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My Lords, I thank the noble Lord, Lord Monks, and congratulate him on introducing this debate. This is one of the central challenges facing British society, both economically and socially. Unless we can do something about vocational education we will face an increasing problem of NEETs, of which my noble friend Lady Nye has spoken. Opportunities for young people without qualifications are in secular decline. Unemployment rates for people without skills are rising and this is a huge social challenge. At the same time, we have the economic challenge of the huge skills shortages that we know exist in STEM subjects in technician-level jobs. That is a major barrier to us becoming a more successful industrial country. There is now a bit of an opportunity to reindustrialise ourselves.
There have been many expert speeches today, and I am not an expert in this field, but I have thought about it as someone involved in politics for a very long time. What has always struck me is how we have known about this major problem in our society—certainly for decades, though some would argue for over a century—yet no Government have managed to crack it, despite effort, lots of activity and lots of public money. Something about our politics explains this failure. It is partly a lack of ability to build consensus about how we do things—consensus that can last and survive a change of Government.
I remember that when we came to power in 1997 we had two very big promises on vocational education, both of which are worth reminding ourselves of because they show how Governments can fail as well as succeed. One was that we would establish a university of industry, which sounded wonderful—a kind of Open University for skills. The other promise was to establish an individual learning account which, again, sounded an absolutely wonderful idea where employers, individuals and the taxpayer could contribute to a pot of money with which people could decide for themselves how to improve their qualifications. Both of those great ideas bit the dust. Indeed, the ILA was a bit of a disaster and had to be withdrawn at very short notice.
A bit of my bedtime reading at the moment is the excellent book by Tony King and Ivor Crewe, The Blunders of our Governments. This is an area in which there have been blunders by Governments, with too many interventions from the top down by Ministers who try to change things. In future, we have to learn the lessons of that and try to think longer term on how we tackle these problems.
We should look to one of the great successes of Britain, which is our university system. Why are the universities successful? They are autonomous institutions, have a mixed economy of funding and have the ability to decide their own strategy. In vocational education we do not have that number of strong enough institutions and we must put the effort into remedying that systemic failure. What sorts of things would I look at? I would think about how we expand the excellent idea of university technical colleges. I do not think that they will really expand unless we empower our cities to do more in this area. Cities have a crucial role in deciding what skills are needed to be developed in their area.
Secondly, we have our colleges, as the right reverend Prelate said. At present, too many of them are chasing funding streams rather than thinking about how, as institutions, they play a role in the development of their local economy. I think that somehow we have to liberate the colleges. We need to give professional bodies, such as the engineering bodies, a much bigger role in deciding on technical qualifications which should become the ticket for the job. I believe that we need to correct the overflexibility of our labour market. I have come to the view that we will not make progress in this area unless we incentivise employer co-operation sector by sector, so that money for training is provided in return for controlled entry standards and decent pay for people who are doing apprenticeships. The Government have actively to try to bring employers together and perhaps recreate the kind of partnerships that used to exist in some areas with the industrial training boards. It is the institutions that need to be developed if we are to make this sector as successful as our universities have been.