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.

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

My Lords, I am very pleased to be able today to speak about this legislation, which will help lay the foundations for transforming technical and further education, ensuring that all our young people have the same opportunities to travel as far as their talents may take them, move to a lifetime of sustained employment and provide the skills that British business needs. I am grateful for the remarks made by the noble Baroness, Lady Cohen. I share her sentiment: this Bill is the greatest engine of social change that can be imagined, or at least we hope that it will be. I also express my thanks to noble Lords for their continuous engagement in the Bill, which, as the noble Baroness said, has all-party support.

In Committee, we had some very interesting discussions on some of the broader aspects of the Bill, and on the operation and delivery that will turn this legislation into reality. My ministerial colleague Robert Halfon and I have found this scrutiny extremely helpful in refining our thinking for this next stage of the legislation—the transition. Minister Halfon was looking forward to being able to join today’s discussion, as he has done previously, but unfortunately has been called away as he needs to participate in the public sector apprenticeships debate.

I turn now to the first group of amendments, tabled by the noble Lords, Lord Watson and Lord Hunt. I welcome the sentiment behind this amendment: that young people who choose to take up an apprenticeship should not be financially disadvantaged and that, in particular, young people who leave care should be encouraged to enter apprenticeships. I believe, however, that we have already established sufficient safeguards and support to deliver these aims. Following a 3% increase in October last year, the national minimum wage for apprentices is now set to rise again to £3.50 an hour from April this year. Most employers pay more than this minimum. The most recent Apprenticeship Pay Survey, in 2016, estimated that the average gross hourly pay received by level 2 and 3 apprentices in England is £6.70 an hour. Moreover, apprentices receive training which, together with their paid employment, sets them up for increased earnings in the future.

[Lord Watson of Invergowrie]

I wonder whether the Minister is going to respond to the point I made about apprenticeship pay. At the beginning of the year, the Low Pay Commission reported that 18% of apprentices were not getting even the national minimum wage.

[Lord Nash]

The noble Lord has raised that before. As we discussed at that time, it is illegal to pay below the minimum wage. We and HMRC are focused on ensuring that it does not happen. We all share the noble Lord’s concern about this. I assure him that we will do everything we can to stamp out such practices.

One of the core principles of our reforms is that an apprenticeship is a genuine job. As such, apprentices are treated accordingly in the benefits system. Child benefit is intended to provide financial support to parents to help with the extra costs of raising a dependent child. It is payable to parents until the end of the academic year in which their child turns 16. After that, payment can be claimed for children up to the age of 20 if they are in approved education or training. From April this year, undertaking an apprenticeship at minimum wage will pay more than five times the maximum child benefit rate. Therefore, an apprentice’s parents are not eligible for child benefit for supporting that employed young person. These rules have been a long-standing feature of the welfare system.

Moving to paragraph (b), on extending the higher education bursary to statutory apprentices, while I understand the intentions behind the proposal, it is not correct to equate being on an apprenticeship to being in higher education, where a student is making a substantial investment in their education and has appropriate access to student finance. Apprenticeships, by contrast, are real jobs and those undertaking them are employees who earn a wage, unlike participants in HE who are students and treated as such by the benefits system. Although apprentices generally spend a fifth of their time in training, it is part of the minimum wage regulations that they are paid while undertaking that training, so I cannot share the suggestion of the noble Lord, Lord Watson, that the training equates to being in HE. They are still being paid.

Consequently, our focus continues to be on ensuring that there are incentives for employers to recruit care leavers as apprentices. An additional £1,000 is paid to employers who take on a care leaver as an apprentice, as well as their training providers. Furthermore, the funding system ensures that, for all care leavers aged under 25, the full training costs related to undertaking an apprenticeship are met by the Government in recognition of their particular vulnerabilities.

I hope that I have provided sufficient reassurance that reflects that apprenticeships are real jobs, pay a wage that is more than sufficient to offset any household income reductions through the loss of child benefit, and are funded to ensure accessibility for care leavers.

Amendments 14, 15A to 15C and 16 concern the protection of students at independent training providers in the event of their closure. I am sympathetic to the intention behind these amendments that the interests of learners must be at the heart of the system.

Turning to the detail of Amendment 14, I think that it will be helpful also to consider Amendment 15, which would amend it. As currently drafted, Amendment 14 would apply only to further education bodies, which the Bill defines as further education corporations and specialist designated institutions in England and Wales, and sixth form colleges in England. Private providers would not fall under the scope of this amendment, although we need to consider that Amendments 15A to 15C would make this change so that private providers are within scope of the amendment.

As noble Lords will be aware, the main purpose of this part of the Bill is the introduction of a special administration regime which will prioritise the needs of learners. It places an overriding obligation on the education administrator to take the action that best avoids or minimises disruption to the studies of existing learners. This will apply to all students—fee paying as well as non-fee paying. The special objective focuses, rightly, on giving learners the opportunity to continue and complete their studies having set out on their journey to gain new skills or qualifications. That is what individuals will be most concerned to achieve rather than the repayment of any money for which they have not received provision.

Of course, fee-paying students typically pay for their courses in stages, as they do via advanced learner loans, and quite often in arrears, so it is likely that the student will not be significantly—if at all—out of pocket. But, through the special objective, the education administrator will be working to identify opportunities for learners to complete their studies, whether by rescuing the college or transferring the individual to another provider, meaning that the learner can continue on their study path.

We know that noble Lords are interested in the idea of a fund or guarantee to support students in the event of private provider failure, especially where they have paid money in advance. Following recent cases highlighted in the press. I will now say a little about what we are doing to provide support for those affected. Our priority is to support learners whose providers have ceased trading. I want to make it clear that we will take every step we can to ensure that learners are given the opportunity to complete their studies, be that with their current provider if possible or with another provider. In the rare cases where providers fail, the Skills Funding Agency and the Student Loans Company work together to identify solutions for any individuals affected. They make direct contact with learners to inform them of the help they will get. I am happy to say that this is already current practice and is an integral part of the contractual arrangements between the funding agency and the provider. There are many cases where those learners who are affected are successfully transferred to alternative providers.

Students’ new providers may receive funding to deal with necessary administrative costs relating to transferred learners to ensure that they are not out of pocket. We have taken further action to protect learners due to recent cases of private providers going into liquidation. For those who have not completed their course, and while we work to make transfers happen, they will not be required to start repaying their loans during the 2017-18 tax year.

I shall now look at the detail of Amendment 16. I believe, as a number of noble Lords have said, that we should approach the regulation of independent private training providers with caution. These are mostly private profit companies and, unlike the further education bodies which are the subject of this part of the Bill, they are not part of the statutory FE sector and are created by their promoters and owners with no hand from government. They are not subject to the same intervention arrangements as the statutory sector. Furthermore, while they may receive state funding, that funding does not have the same breadth of purpose as the funding for the statutory sector and is paid on a different basis. In particular, the funding is contractual and normally paid in instalments linked to attendance, which limits the financial risk which this amendment is seeking to address.

There are around 400 private providers, of which the vast majority are financially sustainable. I am delighted to join with the noble Lord, Lord Storey, in his comment that many of them provide very good quality education.

Providers must be listed on the SFA’s register of training organisations to receive advanced learner loans funding, while successful approval includes due diligence to assess providers’ capacity to deliver contracts to the required standard and to determine whether they are financially robust. Providers delivering only loan-funded provision must have a financial health assessment rated as good or outstanding. Once on the register, the SFA closely monitors providers’ financial health and achievement rates, with providers having to comply with robust funding and performance rules.

However, I accept that there could be rare cases where a private provider fails and students suffer as a result. Although learners choose their private provider as consumers, “buyer beware” may be thought an unduly harsh response to that predicament. That is the concern which noble Lords are seeking to address through this amendment. I understand the concern, but at the moment I am not convinced that the imposition of significant new regulation on a fully private part of the sector is either a necessary or proportionate response to it.

As far as I am aware, a banking or insurance market for the guarantees referred to in the amendment does not exist and would have to be developed. We do not know whether and how fast this might happen, or at what cost. However, much more significantly, the nature of this sort of financial protection is that it puts a burden on the vast majority of healthy providers, where it is not needed, as well as on those few where it is. In aggregate terms, it would mean substantial sums of money, much of it originally public money, moving from the education sector to the insurance and financial sector, which is not necessarily what the taxpayer would want for the sake of a safety net in very rare cases of failure. Moreover, as the noble Lord, Lord Aberdare, said, it would lead inevitably to an increase in the cost of these courses.

Private providers and their representatives will also have views on this of course, and there has not been the opportunity to seek them or reflect on these matters since the amendment was laid, so we are by no means ready to accept that legislation is an appropriate response to the risk that noble Lords have helpfully highlighted. However, I would be delighted to discuss this matter further with the noble Lord, Lord Storey. We are looking into this carefully, but we need to take proper time to consider our policy response, which may not require legislation.

I will now discuss Amendment 20. I am grateful to the noble Lords, Lord Watson and Lord Hunt, for this amendment. I understand their concerns, but I hope that I can reassure them that this amendment is not necessary. The Government are doubling investment in apprenticeships because we know that they provide employers with the skills they need to grow their businesses and benefit the economy. Through the funds raised by the apprenticeship levy, we will be able to invest twice what was spent in 2010-11 in apprenticeships by 2019-20.

The institute’s responsibilities include ensuring that the quality of apprenticeships available to employers reflects employer needs and the Government’s priority for apprenticeships to be a high-quality programme. It will need to work closely with the Department for Education, employers and other stakeholders to make that happen. Its responsibilities also include advising on the pricing of apprenticeship standards to ensure that government funding supports the delivery of high-quality training. The institute will work with employers and providers to understand the cost and value of apprenticeships to inform their advice. The institute does not have responsibility for the apprenticeship budget or how much of it is spent. This resides with the Secretary of State for Education and her department’s agencies.

The Government are fully committed to comprehensive investment in apprenticeships. The apprenticeships budget is set at the spending review. That provides certainty on the forward spending profile for the duration of the Parliament, as well as ensuring affordability of the programme and that the taxpayer receives value for money.

Tying a commitment on spending explicitly to the levy receipts could mean adverse funding consequences for the programme as a whole. The 2016 Autumn Statement revised down the projections for income from the apprenticeship levy over the next five years, but this does not impact on the agreed budget that the department already has as part of the spending review settlement. For example, the provisional budget for spending on apprenticeships in 2019-20 for England and the devolved Administrations totals in excess of £2.9 billion, versus the projected levy income of £2.8 billion. Having certainty over the funding for apprenticeship training is preferable to directly linking the funding on a year-by-year basis to the wider performance of the economy. As described earlier, levels of spending will be determined by the choices that employers make.

I hope that noble Lords feel reassured enough by my responses to these amendments not to press them.

[Lord Watson of Invergowrie]

My Lords, I thank the Minister for his response and all noble Lords who have participated in this debate. On the three amendments that carry my name—our amendments to Amendment 14, in the name of the noble Lord, Lord Storey—the Minister said that we will have an opportunity to consider that further. That is to be welcomed.

On Amendment 20, I feel the Minister rather overegged the pudding. I said that I do not think the levy will be undersubscribed or short of applications. He seemed to be saying that this would depend on monetary fluctuations. The fluctuation that would concern me would be, if not enough applications for the fund came forward, what would then happen to any so-called surplus that would remain? I am not unhappy with his response. I am optimistic that the levy will be fully taken up.

I am not so optimistic about the Minister’s comments on Amendment 1 and apprentices being described as approved learners, as I think they should be. He mentioned apprentices as being employed and receiving—or at least being entitled to receive—the national minimum wage of £3.50, but that is the figure that will apply next month. For any other worker aged up to 18 the rate will be £4.05; for those aged between 18 and 20 it will be £5.60. Despite that very low level, apprentices are paid less than their peers who, for whatever reason, are not in apprenticeships but are working. I do not think that argument carries a great deal of weight.

The Minister also said that he is not willing to support extending the higher education bursary of £2,000 for apprentices to those leaving care. Surely any barriers to young people taking up apprenticeships should be removed or at the very least mitigated. On those two issues, the Minister did not show any willingness to do so. He said there were sufficient safeguards to ensure that apprentices and their families do not lose out by dint of the young person taking up an apprenticeship. That is palpably not the case. Further education colleges have already drawn to the attention of the Association of Colleges a number of cases of would-be apprentices being dissuaded from applying for—or, having applied for, then taking up—an apprenticeship when the financial consequences become clear. That is through pressures within their families. Whatever the rates in place, there are not sufficient safeguards. That deters some young people from taking up apprenticeships. That they are not regarded as approved learners is surely a glaring loophole which the Government must at some stage move to close.

I regret that the Minister has demonstrated no willingness even to acknowledge that there is an issue, far less a willingness to find a means of resolving it. We regard that as unsatisfactory. For that reason, I wish to the test the opinion of the House on Amendment 1.

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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.”

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[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.

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[Lord Nash]

My Lords, I am grateful to the noble Lords and the noble Baroness for the amendments on reporting issues for the institute. I start by discussing Amendment 2, tabled by the noble Lords, Lord Watson and Lord Hunt. Being able to assess how well the apprenticeship reform programme is achieving outcomes is of course essential. We need to know whether those undertaking apprenticeships or technical education qualifications are receiving the benefits that we would expect them to receive. To be able to do that, we obviously need the right information to help us make such an assessment. How the institute reports on its work is a topic that we discussed in Committee, but I remain convinced that the provisions already in the Bill are the right ones and that they are sufficient. I am sorry to disappoint the noble Lord, Lord Watson, but I therefore still do not believe that an amendment to the Bill is necessary to achieve that objective.

As I have said, the amendment was discussed in Committee and on Report in the other place, and in Committee in this place, and both the Minister of State for Apprenticeships and Skills and I have given sound justification for why it is not necessary. The institute will be required to report on its activities annually under the Enterprise Act 2016, and the report must be placed before Parliament. This will include information on how the institute has responded to the statutory guidance. In addition, the Enterprise Act includes provisions enabling the Secretary of State to request information from the institute on any topic.

The information set out in the amendment is already collected and published by the Secretary of State on the performance of the FE sector, which includes apprenticeships. In order to inform its activities, we would expect the institute to make good use of these data in its annual report when it assesses its performance and impact each year. Indeed, the shadow institute has explained in its draft operational plan that it,

“will make more use of learner, employer and wider economy outcome data when reviewing the success of standards”.

The institute’s core role is to oversee and quality-assure the development of standards and assessment plans for use in delivering apprenticeships and, we expect, from April next year, college-based technical education. Much of the information that the amendment proposes that the institute provide goes well beyond what is in scope of its remit. It would therefore be inappropriate for the institute to be asked to provide this type of information, and an unnecessary duplication of effort, given that this information is already collected and published by the Secretary of State. It is right that the Government collect and monitor that information, but where it falls outside the remit of the institute, it cannot reasonably be expected to provide it.

I turn to Amendment 3. Improving social mobility is integral to our apprenticeship reforms. The Institute for Apprenticeships is supporting this by helping to create a ladder of opportunity based on quality apprenticeships for people across the country. This ladder will ensure that, no matter where you are born or who your parents are, if you work hard and apply yourself, you can get ahead, succeed and shape your own destiny.

To support this aim it is of course critical that reporting measures are in place to enable us to assess how well the programme is achieving positive outcomes for a range of groups, including young people. I agree therefore with the spirit of the amendment, which proposes that such information is monitored, measured and reviewed regularly. However, I believe this amendment is unnecessary to achieve that.

We want an education system that works for everyone and drives social mobility by breaking the link between a person’s background and where they get to in life. Our defining challenge is to level up opportunity.

On 18 January, the Secretary of State for Education set out her three priorities: tackling geographic disadvantage; investing in long-term capacity in the system; and making sure that our education system as a whole really prepares young people and adults for career success. That is why the Government are delivering more good school places, making school funding fairer, strengthening the teaching profession, investing in improving careers education, transforming technical education and apprenticeships and opening up access to our world-class higher education system.

The Department for Education already publishes a range of data on apprenticeships through a number of reports broken down by starts, achievements, sector subject area, framework and standard, geography, gender, age, ethnicity and other diversity and disadvantage markers. These data are published as national statistics by the department and intended to provide transparency.

It would be more appropriate for the head of profession in the department to consider how and where breakdowns of disadvantage for apprenticeships data are published, in accordance with the code of practice for statistics set by the National Statistician. Additionally, the department is considering publishing new data and measures required to support the Secretary of State’s three priorities. The department is committed to publishing disadvantage measures such as the pupil premium, but needs to be free to find the most appropriate for each age group, programme and purpose.

Data are already helping our work to improve social mobility. For example, we know that 10.5% of those starting an apprenticeship in 2015-16 were from a black and minority background, and we have set an ambitious target to increase the apprenticeships started by people from BAME backgrounds by 20% by 2010. In addition, the department publishes 16-to-18 performance tables that cover classroom-based provision within schools and colleges. The 2016 performance tables were reformed to report five headline measures for students taking A-levels and vocational qualifications at a similar level. Further reforms are planned for 2017 performance tables. This includes extending the performance tables to include outcomes for students still studying at GCSE level and reporting outcomes for disadvantaged students, the definition of which is those who were in receipt of pupil premium funding in year 11. This will have the effect of linking key stage 4 pupil premium information with 16-to-19 outcomes. In 2018-19, we will include only GCSE-level equivalent qualifications that are on the technical certificates list.

The institute has been given a clearly defined role, in which it will be responsible for setting quality criteria for the development of apprenticeship standards and assessment plans—reviewing, approving or rejecting them; advising on the maximum level of government funding available for standards; and quality assuring some end-point assessments. While we expect data to be at the heart of the institute’s operations, the collection and publication of the data in this amendment goes beyond that remit and would create an undue burden on the institute, preventing it from carrying out the range of its other duties effectively.

I am grateful to the noble Baroness, Lady Garden, and the noble Lords, Lord Storey and Lord Lucas, for tabling Amendment 21. I completely agree with the spirit of the amendment, but there are already measures within the Bill that require the institute to monitor, measure, review and report on performance on a regular basis. I hope that after I have explained this further, the noble Lords and the noble Baroness will feel able not to press the amendment.

The institute will be a sustainable and long-term governance body that will support employers, individuals and others and will, among other things, uphold the quality of standards. I am grateful to my noble friend Lord Baker for his comments on the strength of the board and its governance. Although the institute will have wide-ranging autonomy across its operational brief, and will be able to carry out its functions in relation to apprenticeships independently, the Secretary of State will retain strategic oversight of the reformed technical education system and will be able to give directions and statutory guidance where appropriate. Of particular relevance to this amendment, the Secretary of State may direct the institute to prepare and send to the Secretary of State, as soon as reasonably practicable, a report on any matter relating to its functions. It may be in that context that the idea to which my noble friend Lord Baker referred, of a letter, would be most appropriate.

The institute will be required to report on its activities annually under amendments made under the Enterprise Act 2016, and that report must be placed before Parliament. This will include information on how the institute has responded to the strategic guidance provided to it by the Secretary of State. While the institute will collect and report on relevant data and information, the Secretary of State will also continue to collect and publish a range of data on the performance of the FE sector, including apprenticeships. We would expect that, to inform its activities, the institute would make good use of those data when it assesses its performance and impact each year, and compiles its annual report. The Enterprise Act has made amendments that also include provisions enabling the Secretary of State to request information from the institute on any other topic that she deems appropriate in relation to their functions in relation to apprenticeships. Through this Bill, those provisions extend to technical education.

Therefore, although ultimately the Secretary of State will retain sufficient powers to ensure that government retains overall control in relation to technical education and will provide strategic guidance in respect of both apprenticeships and technical education, we would expect that, in the exercise of its functions, the institute would assess its performance and take action to address any issues identified. I am confident that, with the governance that it has managed to line up, that should happen.

I hope that noble Lords and the noble Baroness will feel reassured enough on the basis that I have explained not to press their amendments.

[Lord Watson of Invergowrie]

I thank the Minister for his comprehensive reply—almost half the debate on this group of amendments was from his lips—which in some ways was not unencouraging. I welcome the contributions of two former Secretaries of State for Education, which are always informative. Although my noble friend Lady Morris was very supportive, the noble Lord, Lord Baker, was supportive only up to a point. He said that he did not believe this needed to be on the face of the Bill, but welcomed what Amendment 2 seeks to achieve. I noted that the Minister said it was likely that the request by the noble Lord, Lord Baker, for a letter from the Secretary of State would be taken up, and that is to be welcomed.

I also welcome the supportive contributions of the noble Baroness, Lady Garden, and the noble Lord, Lord Lucas. We are trying to make the point—expressed strongly by my noble friend Lady Morris—that the institute is just being established and needs to build its reputation. One way it will do that is by being as open and transparent as possible. The Minister said that collecting the information mentioned in Amendments 2 and 3 would be an undue burden. However, Amendment 3 provides only for the institute to ask the department for information which it already holds, which is not particularly burdensome.

The transparency mentioned in Amendment 2 is important because it will build confidence, as my noble friend Lady Morris said. Many employers and training providers—all further education colleges—as well as putative apprentices, are looking to the institute to raise the quality of apprenticeships. Why not demonstrate that as effectively as possible by both assembling and publishing the information mentioned in Amendment 2? The Minister said that the activities of the institute will be monitored, measured and reviewed but not reported on in the detail we have asked for. The Department for Education will have the information but apparently it does not want to give it to the institute to publish in its reports, which seems slightly odd.

Nevertheless, the Minister said quite a lot. I need to read his words in Hansard but he seemed to be mentioning quite a lot of benefit which will be seized on by those in the sector who have a genuine desire to make the Institute for Apprenticeships successful—to get it off to a good start and then build from there. There was certainly some positive input from the Minister, which I welcome. On that basis, I beg leave to withdraw the amendment.

Amendment 2 withdrawn.

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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.

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[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.

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[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.

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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.