necessary. However, the Government’s amendment in lieu actually appears to be stronger than the original amendment. First, it goes further than further education colleges and refers to “FE institutions”, which of course covers all training providers on the register.

Secondly, the original amendment in the name of the noble Lord, Lord Storey, which your Lordships’ House voted for at Report, called on Ofsted to “take into account” the careers advice made available to students by colleges. Government Amendment 6A states that Ofsted must,

“comment on the careers guidance provided to relevant students at the institution”.

For that reason, I welcome Amendment 6A, as Ofsted will be obliged to be proactive in reporting what it discovers in FE colleges that it inspects. That is certainly to be welcomed, although it comes with the caveat that it will apply only to those colleges that Ofsted actually inspects. How many will be? Realistically, how many can it be?

At Report, I asked the Minister to give an assurance that Ofsted would be adequately resourced; I fear that he did not reply. Mr Marsden asked the same question of the Minister for Apprenticeships and Skills, and he did not reply, so perhaps the Minister can now tell noble Lords how many additional staff Ofsted will have to enable it to inspect as many training providers as possible out of the 2,000 likely to emerge. It cannot do that with its existing staff, and we have a right to know what additional resources Ofsted will receive to enable it to cope with large new demands. I look forward to his response on that. I suggest that he must have one because it is surely inconceivable that he and/or his officials have not met Amanda Spielman or her deputy, Paul Joyce, to discuss the resources that they will require as a direct result of the Bill.

We are now at the end of a process that has produced the Bill, which will strengthen the sector but could have achieved much more. I thank all noble Lords who have participated in our debates, as well as Ministers, who have moved some way, if not as far as we would like, during our deliberations.

[Lord Storey (LD)]

My Lords, I shall speak to Amendment 6A. The Minister has put it better than I could, so I shall be very brief. I have always thought that the key to making the Bill successful was twofold. First, there was breaking the logjam of mainstream schools not allowing for or understanding the important role of technical education, whether it be FE colleges or university technical colleges. The acceptance of the amendment of the noble Lord, Lord Baker, was a crucial step forward. Secondly, there was careers. You can have all the courses in the world, but unless young people get a successful career at the end of it and an understanding of what is available to them, it is all for naught. I am delighted with the amendment. It sends a clear signal not only to the further education sector but to schools themselves. The explicit wording in the amendment means that there is no hiding place.

This is an important Bill, and I congratulate the Minister and his colleagues on carrying it through the Chamber in such a sympathetic way. I also thank the civil servants, who have been exemplary in the support that they have given us all. We could not wish for anything better. Finally, I thank my noble friend Lady Garden—she cannot be here—who led for my party on the Bill, and other colleagues who have supported us.