Amendment 5

Skills and Post-16 Education Bill [HL] - Committee (1st Day) – in the House of Lords at 6:30 pm on 6th July 2021.

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Lord Storey:

Moved by Lord Storey

5: Clause 1, page 1, line 14, leave out subsections (3) and (4) and insert—“(3) The employer representative body and relevant providers in a specified area must co-operate to develop a skills improvement plan for submission to the Secretary of State for approval and publication.(4) The employer representative body and relevant providers in a specified area must co-operate to—(a) keep the plan under review, and(b) where appropriate, develop a replacement plan for submission to the Secretary of State for approval and publication.(4A) The relevant provider must have regard to the plan so far as it is relevant to any decision that the relevant provider is making in relation to the provision of post-16 technical education or training that may be relevant to the skills, capabilities or expertise that are, or may in the future be, required in that area.(4B) In developing a new or replacement plan, the employer representative body and relevant providers must consult with such persons as they consider appropriate in the specified area, including—(a) local authorities,(b) mayoral combined authorities,(c) trade unions, and(d) students’ unions.”Member’s explanatory statementThe purpose of this amendment is to ensure that establishment of the LSIPs involves colleges as joint partners and involves the input of the wider community.

Photo of Lord Storey Lord Storey Liberal Democrat Lords Spokesperson (Education)

My Lords, it is important for the development of these local skills improvement plans that the partners involved are working together. The notion of divorcing, if you like, the employers from those providing the education seems to me to be wrong. The two key players to make a success of this are obviously the employers, who know their needs and can identify the skills that are short, and the colleges that provide the training and education. I do not like the notion that we should separate those two or that, as the Minister’s letter said, we might consider what they say. My Amendment 5 seeks to understand whether the colleges will be joint partners in this venture and make that point.

I say that for other reasons as well, not just in terms of developing the local skills improvement plans but because it helps the colleges themselves. It helps them to work with the employers in their locality at a really close level. It will improve the ethos and standing of colleges in the community, making employers realise what colleges are about and what happens in them: they will be properly engaged with them on a regular basis, not think of them as “some sort of building over there”. That dialogue and, dare I say it, teamwork will bring about genuine and effective plans. This is not an attempt to create more bureaucracy or paperwork; it is about saying that—I reiterate—these two key players must be locked together to make this happen.

My other amendment in this group, Amendment 38, is again about

“effective partnership working between employer representative bodies and local authorities and Mayoral Combined Authorities”.

We now have nine different mayoral authorities in England, and these nine city regions account for 41% of the country’s population and 43% of our economic output. The notion that they are sort of over there and may just be consulted seems wrong; they should be clearly involved in not just the final decisions but the day-to-day decision-making on these plans.

They already have emerging powers in relation to adult education and funding for FE, skills training and learners above the age of 19, so they are already important players in this area of work. In fact, as I said earlier, Liverpool was given a £41.1 million grant of local growth money to support skills and capital investment, and is currently working on a budget of £18 million for this year to make it available. I notice that other noble Lords also have amendments in this group. In particular the noble Lord, Lord Watson, is equally calling for working bodies to work closely together on this.

At the beginning of my contribution, I used the term “teamwork”. We only have to see how this has produced the successful run so far of the England team, which is not about separating a manager from players, and whatever else, but working together as a team. I hope that this amendment will be considered and that the Minister will ensure that there are not just considered but effective working arrangements.

Photo of Lord Lexden Lord Lexden Deputy Chairman of Committees, Deputy Speaker (Lords)

My Lords, I must inform the Committee that if Amendment 5 is agreed to, I will not be able to call Amendment 6 by reason of pre-emption.

Photo of Lord Patel Lord Patel Chair, Science and Technology Committee (Lords), Chair, Science and Technology Committee (Lords)

My Lords, I speak to Amendment 35 under my name. The amendment is designed to have a body that will be representative of employers in a specified area. The Secretary of State must consult local education, business and enterprise groups, with the aim of ensuring that local employers are represented on the body. So it is a wide-ranging, all-inclusive probing amendment to ensure that there is a range of employers of different sizes, as well as local education groups. In that respect, I support Amendment 5 from the noble Lord, Lord Storey, which includes educational organisations. They should all be represented on employer representative bodies, which will be tasked with pulling together the local skills improvement plans. There are a number of amendments, already tabled, highlighting the need to expand the types of groups feeding into these plans to ensure that they truly represent the local situation and will be able to address any local skills challenges that there might be.

The concern that I believe all of these amendments share is that the Bill, as it stands, potentially gives too much power to a small group of employers in a local area that are not necessarily representative of the wider business community. The Bill currently also risks limiting the choices of young people as well as adults who want or need to retrain in terms of courses and training opportunities. There may be skills that we need nationally—to achieve, for instance, net-zero—which will not currently be required in the particular locality. As a result, no training opportunities may be available for young people who are keen to move into such careers.

I believe that the Bill should enable a truly collaborative approach to local skills planning, with a range of stakeholders to co-create local skills improvement plans. Taking that approach and making sure that the local policy ambitions link up with the national strategies and vice versa might be the right approach and put us in a good position to ensure that we have the workforce, the scientists and the engineers of the future to make the UK an economic success. With 6 million SMEs, some of them quite small and with very niche skills requirements, it might be appropriate that even their voices are heard.

Photo of Baroness Morris of Yardley Baroness Morris of Yardley Labour

My Lords, I very much support the comments just made by the noble Lords, Lord Storey and Lord Patel, and the thrust of the argument. It is right that we get as much knowledge and experience and skills before making any of these decisions. I suggest to the Minister that this is going to be a recurring theme throughout our consideration of the Bill: what is the nature of the partnership which she says is at the core of the proposed legislation before us?

There are two issues. The noble Lord, Lord Patel, just used a phrase about people knowing where the power lies. That is part of the problem. In words it looks as though the employers, the people leading the partnership, have got to, by law, consult with people. The Minister may sense that there is not absolute confidence in noble Lords who have spoken today that that will happen to the degree necessary. I share that concern. Once you say so many times that it is employer-led, that it is those people who matter, and that they will be making the decisions, you have created a very unbalanced relationship between the employers and the people they are meant to consult. So I would be looking for something in the Bill, whether it is these amendments or others, to boost the standing and the contribution of the other partners.

I have not heard anybody say that the other partners—employers, education institutions, students, trade unions—are not important and have not got a role to play. But what is missing from the Bill, given our previous experience of such legislation, is any assurance that they will be listened to and will have the ability to influence what is going on, and some powers to put a brake on something if they do not like it. If they are just going to be written to, asked for their view and then ignored, it will not work, and the Bill could allow for that. That is my worry with that part of the Bill. The Bill as written could allow for that.

The point I really want to make is something that I have changed my mind on this afternoon, and it is the aspect of these amendments that refers to the mayoral combined authorities. I think there is an uneasy and unhealthy relationship between all three major parties—perhaps not the Liberals, in fairness—that have formed a Government in the last couple of decades, and local authorities. I think that over recent years local authorities have much improved: they are more accountable, their progress is more measurable and they have learned some important lessons. But the organisation I want to speak most about is the mayoral combined authority. All major political parties have passed legislation bringing into being more mayoral combined authorities, so all politicians from all parties believe that they are things for the good. The worst thing you can do to those organisations is not give them the power to actually make decisions at local level, because what you then do to the citizens of those areas is say, “These are the people with the power”, but you deny them the power, they cannot deliver the goods and the whole accountability mechanism falls asunder.

I want my main point to be about the mayoral combined authorities, because I have come to think, this afternoon, that they should be leading the partnership, not the employers. I base that on something the Minister said in winding up the debate on the first group of amendments today. She made a powerful case for employers being the ones who know what competence and skills are needed for a specific job. If it is a crane driver, which was the example she gave, I absolutely agree that the people who will need to know what a level 3 crane driver needs are the employers—but that is such a small part of the skill set needed to draw up a local strategic plan, and I am not sure that their expertise hits on the other things as well.

So I agree with the Minister that it is very important that, in terms of the competence of a qualification—the skill that is needed to do the job; the way it is assessed; what it means; how it is described; and making sure standards are high—I take my hat off and I put the employers at the front. However, if we are talking about the overall economic strategy of a region, about being accountable to the people who live there, about having a meaningful role to play in a wide range of activities and responsibilities across a regional area, it is not the employers who have got it; it is the local authorities, where they are the senior civic body, and the mayoral combined authorities, where they are.

I think that part of the success of a lot of policies, not just on skills, will be how successful we are in bolstering civic organisations over the years to come. If the Government are serious about devolving power and saying to local people, “You’ve got a say and decisions will be made near where you live”, there is a real job to be done in bolstering local civic organisations, and this is a glorious chance to do that. However, if we set up a bit of legislation that says, “It’s about local skills and a local plan, and it’s got to do with your locality”, and then you say “But the people we’re going to put in charge could be part of a national or an international employment change and not the people you’ve elected”, I do not know what kind of message that gives.

It is not that I am opposed that any of these people having a say but, having listened to the debates this afternoon, I am not confident that we have, first, the power relationship right, and I am now not confident that we have the lead provider right, either, and these amendments give us the opportunity to explore that.

Photo of Lord Lexden Lord Lexden Deputy Chairman of Committees, Deputy Speaker (Lords) 6:45 pm, 6th July 2021

My Lords, the noble Lord, Lord Rooker, who is next on the list, has withdrawn from the debate. Sadly, I am not able to call the noble Baroness, Lady Blackstone, because she was not here for the speech moving the amendment. The noble Lords, Lord Liddle and Lord Adonis, and the noble Baroness, Lady Whitaker, have also withdrawn from the debate, so I call the noble Lord, Lord Addington.

Photo of Lord Addington Lord Addington Liberal Democrat

My Lords, this is a little sooner than I expected. I put my name down to speak on this because, as the Government have said, this is a framework Bill. Governments like framework Bills because they give them a chance to develop and change as they are going along, with a little bit of freedom and a hint of Henry VII and a half. It is there and they like that. The price they pay is the fact that we want to know exactly what they are aiming at initially.

When this amendment was tabled and it was said which groups were going to be talked to, I saw that we already had employers down there. There is the danger of a dominant employer in here—a dominant employer who may not be the most foreseeing employer. Surely they should be talking to other people as well. Those with local power—that is, the mayoral authorities and local government—are surely dead certs to be involved in that conversation. These are people with budgets which will affect the local marketplace. We have already had a discussion about the green agenda, how that is implemented and the certain skills that are required there. These will be people who will be talking to you as you go through.

The amendments also mention students’ unions and trade unions. Why not? But I do not think that is the really important bit; that is the idea of what the influence will be, and which group will be having the conversation about what you should be doing and what your plan for training is. If we can get an answer to that from the Minister, at least on what the thinking is, we will all be slightly better informed and able to hone our arguments for the next stage of the Bill.

If we do not, we will be going round in a circle here. We will have to impose something on the Government to get them to come back and give us an answer. If the Government can give us an idea of what they actually require on this occasion, life becomes that little bit more straightforward. I hope that when the Minister comes to answer this, she will be able to provide at least the basis of the Government’s thinking about what goes on, because employers are great, but they occasionally get it wrong. I would just point out that many firms that were there 20 years ago are not here today. Surely that means that their boards—however well intentioned—got something wrong.

Photo of Lord Bradley Lord Bradley Labour

My Lords, I am pleased to speak to this group of amendments, particularly Amendments 13 and 14. I commend the contribution of my noble friend Lady Morris of Yardley. I declare my interests in the register, especially my role as chair of council at the University of Salford.

While I fully support the principle of employers playing a more active role in driving certain aspects of the skills system, as well as the more specialist role for further education colleges in delivering high-level technical skills, this should be taking place within the context of a holistic and objective overview of the whole education, skills and employment support system, to guard against introducing further complexity and fragmentation. One of the best ways to achieve this is to have a formal role for the mayoral combined authorities, where they exist, in the development of local skills improvement plans, reflecting MCAs’ unique position in this area of policy.

As drafted, there is no provision or requirement in the Bill for the Secretary of State or the designated established employer representative bodies to engage with mayoral combined authorities, local authorities or other key stakeholders such as universities in relation to—among other things—the designation or removal of designation of an appropriate ERB to lead activities, the geographical footprint of the local skills improvement plan, and the context and strategic priorities of the area. This omission overlooks the vital roles that MCAs and local authorities play in skills and economic regeneration, as well as MCAs’ devolved functions across adult education and, in the case of Greater Manchester, significant elements of employment support.

Further, the DfE has indicated that while an MCA’s agreement to the proposed local skills improvement plan would assist the Secretary of State’s approval, it is not a prerequisite, so proposals that fail to secure the support of mayoral combined authorities might still receive government approval. Therefore—I agree with the Greater Manchester Combined Authority and am grateful for its extensive briefing on this matter—the Bill should make provision for consultation by the Secretary of State and the consent of MCAs in the designation of employer representative bodies and the approval of local skills improvement plans. Without such a provision, there could be a number of potential issues and risks to their success—and success is what we all want.

First, the Bill focuses primarily on higher-level skills and technical specialisms, which I agree have been neglected in policy and funding terms for far too long. However, there is a vital talent pipeline, starting with community-based engagement and entry-level essential skills, that is barely recognised in the Bill. It is unclear to me how this vital progressive pathway will be protected in the face of employer-led plans that will have a legal status not afforded to strategies for other aspects of the system. This could undermine existing partnerships and collaborative approaches to the local labour market.

Secondly, it is unclear how ERBs will be accountable in relation to strategic oversight, long-term vision and resource and capacity issues to ensure co-ordinated and impactful delivery in partnership with all relevant stakeholders. In particular, checks and balances will be required where designated ERBs are membership organisations and/or where they hold contracts as providers in order to ensure that local skills improvement plans are truly reflective of employers’ needs and interests across a locality, rather than solely for those ERB members.

Thirdly, the Government have not specified what constitutes a local area in terms of the geographical footprint of the new local skills improvement plans. Instead, employer representative bodies are being invited to define their own localities for the purpose of skills planning. So, for example, despite Greater Manchester being a well-recognised functional economic area with a long history of collaboration, there is no guarantee that the new local skills improvement plan proposals will follow existing geopolitical and functional economic footprints. This could undermine the alignment of skills and employment support in places such as Greater Manchester, which has used complementary devolved functions, pilots and other resources to support the creation of jobs and the skills to match them.

To address these issues and others, I believe the role of the mayoral combined authority and the local authorities should be properly recognised in the Bill to ensure the successful development of the local skills improvement plan and that all stakeholders feel they are part of the success going forward. I am pleased to support these amendments.

Photo of Lord Lexden Lord Lexden Deputy Chairman of Committees, Deputy Speaker (Lords)

The noble Lord, Lord Young of Norwood Green, has withdrawn from the debate, so I call the noble Baroness, Lady Neville-Rolfe.

Photo of Baroness Neville-Rolfe Baroness Neville-Rolfe Chair, Built Environment Committee, Chair, Built Environment Committee

My Lords, I was very sorry not to be able to speak at Second Reading, but I was present for some of the debate and was struck by the contributions made by my noble friend Lord Taylor of Holbeach, on the need for localism and the example of horticulture, and the noble Baroness, Lady Morris of Yardley—who is in her place—on local skills improvement plans, which are the subject of this group. I also agree with my noble friend Lord Baker that the strength of the school system is incredibly important and that we need parity of esteem for technical and vocational education in our schools. Indeed, whenever I talk at a school, I always talk about apprenticeships.

I refer to my entry in the register of interests. I serve in a non-executive role in various sectors, which gives me a feel for the training needs of young people and for lifelong learning. Skills and their continuous improvement are essential to successful business and, as I have been saying since I joined this House in 2013, a strong system of vocational learning and training is as important to a productive economy as university education. I have often mentioned the experience of Germany, Austria and Switzerland in this respect, so I was glad to see the references to the German one-stop shop chambers of commerce system in January’s White Paper. I have a great deal of sympathy with the thrust of the thinking of the Secretary of State, Gavin Williamson, on this.

I like the way in which this Bill puts employers at the heart of the process—including big public sector employers such as hospitals, which often dominate in our towns, such as my home city of Salisbury. However, which bodies does my noble friend the Minister see the new skills improvement plans being modelled on? Is it the skills plans of the regional majors or of local enterprise partnerships, or are they modelled on something quite different? Can she share a model skills plan or two with us? As a large former employer in my time at Tesco, and as chair of various SMEs, I am keen to understand and assess how these might work in practice. The impact assessment suggests that the cost is not great—£25 million in total—especially relative to the potential benefits of a good new system. However, I would like to understand better how things would actually work, perhaps in a meeting rather than on the Floor of the House.

I also want to know how the national bodies identifying skills gaps will link in. There are gaps in digital, for example, which is needed in nearly every sector. There are gaps in AI, engineering, climate-friendly construction and health. As we have heard, there are also gaps among chefs, in agriculture and, of course, in the critical areas of management, leadership and teamwork. I think my noble friend the Minister mentioned that the principal vehicle will be the Skills and Productivity Board. But how will that and other national bodies or manifestos—and, indeed, regional mayors—be involved? How will they influence and link to those responsible for framing and revising our local skills improvement plans?

I should add that I care a great deal about training for SMEs—whether in manufacturing, services or the creative sectors—where localism is absolutely key to the provision. I also know that productivity and growth need a revolution in skills in larger companies that may operate across the UK and outside local areas, as well as in the public sector.

These improvement plans are a new statutory requirement, and we must beware that they do not become like local plans in planning. These are expensive and complex both to create and understand. Moreover, they are out of date or non-existent in some areas. We heard today in the Built Environment Committee that this represents 30% of local plans.

I was glad to hear from the noble Lord, Lord Storey, about his experiences in Liverpool since, for a major part of my career, I worked alongside Terry Leahy, a well-known Liverpudlian. We were able to employ and train—and even teach reading and mathematical skills to—many young people who had missed out in the school system. Much of that, I have to say, was done in partnership with the trade union USDAW.

However, I do not agree with the noble Lord, Lord Storey, that there should be statutory consultees. This is because, first, someone has to be in charge, and the successful German experience suggests that this should be the employers; and, secondly, adding statutory consultation would add costs and distract local authorities, trade unions and student unions. You could give the plans to the regional mayors to do instead, as I think the noble Baroness, Lady Morris, was suggesting—but that would be a different Bill, and you would be moving away from localism. So this is all quite tricky. A statutory involvement could also bring in the lawyers if processes were not followed, as you see in the planning system. So it seems much better to keep the system simple and in the hands of employers, and to leave it to their discretion as to how stakeholders—including the trade unions, which have a very good record in promoting skills in my experience—are consulted.

For similar reasons, I would be against most of the other amendments in this group, although they are all useful as probing amendments, especially Amendment 27 in the name of the noble Lord, Lord Patel.

Photo of Lord Baker of Dorking Lord Baker of Dorking Conservative 7:00 pm, 6th July 2021

I hope that the Minister will not, in her reply, dismiss this amendment out of hand and say it is totally unacceptable, because I suspect that, as the procedures develop for local skills plans, extra help will be needed. I speak as someone who, for the last 12 years, has had to involve local companies actively in the running of the schools that I have been promoting: university technical colleges. I can assure noble Lords it takes a long time to persuade companies to do this. It takes many meetings, and many companies look on it as a burden and an expense. So there is not a huge number of companies lining up to become members of the employment body.

I hope the Minister is listening to what I am saying and not reading her notes, because I think she would benefit from what I am saying. I suspect that the Government are going to have to change their policy in this respect. She expects the chambers of commerce, where the chambers of commerce exist, to be the employer representative bodies. Could I take her through the complexity of that? First, chambers of commerce will look on it as an extra expense, which it is going to be. They have to balance the interests of their own members as to whether they should listen to the big or small companies, the ones which are expanding or declining, and the ones which are loquacious or silent. The proposals they may make may offend several of their members. So it will involve a series of meetings, and probably visits to the companies. That is my experience from the last 12 years.

I ask the Minister: where there is not a chamber of commerce, who is going to institute the examination to determine the numbers on the local employer representative body? Who is going to do it? Have the Government yet thought this through? Who is physically going to do it? Who is going to then make a list of all the companies? Who is going to know about the companies? Who is going to visit the companies and persuade them to take an interest? Because it is a continuing interest: they will have to appoint somebody to serve on the body, and that is an expense to the company. Are the companies going to get a benefit from this? I have gone through this for the last 12 years, and I do not think the Government have an answer to that.

The Government may find that they need the assistance of local authorities, which know a lot of companies. They may also need the assistance of the LEPs. The LEPs do not appear in this Bill at all, but the LEPs have a statutory duty for vocational skills, and some of them have policies on vocational skills, and they know about the companies in their area, and they know about the companies in several towns in their area. In the Select Committee of which the noble Lord, Lord Storey, and I are members, we took evidence from the North East LEP. A lady called Michelle Rainbow turned up, and she obviously had taken a big interest in education. The North East LEP had a big scheme involving 70 primary schools. The LEPs might have all sorts of schemes the Government do not really follow, or that the Department for Education does not follow or know about, and in secondary education as well. They have this knowledge. Therefore, I hope that the Minister appreciates that there will have to be assistances in the whole procedure of establishing local skills plans. Certainly, the Government should listen to the LEPs in addition to the local mayors and the mayoral authorities as well.

One other voice that has not been heard in any clause in the Bill is that of the unemployed. I suspect that no one who has drafted the Bill in the Department for Education has talked to groups of unemployed young people and nor have many Ministers. The committee that the noble Lord, Lord Storey, and I sit on has now held meetings in Bolton and Nottingham, and this morning in London, talking to unemployed young people. The group that I talked to were six black young men and women, all of whom were unemployed, or trying to get employment, and their voices were remarkable. They answer a lot of the questions raised by this Bill. We asked them all why they were unemployed, and they explained that they had never been given information about employability at their ordinary schools. These are not people who have been to FE colleges and things of that sort. They left their ordinary secondary schools with no understanding of how industry and commerce work and with no employability skills because they had just been doing academic subjects. They were very passionate this morning. They said, “We left with no employer skills, no data skills.” I asked whether any of them had learned about computing in their schools, and they said, “No, we didn’t have lessons on computing at all.” Many of them left with no communication skills, but they certainly developed them in applying for jobs. They have no experience of working in teams, but they are often asked by employers whether they have worked in teams.

These voices should be listened to. If you are replanning the whole basis of technical education in our country, then listen to people like this. They have a voice, they are concerned, and they are the victims of our failure to educate them adequately to get jobs. I hope that the department will perhaps take some knowledge of that. I urge the Government not to dismiss this amendment too lightly because what it proposes is likely to be needed.

Photo of Baroness Bennett of Manor Castle Baroness Bennett of Manor Castle Green

My Lords, today’s debate has not progressed very fast in terms of groups, but we have covered a great deal of ground and, through the debate, have almost developed a shadow Bill, as the noble Baroness, Lady Neville-Rolfe, suggested. I agree with much of what the noble Baroness, Lady Morris of Yardley, said, as I often do. It is clear that the structure of the Bill needs to be rethought. One crucial area is the place for local authorities and regional and city mayors in making skills plans, which a large number of amendments in this group address.

Although the noble Baroness, Lady Morris, talked about the economic strategy of the region, I would rather talk about a transformation strategy for a region. Levelling up is about much more than just the economy. It is not even about just the environment and the economy; it is about the well-being and social capital of the region contributing to every aspect of life, the community and family. You might even call it a public health approach to skills and post-16 education. If we are thinking about public health on that broad scale, this is something that clearly needs to be democratically decided. Elected people should be leading the development of skills development plans, or perhaps, as an alternative suggestion, we might want to think about drawing up a people’s assembly approach, something to put on the table at least, and something that the Minister might like to talk about to her colleague, the noble Baroness, Lady Barran, because I know that she has had very good experience with such direct, deliberative democracy.

The term “employer representative body” reminds me, very uncomfortably, of local enterprise partnerships. Some noble Lords have spoken of them with great approval and, in some places, undoubtedly some good work has been done, but they are not in any way representative of the people or the community. They are, by definition, the status quo in an area. They are invested in the way things are, in our current, unequal, poverty-stricken, planet-destroying system.

During this debate, I was thinking about joining the south-west regional Green Party in a detailed consideration of the Heart of the South-West LEP’s Strategic Economic Plan 2014-2030. We went through that plan page by page and found a focus on nuclear power and on aerospace in advanced manufacturing, and nothing about the crucial place of food production, small-scale farmers and growers and artisan food production, things that are so important to the region but had not found their way into the LEP plan.

Local authorities and elected mayors are in many respects problematic. The former are elected through the undemocratic first past the post system in England, the latter by putting a single person into an essentially impossible position to represent a whole region. However, they are what we have, and they have hugely more knowledge and representativeness than a handful of large local employers which will surely dominate employer-representative bodies or far-off Westminster. On which point, in the interests of balance, I must applaud what we have been hearing from the Minister about the importance of local decision-making, but if we are going to have that local decision-making it must be democratic.

Photo of Lord Inglewood Lord Inglewood Non-affiliated 7:15 pm, 6th July 2021

My Lords, I was unable to speak at Second Reading, so I must now declare my interests as set out in the register, particularly that I am chair of the Cumbria Local Enterprise Partnership, which provides me with a particular and, I believe, helpful perspective on the Bill. Having heard the noble Baroness, Lady Bennett, while I recognise some aspects of what she said, it bears no relationship to the work that is going on in Cumbria.

My remarks around this group of amendments are probing, so I trust that the Minister can straightforwardly and candidly clarify my concerns. While my comments are mine alone, they echo many of my LEP and mayoral combined authorities colleagues’ concerns. We welcome the key principles underlying the ambitions of the Bill and the desire to bring business closer to the process of curriculum development and delivery. Like the noble Lord, Lord Baker, I suggest that this is exactly what LEPs have been doing for some considerable time: ensuring that the needs of the economy and businesses inform the skills system locally, particularly to ensure that these real needs can be met in a useful and constructive way. LEPs command respect, and I know that they are impartial, so businesses and providers equally trust them. To lose this would be a backward step.

The draft legislation which we are considering proposes that employer representative bodies are reasonably representative of employers operating within the specified area, and I do not think that anybody could reasonably object to that, but it excludes local enterprise partnerships. Therefore, I seriously question and thereby challenge the exclusion of LEPs. How can LEPs not be employer-representative bodies, given that each LEP is created specifically to be the voice of business and consistently to represent, not least at the Government’s specific request, hundreds of businesses in our local areas, including on skills-related issues?

Importantly, LEPs do this for all businesses across all sectors and geographies, not just for those who are part of a membership organisation. This is important. We do not do this just for particular constituencies. We have no further specific axe to grind in the matter. Unfortunately, the White Paper and the Bill appear to ignore this excellent long-term business engagement which has been in place for some considerable time. From my perspective, the absence of any role for LEPs in this legislation strikes me as lacking any rationale based on the evidence and the scale of the work that has been done in the past. It is not a matter of reinventing the wheel, but of the Government disinventing the wheel.

The skills advisory panels, funded by the DfE and led by LEPs, have been assured that there is a deep, evidence-based understanding of the needs of their local economy, their sectors, their businesses and, importantly, the skills required in their locality. In my own LEP in Cumbria, we have a comprehensive governance structure, specifically endorsed by the Government, that ensures that the skills system is demand-led, with our business-led sector panels articulating what is needed and our people, employment and skills strategy group bringing together the skills systems to respond to this. That is the skills advisory panel in action. It matches the claims of that well-known brand of beer that reaches the parts others cannot get to.

The current lack of clarity on the future role of the skills advisory panels is accelerating uncertainty, making it extremely difficult to make any medium- to long-term plans. This has left many members—a number of them volunteers—questioning whether there is any future role for them. We therefore risk losing both momentum and expertise at precisely the point when it is most needed, as the nation recovers from Covid-19 and grapples with the now known challenges posed by moving away from the EU.

As we debate the Bill, LEPs are working in their localities to address the immediate needs of businesses as they come out of the pandemic and respond to the significant changes in the labour market. For example, in Cumbria, we are seeing chronic labour shortages—as the noble Lord, Lord Storey, pointed out in an earlier group—which are not merely inhibiting business but actually stalling recovery; we are working directly with our businesses to help address these.

Simultaneously, we continue to make sure that we focus on the medium- and longer-term skills needs to ensure that we have a pipeline for the future, and we are focusing on supporting the priorities identified by the business community itself. It is in this context that the focus on the pipeline is in the forefront of our thinking and where our work with the careers and advisory company comes in to ensure that all our young people understand the economy and the career opportunities available. We are committed to this in Cumbria, and we and other LEPs provide matched funding to underpin the role of enterprise co-ordinators.

In conclusion, I ask the Minister to respond directly to my points and to a number of other powerful points raised in this group to clarify how the Government see matters in these regards so that, based on her remarks, the House will be able to know whether and, if so, in what way this matter will need further consideration on Report.

Photo of Lord Curry of Kirkharle Lord Curry of Kirkharle Crossbench

My Lords, it is a great honour to follow the noble Lord, Lord Inglewood, whose experience of chairing a LEP is extremely valuable; I believe that he has a lot to offer to the consideration of the Bill.

I will comment briefly on Amendments 13, 16, 32 and 35 in this grouping. Much has been said already during this debate that overlaps with other amendments, so I want to reinforce some of the messages that have already been made very strongly by other Peers. To reinforce what I said at Second Reading, I still think that there is a risk of confusion between the various bodies involved and a potential overlap between the agencies. Clarity is essential, and I hope that the Minister will take that on board.

I have two overriding concerns, one of which has been stressed a number of times already this afternoon; that is, in devolving responsibility at a local level to local groups, there is consistency with the national skills strategy and regional priorities. It seems obvious that there should be a very strong conduit between the regional bodies, the LEPs, the combined authorities and the mayoral authorities. I hope that the Minister has recognised the strength of feeling there is on this now. As reinforced by the noble Lord, Lord Inglewood, to leave out the mayoral authorities and not work with the LEPs, with the experience they have and the networks they have established—to throw that away and not build on it—would seem foolish. So I hope that the Government will take those messages into account.

I am also slightly concerned that if this does not happen, we will see a patchwork of disconnected skills groups paddling their own independent canoes. Co-ordination is vital for skills providers to develop appropriate courses to meet regional and local demand. The Minister was reassuring on that point earlier this afternoon, so I hope that is the case.

The critical balance is to achieve local ownership within a framework of national and regional priorities. I restate that regional involvement is essential. My second concern with this grouping is highlighted in Amendment 32, and in Amendment 35 from the noble Lord, Lord Patel. Too often, SMEs and, in particular, rural interests are ignored in designing skills strategies. The SME sector has a weak voice.

Large industrial employers have the resources to engage in consultation exercises. They can devote personnel to sit on boards and, in doing so, influence outcomes. It is a good thing that they do. However, SMEs have difficulty in devoting the time to engage in what, to them, seems like numerous consultations and time-consuming exercises. They do not have the time to sit on boards but their voice is essential. Too often, one has a willing volunteer within an area or region; they get overloaded and do not necessarily represent the SME sector. I am really concerned about the influence of the SME sector in helping to design policies that will work for all.

I conclude by highlighting the importance of the rural sector, which has been mentioned once or twice. There is clear evidence that economic success in rural areas has been hampered, held back and constrained by skills gaps. This will be perpetuated if it is not addressed. The gap between rural and urban will continue to grow. Skills provision is critical, if levelling up is to be achieved even in a modest way, to reduce this rural/urban divide. Too often, government policy has been focused on cities. The large industrial areas are the ones that influence skills strategies. The SME sector, and particularly the rural sector, are the ones that get neglected. As was said by the noble Lord, Lord Baker, the Government are going to have to work really hard to engage with this sector and make sure that the local skills bodies embrace this challenge, and do not once more neglect the rural sector.

Photo of Lord Aberdare Lord Aberdare Crossbench

My Lords, my name was initially omitted from the list for this group. My reaction when I found I had been reinserted at number 17 was, “be careful what you wish for”. I am not sure I have a lot to add to what has been said. I very much welcome the amendments that seek to ensure that the voices of independent training providers, SMEs and the self-employed are heard in the LSIP process. I particularly await the Minister’s response to Amendment 40 from the noble Lord, Lord Watson, which would require the Secretary of State to report annually

“on the performance of employer representative bodies.”

This seems to raise important questions of the accountability of ERBs, and indeed LSIPs. I hope the Minister might tell us what sort of reporting will be required for LSIPs and how their performance will be measured—against what criteria and by whom. What will happen if they are seen not to deliver the results expected? Much more fundamentally, I strongly echo the points made by the noble Baroness, Lady Neville-Rolfe, and the noble Lord, Lord Baker, about how the system will actually work in the real world, as described by both those noble Lords.

I also notice that the Bill includes quite a few duties and requirements for colleges and other education providers to meet—there are all sorts of things that they have to do—but these seem somewhat less prominent when it comes to LSIPs and employer representative bodies. I also welcome the paragraph (b) proposed in the Amendment 36 of the noble Lord, Lord Watson, which goes a little way to redressing the balance by enabling colleges and other providers to challenge LSIPs if they are not happy with them.

Photo of Baroness Garden of Frognal Baroness Garden of Frognal Deputy Chairman of Committees, Deputy Speaker (Lords) 7:30 pm, 6th July 2021

My Lords, I shall aim to be brief, which may be welcome at this stage of the evening. I have added my name to Amendment 31, of the noble Lord, Lord Watson, which leaves out “reasonably”—why not just have “representative”, which is a term that is vague enough not to need qualification? Legislation should be clear. This “reasonably” puts doubts into the worth of the employer representative body. However, I am slightly concerned to see that the noble Lord, Lord Watson, has inserted “reasonably” in Amendment 17, which seems to be slightly contradictory.

This group has thrown up many other issues. There are concerns about the creeping potential for the Secretary of State to make overall interventions in matters that were set up to operate with some independence from government—Amendment 36 addresses this. There is obviously a tension between local and national, and we have seen this in a number of recent Bills, where the Government are intent on taking powers that would be much better used by those closer to the issues.

After his impassioned tirade, the noble Lord, Lord Adonis, has obviously exhausted himself and left, but there are many amendments in this group to do with the importance of local authorities and mayoral combined authorities. They must not be constantly subjected to national government oversight. Further education providers are also expert in these fields and must not be overlooked. As my noble friend Lord Storey set out, much is expected of our further education colleges, but they are overlooked far too often. They are well used to collaborating with other local bodies, and their knowledge and contacts must not be ignored. They are also very good at teamwork.

The amendment from the noble Lord, Lord Watson, also makes clear the importance of SMEs, the self-employed and public and voluntary sector employers—so consultation must be as wide-ranging as possible, with national government taking a back seat, if it takes a seat at all. Colleges should have the power to challenge the local skills improvement plans where, from their local experience, they can see that all is not well.

I support the misgivings of the noble Lord, Lord Baker, about employers. I remember well that, when we were developing national vocational qualifications—which were employer led—at City & Guilds, it was incredibly difficult to get the employers to decide which skills they actually wanted. In the end, it was left to the colleges and the awarding bodies, which barely get a mention in the Bill, to get these employer-led qualifications into action. This is a great lack—the Government ignore the colleges and awarding bodies when they are discussing anything to do with skills, but they are the people who really make it happen.

These amendments call for monitoring and reporting. The crucial element is to give authority to those who are closer to the issues and have the expertise to make judgments. The Government must learn to take a back seat where they do not know best. My noble friend Lord Storey mentioned the effect on Liverpool when it was allowed to thrive when local people took control.

In Amendment 28, the noble Lord, Lord Watson, mentions plans about “trailblazer areas”. I do not think we know very much about these—perhaps the Minister can enlighten us about them. The noble Lord, Lord Inglewood, spoke about the LEPs and their work, which has once again been overlooked.

So I trust that the Minister will see that it is in the local and national interest for national government not to intervene at every step and to learn from people who do know what is going on. I hope that she will be able to accept some, if not all, of the amendments in this group.

Photo of Lord Watson of Invergowrie Lord Watson of Invergowrie Shadow Spokesperson (Education)

My Lords, despite several noble Lords listed to speak falling by the wayside, I commend those noble Lords who have stuck it out for their contributions to the debate on this group, and I appreciate their support for the amendments standing in my name.

As many noble Lords have already said today, this is a pretty thin Bill. In her response to group 1, the Minister called it a “framework”, and one might say that that is actually generous. However, the cornerstone is the development of local skills improvement plans, with the role of employer representative bodies being crucial in that process. The manner in which the Bill proposes that ERBs—I will use that shortened terminology—should be designated is flawed, to the extent that it would, we believe, make the Bill unworkable.

There needs to be a much more clearly defined and significant role for local and mayoral combined authorities, as well as colleges and other training providers. The skills needed in Greater Manchester will be significantly different from the skills needed in Cornwall or Cumbria. There has to be an appreciation of differing labour markets, and the way they have developed and are likely to develop. Surely that is best understood at local and regional levels. It is impossible to prescribe the skills needs for the whole of England from an office in the DfE HQ in Great Smith Street, yet that is what the centralising measures in the Bill propose. In relation to the skills agenda, as my colleague in another place, the shadow apprenticeships Minister, Toby Perkins MP, memorably said,

“I have never heard anybody suggest that a more hands-on role for Gavin Williamson was needed”.

That centralisation is very much part of a pattern that we have seen from this Government. They seem to be rowing back significantly on English devolution, and last week the Welsh First Minister’s frustration was plain to see as he accused the Prime Minister of what he called “aggressively ignoring” Wales’s Parliament.

In this Bill, local authorities, including mayoral combined authorities, are to be marginalised, ignoring the fact that they have been democratically elected. Although we fully support the principle of employers playing a more active role in driving certain aspects of the skills system, as well as a more specialised role for FE colleges in delivering higher-level technical skills, that must take place within the context of a holistic and objective overview of the whole education, skills and employment support system, to guard against introducing further complexity. That is what our Amendment 13 seeks to achieve.

We believe that the best way to bring that about is to have a formal role for mayoral combined authorities, where they exist, and other local authorities, in the development of LSIPs, reflecting their unique understanding of their communities and, as I said earlier, their job markets. As my noble friend Lord Bradley said, there is currently no provision or requirement within the Bill for the Secretary of State or the designated ERB to engage with mayoral combined authorities or local authorities—or, indeed, with any other stakeholder —in relation to the designation of an appropriate ERB to lead this activity. The same applies to the boundaries of the LSIPs.

On the subject of mayoral combined authorities, my noble friend Lord Adonis, in a bravura performance earlier, said that the reason he had been given for excluding MCAs was that they were not employers. That might come as news to Sadiq Khan, Tracy Brabin, Andy Burnham, Andy Street and others, who must be superhuman if they do all that work on their own. They have considerable staffs at their disposal: MCAs are indeed employers. I do not have the figures to hand, but I suspect that all of them have several hundred employees. That would be like a small or medium-sized enterprise—and those, as I shall say in a few moments, should very much be part of the consideration when putting together the employer representative bodies.

We agree with the amendment in the names of the noble Lord, Lord Storey, and of my noble friend Lord Rooker, saying that ERBs must develop local skills improvement plans as joint partners with colleges and have input from the wider community. Our Amendments 14 and 16 emphasise the fact that local skills improvement plans should draw on the views of local authorities and training providers in the area. I have to ask the Minister: why would the Government not want that sort of input, if they want the best possible response to local training and employment needs? Those people should also be involved in the ERB itself. The aim is to ensure that LSIPs are more collaborative, with local further and adult education providers closely aligning with existing strategies. Why not build on the existing skills advisory approach and develop a more inclusive way of providing advice on employers’ needs?

The existing landscape includes, of course, local enterprise partnerships, which do not merit a mention in the Bill. The noble Lords, Lord Inglewood and Lord Curry, both made a strong case for LEPs to have a continued role in the delivery of the skills agenda. I asked the Minister on Second Reading what plans the Government had for LEPs, and perhaps she will enlighten us on that matter on this occasion.

Amendments 28 and 29 seek to ensure that there is appropriate consultation of MCAs and local authorities prior to the publication of the local skills improvement plans, and for those elected bodies to give their consent to the designation of ERBs. Amendment 37 seeks to ensure that, once designated, the ERB ensures effective partnership, working with providers, local authorities and mayoral combined authorities to support integration of the skills and employment system in each locality. Again, why would the Government have a problem with these sensible improvements to the operation of employer representative bodies?

As the noble Lord, Lord Storey, said, it is about teamwork. That said, I trust that he will forgive me for being somewhat less enthusiastic about his analogy with the England football team, although, for the record, I do wish them well tomorrow. Our Amendments 31 and 32 seek to gain an understanding of the Government’s intentions in Clause 2. The role of employer representative bodies will be important in shaping local systems, and there is a risk that some ERBs might represent a narrow group of employer voices, focus too much on current skills needs, or be unwilling to take advice from other sources. It is important to ensure that they represent the full breadth of employer voices, focus on future demand and, of course, have appropriate governance.

My noble friend Lady Morris said that she is not sure that the Bill has the power structure right, or the right lead provider; I very much agree with her. Another question is: what will be the role of the chambers of commerce? They are not necessarily representative bodies and vary greatly from one part of the country to another. It is an open secret that they are distinctly cool about being directly involved in the formation of the LSIPs and I understand that this is even the case for some of the largest ones, such as Greater Manchester.

Most employers and employers’ organisations do not really want to run the system; they just want a system that works. They have no more interest in running further education than in running a school or a university. They want to concentrate on their core businesses and do not have a great deal of time to spare in developing local structures or devising plans beyond their own personal needs. As my noble friend Lady Morris said, employers are primarily focused on the now. That is generally understandable, but it is important that ERBs really are representative of the area for which they will have responsibility, so I look forward to hearing from the Minister why the Government have no greater ambition than to make a reasonable attempt at making them representative.

As the eagle-eyed noble Baroness, Lady Garden, pointed out, our Amendment 17—which is not being discussed today—also inserts the word “reasonable”. In my defence, I can say only that that refers to relevant providers, whereas the point I am making here applies to the employer representative bodies. It is surely not too much to expect that the ERBs include a wider range of local employer interests, including small and medium-sized enterprises, the self-employed, and public and third-sector employers. This would ensure that a range of employers of different sizes is represented in the ERB, as the noble Lord, Lord Patel, seeks in his Amendment 35.

There is also a need to clarify the role and accountabilities of employer representative bodies in developing their LSIPs, including describing the role of the ERBs, their accountabilities and the process for responding to instances where they do not deliver this effectively. Amendment 36 seeks to ensure accountability and oversight of ERBs, about which my noble friend Lord Bradley spoke compellingly, specifically in relation to the Greater Manchester MCA. This includes preparing and publishing a conflict of interest policy, which could be important where major employers such as universities or local authorities are also providers of training, or where employer representative bodies run publicly funded training providers—as some do—which compete with colleges for apprenticeships and other contracts.

The requirement also to have regard to national strategies is important, not least in the run-up to COP 26, because in March the Government published their industrial decarbonisation strategy. What will they have to say to ERBs about, for example, the content of their local skills improvement plans with regard to chapter 6 of the decarbonisation strategy, which is entitled “Accelerating Innovation of Low Carbon Technologies”? That could be one example of a situation where colleges and other providers feel the need to challenge local skills improvement plans and put forward revisions where they feel the plans fall short.

If the aim of the Bill really is to deepen the strategic relationship with, and service to, employers, then delivering this must involve a genuine partnership of colleges and other providers empowered to stimulate and challenge articulated demand rather than acting as passive policy recipients. It is important that they have the means of doing so; if the Minister is unable to support Amendment 36, perhaps she will tell the Committee what recourse will be available to providers in such circumstances.

Lastly, our Amendment 40 calls for the Secretary of State to publish an annual report on ERBs and lay it before Parliament, a standard demand when a new body is being established. I have to say that it is also standard for the Government to resist, usually saying that such a requirement is overly bureaucratic and in any case unnecessary. However, given the major importance of the structure that the Bill seeks to establish, we believe it will be essential for Parliament to receive and debate regular reports. To deny that would be to deny the importance of the task of preparing the skills that the country will need in the years ahead.

It is essential that MCAs, local authorities, FE colleges and universities are able to be part of producing local skills improvement plans. Denying them that right would not simply undermine the effectiveness of the plans but, as I said earlier, would make those plans unworkable. Unless the Minister and her Government relent, the Bill that she has characterised as a framework runs the risk of remaining just that.

Photo of Baroness Berridge Baroness Berridge Parliamentary Under-Secretary (Department for International Trade) (Minister for Women), The Parliamentary Under-Secretary of State for Education 7:45 pm, 6th July 2021

My Lords, I am grateful to noble Lords for their contributions. I am optimistic about persuading the noble Baroness, Lady Morris, once again of the merit of the employer representative bodies being in charge of the local skills improvement plans.

I am grateful to my noble friend Lord Baker for his challenge, which was an important one. I can confirm to him that, particularly in my role as Minister for Women, I have heard from many unemployed women. I think I am not alone in your Lordships’ House in this: through such a thing as a pandemic, many of us do not just listen to the voices of unemployed people but in fact know unemployed people who are claiming universal credit. My noble friend raises an important challenge for us always to keep in mind.

I shall deal with one or two themes before I deal with the detail of the amendment, particularly the question asked by the noble Baroness, Lady Morris. It is an interesting position to be in to be putting forward legislation for the Secretary of State to designate the power for an employer representative body to produce the local skills improvement plan. Clause 1(6) outlines that an LSIP

“draws on the views of employers operating within the specified area, and any other evidence, to summarise the skills, capabilities or expertise that are, or may in the future be, required in the specified area”.

That is the language that we have seen in technical education and occupational requirements for apprenticeships. The local skills improvement plans will set out the key changes needed for post-16 technical education training, as I have emphasised, and make it more responsive to employers’ needs, but this is not a complete economic plan nor a complete local strategy. In some ways it is a compliment that noble Lords have viewed this as more expansive than it actually is, but it merely sets out what the employer needs are in relation to technical education and, as I say, puts the duty of co-operation on relevant providers so that there is a dynamic relationship on the ground.

Relationships are the theme of employers and employer engagement. It is true that in the recent changes much has been asked of employers in relation to apprenticeships, and then we introduced T-levels; we had engagement from 250 employers on T-levels, and we should not underestimate that. I have to tweak the language of the noble Lord, Lord Watson: they are not always looking to their own needs. That is why we have gone for an employer representative body rather than, say, simply asking BAE Systems to do it for the local area around Barrow. There has to be a representative function, a point that the noble Lord, Lord Addington, referred to. It is important that these are representative bodies of employers, not just collaborations.

My noble friend Lord Baker does down his own work. On my visit to Ron Dearing UTC, I thought I was passing a shopping centre because the employers that pay to be part of that UTC are advertised around the side of the building. I met the CEOs of the businesses involved and they were solving their skills needs by getting directly involved in the UTC.

Obviously, we have heard from many employers about productivity and about the skills gaps that we have. There is good evidence on which we can base the fact that employer representative bodies—it will not always be a chamber of commerce, but that might be one of the bodies that puts itself forward—do want to solve these skills needs, and there is significant good will in relation to their involvement.

The noble Lord, Lord Bradley, and my noble friend Lady Neville-Rolfe, raised the question of what the local area is. There is no agreed defined local government geography. I mean by that that there is no agreed defined standard across our country, and there is no single functional economic area—so we have allowed areas to define themselves. Having lived in Greater Manchester, I know that sometimes a whole area will want to define itself, but the freedom has been given. The areas for the trailblazers have not been dictated from the centre. We will publish their plans when they produce them, and they are informing the guidance. Another noble Lord asked that question. There is that freedom from the centre that says, “Tell us what your functional economic area is for the employer representative body and the local skills improvement plans”. As I outlined, most of the applications came with a letter—so we have not encountered the resistance from the mayoral combined authorities or local authorities in relation to the trailblazers that we have embarked on.

On the point about providers made by the noble Lord, Lord Storey, I would say that providers often have different perspectives, from FE colleges to higher education institutions to the ITPs. That is why we want all providers of post-16 training to be involved, but I fear, from some of the comments that noble Lords have made, that we will be back to what the noble Baroness, Lady Morris, mentioned at Second Reading: having a cast of thousands.

On Amendments 5, 13, 14, 16, 23, 28, 29, 37 and 38, the relevant providers will play an important role, working with the employer representative bodies to develop these plans. We have not taken them out of the picture; the duty is there to co-operate. To answer the point from the noble Lord, Lord Bradley, we made it clear in the Skills for Jobs White Paper that mayoral combined authorities will be engaged in the development of local skills plans where they have a presence in the area. We expect employer representative bodies to engage with and build on the good skills-related work that local authorities and mayoral combined authorities are currently doing, including skills advisory panels. We will build on that work, but ERBs will be independent of government. If I am correct in the definition of LEPs, that is not their role—but there is currently a review and we will make clear the plans for that.

I emphasise again the limit of the LSIP—hence it is complemented in the Bill by the duty under Clause 5 for providers to look at their entire provision for local needs. I do not want to underplay it completely, but it has rather been taken to a level that it will not actually have in the Bill. It is to ensure that the skills are closely aligned to local labour markets, and employers are best placed to know that. Noble Lords will be encouraged to hear that this is not an amendment on which I will say that everything will be in the guidance and should not be in the Bill. We have a point of principle here that is the DNA running through our technical education changes about employers being the body that can assess needs. They will play a leading role and there will be duties on providers to engage with them. The premium we place on the ongoing direct and dynamic engagement between providers and employers is what we are trying to set up in this legislation.

Additionally, to discharge this new role effectively, the designated employer representative will need and want to work closely with MCAs and individual local authorities. There is a question of practicality as there will be a large number of providers and stakeholders, and indeed a number of local authorities, in any given local area with different perspectives on the key priorities. Giving them all a statutory role in developing the LSIP is much less practical than having a single designated employer representative body that can engage with all the relevant providers in a way that minimises burdens and brokers a plan.

This set of amendments includes placing a new duty on the designated ERBs to co-operate with relevant providers. However, that is not necessary since a designated body cannot discharge its role, as already set out in the legislation, without the co-operation of those providers.

Looking beyond the providers and employers, I think there is broad agreement that the views and priorities of key local stakeholders should be considered in developing these plans. That is why we want employer representative bodies to engage meaningfully with key local stakeholders, and we have made this clear with the trailblazers we are running this year. However, a rigid process—as my noble friend Lady Neville-Rolfe mentioned—with a fixed set of local stakeholders could make it difficult to effectively plan, keep under review and keep up-to-date in an agile way within a timescale that is reasonably responsive to employers’ skills needs. Therefore, at this point we will use statutory guidance to set out the clear expectations on key stakeholders that employer representative bodies will need to engage. As I have said to noble Lords before, this will be informed by the trailblazers. If the designated employer representative body does not have regard to the guidance, the Secretary of State could decide not to approve and publish the plan and actually has a power to remove the designation.

On Amendment 31, the noble Lord, Lord Watson, challenged how representative the ERBs are. Again, they will be informed by a range of employer views. That is clear on the face of the Bill. The Secretary of State can designate a representative body only when satisfied that it is reasonably representative of employers operating within a specified area. I know there has been some interchange about reasonableness between the two Front Benches opposite, but that is obviously an objective criterion that is assessable on evidence. The Bill requires designated employer representative bodies to draw on the views of employers in the area and other evidence, so it is a very wide scope. To do this, they would need to talk to employers outside the body itself and other bodies present in the area, and we would put that in the guidance. A balanced judgment of what constitutes a “reasonably representative” employer representative body will be informed by suitable evidence, including, for instance, the extent to which characteristics of an employer representative body’s membership compares to the overall population of employers in the local area.

On the concerns of the noble Lords, Lord Watson, Lord Patel and Lord Curry, about SMEs, public sector employers and voluntary sector employers, of course MCAs are an employer, but they are not an employer representative body. They may also be a member of the chamber of commerce, like the local hospital might be. That is the distinction we have made. The term “employer” in Clause 4 is defined particularly widely as any

“person that engages, or intends to engage, an individual under … a contract of service or apprenticeship, or … a contract for services … for the purposes of a business, trade or profession”.

Therefore, it includes employers of all sizes, and public authorities and charitable institutions are also specifically mentioned. Of course, when the Secretary of State is designating the ERB, he is bound by the normal principles of public law to act rationally and fairly, and he will need to take into account a range of relevant, reliable and accurate information.

Amendment 36, in the name of the noble Lord, Lord Watson, would require LSIPs to have due regard to national and regional strategies, particularly in respect of decarbonisation. I think I have outlined a number of times to noble Lords that these will be expected to take into account various national strategies, particularly around the net-zero target, and that this will be within the guidance. Obviously, it is important to have regard to that in terms of the green workforce that we need in the future. But they should also draw on other evidence, and we expect that to include regional strategies.

To deal with the points raised by the noble Lords, Lord Curry and Lord Patel, the Skills for Jobs White Paper has already made clear that we expect the local skills improvement plans to be informed by, and in turn inform, national skills priorities as highlighted by the Skills and Productivity Board. Specific strategies and associated priorities are likely to change and evolve over time, so we believe that describing them in guidance that can be regularly updated, rather than legislation, is the best way of future-proofing the Bill.

The point about accountability that came up in the first group of amendments was raised by the noble Lord under Amendment 40. We of course agree that the ERBs need to be accountable for their leadership of local skills improvement plans, and the Bill provides a framework for that. The Secretary of State must be satisfied that an eligible body is capable of developing a local skills improvement plan in an impartial manner before they can be designated; we have not mentioned this before, but I think it is very important that that is on the face of the Bill. Then the Secretary of State must publish a notice of the designation of an employer representative body. He must name the body and the specified area for the designation, along with the effective date and any terms and conditions that the designation is subject to. On previous groups of amendments, I have said that the Secretary of State can set the terms and conditions; in relation to trailblazers, there is public money and that, of course, is always spent in accordance with appropriate transparency.

In its role, the designated employer representative body will be accountable to the Secretary of State and the department will monitor and review its performance. Importantly, Clause 3 gives the Secretary of State the power to remove the designation. If that designation is removed, the Secretary of State is under an obligation to publish that notice as well. Again, it can be subject to terms and conditions, a point raised by the noble Lord, Lord Aberdare.

I hope that my remarks have reassured noble Lords that the Bill already contains a number of important safeguards to ensure that the right organisations are involved in the process of drawing up an evidence-based and actionable local skills improvement plan. In the light of what I have said, therefore, I hope that the noble Lord, Lord Storey, will feel able to withdraw his amendment and that other noble Lords will not wish to press theirs.

Photo of Lord Lexden Lord Lexden Deputy Chairman of Committees, Deputy Speaker (Lords) 8:00 pm, 6th July 2021

I have received one request to speak after the Minister. I call the noble Baroness, Lady Neville-Rolfe.

Photo of Baroness Neville-Rolfe Baroness Neville-Rolfe Chair, Built Environment Committee, Chair, Built Environment Committee

I thank my noble friend for taking so much trouble to answer our questions. It is refreshing even if we do not like every answer. She said something very interesting: that the economic area could even be Greater Manchester. Could the proposed area be one that is supported by the combined mayoral authority in the Greater Manchester area or some other combined mayoral authority? Secondly, I do not think she answered my question. Could I see a specimen local skills improvement plan before we move to Report? That would be very helpful in feeling assured that the system was really going to work as intended.

Photo of Baroness Berridge Baroness Berridge Parliamentary Under-Secretary (Department for International Trade) (Minister for Women), The Parliamentary Under-Secretary of State for Education

Yes, as I have said, in the process of bidding for the trailblazers, we have allowed local geographic areas to define themselves as the economic area. So, it could be the mayoral combined authority for Greater Manchester, or it might be that parts of the north of that area decide that they are going to be in an area with somewhere else. We have not prescribed that. We have allowed that local decision-making, and we are not dictating from the centre. We would be criticised if we were to do that. It is up to that geography to define itself. I will have to come back to my noble friend on a model plan. We will be publishing the trailblazer plans during that pilot, but I will write to my noble friend about any other model plan.

Photo of Lord Storey Lord Storey Liberal Democrat Lords Spokesperson (Education)

My Lords, I thank all Members for their wise contributions and the Minister for her very detailed replies. I thought the noble Baroness, Lady Morris, really put her finger on it when she said, “I am not confident we’ve got the relationships right.” This is not—and I look directly at the Minister—about those pesky politicians or those pushy colleges wanting to get their hands on the levers of provision. This is about making sure this works. We support the Bill, we want the Bill to be successful, and we want these plans to work. All the contributions that noble Lords have made indicate that we have reservations about the way these plans are going to be drawn up. I was taken with my noble friend Lady Garden’s comment about when she was at City and Guilds. It was trying to get employers to come forward and was asking, “What skills do you want?” They did not have a clue. If you think “We will just give a sop to consultation”, people will feel that they are not properly involved. At the beginning, we heard the noble Lord, Lord Patel, say it gives too much power to a small group. That feeling will be there, and people will not feel engaged and will not want this to be success. So, I hope that in Committee and on Report, the Minister will consider the wise words of Members and we can have a system—if that is the right phrase—that will deliver what we all want. That is really important, as is, as the noble Lord, Lord Bradley, said, that we have those proper checks and balances.

To finish, the noble Baroness, Lady Neville-Rolfe, will be pleased that business and politicians can work together. Liverpool gave the freedom of the city to Terry Leahy. There you go: an arch-capitalist being lauded by the Lib Dem council at the time. I beg leave to withdraw the amendment.

Amendment 5 withdrawn.

Amendments 6 and 7 not moved.

House resumed.