It is a delight to serve under your chairmanship, Sir David, and if it is not too late, I wish you and everyone here a happy new year. We have had a superbly balanced and broad-ranging debate. We must thank my hon. Friend Judith Cummins not simply, as she put it, for making this a wide-ranging debate, but for her strong and important points. She gave a powerful critique of the current apprenticeship programme, and outlined the direction in which it needs to go to assist somewhere such as Bradford, which, as many have said, has a fantastic history but needs a powerful future as well.
I was impressed by the huge range of contributions from colleagues across the House. John Howell spoke about the importance of work placements. After a voyage around his witticisms, my hon. Friend Stephen Pound found more fertile ground in horticulture, for which we thank him. Lee Rowley rightly spoke about the need to look to the future and different sorts of skills, and showed an intelligent understanding of where the tensions are between such skill sets. My ever-forceful colleague, my hon. Friend Emma Hardy, talked about apprenticeship pathways to get to degree apprenticeships and spoke strongly about the importance of level 2 in terms of progression—I shall come to that later in my remarks.
My hon. Friend Faisal Rashid raised concerns about how the Government will have a lost generation if they do not properly prepare for apprenticeships, and said that the Institute for Apprenticeships should be focused on outcomes and be supported. My hon. Friend Hugh Gaffney spoke about the importance of ethnic minorities not missing out in Scotland, and he raised some significant concerns. Finally, Marion Fellows shared her experiences as a former FE tutor and lecturer and spoke about the need to promote modern apprenticeships. All those contributions have added to this debate.
We know that we are entering a period of extreme uncertainty regarding our skills base because of a cocktail of challenges: Brexit, automation—I take that point from the hon. Member for North East Derbyshire, which is why I said “challenge” rather than “problem”, but it nevertheless focuses our minds strongly—and the damage already done by the neglect of older as well as younger people in adult education, the dramatic fall in take-up by adult learners, and cuts to the adult skills budget. If we are now faced with the impending scenario of a no-deal Brexit, the need for home-grown skills is strengthened yet further.
Despite consistent warnings from ourselves, and the university and FE sectors, the Government have been neglectful of the impending damage—especially through the drift to no deal—that Brexit could cause to our world-class FE colleges and universities, and to skills as a whole. This is an issue for FE in particular, because of the deep engagement of community projects that are funded via the EU. Thousands of UK jobs, and tens of millions of pounds that the UK earns from our EU links with universities, further education colleges and training providers, are in jeopardy as a result. The Government need to get to grips urgently with spelling out how their shared prosperity fund will replace the funding from the European Social Fund and the Research Development Fund, on which our community-focused higher education institutions and colleges so rely.
What is the Department for Education doing—the Minister will have heard me speak about this before—to ensure that the needs of skills and apprenticeships are at the top table? Why have we seen so little proactivity? The Secretary of State seems to have thought that Erasmus was a second-level issue. That is what I have been told, but I hope the Minister will reassure us that it is not a second-level issue, because it is crucial to the skills processes that we need, whether in Bradford or Blackpool.
The already growing skills shortages in areas such as the health service are becoming catastrophic. We heard the national health service plans yesterday. That was all well and good, but the unanimous comment in the media has been about where the 100,000 extra jobs will come from. Where will those people come from if we do not have a progressive integrated policy? We have a Department—it is new year, so I will try to be charitable to the Minister—that is struggling with the consequences of nursing bursaries being scrapped. I entirely support the Royal College of Nursing’s campaign in this area, and have heard from constituents who have been seconded via the NHS to Blackpool hospital about some of their concerns. We have world-class colleges and providers, but they are being consistently let down by cuts to budgets and funding streams. Unfortunately, apart from the eventual money pledged for the introduction of T-levels, there has been no reversal to those damaging reductions made by the Government.
The Minister urged MPs and the sector to lobby before the Chancellor’s Budget. They did, but they got precisely nowhere. It is imperative that we use apprenticeships and our skills network to help people be trained, but we have to fund them properly. We are being told to look at the spending review, but as the former Minister David Willetts observed on Saturday, when talking about the Augar review, the chances at the moment of the Chancellor focusing his eye on education as opposed to the NHS appear to be minimal.
Fine words we have had plenty of, but they butter no parsnips. That is particularly important in smaller towns and cities, such as Bradford, Blackpool and many of the places that Members who have spoken today represent, the people of which feel that they have been let down. We hear rumours that the Augar recommendations will pin all hopes and money on the cut in university fees. I sincerely hope that the Minister, in whatever capacity she is able to, will raise her voice against the focus simply on higher education, to the detriment of further education.
One of the potential avenues that we need to explore to achieve all that is, of course, the devolved skills and adult education budget implications. There are clear opportunities via those new structures that could be utilised, and should be, if we are to have proper progression in the devolution of adult skills funding. We need a much bigger debate about the devolution of broader apprenticeships than we have had so far.
We need proper infrastructure and long-term thinking. The Government have been poleaxed by Brexit, and are looking only to scrape to 2020 in their funding and policies. While they do that, our new national education service will look at devolving apprenticeships and other skills funding, not just the adult education budget, and our lifelong learning commission will expose and explore new ways of collaborating on the ground with the third sector and the unions to get those skills up and running.
Skills devolution is not just a smart thing to do economically; it is the right thing to do for community growth and cohesion. If apprenticeships are to have strong, positive outcomes for local economies and workforces, far more young people need to get to the starting place to begin with. It is important to grasp the potential for high-quality apprenticeships in the service sector. As others have said, that means supporting our small and medium-sized enterprises and starts at level 2, and ensuring a properly funded and promoted traineeship programme.
We have been banging on about that to a succession of Government skills Ministers for two years; the current Minister is the third to hear me speak on it. The latest statistics from the Department for Education show a significant drop in level 2 apprenticeships—just 161,000 starts at level 2 in 2017, down from 260,000. The proportion of overall starts has fallen to its lowest level yet. As Mark Dawe of the Association of Employment and Learning Providers said,
“major mistakes in the implementation of the levy have resulted in a serious undermining of the government’s social mobility agenda”.
He also said:
“Level two starts are now the biggest issue we face”.
I can only make reference to the briefing that Members have had from the British Hospitality Association about the importance of progression in that area from level 2 and onwards. Recently I was glad to welcome representatives of Stonegate to Parliament, and a person in my constituency who has gone from being a barperson to running the new refurbished Manchester hotel, which will be reopened shortly.
Level 2 apprenticeships have fallen, but we have seen a huge rise in management apprenticeships. I do not know what the real story is there. Does the Minister? Has the Government’s failure on level 2 been a market consequence of the way that they sold the levy? I do not know; perhaps the Minister can enlighten us. What we know from the Sutton Trust is that about a third of those apprenticeships are converting existing employees and skills. If that is the case, we are in an even more dire position than the Government’s figures show.
Anything that simply rebadges or validates normal training will not get us where we need to go. To create that step change we must ensure that people can get to the starting point, because level 3 is one of the most telling points for SMEs or self-employment. Whether someone is a hairdresser—I hope that the Minister has managed to get the Secretary of State off the unfortunate prejudices about hairdressing in his Battersea speech—a social care provider, a brickie, an electrician or a plumber, those are the people we need, and the skills that we need. Level 3 is a de facto licence to practise. That is why it is so important that the Government should not neglect traineeships.
There are issues regarding the overspend. The Minister knows that the Institute for Apprenticeship’s chief financial officer recently presented a forecast of a £500 million overspend. Can she tell us whether those figures are accurate? The Education Committee published an all-round critique of the Government’s apprenticeship record, and highlighted the importance of not only apprenticeships, but apprentices. That is a long-overdue priority for the Government. I know that the Minister agrees about the importance of world skills, skills competitions and skills champions. She has banged on about it, and it is very good that she has, but her Department has not always seemed to share the same enthusiasm for taking on board the opinions of apprentices. I urge her to do so, and to utilise the talents of the IfA’s panel.
That is the right way to promote the social mobility that we will need in the 2020s, when bespoke skills and enabling ones will have to combine in people’s lives with more traditional qualifications. We need to encourage young people to take up their curiosity for future jobs and apprenticeships at a much earlier age. We have been saying that for some time. It needs hardwiring into careers advice to go beyond the Baker clause and to have a sustained, holistic strategy.
The Government’s consistent failure to support under-represented groups, whether black, Asian and minority ethnic, people with disabilities or care leavers, has to be addressed. We would address it directly by giving it strong positioning in our new national education service. We have been very clear that if we are to get to the right position on T-levels, they cannot be seen simply as a competitor with A-levels. The Sainsbury review pointed in the right direction in that area, but unfortunately the Government have ignored that holistic approach and turned it into a beauty contest.
The concerns that we have heard today about regulations not being fulfilled in key new pathways—employers say they are not currently—and there not being the number of work placements illustrate the point. It is important that we get T-levels going properly, but they must be part of a broader strategy. That is the problem with so much of what the Government have told us. We are not short of potential “ladders of opportunity”, as the Minister’s predecessor, Robert Halfon, put it, but we now need more resources, simplifications and long-term strategies—not the short-term targets that have tied the Government in knots and led to the issues that my hon. Friend the Member for Bradford South raised in this excellent debate.