Amendment 50

Skills and Post-16 Education Bill [HL] - Report (2nd Day) (Continued) – in the House of Lords at 5:30 pm on 21 October 2021.

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Lord Clarke of Nottingham:

Moved by Lord Clarke of Nottingham

50: After Clause 21, insert the following new Clause—“Provision of opportunities for education and skills development(1) Any person of any age has the right to free education on an approved course up to Level 3 supplied by an approved provider of further or technical education, if he or she has not already studied at that level.(2) Any approved provider must receive automatic in-year funding for any student covered by subsection (1), and supported by the Adult Education Budget, at a tariff rate set by the Secretary of State.(3) Any employer receiving apprenticeship funding must spend at least two thirds of that funding on people who begin apprenticeships at Levels 2 and 3 before the age of 25.”

Photo of Lord Clarke of Nottingham Lord Clarke of Nottingham Conservative

My Lords, this amendment was tabled by the noble Lord, Lord Layard, and myself. We discussed it in Committee, without much response from the Government. I travel more optimistically today and hope that we will get a more favourable reception. We probably should, because it is entirely consistent with the Government’s stated aims on skills and the need for skills development in this country, and with the admirable spirit of this Bill, which I broadly welcome. As the noble Lord, Lord Adonis, said rather forcefully on more than one occasion in Committee and on Report, the Bill is very sound in principle, trying to develop our training and skills system in this country, but a little thin on substance in places. This amendment seeks to add a little more specific substance.

The first two subsections of the proposed new clause hang together and are connected. Proposed new subsection (1) speaks for itself, if one reads it. It deals with those people who have not managed to attain skills up to level 2 or 3, which are quite essential in today’s world and will be for the future, and entitles them to free education of the kind they are entitled to up to the age of 18, as far as school education is concerned, if they, at any stage in their life and for whatever reason, turn to try that level of skill. People do not always take the opportunities available to them in their teens and early years. This subsection would enable people to turn to free education. It takes a step further, and for this particular case is more suitable. I have been listening to all the discussions we have had about the Government’s loan schemes and so on, which I welcome. There is no need to read out the subsection’s terms; noble Lords can read it for themselves. It spells out this entitlement to free education.

Such an entitlement is quite useless if, where you live, there is nobody in a position to provide such courses. That is where proposed new subsection (2) comes in. Although this is a modest amendment, it addresses the rather bigger problem of how we fund further education in this country. From listening to debates throughout the Bill, I see that there is nothing new in the world; we have been debating all this for 50 years. I can well remember that when I was Secretary of State we just acknowledged that further education had for too long been treated as the Cinderella of the education system. There was the great gap left by the failure of the 1944 Act to develop technical colleges and all the rest of it. I am not sure, when we look back on our efforts, that Governments of both parties of the last few decades have made anything like adequate progress.

One of the problems is the way that further education is funded. Proposed new subsection (2) deals with the question of how one would fund the entitlement to free education that proposed new subsection (1) proposes. There is a huge difference between the way courses are funded at schools—at the lower level—at universities and in further education. Schools are paid open-endedly about £5,000, if it is a sixth former, for every student they manage to retain. That is why it has been said several times in the debate that schools sometimes unhelpfully persuade people to stay in the sixth form because it is worth £5,000 a year for the school budget, when from a pupil’s point of view they might very advantageously move to a more suitable course. If you are a university, for every student you manage to recruit for a degree course, of whatever quality you have laid on, £9,500 comes automatically, student by student.

Further education colleges are still subject to cash-limited budgets. Those budgets, like most public expenditure, have been particularly fiercely curtailed in recent years, for necessary reasons in large part. The proposed new subsection makes a straightforward suggestion: if you accept proposed new subsection (1), that you are giving a right to free education to the people whom I have described, then you actually have to provide the funding. It says that the Secretary of State, out of the adult education budget, at a tariff to be set by the Secretary of State, will provide the funding to colleges to provide the courses. It hangs together very neatly.

I cannot think of any policy reason or reason of principle for opposing these two modest suggestions. My hope, were we to get the second in place, is that sooner or later one would face up to the big prospect, which I hope the Chancellor is contemplating in his current public spending round, of moving further education colleges to the open-ended funding that will be necessary to let them play the major part they are going to have to play in the reskilling of our population, providing the skills for our economy in future years.

The third part, which is obviously related to the subject but moves on slightly, is on apprenticeships and the working of the apprenticeship levy. It makes the proposal that, following the introduction of the levy and the intention of injecting powerful financial incentives to get our employers back into providing the apprenticeships, opportunities and training that our workforce requires in future, two-thirds of the levy-funded apprenticeships should be for those between 16 and 25.

This is a marked change from what has actually happened since the apprenticeship levy was introduced, which I do not think anyone foresaw. I am sure that, when the policy was first brought in, the Ministers involved and the general public envisaged that we would see a steady growth of good-quality apprenticeships —because very valuable conditions were put in, such as having off-work training and not just calling everything at work “training”, and so on—that young people would, steadily, have an attractive alternative if the academic education route did not suit them and that we would develop, through apprenticeships, people skilled in the new skills of tomorrow’s economies, which our young people in particular will require if they are to have a satisfactory work career thereafter.

That did not happen because the large companies were, I am afraid—not too surprisingly—anxious to see how they could recover levy money and reduce the impact of what was otherwise a new tax by ascribing to the levy most of the training that they already did for their existing workforce of all ages. It did not have the effect that we all hoped—which would advantage the company as well—of making people contemplate taking on and providing new training opportunities for young people coming out of schools, colleges and universities in order for them to get into the beginnings of their careers.

I know that the Government have got rid of the worst excesses. People without any kind of training, at every level of large companies and in the public sector, including the Civil Service, in order to improve the figures were being described as apprentices. Most of them did not know that they were apprentices but, for the purposes of recovering the levy, quite high-ranking managers were described as such. As I said, the Government have got rid of the worst abuses. At one point, it was possible for a high-flying senior manager to go on a business management degree course at a university and the apprenticeship levy would be recovered against the cost incurred.

Therefore, our amendment seeks to take the policy back to what it was expected to produce when it was first introduced and certainly to what the general public and both Houses of Parliament thought we were talking about when we first introduced the apprenticeship levy. It depends on all kinds of other things, such as explaining it to the public, improving the status of apprenticeships alongside alternative academic and technical routes and so on. But it was mainly an opportunity for the under-25s.

I quite accept that there are older people who can benefit from training or retraining. Indeed, people will have to change their jobs far more frequently in tomorrow’s economy, and plenty of people will, at the age of about 50, find that their existing job is coming to an end, and retraining is important. Because I have seen the Minister’s note, I anticipate that her response, which will no doubt be as courteous as ever, will say, “Well, first, we cannot interfere with businesses; they must decide what training they want”. That rather overlooks the fact that they are doing it for financial reasons, just to minimise what they spend on training anyway. More importantly, she will say, “Training is required by people of all ages”. I have already conceded that, and that will include some people who are sent off on totally fresh training courses by their employers.

The amendment says only that two-thirds should go on those under the age of 25; for one-third there is no age limit. If anyone starts producing good examples of people in later years who might reasonably qualify for funding for their training—and then the recovery of that funding by means of the levy through the employer providing it—that is fine, but the balance at the moment is absurd. Since the levy system started, the number of young people going into apprenticeships has actually declined, particularly at the ages of 16 and 17. The overwhelming majority of apprenticeships funded under the levy scheme are for older people.

I have described the way in which many large companies just use the scheme to attribute spending and recover the levy. All they are recovering is money that any large business ordinarily spends all the time and always did. There are always some people who need retraining. As you automate and change your technology, you give some extra skills training to your existing staff. If the companies were not doing that, they would not be successful and would not be progressing. To allow money to be used in that way does not really add to what any good company should be doing anyway, whereas the amendment advocates using the levy system as an incentive to give apprenticeship and training opportunities for those up to the age of 25, and I hope the House will accept it.

As I say, this is not a new question. Practically most people in the House, if they have taken an interest in the subject, have been advocating various policy changes on the subject of skills shortages and training. I have already said that in 50 years we have not got very far. Particularly after Covid and Brexit, and because of the pace of technological and other change in the globalised economy, the need is more urgent now than it has ever been.

Back in the old days, decades ago when I was in the departments for employment and education, we had YTS and NVQs, the youth training scheme and national vocational qualifications—daring stuff and very controversial at the time, but primitive efforts compared with what we do now to try to rationalise and raise the quality of our training. At any time in the last few decades, if you asked the management of a medium-sized or reasonably small-sized company what the biggest problem was that they were facing in running their business—a question that I often asked at several of the departments I worked in—skills shortages, over and again, was likely to be the first thing that featured when they spoke.

I cannot remember the number of speeches that I have heard where we have compared ourselves with Germany and regretted the fact that the Germans are so good at technical qualifications—they do not have our problems of equivalent status, and so on. People on both sides should hang their heads in shame; we have all made speeches using that as an illustration to forward our policies, but we have not got there.

If I may say so, the Bill is a valuable attempt to catch up to the pace of events. It is needed at a key moment. The careers of the next generations of people are not going to resemble the careers of the last. The acquisition of skills is essential from a personal point of view, while making sure that we have a workforce for skills is fundamental to our getting back to having a healthy, modern economy. I therefore urge the Government—having considered the debate in Committee, where we had quite a lot of support—to consider making a positive and content-filled response to the amendment and, I hope, accepting it.

Photo of Baroness Garden of Frognal Baroness Garden of Frognal Deputy Chairman of Committees, Deputy Speaker (Lords) 5:45, 21 October 2021

My Lords, I have added my name to Amendment 60 on the lifetime guarantee tabled by the noble Lord, Lord Watson, but I shall first say a few words about Amendment 50, which has been so eloquently introduced by the noble and learned Lord, Lord Clarke. It was good to go down memory lane with NVQs and YTS; I remember them well. I am concerned about subsection (1) in the proposed new clause, which requires funding for an approved course

“if he or she has not already studied at that level.”

We have put quite a lot of effort into trying to get funding for people to study at levels equal to or lower than qualifications they already have, if that is going to enable them to get into a new job. To restrict this to people who do not have a level 3 qualification might well be problematic. But oh, how much I agree with him about apprenticeships. In my mind, an apprentice is somebody starting out in work, not a middle manager doing an MBA. Having something to try to ensure that apprenticeship levy funding goes to young people is essential if that system is to work properly.

On Amendment 60, it is important that the lifetime skills guarantee is on a statutory footing if it is to have any impact at all. Both these amendments refer to courses up to level 3. It is important that we do not overlook qualifications at levels 1 and 2, because often they are the gateway to learning for people who have been put off education at an early age, as I have said before. Level 1 learners can be people who are encouraged for the first time to find learning accessible, enjoyable and fulfilling, when at school academic learning and GCSEs had been nothing but off-putting and a source of failure. That is something we need to be sure to support. Once such people discover that a national qualification is within their grasp and their ability, they will often find the confidence to continue to upskill and to gain employment in areas that they previously assumed were unobtainable. If the Government are serious about levelling up, they must start at the lowest levels. Amendment 60 would be a definite boost to that agenda, and I hope the Minister will look on it favourably.

Photo of Lord Layard Lord Layard Labour

I support Amendment 50, which could transform the lives of hundreds of thousands of our young people. Given the time, I shall make just four points. The problem is much bigger than most people, maybe myself included, have realised. In 2019-20, the proportion of all 18 year-olds who were in no form of education or work-based training was 30%. That 30% of the 50% not going to university are getting no education beyond the age of 17. This is completely extraordinary and shocking. What is the reason? It is that there simply are not enough places for these people to study and acquire skills compared with people going down the academic route.

The lack of places is almost entirely due to the completely different way in which those places are funded. As the noble and learned Lord, Lord Clarke, said, when young people go down the academic route, the funding automatically follows the student year by year, but for the other 50% the budget is simply set by the Treasury. It is capped in total and college by college. The current funding for 2021-22, including recent additions, is still less than half what it was in nominal terms in 2010. This is extraordinary and shows the failure of the system that this sort of thing can happen. It is difficult to think of any case of greater discrimination in any other aspect of our public life. I cannot think of any more extreme class-based discrimination than in that area.

What is the remedy? It is clear that the only approach which is fair to other 50% and which will adequately address the problem is to fund the other 50% the same way as the privileged 50% who go down the academic route—to make the money automatically follow these students. The proposal is that every student up to level 3 exercising the lifetime skills guarantee and taking an approved course—not just anything—should be automatically funded according to a national tariff. As the noble and learned Lord, Lord Clarke, explained, that is the essential part of the first half of this amendment.

The second half relates to apprenticeships. When I was very young, I worked for the Robbins committee. It established the principle that there should be enough places for anybody who qualified for a place and who wanted to exercise access to it. That has always applied to higher education, ever since the Robbins report. It has never applied to the other 50%; they just have not been thought of in that way at all. That really has to change.

As the noble and learned Lord, Lord Clarke, said, we now have a severe lack of apprenticeships for young people. There is huge, well-documented excess demand but supply is falling. The system is completely unresponsive and far too much of the apprenticeship money is being diverted to the over-25s. I will give two reasons why I think that is wrong. First, what is the key duty of any system of education and training? The first key duty is of course to get everybody off to a proper start. Good initial training is the central feature of any just, efficient system.

There is an extra, economic fact about the use of resources which I think is very relevant. The Department for Education’s own figures show that the benefit-cost ratio is much higher—in fact, double—for apprenticeships for the under-25s compared with those for the over-25s. For the sake of justice and efficiency, we have to redirect this money to an important degree back to the under-25s.

I would have thought this was a central proposal for any levelling-up agenda. We have a problem which is a major cause, almost the main cause, of our low national productivity per head. It is also a major cause of the spread of low incomes among the lower part of the workforce. If we are looking for items for a levelling-up agenda, surely this should be near the top.

I hope that as many noble Lords as possible will support this amendment and that the Government will also support it. If the Government find that they cannot support this proposal, I worry about the whole future of the levelling-up agenda.

Photo of Lord Adonis Lord Adonis Labour

My Lords, I agree with every word of what my noble friend Lord Layard and the noble and learned Lord, Lord Clarke, said. When I spoke in Committee, I gave the figures that show that the number of apprentices under the age of 25 is now lower than it was when the apprenticeship levy was introduced. Rarely has there been a policy which has failed so catastrophically to deliver its objective.

I do not want to repeat what my noble friend and the noble and learned Lord, Lord Clarke, said; their points about the failure to create apprenticeships in the private sector were very well made. The point I want to address to the Minister and introduce to the debate relates to one of the other really significant failures in the creation of apprenticeships, namely the failure to create apprentices in the public sector. This has been another very long-running and serious failure.

The worst provider of apprentices in the country among large organisations is the Civil Service, which had no scheme of creating apprentices at all before 2015. I met the noble Lord, Lord Kerslake, who was the head of the Civil Service then, and some of us worked very closely with him to get the Civil Service apprenticeship scheme going. There was quite a lot of foot-dragging and reluctance to do it. The Civil Service has a graduate fast stream and recruits tens of thousands of graduates each year across the different parts of the organisation, but had no apprenticeship scheme. An apprenticeship scheme was created and I checked before coming into the House where it had got to.

The other remarkable thing about it was the thing that persuaded the noble Lord, Lord Kerslake, to go for it: it turned out that the department responsible for apprentices—it keeps changing its name; I think it was then called the Department for Business, Innovation and Skills, but it may have been something else—had, I think, three apprentices under the age of 21. The department of apprentices was one of the worst apprenticeship providers in the entire country. That was the department, with its Ministers, that was supposed to preach to the private sector about how it should create apprenticeships.

I checked where we are with apprentices now in the Civil Service. The state, which is the largest employer in the country, has an obvious capacity and indeed a duty. If everything that the noble and learned Lord, Lord Clarke, said is true about the economy at large, it is manifestly true that the Government themselves should create apprenticeships.

These are the statistics. According to the Civil Service statistical bulletin just out on the employment pattern in the Civil Service last year, since 2015, when the Civil Service apprenticeship scheme started, 29,000 apprenticeships have been created across the Civil Service at all levels. Across six years, that is about 5,000 apprentices in the Civil Service a year. The head count of the Civil Service, as of 1 January last year, was 456,410. Recruitment that year, which was lower because of Covid, was 40,680. There were 40,680 new recruits to the Civil Service last year and under 5,000 apprentices, so less than one in eight of all new recruits to the Civil Service is an apprentice. That is an apprentice at any age; it does not break it down by age, so I do not know how many of them are under 25.

It would be interesting to ask the Minister how many young apprentices, under 25, are in the Department for Education. Maybe the Box has time to provide her with a note by the end of the debate. She may not want to read it out, because it will be a very small figure. I will be surprised if the number of young apprentices in the Department for Education is into double figures—and this is the department, with its Minister, that is supposed to tell the rest of the country of the importance of apprentices.

That figure of 5,000 new apprenticeships a year created by the Civil Service is utterly pitiful. It should be many multiples of that. The idea that only one in eight new recruits to the Civil Service is an apprentice of any age, let alone a young apprentice, is a really serious condemnation of the state and the state’s leadership in the creation of apprenticeships. If the state does not lead on this business, there is no reason whatever to expect that the rest of the country will follow.

Photo of Lord Aberdare Lord Aberdare Crossbench 6:00, 21 October 2021

My Lords, I fully support what the noble Lord, Lord Layard, described as the first half of Amendment 50, but I am rather less comfortable about the approach taken in the second half, requiring any employer receiving apprenticeship funding to spend at least two-thirds of it on people under 25 beginning apprenticeships at levels 2 and 3. That is an aim I entirely support, but I am not convinced that putting the onus wholly on employers to deliver it is the right way of going about it.

One of the concerns employers have regularly expressed about the current apprenticeship system is its lack of flexibility. This amendment would not only reduce the flexibility available to employers but impose extra requirements on them to manage their apprenticeship programmes and an extra level of bureaucracy resulting from the process of enforcing the requirements.

Employers already find it difficult to spend their levy funds, which is why so many apprenticeships go to reskilling and upskilling existing employees. The energy and utilities sector, which has a very good record of employing apprentices, has managed to spend on average only 54% of the levy funding available to it, so it is not as if there is not more money available. All that they do not spend just goes back to the Treasury.

I believe a better approach might be to introduce that extra flexibility into the apprenticeship levy system itself, to make it easier and more attractive for employers to offer more apprenticeships at these levels to younger people. This could be done through, for example, enabling part of an employer’s levy funds to be used for pre-apprenticeship training initiatives in schools to identify and prepare young people who might then be suitable candidates for apprenticeships. I am sure there are other ways of motivating employers to offer more apprenticeships of this type, rather than introducing additional rules that could lead to their providing fewer.

I support two and a half thirds of this amendment, but I am slightly uncertain about the mechanism that the noble Lords are implying to address the third one.

Photo of Lord Forsyth of Drumlean Lord Forsyth of Drumlean Chair, Economic Affairs Committee, Chair, Economic Affairs Committee

My Lords, I have not participated in any of the proceedings on this Bill, partly because I chair the Economic Affairs Committee and we are looking at central bank digital currencies at the moment. But I bumped into the noble Lord, Lord Layard, who pointed out to me that this amendment is entirely in line with the recommendations made by the committee in its report, Treating Students Fairly, which was published in June three years ago. I shall not repeat the arguments so eloquently put by my noble and learned friend Lord Clarke of Nottingham, with every word of which I agree, but it was set out clearly in that report, more than three years ago, that the apprenticeship levy was not working. Indeed, we found that larger employers who were running very effective apprenticeship schemes had simply abandoned it, treating the levy as a tax, and done their own thing.

My noble and learned friend spoke about the way in which all the financial incentives are to keep people in schools and send them on to universities, where they do courses which do not enable many of them to use the skills and achieve the kind of living standards which they aspire to. In short, we probably need more plumbers, electricians, specialists and engineers than we do people who are experts in media studies. I am not saying that media studies is not a serious subject—well, actually, I do think that it is not a serious subject, but that is probably going to get me a lot of abusive emails. I am disappointed that, as this matter was discussed in Committee and as there has been so much about it in the all-party unanimous report, the Government are still dragging their feet on the matter.

When we discuss future topics in our committee, one thing that is regularly suggested is that we look at productivity. We always reject it, on the grounds that it is such a broad subject and so difficult, but this matter is absolutely central to productivity and, even more importantly, offers a future to so many of our young people. So I hope that my noble friend will consider this amendment. I take the point about providing flexibility.

One thing that struck me—and I know that the Government have taken some action on this—was that one of the officials who gave evidence to us proudly announced that the apprenticeship scheme had been used to send her to business school. Of course, that is the antithesis of what the scheme should be. I am not up to date on what has happened since, but there were some 400 different types of rules for different organisations, and the whole thing had become utterly bureaucratic.

The noble Lord, Lord Layard, referred to the Robbins committee. Those of your Lordships who have not read the report should just read the introduction; it is written in the most beautiful prose. It sets out the objectives, from all those years ago, and this amendment is central to achieving them.

When we were looking at treating students fairly, one thing we got in evidence was a diagram showing all the initiatives that had been taken by various Governments for training, and all the changes in names and so on. It is an unbelievably complicated process—not just YTS; there are literally tens and tens of different initiatives. What we need, in the words of Her Majesty the Queen, is perhaps less talk and more doing in this area. This amendment is a very important step forward if the Government decide to accept it.

Photo of Lord Cormack Lord Cormack Conservative

My Lords, I had not come to speak in this debate but to listen. However, some things said by my noble friend Lord Forsyth provoke me to make a short intervention. I do so because I am the chairman—I was the founder—of the William Morris Craft Fellowship. Every year, we award craft fellowships to craftsmen working, for the most part, on historic buildings, including stonemasons, plumbers and bricklayers; people who have gone through a proper apprenticeship in the past and who we select because we think they have the potential to oversee a great project. Your Lordships all know the sort of thing to which I refer: a great parish church or cathedral, or a country house in the possession of the National Trust or privately owned. These places are at risk because of the very few people who are coming forward and getting a proper apprenticeship in this modern age.

My noble friend referred to the young woman and the business qualification that she claimed to be an apprenticeship. I have met people who have claimed to have apprenticeships in flower arranging. But I am talking about young men and women—and there is an increasing, though not overall great, number of women— who have spent four, five, six and sometimes seven years learning and mastering a craft. The noble Baroness, Lady Sherlock, on the Front Bench opposite, is a great devotee of Durham Cathedral, as I am of Lincoln and indeed all our great cathedrals. Their survival depends upon having men and women who are accomplished and able enough to master these crafts, which go back centuries. And they are in danger.

I am also a vice-president of the Heritage Crafts Association, which represents crafts men and women who very often work individually, at home, producing something, in the William Morris idiom, that is both useful and beautiful. We have produced only recently a red list of endangered crafts. I give you but one example: we are down to the last sporran maker. It might sound slightly amusing, but—

Photo of Lord Cormack Lord Cormack Conservative

It is serious, as my noble friend Lord Forsyth knows better than most. Not only is it serious but it is outrageous that, to provide sporrans for a Scottish regiment, the Ministry of Defence has recently gone to Pakistan, whereas in Scotland they can still be made.

I will not go on; I hope I have made my point. Apprenticeships are desperately important, and they are not second best. A young man or woman cannot work with his or her hands unless they have a brain that functions—although, rather interestingly, many people with dyslexia are particularly good crafts men and women. We need them, and we must have proper apprenticeships that enable them to become accomplished.

I am very taken by the amendment moved by my old noble and learned friend Lord Clarke. We began in politics together, way back in 1964, fighting in adjacent constituencies. I think he has performed a service to the House by moving his amendment, so ably seconded by the noble Lord, Lord Layard. I very much hope that my noble friend who winds up will accept the thrust and logic of what has been said and give us a comforting reply.

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

My Lords, I rise to agree with almost everything that has been said about the importance of apprenticeships. This is the right moment to be pressing for reform, as both the Prime Minister and the Chancellor are emphasising the importance of skills in the post-Brexit economy and in levelling up, as the noble Lord, Lord Layard, indicated. However, there are some problems with this amendment as it stands—notably, the lack of clarity as to what it would cost, and exactly where the funding would be found for proposed new subsection (1).

Turning to proposed new subsection (3), I would say that there is a case for some investment in management skills, which are very poor in parts of the economy and are often a cause of poorer company and public sector performance. Indeed, when I was a Minister, I had an assistant private secretary who was an apprentice and in fact became something of a showcase for how apprenticeships could be used right across the public sector. Some levy funding should be spent in these areas. However, I entirely agree with my noble and learned friend Lord Clarke that most apprenticeship money should go the under-25s. His proposal of two-thirds is worthy of consideration.

Frankly, this is only one of several things that are still wrong with apprenticeships. Another issue is that lower level apprenticeships have been phased out. In my Tesco days, such apprenticeships made many of the least well educated in the land extremely proud that they were able to achieve an apprenticeship and then able to move from one employer to another with a certified skill. The exclusions under the current scheme have led to much smaller numbers of people able to become apprentices, which I think is one reason why so much less is spent on the under-25s. Flexibility is also an issue. The noble Lord, Lord Aberdare, gave us some examples from his own experience, and of course we have had the experience of my noble friend Lord Forsyth’s report on this whole area.

In conclusion, it is very good that we have this amendment. We have a new, impressive and energetic Secretary of State in Nadim Zahawi, and we have my noble friend the Minister. I hope that they will review the apprenticeship arrangements and that this amendment will spur them to action.

Photo of Baroness Wilcox of Newport Baroness Wilcox of Newport Opposition Whip (Lords), Shadow Spokesperson (Wales), Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Education) 6:15, 21 October 2021

My Lords, the Queen’s Speech promised that legislation would support a lifetime skills guarantee to enable flexible access to high-quality education and training throughout people’s lives. It therefore beggars belief that there is no mention of this flagship policy in this skeleton Bill; indeed, the Bill is silent on the value of qualifications below level 3 altogether.

At present, 13 million adults in the UK currently do not have a level 2 qualification—that is equivalent to GCSE—and 9 million adults lack functional literacy and numeracy skills, leaving them vulnerable to job loss and making it harder for them to secure work. DfE data has shown that the return on investment for qualifications below level 2 is higher than for level 3. Furthermore, lower level qualifications offer many adult learners a key progression route. Without adequate support through the adult education budget for these lower level qualifications in future years, many students will not be ready for and able to progress to levels 4, 5, 6 and up to degree level, which this Bill—or indeed, in the absence of the LLE amendments, its successor—is intended to support.

Amendment 60 in the name of my noble friend Lord Watson would seek to rectify this by placing the LSG on a statutory footing. It is also intended to address concerns that, at present, the LSG does not offer support for subjects outside a narrow band of technical disciplines. Consultation and regular review of eligible courses are therefore key. Our amendment also addresses concerns that the LSG appears to omit reskilling and second level 3 qualifications by retaining the equivalent or lower qualification rule. I will not repeat earlier speeches on the need for ELQ reform, but I urge the Minister to reconsider including flexibility for subsequent level 3 courses in the LSG to unlock retraining for even more people in an area where there is a demand for skills.

I also support Amendment 50, in the name of the noble and learned Lord, Lord Clarke, and my noble friend Lord Layard, which would ensure that the LSG and support for courses below level 3 are placed on a statutory footing. Amendment 50 also encompasses apprenticeships, which provide an alternative for able young people to the traditional academic route. It would ensure that two-thirds of the funding is spent on under 25s; this is key to ensure they are properly targeted.

Moreover, as noted by many noble Lords, the sharp decline in apprenticeships is deeply concerning, with 2020 seeing the lowest number of 16 and 17 year-olds starting an apprenticeship since the 1980s. We have seen 189,000 apprenticeship opportunities disappear since 2017, which is why Labour has called on the Government to use unspent funds from the apprenticeship levy to fund 85,000 new apprenticeships for 16 to 24 year-olds, creating opportunities for young people to rebuild from the ravages of the pandemic. More than £1 billion in apprenticeship levy funding paid by employers expired unused between May 2020 and February 2021 alone. It is absurd that businesses are allowing hundreds of millions of pounds of levy funds to expire, when so many young people are unable to access a high-quality apprenticeship. Vast sums of money going unspent is a sign of a system in need of fundamental reform to make it work for learners and business.

Skills and retraining must be a vital part of our economic recovery. I hope the Minister is persuaded of the merits of placing the LSG on a statutory footing, especially given it has cross-party and sector-wide support. After all, it reflects the Government’s policy to try to address the skills gap in this country and to enable individuals to develop skills relevant to today’s and tomorrow’s labour market, in their area. This is an opportunity for the Government to show that levelling up is more than just a slogan or an addition to the name of a ministry.

Photo of Baroness Barran Baroness Barran The Parliamentary Under-Secretary of State for Education

My Lords, I thank my noble and learned friend Lord Clarke and the noble Lord, Lord Watson, for their amendments, and all noble Lords who spoke in the debate. I concur with all noble Lords’ ambitions around lifelong learning. This is an important issue with which the Government agree; however, we do not believe it is necessary to specify such a requirement in the Bill.

In April, we launched the free courses for jobs offer as part of the lifetime skills guarantee. This gives all adults in England the opportunity to take their first level 3 qualification for free, regardless of their age. We have ensured that our funding arrangements will allow relevant providers to access further funding if there is higher-than-expected learner demand. Over 400 level 3 qualifications are available, which have been specifically identified for their strong wage outcomes and ability to address key skills needs. Adults in all regions of England have been enrolling since April.

The free courses for jobs offer builds on the pre-existing legal entitlement for 19 to 23 year-olds to access their first full level 2 and/or level 3 qualification—a point raised by the noble Baronesses, Lady Wilcox of Newport and Lady Garden of Frognal—which the free courses for jobs offer complements. Through the adult education budget, full funding is also available, through legal entitlements, for adults aged 19 and over to access English and maths to improve their literacy and numeracy, and for adults with no or low skills to access fully funded digital skills qualifications, as we discussed in an earlier group of amendments.

The adult education budget also supports colleges and training organisations to work with adults at lower levels who want to re-engage with learning and/or their local labour market. This includes around 2,000 regulated qualifications and their components, and non-regulated learning, from entry level to level 2.

In areas where adult education is not devolved, the adult education budget can fully fund eligible learners studying up to level 2 where they are unemployed or earning below around £17,300 per year. In areas where the adult education budget has been devolved to mayoral combined authorities or the Greater London Authority, they are responsible for determining the provision to support outside of the legal entitlements.

The noble Baroness, Lady Wilcox, asked why the Government will not put the offer of free courses for jobs on a statutory footing. As she will be aware, this policy has been in delivery since April and is already benefiting adults aged 19 and above without a prior level 3 qualification in all regions of England. We do not believe that it is necessary to legislate in order to deliver this important investment in the nation’s skills.

Photo of Lord Forsyth of Drumlean Lord Forsyth of Drumlean Chair, Economic Affairs Committee, Chair, Economic Affairs Committee

I am most grateful to my noble friend. It is fantastic that she has listed all these initiatives, but it does not really explain why she is not prepared to put this in the Bill. She says that she does not believe that it is necessary. Why?

Photo of Baroness Barran Baroness Barran The Parliamentary Under-Secretary of State for Education

I am sorry; I thought that I was clear in my remarks. We are already delivering the policy and therefore do not believe that it is necessary to have it in the Bill.

Photo of Baroness Barran Baroness Barran The Parliamentary Under-Secretary of State for Education

If my noble friend will allow me to finish, I will come on to talk about some of the wider issues—particularly in relation to funding, on which I know he is a great expert—further on in my comments.

Photo of Lord Forsyth of Drumlean Lord Forsyth of Drumlean Chair, Economic Affairs Committee, Chair, Economic Affairs Committee

I do not wish to press too hard on this, but Governments are here today, gone tomorrow, and Ministers change. By putting this amendment in the Bill, it is clear to everyone what the future is; otherwise, we are relying on administrative decisions, which can change.

Photo of Baroness Barran Baroness Barran The Parliamentary Under-Secretary of State for Education

My noble friend is quite within his rights to press me and the Government as hard as he sees fit, but I have set out the Government’s position as best as I can at this stage.

Turning to the other aspects of the amendment in the name of the noble Lord, Lord Watson, I agree that the list of qualifications—

Photo of Lord Clarke of Nottingham Lord Clarke of Nottingham Conservative

I am sorry—I know that the point has been made—but I find this an extraordinary approach to legislation. Everything that the Minister has said so far has given examples of things that the Government are doing that are compatible with the amendments that we are discussing. She has not raised a single objection in principle to either of the amendments, but she has been given a brief saying that it is not necessary to legislate. What harm is done by legislation, given that so many Governments in the past have, in the end, fallen rather short of their agreements in principle?

Photo of Baroness Barran Baroness Barran The Parliamentary Under-Secretary of State for Education

I think that the Government’s priority is to see this measure working in practice. Many of your Lordships have far greater experience than I do of how attempts have been made to reform this area, including through legislation, which have not delivered the outcomes that noble Lords across the House violently agree we want to see. So, our focus—

Photo of Lord Cormack Lord Cormack Conservative

I apologise. We are all on the same side here. I understand my noble friend’s powers personally and understand that she has a big document with “resist” written on it, but why can she not talk to her ministerial colleagues and say, “We’ll seek to come forward at Third Reading with something that reflects the concerns expressed by my noble and learned friend Lord Clarke, my noble friend Lord Forsyth and others”?

Photo of Baroness Barran Baroness Barran The Parliamentary Under-Secretary of State for Education

I can assure my noble friend absolutely that I am in regular and detailed dialogue with my ministerial colleagues. I will certainly share your Lordships’ concerns with them but, if I may, I would like to progress in responding to these amendments.

Turning to the other aspects of the amendment of the noble Lord, Lord Watson, I agree that the list of qualifications in the free courses for jobs offer should be updated regularly and reflect labour market need. That is why we keep the list under review and accept suggestions for additional qualifications twice a year from mayoral combined authorities, the Greater London Authority and qualification-awarding organisations. For example, we added hospitality qualifications to the offer in July to ensure that it meets key needs in that sector.

Maintaining the offer as a policy entitlement allows us to continue to respond quickly to the changing labour market. I am sure that this is not the noble Lord’s intention, but the amendment has the potential to slow that process down. There are an estimated 11 million adults aged over 24 in England without a level 3 who can now access their first level 3 via the three courses for jobs offer. We know that there are real benefits to adults gaining a level 3 qualification. Achieving a full level 3 on average gives adults 14% to 16% higher wages and a 4% increase in their chance of being employed. It is right that we focus on those who have not already achieved those advanced level skills, as they have a significant amount to gain. Learners who already have a level 3 or higher can still benefit from a generous government-backed advanced learner loan.

Turning now to the amendment tabled by my noble and learned friend Lord Clarke and also in the name of the noble Lord, Lord Layard, I absolutely agree with the noble Lord, Lord Layard, that this reform is fundamental to achieving our levelling-up ambitions. The Government are clear that the further education funding system needs to change in order to meet the needs of learners.

I shall spend a moment setting out what the Government are doing. We are reforming the adult skills funding system so that it is simpler, outcome-focused and more effective. We are currently consulting on this and it would be wrong to pre-empt the outcome of that consultation. We do not want to commit to funding arrangements on a piecemeal basis, which is why we cannot accept this amendment.

I remind your Lordships that we are proposing, first, to introduce a single skills fund that brings together all direct funding for adult skills, making the system easier for colleges to navigate; secondly, to establish a simpler and fairer way of allocating the money within the skills fund; and, thirdly, to give more certainty to colleges over their funding, including over multiple years, which I think goes to the heart of the second part of my noble and learned friend’s amendment.

On the third element of my noble and learned friend’s amendment, noble Lords are aware—my noble and learned friend anticipated this perfectly—that it is a central principle of the apprenticeship programme that employers take the decisions about who they recruit as an apprentice on which standard, including the level of apprenticeship, and government funding will then follow those decisions. We believe that employers are better placed to make those choices, as they know what skills they need and who might best meet that need. Therefore, we would be concerned about restricting that choice by agreeing to that part of the amendment. It might work for some employers, but not for all. It would reduce opportunities for older employees who may want to retrain for progress. There may also be younger people who want to start with a higher-level apprenticeship.

From August 2020 to April 2021, 16 to 24 year-olds accounted for just over 50% of apprenticeship starts and, in the same period, level 2 and level 3 starts made up more than two-thirds of total starts. The latest figures show that more than 101,000 apprentices have been supported through the apprenticeship initiatives between August 2020 and September 2021, of which 76% are aged between 16 and 24.

There were a couple of other questions. My noble and learned friend Lord Clarke talked about converting existing training into apprenticeships. Employers cannot simply convert their own training into an apprenticeship. The Institute for Apprenticeships approves all apprenticeship standards to ensure they meet high quality requirements. Apprenticeships must last a minimum of 12 months and include at least 20% off-the-job training.

The noble Lord, Lord Adonis, asked about the number of apprenticeships in the Department for Education. I am pleased to tell him that times have moved on since he and the noble Lord, Lord Kerslake, were battling on this. We have a strong internal apprenticeships programme. We have more than 350 apprenticeships, on standards from level 2 to level 7. Following a successful pilot last year, we put in place a new policy for external recruitment at our EA and EO grades, which I am informed are the two lowest grades in the Civil Service, in February 2021. Externally advertised vacancies at these grades are now recruited as apprentices by default.

In conclusion, I am grateful to my noble and learned friend Lord Clarke and the noble Lord, Lord Watson of Invergowrie, for tabling these amendments. It is vital that all adults in England can access their first level 2 and level 3 qualifications for free, which is why the Government are already funding this through existing legal and policy entitlements. I also agree that the funding system must be fit for purpose. That is why, as I set out, we are currently consulting on new funding and accountability arrangements for the further education system, which aim to give providers more certainty and allow them to focus on education and training.

I hope my noble and learned friend and the noble Lord, Lord Watson, are satisfied with the work being done in these areas. If so, would my noble and learned friend be happy to withdraw his amendment, and would the noble Baroness, Lady Wilcox, in place of the noble Lord, Lord Watson, not move Amendment 60 when it is reach?

Photo of Lord Clarke of Nottingham Lord Clarke of Nottingham Conservative 6:30, 21 October 2021

My Lords, my noble friend kept thanking us all for introducing these amendments, which is very kind of her. I think we all thank her for the skill and courtesy with which she delivered her brief in attempting to reply. Faced as I am with a situation where, as far as I can see, her brief gives examples of things the Government are doing that are entirely compliant with our amendments but provides no reason in principle for opposing them, except that it is not convenient or wise, I would like to take the mood of the House and put my amendment to a vote.

Ayes 126, Noes 116.

Division number 5 Skills and Post-16 Education Bill [HL] - Report (2nd Day) (Continued) — Amendment 50

Aye: 126 Members of the House of Lords

No: 116 Members of the House of Lords

Aye: A-Z by last name

No: A-Z by last name

Amendment 50 agreed.

Clause 22: Further education in England: intervention