Institute for Apprenticeships and Technical Education (Transfer of Functions etc) Bill [Lords]

Peter Swallow Excerpts

2nd reading
Tuesday 25th February 2025 Commons Chamber

[Peter Swallow (Bracknell) (Lab)]

A Government who are ambitious about growth need to be serious about skills, because without the workforce trained to build and insulate the homes we need, to install the next generation of electric vehicle charging infrastructure, to deliver excellent health and social care and to deliver high-quality early years education, none of the Government’s missions are achievable. Better skills mean good, often well-paid jobs. Apprenticeships are a driver of social mobility, and I am determined that my constituents feel the benefit of those opportunities. Skills England will have much to do to pull together a fractured skills landscape and deliver real change, but the Bill will enable it to make a solid start.

My constituency is home to the excellent further education college Bracknell and Wokingham college, which already does so much to offer young people the chance to deliver the skills of the future in everything from social care to sustainable technologies, from pharmaceuticals to construction. The college trains over 100 electrical installation apprentices, providing them with hands-on training in state-of-the-art electrical installation workshops, which were recently renovated with more than £200,000 of investment. The facility ensures that learners gain practical experience with the latest industry-standard equipment, preparing them for high-demand roles in electrical engineering, construction and sustainable technologies.

Last week, I visited the Bracknell Forest skills hub, led by Nikki Burns, a small business owner with years of experience. The hub is proactively identifying with employers where the skills gaps are, working with potential and existing employees to address those gaps, and teaming up with education providers, including my local college, to design bespoke courses to plug the gap, all backed with support from local and national Government. Since launching in September, the skills hub has already engaged with over 40 businesses, offered tailored support for over 50 jobseekers, trained 300 employees and built two bespoke courses. That is a system working as it should, but we need more collaboration, and Skills England will have a huge role to play in identifying skills gaps at both national and local levels, and in ensuring that businesses and Government are talking to each other.

Businesses understand the value of good skills and apprenticeships for their workforce. Waitrose, whose head office is in my constituency, is just one example. It currently has 1,200 partners on live apprenticeships across 30 schemes. When I visited Waitrose last year to meet some of its apprentices, I saw the true range of opportunities available, from people training up to look after Waitrose’s delivery fleet and maintain its bodywork to apprentices studying for a T-level in finance, in partnership with Bracknell and Wokingham college. Smaller-scale schemes also offer routes into employment. Waitrose’s “Building Happier Futures” programme is designed to support care-experienced young people—including those who have been in kinship care—into work.

When I have spoken to Waitrose and other businesses in my constituency, they have told me that among the barriers they face to offering more apprenticeships are the inflexibility of the apprenticeship levy and the overly burdensome requirements needed to run and recruit to an apprenticeship. That is why the reforms to apprenticeships that the Government announced two weeks ago are so very welcome. They will provide more flexibility for employers and those who want to take up these opportunities, shorten the length of some apprenticeships, and scrap the need for adult apprentices to pass English and maths GCSE. Those are common-sense changes backed by business. To be successful, Skills England will also need to get a grip on the lengthy time that it takes to update frameworks, to ensure that apprenticeships always remain at the cutting edge.

It is also vital that opportunities be genuinely open to all, including those with additional needs. Data from the Office for National Statistics shows that only 29% of autistic people are in paid employment—that is not good enough. More targeted support is needed at local and national level to ensure that more autistic people can better access apprenticeships and other skills. Bracknell Forest council is currently looking at how to address that autism employment gap, particularly through more support into apprenticeships and other forms of work experience.

Skills England has a huge job ahead of it. Our country has too often relied on importing skills rather than nurturing our own talent, which is not progressive, and too many young people have missed out on valuable opportunities. Skills gaps are preventing us from building, growing and thriving. Skills England will be at the vanguard of the Government’s work to fix all that—no small task, but one for which the reward is great.

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

I start by paying tribute to the work of Mr Speaker and the Deputy Speakers in driving up the number of apprenticeships in this House. Not only is that creating brilliant opportunities, but it is setting a brilliant example, so I pay tribute to them for the work they are doing.

We have heard some brilliant speeches today, and not just from right hon. and hon. Friends on the Conservative Benches. We have heard really important questions from the Chair of the Select Committee, the hon. Member for Dulwich and West Norwood (Helen Hayes); from the chair of the APPG, the hon. Member for Chesterfield (Mr Perkins); and from the hon. Member for Ribble Valley (Maya Ellis). We also heard a great speech from the hon. Member for St Neots and Mid Cambridgeshire (Ian Sollom). We do not always agree with the Liberal Democrats about everything, but a strength of the liberal tradition is suspicion of centralisation, which is what is in front of us today.

We have three main concerns about this Bill. First, there were good reasons why standard setting was put at arm’s length and closer to employers. As we have heard from Members across this House and in the Lords, this is centralisation, and alongside the other changes that the Government are making, it will risk directly damaging the status of these qualifications.

Secondly, the Government are doing several things that will make it less likely that businesses will take on apprentices, but rather than fixing those problems, the Government are reorganising. Skills England will be the 13th skills body in 50 years—it is yet more reorganisation, rather than a focus on the real issues, and from the Secretary of State’s comments earlier, it sounded as if there might be a further reorganisation later to boot.

Thirdly, we have real concerns that this reorganisation of the machinery of Government will lead to harmful delays in addressing some of the most important strategic issues that we face. Those concerns are borne out by the Government’s own impact assessment. As with the schools Bill, this Bill is highly centralising and does not address the real issues. There are multiple things in the skills system that we need to address, but I am slightly baffled as to why the Government are starting by creating a new agency within the DFE and abolishing IfATE.

It is worth explaining how we got to IfATE in the first place. For decades, people said that they wanted to make apprenticeships more prestigious, and part of the answer was growing higher apprenticeships. The number of people on higher apprenticeships went up from just over 3,000 in 2010 to over 273,000 last year—a huge increase—and the hon. Member for Erewash (Adam Thompson) was absolutely right to talk about how good those degree apprenticeships are. They are great routes into good jobs. Indeed, the latest data shows that the median first degree graduate earned £29,900 five years after graduation, whereas a level 4 apprentice earned more—£33,800 on average.

As well as creating and boosting those higher apprenticeships, the other big change was a shift from a frameworks-based approach to a standards-based approach, and those standards meant a shift to a higher quality. They were led by employers, they had a longer duration—at least a year—and they had more off-the-job training and rigorous final assessments. That was much needed. In 2015, an Ofsted report found that even though some apprentices had been on the job for more than a year, they were not even aware that they were on an apprenticeship, such was the problem of quality. Things were being funded that did not ultimately benefit young people, but did allow employers to pay a lower wage, which was obviously concerning.

The apprenticeship levy was designed to give employers much more ownership of the skills system, and making IfATE independent of Government was a big part of that, creating a properly employer-led system. I pay tribute to the work of IfATE—the Secretary of State did not thank it for its work, but I will do so. IfATE has created and maintained around 690 apprenticeships, supporting around 750,000 people on apprenticeships last year. It created 21 T-levels and 174 higher technical qualifications and enabled employer leaders to set a strategic direction for schools in their sector, and its website is an amazing resource.

However, we now see the Government completely reversing the direction of policy. While we lengthened apprenticeships, they have cut the length of an apprenticeship to eight months. While we grew higher apprenticeships, they are abolishing most level 7 apprenticeships, and by abolishing IfATE and bringing it in-house at the DFE, they are eroding independence and employer ownership. Why are the Government suddenly moving in a reverse direction?

[Peter Swallow]

Does the hon. Gentleman not see that the Government are doing so because this is precisely what businesses are calling for?

[Neil O’Brien]

I will come on to what businesses are saying in one second. The Government are doing two things that are going to be very bad for apprenticeship numbers. First, while apprentices are exempt from national insurance, the Budget—particularly its £25 billion increase in national insurance contributions—is cutting hiring and leading to job losses across the board. What employer groups are saying about that is pretty damning; be it the Institute of Directors, the Federation of Small Businesses or the Chartered Institute of Personnel and Development, they are warning of serious job losses as a result of the Budget. That tax increase, and the damage it is doing, is focused on exactly the type of jobs that apprentices might traditionally get, so apprenticeships are being hit by the backwash from the Budget.

Secondly, the Government are planning to move funding from apprenticeships to other areas. In opposition, Labour talked about allowing employers to spend 50% of their apprenticeship levy funds on other things. As the election drew nearer, that commitment seemed to be disappearing. On 20 November, the Minister said that the commitment to 15% was “currently being reviewed”, but just weeks later, on 9 December, the Secretary of State said that the Government were still committed to “50% flexibility for employers”. It would be interesting to hear from Ministers whether that 50% still stands now.

Given that the levy funds £2.5 billion of spending, 50% is a lot of money to potentially move out of apprenticeships. We can argue about whether that is desirable, but all things being equal, it will certainly cut funding for apprenticeships. We might also be wary that it will undercut the purposes of the levy and have high dead-weight. In fact, the Institute for Fiscal Studies has pointed out:

“In principle, this could help employers to pay for other forms of training that they and their employees would find valuable. But the history of these wider training subsidies, such as the former Train to Gain programme”—

a programme under the last Labour Government—

“suggests that the result is often that much of the spending goes on training that firms would have provided—and paid for—even without the subsidy.”

The apprenticeship levy, whatever its flaws, did at least attempt to address this problem of dead-weight and discouraged freeriding by large firms, so that firms that invested in their workers did not lose out to those that did not. Since the levy was introduced in 2017, real-terms spending on apprenticeships and work-based training has increased in real terms by about a quarter, from £2 billion to £2.5 billion.

In a written answer to me, Ministers have confirmed that the Department has a forecast for the number of apprenticeship starts, but they have also said that they will not publish it. If it was published, it would surely show that removing possibly half of the funding would lead to a substantial drop in the number of apprenticeships. Perhaps that is why we are not allowed to see it. Those same reasons are why the Government are going back to shorter apprenticeships and away from the higher level, reducing quality and cutting length to try to offset the hit to numbers from other Government policies.

There are bits of this agenda where we share the same goals. We all want to see more SMEs offering apprenticeships and more young people getting apprenticeships. Although on average twice as many people started apprenticeships each year under the last Government as under the previous Labour Government, we still wanted that to be much higher. Although we are interested in the same questions, we have quite different ideas for how we address them. Part of the Government’s answer is to abolish the highest level of apprenticeships in order to redistribute the money.

The level 7 apprenticeships that the Government are axing currently account for just 9% of apprenticeship spending, but a lot of good things will potentially be lost by abolishing them. I have been contacted by firms worried about the abolition of the solicitors apprenticeship, which is a great way into the law for people from less privileged backgrounds. One firm worried about that is Bolt Burdon Kemp, which told me:

“This will really impact social mobility into sectors like law, accountancy, and consulting. The traditional route into law is expensive and therefore without the apprenticeship scheme many would not be able to afford to do so. We also believe it will have a wider detrimental impact on the reputation of apprenticeships.”

It has taken such a lot of effort to get that route going, and it would be a huge shame to lose it.

Likewise, level 7 apprenticeships are opening up great jobs and leadership roles in the public sector, too. Some 56,000 people started apprenticeships in the public sector last year. More than half of management apprenticeships at level 7 are in health and education. In fact, they were identified as having a key role in the NHS’s own long-term workforce plan. Public services will lose out, as will ambitious apprentices.

Because level 7 apprenticeships are a small part of funding, I am worried that the Government will now go after level 6 apprenticeships, which is a much bigger share of spending. A lot of employers are worried about that, too. [Interruption.] The Secretary of State sighs as I say that. Presumably when the Minister gets to her feet, she will promise that they will not do to level 6 what they will do to level 7. It sounds like Ministers will be clear when they stand up, will they not, that they definitely will not do that to level 6 apprenticeships.

The last Government moved to make it more attractive for SMEs to take on younger people. From April, 16 to 21-year-olds have had 100% funding, rather than requiring the 5% employer contribution. We need to build on that by cutting bureaucracy and making it easier and more attractive to take on young people. Building on that would be more sensible than reorganisation, centralisation and the defunding of higher apprenticeships. This Bill abolishes IfATE and gives the Secretary of State significant powers as a result, but it says nothing at all about the new body, Skills England, which is intended to be at the centre of the skills landscape under this Government. That has been a pretty unwelcome surprise to some in industry.

In its briefing on the Bill, the Construction Industry Training Board noted that this was

“contrary to the previous characterisation of Skills England that was outlined in the…King’s Speech…and contrary to the vision for Skills England to be an independent body, established in law, with a cross-governmental role”.

The CITB makes an important point. IfATE existed to serve all employers—public and private—and across every Department. In contrast, Skills England will be a part of the DFE. The CEO of Skills England will be a job share between two civil servants who are currently running post-16 skills at the Department. I am told by former Ministers that they are good officials, but this is a recentralisation into the Department—as was pointed out by both the Chair of the Select Committee, the hon. Member for Dulwich and West Norwood), and the Liberal Democrat spokesperson, the hon. Member for St Neots and Mid Cambridgeshire.

Institute for Apprenticeships and Technical Education (Transfer of Functions etc) Bill [ Lords ] (First sitting)

Peter Swallow Excerpts

Committee stage
Thursday 13th March 2025 Public Bill Committees

[Neil O’Brien]

That is a perfectly good question. Of course, this Government are a big fan of quangos and have, I think, created—net—28 more quangos since it came to office. Some can be the right thing to do, so I am not necessarily criticising the Government for that. In this case—I cannot remember if the hon. Lady was around when we were creating the apprenticeship levy—the reason why it was made independent of Government and an employer-owned body was that we were, for the first time, creating something that is quite common in the rest of Europe, the apprenticeship levy.

The levy is intended to stop—to be blunt—good employers who invest in their workforce and the skills of their workforce being taken advantage of by those who do not. That meant doing something controversial, which in effect was requiring them to pay into the levy—in many ways, it is like a tax—but they could get their money back through the apprenticeship levy. However, in return for that big change, requiring larger employers to put their own money into skills, we wanted to ensure that the whole thing would be truly employer-led, rather than politician-led.

Of course, current Ministers are brilliant—this is not any criticism of them—but we legislate for the ages, not for whoever is currently the Minister. Ministers change, and sometimes there have been instances—I am horrified to tell the Committee—where politicians have foibles or funny ideas of their own, which are not necessarily reflected in the wishes of employers and what they want from the skills system. That was why we put the system more into the hands of employers.

[Peter Swallow (Bracknell) (Lab)]

It is interesting to hear the shadow Minister speak about business’s view of the apprenticeship levy. When I speak to businesses in my constituency, they tell me that the apprenticeship levy was not flexible enough and was not working, and it was preventing them giving opportunities to young people. That is exactly why so many businesses have welcomed the changes that this Government are bringing in. Has he not heard the exact same from businesses in his constituency?

[Neil O’Brien]

Even before we set up the levy, I always heard employers expressing concerns about the idea of a levy of any kind. In many instances, they would prefer just to keep their money and not spend it on skills at all. The fact that they were not spending on skills is the reason why we brought in a levy—it was quite a contentious thing, and quite a centrist thing in lots of ways.

As the Institute for Fiscal Studies pointed out in its recent paper on the Government’s proposals to change the levy, the danger, if we start to make these things too open-ended, is that we completely collapse the concept. It notes what happened with things before, such as Train to Gain, where what we end up with is pure dead-weight—we get zero additionality.

To reduce the idea to absurdity, if we were to say that employers can spend the apprenticeship levy on whatever they like, there is no point in having a levy, is there? That is because we would have just gone around in a circle. There is no point taking money off people and saying, “You can do whatever you want.” The whole point of containing that expenditure to apprenticeships was, as well as wanting to prioritise apprenticeships, to avoid the very real problems that the Institute for Fiscal Studies pointed out with previous schemes such as Train to Gain, where we ended up with huge amounts of dead-weight. It did not work, and the amount of money spent by employers on such things went down.

I am absolutely ready to hear criticisms of, and improvements to, the idea of the levy. In a moment, I will talk about some of the challenges that will be thrown up by the Government’s proposals to move large amounts of money out of apprenticeships through the reforms to the levy.

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[Damian Hinds]

I am very grateful; who knows where this conversation might take us? Last time I looked, 1563 was not in the past five decades. The hon. Lady says that every generation should try to reform, and that may well be true. I do not know how many generations she calculates there are in a 50-year period, but as sure as anything, there are not 12, let alone 13.

Those many bodies over the years have been mirrored by a true panoply of qualifications and awards: traditional apprenticeships; modern apprenticeships; the YOP or youth opportunities programme; the YTS, or youth training scheme; City and Guilds; the TVEI, or training and vocational education initiative; the NCVQ or National Council for Vocational Qualifications; NVQs or national vocational qualifications, which are still in use; GNVQs, or general national vocational qualifications, which became BTECs and diplomas; the 14-to-19 diplomas, which are not quite the same thing as the Tomlinson diplomas; Skills for Life; traineeships; and all together between 100 and 200 recognised awards and organisations, excluding those that do only end-point assessments.

[Peter Swallow]

rose—

[Damian Hinds]

I have not forgotten another one, have I?

[Peter Swallow]

I simply wish to say to the right hon. Member that it was not too long ago when he was on the Government Benches and presiding over the very system in question. As he has helpfully elucidated for everyone, we are dealing with an incredibly fractured landscape, which is precisely the challenge that the Bill proposes to address. In all frankness, given the fractured nature of the landscape, which he eloquently identified, should he not support any attempt to bring it together?

[Damian Hinds]

Yes, but the Bill does not do that, and if the hon. Member thinks it does, I am afraid he is mistaken.

Some years ago, I used to sit on the Government Benches and was a Minister at the Department for Education, as the hon. Member said, and on many occasions I have had a close interest in these areas. There was a cross-party coming together in the early to mid-2010s, which resulted in the Sainsbury report. The noble Lord Sainsbury, as the hon. Member may know, is a Labour peer who devoted a great deal of his life and the work of his foundation, the Gatsby Foundation, to trying to improve something that in this country, historically and by international comparison, we have not been tremendously good at: technical and vocational education and training. The Independent Panel on Technical Education, which convened in 2015 to 2016, took a broad overview of exactly the fractured landscape that the hon. Member talked about. By the way, I have missed out the page of my notes where I was going to go through all the qualifications that someone could do at level 3 to age 18, which is a similarly sized list.

Institute for Apprenticeships and Technical Education (Transfer of Functions etc) Bill [Lords]

Peter Swallow Excerpts

Report stage
Monday 31st March 2025 Commons Chamber

[Ian Sollom]

I will come to my preference for an executive agency that fits what the Government want to do. That is the reason for my new clause, and I do not think that it need delay efforts. Ultimately, a statutory, departmental body would have more clout. On the basis of what we understand, at least, I think that the remit for Skills England is very different from the remit for IfATE when it comes to that cross-departmental working.

[Peter Swallow (Bracknell) (Lab)]

This Government have just taken bold action by abolishing NHS England, the largest quango in the world. Part of the motivation for doing so was the need to ensure that when something is not going right in the NHS, the buck does not stop with a quango that we Back-Bench MPs cannot question directly, but with Ministers. That is better for governance and for scrutiny; it means that when the Health Secretary says that something is not going well enough, we can question him robustly and challenge him to improve. Surely the hon. Gentleman sees that the way to push Skills England to be as robust as possible is by having strong governance.

[Ian Sollom]

There are different options, and I will come to this issue later. Given the scale of cross-departmental working required, having Skills England sit outside a single Government Department is probably more effective. Moreover, such bodies can be held accountable effectively by Parliament, as we have seen with some other quangos. Indeed, I believe the Industrial Strategy Advisory Council will be set up as a statutory independent body when time allows, and I suggest that Skills England is of the same order of magnitude.

Beyond the concerns about accountability and cross-Government authority, there are practical, operational risks to the approach laid out in the Bill. The Skills Federation warned in its evidence that

“there is a key risk that transfer of functions from IfATE will become the key focus for the set-up of Skills England and less attention (and potentially resources) placed on achieving the overarching aims.”

There is significant concern that the broader strategic purpose of Skills England could be lost in the rush to transfer operational functions. That concern was echoed by Lord Blunkett, who suggested that

“there is a real danger that IfATE will swamp Skills England at birth.”—[Official Report, House of Lords, 21 November 2024; Vol. 841, c. GC98.]

The Government’s impact assessment also acknowledges risks, noting that the transfer of functions could

“potentially cause a temporary slowdown in the growth rate of new apprenticeships and technical education courses due to potential delays in the approvals process”,

which

“may disproportionately impact disadvantaged learners.”

In Committee, the Minister emphasised the urgent need to address skills shortages and said that delay “is not an option.” Although we share the Government’s commitment to addressing skills shortages urgently, I respectfully suggest that there is wisdom in heeding the warning that the University of Warwick gave in its evidence. Getting the foundations right is more important than hasty construction.

In light of those concerns, I tabled new clause 1, which I proposed in Committee. It provides a constructive solution to many of the issues that I have outlined, and proposes a clear pathway for establishing Skills England as a dedicated executive agency within the Department for Education. As I said, my party ultimately believes that a fully independent statutory body with cross-departmental authority is the optimal approach, but we recognise the Government’s preference for the executive agency model, so new clause 1 works within that structure but provides essential safeguards. Under the new clause, the Secretary of State would produce draft proposals for establishing Skills England within six months, lay the proposals before both Houses, secure parliamentary approval before establishing the agency, provide annual statements on the agency’s work, and evaluate its effectiveness 12 months after establishment. This approach strikes the right balance between allowing the Government to implement policy at their desired speed and ensuring proper parliamentary scrutiny and meaningful stakeholder engagement.

As I said, I tabled new clause 1 in Committee because I believe that parliamentary scrutiny is essential for an organisation with such far-reaching responsibilities. The Minister argued that the standard accountability mechanisms for executive agencies are sufficient. However, I contend that Skills England is not just another executive agency; it is central to the Government’s economic growth mission and to creating opportunities for millions of people.

Standard executive agency protocols are built for “business as usual” functions, not for what should be transformative bodies at the heart of the Government’s economic strategy. Having a properly accountable Skills England, even as an executive agency, would ensure that employer voices remain central to standards development rather than being merely consultative; that technical expertise is maintained and developed across economic cycles; that Parliament maintains appropriate oversight for this critical area of policy; and, crucially, that political short-termism does not override long-term skills planning.

In Committee, the Minister argued against new clause 1 on several grounds. First, she suggested that it would cause unnecessary delay in addressing urgent skills challenges. Secondly, she pointed to the existing accountability mechanisms for executive agencies, including framework documents and reporting requirements. Thirdly, she emphasised that Skills England is already operating in shadow form and is poised to take these functions when the Bill passes. Let me address those concerns. On the issue of delay, new clause 1 would require reporting and parliamentary approval within six months—a reasonable timeframe that would not significantly impede progress. As the Skills Federation noted, proper planning for the transfer of functions is essential for success, and parliamentary scrutiny would reinforce, rather than impede, the effective delivery of Skills England.

The existing accountability mechanisms are indeed important, but they are surely insufficient for an organisation of Skills England’s significance. As the University of Winchester argued in its evidence to the Public Bill Committee, Skills England should be structured

“to ensure and protect its regulatory independence from Government and other agencies.”

The framework document and annual reports are important tools, but they are prepared by the Executive without any meaningful parliamentary input.

Skills England’s current shadow operations are welcome preparation, but operating in shadow form, without parliamentary scrutiny or approval, only underscores the need for new clause 1. Important decisions about structure, governance and priorities are being made right now, without any oversight in this place.

The Secretary of State indicated on Second Reading that the Government may review Skills England’s status in 18 to 24 months to consider whether it needs to be an independent statutory body, and the Minister confirmed that timetable in Committee. But why wait? Why create uncertainty about the future status of an organisation that needs to establish credibility with employers now? It is worth noting—as the shadow Minister, the hon. Member for Harborough, Oadby and Wigston (Neil O'Brien), did in Committee—that the Government plan to put the Industrial Strategy Advisory Council on a statutory footing “when parliamentary time allows”, according to their own documentation. This suggests that they recognise the value of key strategic bodies’ statutory independence, so why should Skills England be treated differently?

New clause 1 offers a constructive path forward, building on the debates we have already had. Personally, I was disappointed that the Government opposed it in Committee, but I believe that the case for proper parliamentary scrutiny remains compelling. Although my Liberal Democrat colleagues and I ultimately believe that a fully independent statutory body would be the ideal model for Skills England, new clause 1 would work within the Government’s executive agency framework to add essential parliamentary scrutiny and accountability.

The Minister assured us in Committee that Skills England will have robust governance arrangements and clear lines of accountability. If the Government truly believe in those principles, they should welcome rather than resist proper parliamentary oversight. If Skills England is to be the cornerstone of our skills system for years to come, even as an Executive agency with the Department for Education, we must ensure that it has the transparency, accountability and parliamentary oversight to withstand changes in political priorities and economic circumstances.

I urge Members across the House to support new clause 1, which would strengthen the Bill and help ensure that the transfer of functions leads to better outcomes for apprentices, students, employers and the economy as a whole.

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[Josh Dean (Hertford and Stortford) (Lab)]

I will aim to keep my remarks brief, having spoken on Second Reading and served on the Bill Committee. Before I speak about why we should not amend the Bill to include new clauses 1 and 4 and amendment 6, I will set the scene. Madam Deputy Speaker, you will be unsurprised to hear that I warmly welcome the role that the Bill will play in paving the way for Skills England. It is right that we crack on and allow the Secretary of State to transfer to Skills England the tools to find and fill the skills gaps across the country, so that the workforce is equipped with the skills to power economic growth.

My constituency sits just next to Stansted airport, and we have many young people undergoing courses at the Stansted airport college, which I was privileged to visit last Friday. I did not take a whirl on the simulator to learn how to fly a plane; I saved that for a future visit. I was delighted to find out how the college uses our local talent in Hertford and Stortford to fill the critical, growing skills gaps in the aviation and aerospace sector, and to see the careers-focused courses that are giving young people skills for work and life.

Just this morning, I was proud to welcome the Minister for School Standards to Manor Fields primary school in Bishop’s Stortford, where we heard about the impact of the teaching assistant apprenticeship for local support staff, and met the fantastic providers of those courses. It was really moving to hear the apprentices talk about how their confidence had been built by taking those courses.

For a young person, the opportunity to find and develop a skill or something they are passionate about does not just get them into the workforce; it builds their confidence and helps them to find the path that is right for them. That is why it is so important that we get Skills England set up and do not delay getting the Bill through. I know about this from personal experience, having left school at 16. I did not follow the path of an apprenticeship. I did not know what the direction was for me. Apprenticeships are so important for young people who need to find a path and need the certainty of a career at the end of it, but perhaps do not want to stay in traditional education. It builds their confidence, and helps them find their place in the world. This is work that we simply cannot delay.

Young people are being let down by a skills system that is not working for them. One in eight young people is not in education, employment or training, which is holding them back, and the economy back, too. In 2022, more than a third of UK vacancies were due to skills shortages. We need urgent reform—we cannot afford to delay. I urge hon. Members to pass the Bill unamended this evening so that the Government can get on with reforming the skills system and delivering Skills England, to create the opportunities for young people in Hertford and Stortford and across the country that will build their confidence, help them find a path that is right for them, and make a difference to their lives.

[Peter Swallow]

I was proud to serve on the Bill Committee for this vital legislation. It is a small Bill, but, by goodness, it is mighty. I rise to speak against amendment 6. In doing so, I will highlight a local success story in recognition of the third National Supported Internship Day. It took place on 27 March, which also happens to be my birthday.

For 15 years, Bracknell and Wokingham college—my local college—and Activate Learning have been working together with over 100 employers to offer supported internship placements for learners with special educational needs. The scheme offers invaluable opportunities, and provides the skills, confidence and qualifications necessary to thrive in the workplace. Their partners include the National Grid, the Royal Berkshire hospital, Johnson & Johnson, and Sodexo. It is an excellent example of a local college working with big players in the energy, medical and food industries to provide high-quality schemes for stable, well-paid employment. It is proof that young people with special educational needs can thrive with the right support. We face one in eight young people being not in education, employment or training—the number is at an 11-year high, after 14 years of the Tories—and we need more supported internships to address the challenge.

Skills England will deliver opportunities across the country in key industries including green energy, construction and healthcare. That is vital for the Government’s five missions, and for communities like Bracknell. It is a step towards ending fragmentation. A less complex, more flexible skills system will deliver for young people, especially those with special educational needs. By bringing together the constituent parts of the skills architecture, Skills England will create a system that is fit for purpose, responsive to the needs of employers and businesses, and capable of driving economic growth in the years to come. It will lay the ground for a better system.

There is a need to move fast. As the right hon. Member for East Hampshire (Damian Hinds) pointed out, the UK’s productivity is almost 40% below that of the US, and 20% below that of other major economies, such as France and Germany. A major reason for that is a lack of appropriate skills, so the Conservatives’ amendment 6, which would delay the creation of Skills England by a year, is nothing short of irresponsible. We need to work faster, not more slowly. The amendment is indicative of their approach to government: where there was a challenge, they ducked it; where a decision was needed, they put it off; and when a broken system needed fixing, they left it for the next lot. Well, the next lot are now in government and will not put off for tomorrow what needs to be done today.

We know that skills are a crucial driver of economic growth and the key to tackling productivity gaps, but our economy is changing rapidly in ways we cannot fully anticipate, so it is crucial that our education system equips young people with a broad range of the skills necessary for success in the jobs market of tomorrow. That is exactly what the Bill and Skills England will deliver.

[Laurence Turner (Birmingham Northfield) (Lab)]

On the face of it, this is a technical Bill, but the benefits and opportunities that the transition to Skills England can create across the country, including in communities such as Birmingham Northfield, are real and tangible. The amendments would have similar effects. In terms of timing, while new clause 1 would delay the establishment of Skills England by six months, new clause 4 and amendment 6 would delay it by a year. There is a risk that by accepting such amendments we would recreate IfATE under the name of Skills England. As my hon. Friends have said, we cannot wait that long. A new approach is needed.

As the first Skills England report, which was published last September, identified, there has been a steady decline in employers’ investment in training during the past decade. Investment in real terms has fallen by about 20%, even though 90% of the roles in critical demand across the economy require training or education.

In my constituency, apprenticeship starts fell by 35% during the last Parliament, more than double the national rate. This is a social issue as well, because more than half the young people not in education, employment or training in Northfield are classed as vulnerable, and adult skills funded education is accessed particularly in the areas of my constituency with some of the highest levels of social need, including Longbridge and West Heath, Weoley and the three estates in Kings Norton. I am sure the situation is similar for other hon. Members.

According to a response to a freedom of information request in 2022, some £1 billion a year nationally in apprenticeship levy funding was unspent. At the same time, major local employers have expressed their frustration to me about skills shortages in areas from construction and home upgrades to computer science.

I have seen some of the good work already done locally to provide apprenticeships and other forms of technical education. Next month, we will witness the 20th anniversary of the closure of MG Rover in my constituency. Today, South and City College Birmingham, which is partly built on the old Austin site, is one of the largest training providers in the west midlands. A number of hon. Members have paid tribute to their local colleges, and I would like to do the same. That college offers impressive programmes, developing the technical and soft skills of students in a multitude of industries including catering, automotive and advanced manufacturing.

As manufacturing jobs start to return to Longbridge, these facilities and the experienced staff who work there will be vital to delivering economic growth and opportunities for young people, but they are attempting to fit into a system that is not fit for purpose and is not working. In other words, skills policy is essential for the Government’s plans for economic recovery and industrial strategy, and it is appropriate to place accountability for the new development directly with Ministers for this period.

We heard a lot on the Bill Committee as well as elsewhere about whether Skills England should be created as a stand-alone agency at arm’s length from the core Department. As we heard on Second Reading, the Government may review Skills England’s status after 18 months to two years, which seems like a sensible way forward. That is a legitimate debate, but we should not agree tonight to delay Skills England’s creation.

It is important to say that IfATE has not lived up to expectations and that the status quo is a barrier to the Government’s objectives. Nine years ago, the then Minister for skills, Nick Boles, told the House’s Education, Skills and the Economy sub-Committee that IfATE would

“be much more akin to the Bank of England”

in terms of its independence compared with a traditional arm’s length organisation. I think most hon. Members would agree that that has not been borne out.

During the last Parliament, I attended meetings of the UK shipbuilding skills taskforce, where there was common agreement between employers and employee representative organisations that the GCSE entry-level requirement was a barrier for employers taking on the young people who were best equipped for those apprenticeships. However, that recommendation was blocked—by DFE Ministers, we were given to understand—from the final report. Similarly, employers and people with direct knowledge of the skills system I have talked to over the last few weeks have stressed some of the frustrations that existed in the trailblazer employer organisations: within the bureaucracy of IfATE, some recommendations and expertise would be either delayed or disregarded by the route panels, some of which were made up of employers who did not necessarily have expertise in a particular industry.

It is important to reduce some of that bureaucracy so the Bill’s effect of removing a requirement for a regular review of an apprenticeship’s standard—in practice, every few years—is a sensible change. There are, at the last count, 658 live apprenticeships listed on the IfATE website. That implies 219 reviews every year or four a week; I think we are entitled to question how effective those reviews can be given IfATE’s current resources.

If I may, I will list one more example of where the current system is going wrong. The special educational needs and disabilities teaching assistant apprenticeship standard, which was discussed during the last Parliament and then formally created during this one, lists a very large number of organisations that contributed to its design. The overwhelming majority are employers, who, of course, need to be represented. Only one trade union was represented and I question why that was the case. However, not a single SEND parents’ organisation or other group that represents the needs of those young people was drawn into the creation of that standard. I think we are entitled to ask whether that is the right approach. The discussions that led up to the creation of the standard, in practice, were heavily DfE-guided, so I think we are entitled to question the independence of the current system as it exists.