Apprenticeships and T-Levels

Neil O'Brien Excerpts

Wednesday 20th November 2024 Westminster Hall

[Neil O'Brien (Harborough, Oadby and Wigston) (Con)]

I am grateful for the opportunity to speak in this debate.

I congratulate my right hon. Friend the Member for East Hampshire (Damian Hinds) on securing this super-important debate. All Westminster Hall debates are equal, but some are more equal than others, and when I saw the title of this debate and that it was being led by my right hon. Friend, I knew that it would be a good one.

I have not been disappointed at all, nor have I been disappointed by the excellent speeches by the hon. Members for Dudley (Sonia Kumar), for Sutton and Cheam (Luke Taylor), and for Mansfield (Steve Yemm); by my hon. Friend the Member for Broxbourne (Lewis Cocking) and by the hon. Members for Bournemouth East (Tom Hayes) and for Hartlepool (Mr Brash); by my hon. Friend the Member for Mid Leicestershire (Mr Bedford) and by the hon. Members for Stoke-on-Trent Central (Gareth Snell), for Westmorland and Lonsdale (Tim Farron), and for St Neots and Mid Cambridgeshire (Ian Sollom). There was also a rare appearance in Westminster Hall by the hon. Member for Strangford (Jim Shannon), which I am sure we all savour. [Hon. Members: “More!”] More indeed.

My right hon. Friend the Member for East Hampshire did a superb job in giving us the fruit of his many years of experience and his multiple periods of service in public life, including two stints in the Department for Education, regarding this issue. He talked about the alphabet soup of organisations and qualifying bodies, the traineeships, the apprenticeships, the modern apprenticeships, the City & Guilds, the GNVQs, the NVQs, the Skills for Life, the diplomas, the BTECs and now the T-levels. The question now is this: will T-levels just be another element added to this alphabet soup, or will we actually realise the vision of what we have called the Sainsbury routes and rationalise the system? My right hon. Friend asked big questions about where the Government are going with traineeships, the apprenticeship levy and Skills England, and it will not surprise him that I will pick up on those questions.

I have several questions for the Minister. First, do the Government have a forecast for the number of apprenticeships that will start over the course of this Parliament? Such a forecast has certainly existed in the past; I saw one when I was in government. Do the Government have such a forecast? If so, will they publish it? What is the forecast number of apprenticeships that will start over the course of this Parliament? I ask that question because unless we know that baseline, we cannot ask sensible questions such as “What will be the impact of the growth and skills levy on the number of apprenticeships?” Without the baseline we cannot have a debate about the trade-off between one desirable thing, which is more flexibility for businesses, and another desirable thing, which is more apprenticeships.

Is it still the Government’s policy to allow 50% of levy funds, rather than a specific number, to be spent on non-apprenticeships, or will it be perhaps another percentage now? What is the impact of the national insurance increase, first, on the number of apprenticeships —that is why we want to know the baseline number of apprenticeships—and, secondly, on the FE sector more generally? The national insurance increase is focused laser-like on lower-income workers, which particularly hits apprentices and people in the FE sector, so there is every reason to think that it will be particularly impactful for those two groups. Will the FE sector be fully compensated for the national insurance increase, or not?

I echo some of the excellent questions that the hon. Member for Bournemouth East asked about college funding. As the Minister knows, colleges are now classified as part of the public sector, but unlike other parts of the public sector they are not exempt from paying VAT. Is it the Government’s intention to change that situation or not?

The other day, Baroness Smith of Malvern said that college staff were “rightly” disappointed that they were not given the same pay increase as schoolteachers. She implied that the Government would seek to close that historic gap; it has existed for many decades. I am not asking for miracles from the Government; this is a very long-standing challenge that everyone says is a problem. It has become slightly worse in the first pay round under this Government; the gap has grown a bit more. Is it the Government’s long-term aspiration to close that gap between sixth-form college teachers and teachers in schools? I am interested in whether that is the direction of travel.

Will the Minister also answer some structural questions? The Institute for Apprenticeships and Technical Education (Transfer of Functions etc) Bill is obviously going through the Lords at the moment. We have already raised the question about Skills England and—as the hon. Member for St Neots and Mid Cambridgeshire said—the powers are being taken not into a new independent body but directly into the Department. As my right hon. Friend the Member for East Hampshire said, it would be pretty extraordinary if the Ministers set their own standards for A-levels, so why do we think it would be okay in technical education? What is the Government’s game plan after the IfATE Bill? What is the plan to restore independent standards setting, rather than having it in what is only an agency of the Department?

I also want to ask a really specific question. This is a genuine question because I do not understand the decision. Why did the Department refuse to share the terms of reference for the short review of 16 to 19 qualifications with the wider world? I know that FE Week certainly put in a freedom of information request to get it, which is a pretty extraordinary thing to have to do. Normally, when there is a review, the terms of reference are published. That review is not a secret. We know what the Government are looking at—a known question about BTECs and what will happen. Why did the Government not publish it and will they now?

On one last structural question, my sympathies are entirely with the Minister and the Government as there is a big question here, and this is not a straightforward challenge. We have heard the case for BTECs from various Members—the hon. Member for Sutton and Cheam made a passionate case in favour of them. I should declare an interest as I worked on T-levels before they were called T-levels, when they were still called the Sainsbury routes. Lord Sainsbury, Gordon Brown, Nick Boles and others did a huge amount of work to bring them to that point in trying to rationalise this alphabet soup. T-levels are our best hope: they are a more demanding qualification, they have a higher level of funding and they use a lot more time in industry. They are a better qualification that is bringing parity of esteem and higher quality to the FE sector, and they are our big chance to rationalise this issue that everyone agrees is a problem. How far will the Government go towards replacing some of the existing qualifications, and what is their overall strategy and vision for how this will pan out?

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[Janet Daby]

Very smart and clever indeed—I will of course pass on that invitation to Stoke-on-Trent as well. We have also heard from the hon. Members for Broxbourne (Lewis Cocking), for Strangford (Jim Shannon) and for Mid Leicestershire (Mr Bedford)—it was great to hear about his brother’s achievements, so I thank him for that. There were contributions from my hon. Friends the Members for Hartlepool (Mr Brash) and for Stoke-on-Trent Central (Gareth Snell), the hon. Members for Westmorland and Lonsdale (Tim Farron), for St Neots and Mid Cambridgeshire (Ian Sollom) and for Wokingham (Clive Jones), and the shadow Minister—the hon. Member for Harborough, Oadby and Wigston (Neil O’Brien).

Members have spoken about many issues in this debate, such as greater diversity in the workforce, including both women in STEM and the representation of people from diverse backgrounds. Concerns have also been raised about BTECs, apprenticeships and T-levels—for example, the apprenticeship levy, the teaching of further education, the reform of qualifications, and colleges needing certainty in the future about specific courses. I hope to address as many of those and other remarks as time allows, including the points raised by the right hon. Member for East Hampshire.

It is this Government’s mission to drive and increase opportunity for young people across the country. Working with Skills England, it is also this Government’s mission to support employers to train people up and identify and develop the skills they need to grow, helping to kick-start economic growth. Early investment in young people pays off for employers. We want young people to be enthusiastic, energised and passionate about learning and developing in their work. That will benefit employers, industry and our wider economy, which will be galvanised by a new generation who are willing to work hard and progress in their careers.

It has been concerning in recent years that young people have seen their apprenticeship opportunities disappear. We ask ourselves, “Why is that?” It may be helpful to remind the shadow Minister that following apprenticeship reforms made by the previous Government, including the introduction of the apprenticeship levy in 2017, apprenticeship starts by young people under 25 fell by almost 40% according to the Department for Education’s published data. It is also concerning that so many workers and employers have told us that they find it difficult to access the skills they need. UK employers report that more than a third of UK vacancies in 2022 were due to skill shortages. That is what we have inherited.

According to a stark statement from the OECD, 26% of the UK workforce are underqualified for their job, compared with an OECD average of 18%. There are widespread skills shortages in areas such as construction, manufacturing and health and social care. We desperately need workers in those areas. That is why meeting the skills needs of the next decade is central to delivering our Government’s five missions, which, I remind everybody, are economic growth, opportunity for all, a stronger NHS, safer streets and clean energy.

This Government will create a clear, flexible, high-quality skills system with a culture of businesses valuing and investing in training that supports people of all ages and backgrounds, breaking down the barriers to opportunity and driving economic growth. We are bringing forward legislation to enable Skills England to work with key stakeholders. Skills England will make sure that we know where our skills gaps are to ensure that a comprehensive suite of apprenticeships, training and technical qualifications is aligned with those skills gaps and the needs of employers.

I have heard concerns that Skills England will not have the independence or authority it needs. I would like to dispel those concerns today: Skills England will have an independent board that will provide leadership and direction, as well as scrutiny to ensure that it operates effectively and within the agreed framework,

Growth and skills are essential. We have listened to employers, who have told us that the current apprenticeship system does not work. We must do more to support them in accessing the training they need to fill their skills gaps and spread opportunity. Our growth and skills offer will provide employers and learners with greater flexibility and choice and create routes into good, skilled jobs in growing industries aligned with our industrial strategy.

[Neil O’Brien]

Will the Minister give way?

[Janet Daby]

I am going to make progress, and then I will take some interventions if I can.

We are introducing new shorter-duration apprenticeships and foundation apprenticeships as a first key step towards greater flexibility that will benefit employers and, indeed, students. We recognise that some roles need less than 12 months’ training and employers are currently locked out of offering apprenticeships. We want to support sectors that make use of fixed-term contracts or have seasonal demands or specific recruitment timetables. We will engage with employers via Skills England and introduce that flexibility where the justification is clear. Our new work-based foundation apprenticeship will focus on ensuring that training is directed towards real vacancies. It will offer young people broad training with clear and seamless progression into other apprenticeships. Unlike the last Government, we will work closely with employers and providers. This Government will make sure we get it right.

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[Neil O’Brien]

The Minister talked about introducing flexibility where appropriate—it sounded like perhaps only in some sectors. Is it still the intention for all employers to be able to use 50% of their apprenticeship levy for things that are not apprenticeships?

[Janet Daby]

The area the shadow Minister mentioned is currently being reviewed. As that information comes out, I am sure we will make him aware of it.

To open up the growth and skills offer and to deliver opportunity where it is most needed, we will ask more employers to step forward and fund level 7 apprenticeships themselves, outside the apprenticeship budget. Of the 2.5 million workers in critical demand occupations, the vast majority—more than 80%—require qualifications lower than degree level, so it feels right that we focus our support on those at the start of their working lives, rather than those already towards the top of the ladder.

The Government believe that all young people should have access to high-quality training that meets their needs and provides them with opportunities to thrive. That is why we are committed to making a success of T-levels and extending the opportunity they provide to as many young people as possible. We have introduced three new T-levels this year, opening up more opportunity for young people in the areas of craft and design, media, broadcast and production, and animal care. It was great to see an overall pass rate this year of nearly 90% and to learn that 83% of T-level students who applied to higher education secured a place.

At the end of the last academic year, more than 30,000 young people had taken a T-level, and we want to ensure that many more have the opportunity to study them, but we know that some changes are needed if we want to make that a reality. That is why we are looking at the delivery of current T-levels to ensure that more young people are able to enrol and succeed in them. Our review of post-16 qualifications reforms will ensure that there is a range of high-quality qualifications at level 3, alongside T-levels and A-levels, to support the skills needs of employers and the needs of learners.

[Neil O’Brien]

Will the Government agree to publish the terms of reference of that review?

[Janet Daby]

I have heard the shadow Minister mention that already, and I believe he has already received a response. [Interruption.] No, the shadow Minister has already received a response.

[Neil O’Brien]

Is that a yes? Will the Minister—

[Janet Daby]

I am sorry—I have already answered.

Last month’s Budget saw a good settlement for further education and skills, including £300 million revenue funding for further education and £300 million capital investment to support colleges to maintain, improve and secure the suitability of their estates.

Each one of us here knows the importance of high-quality skills training for young people, and I am grateful for the considered contributions of everyone who has spoken. When we look at the statistics, it is clear that for too long, young people have been locked out of the opportunities that can benefit them most. The actions I have outlined today will give us a real sense of how to make a difference for learners and employers. That is at the heart of the Government’s mission to spread opportunity and drive economic growth across all parts of our country.