I am grateful for the opportunity for the debate. I welcome the presence of my hon. Friend the Member for Pendle (Mr. Lee) and the hon. Member for Burnley (Mr. Pike).
Over the past few years a great deal has been written and said on the subject of training. I welcome that, as I welcome the recognition by the Government that improvement in training is one of the keys to Britain's future prosperity. The Government's training programme is probably one of the most ambitious and successful that the country has ever seen. In deciding last year to spend £2·5 billion on training, two and a half times as much in real terms as in 1979, the Government were acting wisely. We must ensure that young people and the long-term unemployed can hold down jobs by equipping them with the modern skills which employers demand and need to have in a competitive world.
Training benefits employee and employer alike. The employee who has undergone training is more likely to get a job, to keep it and to earn a reasonable wage. The employer benefits from his work force's greater skills and efficiency which will allow him to be more competitive.
To be successful, any training scheme must have the enthusiastic support of employers. I believe that training and enterprise councils have that support. They have it because the councils are employer-led, making use of local people who have proved their success in industry and in commerce. Local people are the best to deal with training and enterprise because they know the needs of the area. I welcome the setting up of the 82 training and enterprise councils and wish to comment especially on East Lancashire TEC.
I am confident that ELTEC will succeed in ensuring high-quality training in east Lancashire. Having known Mark Price when he was managing director of a local subsidiary of GEC, I believe that we are fortunate to have him as the chief executive, as we are to have Peter Hornby as deputy chief executive and Tony Cann as ELTEC's enthusiastic chairman.
In addition to industrialists, ELTEC has on its board an ethnic director, a trade unionist, the leader of Lancashire county council, the local chief education officer and the manager of a local area hospital group. While half the management team is seconded from the Training Agency, the other half is, somewhat unusually, from areas outside the Training Agency. The board and staff at ELTEC are dedicated to their mission to improve the economy of east Lancashire. There used to be a saying that Britain's bread hangs by Lancashire's thread. Sadly, with the decline of Lancashire's textile industry, that is no longer true. Nevertheless, manufacturing is still of vital importance to the economy of not only east Lancashire but the United Kingdom as a whole.
ELTEC is the TEC in which the proportion of the work force in manufacturing is highest—some 49 per cent. in Hyndburn compared with 24 per cent. in the United Kingdom as a whole. Not surprisingly, therefore, I regard East Lancashire TEC as the most important one. Its success or failure is of vital importance to the local community and the country.
Mark Price and his team are well equipped to ensure that people go on training courses which are appropriate to their needs and the needs of potential employers, thus ensuring that the training provided leads directly to employment. They are well qualified to ensure that the many small and growing businesses that we have in east Lancashire receive the necessary support and advice to enable them to prosper. As TECs are employer-led, they are well qualified to ensure that there is an increased commitment to training by local employers. So often in the past, that commitment was not there totally, and when necessary cost-cutting exercises had to be undertaken, training always suffered.
In a recession such as we are experiencing it is not easy to persuade companies to invest in people, not because they do not believe that it is right to do so, but because they face serious short-term financial difficulties. By identifying and promoting the benefits of training, to not only the local community and individuals but local companies and their long-term needs, ELTEC seeks to change previous attitudes towards training and raise the priority of investment in skills.
ELTEC has arranged a major conference on 22 January to promote the training ethic in east Lancashire, and provide company membership of ELTEC. Some 500 people are expected to attend. The theme of the conference will be "training is the future". It certainly is the future for my constituency and for east Lancashire if we are to prevent the decline of the area and persuade our young people to stay there, work there and eventually invest there and not, as so many have done, to migrate to the south-east.
Young people need to have ready access to good information about local education and training opportunities, the qualifications to which they lead, and the educational, training and employment possibilities that lie beyond. They need good counselling and a clear statement of their entitlement to future education and training.
In Hyndburn there are four providers of youth training. Business Support Unit Ltd. is ELTEC's third largest YT provider and currently offers training to 398 young people. North Lancs Training Group is one of the few group training schemes operating in the furniture and timber industries. The scheme caters for approximately 180 young people at present, across a range of craft occupations which include cabinet-making, carpentry, joinery and wood machinery. Lucas Body Systems, Rists, part of the Lucas group, has set up a purposely equipped training centre near its Accrington works, where 42 young people are currently undergoing training in a variety of production and assembly skills, while Hyndburn Community Services Project, affiliated to the excellent Accrington and Rossendale college, is a facility of which the primary function is the development of young people with special needs. It seeks to prepare its 71 young people with the skills and motivation to succeed in open employment. Those four schemes account for £1·17 million of ELTEC's YT budget and all four do excellent work.
In addition to those schemes, others in east Lancashire offer specialist training, such as Training 2000 which is the major provider of engineering craft and technician training, while the construction industry training board, via the local college, offers construction craft training in a variety of occupations.
We know what we have to do to ensure a bright future for east Lancashire. By setting up the TECs the Government have increased the opportunity to do it. ELTEC has already demonstrated that it is equal to the task.
The hon. Gentleman has emphasised the importance of training and ELTEC in north-east Lancashire, which includes my constituency. Does he recognise that training is important not only in the areas which he mentioned but for management? If industry and business are to survive, we also need trained, experienced, expert management.
Yes, I agree with that and I am grateful to the hon. Gentleman for being here to make that point. We must ensure that nothing prevents ELTEC from achieving its aims.
In creating the TECs the Government clearly recognised that the traditional programmes were not producing the results required. I hope that the Minister will tell us whether he believes that that was in some way due to the programmes themselves. If so, will he give an assurance that the Government are prepared to listen to what TECs, which are close to the problems, see as necessary? If TECs are to be successful, it is important that the views of those with responsibility for making them so are not only listened to, but acted on. Equally, it is vital that TECs consult widely local interests and local expertise in education and training, and act upon that information.
I welcome the fact that employers' investment in training has risen to record levels. I hope that that will encourage the Minister to ensure that TECs do not fail to do the job that they have been given to do through a lack of resources. It is a matter of some concern that in real terms the budget for 1991–92 is about 30 per cent. below expenditure incurred in 1989–90 when TECs were first created—£16 million last year compared with £13·4 million in 1991–92. It would be a tragedy if underfunding meant that ELTEC could not succeed as effectively as it might otherwise do.
All of us would want the Minister to assure us that the reduction in expenditure has taken full account of the skills gap between ourselves and our international and European competitors. Have we taken account of recent developments in training in other countries·for example, in Italy, France and Germany? Bearing in mind the effect of those developments by our competitors, will our training budget, not least that of TECs, be kept under constant review? We must not give TECs too many tasks and too few resources. The main task is to put the money available to good use.
In the past four years the Government, to their credit, have increased spending on training by 60 per cent. at a time when unemployment fell by half. It does not seem unreasonable, therefore, to expect more resources for training now that unemployment is, unfortunately, increasing.
TECs were created to deal with local circumstances. I believe that they will succeed, but the chances of success will be greatly increased if TECs are allowed to get on with the task that they have been given and if bureaucracy or interference is kept to an absolute minimum, once the Government are satisfied that TECs are consulting locally and, therefore, can act in the best interests of the area which they serve.
It is vital for the future of our country that we succeed in changing attitudes to training, so that the skills of our people compare favourably with those of our competitors. Yesterday someone talking on a completely different subject said to me that if something is worth exhortation, it is worth legislation. I hope that attitudes can be changed by education and exhortation, but the issue is so important that neither legislation nor fiscal steps should be ruled out if education and exhortation fail.
I am grateful to my hon. Friend the Member for Hyndburn (Mr. Hargreaves) for allowing me to contribute to this Adjournment debate. I am particularly delighted to have the opportunity to speak in what I believe is the first debate in this House on a training enterprise council. As my hon. Friend the Minister knows, when I was a Minister at the Department of Employment I had a modest role in the creation and promotion of TECs, and therefore I have a particular interest in them.
I was fortunate to have an early opportunity last year to visit East Lancashire training enterprise council, my local TEC, and to hear from the chairman, Tony Cann, and the chief executive, Mark Price, of their development plans. As my hon. Friend has said, ELTEC is fortunate in having such committed and enthusiastic leadership.
I shall concentrate my remarks on the organisations in Pendle which work with ELTEC and the delivery of programmes. My constituency has the second highest percentage of people in manufacturing employment in the country—just over 55 per cent.
The largest provider in Pendle is the Pendle Training Group which focuses on training in engineering, electronics, electrical work, construction, care, catering and retail. It operates from a purpose-built centre in Nelson under Jim Heaton and his team. It is reputed to have the best equipped CNC training facility in the United Kingdom. Pendle Training Group has a close relationship with ELTEC, which influences between 75 per cent. and 80 per cent. of its activity. It is a major provider of employment training and youth training. Through ET it is providing continuous updating skills to several hundred adults and it is striving to develop a compact for engineering skills with local employers in conjunction with ELTEC.
In addition the Pendle Training Group has had a dialogue with Nelson and Colne college, my local tertiary college, with a view to developing training in tourism and leisure.
The Pendle re-employment project under Marian Wiseman focuses on providing training for clerical-administration work, woodworking, some building, horticulture and care. It also provides a number of places for trainees with special needs. I look forward to presenting to PRP its approved training organisation status award—the first in east Lancashire for employment training—on 25 January.
In recent discussions with PRP I know that it is concerned about three particular matters. First, it is concerned about the role of the training agent. It would prefer to be able to recruit directly. Secondly, it is worried about the likely 31 per cent. reduction in overall funding and either having to manage with less money per trainee or having to cut the number of trainees. That is a particularly worrying feature with unemployment locally beginning to rise. Thirdly, last year, 80 per cent. of PRP's trainees had special needs and it is especially concerned about their needs given the financial pressures. It has also asked me to ask my hon. Friend the Minister whether any future developments are planned towards community-based projects, perhaps on a pilot basis.
Another provider is College Training Services in Colne under the direction of Ken Williamson. He welcomes the flexibility that ELTEC has brought to training, but again that college has drawn attention to the fact that there has been a reduction in the amount of funding available to deliver quality training as compared with the previous Manpower Services Commission—Training Agency structure for special needs trainees. While ELTEC is trying to make performance-related funding applicable to all schemes, College Training Services makes the point that there will be a vast difference in performance achievement between more and less able young people.
We also have a number of other specialist organisations in Pendle that work closely with ELTEC. BCD under David Owen occupies a prime site in the Arndale centre in Nelson and provides hair and beauty care skills with an almost 100 per cent. record of placement throughout north-east Lancashire in hairdressing salons. It is especially pleasing that a substantial number of its former trainees have gone on to become self-employed.
For some years Rolls-Royce at Barnoldswick has undertaken apprentice training under the auspices of YT. Undert training manager Ray Aspin the company has 53 apprentices at various stages of training who are currently following EITB—engineering industry training board—programmes. Brian Carter, the facility manager of the Barnoldswick plant, is a director of ELTEC.
The Pendle Enterprise Trust under director Ron Morrish is currently working with ELTEC on the enterprise allowance scheme and on improving the quality of Young Enterprise. It hopes to develop an increasingly positive relationship with ELTEC.
The TECs programme is a unique concept which is succeeding in bringing local industry into a more formalised training structure and, for the first time, giving those running local companies a real opportunity to target skills training to the needs of regional industry. I urge my hon. Friend the Minister to do all that he can to ensure that ELTEC and others like it have the resources to fulfil their role. Future prosperity and employment opportunities demand nothing less.
I am grateful to my hon. Friends the Members for Hyndburn (Mr. Hargreaves) and for Pendle (Mr. Lee) for raising such an important subject in this Adjournment debate. I pay tribute to the role played by my hon. Friend the Member for Pendle in establishing the training and enterprise councils when he was at the Department of Employment, and, as he said, this is the first debate that there has been on them. I hope that it will not be the last, and that future debates will be as well-informed and constructive as tonight's debate has been.
Training and enterprise councils have been a runaway success that certainly includes east Lancashire. The TEC initiative was launched in March 1989, and in less than two years we have seen established the full network of 82 TECs in England and Wales. Forty six are fully operational, and the remainder will join them by this summer. That remarkable achievement was possible only because of the enthusiasm and commitment of 1,200 key business and community leaders in all parts of England and Wales. They and their officers and staff have given time and energy in putting their TECs on the map, and east Lancashire is no exception. In my travels since last July, I have met many of the people concerned, and it is phenomenal to see the effort that is being deployed. I support the remarks made by both my hon. Friends about the work of particular individuals.
The chairman of east Lancashire's TEC, Mr. Tony Cann, has proved his ability in the commercial world many times over. He has set up a number of manufacturing companies which have become world leaders and which have won the Queen's award for export. He has built up a strong board of TEC directors, and continues to shape it, to ensure that it is representative of the business interests and people of east Lancashire.
We now have, for the first time ever, a training and enterprise structure led by top business leaders and other key local people who have the power and the resources to apply local solutions to local needs. The TECs have a major role at local level, in bringing about the high-skill, high-productivity economy that this country needs. There is a growing consensus about the importance of that initiative. Last week, I participated in a meeting of the National Economic Development Council, and was delighted to see support for the initiative coming from the Trades Union Congress as well as from the Confederation of British Industry. I pay tribute also to the hon. Member for Burnley (Mr. Pike) for his constructive intervention in tonight's debate.
My hon. Friend the Member for Hyndburn emphasised that the principle underlying training and enterprise councils is that they should be business-led and local. I may add that they are based also on the principle of voluntarism. Localism is important because of the immense variety in different circumstances, labour markets and training markets throughout the country. There is an enormous difference between, for example, east Lancashire and my own area of south-west Oxfordshire.
The fundamental reason for putting business in the lead in training emerged clearly from a study of training funding conducted in 1986, which showed that, at that time, individuals invested £8 billion annually; the state invested £7 billion, which included company tax concessions; and employers invested £18 billion. This country's training effort depends absolutely on the attitude and approach of employers, and it is a mistake to put the state at the centre of the picture. The situation can be transformed only by employers acting upon their responsibilities to pursue better profits, by improving their training efforts.
We must build on that through business leadership. The Government spending on training to which both my hon. Friends alluded increased substantially over the past decade—some threefold in real terms—but the fact remains that any real improvement will come by business leadership.
We attach great importance to the principle of voluntarism, and in that I do not entirely agree with the remarks of my hon. Friend the Member for Hyndburn about exhortation and legislation. One can make a good theoretical case for exercising legislative compulsion, but the translation of legislative compulsion into reality involves the creation of political and bureaucratic structures, which detract from the essentially market-based nature of training and from the necessity that training efforts should be employer-led. The TECs represent an option for a market-based and employer-led approach to training which is going to achieve what we need to achieve—a fundamental cultural change in attitudes to training, with ownership of training programmes by individuals and employers. The problem with legislative compulsion is that it does not support those as it should.
Britain has quite a lot of experience of legislative compulsion in training. That experience was not a positive experience. If we have a training problem, its roots go back to the 15 years when we exercised extensive structures of legislative compulsion. The only country which has such an extensive arrangement for compulsion is France. The other countries upon which we might choose to model ourselves, notably the Federal Republic of Germany, Japan and the United States, are essentially using voluntaristic approaches to training.
Therefore, our basic approach is to use the training and enterprise councils to ensure that local business leadership, under contract to the Government, can manage Government training programmes and build upon them as a basis for improving the total training effort under the auspices of business. In that connection, an important new initiative was recently announced by my right hon. and learned Friend the Secretary of State. The investors in people initiative sets a new national standard for effective investment in people. It is a standard which will be the foundation for an action programme, aimed at encouraging employers to plan, act on and to review the training needs of all their employees to achieve business objectives. The investors in people initiative has been developed by the national training task force, and the training and enterprise councils will lead on its local implementation in their area. It will be the device by which they are able to carry a crusade of training into local businesses and local firms, and that will play a key role in the transformations that we are seeking.
My hon. Friend the Member for Hyndburn referred to the idea that TECs should be local. We are very keen that they should be given the freedom to find local solutions to local problems. That is something which the TECs have stressed very strongly and which we have been meeting. At least 25 per cent. of payments for youth training and employment training will normally be based on outputs, rather than time spent on programmes, and that will give the TECs a powerful incentive to decide how they will arrange for the people in their community to have high-quality training, leading to nationally-recognised vocational qualifications and to worthwhile jobs.
We have changed the system for the funding of the enterprise allowance scheme to give greater flexibility, and we have also merged budgets for business training and the enterprise allowance scheme so that TECs will have the flexibility that they have been asking for. Furthermore, we have transferred the responsibility for work-related further education—a programme worth about £100 million a year —to the TECs. That is evidence of our confidence in the future of TECs. Overall the budgets available for training enterprise councils have increased.
My hon. Friend the Member for Pendle asked about the possibility of community-based projects. That is an interesting idea and there may be a possible role for TECs in that. I have tried to outline the way in which we intend the TECs to develop and to grow. My hon. Friend the Member for Hyndburn asked for an assurance that the Government will listen to the training and enterprise councils and I am happy to give that assurance. We have indeed listened very closely to what they have been saying, and that is the basis upon which we have given the flexibilities that I have just described.
TECs can benefit from a provision announced in the last Budget which means that companies making donations to TECs can claim tax relief.
As I have emphasised, we have also cut down the bureaucracy to a minimum compatible with the principle of accountability to Parliament for the spending of taxpayers' funds.
TECs are unique and are learning from one another. We are striving to achieve the right balance between giving them the freedom that they need and the accountability required. TECs, more than any other enterprise, have the ability to bring about far-reaching and lasting benefits in the local economy. They will directly impact upon the well-being of a great number of people, from management to the operative level in every part of England and Wales, and it is in everybody's interest to ensure that they succeed.
My hon. Friend knows that ELTEC has been operational since May of last year. The board has drawn up creative and challenging plans and set itself a number of major tasks. Its members are using youth training and employment training to create more opportunities in the manufacturing sector, which, as both my hon. Friends stressed, and as the hon. Member for Burnley said, is so important in the east Lancashire economy, by offering training in greater skills.
They are encouraging manufacturing companies to recruit more from the ethnic community. At the same time they seek to develop the skills of the ethnic community to meet the needs of local industry. They are promoting greater co-ordination of enterprise agencies and others to improve the quality of services offered to start-ups and small businesses.
The centrepiece of east Lancashire TEC's plans is the establishment of a lifetime training programme. The programme's objective is to promote, organise and pump-prime the development and training of the existing workforce in east Lancashire. It aims to commission by March this year some 20,000 hours of training. This is an exciting proposal and it may well provide valuable lessons for replication in other parts of the country. It sits well with the investors in people initiative. I am certain that encouragement by way of pump-priming activities and the fostering of commitment to training and development will be much more effective than compulsory levy systems, which have failed us in the past. I look forward very much to hearing how lifetime training develops.
East Lancashire TEC also recognises the potential for developing education and industry links and has already drawn up plans to develop compact arrangements, to which my hon. Friend the Member for Pendle referred, in its area. As my hon. Friends know, east Lancashire's objectives have an important economic focus, as clearly set out in the TEC board's objectives. But let me quickly say that the TEC board also has a clear understanding of the social aspects of its responsibilities and of the need to include the disadvantaged within the provision and initiatives of the TEC. I have already given the example in respect of the ethnic communities. The fundamental measure of east Lancashire TEC's success will be the added value that it will bring to the local community.
I know that my hon. Friends support the TEC initiative and east Lancashire TEC in particular. I give my hon. Friend the Member for Hyndburn my assurance that the Government will do everything in their power to ensure that the TECs prosper and grow and become a major vehicle for economic regeneration and development in every part of England and Wales, including east Lancashire itself.
Question put and agreed to.
Adjourned accordingly at fourteen minutes to Eleven o'clock.