Further Education and Training Bill [L ords]
Orders of the Day
3:31 pm

Order for Second Reading read.

4:24 pm
Photo of Alan Johnson

Alan Johnson (Secretary of State, Department for Education and Skills; Kingston upon Hull West and Hessle, Labour)

I beg to move, That the Bill be now read a Second time.

Our further education system has seen unprecedented investment and reform in recent years, and continued reform is vital if the United Kingdom is to become a country with world-class skills by 2020.

In the past, education was mainly to do with social progress, but with an economic stability dimension. Now, continued prosperity in our country depends on high-quality education and training for all learners. However, social progress is, of course, still an important dimension. Good-quality training leads to higher remuneration and job satisfaction and a fuller life.

According to Lord Leitch's review, we need a dramatic expansion of our nation's skills at all levels. The analysis suggests that by 2020 Britain will need 4.6 million more people with intermediate-level skills and that there will be merely 600,000 unskilled jobs in the economy, compared with 3.2 million at present. The analysis also suggests that at least 40 per cent. of jobs will require graduate qualifications. Leitch also pointed out that 70 per cent. of the 2020 work force have already completed their formal education. The further education system is therefore central to meeting the Leitch challenge.

Our 14-to-19 reforms are steadily opening up a wider range of options through a more intimate association with the workplace, apprenticeships and, from next year, diplomas. The aim is to encourage all facets of lifelong learning—the gaining of skills for employability or social development—but the principal focus must be on giving people the skills they need to secure worthwhile jobs. We want this country to have full and fulfilling employment.

We have increased investment in further education: funding for post-16 learning has increased year on year to £11.2 billion in the current year of 2007-08—a 48 per cent. real-terms increase since 1997. As a result, the FE sector educated and trained more than 4 million adult learners in 2005-06. More adult learners than ever before are taking up basic skills courses, and more employers are telling us that they are satisfied with the training of the staff whom they are employing. According to the Learning and Skills Council national employer survey, the proportion of employers classified as "very satisfied" with FE provision rose by 10 per cent. between 2003 and 2005.

However, our journey is far from ended. Lord Leitch has raised our sights, and we should be grateful. Existing targets are worthy but not nearly ambitious enough. We must aim to put Britain among the very best in the world, recognising that the skills challenge will define the winners and losers in the global race for the top.

The Bill builds on the reforms we announced in our White Paper of March 2006, which itself was modelled on the Foster review. It will lock in the progress we have made so far and boost the capacity of the FE system to deliver. We consulted widely on the White Paper and have debated the issues extensively. I look forward to continuing the debate with Members as the Bill progresses through the House.

I believe that we start from a consensus that recognises the importance of FE for our learners, employers and the economy, that appreciates the potential of our FE system and those working in it, and that accepts the need to make sure that FE provision is of the very highest standard. We have an excellent range of colleges and providers, and I pay tribute to the many excellent teachers and principals who are working tirelessly to meet the 2020 challenge. I also pay tribute to the LSC, which is a valued partner in this process.

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Andrew Miller (Ellesmere Port and Neston, Labour)

On that point, my right hon. Friend will be aware of an exchange that I had with the Deputy Prime Minister about the wonderful West Cheshire college, which is in my constituency and that of my hon. Friend Christine Russell. It has made representations to me about where it fits in and its relationship with the LSC in respect of the clauses that were defeated in the Lords on the dismissal of senior college staff. I share its view that it would be a mistake to reintroduce those clauses. Will my right hon. Friend give me an assurance that he will listen carefully to such representations?

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Alan Johnson (Secretary of State, Department for Education and Skills; Kingston upon Hull West and Hessle, Labour)

I can give my hon. Friend an assurance that we are listening carefully to representations, and I shall come on to what we plan to do with that particular aspect of the Bill.

The Bill is divided into four parts. Part 1 relates to the Learning and Skills Council for England. The Bill will restructure the LSC to make it as efficient and effective as possible in managing system reform, and more adaptable to the changing requirements of employers and learners. We propose to remove the 47 statutory local learning and skills councils and replace them with nine regional committees and a network of about 150 local partnership teams. That combination of a statutory regional structure and a flexible sub-regional structure will allow the LSC to respond quickly and effectively to the changing needs of individuals, employers and wider communities. The new slimmer and more focused LSC will promote more flexible working arrangements and reduce administrative costs, with savings of up to £40 million that can be passed on to the front line for the benefit of learners.

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David Willetts (Shadow Secretary of State for Education and Skills, Education; Havant, Conservative)

Will the Secretary of State tell us what he means by the new sub-regional structure that he has proposed for learning and skills councils?

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Alan Johnson (Secretary of State, Department for Education and Skills; Kingston upon Hull West and Hessle, Labour)

First, I am delighted to see the hon. Gentleman in the Chamber. May I say how much we support his stance in seeking to convince his party to, in his words, "confront the evidence"? It is a huge compliment to Tony Crosland that the Opposition have someone such as the hon. Gentleman in their Front-Bench team.

Since the establishment of the LSC, all of us thought it was rather strange, to say the least, that although we had set up regional development agencies and a number of other regional structures, the LSC did not have a regional structure but 47 local learning and skills council organisations. That was a mismatch. Four years ago, we gave a regional dimension to LSCs, but the purpose now is to establish a full-blown regional committee.

As for local partnerships, in Greater Manchester one learning and skills organisation covers the whole area, but there will be 10 much leaner, much more flexible versions of the LSC that can deal with the different communities around Manchester. In a sense, that is devolution upwards to the region but, in another sense, it is a much more powerful approach to the LSC locally.

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Stewart Hosie (Spokesperson (Economy; Home Affairs; Treasury; Women); Dundee East, Scottish National Party)

Clauses 11 and 12 allow the Learning and Skills Council for England both to make arrangements with Scottish Ministers and to allow it to take part in arrangements made by such Ministers in relation to assisting people

"to select, train for, obtain and retain employment".

Will the Secretary of State explain how that will work under the LSC's new regional statutory basis, as opposed to how it would work under the current framework?

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Alan Johnson (Secretary of State, Department for Education and Skills; Kingston upon Hull West and Hessle, Labour)

The skills challenge is a United Kingdom issue. Indeed, the commission for employment and skills will be a UK-wide body, so there will be an umbrella organisation covering the whole UK. It is perfectly possible in that situation to make arrangements to ensure that the skills needs in aerospace, for instance, are properly matched, and that the skills needs in other Great British industries do not stop at Hadrian's wall or, indeed, the Welsh border, and that there is a co-ordinated approach across the United Kingdom.

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Stewart Jackson (Peterborough, Conservative)

Having worked in a previous incarnation for a training and enterprise council, and having experienced four reorganisations in the past five years, may I ask whether the Secretary of State seriously believes that the training and skills needs of, for instance, Kingston upon Hull, are the same as those of Northallerton, Selby, Skipton and Ripon? If he does, will he advise the House why that is the case?

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Alan Johnson (Secretary of State, Department for Education and Skills; Kingston upon Hull West and Hessle, Labour)

No, of course I do not believe that that is the case. However, I believe that we need a strategic overview of skills in each of the nine regions in exactly the same way that there is an overview of all other aspects of economic development. Indeed, since their foundation, the RDAs have said that is necessary.

In fact, the local learning and skills organisation in Hull will be much better, in that it will allow us to concentrate on matters such as logistics and issues relating to the aerospace industry as they pertain to our area. In contrast, the present structure means that a larger organisation covers both sides of the Humber.

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Kelvin Hopkins (Luton North, Labour)

I agree with my right hon. Friend's response to that question, but does he agree that we must ensure that the quality of further education is raised to an equal level across the whole country? In that way, we will establish local flexibility, and equity for everyone.

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Alan Johnson (Secretary of State, Department for Education and Skills; Kingston upon Hull West and Hessle, Labour)

My hon. Friend makes the crucial point about the Bill. The Foster report, the White Paper and these proposals have all been aimed primarily at lifting quality so that the hugely high standards of FE are uniform right across the country.

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John Hayes (Shadow Minister (Vocational Education), Education; South Holland and The Deepings, Conservative)

Will the Secretary of State square what seems to me to be a paradox? He is embedding the LSC's planning function at regional level, even though the Leitch report—to which he has quite properly paid attention—says that planning bodies such as the LSC will require "further significant streamlining". That seems to be a paradox, at the very least, if not a contradiction.

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Alan Johnson (Secretary of State, Department for Education and Skills; Kingston upon Hull West and Hessle, Labour)

It is not a paradox. The hon. Gentleman has said several times that we should have delayed the Bill and used it as a response to Leitch. We believe that the Bill is about supply, whereas Leitch was concerned primarily with demand. The Bill deals with the specific reference to streamlining in his report. It is a £40 million streamlining of the LSC, which is why Lord Leitch is extremely supportive of the proposals.

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Alan Johnson (Secretary of State, Department for Education and Skills; Kingston upon Hull West and Hessle, Labour)

I will give way once more, and then I want to make progress.

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Jeremy Wright (Rugby and Kenilworth, Conservative)

The right hon. Gentleman has been extremely generous. He says that the Bill's restructuring of the LSC will save £40 million, but does not the regulatory impact assessment suggest that the real cost will be something in the order of £55.7 million, a total that is subject to change when we have the final figures? I may have misunderstood what he said, so will he confirm that the LSC's 2005-06 annual report attributes the £40 million of savings to some 1,300 staff losses? Does that not mean that the £40 million has been rationalised already, without the abolition of the local skills councils?

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Alan Johnson (Secretary of State, Department for Education and Skills; Kingston upon Hull West and Hessle, Labour)

We are talking about a further reduction, but the £55.7 million is a one-off cost to secure an annual saving of £40 million. An initial investment made a couple of years ago reduced the LSC's administrative costs from 4.6 per cent. of its total budget to just 1.9 per cent. That is an example of invest to save.

The education and training on offer must be both attractive to prospective students—appealing to a broad range of abilities and interests—and lead to qualifications that are useful to employers. New duties will also be placed on the LSC to encourage diversity, and to increase opportunity and choice in education and training provision.

It is essential that we listen to what learners and employers tell us that they need, and that we put public money to best use by designing provision accordingly, instead of implementing what the Government or FE colleges think that employers and learners need.

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Sarah McCarthy-Fry (PPS (John Healey, Financial Secretary), HM Treasury; Portsmouth North, Labour)

I held an event at Highbury college in my constituency last year, which was attended by the Under-Secretary of State for Education and Skills, my hon. Friend Phil Hope. We brought together employers, FE providers and young people, but there seemed to be something of a mismatch between what the college was providing and what the employers wanted. Highbury college is very much in favour of being able to award its own foundation degrees. I am sure that my right hon. Friend will come on to that later, but does he think that that will be a key element in making sure that we get that correlation right?

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Alan Johnson (Secretary of State, Department for Education and Skills; Kingston upon Hull West and Hessle, Labour)

I do, and the interesting fact that Foster pointed out—in a report that I am proud to say I commissioned when I was Minister of State in this Department—was that 80 per cent. of employers never go anywhere near an FE college. That shows that awareness of what employers need is crucial to the future of FE colleges.

We need to ensure that we are providing what colleges and employers need. That is why we have included a duty in this part of the Bill that the LSC must have regard to guidance on consulting employers, learners and prospective students, as it oversees further education provision in a system that is increasingly led by the demands of learners and employers.

Further measures in this part seek to clarify the power of the LSC to form and invest in any type of company in the provision of education and training, with the consent of the Secretary of State, and to design, develop and operate support services on behalf of individuals and educational institutions, again with consent.

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Sarah Teather (Shadow Secretary of State for Education and Skills, Education & Skills; Brent East, Liberal Democrat)

On the point about diversity, does the Secretary of State envisage this being about diversity of providers or diversity of courses?

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Alan Johnson (Secretary of State, Department for Education and Skills; Kingston upon Hull West and Hessle, Labour)

It is obviously about both, providing that we keep to the basic tenet of the Foster report and the White Paper that we are looking to prioritise those skills that are necessary to the future of individuals and the economy. In that sense, there is a huge diversity in provision and courses.

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Gordon Banks (PPS (James Purnell, Minister of State), Department for Work and Pensions; Ochil and South Perthshire, Labour)

Coming from an industry background, and as a former member of the board of management of Clackmannan college, which is now part of Forth Valley college, I understand what the Secretary of State says about the need for employers to play a bigger role in determining the skills that employees need. However, we are moving into an ever-changing and faster-moving economy, with faster-moving skills and demands. Can we ensure that flexibility is built into the provisions he is discussing so that the educational system can respond with the speed that the economy needs?

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Alan Johnson (Secretary of State, Department for Education and Skills; Kingston upon Hull West and Hessle, Labour)

That is an absolutely crucial point, which is why, in this part of the Bill, we are including the provision to form and invest in any type of company in the provision of education and training. Other measures throughout the Bill are particularly and precisely aimed at flexibility and the need to respond to changes. My hon. Friend is absolutely right: with the challenges of globalisation, we cannot set out something now based on what we believe the situation will be in 10, 15 or 20 years' time. Even in terms of Lord Leitch's report, we have to have the flexibility to change and adapt.

A further duty will be placed on the LSC to implement the skills and training strategies developed by other organisations, at the Secretary of State's request. In particular, the London skills and employment board will be created—chaired by the Mayor of London—and an adult skills strategy will be developed and implemented by the LSC. That does not change the LSC's obligation to comply with existing duties, unless I or my successors give express permission for the LSC not to implement a particular strategy.

The clauses in the second part of the Bill relate to further education institutions themselves. One of the most striking reforms—it is mildly controversial—will enable the Privy Council to grant FE institutions the power to award their own foundation degrees, which must currently be validated by a university.

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Helen Jones (Warrington North, Labour)

My right hon. Friend will know that some of us have reservations about that because the point of foundation degrees was that they should be not merely stand-alone qualifications but part of a system that allowed people to come in and out of higher education. How will he ensure that the curriculums of foundation degrees granted by FE colleges are sufficiently matched with the curriculums of honours degrees to allow people to go on to shortened honours degree courses if they wish?

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Alan Johnson (Secretary of State, Department for Education and Skills; Kingston upon Hull West and Hessle, Labour)

If my hon. Friend will forgive me, I will come on to that precise aspect in a second. However, I would just stress that, as I am sure she agrees, although it is important to have progression routes, we must ensure that if people do a two-year foundation degree and are content just to do that, we do not somehow devalue that. I know that my hon. Friend agrees with that. I will come on to the issue of progression.

This reform will make a huge difference to an individual's ability to advance in his or her chosen career. Increasingly, employees need higher education qualifications to make progress; senior jobs are open only to graduates, and people without such qualifications are denied advancement. Foundation degrees provide a broad knowledge base and a multitude of career options for learners ranging from school leavers who prefer to work while they study, rather than begin a full-time degree, to adults returning to education or training. They are important qualifications in their own right, but—here I come to the point raised by my hon. Friend Helen Jones—they must also allow learners to move on to more advanced studies, including full degrees, should they choose to do so. We believe that 100,000 people will be taking foundation degrees by 2010, which will be a huge success considering those degrees did not exist before 2001. The Bill will make that aim a realistic possibility.

FE institutions must also have regard to guidance on the consultation of employers and learners, including potential learners, which mirrors the duty on the LSC under part 1 of the Bill. The Government are committed to an approach that builds services first and foremost around learners' needs. All parts of the system must adopt that approach for this to work effectively.

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Kelvin Hopkins (Luton North, Labour)

My right hon. Friend will be aware that there is concern among the so-called modern universities—members of the CMU universities group—about permitting further education colleges to award degrees. Is he suggesting that the market will be so large in the future that the provision of universities will not be undermined by further education colleges expanding their degree courses?

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Alan Johnson (Secretary of State, Department for Education and Skills; Kingston upon Hull West and Hessle, Labour)

I certainly am suggesting that. If 40 per cent. of jobs are to be filled by graduates and we have an ambition for 50 per cent. of 18 to 30-year-olds to be in higher education—not at university but in higher education, which will include taking foundation degrees in FE colleges—we can certainly reassure CMU universities about the concerns that they have rightly expressed.

This part of the Bill also aims to facilitate the way in which services are designed and delivered. It clarifies the powers of FE institutions to form or invest in companies providing FE training, or to form charitable incorporated organisations. In addition, powers to establish further education institutions or to dissolve FE corporations will be transferred from the Secretary of State to the Learning and Skills Council. Such measures are designed to encourage the use of new and innovative delivery models, such as federations, trusts and mergers, as part of our goal to broaden and diversify choice.

Along with a focus on the external influences on delivering FE reform, institutional leadership is vital. Provision is included for the Secretary of State to require college principals to achieve a stipulated leadership qualification before taking up a new post. We are working with partners to facilitate this. CEL—the Centre for Excellence in Leadership—has developed a new programme that, from September this year, all newly appointed FE principals will be expected to complete before they take up a post. Meanwhile, Lifelong Learning UK has published new standards for FE teachers, tutors and trainers and a specification for the role of FE principal. The Quality Improvement Agency has established a forum to allow practitioners and providers to share best practice.

Quality assurance is also essential. Excellence must be delivered as a matter of course, and when that is not happening, fast and effective intervention will be necessary. Members of the House of Lords; sorry, Members of the other place. A junior speech writer, I fear —[ Laughter. ] Some training will be carried out at a nearby FE college.

Members of the other place expressed concerns about some of our original proposals on interventions, especially the provision to enable the Learning and Skills Council to instruct an FE college to dismiss its principal if such an action were deemed necessary. I have listened to their concerns and we will shortly be publishing new proposals.

We will hold firm to our original intention to take action in instances of underperforming colleges, because without that power we do not believe that we can put forward these proposals with the necessary reassurance. While that intention remains— including instigating the removal of a principal, should that be warranted—in response to the concerns expressed in the other place, we will make sure that the intervention is scrupulously fair, transparent and legally robust.

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John Hayes (Shadow Minister (Vocational Education), Education; South Holland and The Deepings, Conservative)

I am grateful to the Secretary of State for giving way a second time. He is extremely generous. So that the House can be best informed about this aspect of his thinking, can he tell us how often the Secretary of State has found it necessary to use the existing powers, which include the removal of a principal? That would give us some feel for the legitimacy of the position that he is adopting by extending and enhancing those powers.

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Alan Johnson (Secretary of State, Department for Education and Skills; Kingston upon Hull West and Hessle, Labour)

I do not think that we have used the powers—I will check—but having the provision available is a necessary means of ensuring that it never has to be used.

The remaining two parts of the Bill are shorter and more technical in content.

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Gordon Banks (PPS (James Purnell, Minister of State), Department for Work and Pensions; Ochil and South Perthshire, Labour)

May I take my right hon. Friend back a moment to FE institutions and foundation degrees? Does he agree that the ability of FE institutions to provide foundation degrees will address some of the difficulties associated with rurality throughout the UK and allow a more equal spread of opportunity through delivery by the FE colleges?

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Alan Johnson (Secretary of State, Department for Education and Skills; Kingston upon Hull West and Hessle, Labour)

I agree. That is a central feature of our proposals, to which I shall return.

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Andrew Miller (Ellesmere Port and Neston, Labour)

I understand the powers described by my right hon. Friend as being necessary to serve as the ultimate deterrent, but will he confirm that that does not alter the fact that the college is the legal employer, not the Learning and Skills Council?

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Alan Johnson (Secretary of State, Department for Education and Skills; Kingston upon Hull West and Hessle, Labour)

Yes, since incorporation that is exactly the case. I hope my hon. Friend will look carefully at our proposals. We have genuinely tried to address the legitimate concerns that he and others raised.

Part 3 of the Bill deals with industrial training levies. It seeks to amend the Industrial Training Act 1982 by modernising and streamlining the process that industrial training boards must go through to demonstrate support for a levy proposal among employers in the relevant industry. The measure will simplify the process, and reduce bureaucracy for all involved.

Some of the principles contained in part 2 are covered in part 4, in relation to higher education institutions, including clarification of their power to form and invest in companies, and a new power to form charitable incorporated organisations to encourage new delivery models. These powers are contained in a separate part, as they seek to amend different legislation. The fourth part of the Bill will also enable the Welsh Assembly to introduce FE reforms as it completes its current review.

In conclusion, this is an enabling Bill. It will enable a restructuring of the Learning and Skills Council, generating around £40 million a year in savings for service provision.

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Brian Jenkins (Tamworth, Labour)

On restructuring, my right hon. Friend will have carried out some analysis on the last restructuring of the learning and skills councils and the problems faced by local FE colleges following incorporation. Will he make available to us the risk assessments that were undertaken and tell us what he sees as the advantages and disadvantages of his proposed scheme before we vote on it?

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Alan Johnson (Secretary of State, Department for Education and Skills; Kingston upon Hull West and Hessle, Labour)

We published a regulatory impact assessment. We made various pieces of information available as the Bill progressed through the other place. We will do likewise as the Bill goes into Committee in this place. If my hon. Friend is making a bid to be a member of the Committee, I am sure the usual channels will have picked that up. [Interruption.] I am being unusually nice to my side at the moment.

The Bill will enable a restructuring of the Learning and Skills Council. It will enable learners and employers to convey their views to those who plan and operate services. It will also enable greater choice and diversity by establishing new duties on the LSC to create greater opportunities for learners and employers, and enable better FE management and leadership.

FE is undergoing the most radical reform in its history. That reform is initiated by Government, but driven by the sector. We want to create a system that leaves no one behind. It is not acceptable to target our efforts solely at those who want to take up provision and discard the rest. Often it is those who are unwilling actively to seek out services who need them the most.

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Sarah McCarthy-Fry (PPS (John Healey, Financial Secretary), HM Treasury; Portsmouth North, Labour)

I thank my right hon. Friend for giving way. I think we agree that raising aspiration is crucial. It is crucial in my constituency, which suffered 18 years of under-investment under a Conservative Government.

I notice that Mr. Johnson is not in his place on the Opposition Front Bench. He recently paid a flying visit to my constituency, and said that it was a drab city on the south coast that was full of obesity and under-achievement, and too full of Labour MPs. I do not think that raising aspiration is done by denigrating our young people; it should be done by trying to raise their aspirations and encouraging them. As the shadow Secretary of State for Education and Skills is my next door—

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Michael Lord (Deputy Speaker)

Order. I think that the hon. Lady has made a sufficiently long intervention, and her point as well.

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Alan Johnson (Secretary of State, Department for Education and Skills; Kingston upon Hull West and Hessle, Labour)

My hon. Friend makes an extremely good point. There are not many places in this country that Mr. Johnson can revisit at the moment. If he were making a flying visit to Hull, I would advise my constituents to take cover.

The imperative is clear. We must insist on the same high standard of provision that we would expect from schools, universities, hospitals and all public services. The Bill will empower FE institutions, help the LSC to support them and provide the right balance of interventions in the system from Government and elsewhere. This is the key to making a success of Project Leitch: a strong economy, fulfilled employees and the UK one of the leaders in world skills. I commend the Bill to the House.

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Michael Lord (Deputy Speaker)

I say inform the House that Mr. Speaker has selected the reasoned amendment standing in the name of the Leader of the Opposition.

4:57 pm
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David Willetts (Shadow Secretary of State for Education and Skills, Education; Havant, Conservative)

I beg to move, To leave out from "That" to the end of the Question, and to add instead thereof:

"That this House
declines to give a Second Reading to the Further Education and Training Bill [Lords] because it will introduce yet another expensive reorganisation of the learning and skills councils, further entrenching the management of vocational training through a regional structure;
it will grant the Learning and Skills Council draconian new powers to dismiss college governors, principals and senior managers;
and despite the recommendations of the Leitch Review of Skills it fails to address the UK's relatively poor performance in intermediate level vocational skills, the growing problem of young people not in education, employment or training, the declining numbers of learners in apprenticeships at all levels, and profound doubts about the timetable for the introduction of the new 14-19 specialised Diplomas."

We welcome this opportunity to debate the future of further education in this country. Although we have reservations about the Bill, we can indeed take pride in a lot of what has been achieved by further education colleges in our country. They do particularly well in Ofsted inspections, with 63 per cent. of FE colleges assessed as good or better. Students report high levels of satisfaction; 67 per cent. are either very or extremely satisfied with their experience of FE colleges. Of course, of those employers who use FE colleges—sadly, many do not use them—82 per cent. report themselves satisfied.

We are proud of what many FE colleges achieve, and we on the Conservative Benches trace that achievement back to crucial legislation that we passed in 1992—the Further and Higher Education Act 1992, which gave FE colleges their freedom from local authority control and set them on the path to the success that they now enjoy. Indeed, in the report that the Secretary of State so proudly says he commissioned, Sir Andrew Foster says:

"Incorporation in 1993 is celebrated by many as a defining moment of liberation. And in many ways it was."

We take pride in what those colleges have achieved in the years since they were incorporated. However, we regret that the Bill is a missed opportunity to tackle the problems facing the FE sector now. Those problems and challenges have been identified in two very useful Government reports, the first of which, by Sir Andrew Foster, listed no fewer than 17 different regulatory and inspection bodies that were crawling over the activities of FE colleges. We would have liked to see those reduced. The report says:

"Currently, the rigours of proving the quality of provision to the plethora of interested bodies, including qualifications bodies, are in danger of detracting from the need for continuous improvement and the ownership of that by FE colleges...There is a galaxy of oversight inspection and accreditation bodies."

When we talk about the burden of red tape, a classic example is provided in the list of the regulatory burdens facing FE colleges contained in Sir Andrew Foster's report. Sadly, the Bill contains no measures that would reduce those burdens on colleges.

The second challenge that the Bill fails to address is that presented by Lord Leitch's report on skills. Lord Leitch is frank on the scale of the skills crisis facing our country. The Secretary of State quoted from the report and I agreed with the quotation that he cited. However, he did not go on to cite some of the other points in Lord Leitch's report; for example, that

"Previous approaches to delivering skills have been too 'supply driven' based on the Government planning supply to meet ineffectively articulated employer demand...The Review recommends a fully demand-led approach".

Lord Leitch also said that planning should not be done by bodies such as the Learning and Skills Council.

Lord Leitch's report identifies that there should not be the level of top-down planning that the system currently faces. Sir Andrew Foster's report identifies the burden of regulation on the FE sector. But the Bill does nothing to tackle those challenges contained in reports that the Government have commissioned.

In the Queen's Speech debate, the Secretary of State, I regret, made a virtue of the fact that the Bill does not engage with Lord Leitch, saying

"We do not see a need to wait for Leitch before the Bill. Indeed, we think that Leitch's report will make such radical proposals that there will need to be a further period of consultation. I doubt very much whether there is anything in Leitch that will necessitate our changing the Bill"—[ Hansard, 16 November 2006; Vol. 453, c.251.]

As so often, there are big issues about the future of skills in our country that the Government have failed to tackle and they have missed the legislative opportunity to do so. Instead, we have far too much fiddling around and reorganising, exactly the kind of things that Governments do when they do not really know what to do at all; displacement activity. In fact, we have the fourth reorganisation of the Learning and Skills Council in as many years. It was established only in 2000. In January 2004, there was the creation of a new regional management team with the appointment of 10 regional directors. We had a reorganisation around two directorates, with three directorates being closed down and further reorganisations in 2004 and 2005.

As we have heard from Labour Members, and as a result of parliamentary questions from myself and others, the Learning and Skills Council has incurred redundancy costs of £54 million associated with the various reorganisations in the six years since it was created. If you add on the £62 million of costs from closing the training and enterprise councils that we created, £120 million has already been spent simply on reorganising various skills bodies in this country. That £120 million could have paid for an extra 32,000 apprenticeship places. We are far from convinced that we need another regional reorganisation.

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Tim Boswell (Daventry, Conservative)

Does my right hon. Friend recall that when the Learning and Skills Council was introduced, we were promised annual savings of the order of £50 million? What happened to those savings? Does he think that that is an awful precedent for what is promised now?

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David Willetts (Shadow Secretary of State for Education and Skills, Education; Havant, Conservative)

My hon. Friend has made a good point. I was worried when the Secretary of State had to resort to describing all those extraordinary costs as "investments". It is a funny investment for an organisation that is supposed to be committed to high standards in skills and training to spend £120 million on redundancy and administrative change.

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Stewart Jackson (Peterborough, Conservative)

Is my hon. Friend concerned, like me, that in December 2003 our new, spin-free Chancellor said:

"Everyone on Jobseeker's Allowance will be assessed for their skills and...attend a mandatory skills course."?

And is he surprised, like me, that nothing has happened?

Photo of David Willetts

David Willetts (Shadow Secretary of State for Education and Skills, Education; Havant, Conservative)

My hon. Friend, who follows those matters very closely, has made an excellent point. When we hear an announcement on the "Today" programme, we all know that nothing will actually happen in the real world—as so many people know, that is all too often the case.

There has been a great deal of expenditure on reorganising the learning and skills councils. In the Bill as originally drafted—we have heard that sadly these provisions will return in some form—there were powers over FE colleges, particularly with regard to the position of principals at FE colleges. I invite the Secretary of State to recognise that the creation of those bodies as corporations—legally free-standing bodies—was supposed to mean something real. It was supposed to mean that they would be masters of their own destinies. I had the privilege of sitting on the corporation at Havant college for several years after incorporation, and we regarded ourselves on the governing body as being responsible for running that college, including having responsibility for the appointment of the principal of the college. It is simply not possible on the one hand to announce that those bodies are supported as free-standing corporate bodies and on the other take the power to allow the Secretary of State to remove the principal. That is completely inconsistent with those bodies being free-standing corporations, and we think that that is a failure to grasp the real powers that those bodies have enjoyed since 1993.

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Kelvin Hopkins (Luton North, Labour)

I seem to remember that in the era of the hon. Gentleman's Government, many colleges were found to be financially incompetent, but nothing was done about them. It was only when this Government took over that we started to clear up the mess left by the previous Government.

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David Willetts (Shadow Secretary of State for Education and Skills, Education; Havant, Conservative)

I recognise that colleges sometimes have those problems, but when we established the legislation in 1992, there was a clear legal framework about who was responsible for what. The Secretary of State is in danger of dividing responsibility between the governing body of the corporation, which is supposed to take legal responsibility for the college, and the Secretary of State and the Department for Education and Skills. Each will blame the other, which is a recipe for the type of problems that Kelvin Hopkins has referred to, which happened in the past and which, I fear, will recur again.

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Julian Lewis (Shadow Minister, Defence; New Forest East, Conservative)

Ms Di Roberts is the principal of Brockenhurst college, which is an outstanding college in my constituency. She has contacted me on that particular point to say that there could be severe legal difficulties if someone who had been dismissed not by the governors but by a third party were to mount a legal challenge. Furthermore, governors might themselves be deterred from dismissing someone who ought to be dismissed, because they would erroneously believe that it was probably safer to rely on the LSC to do the dirty work for them.

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David Willetts (Shadow Secretary of State for Education and Skills, Education; Havant, Conservative)

My hon. Friend is absolutely right. I want to hear whether the Secretary of State agrees with paragraph 7.39 of his Government's own White Paper:

"A college, led by its governing body, is responsible for determining its own mission, managing its own affairs, meeting its statutory responsibilities and improving its own performance."

We accept that definition of the role of a college. If that is how a college is to be run and how the corporation functions, how on earth is that consistent with taking that strange power to intervene? That is inconsistent with the Government's own statement about how they see a college. Concern has been expressed by many principals and others involved in further education. The Association of Colleges says:

"The appointment or dismissal of a principal are amongst the most important decisions a governing body has to take. The intervention of a third-party into the relationship between a governing body and a principal would have made it more difficult for governors to take action, particularly as this might create grounds for an individual to argue they have been unfairly dismissed."

That was the crucial point made by my hon. Friend Dr. Lewis, which has not been dealt with by the Secretary of State. We will look with a beady eye at the proposals that he says he will bring forward during further consideration of the Bill.

Another feature of the Bill that has generated controversy—for such a short Bill, it has got Ministers into one or two scrapes in the other place—is the power for FE colleges to award degrees. It is odd that that was not seriously proposed in the White Paper. One of these days we will discover the origins of the proposal—where it came from and when. It suddenly appeared very late in the day, although the Minister has done a great job of providing a retrospective justification for it. We do not object in principle to FE colleges having powers to award degrees, but there are still serious concerns about how it is to be done. As Members on both sides of the House have argued, it would be a tragedy if the new powers had the perverse effect not of strengthening progression from FE into higher education but of reducing the number of opportunities that FE students have to progress from FE to HE. Paradoxically, many universities are worried that as a result of these provisions fewer students will come to them from FE. What assurances can Ministers give us on that point?

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Roberta Blackman-Woods (PPS (Rt Hon Hilary Armstrong, Minister of State (Cabinet)), Cabinet Office; City of Durham, Labour)

Does the hon. Gentleman accept that foundation degrees should be seen as free-standing qualifications in their own right, and that one possible disbenefit of the strong link with universities is that they are seen as being a stepping stone to university instead of a route into employment or further training?

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David Willetts (Shadow Secretary of State for Education and Skills, Education; Havant, Conservative)

In saying that we accept that FE colleges should have degree-awarding powers, I meant that I recognise that it should be possible for an FE college to provide such a course on its own if it is of sufficient rigour to warrant a degree. However, we want to hear a bit more from Ministers about how they are going to ensure that progression is not threatened. We also want to hear more about the status of the degree. We can all take pride in the fact that British university degrees are internationally recognised and valued. As we know from briefings from organisations such as the British Council, they are something that students around the world wish to secure. It is important that we do not do anything that damages the prestige and value that attaches to a degree from a British educational institution, be it FE or HE.

My hon. Friends and I have received a letter from the Minister for Higher Education and Lifelong Learning. We welcome the concessions that he has made and appreciate that he has already moved significantly from the original proposals in the Bill in the light of debate in another place, as well as the extraordinarily constructive and statesmanlike role played by the shadow Ministers for further education and for higher education—my hon. Friends the Members for South Holland and The Deepings (Mr. Hayes) and for Henley (Mr. Johnson)—who have put country before party in a remarkable way. The documents that the Minister sent provided us with some reassurance, but we still need to know more about how he is going to take forward the assurances given by Lord Adonis that the safeguards on progression will be put on to a statutory footing by way of a Government amendment. We greatly look forward to studying that.

We have heard the Government's bold rhetoric, read the extraordinary reports of Sir Andrew Foster and Lord Leitch yet we have a Bill that tries to reorganise the Learning and Skills Council, intervenes unnecessarily in the powers of appointment of a principal and changes the degree-awarding powers. If we compare those relatively modest provisions with the genuine problems that face further education and the skills agenda that faces our country, the omissions are extraordinary.

Why have not we heard from the Secretary of State about what is really happening to apprenticeships? When the Chancellor—or the Prime Minister elect—talks about apprenticeships, he hopes that we think that he means an experienced, gnarled craftsman, wearing his blue overalls—[Hon. Members: "Or her."] Okay. I know that gender is a sensitive issue for the Secretary of State. The Chancellor expects us to envisage an experienced craftsman transmitting a body of knowledge that he has picked up over the years to a younger student—male or female—who wishes to learn a craft. Sadly, that is not what apprenticeships as delivered by the Government mean. All too often, they mean being present at a further education college for a further education course, which may be valuable, but has insufficient employer involvement and sometimes too little practical work experience.

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Brian Jenkins (Tamworth, Labour)

The hon. Gentleman could help the House to understand the role of apprenticeships in this country because Conservative Members are undoubted experts on the matter. Will he tell us how they destroyed so many so that we can apply a reverse policy? He could help the nation in that way.

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David Willetts (Shadow Secretary of State for Education and Skills, Education; Havant, Conservative)

Starts in apprenticeships have reduced from 135,000 in 2004-05 to 123,000 in 2005-06. Advanced apprenticeships, which we might view as traditional apprenticeships, are also falling by a modest amount. Despite the rhetoric from the Chancellor about all the extra apprenticeships, starts in apprenticeships are declining under the Government.

However, the number of young people not in education, employment or training—NEETs—is increasing. When the Government came to office, 1,082,000 young people were not in education, employment or training. Despite the new deal and all the initiatives that the Government launched, the figure is now 1,240,000. When Ministers launched the new deal, I do not believe that they were prepared to settle for nearly 200,000 more young people out of education, employment and training. That is why they need radically to rethink their skills strategy, but I am afraid that they have not done that.

Let us consider diplomas. The other day, the Secretary of State famously said:

"Things could go horribly wrong, particularly as we are keeping A-levels and GCSEs... there is a danger of the Diplomas becoming if you like the secondary modern compared to the grammar."

That is a live topic on both sides of the House. However, we still need to know what is happening to diplomas. It is clear from the Select Committee report, which was published last week, that there is much concern about whether diplomas can be delivered. It states:

"Too often in the past, initiatives have been rolled out in a rushed manner, with negative consequences in terms of quality".

Again, that is the story of the Government—rushing through ill-thought-out initiatives.

The Bill fails to implement the proposals in Sir Andrew Foster's report or in Lord Leitch's report, does not tackle the problem of the decline in apprenticeship starts, settles for an increasing number of young people not in education, employment or training and does not tackle growing concern about the diplomas. For those reasons, Conservative Members will vote for our reasoned amendment this evening.

5:19 pm
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Paul Murphy (Torfaen, Labour)

For the first time in 16 years, I rise to speak in the House on an education Bill. It is interesting that it coincides with the shadow Secretary of State's comments about the inception of the incorporation of further education. I was a Member of the House when that was debated and discussed, and it was not such a noble birth. It came about, of course, as a result of the chaos surrounding the poll tax. When all that collapsed, the Government wanted some money, so they brought in the concept of incorporation of further education. I would not reverse that decision and I am sure that my right hon. Friend the Secretary of State would not either, but that was the reason why FE was incorporated in the first instance.

I also speak as someone who taught in further education for nearly two decades. What astounds me about the comments of the shadow Secretary of State is how he fails to recognise some of the most important and significant statistics on FE. For example, 4 million people—more than all our sixth formers put together—are benefiting from FE, almost half the entrants to higher education come from further education and almost 250,000 people over the age of 16 go into our FE institutions and benefit from the courses they provide. I remember being a young 22-year-old, know-it-all teacher, teaching European history to a 75-year-old woman who had lived through the period I was teaching. At the end of the year, I knew that I should not have been quite so arrogant.

I welcome the detailed provisions in the Bill. I shall not comment on the Learning and Skills Council for England, as it does not affect my constituents, but I would like to comment on degree-awarding powers. I agree that there is a need to ensure the proper quality of the degrees offered at FE colleges, and I am sure that when the Minister for Higher Education and Lifelong Learning winds up the debate, he will provide us with an assurance about that.

I am not quite so sure about the difficulties that some hon. Members have with the dismissal of principals. I would like to refer to an incident that occurred more than a decade ago in Wales. Members for what was then the county of Gwent got together because of the huge financial problems at Gwent college, which was moving into financial chaos and ruin. Those MPs instructed the National Audit Office to look into the problems and to let the then Secretary of State for Wales know about what had happened. The then Welsh Office, together with the governing body, decided between them that the principal had to go; otherwise the college would have gone from worse to worst. The important point is that in some areas of the country, FE colleges provide all the post-16 education, so unless there is a guarantee of proper management at the top of those colleges, the education of our post-16 youngsters—and, indeed, the not-so-youngsters over 16—could be greatly affected.

I know that the overwhelming majority of college principals are good men and women, but there will be some who are poor performers and their continued employment in that job will mean youngsters fail to benefit from further education in our constituencies. In those instances, the best way around the problem is for the Government to talk to the governing bodies in order to reach a decision jointly. There has to be an ultimate deterrent; otherwise the people who suffer will be the students attending those colleges.

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Tim Boswell (Daventry, Conservative)

I am following the right hon. Gentleman's argument with care and a great deal of sympathy. Would he agree that, certainly at the time when I had some responsibility for further education in England, if there were a problem in a particular college, we could commission an in-depth investigation? In one case, I remember that an ex-permanent secretary at the Department was involved, who looked into the affairs of that college and made a report, following which, in conjunction with the governors, the necessary changes were made.

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Paul Murphy (Torfaen, Labour)

Yes, in most cases, that would be the answer. I suspect that the Minister will tell us that, ultimately, he needs some power in order to put into effect the results of any such investigation. I would hope that the matter would be dealt with in that way. It is wrong to assume that every principal in the country is excellent—occasionally there will be difficulties.

I also welcome the Bill's attention to the skills in our country. Anyone who looks at the Republic of Ireland, for example, will see that that Celtic tiger, as it is known, has quite rightly become one of the most prosperous—if not the most prosperous—member of the European Union because of the attention paid to further education there.

My main concern is about clause 25, which devolves to the National Assembly for Wales legislative powers relating to further education. Let me say straight away that I entirely agree with what the clause does. I am concerned, however, about the way in which we deal with the pre-legislative scrutiny of Bills and orders that give the National Assembly for Wales new legislative powers. Jane Davidson is the Minister for Lifelong Learning in Wales, and on 1 February this year, she made a speech in Cardiff welcoming the Bill. I repeat, therefore, that I have no problem with the principle of devolving the powers to the National Assembly.

However, in the debate on Second Reading and other debates on this issue in the other place, my noble Friend Lord Ted Rowlands made reference to the fact that this is not quite what was expected when the Government of Wales Bill was debated in this place. As a former Secretary of State for Wales, I took some time to speak in the debates on that legislation to ensure that this House gave proper scrutiny to any primary law-making powers that were to be devolved to the National Assembly.

I have asked a number of parliamentary questions on this issue. The Minister for Higher Education and Lifelong Learning told me in a written reply that:

"Members of both Houses will be able to scrutinise and suggest amendments to the Bill during its remaining parliamentary passage, including in relation to the provisions for Wales."—[ Hansard, 9 January 2007; Vol. 455, c. 559W.]

My right hon. Friend the Secretary of State for Wales went further, saying:

"To assist parliamentary scrutiny, all framework powers granting wider and more permissive powers to the Assembly will be accompanied by an explanatory memorandum"—

which I and all Welsh Members have received—

"setting out the policy context underlying the proposals. Copies will be sent to all Welsh MPs and will be placed in the libraries of both Houses."—[ Hansard, 11 January 2007; Vol. 455, c. 661W.]

That has indeed happened.

I welcome all that; these are important developments. I am concerned, however, about the pre-legislative scrutiny; we probably missed it in this case. I hope that all Departments will take care to ensure that, when parts of Bills—as opposed to orders—delegate to the National Assembly new law-making powers of a primary nature, this House takes a proper look at those elements in a pre-legislative manner, particularly through the Select Committee on Welsh Affairs.

I say that in the context of the completely changed position in regard to devolution. Last week, we saw dramatic changes in Scotland. We have yet to find out what the nature of the Government in Wales will be. There might be a coalition with the Liberal Democrats, or some kind of agreement with Plaid Cymru, or none of those things, resulting in a so-called rainbow coalition—although I am not sure how we can take the red out of a rainbow. Any such coalition should have regard to the party that was granted the most seats and, indeed, the most votes. That, however, is another issue.

The point is that we are in uncertain waters, and what we shall see over the next four years will be very different from the devolution that we have seen in the past. It is therefore incumbent on the Government to ensure that, when we give law-making powers to the National Assembly for Wales, the House of Commons has proper scrutiny of those powers.

5:28 pm
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Sarah Teather (Shadow Secretary of State for Education and Skills, Education & Skills; Brent East, Liberal Democrat)

This is not a particularly exciting Bill. It has been described by Ministers elsewhere as largely a tidying-up exercise. I do not think that it merits the view expressed by the Secretary of State that 2007-08 is the year of skills. The Secretary of State is no longer in his place; I assume that he has gone off to run his campaign, which is probably a lot more exciting than listening to a speech from the Liberal Democrat Front Bench—[Hon. Members: "Hear, hear!"] I know my place.

The Government have initiated two major reviews of the further education sector in a relatively short time but, rather bafflingly, they have now produced this short and rather technical Bill that fails to implement most of the recommendations of either review. The Secretary of State referred at the outset of his speech to the Leitch review but, as he acknowledged, the Bill contains nothing that deals with the Leitch recommendations.

Mr. Willetts spoke about Foster's recommendations on regulation. Of course, Foster recommended major changes to simplify the funding of further education, and the further education White Paper promised a technical funding group to consider the issue, but there is nothing in the Bill to implement that. It is a real shame that the Government have failed to use the Bill to simplify the complex and confusing funding arrangements between learning and skills councils and local authorities. If only they had chosen to shift funding for 16-to-19 provision to local authorities, we could have proper joined-up funding. That could herald the beginning of a system in which money could follow students as they move between schools and colleges, enabling them to mix vocational and academic courses. Schools and colleges could thereby collaborate on a fair footing, instead of one on which college students find themselves short-changed by as much as £200 each.

Similarly, the Bill does nothing to address the UK's long-term skills needs, which Leitch's report outlined, as others have said. It says nothing about the link between skills and welfare to work. Looking forward to 2020, it says nothing about the optimal skills mix to maximise economic growth, productivity and social justice. When will the Government bring forward a meatier Bill to tackle the issues outlined in the Leitch report? Perhaps we will have to wait for the next Prime Minister for that.

This is a short Bill, which says little and does less. I am not convinced, however, that its vacuous nature alone is sufficient reason to oppose it, as the Conservatives appear to be suggesting that they will. For a short and not very exciting Bill, it certainly provoked some controversy in the other place—controversy would be reason to oppose it. The Bill that we are debating, however, has been amended by the other place. While the Liberal Democrats will seek further changes, reassurances and clarifications in Committee, we will not oppose the Bill's passage at this stage.

I am a little baffled by the Conservatives' reasoned amendment and sudden opposition to the Bill, which is out of kilter with their stance during its passage in the other place. It appears to be something of a grandstanding gesture, and perhaps a bit of a distraction from the internal row last week. [Interruption.] The hon. Member for Havant is so busy talking, he has not even heard me insult him.

Furthermore, the reasoned amendment criticises the Bill for containing something that is no longer there: the most controversial aspect of the Bill—the transfer of powers from the Secretary of State to the Learning and Skills Council to remove college principals—was taken out by Opposition parties in the other place. If, as the Secretary of State suggested, the Government insist on putting that provision back in the Bill, we will vehemently oppose that in Committee and subsequently. That is an issue of principle. As others have pointed out, the Bill appears directly to contradict the Government's White Paper. FE colleges are independent corporations, and we should also note that Learning and Skills Council funding represents but one share of a college's funding—others being student and employer contributions. It is not therefore clear why the Learning and Skills Council alone should have that power, especially as it is not even an elected body with accountability.

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Tim Farron (Leader's Parliamentary Private Secretary, Cross-Portfolio and Non-Portfolio Responsibilities; Westmorland and Lonsdale, Liberal Democrat)

The White Paper also says that a college led by its governing body is responsible for determining its own mission, managing its own affairs, meeting its statutory responsibilities and improving its performance. I believe that the Leitch report said that the FE sector was the "neglected middle child" of education, and we are now seeing FE colleges being treated very differently from the higher education sector, which is undermining staff and students within that sector.

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Sarah Teather (Shadow Secretary of State for Education and Skills, Education & Skills; Brent East, Liberal Democrat)

I agree with my hon. Friend. Legally, the college, not the Learning and Skills Council, is the employer of its own staff. The original proposals were therefore fraught with difficulty and left many questions— about employment practice, appeals procedures and who would be responsible for paying compensation if a decision to remove an employee were challenged in the courts—unanswered. Furthermore, the Secretary of State acknowledged that there is a high level of satisfaction with colleges among students and employers. It seems an odd solution to what already appears to be a high level of quality. We will all watch with interest to see what proposals the Government introduce in Committee, but we want to place on the record that we are not happy with the Secretary of State's tone in the debate.

Another area of controversy is the relationship between local authorities and the new regional councils. From our perspective, the lack of democratic accountability of the Learning and Skills Council makes that problematic, pretty much regardless of how it is organised. Moving 16-to-19 money to local authorities would deal with part of the problem, but 19-plus funding would remain distributed by a body with no accountability to its local area.

We have been able to overcome that problem in London by giving the powers to the Mayor and the assembly, but no analogous elected body exists in other areas. For that reason, the relationship between the regional council and a locally democratically elected body is vital. My colleagues in the other place extracted considerable reassurances from the Minister there, which are on the record, about collaborative working and consultation. Clearly, that is of paramount importance. It is vital that local plans are taken into account when regional strategy is set. Furthermore, local authorities, the regional learning and skills councils and businesses, as well as individual colleges and schools, will have to work together to deliver the 14-to-19 diplomas. Although we accept that the Minister in the other place moved some way to reassure us, we will want to probe some of those points further in Committee.

The final area of controversy surrounds the power of FE colleges to award degrees and to confer degree-awarding powers on other colleges—that is, franchising. The proposal appeared from nowhere, without consulting either the FE or the university sector. Again, colleagues in the other place succeeded in obtaining many improvements to the proposal, but we have concerns, as many hon. Members on both sides of the House do, about progression arrangements in particular. The Committee will need to consider the draft guidance published in support of the Bill carefully to ensure that students' ability to progress is safeguarded. Collaborative progression arrangements may well be in place when degree-awarding powers are given to a college, but they may break down in the first six years before the Privy Council reviews that ability. That may prevent the college from further awarding degrees, but that will be of no consolation to students who have enrolled on courses in the meantime. The Government have given reassurances on the franchising ability of colleges, but we will also want to probe considerably in Committee the extent to which that will apply to overseas courses in particular, about which we continue to have concerns.

My concern about the debate and row about foundation degrees is that it clouds the real issue. Many students begin to study in an FE college because of caring or work responsibilities and they cannot study away from home. They are often likely to be from poorer backgrounds and are much more likely to be from ethnic minority backgrounds. They will want a flexible system that allows them to move flexibly between different types of institutions, often in a non-linear pattern—they may want to study for a while, take a break, and then move on. They will want to have a fair system whereby they are not having to pay all their fees up front.

The Bill does not deal with any of those issues, and that is the real concern for many students who are beginning to study at an FE college. We must rethink those issues. I hope that the Government will consider them carefully when they introduce proposals next time to deal with the matters raised by the Leitch review. I also hope that they will think carefully about progression arrangements all the way through the system for students of all ages who may be studying part-time.

This is a short Bill, so I have made a short speech. We look forward to the Committee stage. As I said, we will continue to probe issues of progression from foundation degrees and collaboration with local authorities in particular. We hope that in the near future the Government will introduce something far more meaty for us to get our teeth into.

5:39 pm
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Don Touhig (Islwyn, Labour)

I welcome the Bill, which will equip learners with the high-quality skills that they need in order to compete in the global jobs market. As one who has always argued that we must constantly re-train and upskill our people to meet the challenges of a global economy, I am pleased that the Bill ensures that employers will have the same opportunities to gain new skills in order to make their businesses succeed in a competitive world.

In my constituency, almost all post-16 education takes place at a college of further education. A similar situation exists in most of the constituency of my right hon. Friend Mr. Murphy, who spoke a little earlier. Like him, I well remember the problems that we faced at Gwent college, and the need—in order to save that college from financial ruin—for steps to be taken to change the senior management and remove the principal. Heaven only knows what would have happened otherwise.

Although I welcome the Bill, I am troubled—as was my right hon. Friend—by clause 25, which makes amendments to the Government of Wales Act 2006. If the clause is approved, it will transfer substantial responsibility to legislate for further education and training from Parliament to the National Assembly. Although I do not oppose the idea of using framework legislation to transfer power from Parliament to the Assembly, I think it wrong to do so without full parliamentary scrutiny of such a change to the devolution settlement. Notwithstanding the way in which it is being presented, the Bill contains a substantial constitutional change, and Parliament should have an opportunity to consider whether it is right to transfer those powers to the National Assembly.

I am all the more concerned because this is the third time Parliament has been asked to transfer power to the National Assembly without proper scrutiny of the reasons for doing so. We have done it twice before, in the Education and Inspections Act 2006 and in the NHS Redress Act 2006. I am particularly worried after reading the memorandum prepared by the National Assembly in support of clause 25 and provided for us by my hon. Friend the Under-Secretary of State for Wales. The memorandum implies that the format set out in clause 25 for giving the National Assembly primary legislative powers will become the norm. My noble Friend Lord Rowlands of Merthyr Tydfil and Rhymney, to whom I spoke earlier today, was a member of the Richard commission, which examined changes in the powers of the Welsh Assembly, and he believes that that contradicts the spirit of the Government of Wales Act.

The memorandum tells us that the provision to enhance the legislative competence of the Assembly reflects the new constitutional law-making provisions introduced by the Government of Wales Act. That is fine as far as it goes, but while the Bill may be the right way in which to deal with the future of further education and training, I think it quite wrong to make changes to the devolution settlement unless Parliament has first had an opportunity to consider the principle of transferring law-making powers to the Assembly. Clause 25 means that the Assembly, not Members of the House of Commons, will scrutinise and finally approve the proposals in the Bill. That has constitutional ramifications that clearly need to be debated separately from the Bill.

Even more worrying is the implication in the memorandum that, unlike in England, the Assembly has not even consulted interested parties on what it should do with the powers if they are given to it. Parliament is not only being given no opportunity to consider the merits of transferring the powers, but being asked to transfer them when the Assembly has no settled view on the use of such powers. The memorandum tells us that until the Assembly consults interested parties, it is not in a position to specify the subordinate legislation that would be required.

Under the Government of Wales Act 1998, secondary legislation is a matter for the National Assembly, but let us consider what that has meant in practice. When the Government have asked Parliament to delegate particular powers to a Minister of the Crown, draft regulations have often been published so that the House can better understand how Ministers will exercise such powers. Since devolution in 1999, when the Government have presented England and Wales Bills and have asked Parliament to delegate similar powers to the National Assembly as are being delegated to Ministers of the Crown, there has been an indication of how those powers will be used. That has been done very successfully, without impinging on the Assembly's right to make secondary legislation.

One useful method that I employed when I was a Wales Office Minister was to publish an exchange of letters between myself and the relevant Assembly Minister so that Members of this House could, in effect, see something similar to draft regulations. Alas, that cannot happen in this case because the Assembly has consulted no one and has no view on what to do with the powers that the Government are asking us to pass on to it.

We are told that only after carrying out a consultation and settling its own views will the Assembly be able to bring forward coherent proposals for legislation relating to its Welsh priorities and time scales for further education and training in Wales. If ever there was a case of putting the cart before the horse, this is it. We are told that the enhanced legislative competence sought by clause 25 will provide the framework for the implementation of key components of the Assembly's education policy in Wales. The memorandum tells us that that policy will be informed by the proposals of the Independent Review of the Mission and Purpose of Further Education in Wales in the Context of the Learning Country: Vision into Action—the Welsh can always be trusted to use 20 words when one will do.

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John Hayes (Shadow Minister (Vocational Education), Education; South Holland and The Deepings, Conservative)

The right hon. Gentleman is making a significant point. May I invite him to ask the Minister to intervene to clarify what discussions have taken place, because it is inconceivable that the Government have not anticipated some of the points that the right hon. Gentleman makes, and this House needs to know precisely what preparations have been put in place to stop the circumstances he describes from occurring?

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Don Touhig (Islwyn, Labour)

The Ministers on the Treasury Bench are very skilled and able, and if they feel the need to intervene on me I am sure that they will do so.

The point I am making is that the outcome of the review is not expected until autumn this year, which could be a full six months away, and the time scale could slip even further given the current situation in the Assembly, which was referred to by my right hon. Friend the Member for Torfaen. At present, we are unsure who will run the Assembly.

At a time when further education and training in England will gain from the benefits introduced by the Bill, Wales will have to wait for the Assembly to make up its mind. That is complete nonsense, and we are being made fools of. The Government are, in effect, asking us to write a blank cheque. We are being asked to give new powers over further education and training to a devolved Administration who have consulted no one on the use of such powers—indeed, the Assembly has no settled view on what it would do with the powers, even if it had them.

It has always been my contention that the transfer of any further law-making responsibilities to the Assembly should be the subject of proper pre-legislative scrutiny and debate. I am opposed to transferring primary law-making powers by the back-door method in clause 25. The Government should ask the Welsh Affairs Committee to look at the proposals, take evidence and report to the House before any decision on the transfer of power is made. That could be done without impeding the progress of the Bill, and we could decide on Report whether clause 25 should remain in the Bill, or be deleted or amended.

Education and training in Wales differs somewhat from that in England, and I recognise that legislation needs to reflect that. For example, the Learning and Skills Act 2000 makes different provision for funding and inspection of further education in Wales than in England. There must be tailored solutions for Welsh circumstances. I have never been opposed to a "made in Wales" solution to a problem, but I have always been opposed to a "made in Wales" solution to a problem just to make it different.

However, that is not the argument. In this country, Parliament governs in the name of the people. It is not right that Parliament is being asked to transfer powers to a devolved Administration without any form of parliamentary scrutiny or debate on the merits of transferring such powers. I hope that the Government will give us an assurance that Parliament will have the opportunity to consider this transfer of law-making power before we are asked on Report and on Third Reading to pass the Bill and to enact it.

5:49 pm
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Tim Boswell (Daventry, Conservative)

It is a privilege to follow Mr. Touhig. I paid particular attention to what he said and, if I find myself serving on the Committee empanelled to consider the Bill, it may be something in which I take an interest. I listened with sympathy to his comments and to those of his right hon. Friend Mr. Murphy. The House may not know that there is a reason for my doing so, as recently—I hasten to add, as the right hon. Member for Torfaen is aware, that this was not on my own account but because of family connections with Wales and with education in Wales—I was invited to join the board of a higher education corporation in Wales, so perhaps there will be contributions from both Government and Opposition Members on the matter in Committee.

The Welsh take education, particularly further education, seriously, and rightly so, for the reasons that the right hon. Gentlemen gave. The House will know that, in my view, further education is a very important sector indeed, and it is dear to my heart. It was with some concern that I realised that it was 12 years ago that I demitted my ministerial responsibility for it under the previous Government. One loses the command of detail that one has as a Minister but, nevertheless, when one revisits the subject one finds that the issues are exactly the same and, in certain cases, have not advanced as much as one would hope. I am afraid that that is what I find to be the case now.

In addition to my accolades for the two right hon. Gentlemen from Wales, may I praise the Secretary of State for his characteristically cool introduction to the subject, and praise my hon. Friend Mr. Willetts, who made all the spiky criticisms appropriate to the Bill? May I pay tribute, too, to my hon. Friend Mr. Hayes, who has hugely advanced the salience of skills, as well as interest in them among members of my party and in the national debate? He is a very practical person, who understands the importance both of building on the subject and its contribution to our national life.

In looking at further education, we start with some difficulties of definition. I have noticed that, typically, further education is defined as a negative. To take the activity itself, it is something that one does not do at school or in higher education—it is somewhere in between. As for its role in the delivery of education, is it vocational? What does that mean, except that it is not academic or is not specifically job-related, which overlooks the fact that the majority of A-levels are delivered in further education colleges, rather than in sixth forms?

There is some difficulty, too, in tying down the institutions themselves. There are further education colleges, nearly all of which are public corporations under the Further and Higher Education Act 1992, but we must consider, too, the role of private training establishments and of sixth forms themselves. May I tell Ministers—because sometimes I think that the impression is given in the House that, on their part, nothing good was invented before 1997, and on our part that nothing good has happened since then—that there have been constructive developments in beginning to integrate the offers between schools and colleges and looking at the perspective from 14 to 19 rather than from the end of compulsory schooling only?

In relation to that point, may I rehearse the offer that I made as a Minister more than a dozen years ago, and offer the modest sum of a pound to anyone who can find a better title than "16 to 19" for the young people concerned? The ground work has been done—it is now "14 to 19"—but no one has come up with the magic phrase. We still tend to look at further education as something in the middle; something between childhood and adult life; and something that is somewhere between school and university. We do not really give it the value that it should have in its own right.

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Angela Smith (PPS (Yvette Cooper, Minister of State), Department for Communities and Local Government; Sheffield, Hillsborough, Labour)

In support of what the hon. Gentleman has just said, will he acknowledge that in relation to young people with special needs, the artificial boundary between 19 and adulthood is completely irrelevant? Many young people with special needs are still in need of further education and training into their early 20s.

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Tim Boswell (Daventry, Conservative)

I could not agree more. The whole business of transition planning for all children, particularly those with special educational needs, is unsatisfactory and inadequate. We do not pay it enough attention—sometimes it is not even delivered to statutory levels—and we ought to pay it much more attention. The irony of the situation—I said that further education is defined by its not being something else—is that further education is the one sector of post-compulsory school life that is universal. One day, half our young people may well have some experience of higher education by the age of 30—incidentally, a great deal of that will be delivered in further education anyway, as has been said—but we must remember, too, that when many people graduate they are not job-ready or employable, and need to acquire further education skills, whether it is enhanced IT, languages and so on, so that they are fit for the specific job that they will do. Even if someone becomes a barrister, they have to do a vocational course. However that is expressed, and whatever the legal label, it is an act of continuing and further education.

We should therefore not look at the subject as an easy progression ever upwards and onwards which culminates in some higher degree; we should look at what is necessary at the start of employment, going on to all the many changes that we anticipate in someone's working life—perhaps they will have three changes of employment—in which they have to return all the time to acquire vocational skills, at whatever level is appropriate.

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Stewart Jackson (Peterborough, Conservative)

I pay tribute to my hon. Friend's long experience in this area. Does he share my great concern that many young people at age 19, including those who have taken part, for instance, in the YMCA Foyer project in my Peterborough constituency, must because of benefit rules make a painful choice between continuing to study and continuing to live in their chosen residence? They lose housing benefit if they continue to study, and that issue should be looked at again by the Department for Work and Pensions and by Ministers generally.

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Tim Boswell (Daventry, Conservative)

That is certainly worth revisiting. There have always been difficulties with it and with the 16-hour rule. No one is advancing unlimited resources tonight. As a general principle, we must promote people's studies, not frustrate them in their pursuit of those studies.

There are concerns across the piece—and they have surfaced a little today, particularly in relation to the controversial clauses on dismissal—about the quality of the delivery of further education. One would not be surprised if a sector involving 4 million students was subject to patchiness. One must recognise, too, that it is not simply the objective measurement of the grades attained by students taking A-levels in general FE colleges that is important, but the value added by a wide range of people, and not automatically the high flyers who are encouraged to stay on in school sixth forms, for example.

A final problem in that area is the question of status. I had a telling exchange in my first two weeks in the Department of Education with a senior official, for whom I had the highest respect. A document came up saying, "This will require two A-levels." I knew that I needed to put down a marker, so I said very firmly, and in public, "Or, I take it, the equivalent vocational qualification." He turned round, with an angelic smile on his face, and said, "That, of course, Minister, goes without saying." He could not have been more eloquent about the way in which we still default to the academic model.

I therefore welcome the Bill's practical focus on what further education does and how it works. At the same time, however, I celebrate FE's role in what I used to call the Heineken effect of education—it reaches the parts that other measures cannot reach. I want to emphasise, too, its role in the midfield. I once delivered a lecture in Berlin on the British politician as a midfield player. I think that you, Mr. Deputy Speaker, will not wish me to go too far down that road, but I do see further education as the midfield, moving forward on its own account, delivering and receiving the ball, and being able to meet all its objectives in a way that no other sector can.

My reservation about the Bill is that it hardly exemplifies what an American President once described, rather inelegantly, as "the vision thing". I shall come back to that before I conclude, but I am surprised by its title. Perhaps another essay could be written about the escalation of Bill titles, but it is now extremely unfashionable to attach the phrase "miscellaneous provisions" to any measure. I think that this ought to be called the Further Education (Miscellaneous Provisions) Bill. A more substantial response to Leitch may come along in the future, but this is a tidying-up exercise and not a major piece of legislation.

I shall spare the Minister the inelegance of looking at the numerous speeches that I made during the passage of the Learning and Skills Act 2000. I said then that I did not like a structure that had a central point and 47 local delivery points in the same model. I must congratulate the Government on beginning—rather slowly and at some expense—to claw themselves back to the Conservative model of the 1990s, which involved a Further Education Funding Council and a modest representation in nine English regions. In my view, that representation was perhaps over modest, as there is a useful planning role to be fulfilled alongside the central model, but all the bureaucracy that we have had since then has not yet entirely disappeared. Even attenuated, the total cost of the LSC bureaucracy comes to £1.8 billion—a very heavy burden, and it comes out of what is available for front-line education.

I wish the Government good luck with their proposed new regime incorporating the Mayor of London, but that will add another body. Characteristically, the only two bodies being removed by the Bill are the panels serving young and adult learners. The National Institute of Adult Continuing Education, with which I am still involved, shares my concern about the position of adult learners. Most of the LSC's expenditure has been concentrated on the cohort of young learners—that is, those at the 16 to 19 school-leaving age—but their numbers are about to decline. That means that the people who must be upskilled for employment will come from the existing adult labour force. We have somehow managed to reduce still further the direct representation of adult education interests in the LSC. That can be overcome, but I am serious when I say that we must strike a better balance.

I share the two reservations about the Bill already expressed by various hon. Members. The first has to do with the "sack the principals" clause, which I find difficult in practice. It has been suggested that it might be useful in an emergency, but any hand-in-the-till problem can be overcome—or should be—by the governors. Typically, a much longer period of dysfunction will be involved: as I said in exchanges with the right hon. Member for Torfaen, it will be difficult to sack someone without a proper, in-depth investigation. After that, the matter can be brought to the governors, and they can assume their responsibility. My late father brought me up on the maxim of never hiring a dog and barking oneself. If we are prepared to give colleges and governors their freedom, they should be allowed to use it. The process will go wrong occasionally, and mechanisms—including financial sanctions—exist to rectify matters when that happens, but we must not work on the assumption that colleges and governors are always on sufferance, because they are not.

My second difficulty has to do with the powers to award foundation degrees. Again, I have no objection in principle—indeed, as a strong supporter of further education, I rather welcome them. However, I can see all the difficulties that will be encountered with articulating them with progression, the interests of the modern universities, and the wider sector. Credit accumulation is one matter that has not been discussed so far. Can we be sure that a given institution will continue to exist? Another problem has to do with the "Bologna" process: I do not want a person from a less functional higher education system in another EU member state saying, "Not only have we to swallow your three-year first degrees, but what about that further education college that is now issuing its own degrees?" That is a real worry.

A deeper worry is the relationship between an FE college and progression. I have heard various eloquent presentations about what is good in the Bill, but anything that causes a college to be isolated, with no reference to the schools with which it should be working in partnership as people arrive or to the higher education institutions to which they should progress naturally, would be a mistake. We need high standards, with FE colleges offering the maximum opportunity and progression.

I said earlier that my concerns were about the Bill's lack of forward vision. Getting the administration right is important, but the Leitch agenda is not really addressed. No doubt that will be the subject of debate in the future, but I believe that the Government may be placing too much emphasis on train to gain. It may be a good idea, but we need the maximum number of potential vehicles to attract people into further education. Individual accounts and the self-management of learning are part of that.

The Bill is also silent about qualification issues. They may be nuts and bolts matters, but they are very important. My hon. Friend the Member for Havant spoke about getting the diplomas right, but it is also about getting the right context for academic qualifications and what employers are likely to specify. We must also ensure that the relationship with apprenticeships is appropriate: I am still not clear whether diplomas parallel apprenticeships, or are alternatives to them, or whether they offer a natural progression to higher education. All those relationships need careful attention.

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John Hayes (Shadow Minister (Vocational Education), Education; South Holland and The Deepings, Conservative)

As ever, my hon. Friend speaks with great authority on these matters. Will he comment on the idea that the fit between qualifications is not as it might be, and that that is a key factor in undermining their credibility? Employers do not know how one qualification fits with another as clearly as they ought to.

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Tim Boswell (Daventry, Conservative)

I agree with that idea, which is perhaps a subset of a problem about which no one would argue—that employers need to be involved much more actively in the whole process of considering these matters. However, they should not adopt a purely literal approach, and believe that they can ring up and get a group of people who are absolutely ready for employment. An employee needs to be able to perform a particular job, developing all the while and then moving on to even more responsible roles.

My final point has to do with something that has been omitted from the Bill. I shall modestly puff the Post-16 Education and Training Bill, which received about 12 minutes of consideration on Friday, when other matters were also considered. It was introduced by Mr. Sheerman, the Chairman of the Education and Skills Committee, and I am a co-sponsor of it, although I did not give tongue when it was debated.

The Post-16 Education and Training Bill aims at providing some important elements in the transition mentioned by Ms Smith in her earlier intervention. That Bill focuses partly on special educational needs, but more generally on mentoring, proper assessment before people leave compulsory education, proper work experience, support and careers advice. In that way, it would give people guidance along a path towards employers who are better informed about the process. The mechanisms would always involve further education and include appropriate qualifications. If we can adopt that approach, we will begin to draw the elements of the system together, and prevent them from operating separately as they sometimes have in the past.

In conclusion, the Bill can be quite useful, although we have reservations, which have been expressed in the reasoned amendment. However, we need not oversell the legislation: it is a necessary but not a sufficient condition for progress in this area. It will not, except in exceptional circumstances, help further education colleges or training providers if it mires them in bureaucracy or trips them up and questions their governance, and it will not win the battle of vocational credibility on its own.

We have to ask two questions. First, how can we, through the Bill and other actions that the Government are taking, more actively involve employers in specifying and helping to create the right framework for skills so that they can tell us what they want in a balanced way and we can make it clear that the system can respond? Secondly—this is equally important because it takes two to tango—how successful will the Bill and other Government measures be in attracting learners back into learning to upskill themselves and build the skills that are essential for national competitiveness, in which all the reports I have seen show we are, despite our efforts, sadly lacking?

6:11 pm
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Angela Smith (PPS (Yvette Cooper, Minister of State), Department for Communities and Local Government; Sheffield, Hillsborough, Labour)

I follow what I thought was an incredibly thoughtful and well-considered speech by Mr. Boswell. I share his commitment to further education and I thought that I would start my speech by outlining my nigh-on 20-year involvement with further education.

I was a full-time vocational student in an FE college from 16 to 18. I moved on to work full-time and became a part-time adult evening class student for three years at my local college, where I studied A-levels, taking a two-year course and then a one-year course. Not surprisingly, given what FE had done for me and the opportunities that it had given me, after university I ended up back in further education where I spent nine years as a tutor. I was also a governor at our local college—not the one I worked at, but a different one—and a cabinet member for education and training. So I have been involved in further education across the range: I have studied full-time and part-time and been an adult learner, a tutor, a governor and a strategic director involved in where the city of Sheffield was going in terms of its further education and post-16 provision.

It is important to set out in some detail what is special about further education and to measure that against the proposals in the Bill. I want to talk first about the quality of the tuition that I received as a learner in further education, because, too often, it is assumed that the quality of that tuition is generally lower than the quality of that received in sixth forms or universities. I would contest that quite seriously because the tuition that I received—even at the vocational level as a 16-year-old girl—was excellent; it was stretching and tough and it delivered.

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Tim Boswell (Daventry, Conservative)

I am grateful to the hon. Lady for her generous personal remarks. Would she not also agree—I am sure that she has seen this many times—that one of the most heartening, but at the same time sobering, things is to go into a further education college and see a group of young people who have been quite demotivated by their experiences at school suddenly find that there is a vocational relevance to what they have to do? Instead of finding work unattractive, they actually fire up and can make a really positive contribution.

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Angela Smith (PPS (Yvette Cooper, Minister of State), Department for Communities and Local Government; Sheffield, Hillsborough, Labour)

I agree entirely with the hon. Gentleman's comments. Indeed, as someone who tore up all her school books and put them in the bin on the last day of school, I was absolutely delighted to find that FE was exactly the place for me, and I saw that as a tutor with the hundreds of students who moved through the FE institution that I worked for.

I studied shorthand and was the highest-achieving shorthand writer in more than a decade at my local FE institution. That in itself opened up an alternative career choice. If I had taken that route, I might well have been up in the Press Gallery taking the notes on this debate, rather than down here delivering one of the speeches. I chose not to take that route and, in many ways, I am probably grateful for that—although we very much value the work that is done in the Gallery.

I want to draw attention to the commitment of the many students that I taught in FE. That relates to the hon. Gentleman's point. In my adult learning role, I have witnessed many students who have been willing to take time off work and to come in of an afternoon to receive one-to-one tuition in order to achieve their goals—in order to achieve the GCSE English or the key skills that they needed to move on to an alternative career or to move up their chosen career structure. I know that students took time off work to attend special study periods and even to do their exams, because not all employers recognise the importance of their employees voluntarily taking up part-time evening class opportunities in education and are not even willing to give them time off for exams. That is an important point. When I took my A-level exams, I had to take annual leave. As a Government, we should think about that issue.

Many adults who take night classes will leave work at 5 o'clock or half-past 5 and will come straight into college without a break. They do not even have a chance for an evening meal. They are in the classroom 10 minutes before the class is ready to start because they are so keen to soak up and absorb what is on offer. One of the most inspirational periods of my life and one of the most rewarding aspects of my work as an FE tutor involved delivering adult education. I took a bunch of students down to Stratford to see "The Merchant of Venice". Those adults had never been to the theatre before. They had never been to the theatre in Sheffield, never mind Stratford-upon-Avon. Can Members imagine how rewarding it is to see adults from working-class communities such as Wath-upon- Dearne—the sons and daughters of coal miners—going down to Stratford and not only enjoying "The Merchant of Venice", but appreciating it? The whole experience had the potential to transform their lives by providing them with other avenues and forms of fulfilment. That applies not just to future employment opportunities, but to how they enjoy their lives and what they make of that rich experience.

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Jeremy Wright (Rugby and Kenilworth, Conservative)

Does the hon. Lady agree that what she is describing very eloquently is education as a second chance—the opportunity to go back and correct what one did not do to one's satisfaction the first time round? If she agrees with that, would she further agree that it is important that, whatever structure we have for skills training and re-education, we do not focus too much on those who are below the age of 25 to the exclusion of those who are above 25 who need to take advantage of those second chances?

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Angela Smith (PPS (Yvette Cooper, Minister of State), Department for Communities and Local Government; Sheffield, Hillsborough, Labour)

Indeed. It has to be said that, given the way in which our economy is now structured and moves, it is important that we remember that people need to reskill and move on continuously throughout their lives. In the context of second chances, it is also important to remember that confidence levels among adult returners are often low. FE tutors understand that better than any other deliverers of education in the entire system. They know how to build confidence and they understand that confidence is the key to success in education. The whole experience is a rich one for a tutor.

For me, one of the more enlightening aspects of GCSE work was delivering speaking and listening opportunities to many of the adult students. Unlike 16-year-olds, especially lads, who will deliver the inevitable lectures about football—or, in my case, on the 1993 Sheffield Wednesday-Sheffield United FA cup semi-final—adult learners will offer talks on varied topics ranging from bricklaying to beekeeping. I have even heard a talk on the history of chocolate, which finished with the offer of chocolate to all who had listened. I think that the offer was made to me in the hope of a better grade. That is the way in which adult education works.

Another really rewarding aspect of the work of an adult education tutor is sharing students' success. When the results come in, they are almost as important to tutors as they are to students. Seeing someone who failed at school and could not cope with school learning structures—the chalk-and-talk approach and the constant drilling of knowledge without an opportunity to find alternative learning styles—achieving B and A grades in subjects such as English makes one realise just how valuable further education is. One sees sulky, reticent 16-year-olds being transformed into confident and mature 19-year-olds who are ready to take on the world. Mature students have broken down in tears during their one-to-ones with me because they lacked confidence in taking exams and all their hang ups and problems of the past had returned to them. When one sees such people pulling through, it makes one realise that further education can be transformational.

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John Hayes (Shadow Minister (Vocational Education), Education; South Holland and The Deepings, Conservative)

The hon. Lady speaks with both eloquence and feeling. Does she acknowledge that many of the people she is describing are attracted back into education through non-accredited courses? The Government have focused on accredited level 2 training and non-accredited courses are under threat. How damaging is that to the kind of people she is describing?

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Angela Smith (PPS (Yvette Cooper, Minister of State), Department for Communities and Local Government; Sheffield, Hillsborough, Labour)

It is entirely true that what we in the trade call small, bite-sized chunks of learning can play a valuable part in building adult returnees' confidence and capacity so that they can move on to the more formal accredited learning opportunities that FE offers. I understand that the Government's direction has always been that colleges and other training providers should be encouraged to make such bite-sized chunks of education available as part of a package of progression for individuals from the moment they walk through the door of a learning centre so that they can go on to FE and then formal learning courses.

FE at its best brings out the best. It brings out the full potential of young people and adults, whatever that potential might be. For example, the expectation and culture of maturity associated with FE, through which young people are expected to take responsibility for their behaviour and learning, brings on a 16-year-old who has just left school as an individual more than anything else. There is no patronising in further education, or any sense of drilling things into people. Those in further education are independent learners. Many young people find independent learning valuable and are natural independent learners who are capable of finding their way through the material and concepts on offer. We underestimate the extent to which young people learn in a variety of ways. The best can be brought out of young people by further education, rather than school, because it offers an alternative culture and a different approach to delivering education and learning. It thus creates incentives and motivates people.

I hope that I can entertain the Chamber with another anecdote about my A-level days at night school. In my third year, when I was studying for the Bernard Crick A-level in government and politics, we suffered a serious misfortune in that our lecturer was suspended from his post two or three months before our exams. I will not go into the details of the suspension, but we thought that the reasons were pretty paltry. Everyone in the night class got together to visit local dignitaries and politicians and to make a fuss. We secured an offer from a local barrister—I pay tribute to him; he was a Liberal Democrat candidate in the local elections—to the effect that we could set up a Saturday school in the premises of his bridge club so that we could continue our studies with our tutor, in addition to attending the classes at the college.

The students on my course were ready to give such a commitment to their learning. They gave up their Saturday mornings to turn up at the local bridge club and set out their materials on a series of card tables so that they could make the most of the opportunities that were provided for them. We did that all the way through to June and even took a week's annual leave so that we could have a study school so we could catch up following the disruption that we had suffered. The group's results were absolutely stupendous. I think that an overwhelming number of us got grade As and secured our places at university because of the commitment that we gave to our education and course. To this day, I remain proud of what we did. We took control of our destiny and learning and ensured that we got what we needed. Again, that is something that further education often cultivates.

All that makes further education especially fit to meet the skills challenge, about which we have heard a great deal in this debate. FE develops the rounded and mature individuals for whom employees are looking. The stats have already been cited, but I will point them out again. We all know that Leitch has said that by 2020 we will need 40 per cent. of adults to be qualified at level 4 and above. However, it has not been mentioned that we will need 95 per cent. of adults to achieve the basic skills of functional literacy and numeracy, and that more than 90 per cent. of adults will need to be qualified at level 2, at least. I congratulate the Government on making it clear that FE provision up to level 2 will be free of charge. That represents a significant contribution towards making sure that we deliver the skilled workers this country requires and the skills we need to compete in a global economy.

Although this is often said, it is worth repeating: our country can survive in the global economy and make the most of the opportunities created by the opening up of markets in China and India only if it meets the skills challenge. The only way to do that will be to work at the high-value end of the employment, job-creation and manufacturing markets.

In my city and constituency, Corus is dedicated to the high-value end of the steel castings market. Corus is now under the ownership of Tata, so I suppose that I should call it that, but old habits die hard. The company has told me that it does not think it could consider moving abroad the Stocksbridge plant in my constituency because the skills that are needed to produce such sophisticated engineering products are available only in such cities as Sheffield. We have to ensure that things stay that way and that further education, higher education and our schools are geared up to continue to deliver such very skilled workers for good, well-paid jobs that are highly satisfactory and rewarding.

Rollem Patent Products, which is in Ecclesfield, is less well known than Corus. It is dedicated to the production of bespoke engineering products, which are special solutions requested by the customers it attracts. The firm exports all the way across the world, to China and south America.

Most of Ronseal's products are manufactured in my constituency, and they really do what it says on the tin. It is a chemical engineering company that makes an incredible contribution to the wealth of my constituency, which is higher than average for Britain as a whole. The managing director of Ronseal has told me that the quality of the local provision in our schools and further education college is critical to the future success of the company. We must meet that challenge.

In Sheffield we also have the teaching hospitals and the medical expertise not just of the doctors and nurses, but of the technicians and researchers. We have growing expertise in sports and leisure, and Sheffield is the world climbing and mountaineering centre. We have an engineering company called Gripple which manufacturers the equipment used by our mountaineers. That is a neat example of engineering and sport coming together. For a city like Sheffield, the challenge is to ensure that Gripple, the sports and leisure facilities, the teaching hospitals and the universities continue to get the excellent, highly skilled staff that they need, and the Bill will contribute towards that. It is the natural vehicle to deliver the skilled workers we need.

As we have heard, there are 4 million students in further education colleges, the vast majority of whom are adults studying part-time. That point is often overlooked. There are more 16 to 18-year-olds in colleges than in school sixth forms. Colleges deliver more than 800,000 vocational qualifications every year and provide 44 per cent. of entrants to higher education. They deliver 11 per cent. of higher education provision. They are already proven deliverers of higher education opportunities. Nearly 300,000 college students are over 60. That is a tribute to the capacity of human beings to study at every stage of life. The importance of further education is illustrated by those facts. FE has taken on the lion's share of post-16 education delivery, and long may that continue.

I welcome the proposals in the Bill to restructure the Learning and Skills Council, particularly the requirement that the new learning and skills councils consult more closely with employers. They should also consult more with schools, parents and young people. We need a more co-ordinated strategic approach to what is delivered in further education if FE is to move from its excellent base to meet the challenges that the Bill requires of it.

I would welcome the Minister's comments on how local learning and skills councils are responding to the needs of employers. We feel the need to move forward, but how far? In my view, based on the experience of Sheffield, we need to move some way. We have had serious engagement with employers in Sheffield, but I still do not think that we have forged the important links with employers that will change FE and make it more responsive to their needs. However, we will at some stage have to say to employers "Put up or shut up", because they too must engage seriously with the system and demonstrate their commitment, not necessarily always in terms of resource but in terms of expertise to ensure that FE is able to deliver what employers say they need.

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Brian Binley (Northampton South, Conservative)

I have been listening intently to the hon. Lady, from whom we have heard sound common sense, as I would expect from someone who comes from Sheffield. The responsibility of employers is part of the equation that the Bill does not cover. Does the hon. Lady agree that it is employers' responsibility to become much more involved and that employing organisations should play an active role in achieving that objective?

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Angela Smith (PPS (Yvette Cooper, Minister of State), Department for Communities and Local Government; Sheffield, Hillsborough, Labour)

Indeed, and in its own way the Education and Inspections Act 2006 tries to do the same in relation to our schools. If we want employers to be formally involved with the work of our schools, we should say the same in respect of FE colleges. One of the things that is overlooked in the Bill is the power to form trusts or charitable arrangements for the involvement of outside bodies in the delivery of further education. The involvement of employers is central to that.

If the learning and skills council works properly, it must provide leadership. My experience as a cabinet member was that the quality of input from the LSC in Sheffield and more broadly, in south Yorkshire, and the degree to which it responded to local need was critical in determining whether post-14 or post-16 provision developed and progressed. That has been the case for some time. My experience leads me to believe that the time has come to regionalise the LSC and to require it in legislation to respond more closely to the needs of the city, the district and the region. If local strategic partnerships are fulfilling their proper role, they too can play an important part in making sure that the LSC at regional level responds to what a district or a metropolitan area needs in order to raise the skills levels of young people and adults.

In relation to the powers proposed for the LSC, the power to incorporate and dissolve will rightly be devolved from the Secretary of State to the LSC. If we were truly radical, we would go further and put in place regionally elected structures to enable learning and skills councils to be accountable to elected representatives. For me, that is the way to ensure that the devolution of power envisaged by the Bill achieves its fullest potential. Regionally elected bodies to which the LSC could be accountable would be the clincher, ensuring that the Bill worked to its maximum effect. We are where we are on that, but I am sure we will return to the matter. That debate is by no means dead and gone.

The powers suggested in the Bill for the LSC to intervene when colleges are coasting or underperforming are entirely appropriate. That power already exists for local authorities in relation to our schools. The 2006 Act gave local authorities more power to intervene more quickly when schools are seen to be coasting or underperforming. That is absolutely right. The role of the elected representative in the local authority is to be the champion of parents and young people, ensuring that what is delivered for young people is of the highest standard and is always excellent.

We do not have the same mechanism in relation to further education, however. The move towards giving the LSC more powers to intervene is a step in the right direction. I return to my previous point: if the learning and skills councils were accountable to an elected body, I would be absolutely confident about the measure. Nevertheless, it is a welcome first step.

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John Hayes (Shadow Minister (Vocational Education), Education; South Holland and The Deepings, Conservative)

I am intrigued by the hon. Lady's support for the measure. She must be one of the very few people who supports it, given the debate in the Lords and outside this place. She said that it is a step in the right direction. Which destination is she aiming towards, however—even greater powers for the LSC to intervene in all aspects of colleges' lives?

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Angela Smith (PPS (Yvette Cooper, Minister of State), Department for Communities and Local Government; Sheffield, Hillsborough, Labour)

No. I thought that I had made myself clear. My point about the measure being a step in the right direction is that, ultimately, I would like the LSC to be accountable to an elected body. There is currently no real accountability for further education other than with the governing body. That is not always sufficient to deliver effective action when colleges are seen to be underperforming or coasting. The measure is welcome as a first step towards recognising that although most college governing bodies are very good, they do not always provide such a check, and the accountability necessary to ensure the highest standards.

Photo of Stewart Jackson

Stewart Jackson (Peterborough, Conservative)

I am puzzled by the hon. Lady's argument. She seems rightly to be lauding local education authorities' ability to intervene directly and quickly on schools, but not further education colleges. Does she share Opposition Members' concern that a fairly aloof regional learning and skills council may get into a dispute or encounter a legal problem if it takes presumptive action in respect of mergers, closures or disciplinary action, especially if there is no local accountability via that learning and skills council, which is a regional body?

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Angela Smith (PPS (Yvette Cooper, Minister of State), Department for Communities and Local Government; Sheffield, Hillsborough, Labour)

If Opposition Members wish to table amendments relating to colleges' accountability to local authorities, I am sure that they will do so. My only point is this: at the moment, when FE colleges start to stray and fail to deliver, very little can be done to bring them to account. When the governing body is too weak or ineffectual to act, very little can be done. In such a situation, a college may start to spiral downwards and its numbers begin to fall, and confidence in that institution will begin to fail. I do not want that to happen again. I have seen it happen in Sheffield, where we are still rebuilding. Indeed, that is being done very well under the current leadership, but I do not want to see Sheffield college go through the process again. From a pragmatic point of view, I am glad to see in the legislation some kind of mechanism for holding colleges to account.

The removal of principals is part and parcel of that argument. We cannot have a situation in which poor performance goes unchecked. Indeed, an earlier speaker referred to a case in which no account was taken of poor performance by a principal. I could give my own example. The lecturer whom I mentioned earlier who was removed from their post went to an appeal panel run by the governing body, which had dismissed him and then recommended an inquiry on the leadership of the college. That inquiry never took place. That is not really good enough. If governing bodies are not robust enough to deliver what we need, something should be in place to ensure that that weakness is remedied.

Just as I welcome the measures relating to the LSC, I welcome the approach taken on another important point that has not received much attention in this debate—the duty placed on the LSC to promote diversity in provision. For me, that is the absolutely critical point with regard to the clauses on the LSC. Training providers of various kinds are already operating at post-16 level, where we have sixth forms, sixth-form colleges and further education. In Sheffield, however, we do not have enough sixth forms. We have just six in a city of 27 secondary schools. All those sixth forms are concentrated in the south-west of the city. I tell a lie, actually: two more sixth forms have opened in the past year in deprived areas because of the opening of two city academies. We now have eight sixth forms, but they are concentrated in one part of the city. In effect, a number of students do not have access to sixth-form education or the choice of pursuing either further education or sixth-form education that many young people have in many other parts of the country.

Photo of Kelvin Hopkins

Kelvin Hopkins (Luton North, Labour)

If my hon. Friend has a shortage of sixth forms in Sheffield, would it not be sensible for consideration to be given to setting up a sixth-form college that provides an enormous variety of courses, the best quality teaching and optimum class sizes, based on all the economies of scale involved? How would we generate such a college under the present arrangements? Could we not ask the Government to do that?

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Angela Smith (PPS (Yvette Cooper, Minister of State), Department for Communities and Local Government; Sheffield, Hillsborough, Labour)

Whether there is a sixth-form college or sixth forms attached to a range of schools is an open question. My key point is that we need choice for young people. I do not believe that many parts of the country—particularly to the north of my city, in Sheffield, Hillsborough—have that choice at that moment. When most young people reach 14 or 15, they either have a clear preference for a more independent learning environment in going on to their level 3 or even level 2 courses at 16, or they require the more pastoral, protected environment of a sixth form. It is very important that we do not close down the ability to choose one of those very different learning environments. Many young people would benefit from a mix of both; those who enjoy the pastoral environment offered by a sixth form may also enjoy receiving some of their provision at the local FE college.

The key point is the individual learner. The learner has to come first in this post-16 world. At the moment, the learner does not always come first, because they do not have the choice of institutions necessary to progress their studies at 16. Partly as a result of incorporation, FE colleges have become much more focused on survival and finances, and on protecting their own market, to the extent that they will put pressure on the local learning and skills council to ensure that no new sixth forms open in their neighbourhoods. That issue must be resolved. I welcome the proposals in the Bill to place a duty on the learning and skills councils to rise above the pressures put upon them not to deliver more choices in post-16 education and to take notice of what parents and learners want, rather than of what local vested interests may want or require. There is nothing wrong with opening up opportunities for people at 16. This is not about being more competitive in terms of the different courses available in different colleges and schools; it is about saying that local people need variety and choice if they are to achieve their full potential. I feel very strongly that the LSC needs to take a more strategic view on those matters, and it needs to learn to put the learner first.

One of the more positive developments in the Bill is on foundation degrees. So far, mention has not been made of the fact that 61,000 students were provisionally on HE-funded foundation degree courses at the beginning of this academic year. The number of entrants has grown more than eightfold between 2001-02 and the current academic year. That in itself is testimony to the success of foundation degrees, which are delivered and assessed by further education but validated by universities. The success of the foundation degree over five or six years means that we can trust further education not to only deliver and assess foundation degrees but validate them as well. If it is good enough to do the one, we should have confidence that it can do the other.

If higher education has a problem with the quality standards applied to the validation by further education, let us by all means put the safeguards in place that have been demanded by the other place. However, if HE is so doubtful of the standard, why is it not questioning the quality of the delivery of foundation degrees in our FE institutions? I am not aware that that is the case. I would welcome the Minister's comments on that.

Another important point is that the delivery of foundation degrees in FE institutions means that we are opening up education opportunities at level 4 for a range of people who could not have accessed those opportunities had we kept them enclosed within an HE system. I live in a city with two first-class universities; I am lucky in that respect. But the town in which I was born and bred has no HE institution; many parts of this country do not have HE institutions. We have to deliver HE opportunities in a range of locations and contexts if we are to meet the skills challenge and develop the potential of all adults and young people.

The majority of people on foundation degrees are part-time learners; they work; they are single parents; they are mature students. Most importantly, they are often from working-class families. A far higher proportion of those enrolled on such courses are from working class backgrounds than in any traditional HE institution. The importance of that cannot be underestimated. If we are to meet the skills needs of the nation, we need to be responsive and flexible and maximise participation.

Provision must be of a high quality. Another important provision is the Bill's requirement that the principal of a college must have a leadership qualification. That is a long overdue measure and is already in place in our schools; it was introduced by the Government for head teachers and has been a great success. If we are to value FE and give it parity with school education, we must recognise that principals need to be as highly qualified and as expert in delivering leadership to their institutions as any head in any school. The leadership of the FE college is critical to whether the ethos, quality and consistency are right in terms of delivering standards. FE can occasionally be found wanting in that respect, just as schools can be, and the key to resolving the problem has to be the leadership of the college or school. I very much welcome that measure.

I want to draw attention to what has been called mission drift. Mention was made of this in the other place as a result of the power to award foundation degrees and so on. I entirely disagree with that accusation. In my view, the mission of FE is to play a crucial role in delivering the potential of all our young people and of people of all ages who need to access FE's facilities and opportunities. It is about lifelong learning and meeting the skills challenge. That is the mission of our FE colleges and the Bill ought to be approved. I look forward to it going into Committee, where I hope that the clauses taken out in the other place will be reinstated.

6:55 pm
Photo of Brian Binley

Brian Binley (Northampton South, Conservative)

First, I pay tribute to Ms Smith whose speech was long but very thoughtful. I was particularly grateful to hear of the concerns for the over-60s. That made me feel wanted and that I was still useful to society.

I thank the hon. Lady for her remarks about employers and their involvement in the process, because one of the weaknesses of the Bill is their lack of involvement. The Bill talks at length about consultation, but not enough about involvement; there is a sizeable difference there about which I want to speak.

Before I do, I pay tribute to my hon. Friend Mr. Boswell. He is my neighbour and it was particularly good to hear his very informed comments on this debate. I particularly liked what he had to say about my hon. Friend Mr. Hayes, because I have had the good fortune to be present at two of his important speeches on this subject. I know that members of the further education profession enormously appreciated his contributions, which were vital to the discussion.

I declare an interest, which is relatively straightforward and people know of it; I am a business man from a business background. I have built up two companies that I am delighted to say are successful and employ reasonable numbers of people. That is reasonably well known in this place but I am not sure that it is as well known that both of those businesses rely totally upon new entrants with relatively high degrees of numeracy and literacy, yet both suffer from skills shortages in those subjects. I recognise that we live in an age where employment is high—that needs to be taken into account— but it is becoming increasingly difficult to recruit people with the basic skills levels that those two businesses need.

I am equally pleased to say that both are in the SME sector, which I believe is the most vital sector to Britain's future. We are in the middle of a 10-year cycle, in which we are seeing sizeable changes to employment in this country. It has been said on a number of occasions that plcs in the UK as a sector will be shedding 1.5 million jobs in that 10-year period. As a business man from the SME sector, I am delighted to say that we would be in serious trouble were it not for that sector, which is expected to add 2 million jobs over the same period. We are discussing a sector that is vital to Britain's future.

Within those figures, we need to set the background to the challenge that Britain faces as a commercial and industrial nation, which is the growing and potentially overwhelming competitive challenge over the next 30 years from emerging countries. I do not need to tell the Minister that it has been projected that India and China alone will control 60 per cent. of global trade by 2050. Bearing in mind the figures that I have quoted, Britain's future depends on the strengths of the SMEs. The sector is important in terms of not only job growth, but creativity—much of the creativity of British industry and commerce emerges from it, and it creates much of our commercial and industrial well-being.

SMEs are massively important in terms of supply chains to plcs. For example, Airbus directly employs 13,000 people, but it has been reckoned that there are a further 135,000 jobs in the supply chain that keeps it going. That means many hundreds of SMEs working together in a team scenario to create Airbus's success in this country at this moment. It is vital that we understand that background before we discuss the role of further education in skills training.

If we are to compete, we must be a highly skilled, high-tech nation that does not directly compete with third-world manufacturing. The old days are gone, and we need to recognise that and to build the impact of that statement into our plans for the future. We need a knowledge-based economy that matches that of the USA, Germany and other advanced nations, if we are to have any place at all. An advanced economy needs advanced skills. That is a truism almost too simple to need repeating, but it is vital that we do. The alternative to becoming an advanced economy based on an advanced skills set is to continue the drift down the competitive ladder, and I know that the Minister does not want that particular drift to occur for our children and grandchildren.

Today, we are discussing the long term, and I want to turn my attention to skills training for the long-term, starting with the basic areas. Let us consider the Government's record in that respect over the past 10 years. The Government say that they have increased spending on education, which is, of course, completely true, but it does not highlight the fact that one in six adults do not have the literacy skills expected of 11-year-olds. That is not directly the fault of this Government—my hon. Friend the Member for Daventry has said that Opposition Members have the habit of saying that everything bad started in 1997 and that everything good started before that point, which is nonsense and does not take us any further forward. More importantly, more than half of adults do not have the levels of numeracy expected of 11-year-olds, which underlines the point made by the hon. Member for Sheffield, Hillsborough about the importance of not only our basic educational structures, but the second-chance structures, which she discussed so eloquently.

The figures show that each year around 120,000 11-year-olds leave primary school unable to read or write properly. That figure is not from a Conservative pamphlet—it is from The Independent. We are not creating the basic skills that we require for an advanced economy. The Government have told us that more money is being spent on apprentices, of whom we have more than 250,000 in England alone. Unfortunately, however, 50 per cent. of them did not complete their full programme in 2005-06. Indeed, the take-up of advanced apprenticeships has now fallen to below the 1997 level. I do not say that to attack the Minister and the Government; I say it because it should concern us all. We need to get the issue right irrespective of party politics, because, as I have said, it is vital for the children and grandchildren who will follow us and whom we are thinking about today.

The fact is that we are not creating the necessary vocational skills for an advanced economy. The Government have told us about the money that they have spent on the youth employment programme, which is true, but the number of 16 to 18-year-olds not in education, employment or training—the so-called NEETs, who have been referred to on a number of occasions—has risen by 27 per cent. since 1997. None of us wants to live in a society where inactivity among the young is increasing rather than decreasing. The Government have told us that funding for FE colleges has increased, which is also true. However, only 14 per cent. of British employees have intermediate level vocational qualifications compared with, for instance, 46 per cent. in Germany.

I hope that that has set the background to the task that we all face in this place. The previous Government, this Government and Governments to come share responsibility for ensuring that the figures that I have quoted in response to the Government's spending statements are improved dramatically and quickly, if we are to face the global challenge that I explained earlier.

We need to recognise that money is not everything. It is not enough simply to identify a problem, allocate money, create objectives, set targets and think that the problem has been solved. If life were as simple as that, we would all believe that we could solve the problem in a couple of hours and go for a drink before half-past 9. In many respects, a decision made within a set of parameters is not absolutely vital. What is vital is how one manages, monitors, assesses and polices once a decision has been made within a given framework.

We have seen too many failures of management to ignore the importance of management within the context of further education. The Government need to recognise that we need to manage FE better, a point which a number of hon. Members have made today. The Government need to monitor and police more effectively; they need to evaluate and assess more effectively; and they need to fine-tune and be more flexible. Whatever system they decide to implement, they need to take account of management qualities, which are so important to the outcome of decisions made in this House.

If we did that consistently, we would not need continually to reorganise. This is the fourth time that the Government have restructured the skills network since they came to power. I am sure that they do not want to be in that position or to have had unnecessarily to spend so much money on restructuring. We want to get it right and to do so by adopting management practices of the kind that I outlined. The fact that the Bill does not mention those requirements is a sadness and something that the Government need to think about if they hope to get FE right on this occasion. They need to recognise that, as noted by the British Chambers of Commerce, we have a massive skills crisis. I am not saying that we did not have such a crisis 10 years ago or that the previous Government handled the matter with all the necessary skill and success—they certainly did not. However, we face the problem now. It is vital that we eradicate complacency and ensure that this legislation is not yet again seen as a missed opportunity in 18 months' time.

Let me turn to what I consider to be the most important oversight in the Bill—its undervaluing of the potential role of business managers, especially those from the SME sector and especially with regard to their involvement in the nation's skills training programme. We can talk about consulting management, but I want to go much further, as, in truth, does the hon. Member for Sheffield, Hillsborough, who wants more involvement from business. She agreed with me when I asked her about placing responsibility on businesses' heads, and I was delighted to hear it. Business is not accepting its responsibility in this area of our nation's life as much as it should. Sadly, the Bill centralises skills training and removes controls over it from the local arena. It fails to recognise that SMEs operate locally, not nationally, unlike plcs. Transferring responsibility from local skills councils to regional councils makes it harder for SMEs to be involved in skills planning, skills delivery or the creation of training programmes.

SMEs have a massive role to play not only in the provision of skills training but as benefactors of the skills that are provided. The Minister should be aware of the results of a British Chambers of Commerce survey that touches on the issue of skills for industry and commerce. I want to cite a few of its findings. It says that more than 55 per cent. of SMEs find it more difficult to find skilled staff than they did five years ago. That is partly the result of an economy that has less unemployment than 20 or 30 years ago, but it is still an indictment of our further education and skills training programme. There is immense support for training from the SME sector: more than 80 per cent. of SMEs spend £100 or more per annum per employee on external skills training, and 50 per cent. spend £250 or more per annum per employee. That is a sizeable amount of money, taken in the round, and it should be used more effectively. More than 75 per cent. of SMEs spend time identifying training needs for their staff. More than 60 per cent. evaluate the effectiveness of training that they have paid for. Most said that the main barrier to training was the lack of financial resource and the absence of staff involved in training. I welcome the Government's promise to pay up to the level 2 stage to make it free. Only 3.8 per cent. of SMEs said that training was not a priority. That massive set of facts shows that SMEs are committed to training and that they spend significantly on it but have limited resources to go further. They are ready, willing and able to help to create a trained, skilled work force and a knowledge-based, advanced economy.

As to whether colleges of further education are successful at working with business, 80 per cent. of businesses surveyed used independent advisers. One said:

"we tend to choose training providers that have a particular specialist skill, or are recommended or with whom we already have an established relationship".

Sadly, only 20 per cent. of SMEs use FE colleges. That suggests a sizeable breakdown in communication somewhere, if not all on one side, which must be put right. I recognise that some of the other 80 per cent. will be in receipt of Government funding, but the figures make it clear that the situation is ad hoc and there is no real assessment of effectiveness. We cannot afford to put up with that in view of the importance of skills training in the challenges that this country faces. The numbers achieving level 3 qualifications dropped from 42,000 in 2000 to 28,000 in 2006. That further underlines the fact that we are missing out in that crucial area of activity.

As a business man, I welcome train to gain—it is a good package and a good product—but only 5.8 per cent. of SMEs have taken part in it. I recognise that it is new; it has been rolled out for only a little under a year. Of those who did take part, however, 87 per cent. were satisfied or very satisfied with the product, so it is worth while. However, despite considerable advertising, 67 per cent. of the sector was unaware of its existence. There is a problem in relation to marketing correctly, communicating and connecting. As regards skills councils, 68 per cent. of SMEs were unaware of councils that represent them in their sector, and only 16.7 per cent. had had any contact from a skills council. Am I making my point, Mr. Deputy Speaker? I can see that I might be boring you now. There is a massive breakdown in the connection between Government training schemes and the SME sector and I fear that the Bill does not pay enough attention to that. We can talk about structures or money, but unless we talk about getting people together we will continue to fail.

Let me make some suggestions that the Government might consider in Committee and before Third Reading. We should face the problems head on by creating structures that allow vocational and skills training to focus much more on the needs of the world of work. That means greater involvement of SME managers locally in creating such processes.

Vocational and skills training should be workplace driven and local business needs should motivate and direct local vocational programmes. If we do not get together, that cannot happen. It will not happen if we do not communicate or involve business enough, and if business does not accept its responsibilities enough.

We must simplify the processes that we create and concentrate on the need to involve quality business management from across the business sector. If that requires sizeable outreach, so be it. Outreach must be designed by business managers for business managers and the emphasis must be on benefits, not features. The Government are for ever selling features but we need to emphasise benefits. Any salesman of note will say that one never sells on the basis of features—one sells on the basis of benefits.

Training programmes that business managers and educationists create jointly must fulfil local needs, and learning and skills councils must be prepared to deliver the programmes in the workplace if necessary. Many SMEs and small businesses cannot reach out in the way in which we would like. Again, the hon. Member for Sheffield, Hillsborough made the point that, in many areas—including important industrial areas—people cannot get to a centre of skills training. We must reach out to them.

All too often, ill-designed packages have been created and delivered away from the workplace and are distant from the ethos and culture of the working environment. That applies not only to new products and service sectors but many of our traditional, locally based manufacturing businesses, which have contracted in the past 30 years but continue to represent an important part of local activity.

In my town of Northampton, we have shoemakers of international repute. You will forgive me for advertising in this place, Mr. Deputy Speaker, but Church's and Crockett and Jones make wonderful products. However, 30 years ago, they had a sizeable pool of experienced craftsmen on which to draw. Whenever they advertised, they had many responses. That pool has shrunk because the industry has shrunk, yet they tell me that, when they ask for on-site training, which they have to do nowadays, there seems be no interest from our colleges of further education or other Government skills bodies. They tell me that there is little understanding of their problem.

We cannot afford another missed opportunity to deal with a massive problem, the solution of which is vital to the future of our nation. I therefore genuinely urge the Minister for Higher Education and Lifelong Learning and the Government to reconsider the Bill seriously in the light of involving business managers in creating and delivering training locally for local business.

We all know that time is running out if we are to meet the challenge of globalisation. Action is urgently needed. We can make more of the Bill and I hope that the Minister will pay attention to that plea and perhaps take action in Committee so that we can proceed more confidently with skills training.

7:24 pm
Photo of Kelvin Hopkins

Kelvin Hopkins (Luton North, Labour)

It is always a pleasure to follow Mr. Binley. I reassure him that whatever he says is not boring and I was most interested in his comments. I shall remember some of his points, and I am especially concerned about his reference to being unable to recruit staff with sufficient literacy and numeracy skills for his companies. That problem bedevils our country. Another skill that we do not have in sufficient quantity in Britain is oracy—a new word, meaning the ability to express oneself orally. On the continent of Europe, it is commonplace for working people to speak another language as well as their own, whereas we have difficulty in commanding only our own language. We should worry about that, too.

I am pleased to have an opportunity to speak about the Bill, which is positive, and I welcome that. However, we must go much further. I am alarmed by the state of skills in Britain. The hon. Member for Northampton, South spoke about skills being lost. If we lose skills in specific industries, we lose the industries and we can never regain them because the skills have gone. Many countries that try to develop cannot do that because they do not have the necessary skills. Rebuilding skills from scratch is difficult—much more difficult than retaining skills and perpetuating them for future generations.

Further education is the most vital sector of Britain's education and training provision. It has been frequently neglected in the past. Mr. Boswell said that officials often dismissed further education or did not take it seriously. He put it very amusingly. I believe that the reason is that officials have no experience of further education. They typically go from a grammar school or a public school to Oxbridge or some other elevated university and never come into contact with further education, which is more vital now than many elite universities. They are splendid, do well and we welcome their presence but we need further education much more. It is not properly valued. That is partly because of lack of experience of it and knowledge about it, but also because of a sort of elitism.

Those from my generation and previous generations who left school at 16, 15 or even 14 never went near college. No one will win an election by championing FE; nevertheless, it is vital to do much more for it. It is a truly massive sector with an enormous spread of activities, from A-level mathematics to bricklaying to basket weaving. It covers almost every activity that one can imagine. Its breadth means that it is difficult to focus on it. We know what schools and universities do, but further education is much more difficult to grasp. However, we must raise it in the public consciousness and, indeed, here, to ensure that we take it seriously in future.

I have a personal interest because, 35 years ago, I was a lecturer in further education when I taught A-levels. It was interesting, but more interesting for me were the day-release students to whom I taught liberal studies. Teaching resentful, alienated young people on a Friday afternoon and trying to get them interested in politics was not always easy. However, I started to understand some of the problems with the education system and our society.

I also taught highly motivated adults at evening class. That is another important component of further education that we forget. We have not done very well by adult students in recent years. I have criticised colleagues on the Front Bench for squeezing the adult education budget, especially the non-vocational budget, to focus on young people. We must ensure that young people are skilled and have the qualifications to do the jobs of the future, but, as my right hon. Friend the Secretary of State said at the beginning of the debate, millions of adults do not have skills now and they need to be trained and retrained. When manufacturing companies closed down in my constituency, many middle-aged people were asked to do mathematics tests and burst into tears because they could not do them. We have a big job to retrain and re-educate our adults in the most sympathetic and supportive way. Many studies have been undertaken of companies in America that trained their staff in mathematics and language. They showed that training made staff not only better workers but happier. It raises workers' morale. Motorola in Detroit was one such company that improved the quality of the work force, made everybody happier and also made the company more productive. Focusing on adult workers is therefore very important.

Not only did I use to teach in FE, but I went back to the same college some years later to teach part-time. I have to say—this is a criticism of Opposition Members; I hope that they will forgive me for raising it—that when I taught in FE 35 years ago, morale was high. Teaching staff did well and felt good about their students. When I went back to the same college 22 years later, I found that they felt much less happy. Morale was much lower, and they told me so. When I taught a long time ago, we typically had better pay and conditions than teachers in schools. When I went back, pay and conditions were much lower than those in schools and understandably staff felt pretty bad about it. Other factors had also entered into their lives, which made them feel less happy. We must ensure that the staff and people who work in FE have high morale, and feel good about their work and valued.

I have two absolutely first-class colleges in the FE sector in my constituency. I describe them as first class because they genuinely are. Barnfield college was the first ever general FE college to be given beacon status and regularly gets a grade 1 in inspections. I spoke to the principal earlier today about the Bill. We also have the Luton sixth form college, which also regularly gets grade 1 inspections and has beacon status. It does a superb job and has improved remarkably in recent years. Both colleges have a high proportion of students from ethnic minorities. In the Luton sixth form college, 60 per cent. of students are from non-white ethnic minorities, and the college does a fantastic job sending its students off to a whole range of universities—from Oxbridge to our own local university of Bedfordshire.

Twenty years ago, I was chair of the governors of what is now the university of Bedfordshire and was then the Luton college of higher education. It was in the local government sector, but when I was chair we moved into the polytechnic sector and eventually towards university status. I was not thanked by some of my political colleagues when that happened, because it was Conservative legislation that got us into the Polytechnics and Colleges Funding Council. However, it worked and we became a university.

Both the beacon status FE college and the university are rather worried about what is going to happen with degrees. In fact, I have had communications from all three of our college principals and vice-chancellors to ensure that I have their viewpoints. I shall pass on their written comments to Ministers to ensure that they are properly aware of all their concerns about FE colleges being able to award their own degrees. I will support the Government, but they should take account of the concerns of the modern universities, one of which is the university of Bedfordshire.

FE colleges do well. As has been mentioned, however, we must focus on the problem not of elites and the highly skilled but of NEETs—those not in education, employment or training. My Luton constituency has very large numbers of NEETs, despite the great lengths to which we have gone to improve our schools, and despite our first-class colleges and our relatively high employment compared with other parts of the country. There are large numbers of these young people, but a couple of weeks ago I found out, most astonishingly, that we do not even know who they are. What we must do first is track the NEETs.

If we do not address this serious problem now, we will in future have a permanent under-class of people with no skills and no jobs, living a relatively poor street life. We cannot contemplate that. We have to deal with that now, and we can start by finding out and tracking these people, then doing something to bring them back into the mainstream of economic life through education and training. We have to identify these people properly. They are not on our radar at the moment and they ought to be. It is no good just talking about them; we have to do something about them.

The Organisation for Economic Co-operation and Development drew attention a little while ago to the enormous gulf between the best and worst in Britain's education and training. According to the OECD, in our top 10 per cent. we have some of the best and most academically capable people in the world. Our best universities compare with the best elsewhere, but equally, at the bottom end, we have some of the worst educated and most poorly trained people of all. The top 10 per cent. are brilliant; the bottom 10 per cent. are appalling; and the bottom half are not very good. That is where our problem has been. For generations we have been concerned about grammar schools, universities, whether we should reform A-levels and have international baccalaureates and so forth, but we have not faced up to the real problem, which is the lower half, the lower third and the bottom 10 per cent.

A report by Claus, now Lord Moser six or seven years ago drew attention to the fact—as did the hon. Member for Northampton, South—that 20 per cent. of people were functionally illiterate and 50 per cent. were functionally innumerate. I have said this before in the Chamber: 50 per cent. of the population do not know what 50 per cent. means. That is astonishing. We take it for granted that all these things are understood, but they are not. We expect people to fill forms in, to understand their pay and handle numbers. The days have gone when people used almost to boast by saying, "I can't do mathematics", as if it were a badge of honour. Now people realise that not being able to do simple mathematics or simple computation is not a badge of honour, but a disability. We should address it in those terms and do something about it—not to make people feel ashamed, but to help them so that they can do simple computation in future, without relying on others. We have all seen the advertisements of fathers—indeed, mothers too—who cannot help their children at school, and we want to overcome that.

I have also worked for a trade union and written quite a lot about economics, and time and again I have come across skills and education problems. A great deal of research was done back in the late 1980s by the National Institute of Economic and Social Research, Sig Prais and, indeed, Claus Moser—and some of the studies were quite astonishing. They compared Britain with the continent of Europe. I remember one study of construction apprentices. They took 30 such apprentices from Britain and 30 comparable apprentices from France. They provided a simple mathematics test and found that all the French youngsters could do all the sums in the test, while none of the British youngsters could do any of them in the same test. Frankly, that was frightening. Many other comparable studies were carried out.

Hon. Members may recall the television documentaries that were made on the basis of Sig Prais's research—comparing German manufacturers with British manufacturers, for example, and the skills found on the shop floor. We saw German manufacturers who took a bespoke kitchen plan from England in English, read it, measured everything, drew it up and built the kitchen, which was packed away and sent off to Britain. In Britain, the staff on the shop floor could never have read a foreign language, so the design had to be done by the engineers upstairs. The chaps on the shop floor just cut on the basis of what they were instructed to do. The skill levels were enormously different. We have failed in manufacturing partly because of that lack of skill and lack of attention to raising those levels.

Significantly, we have seen this week, in spite of the fact that the euro has been a problem for the German economy, that Germany still has a gigantic trade surplus in manufactures, contrasting with our massive trade deficit in manufactures. In my constituency, tens of thousands of jobs in manufacturing have gone. We have seen jobs exported not to the third world, but in many cases to the continent of Europe or even to America. We have not retained our skill base, and we have not retained our manufacturing. Quite frankly, Britain cannot live with a massive trade deficit for ever. That will have to be dealt with at some point; it will unravel. We must start from the bottom by educating people in the skills that are needed in the modern world. That means addressing not just the people who will be lawyers, doctors or even, dare one say it, Members of the House of Commons, but those who work on the shop floor, ensuring that their skills are sufficient.

There are many useful measures in the Bill. I have raised my concerns about clause 17 with my hon. Friend the Minister personally, and he gave me some comfort by saying that colleges would be given the right to award their own degrees only if they met certain strict criteria. That is only right. Indeed, the principal of Barnfield college suggested to me today that one way of dealing with this matter would be to stipulate that only colleges with beacon status would be considered. That would be one possibility. Of course, his college has beacon status, so he is not so concerned, but other colleges might be more concerned. Before we introduce such measures, however, we should apply strict criteria to ensure that the process is well planned and will not damage other institutions.

I look forward to a more planned approach to training and skills education in general in Britain. I am not one of those who believes in the Maoist dictum, "Let a thousand flowers bloom". I am sure that we all remember that Chairman Mao established a kind of competitive environment in which a thousand flowers were to bloom. It destroyed the Chinese economy, and it took the pragmatic planner, Deng Xiao Ping, to put things right after Mao had destroyed almost everything. We need to plan more and to look at these issues in pragmatic terms, rather than simply leaving them to the market. I might be out of tune with some of my colleagues on this matter, especially those in another place, but I still believe that a greater degree of planning for this provision is better.

I also want to talk about sixth-form colleges, which are now in the FE sector. They deal with the more skilled end of education, in preparing students for university and so on. As I have said, Luton sixth-form college is a first-class institution. I have been a governor there for some 17 years, and for the 14 years since incorporation. I have not only taught in further education, but seen what is being done today. The quality of education at Luton sixth-form college is far and away better than anything that I saw or undertook when I was in further education.

We need to ensure that sixth-form colleges are preserved. I am convinced that they are the jewels in our educational crown. I recently asked a parliamentary question about A-level points awards for different sizes of sixth forms, and I was grateful to the Minister for his answer. There is a simple correlation: the larger the sixth-form institution, the better the performance. That is standard across the country. The largest sixth forms occur in sixth-form colleges.

Luton sixth-form college has nearly 2,000 students, and 45 different A-level courses. Every student can study for a tailor-made mix of A-levels, and other courses as well. There are a variety of teachers teaching the same subject, so that they reinforce each other. While there is not exactly competition between them, if one teacher is not quite up to it, there are others who will pick up the pieces. In a small school sixth form, the students have to rely on one teacher per subject, and that teacher might not be particularly good. That teacher might also have to teach other subjects as secondary subjects, which would definitely not be in their chosen field. That sort of thing happens in schools, but not in sixth-form colleges. There, all teachers are geared to teaching their primary subject, and at Luton they certainly do a first-class job.

Sixth-form colleges also allow the possibility of optimum class sizes. There is plenty of research to show that the optimum sizes are typically in the upper teens, so a class with between 15 and 24 students would be the right size for a good class. When classes are very small or very large, they become less effective. In a sixth-form college, the solution is simple: split the class in half and have two parallel classes. That is not a problem. We ought to promote more sixth-form colleges and ensure that we protect those that we have.

At a recent conference, a sixth-form college principal said that, had sixth-form colleges stayed within local education authorities rather than going into the FE sector, we would now have at least 100 more of them. I am not suggesting that we should go back down that route, however. No local education is going to set up a sixth-form college now, because that would result in their giving away their school sixth forms. That would not be reasonable, and councils and officials would never do it. However, the Government ought to think seriously about ways of creating more sixth-form colleges, particularly in urban areas like mine. They do a first-class job, and we ought to give that matter some serious thought.

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Stephen Williams (Shadow Minister (Further & Higher Education), Education & Skills; Bristol West, Liberal Democrat)

Does the hon. Gentleman agree that one of the obstacles to setting up sixth-form colleges or planning post-16 provision in that way is the Government's insistence that academies have to cover all ages from 11 to 18?

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Kelvin Hopkins (Luton North, Labour)

The hon. Gentleman makes a useful point. I have expressed my lack of enthusiasm for academies before, and I shall no doubt do so again. I am hopeful, however, that with our new Prime Minister coming along, we might have a change of direction in that regard, and I look forward to it. Indeed, the Minister in the other place who was so enthusiastic about these institutions might perhaps be relocated to another Department. That would also be helpful. I am not going to make any specific suggestions to my hon. Friend on the Front Bench, or to the new Prime Minister, but such moves might be helpful. Encouraging other institutions to grow sixth forms to undermine sixth-form college provision would not be sensible—and that is an understatement.

I think that I have made all the points that I wanted to make. This is a subject on which I could speak at much greater length, but perhaps it is time for me to give other Members a chance to speak.

7:46 pm
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Rob Wilson (Reading East, Conservative)

It is a great pleasure to follow Kelvin Hopkins, who spoke with great passion and knowledge about the further education sector. I want to compliment him as profusely as possible because his mother lives in my constituency, and it is a very marginal seat. One never knows when one is going to need an extra vote—[Hon. Members: "Shameless!"] That was shameless, yes.

The hon. Gentleman reminded us that we sometimes forget how important the further education sector is to the success of the UK economy. The report on further education by the Education and Skills Committee, of which I am a member, described the sector as the "neglected middle child" of education, and I believe that all Governments would admit that they are equally guilty of neglecting that middle child.

These debates offer a good opportunity to take stock and even to celebrate just how significant a part the further education sector plays in this country. Many people forget how significant a contribution it makes. Several hon. Members have already reminded the House of the highlights involved, and I would like to do so as well. There are 4 million students in further education colleges up and down the country, and there are more 16 to 18-year-olds in such colleges than in sixth forms—nearly twice as many, in fact. Further education colleges provide a massive 44 per cent. of the entrants into higher education, and deliver 800,000 vocational qualifications each year. Nearly 300,000 students in further education colleges are over the age of 60. That is impressive by any measure.

Statistics such as those make all of us realise that further education should not be the "neglected middle child" and that it should perhaps take centre stage a little more often. The reason that it does not do so is that schools and higher education establishments are generally better understood and better supported. It is also true to say that further education is perceived—I emphasise that word—to be inferior in its importance and its overall contribution, even though that perception is far from the truth, as my hon. Friend Mr. Willetts and Ms Smith made quite clear.

The further education sector has not been helped by the Government's confusing array of stakeholders and strategies. We have had Success for All, the 14-to-19 strategy, the skills strategy, Skills for Life, and Agenda for Change—to name just a few—over the past few years. The hugely complex system of stakeholders is so confusing that the Education and Skills Committee had to call in the Audit Commission to make sense of it all. The Audit Commission produced a chart—I understand that it has not yet been released publicly—that looked a bit like the random scribble of a two-year-old. I can say that quite authoritatively because I have a two-year-old who produces plenty of random scribbles, and they look exactly the same as the chart produced by the Audit Commission. It is not the Audit Commission's fault that it looks like that. How else does one show the incoherent and manifold interrelationships between 50-odd different organisations? Only the old Soviet Union could have devised something more bureaucratic and less coherent.

The bloated spider at the centre of the web is the Learning and Skills Council. If one looks at the tangled web woven by the LSC and its various linked organisations, one realises it is little wonder that Leitch described the UK skills profile as

"unimpressive in comparison with other countries".

What he meant was that a significantly higher proportion of the UK adult population has low qualifications, compared with the adult population of competitor countries. The Select Committee on Education and Skills, in its report on further education last September, said:

"Further education has often been left to pick up the pieces of other parts of the education system, and has been beset by a lack of coherent strategic direction."

I am not sure that the Bill has the answers to those criticisms. The report also stated that

"the present planning and funding mechanisms for skills training appear incoherent, over-complex, burdensome, and often act as a barrier to FE's development rather than a support to it."

I hope that the Bill will begin to address those ongoing concerns about the sector and the UK's skills base. It is said that the Bill embeds diversity and choice in the FE sector, and that it will raise standards and improve skills. I hope that it does. I also hope that it will cut back the sheer unwieldiness of the Learning and Skills Council and its array of partners. We will soon find out. I am not entirely convinced, however, that it will do so. After all, as my hon. Friend the Member for Havant said, this is the fourth reorganisation in about four years.

I wish to focus most of my comments, however, on the measures in the Bill that allow FE colleges foundation degree-awarding powers. FE colleges currently do not have the power to award major FE qualifications such as GCSEs or national vocational qualifications. All FE colleges have to be accredited by another institution or awarding body, such as City and Guilds, AQA or a higher education institution. What better way for the Government to reach their 50 per cent. target for participation in higher education than to change the rules? Will it work? I am not convinced that it will. Currently, what defines our universities is the fact that they can award degrees. UK degrees are highly respected internationally, as the numbers of foreign students who flock to the UK confirm.

As I have indicated, further education colleges perform a very valuable role, but they are rightly distinct from universities in what they do and how they do it. They do not have the academic infrastructure that our universities can support, nor do they provide an environment in which teaching is supported by research and scholarship, which is a key part of what makes education at the "higher" level different from teaching in schools and colleges. As I said, FE colleges do not currently award their own qualifications at further education level, so the Government are about to create the rather odd situation in which the only qualification a college can award on its own behalf is a degree. That risks devaluing the currency of degrees and damaging the hard-won reputation of our universities.

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Roberta Blackman-Woods (PPS (Rt Hon Hilary Armstrong, Minister of State (Cabinet)), Cabinet Office; City of Durham, Labour)

Does the hon. Gentleman accept, however, that FE colleges might be much better placed than universities to deliver foundation degrees that are vocationally oriented and skills-based, and can focus on meeting the skills needs of the economy in a way that universities sometimes cannot?

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Rob Wilson (Reading East, Conservative)

That is not the main thrust of my argument. As I continue my speech, my direction will become much clearer.

Will the proposal be worth while? Will the Government achieve the growth in the number of students taking foundation degrees as a result? We heard from the Secretary of State this afternoon that the Government hope for an increase to 100,000 by 2010. I am not sure that that will be achievable. Foundation degrees are a new type of qualification, and were introduced only in 2001. Since then, they have begun to build a reputation with students and employers, and the number taking them has increased from about 4,000 to nearly 60,000 in the past academic year. One of the reasons that students have chosen to study this new qualification is that universities have awarded them. They are not full degrees. They are often taught in further education colleges that provide them on behalf of the university, which remains responsible for their content and quality. They were intended as a "stepping stone" qualification. As such, they acted as a bridge between further and higher education for people who might not otherwise have had the confidence to consider going to university.

University heads describe foundation degrees as a valuable tool in efforts to widen participation and, clearly, they are. The Higher Education Funding Council did an analysis of entrants to foundation degrees and found that most were female, most were over 21 when they started their degrees and were more likely to come from lower socio-economic backgrounds, and the take-up among ethnic minority groups was much higher. They have been a resounding success in attracting hard-to-reach socio-economic groups. The old saying, "If it ain't broke, why fix it?" applies particularly in this case.

Foundation degrees have also provided a catalyst for extensive collaboration between universities and colleges, creating pathways for learners to progress from one course to another. They work—59 per cent. of foundation degree graduates go on to further study, often at honours degree level, and often combined with work. The measures in the Bill risk breaking up those partnerships and disrupting the progression pathways for students. What incentive will universities have to collaborate with colleges, when those colleges are their direct competitors? Will students want to study degrees awarded by further education colleges? I have my doubts.

I followed closely the debate on the Bill in the other place, and I am grateful that Lord Adonis has listened to some of the concerns that have been expressed about this part of the Bill. The provision that the Privy Council can grant FE colleges foundation degree-awarding powers for an initial six-year probationary period, without the right to authorise other institutions to deliver the degrees, is a big improvement, which I welcome. After those six years, however, an FE college can apply for full powers, which allow a college unlimited ability to authorise other providers to award its foundation degrees. The Minister can deny or confirm that in summing up later. I also thank Lord Adonis for some of the amendments that he has accepted to the draft criteria for foundation degree-awarding powers, which were helpful in getting consensus.

Despite all that, I remain concerned by the prospect of FE colleges franchising foundation degrees, even after the probationary six-year period. There is a risk to quality, as the QAA has recognised. FE colleges will be taking on responsibility for the quality and standards of their own foundation degrees for the first time. That is a big change, which has lacked consultation. The Government risk producing the opposite effect to the one that they intend: instead of encouraging more people to study for foundation degrees, they may end up reducing the opportunities and the incentives to choose that qualification.

If we are to go ahead and give colleges degree-awarding powers, we will need to be sure that they can offer the same quality that our universities currently guarantee. Therefore, colleges must be subject to the same arrangements that ensure that our universities maintain high standards. If that does not happen, the foundation degree, despite its early success, will suffer from accusations that it is "only an FE qualification", and by extension the degree brand itself will be damaged.

7:59 pm
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Roberta Blackman-Woods (PPS (Rt Hon Hilary Armstrong, Minister of State (Cabinet)), Cabinet Office; City of Durham, Labour)

The Bill is important for moving on the agenda for the FE sector that was outlined in the Foster report and the further education White Paper. In particular, it helps to provide that clear focus for the FE sector to concentrate on qualifications that are skills based and relate to the needs of the economy. It also helps businesses and individuals to respond to those needs. The Bill looks ahead to the fact that our FE sector needs to respond to changing technological and social imperatives by changing the types of qualifications that are available. Critically, it encourages the FE sector to work in partnership with other providers and businesses, and to develop and attract dynamic leaders.

I disagree with hon. Members who said that the Bill has no relevance for the Leitch review. One of the targets that Leitch set us was for more than 40 per cent. of adults to be qualified at level 4 and above by 2020, and he emphasised that we needed to do that to remain internationally competitive. Foundation degrees are, of course, level 4 qualifications and will be critical in helping us to skill our work force for the future.

As other hon. Members said, key features of the Bill relate to the new structure and role for the learning and skills councils, new powers for FE colleges to award foundation degrees, and granting LSCs the power to intervene in failing or coasting colleges. It is important that LSCs are structured with a key regional role for overseeing post-16 education. In a dynamic economy, such as the one that we are in, it is essential that skills providers can respond flexibly to the changing demands at a regional as well as a national level. On Friday, I was at the launch of the regional economic strategy for the north-east in my constituency in Durham. It was clear from both the action plan and the response from people who attended that we need to be careful to ensure that we provide the skills at a regional level that are needed for businesses in that region and that we can attend to skills shortages in the region, because they are not the same in every area of the country. It is very important that we give the LSCs that regional focus, so that they can attend not only to skills for the future but to current skills shortages.

The LSCs have been given the role of encouraging greater choice in the delivery of post-16 education and promoting the personalisation of learning. We often equate that with something that needs to happen to under-fives and, more recently, in the secondary and primary sector, but it also needs to happen in FE so that young people and adults can build on their previous experience and learning. In addition, there has to be a greater employer and student focus. We should recognise that focusing LSCs at a regional level is an important advance.

Clause 17 allows the Privy Council to grant further education institutions powers to award their own foundation degrees. That is a critical element of the Bill. We heard that about 60,000 students are enrolled in foundation degree courses, which are delivered in about 80 universities. Just over 2,000 courses are being run at the moment, with about 750 in the pipeline. As hon. Members said, that points to a successful qualification. However, it does not mean that we should not examine the degrees and see whether things can be done better.

Giving the power to FE colleges to award their own foundation degrees has proved controversial in some sections of the education community, but it is an enormous step forward in bringing foundation degrees back to the purpose for which they were originally intended. I dispute what Mr. Wilson said about how foundation degrees were formulated as a stepping stone to higher education. I think that they were formulated instead to be a higher education qualification that integrated both academic and work-based learning, and that they would be designed in partnership with employers. So they were designed initially to be a free-standing qualification, but one that was vocationally oriented.

Provided caveats are put in place—I shall discuss those later—to ensure that the quality of degrees is maintained, FE colleges with a sound track record of delivering higher education should be enabled to deliver foundation degrees with a strong skills dimension based on employer needs, especially as they now have to do that for level 2 provision onwards. That relates to what I said about defining the role of FE colleges much more clearly to be the sector that concentrates on skills-based education and vocational education.

In support of the Bill, the British Chambers of Commerce pointed out that there is an urgent need to plug the skills gap in the UK work force. Enabling foundation degrees to concentrate more closely on that skills gap is an important way forward. There also needs to be a mechanism—we have not discussed this as much as we could have done—to ensure that colleges are flexible in responding to employer need and a changing skills demand. The current system of validating those degrees through universities does not always allow that degree of flexibility.

I understand that universities have genuine concerns about losing much of their partnership work with FE colleges. They are also concerned about standards and the creation of a two-tier system. Hopefully, the measures set out in the draft criteria for foundation degree-awarding powers, which were published when the Bill went through the other place, will allay those concerns to a large extent. I note in particular the requirement that FE colleges must have four years' experience of delivering HE; that an application for foundation degree-awarding powers will not be considered unless the FE college has consulted its students; that clear advice is given to the Privy Council to grant foundation degree-awarding powers for an initial period of six years, hence introducing the probationary period; that proper inspections and audit arrangements are in place; and that a review period is applied. Those criteria put in the necessary safeguards that have been asked for by the university sector.

Universities have done a good job already in validating the degrees and in delivering them in some cases. In my university career before I came into Parliament, I was responsible for validating a number of them. There were two problems in the validation process at the university level. As we have discussed, one was the fact that universities are academic institutions. It was often difficult to get academic staff in universities to look at the skills base of foundation degrees, rather than the academic content. The second problem was that universities often did not have the links with employers that would make foundation degrees sufficiently employer-focused. Although that has improved over time, there are still problems in relation to the close tie-in with the university sector.

There is a stronger point to be made about the loss of partnership working in modern universities, but I hope that it can develop in other ways. Clearly foundation degree students will need progression routes to higher education, so it will still be necessary for the further education and higher education sectors to work together to ensure that the routes exist and that one builds on the other. As I have said, however, I think it important to establish foundation degrees as a qualification in their own right. They should not be seen simply as a stepping stone.

We know that of those who complete their two-year courses, 35 per cent. go directly into employment, 27 per cent. opt for a combination of work and study, and 32 per cent. progress to further study, the aim of the vast majority being to complete an honours degree. That shows the necessity for further education colleges to provide advice for foundation degree students that includes employment options and work-based learning as well as progression to higher education. I hope that the Minister will tell us how that is to be achieved in practice.

I have useful anecdotal evidence from my further education college, which is already an excellent provider of higher education. The principal tells me that many of those studying for foundation degrees wish to return to employment, or to return to it for a period before returning to obtain professional or managerial qualifications rather than honours degrees.

Foundation degrees could also help to fulfil the Government's stated intention to widen access to higher education qualifications. Some 28 per cent. of foundation degree students come from areas of deprivation, 65 per cent. are over 21, and 48 per cent. study part-time. The degrees are important to the Government's aim of widening participation in higher education, and we should support them for that reason.

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Rob Wilson (Reading East, Conservative)

Some further education colleges will have powers to award foundation degrees, while many obviously will not. How does the hon. Lady think that the sector will cope with two categories of FE college?

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Roberta Blackman-Woods (PPS (Rt Hon Hilary Armstrong, Minister of State (Cabinet)), Cabinet Office; City of Durham, Labour)

There is already a distinction. A number of FE colleges deliver higher-education qualifications, while a number do not. What is important is that we proceed with foundation degrees to ensure that there is a qualification that brings together skills and academic knowledge, and is very much a vocational qualification.

Further education colleges have been improving in recent years. According to Ofsted, the success rate percentage has risen from somewhere in the mid-50s to about 77. It is right for the Government to acknowledge that progress. A number of FE colleges have already proved very successful, but I can tell the hon. Member for Reading, East that they are improving, and I think that they should be given additional powers for that reason.

My local FE college, New College Durham, has new buildings and facilities, including a separate higher education building, and a strong commitment to delivering high-quality courses that reflect employer demand and the regional skills deficit. I think that it will be able to build on its substantial links with employers to improve the standing of foundation degrees in the context of future employment. It has a centre of vocational excellence in construction, and will be able to build on that in other sectors.

I understand that the Government intend to reinstate clauses that were removed in the other place relating to the transfer of powers from the Secretary of State to learning and skills councils to intervene in colleges that are considered to have inadequate provision, have been identified as under-performing, or have been mismanaged. I think it essential for those powers to be given to LSCs if there is to be greater confidence in further education, but there is an important proviso. The Association of Colleges has expressed concern about the fact that an LSC can remove principals or senior officers, fearing that that might contravene employment law. I hope that the Minister will tell us whether he envisages a conflict. When a college is failing, however, it may be useful for the governors to be directed by the LSC to make collaboration arrangements with another body, or to improve the management of the college. That is relevant to the provisions in clause 21 to improve leadership skills in the sector by requiring principals to obtain a leadership qualification, which, as has been said, is probably long overdue.

What should also be considered in Committee is a point raised by the National Union of Students about different complaint procedures in the HE and FE sectors. Given that further education colleges will validate their own higher education courses, it is clearly necessary to ensure that those procedures are compatible, and that FE colleges have enough resources to deliver higher education qualifications in a way similar to the way in which they would be delivered by HE colleges.

The Local Government Association is concerned about the need to protect local learning partnerships. Perhaps that could be considered in Committee as well. Mr. Binley made an important point about the need to involve small and medium-sized enterprises in the planning and delivery of foundation degrees. SMEs often interact through local partnerships. It is important for them to be not just protected, but encouraged and properly resourced.

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Stewart Jackson (Peterborough, Conservative)

The hon. Lady seems to be on the same tack as her hon. Friend Ms Smith—broadly supporting the Bill, but with many caveats. May I return her briefly to the issue of intervention in respect of principals of FE colleges? The Secretary of State said that he could not recollect an occasion on which there was an intervention to remove a principal. The hon. Lady is commending powers to be conferred on learning and skills councils that have never been exercised even by the Secretary of State. That is very speculative, and I think we need to discuss it further.

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Roberta Blackman-Woods (PPS (Rt Hon Hilary Armstrong, Minister of State (Cabinet)), Cabinet Office; City of Durham, Labour)

I said that I wanted the Minister to say whether that provision would contravene employment law.

Although I have asked for clarification of some points, I am happy to support the Bill. I think that the Government should be congratulated on a Bill that will help us to meet the skills requirements of the coming decades. It may be only a step towards implementing the Leitch review, but it is an important step that we should recognise and support. We need more people to be skilled at a higher level so that we have a work force that is equipped to compete in a global economy, and I think that the Bill will help us to ensure that that happens.

8:19 pm
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Jeremy Wright (Rugby and Kenilworth, Conservative)

I agree with those Members who have said that the Bill is a missed opportunity. The Leitch review and—to be fair to the Government—the White Paper that preceded the Bill were wide ranging and, in their different ways, ambitious documents, but this Bill is not. It is not all bad, of course. There are provisions on consultation that I welcome, and I also welcome the freedoms that the Bill gives to colleges—as far as they go. The problem is that those freedoms are undermined by other parts of the Bill, especially measures—which have been discussed in detail—that might give the Learning and Skills Council the power to intervene in the running of colleges. We should trust colleges to do the important job that we ask them to do.

Many Members have talked about the role that we want colleges to play, and all of them have recognised that they are crucial institutions that do good work. However, the Bill sends colleges mixed messages about how much we trust them to do that important work. We are considering allowing colleges to confer their own degrees, yet we are also considering allowing the LSC to direct governors to behave as it thinks most appropriate, and even to dismiss the principals of colleges. It is one thing for the Secretary of State to do that; at least he or she is elected and democratically accountable to this House. However, the LSC—a non-elected, non-departmental body—does not have such democratic accountability. I am profoundly troubled by that proposal.

There is another incongruous aspect of the Bill. The Secretary of State retains the power to issue guidance on how governing bodies should consult learners—clause 20 deals with that. I welcome these provisions, but the LSC does not gain that responsibility. The Secretary of State retains it, yet learning and skills councils will have the power to set up, dissolve and potentially fire the management of further education colleges. That is odd.

There is also the question of much the exercise of those powers that might be transferred to the LSC will cost. Dr. Blackman-Woods has made the point that there is the danger that there will be legal proceedings following the sacking of the manager, principal or chief executive of an FE college. I can say from experience that legal proceedings cost money. If those costs are no longer to be covered by the Secretary of State but instead are to be transferred to the LSC, it is important to recognise that it will be necessary to ascertain how those costs will be met. However, that is unclear.

On the transfer of certain powers to FE colleges, the explanatory notes state:

"There will be no increased funding as a result of the provision in the Bill transferring powers of the Secretary of State to establish and dissolve further education corporations to the LSC. The LSC will incur certain additional costs in exercising the powers, but these costs are difficult to ascertain."

Those costs might well be difficult to ascertain, but the costs of firing principals will be even more difficult to ascertain and could be much larger. We have heard about the costs that the Government hope will be saved by this restructuring of learning and skills councils, but before we accept those savings as a given it is important that we talk about what costs might arise on the other side of the balance sheet.

The Bill restructures the learning and skills councils in a way that I am unconvinced is either needed or desirable. On first inspection, it does not appear to me to be wholly sensible that the powers of the LSC should be transferred further away from learners and from employers, which is what the Government intend to do by transferring responsibility regionally instead of locally.

What concerns me most is not the organisation of the LSC, but its direction and priorities. As has been discussed in the debate, we face a very definite problem: we are behind our competitors in work force skills, and in many respects we are falling further behind. In 2006, we were 18th out of 30 OECD countries in terms of the proportion of 25 to 64 year olds with skills at or above level 2, and the problem is getting worse. The amount of learners between the ages of 19 and 59 fell by 16 per cent. between 2004-05 and 2005-06. There is a further decline in enrolments for 2007. I want to address that problem in the remainder of my brief remarks.

The LSC has focused primarily on those up to the age of 25, and everybody understands why it would wish to do that. It is important that that group is properly catered for and provision is made for it, but in the new world of work the over-25s are just as important and they are not as well served. Part of the reason for that is the progression that everyone now needs to make in the course of their chosen profession. As many Members have said, progress in training must be continuous. We must make provision for ongoing training for everybody. It will not be possible for people to sit on their laurels and think that the skills that they learned at 16, 18 or 21 will see them through the rest of their career. Ongoing training and skilling is vital.

There is, however, a problem in that we are developing a plateau at about the level 2 mark. It is difficult for many people with level 2 skills to go on to develop skills at level 3 and beyond. There is much good provision for level 2 skills and below, but far less good provision for skills above that level. It is as important that people are able to develop such skills because, as is already generally accepted, we neither can, nor would wish to, compete with the rest of the world on the basis of lower wages. We will have to—and should want to—compete with the rest of the world on the basis of higher skills. The higher skills required to enable us to do that will not stop at level 2; we will need still higher skills. If there is a problem with graduating from level 2 to level 3 and other intermediate level skill qualifications, that needs to be addressed, but the Bill fails to do that.

It is also highly likely that anyone of my age or younger will not be able to expect that the profession, trade or career that they begin at 16, 18 or 21—or whatever age—will be the profession or trade that they will be working in when they retire. It is highly likely that all of us will have to accept having two, three or perhaps four changes of career in a working lifetime. Reskilling and retraining become vital for that reason, and of course the people in need of such retraining and reskilling will be well above the age of 25. The skills structure needs to be flexible enough to deal with that and, as the Leitch review says, it needs to be demand led. It discusses individual learning accounts, and they seem to me to be the only way in which the system can be flexible enough to respond to such continuing and varied demands. Again, nothing in the Bill deals with that.

It is right—and it is accepted in the White Paper and in the Leitch review—that we cannot wait to deal with those problems. They will not be resolved by dealing with the skills requirements of people under 25 because, as both documents observe, 70 per cent. of the working population in 2020, which is the target date for all that Government activity, has already left compulsory education, so it is too late for them. We have to make provision for them post-25.

Finally, it is important not to forget in the course of this debate that further education is about more than simply work-related skills. It is important that we regard education as a lifelong experience, with merits not simply for gaining new skills for the workplace but gaining new experiences for life more generally. Further education can be a social experience; it can be a health-giving experience; it can be an enhancing experience in many different ways. We have lost sight of that because, in this debate and in others, we talk a great deal about the needs of people between the age of 14 and 25, and a little less, although we have still discussed it, about the needs of those who need to retrain in the working environment. Those who have been forgotten are people who engage in further education—I do not want to say "recreationally", because that is the wrong word—without a direct connection to employment. For those people, further education is important. For all of us, it should be important, because if we are going to persuade those who need to reskill for the good of our economy that education is a lifelong experience, and should be available to them, they need to see that we regard education as lifelong for everyone. I hope that in the course of this debate, we do not lose sight of those people, but it does not seem, either for them or for those who need for their own good and for the good of all of us to reskill later in life, that the Bill deals with their problems.

My hon. Friend Mr. Boswell referred to the Bill as a tidying exercise, and it may be so. The Secretary of State described it as an enabling Bill, but in my judgment it does not enable anywhere near enough. It does not enable us to deal with fundamental problems in our economy and the skills structure. Until we do so we will not be able to compete. I very much hope that in the course of our debate and the Bill's progress that the Government will either add what needs to be added or consider very shortly a further Bill that will deal with those problems.

8:31 pm
Photo of Iain Wright

Iain Wright (Hartlepool, Labour)

I have a lot to be thankful for as a result of my experience in further education. My time in Hartlepool sixth form college in the late 1980s and 90s, particularly the experience, commitment and enthusiasm of the staff by whom I was taught, opened up to me the possibilities that are available in the world. In retrospect, the level of commitment from the staff was astonishing in the face of Government indifference and a real-terms cut in FE sector funding in the late 1980s and throughout the 1990s. Despite that, the tutors and staff at the college were focused and professional. They gave me confidence and ignited the ambition that allowed me to go on to university and, ultimately, led to membership of the House. The dedication of the staff in the FE sector is second to none, and I am extremely pleased to pay tribute to them.

For a relatively small town, Hartlepool has a remarkably diverse further education provision. Hartlepool sixth form college has an A-level pass rate of 99.7 per cent, and is going from strength to strength under principal Rick Wells. Hartlepool college of further education had an A-level pass rate of 100 per cent. last year and, under the strong leadership of Dave Waddington, is driving forward with passion the skills agenda in the town. We are blessed, too, to have a specialist art school in Cleveland college of art and design which, under the leadership of David Willshaw, understands the importance of its contribution to the British economy at a time when Britain is the design workshop of the world. Graduates of the college designed "Bob the Builder" and now head up the Jaguar X-type design team, although I do not necessarily think that it was the same people. A sixth form college is attached to the English Martyrs school, with a remarkably committed head teacher in Joe Hughes. The choice for learners in Hartlepool would be the envy of people in much larger towns and cities.

I am pleased that there is broad consensus in the House about the fact that skills, and the need for our country's economy and work force to adapt to meet the challenges of globalisation, are a vital part of economic and education policy. Leitch mentioned that in his report, and many other hon. Members far more articulate than me have reiterated it, not least Jeremy Wright, who preceded me. I agree with the Government's approach that the FE sector should be the engine of economic growth and social progress. I agree, too, with the sentiments of the recent White Paper and the Bill about to what a further education college's remit should be: it should improve employability and skills in its local area and contribute to economic growth and social inclusion to meet the demands of the modern economy.

There is an acute need for Hartlepool to upskill its work force to compete in the regional, national and global economy, and to give every individual the tools to achieve his or her own ambition. There are significant challenges. The percentage of school leavers who stayed on in further education and training in Hartlepool is good at 88.1 per cent.—higher, in fact, than the regional and national averages. However, the Hartlepool figures reduce to well below the national average when the whole of the 16 to 19 age group is considered. That shows that there is a pressing need toretain learners in the FE sector so that they can train and obtain appropriate skills beyond the age of 17.

The infrastructure of the Hartlepool economy is dominated by the public sector, with a third of all jobs in the town being in the NHS and the local authority, and in the education sector. In view of the deprivation and ill health caused by years of neglect, that is not necessarily a bad thing, but it shows that we have a relatively undeveloped and small private sector. Its domination by a few large firms—certainly in my constituency, but also across the region—reduces the ability of Hartlepool and the north-east to be dynamic, diverse and more enterprising, and therefore more prosperous.

There are skills gaps, in the region and in my constituency, in the financial services sector and the utilities sector. It is estimated that the Tees valley will require 30,000 additional jobs in the next decade in high-value, added-process industries such as chemicals, science, engineering and manufacturing technologies, but at present we do not have the appropriate skills base to fill them.

Low skills levels in Hartlepool, below the sub-regional and regional levels, are hindering our potential progress. In many ways, though, that scenario could only have been dreamed of even 20 or 30 years ago: then, we had the highly skilled workers, but we did not have the world markets or the Government to help them. Today, there is a chance that we will squander this once-in-a-generation opportunity if we do not match the potential with the skills in the work force, and the role of further education in that is crucial. The Bill is at its strongest and most forceful when it focuses on responding to employer demand and on allowing Britain and the regional economy to compete, but there is still a long way to go.

The Government's aspiration is that 50 per cent. of all young people will go on to higher education. Nationally, the participation rate has reached 43 per cent., but only 24 per cent. of young people from the north-east enter higher education, and the figure among my constituents is even lower. Although the increase in the number of young people progressing to higher education is in line with the national average, we are starting from a much lower base—the result of immense cultural barriers.

The key challenge is to raise aspiration, to show a proportion of young people in my constituency and elsewhere in the north-east what is achievable and possible. That is where the Bill needs to be looked at in a fresh way. It quite rightly places the onus on the FE sector to act as the catalyst of the national economy in the face of the pressures of globalisation. The consequence is that purchasing power in terms of the design, shaping and costing of the courses on offer in FE is placed in the hands of employers, but that tends to focus FE learning on those already in employment. How does the Bill therefore marry up with the worklessness agenda? How does it contribute to the Government's target of ensuring that 80 per cent of working age adults are in employment, when its emphasis is on people already in work?

The equalities review found that not being in education, employment or training for six months between the ages of 16 and 18 was the single most powerful predictor of unemployment at the age of 21. I would like the Bill to contribute more towards removing the massive cultural barrier of young people and others not in education, employment or training. I know that clause 7 requires the regional LSCs to consult and canvass the views of potential learners, but how is that possible if they are so hard to reach, and therefore disengaged from any such process?

On Second Reading in another place, mention was made of how vital it is to break down the rigidity between further education, higher education and schools. Mr. Boswell made a powerful and thoughtful speech, in which he mentioned the need for that fluidity, and it is something that we in Hartlepool are embracing already.

The town's college of further education has a centre of vocational excellence—a CoVE—in engineering, and two other CoVEs in different disciplines. There are close links between the college and St Hild's school, which is a specialist engineering school whose high-tech lab and engineering facilities I am due to open in the next few weeks. Teachers from St Hild's provide input into the CoVE; conversely, tutors from the college teach 15 and 16-year-olds at school or on the college campus. That fluidity is vital if we are to encourage more of our young people to enter engineering, one of the growth areas for the Hartlepool economy in the years to come.

It seems to me that FE colleges with a modern and welcoming environment—they are not schools, with their possible memories and ramifications, nor yet universities, which to learners at that stage might seem out of reach—are the ideal place to widen participation and tackle the problem of disengagement. I therefore ask Ministers to question whether this Bill does all that it could to address that specific concern.

Foundation degrees, in their short existence, have been an enormous success in my part of the world. Hartlepool college of further education provides a range of foundation degrees accredited by the universities of Sunderland and Teesside on subjects from assisted learning and working with young people to construction and manufacturing maintenance engineering. Cleveland college of art and design is reconfiguring its courses so that all its higher education courses will be taught from its Hartlepool campus from September. It will be launching new foundation degrees in applied arts, as well as in costume construction for stage and screen—whatever that is—contemporary textile practice and commercial photography. The number of students on the campus studying for HE degrees will rise from 200 to 700. Hartlepool sixth-form college provides a full-time law degree in conjunction with Leeds Metropolitan university. Students complete their first year in Hartlepool and then transfer to Leeds for the second and third years.

Foundation degrees have been a success in my area because they have been undertaken in a spirit of collaboration and partnership. They allow real investment to come into Hartlepool, which in turn lifts people's aspirations because they have the opportunity to take valued qualifications that they would previously have been unable to take, and that very much widens participation. However, I am concerned that allowing FE providers to award their own degrees will result in unnecessary and counter-productive competition and rivalry between FE and HE providers, which would prevent collaboration. On Second Reading in another place, my noble Friend Lord Sawyer, who is the chancellor of the university of Teesside, highlighted the university's £6 million capital investment in a higher education centre at Hartlepool college of further education, and there is the prospect of the university putting much more investment into Hartlepool. However, I ask the House, and particularly Ministers, to consider whether the university would readily co-operate with Hartlepool if it felt that potential students were somehow being poached? Although those concerns were addressed during the Bill's passage through another place, I hope that during the Committee stage in this House Ministers will mitigate such risks so that the awarding of foundation degrees strengthens the partnership between FE and HE and does not compromise the principle of ensuring that there is mutually beneficial support and provision and the best strategic fit.

The Government are right to see skills as the major factor in developing our economy in the 21st century and also to place FE providers at the heart of that challenge. I hope that the Bill can address such challenges, subject to the concerns that I have raised, and I wish it well in its passage through the House.

8:43 pm
Photo of Stewart Jackson

Stewart Jackson (Peterborough, Conservative)

It is a pleasure to follow Mr. Wright. We have had a great education in this debate. We had Ms Smith who demonstrated Smith's law, according to which, it is fair to say, a speech expands in inverse proportion to the length of a Bill. My hon. Friend Mr. Binley, who is now in his place, talked cobblers, as befits someone who represents that fine town in Northamptonshire.

I would very much like to have supported the Bill, but I cannot, in common with my hon. Friends, because it lacks imagination and is, unfortunately, about structures—it is a missed opportunity. It is also about bureaucracy and fails to reflect the reality of further education in the real world. In common with others, I believe that Ministers have missed a trick in failing to wait for the final recommendations of Lord Leitch's report on skills. They should have done so because it would have meant that we could have had a much more fully informed debate.

I am pleased that my constituency has one of the finest further education colleges in the country: Peterborough regional college. It has 15,000 students, and the adult learning inspectorate of Ofsted has consistently rated it as an outstanding example of a further education college, especially in financial management, for which it has achieved a grade 1. The situation in Peterborough is a microcosm of that throughout the country. The Secretary of State has told us that by about 2020 the number of unskilled jobs will decrease from 3.5 million to 500,000. However, we have a skills crisis now. In 2001, youth unemployment in Peterborough was 8 per cent., but it is now 14.1 per cent. We have 760 young people between the ages of 18 and 24 who are not in employment, education or training. That figure dates from January 2006 and I believe that the new figures will be published next month.

Peterborough faces the problem that because it is a regional centre for horticulture, agriculture and food processing and packaging, we have been a magnet since May 2004 for unskilled migrant workers from the accession 8 countries in particular. That has clearly had an impact on youth unemployment and the low-skill, low-wage end of the employment sector, hence the increase in the number of young people claiming jobseeker's allowance.

At the same time, we are a sustainable growth area. Peterborough city council area is officially registered by the Office for National Statistics as one of the fastest growing economic areas in England. The Government must examine seriously our growing problem of NEETs—people not engaged in employment, education or training—because we must not entrench an underclass of people who feel that they have no way of getting on the ladder to a better life through jobs, skills or courses. The hon. Member for Sheffield, Hillsborough spoke movingly about people who perhaps consider that it is not their place to be in education. There are working people who think that it is for someone else to have a good education and to improve their lives and those of their families.

In some respects, the situation is grim. A third of the work force still have no basic school-leaving qualifications. As my hon. Friend the Member for Northampton, South said, one in six people have the literacy skills of an 11-year-old. Five million adults in our country have no academic qualifications at all, which is a serious problem. I am afraid that I am not as willing as others to agree with the rosy hue of how well things are going that has been suggested in the debate.

As I said earlier to my hon. Friend Mr. Hayes, the Government have form on grandiose promises and plans on skills, training and enterprise. The Chancellor—the no-spin Prime Minister elect—gave an undertaking that everyone on jobseeker's allowance would have their skills assessed and would attend a mandatory skills course, yet that never happened. On Budget day in 2005, he gave the promise:

"I have set aside funds to ensure that by 2006 we meet our target that every school pupil has enterprise education."—[ Hansard, 16 March 2005; Vol. 432, c. 263.]

The Minister for Schools confirmed on 6 November 2006 that that had not happened.

The Bill is not all bad. We are inclined to support its aspects that will award more independence and autonomy to the FE sector, and we might well do so in Committee. Where it gives employers a greater role in driving a demand-led—not a supply-led, top-down—skills agenda, we will support it. However, I fear that the Bill overemphasises and focuses too much on structures and controls. As my hon. Friends have said, with NEETs up by 29 per cent. since 2001 to 1.24 million, that is a significant problem. We should focus instead on practical solutions.

The Bill represents the fourth reorganisation in five years, as has been pointed out. I declare an interest, as I was an Investors in People manager in a previous life and I worked closely with small and medium-sized enterprises. The contractual arrangements made between a learning and skills council, Business Link, employers and trainees was tortuous at local level. I can assure the House that it would be punishing in the extreme at regional level.

We still have 17 bodies overseeing the FE sector. As my hon. Friend Jeremy Wright said, 70 per cent. of the work force in 2020 have already finished their statutory education. He makes a pertinent point about adult education. A year or so ago, many of us had constituents writing to us about cuts in adult education and the hike in fees that priced many people out of adult education. Whether it was basket weaving, painting or foreign languages, it may not be important within the great global skills agenda, but it was very important to those individuals. The Minister listened to us and I commend him for it. He called a meeting and spoke to hon. Members individually to try to alleviate their concerns.

We should not lose sight of the fact that older people have a right to education as well. We need constantly to consider training and upskilling during work. As an Investors in People manager, I was well aware that for the best employers, the No. 1 issue was not necessarily the bottom line, profit or machinery. It was the power of their people to deliver brilliant results. We should never forget that. It is the reason we are a successful economy.

I lived through the last reorganisation of the training and enterprise council in south-west London. I worked for AZTEC. In that reorganisation, unfortunately, the worst TECs were the ones that were considered the templates. The Government looked at them, assessed them as poor—in that case, I believe, it was the South Thames TEC—assumed that all TECs were like that, closed them all and converted them into learning and skills councils.

The idea that 10 regional learning and skills councils will save money is naive and ridiculous, not to put too fine a point on it. What about redundancy payments? What about office costs, badges, name plaques, job reconfiguration, and consultants, who are ever-present? We know that the current spend on administration alone in LSCs is £1.8 billion. I remain to be convinced that any significant funding will be released as a result of the Government's regional agenda. It is a recipe for bureaucracy, a lack of accountability and obfuscation, which will impact on businesses and their work forces as they see a disconnect between the local employment market and its priorities, and the regional priorities, which are currently articulated by the regional development agencies.

As I pointed out to the Secretary of State, a priority in Hull is entirely different from a priority in Barnsley, Dewsbury, Skipton or York, and that is just in one region. Local is best. Ministers seem confused about whether to regulate or deregulate in the Bill. They seem unwilling, as my hon. Friends observed, to trust the management of FE colleges.

In respect of clauses 13 to 18, I do not believe that there will be true accountability to the taxpayer, student or employee in respect of substituting the Learning and Skills Council for the Secretary of State. The hon. Member for Sheffield, Hillsborough made a fluent and eloquent speech, but she was unable to square the circle when directly challenged on that point and about dissolving, incorporating and merging colleges and removing college principals and senior staff.

We must also focus on improving and strengthening local economies and have regard to local authorities. Ultimately, learning and skills councils do not have the same level of accountability as the Minister on the Treasury Bench; they are unelected, faceless and unaccountable. The Bill fails to mention the 148 local area partnerships, which I believe need a statutory footing. There is no requirement in exercising powers under clauses 14 to 16 to consult local authorities about the opening, merging or closing of colleges. I do not think that that is acceptable.

Other hon. Members have spoken about the ramifications of clause 17. I believe that the proposal is ill thought out, hasty and confusing. Despite the evidence drawn to our attention by my hon. Friend Mr. Wilson, the provision fails to recognise the success or otherwise of foundation degrees awarded by FE colleges. It has the potential to undermine the powerful and pervasive influence of the UK brand in further and higher education, which has been mentioned by a number of hon. Members. Contrary to what the hon. Member for Sheffield, Hillsborough said, it removes the focus from the raison d'être of further education and what employers want—vocational training at levels 1, 2 and 3, rather than at level 4 and upwards.

Finally, the sector skills councils sadly have less influence than they need to have to exert leverage and use enlightened self-interest for the benefit of the work force for the long term. Sector skills agreements need to be placed on a statutory basis. The Government could have been so much more ambitious in the proposals. They could have looked at local arrangements to give apprenticeships in housing associations, local authorities and NHS trusts. They could have brought best practice from all those areas into the Bill and assisted that process.

The Bill needed to focus on light-touch regulation, innovation, local expertise and accountability, a demand-led strategy and a serious recognition that economic exclusion resulting from the current skills crisis is getting worse, not better. Instead, it focuses on structures and command and control. That is why I shall support the amendment in the name of Her Majesty's Opposition.

8:58 pm
Photo of Gordon Banks

Gordon Banks (PPS (James Purnell, Minister of State), Department for Work and Pensions; Ochil and South Perthshire, Labour)

I am grateful to have the opportunity to contribute, and to follow Mr. Jackson, who I am sure will not be too disappointed if I do not agree with everything that he said.

I should like to bring to the House my personal experiences both in industry and the further education sector. For 20 years before coming to the House, I ran my own business. During that time, I spent a number of years on the board of management of my local college, which has now merged with Falkirk college to form Forth Valley college. My hon. Friend Ms Smith spoke about engaging employers, which I believe is vital. I was disappointed when I was a further education student at the age of 19, as I was five or six years ago on the board of management, with the role of employers.

The hon. Members for Havant (Mr. Willetts) and for Daventry (Mr. Boswell) talked about the diplomas for 14 to 19-year-olds. Diplomas can assist in achieving the aims and objectives of the Bill in addressing the skills shortage. The role of FE in delivering the diplomas is fundamental to student progression into full-time FE foundation degrees and then into additional higher education or employment. It is vital to highlight the importance of FE colleges' vital partnership with schools, universities and employers. If we fail to get all the links in the chain right, we fail full stop.

I want to repeat a plea that has been made tonight about adult learning. I had experience of FE when I was 18 or 19; I also had experience when I was 46 or 47, and my later experiences were much more positive than my earlier ones. In order to strengthen the qualifications and the experience that FE can give, we need to make more demands and create more opportunities for employers to enter the system. When I was 19, I was busy as an assistant planner working on the development of a multi-storey shopping complex and parking facility in Stirling. I was going to the Glasgow College of Building, where what I was being taught bore no resemblance to what I was seeing on the other four days of the week. I gained nothing from that period other than a qualification. We need qualifications that students can put into practice day in, day out, whether on day release or in full-time education. They must be relevant and practical.

I do not mean to be over-critical of an establishment in the 1970s, but at that point the thought of employers being engaged in the system did not exist. We want employers to be engaged now, but we cannot expect them always to put up their hands and say that they want to be involved. We have to ask them and, in some cases, demand that they become involved. No further education college has come to ask what skills my business needs to grow and to develop, and to see whether relevant courses are available in the college.

Mr. Binley referred to SMEs, which are important. We have heard a lot tonight about how larger plcs can make a contribution, but many regions do not have large plcs and are driven by SMEs. They are the backbone of the economy up and down the UK. We must be imaginative in expressing the need for SMEs to become involved and we must make them understand that they can benefit from their involvement, that there will not necessarily be a financial or a time cost, and that there will be a benefit to them and their sector if they become involved. Possibly we need to make even greater demands.

We also need to think about the additional skills that we need. As an employer, I need someone with the skills to do the job, but I also need communication skills, punctuality, presentation and interaction, which are fundamental to delivering skills learned through further education or higher education.

Earlier today, I asked the Secretary of State to clarify accessibility around FE colleges delivering foundation degrees. Many areas have access to FE colleges but do not have access to higher education facilities. The availability of FE colleges to deliver such courses addresses a social aspect of education and training policy, something of which Government Members can be proud.

I ask the House to consider why we need these changes. The world and the economy are changing. We know about the huge economic growth in India and China, which is impinging on many countries. Low-skill and low-cost jobs have been eroded—frankly, UK plc should not want to be a low-skill, low-cost employer again. As the world changes, so do the things that the UK and individuals need to do. Individuals must recognise that they have a role and responsibility, too. We cannot stand still. The Bill recognises the ever-changing situation in the economic environment. It is an important piece in the jigsaw, and it will allow the UK and individuals to benefit from improvement in learning.

9:07 pm
Photo of Adam Afriyie

Adam Afriyie (Windsor, Conservative)

The Bill should be welcomed with one hand and rejected with the other. I sense the agile mind and nimble figures of Lord Adonis. He has certainly done some reasonably good work on secondary education in terms of city academies. That has been welcomed by many Conservative Members, although I am not sure how many Labour Members welcome those measures. We must view the face of the Bill with a degree of caution and perhaps with a degree of suspicion as to what the ultimate motive may be.

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David Taylor (North West Leicestershire, Labour)

Is the expansion in the number of city academies valued more highly on the Conservative Benches than the retention of town grammar schools?

Photo of Adam Afriyie

Adam Afriyie (Windsor, Conservative)

I welcome that intervention, which highlights the unity on this side of the House with regard to welcoming city academies. Over the next few years, city academies will provide benefits in terms of social mobility, which the current Government have stamped down on.

I thank Gordon Banks for raising the issue that the requirements of business are slightly different from those of universities. I also enjoyed the speech by my hon. Friend Mr. Binley, who made an energetic, enthusiastic and emphatic endorsement of the need for small and medium-sized enterprises to be involved in the definition or design of further education courses. One of the themes running through hon. Members' contributions has been the provision of information that enables students, employers and colleges and other further education institutions to see clearly what is going on in the job market and with demand for courses. The Bill is a bit of a missed opportunity in several ways.

Further education has been improving over the past few years, at least since 1992 when many organisations were released to a certain extent to do things in their own way. However, there are some concerns about what has been going on, and I should like to raise a couple as a backdrop to my comments. If this is the fourth restructuring of the Learning and Skills Council and the further education sector in four or five years, something must have been wrong with the earlier reforms. That is why we must scrutinise these changes carefully in Committee. For example, clause 15 abolishes the role of committees of young people. Can the Minister explain how those committees have failed? He may say that they did not fail but were surpassed or usurped by something new. If so, why does the Bill not specify what will replace them? The Learning and Skills Council has had a £15 million cost against it for redundancies, with about 1,300 staff being laid off. That excludes the cost of tribunals, consultancy, advice on outplacements, early retirement and several other factors. It is therefore rather bizarre that we are talking about another restructuring.

Clause 4 does not specify which bodies will be able to formulate strategy. It mentions the Greater London authority and the Mayor of London but does not designate who the Secretary of State will empower to make strategy on behalf of further education. Given previous legislation involving the nimble fingers of Lord Adonis, I suspect that a lot might be hidden in the clause. Why is it necessary to confer a power without telling us on whom it is being conferred? That is an odd situation. I am sure that Labour Members will be concerned in view of their worries about city academies, which I suspect that they did not envisage were being created in the previous legislation.

Another big question is whether the Bill enables the Government to redirect money into city academies. As the bodies have not been defined and the precise definition of "further education" is not completely clear, surely it would be possible to direct funds to city academies—perhaps even to enable new ones to be created. I am not against that, but I am curious to know whether the Bill is intended partly to open up these definitions. The Minister is shaking his head; I look forward to his comments when he winds up. I ask the question because the number of city academies is set to increase from 80 to 200, 300 or 400 over the next few years.

If, under clause 21, all principals must be qualified to be in charge of a further education institution, that prompts the question of what qualifications they will need. In a freely operating market, where innovation is needed, straitjacketing people into a single sort of qualification to hold a post of leadership does not lead to the variety and differences that enable the development of better practices. I would be interested to hear a few words about the reason for clause 21's insistence on what appears to be—until the regulations are published, we will not know—a specific sort of qualification for a principal of a further education institution.

Earlier, I mentioned an overall theme. Many contributions revolved around information provision. I wonder whether the Government are attempting to straitjacket organisations and perceptions of further education, rather then releasing them to be responsive to employers and the market. I shall explain that a little further. Kelvin Hopkins said that he wanted to raise further education's profile and remove the stigma from it. My hon. Friend the Member for Northampton, South said that he wanted SMEs to play a role in defining courses. My hon. Friend Jeremy Wright said that he was interested in lifelong learning. He said that we begin our careers in one specific role, but few of us remain in it later in life. He considered the lifelong learning pattern and the way in which further education could enable that.

The Bill is a missed opportunity. We have modern technology, including the internet and websites. If we wanted to ensure that supply and demand were matched, providing information is the way to do that. Nowhere does the Bill enable or empower people who want to take up a course, or SMEs or large businesses that want to consider students, to obtain the information overtly. We have an opportunity to consider creating or enabling—perhaps simply through a website—a method of ascertaining demand throughout the UK for specific skills and qualifications. For example, when students embarked on a course in further education, they could see that there were 500 jobs and only 200 people studying for the relevant qualification. That would be helpful and a good method of matching supply and demand without top-down control or fixing a structure in further education.

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David Taylor (North West Leicestershire, Labour)

The hon. Gentleman is developing an interesting theory. Does he not believe that it contains some aspects of the work force planning that we experienced in the NHS? Is there not a cautionary tale to extract from what has happened with the Medical Training Application ServiceMTAS?

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Adam Afriyie (Windsor, Conservative)

That is well spotted and I welcome the intervention because that is exactly what I am not considering. I am talking about showing the demand—the number of jobs throughout the country; we are not considering an especially local issue—that requires a specific further education qualification. Employers—the matter is largely about economics—could also clearly see how many students were studying for specific qualifications that might match their demand. That would enable employers to decide whether there was a skills shortage a year or two in advance. I continue to employ several hundred people and I know when I am looking for a skill in my work force. If one plans a year or two in advance, it would be helpful to know whether the skills were coming through. If they were not, I would do my best—as would other business people—to encourage demand for the courses and get the skills into my business.

Conversely, it would benefit individuals looking to study a course—many people are fairly relaxed about which courses they are studying within a limited field—because they could look into the job market, see that 500 jobs were available with only 200 students studying for a relevant qualification, and decide to opt for that particular course rather than another. The Bill therefore misses an important opportunity to do more on the provision of information in order to empower and enable the work force and SMEs to match supply and demand. The Bill in its current form should not be tossed aside lightly; it should be thrown with very great force.

9:20 pm
Photo of John Hayes

John Hayes (Shadow Minister (Vocational Education), Education; South Holland and The Deepings, Conservative)

Let me begin with an acknowledgement, a regret and a plea. First, I acknowledge how the Minister has fully briefed the Opposition on the Bill and listened to my arguments and those of my colleagues and other interested parties. This House is at its best when our formulaic partisan exchanges are supplemented by a creative tension that blends our ideas and our skills. Much of that work, by necessity, goes unseen, but we should celebrate the political culture of which it is a part.

Sorry, Bill, but having raised your expectations with my acknowledgement, I am about to blight them with my regret. It is a regret shared— [Interruption.]

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Michael Lord (Deputy Speaker)

Order. We have a special way of addressing colleagues in the House, but the way in which the hon. Gentleman has just referred to the Minister is not one of them.

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John Hayes (Shadow Minister (Vocational Education), Education; South Holland and The Deepings, Conservative)

It was intimate, but improper. I am sorry, what I meant is, "Minister, I am about to blight your expectations with my regret". It is a regret shared by almost all of the very many people I spoke to who were connected with or concerned about skills. They regret, as I do, that the Bill is not fit for purpose. The Government must know that, and I cannot believe that the Minister is not embarrassed by its limited ambitions.

So to my plea—that the Government should take their heads out of the sand and listen to their own advisers. Let us be clear. The Government were so concerned about further education that they commissioned the Foster review. Sir Andrew Foster recommended radical changes for colleges because he recognised that they are stifled by regulation and strangled by red tape. According to Foster, there are 17 bodies with a monitoring or regulatory role in FE, stifling innovation and excellence. Foster recommended "less centralisation" and moves to "greater self-regulation". There is none of that in the Bill.

Worse, where the Government do not disappoint, they offend. Why on earth do they still think that the Learning and Skills Council should be given sweeping new powers to sack college principals and senior managers. Yet the Government do indeed think that, because we heard it confirmed in earlier exchanges. The Secretary of State can currently do some of that, but the new threat to colleges is more draconian. Indeed, I asked him earlier today how often the existing power had been exercised. He hesitatingly said that it had not, so let me clarify.

In replying to a parliamentary question that I tabled last month, the Minister revealed that the existing powers had "never been used" except where, following the resignation of a governing body, the Secretary of State had been required to appoint new governors. I emphasise again that it has "never been used"—not once. Is it any wonder that the other place voted against this part of the original Bill? The Association of Colleges, Opposition Front Benchers and others have urged the Government to think again, and this evening my hon. Friend Jeremy Wright amplified our appeal.

Now, to be fair, the Government were so concerned about skills that they commissioned the Leitch report. Lord Leitch, like Sir Andrew Foster, recommended radical reform. This Bill contains nothing of Leitch. It is bizarre by any standards to ask for a detailed study and simultaneously to introduce a Bill to Parliament that pays no attention whatever to the report of that study. Lord Leitch's review revealed just how much work still needs to be done. The scale of the challenge is formidable, as Dr. Blackman-Woods told us in her speech. Even if the Government were to meet their target to improve UK skills by 2020, at least 4 million adults will still not have the literary skills expected of an 11-year-old and 12 million would not have equivalent numeracy skills. Britain would continue to be, in Lord Leitch's words,

"an 'average performer'—positioned at best, in the middle of the OECD rankings".

We would continue to have smaller proportions of intermediate and higher level skills than key competitors such as France and America. Skills gaps hinder national progress, as Mr. Wright pointed out, and much is getting worse. There are now 1.25 million young people aged 16 to 24 who are not in education, employment or training—NEETs. That figure is up 15 per cent. since 1997. While we waste a generation's potential, we add to its number as 45,000 16-year-olds leave school each year functionally illiterate and/or innumerate. As my hon. Friend Mr. Jackson said, it is time to champion the cause of those NEETs. What a tonic it was to hear from him!

That is not the only thing that is getting worse. Mr. Murphy, who is not in his place at the moment, said that he celebrated the fact that 250,000 over-60-year-olds were engaged in adult education, yet this week the National Institute of Adult Continuing Education reported that 500,000 adult education places have been lost in the past year. The proportion of adults currently learning or having done so in the past three years has fallen to just 41 per cent. That means that fewer adults now have the opportunity to be inspired in the way that Ms Smith described with such eloquence.

The Learning and Skills Council has played a significant part in our discussions today. This year, the LSC will receive £11 billion of public money—more than the Royal Navy—yet too much of that funding is consumed by complex bureaucracy. Staff costs rose by 26 per cent. between 2001 and 2006, and there are more than 4,400 people directly employed by the LSC. None of them is democratically accountable to their locality, as Sarah Teather reminded us.

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John Hayes (Shadow Minister (Vocational Education), Education; South Holland and The Deepings, Conservative)

I will happily give way to my right hon. Friend, who is a great expert on these subjects.

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John Redwood (Wokingham, Conservative)

Has my hon. Friend noticed that, in the account of the Bill issued by the Government, they proudly tell us that, although they are abolishing all the local learning and skills councils, there will be no manpower savings at all? Is not that bizarre?

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John Hayes (Shadow Minister (Vocational Education), Education; South Holland and The Deepings, Conservative)

It is indeed bizarre. Even more bizarrely, we heard that the reorganisation, which is going to save £40 million, will to cost £50 million. That does not sound like very good maths to me. When we consider the costs of the three previous reorganisations, we realise that it will be donkeys' years before we are back in credit. The conclusion is that we should reorganise less often and save money.

A study for the Economic and Social Research Council has identified nine layers of bureaucracy that a pound of public expenditure must pass through on its way from Whitehall to learners. No wonder one LSC official told a study,

"I categorise myself as the confused, trying to be less confused".

He could have added, "governed by the most confused of all." As my hon. Friend Mr. Willetts said, at the root of this confusion is the Government's lack of a coherent skills strategy.

Soon, the Government will publish their detailed response to the Leitch review. Lord Leitch advocates a demand-led system to meet the nation's skills needs. He argues that the present supply-driven model, based on Government planning, has a "poor track record"—his words, not mine—yet the Bill will establish regional LSC councils with precisely such planning functions. When I asked the Secretary of State earlier whether that was a paradox or a contradiction, he said that it was not a paradox, so we must assume that it is a contradiction. Lord Leitch proposes a system driven by employers of the kind advocated by my hon. Friend Mr. Binley. Such a system would bring together the needs of employers and the work of trainers. As a result of the Bill, however, the power of employers to drive the system will be stifled in a way that was highlighted by Gordon Banks. The danger of establishing parallel structures is that it would add further confusion.

Lord Leitch recommended a step change in policy to close the skills gap, yet the Bill will do little to meet the challenges involved. At best, it is a wasted opportunity; at worst, it is a regressive step, tightening the bureaucrats' suffocating grip on further education. Sir Andrew Foster's report, published less than two years ago, argued that colleges also play a vital role in improving employability and skills in their locality. He said that they should work effectively with their local LSCs, helping them to develop and implement strategies, yet the Bill will abolish the local LSCs.

So, local LSCs are recommended by Foster, the report is published, and then it is rejected by the Government. Leitch brings out his report proposing a root-and-branch reform of the management and funding of skills, and it is ignored.

When the Minister spoke of the need to ensure a clear vocational pathway, vocational diplomas were at the heart of his thinking. To improve the skills of the nation, it is vital to establish an attractive vocational pathway to match the academic gold standard of GCSEs, A-levels and degrees—a guided pathway leading to employment, as my hon. Friend Mr. Boswell described it. If properly implemented, diplomas provide just such a pathway, and yet the Education and Skills Committee warned in a recent report that,

"the development work has sometimes been uncomfortably compressed",

raising doubts about the timetable for implementation.

The clarity of purpose that characterises the Bill also characterises the diplomas—in other words the Government's intention is not clear at all. There is great confusion about what the diplomas are for, and whether they will deliver rigorous instruction in vocational subjects. Lord Adonis referred to the new awards as recently as May last year as "specialised vocational diplomas", and yet the Minister tells us:

"When we talk about specialised diplomas, it is important that we do not pigeonhole them as exclusively vocational."—[ Hansard, Westminster Hall, 8 February 2007; Vol. 456, c. 378WH.]

The awarding body, OCR, told the Education and Skills Committee that such confusion had led to a lack of consistency across the five diplomas being introduced first. It argues:

"The first five Diploma Development Partnerships have not demonstrated a common understanding of the nature of the Diplomas".

As well as confusion, the constantly changing nature of diplomas has created concerns that they will fall between two stools—neither sufficiently academic nor vocational. The Nuffield review of skills argued that there was a danger that the new emphasis on theoretical learning might push specialised diplomas towards becoming more general, rather than vocational, awards. The Qualifications and Curriculum Authority told the Education and Skills Committee:

"In ambition and scope, complexity and potential, the introduction of a Diploma qualification"

is

"without parallel in any other country".

Others, including the Institution of Engineering and Technology, have argued that there is insufficient time to introduce the diplomas without hazard. Of particular concern is the warning from the Edge Foundation:

"The current time-scales are unrealistic—some would say dishonest—and unless relaxed the Specialised Diplomas will fail as have very many similar initiatives over previous decades."

In a moment of sincerity, even the Secretary of Sate said that the diplomas could go horribly wrong. Unless we are confident that they will go happily right, we owe it to employers, colleges, schools and, most of all, children, to delay their introduction. To do otherwise would add irresponsibility to doubt, and would tarnish the diploma brand so badly that it would become unattractive to learners and employers.

Like most Governments, this Government do some good things. The decision to extend foundation degree-awarding powers to FE colleges is right. As my hon. Friend Mr. Wilson said, however, it is vital that rigour is maintained, that the relationship between FE and HE is guaranteed, and that the matter is properly reviewed. We should proceed on that basis with enthusiasm. It is not surprising that there is doubt given that the consultation was, to be generous, very limited. It seems as limited as that on clause 25, if we are to believe Mr. Touhig.

Much of the history of the Labour Government is of horror and disappointment. The Bill is not horrible, but it is deeply disappointing. It is too piecemeal, limited and unambitious to make a significant contribution to tackling Britain's skills crisis. As my hon. Friend the Member for Havant said, it is not what is in the Bill, but what is not in the Bill, that matters. The Bill is not big enough to meet the challenges we face for the good of our people, and the good of our country.

The reasoned amendment directs us to the big picture that the Bill ignores. Britain's future depends on a skills base that is built on the fulfilled potential of a new generation of craftsmen. That generation's future is being jeopardised by the obstinate inaction of Ministers who should know better.

Those arguments were put time and again during the course of the Bill's passage in the other place. As I said, the Minister has been generous and professional in the way he has listened to those arguments and has responded, but I say to him in honesty that he cannot really believe that the Bill is fit for purpose. How can it be when we expect any day now the Government's response to the Leitch review, which is bound by necessity to look at the fundamental weaknesses with our skills system; which is bound, in my judgment, to require further legislation? Why did the Government press ahead with a further education Bill in full knowledge that Leitch would report? Surely we are not going to have another FE Bill in the next Queen's Speech—or are the Government so short of ideas that they have to revisit the same subjects time and again? That is not reasonable for the House and it is equally unreasonable as far as FE colleges, teachers, learners, employers and all those involved with skills are concerned. It is simply not good government.

The House should support the Opposition amendment for the sake of apprentices, who deserve to learn by the side of the best in each craft. Make no mistake about it, Mr. Speaker, apprenticeships in this country, though not in crisis, are certainly in difficulties. It is quite unacceptable that, in the words of the adult learning inspectorate, it is possible to complete an apprenticeship without ever having set foot in a workplace. That cannot be right. Declining levels of employer engagement; declining levels of mentoring; and some apprenticeships with very little workplace element are not worthy of the name "apprenticeship", because they do that brand no good at all.

The House should support the Opposition amendment for the sake of colleges, which need the freedom to innovate and excel. As I travel around the country visiting colleges, as the Minister, the Secretary of State and, I guess, all of us do, I see many professionals doing an immense amount of excellent work. Surely we should have faith in those professionals by entrusting them with the freedom that they could use so favourably in the interests of learners.

Most of all, however, the House should support the Opposition amendment for the sake of the lost generation—the sad, forgotten army of NEETs, which at 1.25 million people is roughly 15 per cent. higher than in 1997. Before I left home for the House this morning, I grasped my six-year-old son to my breast, like every parent does, and I looked at him and thought what he might do in the future, as, again, every father does. Then I thought of all those 16, 17 and 18-year-olds—hopeless and helpless, and only looking forward to a future of unemployment. When I came to the House tonight I thought that I would say a word—make a passionate plea—on behalf of that lost generation. We owe it to them to support the amendment. That would be a fitting response to a Bill that is unimaginative and unworthy of the scale of the challenge that we face; that is quite simply, unfit for purpose.

9:39 pm
Photo of Bill Rammell

Bill Rammell (Minister of State (Lifelong Learning, Further and Higher Education), Department for Education and Skills; Harlow, Labour)

We have had a good and constructive debate, and I am grateful to all hon. Members who contributed to it. I start by reciprocating the acknowledgment of Mr. Hayes that we have rightly discussed the Bill across the Benches and improved it as it has progressed. I believe that where can do that, it is the right thing to do.

I start from the premise that I strongly believe that our further education sector is probably more life-transforming than schools or universities. There are literally countless examples up and down the country of further education colleges that have given people a second chance and have immeasurably improved the quality of their lives. For too long, however, the further education sector has felt neglected and undervalued. I believe that under this Government that has changed, and will change further.

We were the first Government to commission two successive skills White Papers, highlighting the crucial role of further education in delivering skills for work. We commissioned Andrew Foster to conduct the most comprehensive review of our further education system to date. We commissioned, across Whitehall, Lord Leitch to undertake a detailed analysis of what we need to do to meet our skills aspirations by 2020 and the critical role that further education will play in the process. This is the first further education Bill that we have discussed in the House for 15 years. Further education is now centre stage in a way that it has not been in the past, and we should all welcome that.

In the past decade we have rightly increased investment in further education significantly, by almost 50 per cent. in real terms. That is a huge contrast with the 14 per cent. real-terms cut in the five years preceding 1997. We know that a poor environment leads to poor learning, but in 1996-97 there was not one penny for further education in the earmarked capital budget. This year the Government will spend £500 million on further education capital projects, which will shortly increase to £850 million. In virtually every college I visit, all over the country, I see physical examples of regeneration.

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John Redwood (Wokingham, Conservative)

How can the Minister say that there will be £40 million a year of cash savings when there will be no manpower savings?

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Bill Rammell (Minister of State (Lifelong Learning, Further and Higher Education), Department for Education and Skills; Harlow, Labour)

That figure relates to changes that have already taken place. The savings are already being delivered under the LSC's strand 7, and those changes will further streamline the LSC's operations. I shall deal with the right hon. Gentleman's point in detail later in my speech.

Because of the Government's extra investment, because of our reforms and because of the phenomenally hard work of those who work in the further education sector, to whom we should all pay tribute, we have seen significant improvements in performance over the past decade. In the past six years alone, overall success rates in further education colleges have rocketed by a third, from 56 per cent. in 1999 to 2000 to 77 per cent. in 2005-06. We have seen 1.6 million learners attain their first skills for life qualifications in literacy, language and numeracy. We have—rightly—increased dramatically the number of people gaining both level 2 and level 3 qualifications.

Much of today's debate has centred on the relationship between the Bill and the Leitch agenda. Let me respond in detail to the points that have been made. The Leitch report built on reforms already introduced through the further education White Paper and, indeed, the Bill. The Bill is about the supply side preparing to deliver a more responsive system, increasingly engaging with employer needs, while Leitch focuses more closely on stimulating and channelling the demand side. If we are genuinely to rise to Lord Leitch's challenge, Government, employers and individuals must work together. That is why we are engaged in a process of consensus-building on the Leitch recommendations. Should we and partners agree at the end of that process that any of Leitch's recommendations require legislation—and we may well take that view—we will use a separate legislative vehicle. In the meantime—and I consider this the really important point—there is no benefit to be had from stalling the momentum for change that has built up in the further education system, and which the Bill enables us to take forward.

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John Hayes (Shadow Minister (Vocational Education), Education; South Holland and The Deepings, Conservative)

The Bill embeds the LSC, at regional level, in the structure for managing and funding skills. Lord Leitch says

"the switch to demand-led funding and end to the supply-side planning of adult skills provision fundamentally changes the role of planning bodies, such as the LSC".

In other words, Lord Leitch says that the LSC should have less of a planning function, while the Minister says in the Bill that it should have more of a planning function at regional level.

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Bill Rammell (Minister of State (Lifelong Learning, Further and Higher Education), Department for Education and Skills; Harlow, Labour)

Lord Leitch made it clear—as the Government have made clear—that the role of the LSC can and should continue to evolve and change, but Lord Leitch also made it clear that instinctively he was not in favour of ripping up structures and starting again simply for the hell of it, but that we had to reform the process overall.

The two other significant areas of debate this evening have been interventions and foundation degree awarding powers. On intervention powers, we need a new relationship with colleges that will release the energy of providers in order to focus on the improvements that we need and to meet the needs of learners overall. We have committed to new freedoms for FE providers to enable them to transform their provision. However, that must be matched by clear commitments to continue to drive up the quality of the system. We now have much less failure and unsatisfactory provision in the FE system than in the recent past, but we have to ensure that we eliminate such poor provision. As any failing provision means that we are failing learners, that is imperative for all of us. The White Paper made it clear that we would establish a robust intervention strategy, and the Bill seeks to do that.

We will ensure that the concerns that have been expressed during the passage of the Bill will be addressed when we introduce amendments in Committee. We retain our commitment to intervene, but we will also address the concerns that have been raised, and I believe that we can come up with a set of proposals that establish the role of the LSC and that of the governing body in dealing with failure and underperformance.

One of the most innovative aspects of the Bill is the proposal to allow high-performing colleges to award their own foundation degrees. Foundation degrees give students a strong basis for employment in their chosen sector. Programmes are designed and delivered in partnership with employers. The amount of people on foundation degrees continues to rise; there are currently about 61,000, and we are confident of moving towards 100,000 by the end of the decade. There are significant rewards for students; they have better job prospects, and once they are in work they have better prospects for progression. Foundation degrees also provide an accessible route for many people who would not otherwise go into higher education.

Some FE colleges already run foundation degree programmes, but colleges without full degree-awarding powers cannot award the qualifications in their own right. We strongly contend that if they meet the necessary quality criteria they should be able to do so. The measure aims to innovate and to free up providers within the system. The robust quality criteria on which we will be taking these changes forward are based closely on those for full taught degree awarding powers. We have rightly listened carefully to the feedback that we received since the Bill's publication and that has helped us to strengthen the proposals on foundation degrees. For example, a Government amendment to address the issue of colleges franchising their foundation degrees was rightly passed in another place, and another Government amendment required a report on the effect of proposals to be laid before Parliament.

It is vital that all foundation degrees are of the same standard and carry the same academic value regardless of whether they are awarded by a college or a university. A foundation degree is a significant and important qualification in its own right, but it needs to provide a gateway to more advanced levels of study, should the learner wish to pursue that option. All foundation degree awarding institutions will be expected to have progression routes to more advanced levels of study in place in respect of their foundation degrees. Nevertheless, because of the widespread interest in the matter of progression, I am minded to introduce a further amendment that will focus on the importance of progression routes. The Opposition have pushed strongly for that.

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John Hayes (Shadow Minister (Vocational Education), Education; South Holland and The Deepings, Conservative)

I am grateful to the Minister for those assurances. He has addressed a number of our concerns, which are shared by the university sector. Will he, however, go one step further? He has travelled a long way with me, and I am inviting him to take one extra step. Will he agree that these degrees might be jointly promoted and marketed, thus illustrating the strength of the partnership between HE and FE to potential learners? That would be helpful. I cannot see any downside to it. He might want to make further concessions on that either this evening or during the course of the Bill's passage.

Photo of Bill Rammell

Bill Rammell (Minister of State (Lifelong Learning, Further and Higher Education), Department for Education and Skills; Harlow, Labour)

With respect to the hon. Gentleman, I do not think that the issue requires concessions, but I am sure that in Committee we can discuss in detail the way in which further education colleges and universities can work together to promote those crucial qualifications. We have responded to concerns by introducing proposals on foundation degrees that ensure that the system is as innovative and flexible as possible so that we genuinely meet the country's skills needs.

May I address specific comments made in our debate, starting with Mr. Willetts, who led for the Opposition? It was noteworthy that we managed to go through the whole evening debating education without one comment from Opposition spokesmen about grammar schools, but perhaps that is a subject for discussion on another occasion. The hon. Gentleman said that the Bill was something of a missed opportunity, and he made significant criticism of the 17 different regulatory and inspection bodies. We have already responded to concerns on those issues, as well as the concerns expressed by Andrew Foster. We have merged Ofsted and the adult learning inspectorate, and we have streamlined the Learning and Skills Council to reduce the planning burden. We have put colleges in charge of their own regulation, and we have invited them to introduce proposals. We have reduced the burden on colleges imposed by data collection and the publication of documents. It is far from the case that we have not ensured that there is a more appropriate system of regulation for our colleges.

The hon. Gentleman made significant criticism, too, of the burden of bureaucracy on the Learning and Skills Council. For the record, may I make it clear that the LSC continues to make significant savings on its administration budget, and has delivered savings of more than £100 million? Compared with its predecessor bodies under the Conservative Government, expenditure on administration has fallen from 4.6 per cent. to 1.9 per cent. I believe, too, that the hon. Gentleman made a false accusation that the proposals on foundation degree awarding powers had come out of the blue. If he reads very carefully what Andrew Foster said in his report, he will see that he explicitly recommends that consideration be given to allowing some colleges that meet the quality criteria the ability to award their own qualifications. Far from coming out of the blue, the proposals were very much in the grain of Andrew Foster's recommendations.

I will take many criticisms on the Government's behalf, but being criticised by the hon. Gentleman for our record on apprenticeships is a bit rich. In the 1980s and 1990s, the concept of an apprenticeship had almost disappeared in this country. When the Government came to power, there were 75,000 apprenticeships a year; today, 255,000 are being delivered. Yes, we need to do more, but we are moving firmly in the right direction.

My right hon. Friends the Members for Torfaen (Mr. Murphy) and for Islwyn (Mr. Touhig) raised important issues concerning the scrutiny of the legislation and the enabling powers of the Welsh Assembly. I should make it clear that in Committee every line of the Bill will be scrutinised. Any proposed measure by the National Assembly for Wales must be fully debated by the Assembly, and we will ensure that there is adequate and proper scrutiny of the proposals.

Sarah Teather made a criticism of 16 to 19 funding, and she advocated that it be transferred to local authorities. I am not convinced by her argument, and it is usually the case in these issues that the Liberal Democrats support the view of providers. In my experience of talking to college principals up and down the country, there would not be support for her proposition.

We then had a very interesting and well informed contribution from Mr. Boswell, whose remarks drew on his experience in these matters. He was absolutely right to highlight the importance of the status of vocational education and the FE system, and came very close to supporting the proposals for restructuring of the LSC that we are proposing. He said that he did not support the 47 area councils in the Learning and Skills Act 2000, but he now seems to be supporting what we are proposing in this Bill.

The hon. Member for Daventry also raised important points about the qualification reform process. Our reform of vocational qualifications is to be delivered by 2009, and that is an exceedingly important issue. The hon. Gentleman also mentioned foundation degrees in the Bologna process, but there is no incompatibility there. Indeed, the Bergen communiqué at the last but one Bologna conference explicitly recognised the principle of foundation degrees in national systems. That gives us the licence and ability to move forward with that agenda.

My hon. Friend Ms Smith made an excellent speech that demonstrated her enormous personal experience of FE, and it was a fluent and persuasive contribution. She highlighted the importance of quality in the FE system, and spoke about the need to continue to professionalise the work force. One of the Government's commitments is to ensure that there is at least 30 hours' continuous professional development for people in the FE system. That is very much part of the way forward.

My hon. Friend the Member for Sheffield, Hillsborough also asked how we could ensure that the LSC and colleges were responding to the employers' agenda. One significant way that we are doing that is through the roll-out of the train to gain initiative—the incredibly radical proposition that, for the first time in this country, adults in the workplace who do not have a full level 2 qualification should be guaranteed that training. I am extremely heartened by the evaluation of the initiative so far, with employers who have engaged in it expressing roughly 89 per cent. satisfaction. We are also doing very well in accessing hard-to-reach employers.

Mr. Binley expressed concern about the marketing of train to gain. In fact, we are ahead of profile on many of the benchmarks for success that we have set for the initiative.

My hon. Friend Kelvin Hopkins made a number of points, and claimed that officials in the Department for Education and Skills had no experience of the FE sector. That may have been true in the past, but the Department has undertaken a deliberate policy of recruiting officials with some direct experience of the sector, and that was absolutely the right way forward. Also, I disagree with my hon. Friend's view that we are squeezing adult education to fund the provision for young people. That is not the case: what we are doing is shifting the priority in adult education from shorter to longer courses, to courses that offer progression, to skills-for-life programmes, and to work-based delivery. I believe that they are the right priorities.

Mr. Wilson said that all Governments would admit to being responsible for neglecting the FE system. That may have been true of the previous Conservative Government, but it is most certainly not true of this one.

My hon. Friend Dr. Blackman-Woods spoke fluently of her experience of further and higher education. She gave strong support for the regionalisation of the LSC structure. Jeremy Wright made some important points, as did the other hon. Members who spoke in the debate.

In conclusion, our further education system has achieved a great deal in the past 10 years. We need to do more and to respond to the skills needs in the country. To make that a reality, we need a strong and excellent FE system. The Bill will help us to achieve that and I commend it to the House.

Question put, That the amendment be made:—

The House divided: Ayes 137, Noes 296.

Division number 124

See full list of votes (From The Public Whip)

Question accordingly negatived.

Main Question put forthwith, pursuant to Standing Order No. 62 (Amendment on second or third reading), and agreed to.

Bill accordingly read a Second time.