My Lords, as we place a much greater emphasis on skills and professional technical education, further education colleges have an increasingly key role to play in delivering the skills needed to support our industrial strategy. They form part of our skills infrastructure, delivering the full range from basic skills to high-level technical training. They are key to delivering existing professional technical and apprenticeship training, and will be important to the delivery of T-levels and the national retraining scheme.
My Lords, industrial strategy investment in skills is welcome but the sums are tiny alongside the £7.4 billion set aside for research and development. Innovation is vital, but so is a skilled and adaptable workforce. Is the Minister concerned by Augar’s report of shrinking numbers enrolling in colleges at technician level, declines in adult learning and a 45% fall in spending on adult skills over the last decade? Does he agree that investment in further education would not just address skills shortages across the economy but support social mobility by tackling stubborn inequalities of income and opportunity?
My Lords, I recognise the pressures that FE funding is under and we are looking at this carefully ahead of the spending review. Further education is a driver of social mobility, providing a wide range of education and training for both young people and adults. For example, we know that a level 2 apprenticeship boosts earnings by 11% and a level 3 apprenticeship by 16%. They can provide a second chance by engaging adults who are furthest from learning and the labour market, providing the skills and training that they need to equip them for work.
My Lords, the skills gap between ourselves and, say, Germany is massive. Despite that, the Government have made cuts every year. Why are they cutting something that we need to catch up on?
My Lords, we have protected the base rate of 16 to 19 funding to 2020 and we are putting in money in slightly different ways. For example, we are providing some £500 million this year for disadvantage funding—uplifts in addition to the base rate—and we have provided additional funding to support institutions to grow participation in level 3 in maths and additional funding for T-levels, which will come on stream in the next year or so.
I am sorry; I shall quickly repeat it. Will the Minister explain why the cuts were instigated in the first place? I do not think that he answered my noble friend’s question about the various changes that will be made from now on. Why did the Government make them in the past?
The noble Baroness will know that we have put a floor under funding for young people from 16 to 19. I cannot speak for what happened in 2010 or earlier, but if she would like me to write to her on that, I will be very happy to do so. However, we are absolutely committed to further education, and in an earlier answer I gave examples of some of the areas that we have put resources into.
My Lords, the noble Baroness, Lady Bull, pointed out the chronic underfunding of further education and referred to the Augar review; I declare an interest as a member of the panel that produced that review. I will follow up on this by asking the Minister how the Government can possibly deliver on some of the specific commitments of the industrial strategy without rethinking in major form the way in which they fund further education. More than 60% of all private sector jobs are in small and medium-sized enterprises, which operate in a way that means they cannot work easily with universities and depend directly on the further education sector. The industrial strategy, among other things, commits itself to putting the UK at the forefront of high-efficiency agriculture and transforming construction techniques. I cannot see—I would like the Minister to tell us—how this can be delivered without changing the funding system.
My Lords, we welcome the Augar review. It was the most far-reaching review of further and higher education since—amazingly—1963. It makes a number of recommendations that we are considering. The industrial strategy has aimed to support education and skills with a package of some £400 million. That includes a four-year programme to improve teaching and participation in computer science, an additional £50 million to improve the quality of post-16 maths teaching, £100 million of new government funding for the national retraining scheme, and £20 million to support providers to prepare for T-levels. We are doing a great deal to support the industrial strategy and it remains a key focus.
The noble Baroness is right. The number of starts for the first quarter of 2018-19 is some 76,000, compared with 41,000 this time last year. We know that the quality of the new apprenticeships is of a much higher order than under the old system, and this shows that employers are getting behind the scheme.
My Lords, the creative industries are an important part of the industrial strategy. They are worth £101 billion per year to the British economy and grow at double our overall rate of economic growth. The difficulty is finding people to go into the creative industries. We are seeing, as we heard in the first Oral Question, that the number of students following creative subjects is declining in our schools. How can we ensure that we have the young people to go into these important creative industries?
My Lords, for that to happen, we need to make sure that we have apprenticeship standards for the creative industries. A great deal of work is going on there and the number of apprenticeships in creative subjects is increasing as we speak.
My Lords, I am concerned about funding for further education. I believe that it needs to be a priority in the spending review; I have said that publicly, as recently as last week at the Wellington Festival of Education. We need to put more emphasis on that and to ensure that we are developing the skills base we need for the next generation.
My Lords, shipbuilding is a long-standing and noble industry in this country, and we will continue to encourage it. However, we are in a globalised world, and it is a priority that we encourage skills in the areas that are growing most rapidly.