Skills Devolution (England)

Stephen Timms Excerpts

Tuesday 23rd January 2018 Westminster Hall

[Stephen Timms (East Ham) (Lab)]

Welcome to the Chair, Mr Paisley. The Government have said that they want skills devolution, and the right hon. Member for Witham (Priti Patel) has supported that aim. Indeed, I think George Osborne announced that skills would be devolved to a number of mayoral combined authorities, but progress has been woefully slow, so I very much welcome the fact that my hon. Friend the Member for Hornsey and Wood Green (Catherine West) has secured today’s debate.

There are still lots of operational details about how that devolution will be achieved. I very much hope that the Minister will be able to give us some detail about when devolution will happen in London and the other mayoral combined authorities, because the need is now pressing. I welcome the report from the all-party parliamentary group for London, and congratulate my hon. Friend the Member for Croydon North (Mr Reed) and the hon. Member for Bromley and Chislehurst (Robert Neill) on bringing it forward. I welcome the sense of urgency that the report conveys about what it describes, absolutely rightly, as “an enormous skills challenge” in London.

There is a striking degree of agreement in London about what needs to be done. My hon. Friend the Member for Hornsey and Wood Green set out a number of priorities. The London Chamber of Commerce and Industry, in its most recent quarterly survey, for the third quarter of 2017, found that 60% of businesses in London that tried to recruit encountered difficulty finding people with the right skills. That is the highest—that is to say, the worst—proportion since it started collecting those figures four years ago. The right hon. Member for Witham mentioned the Essex Chambers of Commerce and Industry. The London Chamber of Commerce and Industry explicitly endorses the recommendation in the all-party parliamentary group’s report to devolve all 16-to-18 provision to London, and to give the capital greater control over policy and commissioning.

Life is difficult for many in London today. Employment is high, which is a very good thing, but jobs are often insecure and uncertain. Housing costs are high and rising quite fast, and wages are not keeping pace. More and more people are in the position characterised by the Prime Minister as “just about managing.” Some forecasters currently estimate that 3 million jobs could be lost to automation in the next generation. Automation is a huge driver of the need for reskilling. Furthermore, in the background to all of that is the perennial UK challenge on productivity. UK productivity fell from 9% below the OECD average in 2007 to 18% below it in 2015. We have to overcome that long-term challenge. The report is also absolutely right to highlight, as my hon. Friend the Member for Hornsey and Wood Green did in her opening speech, that a drop in European Union migration will have a disproportionate impact on London, because so many workers in London are from other parts of the European Union. Lots of London’s key sectors have big EU-born workforces, and Brexit is bound to make the problems of skills shortages worse and increase the importance of achieving solutions.

Those challenges are particularly acute in east London—the part of London that I represent. In October, the Mayor of London published research showing that east London is the fastest-growing area of the capital. Some 110,000 additional jobs have been created in the six Olympic boroughs since 2012—three times the number predicted in 2013. I very much agree with what the Mayor said in October:

“Businesses, universities and cultural institutions are flocking here and the centre of gravity in London is moving east.”

That trend in our part of London further highlights the importance of the skills challenge.

The report published by the all-party parliamentary group for London highlights a number of issues specific to the capital, such as,

“a much higher demand for English for Speakers of Other Languages”.

My hon. Friend the Member for Hornsey and Wood Green mentioned that as one of the concerns, and I very much agree with her on that. It is widely recognised that the ability to speak English is key to integration and community cohesion, and yet funding for it in London has been dramatically cut. The joint briefing for this debate from London Councils and the Greater London Authority makes the point:

“London’s population has grown from 7.4 million in 2005 to 8.9 million in 2017, but funding for English for Speakers of Other Languages has reduced in real terms by 60% since 2009.”

My hon. Friend the Member for Blackpool South (Gordon Marsden), who will be winding up for the Opposition in this debate, pointed out last October, in a parliamentary briefing on delivering skills for London organised by the Learning Revolution Trust—a charity linked with Newham College in my constituency—that annual ESOL funding had been cut from £203 million in 2010 to £90 million. Refugee Action says that about half of ESOL providers report waiting lists of six months or more.

I hope that we can recognise the importance of ESOL and do something to address the current lack of funding. I pay tribute to the work in my borough, Newham, of ESOL Exchange, which will mark its 10th anniversary next month. It is a network of people and organisations working together to improve ESOL in Newham, managed by the Aston-Mansfield Community Involvement Unit. It provides a web-based directory of formal and informal ESOL provision of all kinds across our borough, in order to make it as accessible as possible. Helping people in east London speak English proficiently is a very important part of the skills challenge.

I pay tribute to the Learning Revolution Trust, a charity that aims to reduce the financial barriers to education faced by many people today in east London. It typically provides modest financial support to people, perhaps midway through a course, for example to help with childcare costs, and has helped more than 300 young people since it was established in 2012. It has made an important contribution.

My hon. Friend the Member for Hornsey and Wood Green and the right hon. Member for Witham both mentioned apprenticeships, which are key. It seems to me, however, that the programme has been botched in the past year or two. The Association of Colleges has reported, based on data from 91 further education colleges last November, that the number of apprentices had fallen 39% compared with the previous year. It suggests that, even though £2.6 billion is being collected through the apprenticeship levy, the Government might actually end up spending less on apprenticeships this year than last year, because the cuts in funding for the apprenticeship programme from taxation have been greater than the extra amount going in through the apprenticeship levy.

The right hon. Member for Witham rightly drew attention, in a very courteous way, to some of the flaws in the design of the levy. Those flaws are serious. As my hon. Friend the Member for Hornsey and Wood Green suggested, it would be great if the Minister would tell us that there will be some sort of review of how the levy is going. I have not heard any suggestion of that yet, but I do think a review is urgently needed. It is now absolutely clear that the target of 3 million apprenticeship starts by 2020 will be missed. FE Week published an informative graph in November, showing that achievements towards that target were behind target up to a year ago, and then, almost a year ago when the levy was introduced, they went massively off-target. There is really no prospect now of the ground being made up. It would be very good to hear from the Minister what plans there are to try to get the apprenticeships programme back on track.

The call for devolution, which is across the board now, of powers on skills should be not just heeded—the Government have recognised that—but delivered. I hope we shall hear from the Minister what steps will be taken to do that.