Institute for Apprenticeships and Technical Education (Transfer of Functions etc) Bill [HL]

Second Reading

18:51:00

Moved by

That the Bill be now read a second time.

First, I thank noble Lords who contributed to the debate following His Majesty’s gracious Speech, when we first discussed this Bill. That was also my maiden speech, and it seems an awfully long time ago. I thank noble Lords who attended the recent open briefing sessions with me in this House to talk about the Bill and the work that the Government are doing in this area. Our central mission is to grow the economy. We have set out a modern industrial strategy with a primary objective of long-term sustainable growth in our highest-potential growth-driving sectors. To succeed in our growth mission, we need to harness the talent of our people, meet businesses’ skills needs and break down the barriers to opportunity. Education is critical to breaking down those barriers, and we are focused on ensuring that all children and learners can achieve their ambitions and thrive in education, work and life, no matter their background. However, I am sorry to report that this country’s workers still lack the skills they need. This means that businesses cannot grow and people are not able to make the most of the opportunities that come their way. For example, around 7.5 million working-age adults do not have even basic digital skills, despite most employers saying that these are vital for their businesses. As recently as two years ago, UK employers put over one-third of their vacancies down to skills shortages. Our businesses have become overly reliant on importing skilled workers from abroad as they have not seen a plan to develop the skills they need in this country. Compared with other countries, our workers are underqualified. The OECD states that 26% of the UK workforce are underqualified for their job, compared with an OECD average of 18%. That underqualification is in part the result of a “missing middle” in our skills system. Not enough people attain post-school qualifications in sought-after disciplines. Technical training at levels 4 and 5, between A-levels and undergraduate study, is low compared with other countries and with our own historical levels. In England only 4% of people have level 4 and 5 qualifications as their highest qualification, compared with around 20% in Germany and 34% in Canada. Not only do we lack the skills we need today; our economy’s skills needs are changing, with 1.4 million jobs in new fields projected by 2035. England’s skills system has a crucial role in ensuring that businesses and individuals are prepared for the future, but the current fragmented skills system is preventing young—and older—people from seizing the opportunities that are out there. That is the sorry state of the skills system that we have inherited from the last Government, a system that employers and individuals report is overly complex, where people cannot find the training opportunities that would help them achieve and which is holding back our businesses, our public services and our economy from accessing the skills they need to grow. After 14 years of tinkering with qualifications, introducing a levy that has seen apprenticeship starts fall, and a failure to look to the future needs of our economy, the skills system is failing individuals and our country. The skills system needs an overhaul. It needs to be strategic, creating opportunities for young people to get on and for adults to upskill and retrain, and delivering the skills that will help our businesses to grow. The Bill is a crucial step towards creating a skills system fit for the future, enabling our growth and opportunity missions to deliver better life chances for all, meeting the challenge of our industrial strategy, supporting our NHS to have access to the people and skills that it will rely on, and delivering the skills to build the houses and infrastructure that we need and to support our clean energy superpower mission. This Government have already begun to take action. In July the Prime Minister announced the launch of Skills England, which then published its first report in September. This new organisation will bring coherence to the system, ensuring that we have a clear assessment not just of where the skills gaps are now but of what we will need in the future to realise our potential in a rapidly changing world. It will use that assessment to ensure that there is a comprehensive suite of apprenticeships, training and technical qualifications for individuals and employers to access. At its heart will be employers working with trade unions, training providers across our further education, higher education and independent sectors, and local and regional government—a partnership raising the profile and impact of our skills system. Skills England’s strong board and chair will deliver the operational independence, external expertise and challenge to drive the change that we need to see. Its link back into government will provide the voice and the advice to ensure that skills sit at the heart of joined-up decision-making across government. Skills England will transform our ability to determine and then deliver the skills that our country needs, giving it a key role as part of an even more ambitious programme of reform and national renewal. The launch of our industrial strategy will provide the firm foundation and confidence for businesses to plan. We are moving away from the chaos of recent years, where policy changed as quickly as Prime Ministers. Skills need to support this growth and investment rather than being the barrier that many employers highlight, so Skills England will work closely with the industrial strategy council to remove those barriers. Skills England will work closely with the Department for Work and Pensions on our major cross-government effort to get Britain working and tackle deep-seated challenges in our labour market. It will work closely with the Migration Advisory Committee to ensure that we have a strong skills pipeline. We plan further fundamental reform to support a vibrant and responsive skills and education system. We are creating a growth and skills levy to bring the focus and flexibility lacked by the last Government’s levy; a curriculum and assessment review to ensure that our schools are providing the learning to maximise all children’s chances to develop the skills, knowledge and creativity to make the most of their education; a youth guarantee to ensure that all young people have access to jobs and training; and a new national jobs and careers service to provide direction and support for people entering the workforce. To create a single, unified body in Skills England, it is crucial that the functions that currently sit with the Institute for Apprenticeships and Technical Education are folded into it. Skills England will build on IfATE’s role in securing the quality of technical qualifications and apprenticeships, and we are grateful for the role that IfATE has played in doing that—but, to pave the way for Skills England, the Bill will abolish IfATE. It will remove functions relating to IfATE’s current accountability to the Secretary of State and Parliament, transfer IfATE’s functions to the Secretary of State and amend five of them. It will allow the skills system to operate without organisational boundaries and administrative hurdles. Skills England will help the skills system become more agile and responsive by identifying what skills are needed where in the economy, supporting our industrial strategy and securing the availability of high-quality qualifications that meet those needs. The Bill is narrow in scope and technical in nature. There are two main elements. The first part of the Bill, as outlined, will abolish IfATE and transfer its functions to the Secretary of State. These functions will largely be exercised by Skills England, operating as an executive agency. The Bill will also enable the transfer of IfATE’s property, rights and liabilities to the Secretary of State. The second part makes changes to some of the functions to be transferred. We have examined the functions carefully and determined that the way some of them are set out in the existing legislation is overly prescriptive and could hamper the responsive and agile skills system we need. The Government therefore propose some changes to functions relating to apprenticeships and technical education to increase our responsiveness and allow the Secretary of State to make small and fast adjustments to our education and training programmes. This should provide the speed and flexibility the skills system needs. Clauses 4 and 5 remove the requirement for each occupational standard and apprenticeship assessment plan to have been prepared by an appropriate “group of persons”. Employers will continue to be central to how technical qualifications and apprenticeships are produced. In the preparation and design of standards and apprenticeship assessment plans, while design by employers and others will be maintained as the default position, these changes will allow greater flexibility in scenarios where preparation by a group can be unnecessary or restrictive—for example, where training requirements are already tightly defined as a result of there being a regulator or an industry-recognised qualification, such as the dental hygienist occupation being regulated by the General Dental Council. Giving the Secretary of State the flexibility to consider whether to convene a group of persons in such cases will enable the skills system to be more agile. Where the Secretary of State makes the determination not to use a group of persons to prepare standards or apprenticeship assessment plans, a high level of rigour and recognition of the value of external input will be upheld, for example by publishing standards in draft for stakeholder comment before they are finalised. Clause 6 will retain the duty to maintain arrangements to review technical education qualifications, standards and apprenticeship assessment plans. But we will remove the duty to review these at regular intervals and publish information about these intervals. This change is necessary in light of there now being more than 700 standards, spanning a huge range of sectors and occupational specialisms. The frequency with which different standards should be reviewed and updated will depend on their performance, how widely they are used and the pace and extent of technological advancements resulting in changes to the type of tasks performed and expertise required. This change will therefore allow the Secretary of State flexibility to focus on reviews with the greatest need and impact. Clause 7 will remove the requirement for a third-party examination of a standard or apprenticeship assessment plan to be carried out before approval. Again, we expect the default position to remain that standards and assessment plans will be examined by independent third parties. The Secretary of State will deviate from this only in a minority of instances, where appropriate. This change will allow flexibility where examination would add limited value—for example, in highly regulated occupations in the health and finance sectors where the assessment plan simply sets out the regulator’s requirements. Clause 8 will allow the Secretary of State to grant an exception to Ofqual, which is currently prevented from exercising its accreditation power for technical qualifications. This amendment would allow Ofqual, where the Secretary of State deemed it appropriate, to be given the discretion to apply its accreditation power to specified technical education qualification types, subject to appropriate consultation. This change reintroduces the potential for technical qualifications to be accredited in the same way as general qualifications, so that learners and employers can be assured of the quality of the most high-stake qualifications. These flexibilities reflect the calls from employers and others to ensure that the system is agile and flexible and can respond to rapidly changing needs. In developing Skills England we are already building the vital partnership I mentioned earlier through a series of engagement events. So far, the round tables led by Skills England’s interim chair, Richard Pennycook, have involved more than 100 key stakeholders, including a wide range of employers. These sessions have emphasised the need for greater flexibility in the skills system and more opportunities becoming available to shape technical qualifications and apprenticeships so that they best reflect the changing needs of industry, particularly in the most critical sectors. It is in this spirit that we bring forward the Bill. The Bill makes vital, practical changes that enable us to deliver Skills England, to bring coherence to the skills system and ultimately to deliver the skills we need for the future. These reforms will sit at the heart of this Government’s missions to drive economic growth and to spread opportunity across all parts of this country. I beg to move.

19:07:00

My Lords, I look forward to hearing the maiden speech from the noble Lord, Lord Beamish. The apprenticeship model is a win-win that builds a skilled labour force while at the same time stimulating local economies and creating jobs. There are surely few better ways to foster innovation, enhance productivity and drive growth. IfATE was part of our commitment to deliver employer-led apprenticeship standards. Since 2010, 5.7 million people have started an apprenticeship—our system is working, and we were on track to building a skills and apprenticeships nation. We would have increased investment in apprenticeships to £2.7 billion per year by 2025. Leading companies agree with our policy: Amazon, Specsavers and Premier Inn all make the most of their levy funds to recruit talent. In fact, 98% of the apprenticeship budget was spent over the last two years. More than 690 apprenticeships are now available for a broader variety of jobs than ever before. We train nurses, lawyers and scientists, with around 750,000 people currently on apprenticeships. These apprenticeships are all designed by employers, so apprentices can be confident that they are learning skills valued by businesses. A national survey of apprentices revealed that 92% of respondents felt that the employer-defined knowledge, skills and behaviours they are required to learn through their apprenticeship would equip them to succeed in the future, while 80% said they felt empowered to have successful careers in their industry. One has only to look to Preston in Lancashire, where BAE Systems has a vast college in which it trains apprentices on its fighter programmes, or to Barrow-in-Furness in Cumbria, where they train on submarines. BAE’s number of apprenticeships has nearly tripled since 2017. Higher apprenticeship levels 4 to 7, from foundation degrees to master’s level, increased from 27,000 to 112,000. These levels give apprentices the opportunity to earn a degree, combined with enjoying many years of work experience at top UK firms, and the benefit of avoiding taking on significant student debt. In February this year, BAE Systems and the University of Portsmouth launched the UK’s first ever degree apprenticeship in space systems engineering. Not content with stopping at space systems, IfATE is also helping heritage industries such as stonemasonry. In 2020 just one person took up an apprenticeship. Last year, that number jumped to 53. In March this year, we pledged to create a new £60 million investment fund to enable up to 20,000 more apprenticeships, including for young people and small businesses. Our record speaks for itself, so we have concerns around various proposals in the Bill. It is not yet clear whether Skills England will be established in statute as IfATE was, which raises questions about its independence from the Department for Education and its ability to galvanise other government departments. How will it be able to pitch for the money needed from the Treasury to fund the skills gap that we know we have? Can the Minister please enlighten the House on this? Clause 4 gives the Secretary of State the power to prepare apprenticeship standards either herself or to commission others. It would therefore technically be possible for an apprenticeship standard to be prepared without the input of employers, providers or industry groups. The Secretary of State could even close down or fundamentally change Skills England without the consent of Parliament. Can the Minister explain what failsafe measures will be put in place to avoid this happening to the detriment of employees, employers and the many people who currently benefit from the apprenticeship programme? There are concerns that the Bill may decrease the standards of technical qualifications because Clause 6 removes the IfATE requirement that reviews of approved technical qualifications should happen at regular intervals. The reason given in the Explanatory Notes is “to enable flexibility to review standards according to priorities and employers’ needs”. But how can the Government guarantee to maintain the high standard required if this clause is left in place? A regular review process significantly improves performance via proactive feedback, identifying areas for improvement and setting clear and achievable goals. We designed an apprenticeship programme to encourage personal and professional growth, which ultimately leads to enhanced productivity and job satisfaction. Will the Minister please explain whether there will be a guaranteed minimum amount of reviews per annum? The Bill’s impact assessment states that there may be a drop in apprenticeship starts while IfATE’s functions are transferred to the Secretary of State and, ultimately, Skills England. It states that this will disproportionately impact adult apprentices and disadvantaged learners and regions. AI and technology are transforming the nature of work and the skills people need to be successful. Many older people need help to be better with technology. We have more than 5 million older workers in the UK who are thinking of retiring early and, of those, circa 500,000 said that they could not keep up with the skills needed. These are the people who will be hit, according to the impact statement. What assurances can the Minister give us that this negative impact will be mitigated as much as possible? There are also concerns that the unions will have a disproportionate influence over Skills England, to the detriment of employers. The senior deputy general secretary of Prospect welcomed the launch of Skills England, but argued that it “won’t achieve its objectives without engaging and involving trade unions at every level”. What reassurances can the Minister give the House that there will not be undue involvement of the unions, to the detriment of employers and learners? The Government have said that they will build 300,000 new homes every year, but we do not have the electricians, plumbers, bricklayers or roofers needed to build that number of homes every year. Their skills cannot be conjured up; they need training and apprenticeships, which take time. In March this year, the current Secretary of State for Work and Pensions announced that Labour would fund 1,000 new careers advisers in schools and a number of employment advisers in new young futures hubs. The Government committed to 1,000, but what is the timetable for getting them all in place? In the Government’s manifesto, they set out plans to reform the levy and allow businesses to use 50% of their funds for non-apprenticeship training. But analysis has shown that, if you allow employers to use half the funds for other skills training, you materially reduce the number of apprenticeships. Are the Government still taking this course of action and, if yes, why? Apprenticeships and technical qualifications are the engine room of the UK economy. A successful programme leads to innovation, productivity and growth. This must work, so that everyone in the country feels the benefits. We very much look to forward hearing from the Minister on our concerns.

19:16:00

My Lords, I am looking forward to the maiden speech of the noble Lord, Lord Beamish. It is an odd experience to find yourself looking at a document with a background that seems to agree with you. In the last speech I made in the previous Parliament on this subject I said that levels 4 and 5 needed tremendous support and encouragement. We now have a document which, in the policy summary notes, says more or less that. So I can sit down and say. “The Government are listening to me at last” and all will be right in the world. But when you see something that is all going to the Secretary of State—their office, but really the person in charge—alarm bells start to ring. If the Secretary of State is going to do it, what happens if they do something which is slightly off? What is the warning construction? Does Skills England go back and say, “You’re wrong”? How would we resolve that? Would we actually find out if there was real disagreement? That is something we should have a long hard look at during this Bill. We also have to make sure that we have a balanced approach to skills. Key to this is the approach—the previous Government did start this—to careers guidance. The two have to work together to get a decent result. We have to make sure that people know what the skills are and where you are going to start to apply them. I was never comfortable with the previous Government’s approach to the breakdown between the local skills structure and the national skills structure. We should get a better balance, especially for levels 4 and 5, with a big emphasis on the technician level. We have historically been bad at this—for decades we have been bad at this. When I first got into Parliament, I was told that we were bad at it. If we are going to do that, where should that support come? Where are we going to look at that balance of getting a high technical level of training? It might be delivered by the higher education sector in places—indeed, it probably should be. One of the things we might have lost when we lost polytechnics was something that bridged that gap. I know that that battle was already lost before this came in, but how will we deliver that higher level of training? Apprenticeships are one way to access this, and colleges will be another. How do we balance these two things and how does Skills England take on this role? That is one of the important things we have not heard about in enough detail to pass judgment. If we are being more flexible and removing barriers to flexibility, we are also removing potential safeguards. It is the trade off, balancing the two. How will we know when the Government have decided that something has gone wrong? And it will—there will be mistakes and misjudgments; all Governments make them. It is not making a mistake that damns you; it is not realising and not adjusting. How will they report back and let us know what is going on? How will they let the sector know that they are making changes? That will be vital to ensure confidence, which is once again a feeding-in point; if there is confidence across the sector, people will buy in. It is important that we hear that during the Bill’s progress. Our skill here will be tested with probing amendments, but we need to know what the Government’s approach is in more detail than we will get tonight. I could speak for a long time but I do not think it is appropriate—I could try to work salmon into my speech but I think I will give that a miss. The final brick that will make this work is knowing where we will get the structure to examine what is being done, if it is all held in the department. This has got to talk to every other bit of government, and then all the bits outside government. If there is a central structure, how that is intended to happen and its capacity to change—how to extend bits that work well and what to do when bits do not—is what we are coming to. The intention behind the Bill is basically good; it is the delivery that we should talk about. How do we bring in practical solutions, from inside and outside government—indeed, from inside and outside the Department for Education? The Department of Health, for instance, will know what it requires, and if those two bits of Whitehall can talk to each other, that is great. But anyone who has been here for any length of time knows that Chinese walls take a lot of kicking to get through. Everybody here has done that. Whoever is looking after trade or local government will have an input. If Ministers can say what they expect to happen, at least within Whitehall, I would be much more sanguine about the Bill. But we will have to find out how this works to have real confidence in the process. I wish the Government well, because any sane person would, but we are not writing them a blank cheque yet. We would like to hear about the process behind this, because if it achieves success then that will be great, but knowing how they will recover from any mistakes and adapt to them—the cock-up school of history is one I agree with—would reassure me. I hope that the Government will be forthcoming about their plans. In that way, we will all be able to rest a little easier in looking at the training agenda.

19:24:00

My Lords, it is always a pleasure to talk about the importance of skills with many who we might think of as the usual suspects assembled here this evening, even at rather a late hour. I too look forward to the maiden speech of the noble Lord, Lord Beamish. I welcome this Bill, which is an important, if mainly technical, step towards a much-needed revamp of overall skills policy. Other elements of this include the establishment of Skills England, a new growth and skills levy to replace the apprenticeship levy, and the curriculum and assessment review addressing those two aspects of education. All this is in the overall context of the industrial strategy launched last week, which rightly includes a strong focus on people and skills. Three of the Government’s five missions, on growth, net zero and opportunity for all, make specific reference to jobs, productivity or education, and the NHS mission also depends on skills. The skills system is a critical enabler of economic growth. Yet employers across virtually all sectors report significant skills shortages, combined with growing future skills needs. Meanwhile, the education system is failing to respond adequately to these needs, particularly for young people who are less academically inclined and do not aspire to university but are not made sufficiently aware of the alternative technical and vocational pathways available to them and the rewarding and fulfilling employment opportunities that those pathways can lead to. In her foreword to Skills England’s first report, the Secretary of State for Education highlights that we have a “fragmented and confusing skills landscape that lets down learners, frustrates businesses and holds back growth”. This Second Reading debate poses an unusual challenge: whether to focus on the Bill itself, which is relatively short and technical, or to address the bigger skills policy picture, of which the Bill is a harbinger. The Minister has managed skilfully to ride both these horses. By the way, it is very good that we have the Skills Minister in the House of Lords, and I wish her every success in her crucial role. Taking my cue from her, but possibly in another order, I shall address some provisions in the Bill before raising questions about other aspects of the Government’s overall skills plans. The Bill transfers IfATE functions to the Secretary of State, with the intention that most of them will be passed on to Skills England when it is up and running. What can the Minister tell us about what criteria will be used to determine which functions will or will not be transferred? Clauses 4 and 5 provide the option for standards and apprenticeship assessment plans to be prepared by the Secretary of State rather than “a group of persons”—typically a group of key employers. I have heard mixed reactions from employers to this: it is welcome if it speeds up the review process for minor changes so long as it does not become the default, but there are concerns if it results in employers becoming less engaged or even bypassed and the quality and consistency of apprenticeship being undermined. I was reassured by some of what the Minister said about the intentions. Can the Minister confirm that both standard-setting and assessment plans will be transferred to Skills England to avoid inconsistent outcomes for the same apprenticeship if these functions are separated? In particular, will Skills England be required to work closely with industry skills bodies to ensure effective employer input? The Bill’s impact assessment, as a previous speaker mentioned, recognises that there may be some delays in approving qualifications during the transition process. What is the Government’s assessment of the likely impact of these on learners and employers, and what steps are they taking to mitigate or minimise that impact? Together, the points I have mentioned come down to a single underlying question: what reassurance can the Minister give that the specific proposals in the Bill will not be used in a way that results in the influence and centrality of employers in the process being diluted? I turn now to three broader skills policy issues. I could have covered many more, so I will try to keep to just the three. The first relates to the proposed growth and skills levy and how it might address the perennial challenge of persuading more small businesses to offer apprenticeships. Taking construction as an example, the Government are seeking to build 1.5 million new homes over the next five years which, according to the Construction Industry Training Board, will require the current workforce of the sector to increase by an estimated 30%, or some 152,000 people. Where are these people going to come from if not from SMEs, which account for 98% of the construction industry? Yet the tight margins on which SMEs in the sector operate, exacerbated by issues such as cash retentions—about which noble Lords have regularly heard me complain—mean that they find it hard to invest in apprenticeships and other forms of training and lack sufficient incentives and support to do so. How will the growth and skills levy seek to overcome the challenges of funding and bureaucracy preventing so many SMEs, not just in construction, from offering apprenticeships? Might the Government be considering some sort of weighting in the allocation of growth and skills levy funds—for example, to prioritise apprenticeships in smaller businesses, or for younger people, or for higher priority sectors, or at lower levels, given that employer skills needs in construction are primarily at level 3 and below? Hitherto, it has been very unclear what the desired balance of apprenticeships in these areas might be. My second issue concerns the limited focus, and lack of alignment and agility, of the education system in meeting the skills needs of the employment market which students will need to navigate. The Education for 11-16 Year Olds Committee on which I served last year, some of whose members are here today, found an alarming imbalance between the academic subjects required to obtain good GCSE results and the more technical and vocational options that develop the essential practical and life skills sought by employers, including digital skills, communication skills, such as oracy, which I wish I had learned, teamwork, problem-solving, resilience and creative skills. An effective skills strategy must be clear not only about the skills that employers in key sectors need, now and in the future, to boost productivity and growth, but also how the education system should be adapted to provide those skills. Will these issues be fully taken on board by the curriculum and assessment review, and how will employer needs be reflected in the review, given that there seem to be no employer representatives in its membership? Finally, to pick up on what previous speakers have said, what can the Minister tell us about how Skills England, as a non-statutory—and “Why non-statutory?” I ask—executive agency within the Department for Education, headed by a chief executive at Civil Service director level, and with a range of detailed technical and regulatory functions to fulfil, will at the same time be able to co-ordinate skills needs across sectors and regions, building on local skills improvement plans and driving strategic collaboration across the whole of government, in partnership with sector skills bodies, unions, the devolved nations and others? That is an enormous task for any single organisation to fulfil, particularly at that level of government. How will the pieces of this complex puzzle fit together to create a coherent national strategy, fully integrated with the industrial strategy, to ensure that the identified demand for skills is matched by the provision from education and training at all levels, and who will be responsible for driving this process across government? To pick up on what the noble Lord, Lord Addington, said, what tools will be available to identify and fix things that are not working, and who will exercise them? The Government have set themselves ambitious and inspiring goals for skills policy, and I look forward to hearing more from the Minister about how they will be achieved and what part this Bill will play in what will be a long, complex and vitally important process.

19:33:00

My Lords, it is a great pleasure to follow the noble Lord, Lord Aberdare. I realise that I stand in the way of the maiden speech of the noble Lord, Lord Beamish, which I look forward to hearing shortly. I shall try to be brief. I support the Bill in principle, and certainly the ambition behind it—and I certainly understand the logic behind it. A number of questions have already been raised about it that will need some careful addressing and answering if the House is to be confident about what is proposed. I want to focus on the FE sector, which has been facing some difficulty in recent years—facing the uncertainty while awaiting the outcome of the Government’s pause and review of level 3 qualifications, deals with FE pay being considered separately from the ongoing negotiations for the recently resurrected School Support Staff Negotiating Body, and faces up to the impact of sustained cuts and falls in funding in real terms. But FE is doing amazing work, particularly with particular sectors of our young people. My questions relate to the move of IfATE into Skills England in relation to several issues. First, on young people, the apprenticeship levy has resulted in fewer young people undertaking apprenticeships, Young people in general, but especially those not in employment, education or training, form a demographic that stands to benefit immensely from apprenticeships, but it seems to me that we have seen a trend of employers choosing to spend their apprenticeship levy on older employees or career changers, as young people are sometimes perceived as harder to work with. How will Skills England incentivise the recruitment and training of young people through apprenticeships? Secondly, on SMEs, small and medium-sized enterprises have not found the apprenticeship levy simple to navigate. It is much simpler for those with a turnover of more than £3 million a year, as they contribute automatically. Complexity and perceived uncertainty around a solution of co-investment has limited the take-up of apprentices by SMEs, which can disproportionately affect smaller or more rural communities, where larger businesses simply may not operate. How will the new structures around apprenticeships incentivise and support provision of apprenticeships by small and medium-sized businesses? On the question of levels, the apprenticeship levy has had a much bigger impact on higher-level qualifications, such as higher and degree apprenticeships, and in turn therefore helps higher education institutions. But it is not improving the range and offer of courses available at lower levels, such as intermediate apprenticeships at levels 2 and 3, to anywhere near the same level. Arguably, that increases the options available to already more privileged or socially mobile apprenticeship candidates, while restricting the options available to those most in need. I shall give an example to illustrate my point. There is currently a crisis in care. Statistically, care-experienced young people are far more likely to study at FE institutions than HE institutions. Given the weaker social fabric supporting them, and the complexity of transitioning to independent adulthood after 18, which is challenging enough as they leave the care system, these young people should be the ideal candidates for apprenticeships and the training and salary or wages that they provide. However, they are more likely to need to undertake a lower-level apprenticeship in the first instance, and are seen by some providers as harder to work with, as I indicated earlier, and are therefore doubly passed over in favour of older and more experienced candidates undertaking higher or degree level apprenticeships, for which a young learner may not be eligible, depending on their prior education. How will Skills England use apprenticeship structures and incentives to make sure that our apprenticeship structures and technical education are making the most impact for our most vulnerable young adults and learners?

19:38:00

My Lords, it gives me great pleasure to give my maiden speech in your Lordships’ House. I begin by thanking Black Rod and her staff for their help and assistance since my introduction. I also thank the principal doorkeeper and other doorkeepers and other House staff for their welcome and advice, along with the warm welcome that I have received from noble Lords from across the House. I also take this opportunity to thank my two sponsors, the noble Baroness, Lady Ramsay of Cartvale, and the noble Lord, Lord Grocott. I have been friends with the noble Baroness, Lady Ramsay, for many years. We served together on the NATO Parliamentary Assembly. On our many travels, she used to describe me as her unofficial Batman, as I carried bags through numerous airports around the world. However, it was a delight to undertake that role for such a noble Baroness. The noble Lord, Lord Grocott, has similarly been a good friend and, like me, is an early riser. We were both members for many years of the House of Commons tearoom breakfast club, which meets at 7.30 am every day. It is an opportunity to read the morning papers, and usually by 9 am the assembled masses have put the world to rights. I am also pleased to be reunited in your Lordships’ House with the noble Lord, Lord Arbuthnot of Edrom. We served together on the House of Commons Defence Committee, but more importantly we have also worked for more than 15 years on the campaign to get justice for sub-postmasters affected by the Post Office Horizon scandal. Although we are of different political parties, we have worked well together and over the years have helped right a grave injustice. In your Lordships’ House I hope to continue that work on Post Office justice. The latest scandal is around a system called Capture, which pre-dates the Horizon system and has just been the subject of a report by the Department for Business highlighting a similar scandal that took place with that system. It is something that I think we now need to address. I join your Lordships’ House having had the honour of being the Member of Parliament for North Durham for 23 years. Many people have inquired about the origins of my title, Lord Beamish. Many, including my good friend Gavin Robinson, the leader of the DUP in the Commons, asked me whether it is in honour of the famous Irish stout. No, it is not. It is one of the many villages that make up the North Durham constituency and, as those from the north-east know, it is also the site of the world-famous open-air museum. As your Lordships know, it is always difficult to decide which village or community to include in one’s title, but I drew the line at a village very close to Beamish called No Place—I did not think that being Lord No Place would have the same ring. I am the third former Labour Member of Parliament from North Durham or its predecessor constituency to enter your Lordships’ House, the others being Jack Lawson—Attlee’s Minister of War in the 1945 Labour Government—in 1950, and Giles Radice in 2001. I know that many noble Lords will remember him with affection. In his maiden speech to your Lordships’ House in 1950, Lawson said that “I have listened to the debates in this House for some weeks. I confess that from time to time I felt very much like David Copperfield on one occasion, when we are told he felt ‘very, very young’”.—[Official Report, 23/5/1950; col. 442.] Being a 60 year-old, I think I understand what he was saying. My maiden speech in the House of Commons in 2001 described North Durham as “a rural constituency with urban problems”.—[Official Report, Commons, 9/7/01; cols. 585-86.] It is a former coal-mining constituency with beautiful countryside, and the sad thing is that the economic reason why most of the communities existed is no longer there: coal mining closed and industry moved away. The jobs now are mainly to be found to the north, in Newcastle, Sunderland and the A1 corridor. The communities are still very strong, but jobs are needed. The other thing that is needed is to raise the aspirations of many young people who live there. That is why I welcome the new Government’s commitment, as one of their key missions, to economic growth and concentration on skills. There has been much debate about the need for capital investment but, unless we invest in people, the economic gains that we strive for will not be achieved. If your Lordships look around the world, the most successful economies are those that invest in their workforce. This Bill is a key step in that direction. As the Minister said in opening the debate, the skills landscape for too long has been fragmented. If Skills England is to succeed, though, it will need to be a genuine partnership between government, the education sector and the private sector. Government and the private sector will need to come together not only to identify the areas where skills are needed but to make sure that resources are directed towards them. I also argue that skills and Skills England need to be hard-wired into all government departments—they need to be thinking about skills when policies are developed. I note that the policy publication for the Bill, produced by the Department for Education, refers to work with devolved Administrations, combined authorities and government department such as the Department for Energy Security, DWP and the Department for Science, Innovation and Technology but does not mention other departments such as, for example, the Ministry of Defence. As many noble Lords know, defence has been one of my interests, as a former Defence Minister. According to ADS, aerospace, defence, security and space employ 427,000 people in the UK, from large primes down to small SMEs, and provide some 20,000 apprenticeships every year. It is therefore vital that the Ministry of Defence and groups such as ADS work in partnership with Skills England when drawing up strategies for those sectors. As has been said in this debate, skills are important for the economic well-being of our nation, but I also argue that they are vital for our national security. As a former member of the Intelligence and Security Committee, I saw at first hand that if we are to defend our nation against those who wish to threaten us, whether they be nation states or not, we will need a new generation with computer and IT skills and mathematicians in the future. That is something that needs to be thought about. I also draw the Minister’s attention to the work that is going on at GCHQ with the neurodiverse community, tapping into a resource that is not only having great beneficial results for the individuals but helping it develop new programmes and ways to protect our country. When government departments, particularly the Treasury, are awarding contracts, they also need to think about skills. Some 38p in every pound spent on a defence contract with a UK company not only comes back to the Government in tax and national insurance but helps grow the skills base of our country. This was clearly demonstrated in Philip Dunne’s excellent 2018 report Growing the Contribution of Defence to UK Prosperity. Sadly, the last Government completely ignored that excellent report. I conclude by making a plea for what I call our traditional skills. There is still a need for stonemasons, glass craftsman and traditional carpenters, and I commend the work being done by the Beamish museum in giving apprenticeship opportunities to young people in those skills, which are in danger of dying out. If the Houses of Parliament ever decide to get around to the restoration and renewal programme of the Palace of Westminster, these skills will be vital. I thank your Lordships for listening to my maiden speech. I look forward to making further contributions and taking an active part in the work of the House.

19:49:00

It is my great pleasure and privilege to follow my noble friend and congratulate him on an excellent maiden speech. We are very glad that he is here, bringing the experience he outlined, his cross-party campaigning zeal on the Post Office scandal and his work on defence. My noble friend on our Front Bench will very much welcome his expertise. I agree with him about craft skills, which my city was built on as well, and the collaboration between the public and private sectors that we will need if we are to make the skills agenda work. I appreciate that very much. I knew about the Beamish open-air industrial museum. As my noble friend was making his maiden speech, I was thinking that he had moved from one museum to another. This is more like a natural history museum where the occasional dinosaur moves around the corridors—responsible, in part at least, for not changing the sitting hours of this House. So here we are debating something really important late on a Tuesday night, perhaps too late to do it justice. I will therefore cut my speech down. I declare my interests in the register on a wide range of issues relating to education. I congratulate my noble friend the Minister on being able to ride the two horses—and Houses; she has been in both—referred to earlier of addressing the minutiae of this legislation and the greater vision of Skills England. I was proud to lead on the learning and skills proposals published two years ago from which Skills England, the growth and skills levy and much else have been drawn. I am still struggling with the idea of being on the Government Benches rather than in opposition. After 14 years, it is quite hard not to make a remark like “This Bill is necessary but not necessarily sufficient” sound like a criticism. While the Bill is needed to transfer IfATE’s duties to Skills England, it is only a tiny part of creating a vision and pathway to generate the energy, drive and commitment of everyone involved to make Skills England a force to be reckoned with. Some of the questions already asked today arise directly from that. Figure 7 in chapter 3 of the paper published on 24 September—the day the Prime Minister made a speech at Labour’s party conference—lays out the challenge of getting the right skills in the right places, not just now but for the future. That paper made some interesting comments that I strongly welcome and hope we can build on in Committee and in responses from the Government, as well as in wider workforce planning. My noble friend Lord Beamish referred to using other departments as a template. He noted the massive investment of the Ministry of Defence. Defence procurement reminds me that we have an enormous opportunity that has not yet found its way into government policy: using procurement to drive apprenticeships as well as the necessary skills agenda for the future. When asked what consultation he had carried out on the production of his first car, Henry Ford indicated that, if he had bothered to consult anybody, their first thought would have been “faster horses”. In just the first 25 years of the last century, the proportion of movements by mechanical means moved from 5% to 95% due to the creation and development of vehicles. We are at a point where enormous change is happening as we speak. That is why, as I imagine my noble friend will know, there is such controversy in Germany at the moment about where it is going on the skills agenda and investment for the future. We have always turned to Germany as an example of what we might have done in the past and might do today. I fear that the world is changing around us, sometimes leading us and sometimes giving us an example of how we have to skip a generation in what we are doing in order to be in the right place to deliver the skills we need for the future. My noble friend mentioned dental technicians. I make a plea that we move very rapidly to decentralise the accreditation of industry standards to organisations such as the Construction Industry Training Board and the ECITB—both of which had a role in this area before 2016 when IfATE was created—to cut out the bureaucracy. Over the last eight years IfATE has undoubtedly developed a bureaucracy, but we owe it a debt of gratitude because it has had a thankless task. I thank the noble Baroness, Lady McGregor-Smith, its chief exec, all its staff and Richard Pennycook, who has done an incredible but unsung job in a very short period of time to get shadow Skills England off the ground. There are questions about the level of the post of chief exec, which I hope my noble friend will address not just now but in the weeks ahead. We have an incredibly powerful director-general in the Department for Education who has a reputation for delivery and is in a position to drive Skills England forward. However, we are talking not about individuals in a post but about whether Skills England will have a chair who can deal with business, trade unions and departments in an independent and vigorous fashion and advocate for the resources needed. The apprenticeship levy—I hope the Chancellor of the Exchequer will say much more about it next week—is fundamental and should be expanded. The Treasury should stop top-slicing it and thereby diminishing the amount of money and resource available to deliver. Skills England can play an important part in making that advocacy work, but not if it does not have the clout or reputation to ensure that it can be done. I was going to raise many other questions but, to respect those still to come on this late Tuesday night, I will end with this. We have to be really ambitious. Microcredits and modular learning will mean that in future we will need a learning passport; to answer a query raised earlier, we will need to reinstate the Union Learning Fund created in 1998. I was very proud of that, because along with it went learning representatives who advocated alongside management for learning in the workplace and beyond. There are many examples of how well that worked, such as the UK Commission for Employment and Skills. Let us not reinvent the wheel; let us work out what worked in the past and what did not, and then build on it. Let us also rejoice in the fact that we have a Minister of State in this House with hands-on experience, who understands the economic and business needs required and who can be a great leader in ensuring, along with the Secretary of State, that we get it right. Tonight is the beginning of a journey that I hope we will be on together.

19:59:00

My Lords, I am pleased to be speaking in tonight’s debate and I draw attention to my registered interests. I also congratulate the noble Lord, Lord Beamish, on his maiden speech and very much look forward to his contribution to the House. As this debate has already shown, across the House there is cross-party agreement on the importance of an effective skills agenda to develop a high-skill, high-productivity workforce that fulfils employers’ needs and provides the opportunities and training that employees need to thrive. I, too, recently served as a member of the Education for 11-16 Year Olds Select Committee with a number of other noble Lords speaking today. While our focus was on the schools system, during our evidence sessions we heard time and again from witnesses about the need for an increased focus on skills and training to equip our young people for the world of work both now and in the future. The data bears that out. Studies consistently highlight the importance of skills to growth, with around one-third of average annual UK productivity growth between 2001 and 2019 attributable to the expansion of skills in the workforce. As we have heard, it is estimated that there will be 1.4 million new jobs in the economy by 2035. For instance, evidence to our Select Committee suggested that, over the next five to 10 years, more than 200,000 jobs could be created in the energy efficiency sector, with the retrofitting of buildings alone requiring the training of 45,000 new technicians a year. It is against this context of the changing skills demands of the economy that we are considering this Bill. Yet the Bill does not tell us anything much about the Government’s approach to the challenges. As the Minister said in her opening remarks, the Bill is narrow in scope and technical in nature. That is certainly true and it raises some concerns. The Bill abolishes the Institute for Apprenticeships and Technical Education, giving the Secretary of State significant powers as a result, but includes nothing at all about the new body, Skills England, that is intended to be at the centre of the skills landscape under this Government and absolutely fundamental to the delivery of their agenda. Despite the department’s policy summary repeatedly referring to the role of Skills England, as the Minister set out in her opening remarks, the Bill itself does nothing practically to progress its establishment. Surprisingly, the organisation which is intended to be the “driving force” behind a “much-needed upskilling of our economy in the coming decades” is not mentioned once in the Bill. Instead, most measures transfer a significant number of powers and functions directly to the Secretary of State. In its briefing on the Bill, CITB noted that this was “contrary to the previous characterisation of Skills England that was outlined in the … King’s speech … and contrary to the vision for Skills England to be an independent body, established in law, with a cross-governmental role”. In her introduction to the first report published last month by Skills England in its shadow form, the Secretary of State set out a number of responsibilities that will be invested in the new organisation: first, bringing together business, training partners and unions with national and local government to develop a clear assessment of the country’s skills needs and how they can be filled; secondly, working closely with the Industrial Strategy Council, the Migration Advisory Committee and across government to deliver the necessary skilled workforce required in the future; and, finally, shaping the Government’s response to skills needs by identifying key priorities, including advising on the new growth and skills levy. In his foreword, Richard Pennycook, interim chair of Skills England, added a further list of actions the body will be taking, including working with providers in further and higher education to clarify and strengthen the skills landscape, and supporting schools in the provision of high-quality advice to students on career opportunities. There is no question but that these roles are extremely important and need to be fulfilled, but there is no detail about any of this in the Bill. So we are being asked to abolish IfATE and give the Secretary of State significant powers, but with no legislative underpinning of what Skills England will actually do in practice, and no details about how it will fulfil its extremely important functions to achieve the laudable outcomes the Government want. I am not sure how the Bill fits with the speech made by the Attorney-General last week, in which he said: “Excessive reliance on delegated powers, Henry VIII clauses or skeleton legislation upsets the … balance between Parliament and the Executive. This not only strikes at the rule of law values ... but also at the cardinal principles of accessibility and legal certainty”. The Labour manifesto itself made several very clear commitments about Skills England: that it would work with the Migration Advisory Committee, co-ordinate with local and regional authorities and determine which courses would be eligible for levy funding. So I would be grateful if the Minister could explain why at the very least these are not included in the Bill, with reference to the creation of Skills England. The lack of a statutory footing for Skills England and the centralisation of powers in the Secretary of State in the Bill raise questions for many of us. With all the powers in the Bill passed to the Secretary of State, how independent will Skills England—and indeed the board—really be able to be in practice? Will they truly feel able to challenge Ministers if they believe that government policy is not delivering on the outcomes intended if they have no legal independence? How in practice and on what basis will their relationship develop with the Industrial Strategy Council and the Migration Advisory Committee? What role will they have in approving new qualifications or overseeing the system and what will be the extent of their responsibilities? There are also important unanswered questions around how Skills England will be asked to oversee the apprenticeship system. Policy Exchange’s report, Reforming the Apprenticeship Levy, published last year, found a recurring complaint from employers of all sizes that standards were too inflexible for their needs. How will Skills England address this problem and what safeguards will be in place to ensure that powers taken by the Secretary of State are used appropriately? Unfortunately, with the paucity of detail about the new body within the Bill, there is a very long list of questions. So, in conclusion, I believe the Bill raises more questions than it answers and I look forward to our more detailed discussions during its passage, when I hope the Minister will build on her opening comments to provide much more detail on the role and responsibilities of Skills England, and, perhaps most importantly, offer clear reassurances that it will have the autonomy, responsibility and flexibility to lead the revitalisation of our skills system that we all want to see.

20:06:00

My Lords, as ever, I declare my interest as a teacher in a state secondary school in east London. I thank the organisations that briefed us—there were a lot of them. I also congratulate the noble Lord, Lord Beamish, on his excellent speech. I have to admit that I am rather sad not to be congratulating the noble Lord, Lord No Place—but that was maybe a good choice. This is an interesting one. We get very little detail in the Bill, so this debate is more about a wish list than talking about the Bill itself. Through the Bill we get Skills England and its utopian dream: stronger, flexible, nimble, swerving, agile, breaking through barriers. This is less of an arm’s-length body and more of a job description for an England rugby fullback. So here is the first question the Minister might like to answer. According to the Association of Employment Learning Providers: “The remit of the IfATE had become bloated and not fit for purpose”. Given the larger remit of Skills England, how will it remain nimble? Now that so much power will be vested in the Secretary of State, how is this agility going to work? I am not being flippant when I ask: does the department have the skill set for this new agile way of working? As my noble friend Lord Aberdare quoted, in its first report Skills England said that over a third of the vacancies in 2022 were the result of skills shortages. It said that the qualifications landscape for employers was “opaque”; that, for learners, career paths were “not sufficiently clear”; and that the current skills system was not always equipping learners with the necessary skills. There is work to do; we need to go back to fundamentals. We must not confuse skills with knowledge. Skills are practical abilities developed through practice and application. The knowledge-rich curriculum in schools has been to the detriment of skills. For too long, we have concentrated too much on getting the best maths results this side of Mars, while downplaying skills that employers want and need. By prioritising mathematics and engineering, the Government sought to boost innovation and competitiveness, but neglected the very sectors that have made the UK a cultural powerhouse: arts, music, design and literature. Obviously, an ability in maths and English is important, but not to the exclusion of everything else. The Empire is gone; there are no jobs for life. As a teacher, I am constantly amazed that students can name every god in the major religions but cannot use Microsoft Office. Designing and populating a spreadsheet should be part of the basic maths taught in primary school. Every student should leave school having started at least one business, and I commend the work of Young Enterprise in this field. Every student should have the skills to build healthy work, social and sexual relationships, and again I urge the Minister to look at the work of the charity Tender if she does not know it. These are some of the many reasons why every child should be in school. Maybe by making the curriculum more relevant, we could tempt the abstainers and their families back into the fold—it might also be fun to teach—otherwise, I have no idea where the thousands of new teachers will come from. I welcome the recent government Statement on the British film industry: “Britain is open for business, and creativity is … at its heart”.—[Official Report, Commons, 9/10/24; col. 317.] That is great news given that successive Governments spent time downgrading creative subjects. Can we say goodbye to Ebacc and Progress 8, which penalise schools and give them no credit for large amounts of high-performing creative subjects? Can the Minister expand on an answer she gave during Oral Questions earlier this afternoon, when she said that the “curriculum and assessment review” would be “creating space for … creativity”? Qualifications are a mess. Apparently, Skills England will intervene “sometimes” in the award of technical qualifications. Clause 8 means that Ofqual may not decide whether there may be an accreditation requirement for approving technical education. Can the Minister explain the high-stakes qualifications and the specified technical education types? I am afraid that I still do not understand them. I am member of the APPG on T-levels and I have chaired a conference on them. Time and again, we hear that they are too technical and that schools and colleges are struggling to find meaningful relations with industry. The Minister said in an answer yesterday that T-levels would be beefed up—great gung-ho language. Does she have more detail of the beef to be applied? I have taught both the unloved BTECs and V Certs, and friends of mine have taught unteachable V Certs. What will happen to those lower qualifications? According to the CITB, each year 58,900 people either on a construction apprenticeship or an FE course fail to achieve their qualification or immediately progress into construction employment on completion of their qualification. The main reasons for this training wastage are the limited focus, the lack of alignment and the limited agility of the education system to meet construction employer skills needs, which are primarily at level 3 and below. Ultimately, this leads to low apprenticeship completion rates and unacceptable FE outcomes for the industry. The Minister mentioned the short qualification reform review; can she say how that is going? Overall, this Bill is to be welcomed. Skills England talks a great fight, and if it can truly deliver the skilled workforce that this country so desperately needs, it will have achieved something monumental. However, this Government need to be brave, for Skills England can thrive only in an education system that is as agile and relevant as Skills England itself.

20:13:00

My Lords, I congratulate my noble friend Lord Beamish. I warmly welcome this Bill for two reasons. The first is economic growth. That is obvious, but equally importantly—I want to stress this perspective—skills are crucial for people and their individual ability to earn a living. For those two reasons, it is highly desirable that we have a well-focused system of skills development led by a single body. That is what this Bill will provide. However, when I read the brief from the DfE for Skills England and the first report that it produced, I immediately noticed what seems to be an imbalance. It is concentrating entirely on the first of the two reasons I gave: the perceived needs of existing employers for labour and the estimates of the new types of jobs of the future. This is very important—it is crucial that we know all that in order to have the right balance of training that fits the pattern of future jobs—but there is also the other perspective: that of the individual. If one were thinking about the need for a particular volume of training, that would lead one to ask how many young people need to be trained to earn a decent income. I have not seen them mentioned in the documents I have read so far. It is quite impracticable to say how many people should be trained just by adding up the estimates from employers and the estimates of new jobs. If you want to think about the numbers that have to be trained, you have to think about how many people are out there. The estimates from employers and the estimates of new jobs are vital for understanding the pattern of training. If we want to think about the total volume of training, we should start with the very simple principle that it is in the national interest that every young person achieves the highest level of skill they can and wish to achieve. It is a prime duty of the state to get every young person off to the best possible start in working life. It is a much lower duty of the state to support lifelong learning, and indeed most in-service training should be, as it always has been, paid for by employers. By contrast, getting people off to a good start in life is central to the Government’s opportunity mission, but we are currently far from achieving that. Where is the problem? The problem is not in schools. At age 15, our young people do better in the PISA tests than youngsters in France, Germany and most other European countries. However, by age 25, they are way behind, unless they are in the group who went to university. It is after school that the real barriers to opportunity exist. For example, in the Government’s apprenticeship matching scheme there are three times more applicants than there are places on offer, so it is no wonder that at the age of 18 a third of our young people are getting no education or training. This is a shocking state of affairs. Let me break it down. There is the 14% who are NEET—not in education, employment or training—that we often talk about, but I think just as bad is the 20% who are in jobs without training and heading for a lifetime of low pay. It is this lack of training that I consider one of the biggest problems facing our country: the people who are getting nothing beyond the age of 17. It is completely extraordinary. That is why I am encouraged that the Government are offering young people up to the age of 21 a Youth Guarantee of education, training, or help with finding work. That is good, but it is not nearly enough. What we need for these young people is, in addition, inside the Youth Guarantee, a guarantee of training if that is what they want and are qualified for, and I hope the Government can modify the Youth Guarantee in that way. In 2009, the previous Labour Government passed an apprenticeships Act which obliged the Government to ensure that every young person who was qualified for a level 2 or level 3 apprenticeship could expect to receive an offer. That was repealed a year later. The guaranteed offer is, of course, what we do for people going down the academic route to university. They are pretty much guaranteed a place—not necessarily what they want but a place. We have never applied it to the other 50%, and that is why we have low productivity, low pay and inequality in our country. To apply this guarantee principle would require a major administrative effort at the centre, working through local authorities, and, if necessary, an extra element of subsidy. I suggest that every local authority would be required to assess the number of young people likely to want an apprenticeship and it would then do its best to persuade local employers to provide these opportunities. The research shows that employers like the idea of an apprenticeship guarantee. They are not averse to it. The Chartered Institute of Personnel and Development found that 85% of those surveyed supported the idea and 60% of them said that, if it was introduced, they would provide more places than they currently do. This guarantee would be only fair to that cohort of young people, but also it is a very good investment, because, according to our calculations, within 12 years it would recoup enough in extra taxes and reduce benefits to repay the cost of the apprenticeship to the Treasury. The total cost of such a guarantee would in fact be no more than 40% of the growth and skills levy, so my proposal is that 40% of the growth and skills levy be ring-fenced for young people aged up to 21 taking an apprenticeship up to levels 2 and 3. These are mostly young people without A-levels and I think we have a prime responsibility, if we are looking for change, to focus above all on that group. Their claims must come before the claims of people doing levels 4, 5 and 6, who have already been helped through their A-levels and are now eligible for student loans. The future of the levy is a crucial early issue for Skills England. I hope it will be interested in some of the arguments that I have put forward, but whether or not it accepts the idea of a guarantee and some ring-fencing of the levy, it is crucial that Skills England not only looks at what employers and the jobs of the future suggest but includes a serious study of the number of young people who are needed to acquire a skill—that is a crucial point. I hope we can continue to discuss that additional focus for Skills England in the later stages of the Bill. It is a vital dimension, because in the end the economy is for people and not people for the economy.

20:22:00

My Lords, I congratulate the noble Lord, Lord Beamish, on an excellent maiden speech, which was both informative and entertaining, and I thank the Minister for her exposition of the rationale for this Bill. While I applaud the ambitions for Skills England—our country must obviously have the right skills to meet the challenges of modernity— I wish to provide some gentle warnings of the risks that I fear will inevitably arise with the Government’s approach. First, I readily accept that, despite the previous Government’s best efforts, skills shortages remain a challenge for the UK, as for most developed economies. Despite record participation rates in higher education, a generously funded apprenticeship scheme and soaring levels of net migration, skills shortages remain. I sympathise entirely with the Government’s desire to act to shore up skills gaps. The last Government had considerable success with their reforms to apprenticeships, and the Institute for Apprentices and Technical Education—IFATE—was set up as part of those reforms. Its purpose was to be independent of Government and to represent employers in setting standards for technical qualifications. It succeeded through instilling confidence in the integrity of apprenticeship standards. Employers are fundamental to the input of the qualifications they need in the workplace. I pay tribute to the chair, the noble Baroness, Lady McGregor-Smith, and her team for the work of IfATE. It has, among other successes, created and maintained around 690 apprenticeships, which supported around 750,000 people on apprenticeships last year. It created 21 T-levels and 174 higher technical qualifications, and enabled 120 employer leaders to set strategic direction for skills in their sector. Perhaps the best assessment of IfATE comes from apprentices themselves. A national survey found a 90% satisfaction rate with IfATE from apprentices who had completed their apprenticeships—what other part of government can report a 90% satisfaction rate? Established in statute, IfATE has an independent chair and a board that afford a certain distance from the Department for Education. The chair of IfATE is independent of the department, while ultimately remaining accountable to the Secretary of State. This governance arrangement has been key to instilling confidence among employers and being able to galvanise others in support of the standards that IfATE sets. However, Skills England is to be an executive agency of the Department for Education. Under the Government’s proposals, Skills England will report to a senior official in the DfE. In my view, this change in status is both critical and presents significant risks. In all so-called arm’s-length bodies, there is a hand at the end of the arm. This hand exercises a certain amount of control depending on how the body is set up. The Bill will place far greater control in the hands of officials, rather than employers, in setting and ensuring the rigour of future standards. This concern is borne out in Clause 4, which gives the Secretary of State, or the officials reporting directly to her, the power to prepare apprenticeship standards herself or to commission others to do so. David Kernohan, in a recent article, highlighted the issue thus: “This tweak makes it technically possible for an apprenticeship standard to be prepared without the input of employers, providers, industry groups or indeed anyone. The Secretary of State could knock out an apprenticeship standard while bored on a train provided she is ‘satisfied that it would be more appropriate for the standard to be prepared by the Secretary of State than by a group of persons’”. Such wide-ranging powers lead to genuine concerns that the Bill could decrease the standards of technical qualifications. Clause 6 removes the IfATE requirement that reviews of approved technical qualifications should happen at regular intervals. The reason given in the Explanatory Notes is that this is “to enable flexibility to review standards according to priorities and employers’ needs”. Can the Minister explain why a statutory requirement for regular reviews of the suitability of qualifications is to be replaced by such a broad discretion? Would she also be able to provide some clarity on who will decide these priorities and how the decision-maker will determine “employers’ needs”? As my noble friend Lord Effingham highlighted, the new skills foundation will give increased influence to trade unions, with Sue Ferns, senior deputy general secretary of the union Prospect, arguing that: “Skills England … won’t achieve its objectives without engaging and involving trade unions at every level”. Although trade unions play an important part in the workplace, they should not be allowed to push out employers and exercise a disproportionate influence on the standards and formation of qualifications. There is a very real danger that a successful organisation such as IfATE could be subsumed in a new Skills England and become merely a convening body for interested parties. On the levy, Ms Ferns has called for flexibility and argued that it “must extend beyond a demand-led model”. While I appreciate that she does not speak for the Government, I wish to express my alarm that anything other than a demand-led model is appropriate for solving a skills shortage. Such an approach would imply that Skills England is at risk of taking on the role of a central planner for skills—an approach that Governments long ago experimented with and which I hoped had been consigned to the dustbin of history. I close by acknowledging the scale of the challenge facing the Government. Skills shortages arise in almost every advanced economy and there is a wide variety of tools by which government can contribute to meeting this unmet demand for skilled workers. My fear is that Skills England assumes, philosophically, that the state knows best. One need look only at the alarming number of skilled vacancies within the National Health Service and the startling paucity of specialist skills within the Civil Service to recognise that the Government are not best placed to fill skills shortages among those they directly employ, let alone those they do not. IfATE may not be perfect, but it has gone a long way towards remedying many of the underlying problems. I urge the Minister to give careful thought to whether a governance arrangement that places so much discretion in the hands of civil servants is one that is likely to best meet the needs of our economy.

20:28:00

My Lords, I congratulate the noble Lord, Lord Beamish, on his excellent maiden speech. I declare my interests as set out in the register in a number of businesses that would benefit from a strong economy. My background is business and I am passionate about business and economic growth in the UK, but today it is a pleasure to speak to your Lordships in my capacity as chair of the Institute for Apprenticeships and Technical Education, known as IfATE. I recently met with the noble Baroness, Lady Smith of Malvern, in her role as Minister of Skills in the Department for Education, and we agreed that the progress and achievements made by IfATE offer firm foundations for Skills England to build on, and that they support the Government’s ambitions on growth and opportunity across our economy. I am proud of all that IfATE has achieved. No arms-length body is perfect, but it has done some fantastic things to begin the reform of the skills system that is so desperately needed. The baton will now pass to Skills England, an organisation whose remit will be much broader and wider. What matters now is keeping employers’ voices at the heart of the skills system. This has been central to the successes that IfATE has had and should form part of Skills England’s DNA. Growth will be underpinned by employers getting the skills that they need. I will take the opportunity to outline to this House some of the achievements that IfATE, and the thousands of employers who have worked with it, have had since 2017. Apprenticeships and technical qualifications in the UK are all now based on IfATE’s occupational standards, which have been created using expert input from employers across the economy, covering everything from nursing to aerospace engineering. These standards capture the essential knowledge, skills and behaviours that employers want within their businesses, increasingly including more and more technology and AI. They form a spine within our skills system, from which apprenticeships and technical qualifications can grow. I am proud of the breadth and range of standards that we have, which demonstrates how employers from every sector have engaged in the development of the skills system. I am also proud of the recent prototype, the skills compass, which IfATE has been developing in collaboration with the Gatsby Charitable Foundation and Innovate UK. It will use labour market insights and AI to update rapidly these standards and capture changing skills needs. This is what we need in a responsive and flexible skills system. IfATE has worked with employers to develop and approve over 700 apprenticeships, and 750,000 people participated in an apprenticeship in England last year. The estimated annual gain for employers from apprenticeships is between £2,500 and £18,000 per apprentice during their training, and many apprentices will remain loyal to their apprenticeship employers long-term. I am sure the many noble Lords who have met apprentices will know that they are so passionate and committed to what they do. I have been a big employer of them and am hugely proud of so many of their continuing achievements. IfATE has set out occupational maps of career paths using apprenticeships and technical qualifications. They show everyone, from school leavers to employers, how you can progress in technical and professional careers. I am pleased to say that seven out of 10 of the mayoral combined authorities now use these maps and the back-office digital interface developed by IfATE to support their own careers guidance offerings. These maps are a real asset that can be transferred to Skills England as a result of this Bill. IfATE has made great strides in working with employers to identify where existing occupations and apprenticeships can become greener, supporting sustainable growth and our net-zero targets for the UK. We have also supported the Government’s ambitions on T-levels. As we know, T-levels offer routes to professional careers, such as construction, nursing, agriculture and digital, with students able to progress to high-quality apprenticeships. They also offer an alternative route to university education, and 97% of T-level students who applied this year were offered a university place. IfATE has approved over 230 technical qualifications at levels 4 and 5, providing a quality mark showing alignment to employer-led occupational standards, enabling learners to enter their chosen profession or progress to higher education. This is about expanding the opportunities that learners have to develop their careers and for businesses to get the high-quality skills that they need. The list goes on. I wanted to share this picture to assure everyone that Skills England will inherit a skills system with the foundations in place. It still needs to be developed, but we are ready to realise the Government’s ambitions to reshape the economy and unlock growth. However, there is a lot more to do. As well as translating the existing duties that IfATE has into powers for the Secretary of State, the Bill seeks to introduce flexibilities which will help to increase the pace at which we can deliver the skills that are needed by employers and learners. For example, the Bill sets out that groups of persons, currently in the form of employer groups known as trailblazers, may not always be required in the development of occupational standards and apprenticeships as is the case now. This provides the flexibility to make standards based on labour market data and information, and could avoid delays in revising and improving standards. My view is that, while this flexibility is a sensible tool for the Secretary of State, we should still seek for the norm to be to combine this type of data-led insight with the views of groups of employers and other experts. This matters because it provides them with a direct stake and role in the shaping of the skills system. I would encourage the Secretary of State to make clear and publish her rationale for any exceptions where a group is not used in the development or updating of standards. I also note that the Bill, in abolishing IfATE, removes the general duties that IfATE has with regard to the needs of learners and employers in exercising its functions. These are not replicated in the transfer of powers to the Secretary of State. I would welcome clarification from the Government on how they envisage Skills England will continue to ensure that those interests are considered under the system. In due course, strategic guidance to Skills England from the Secretary of State may be one helpful way of ensuring that these priorities are protected. Before I finish, I want to thank my fellow IfATE board members, who represent many of the largest employers in the UK, and all the IfATE employees for all the outstanding work that has been done since 2017. I also thank Jennifer Coupland, the chief executive of IfATE, whom I really admire for her passion, expertise and leadership of the organisation. In conclusion, I urge the Government not to lose momentum on the work that IfATE has done since 2017—there is too much at stake for everyone involved in the skills system—and to always keep the employer voice central to the development of apprenticeships, qualifications and flexible skills training. We should not forget that, as our workplaces are changed beyond recognition by further advances in technology and AI, we have to ensure that the entire country’s workforce still has the opportunity, under any new system, to constantly reskill.

20:36:00

My Lords, this looks such an innocuous little Bill, but there is so much more to it than meets the eye. It is a precursor to the arrival of Skills England, which we all hope will bring together the myriad of agencies operating in FE and skills to ensure quality and accessible education and skills for 100% of the population, as the Association of Colleges so heartily wishes, along with all of us who really care about technical and vocational skills and the well-being of the further education sector. However, the Bill does something that those of us on these Benches will always be wary of, as my noble friend Lord Addington has set out and other noble Lords have alluded to. It transfers powers from IfATE, a body made up of professional people who know and care about apprenticeships and vocational education, to the Secretary of State. It is a great pleasure to follow the noble Baroness, Lady McGregor-Smith, who has chaired the board of IfATE so successfully. I add my congratulations, too, to Jennifer Coupland, the chief executive, and the other key members who have shown knowledge of, and dedication to, the further education sector and work-based qualifications. Alas, they are to be replaced by a here today, gone tomorrow Minister, almost certainly university-educated, with little direct knowledge of, and, sadly perhaps, even less interest in further education colleges and the work-related training and qualifications which they so brilliantly deliver. In a democracy, we should never aspire for unlimited power to be given to politicians. The Minister may argue that this is an interim stage, but it appears that Skills England, when it comes, will not have a statutory basis—as many other noble Lords have pointed out—and will be at the whim of the Secretary of State, who could fundamentally change it. Skills England will legally be part of the Department for Education, so not as notionally independent as IfATE was. The Education and Skills Funding Agency is also an executive agency, and as such could be easily abolished without parliamentary debate. So what will happen to IfATE’s “employers first” approach to developing policy and qualifications, which could well be at risk if the Education Secretary of the day prescribes a different policy? It was hoped that Skills England would be able to work across departments, have recourse to employers and be flexible enough to be responsive and approve standards to ensure that work-based qualifications were always employer-led. As I know from my days at City & Guilds, work-based qualifications have always been employer-led. This was by no means true at first with T-levels, which were always billed as different because they were employer-led. Will that be the case when it is set up? As we have heard, the impact assessment states that there will be a drop in apprenticeship starts while functions are transferred from IfATE, which will disproportionately impact adult apprentices and disadvantaged learners and regions. What will the Government be doing to minimise this? We know that the numbers of young people starting apprenticeships are already disappointing. If these changes make the position worse, what steps will the Government take? What steps are being taken to ensure that apprenticeships under the growth and skills levy will be available to learners of all ages and at all levels, and how will the growth and skills levy do a better job than the apprenticeship levy? Lifelong learning matters now more than ever. Can the Minister say what steps are being taken to incentivise flexible lifelong learning? What assessment has been made of the lifelong learning entitlement and its introduction from 2026? It is crucial to improving the UK’s economic growth. Supporting and encouraging adults to upskill and reskill will help with increasing productivity and filling skills shortages in growth areas of the economy. Flexible study is also essential in allowing people to fit their studies around busy work and family lives and in allowing people to access higher-level skills in the local area where they live, even if there is limited face-to-face provision. However, over the last 15 years, the number of adults aged 21 and over accessing higher-level skills courses has fallen dramatically. Policy and funding interventions are now long overdue for flexible higher education provision. This little Bill could hide a very damaging move to overpowerful politicians overriding experts in the field. We shall monitor this with great care as this Bill and the Skills England Bill proceed. Of course, we all hope for the best, because this is a vital area, but we shall be watching carefully for the independence of Skills England if it really is to fulfil its ambition.

20:42:00

My Lords, I offer my congratulations to my noble friend Lord Beamish on an excellent maiden speech. It is clear that he is going to be a real asset to your Lordships’ House. It is probably not unfair to say that there have been few more uncontroversial Bills presented to your Lordships’ House than the one we are discussing this evening. That is not at all to denigrate this Bill, which is an important cog in the wheel that will power the development of the skills needed to drive the economy in the uncertain years ahead. There is little that I want to say about the Bill itself, other than perhaps to ask my noble friend to say a little more about the additional powers being given to Ofqual around accrediting technical qualifications for the first time. The Secretary of State will have the power to ask Ofqual to do so, and it would be helpful to have some clarity as to when that power might be exercised. There is another issue that I want to raise, which I will speak to later. Skills England is not mentioned in the Bill, but I follow other noble Lords in using this as a convenient means of welcoming the formation of a new body and considering what role it might play in a future likely to be dominated by AI. I envisage Skills England being key in developing a new post-16 skills strategy, co-ordinating engagement across government with key agencies and devolved bodies. I must say that it is a pleasure to be on this side of the Chamber for a change when debating skills provision. Several noble Lords, not least the noble Baroness, Lady Barran, who is here today, were involved three years ago when the skills Bill was making its way through your Lordships’ House, demonstrating to the then Government that we felt their plans lacked the breadth and depth needed to address the shortfall in providing for training and skills development. At that time, local skills improvement plans were identified as the means of achieving the spreading of opportunity more evenly across the regions. Many noble Lords, including some on the then Government Benches, submitted amendments to the skills Bill. They highlighted that, with a disproportionate role given to employers, existing structures were being ignored, such as metro mayors, combined authorities—many with democratic accountability for local skills and economic regeneration —local enterprise partnerships, trade unions, universities, FE colleges and training providers. All were originally excluded, and only university and training providers were eventually allowed a meaningful say. It is refreshing that the current Government appreciate the contribution to be made by a wide range of bodies and are willing to empower them to coproduce local plans in recognition of their unique feel for priorities and skills development in their areas. I like the description given to Skills England by the Association of Colleges in its briefing to noble Lords for this debate. It describes it as a “new social partnership body” bringing together business, FE colleges, training providers and unions with national and local government to ensure we have the highly trained workforce needed to deliver the industrial strategy announced last month. On the subject of FE colleges, if they are to be able to play their full role in delivering the Government’s missions and in helping to ensure that Skills England is a success, it is vital that the long-term underfunding of the sector compared to schools and higher education is addressed. With that in mind, I was one of a number of Labour peers who wrote recently to the Chancellor emphasising that point and asking that greater funding for the FE sector be a feature of the Budget. Following the UK’s departure from the EU, skills shortages are a major problem. Indeed, one third of all job vacancies are due to the lack of people suitably skilled to fill them. That is an indictment, surely, of the previous Government’s record, and it is not acceptable simply to cite the pandemic or exiting the EU as reasons. Skills England has not allowed the grass to grow beneath its feet. The organisation had been in existence for just two months when it published its first report. Its title, Driving growth and widening opportunities, is certainly relevant and it included an index, ranking the demand for each occupation across the UK labour market. I studied economics, but I had never come across something called an SSVD—a skills shortage vacancy density. Worryingly, the report revealed that the sectors with the highest vacancy density are construction, information and communications, and manufacturing, with health and social work and education not far behind. All those sectors are pillars of any economy, essential in achieving the growth everyone is searching for. That report noted that much of the UK economy is dependent on skills gained in higher education. Future job projections suggest that occupations requiring higher education are expected to see the most employment growth over the next decade. Addressing shortages in higher-level skills is therefore essential to achieving government missions to drive growth and widen opportunity, making universities critical delivery partners to Skills England. What role does the Minister envisage for universities in the development of Skills England? Also critical to the effectiveness of Skills England will be the re-shaped growth and skills levy. I echo the point my noble friend Lord Blunkett made about the money that goes back to the Treasury from the existing apprenticeship levy. A means has to be found to use money that has not been spent in whatever the period is—currently two years—so that it stays within the training budget and is not just returned to the Treasury, where it will be spent on anything the Treasury deems then appropriate. Since the introduction of the levy, there has been a steep decline in apprenticeship starts for young people and a shift in starts from the most deprived parts of England to London and the south-east, as well as a decline in starts in sectors where skills challenges are most acute. Added to that is a growth in management and leadership courses and a decline in starts for those from the most disadvantaged backgrounds. It is to be hoped that Skills England will address the effects of those trends by bringing greater transparency, especially in how the growth and skills levy is spent. Apprenticeships are essential for ensuring that young people from a diverse range of backgrounds can access high-quality training. They can also tackle skills gaps, particularly in the public sector. Across the apprenticeships landscape, almost two thirds of those who started a degree apprenticeship in the health, public services and care sector in 2022-23 were aged 25 and over, including 93% on the social worker programme and a large number of those on the nursing programme. Apprenticeships must be available to learners of all ages and at all levels to enable them to upskill and reskill, which I know is the Government’s aim. Open University students tend to be older compared to the rest of the sector, and that is a good example of flexible lifelong learning, which is crucial to improving economic growth. Can the Minister say what steps are being planned to incentivise flexible lifelong learning? Linked to that, of course, is the lifelong learning entitlement. Can she also reveal what assessment has been made of it and its introduction, we understand, from 2026? I turn to my final issue today as the only Scot taking part in this debate. I have given notice to my noble friend that I would raise questions relating to the assumption that, as education and skills are devolved matters, the Bill applies only to England and Wales. However, as set out in Clause 10, that is not the case. That is because the remit and responsibilities of Skills England will feed into UK-wide policy and funding agendas, resulting in both direct and indirect implications for the post-16 skills landscape and higher education in Scotland. Both the Skills England report to which I referred earlier and the Government’s industrial strategy are UK-wide in scope. Skills England is responsible for identifying where skill gaps exist and, as my noble friend said in her opening remarks, is expected to work with the Migration Advisory Committee to address them. The MAC is, of course, UK-wide in scope. The same applies to the growth and skills levy. The apprenticeship levy is collected at UK level by HMRC, and Scotland receives a proportion via the Barnett funding formula. The Scottish Government then have discretion as to how the levy is distributed north of the border. Without going into detail, I will just say that they do it differently. Can the Minister say what engagement the UK Government have had with the Scottish Government on the creation of Skills England? What mechanisms are the Government considering in order to ensure strong connectivity between Skills England and the Scottish Government—indeed, all the devolved Administrations —where the work of Skills England feeds into UK-wide agendas such as the industrial strategy and the recommendations of the Migration Advisory Committee? Ensuring that the country has a sound base of the skills needed for the demands of a fast-evolving economy should not be seen as a cost. It is clearly an investment in the future and an essential part of driving economic growth. I welcome the establishment of Skills England as a decisive step in that direction.

20:51:00

My Lords, I declare my interests as a chief engineer working for AtkinsRéalis, the chair of Midlands Nuclear and president of the Sustainable Energy Association. I deal with skills challenges on the ground every day. I work in business and my industry, the nuclear industry, is undergoing a significant period of growth. We currently have around 83,000 people in the sector but, to meet growing demand and replace people leaving, we need to fill around 40,000 new jobs by 2030. My business in Derby has some really specialised technical skills that are difficult to find on the market, which is acting as a brake on our ability to grow our business and contribute to the Government’s economic growth goals, as well as the national goals of clean power and the defence of the realm. For example, software engineers, electrical, control and instrumentation engineers, and process engineers are very difficult to find. The Minister will be aware of the Nuclear Skills Taskforce and the resulting nuclear strategic plan for skills, which are a great first step in meeting these opportunities. In that vein, I welcome the intent of the Bill in taking a more integrated and joined-up approach to skills across the country, particularly in better considering regional needs. I will concentrate my remarks on how Skills England will work from a regional perspective. First, local skills improvement plans—LSIPs—were set up as part of the previous Act, to which noble Lords have referred. I was grateful to the Minister for speaking at a recent Cross-Bench meeting where I raised this issue. Overall, LSIPs have been a welcome development in helping to set out plans to meet local skills needs and provide better join-up between local businesses and skills providers, but we have sometimes found limited join-up nationally. This can result in them being fairly generic or overlapping, in some cases. Can the Minister provide more detail on how Skills England will help set the strategic direction for LSIPs and other potential reforms to these plans? Secondly, on regional partnerships, in the Midlands where I live, we are now blessed with two combined authorities. We have the East Midlands Combined County Authority and the West Midlands Combined Authority, but these cover only a relatively small part of the region. How will Skills England operate regionally and deliver for those areas not covered by combined authorities? For me, part of the answer is in the regional partnerships—for example, the Midlands Engine and the northern powerhouse. I am currently chairing an energy security task force for the Midlands Engine that is all about how the region can seize the opportunity of the energy transition. One of our offers to the Government is to work right across the region to collaborate, test and scale a skills-hub approach to address the technical gap in the region’s clean energy and manufacturing sectors, intervening where the markets currently cannot. In fact, following a meeting earlier this year with the noble Baroness, Lady Barran, we are setting up a regional nuclear skills hub, which will start to reap some of those benefits. Such hubs could provide specialised training and school-level engagement, foster innovation, support workforce transition, and encourage collaboration between academia, industry and local communities, leveraging the region’s wealth of universities and colleges. I would be grateful if the Minister could say how Skills England might work at a broader regional level to ensure that the overall skills picture and demand is being considered. Finally, following on from the remarks of the noble Lord, Lord Hampton, on better linking up schools’ under 16 education with regional opportunities, there is a real opportunity here for the Government, and that is something else that we in the Midlands region are considering carefully. There are lots of successful opportunities, such as the Science Summer School of the noble Lord, Lord Mawson, and Professor Brian Cox. In many regions across the UK, it is doing a great job of linking up schools with broader opportunities. As the noble Lord, Lord Beamish, said in his excellent maiden speech, this all feeds in to raising aspiration in many areas across the country and getting young people excited and enthused about contributing to the national goals that the Government are pushing. I very much look forward to working with the Minister and her team on this important Bill.

20:56:00

My Lords, I declare my interests in the Good Schools Guide and as a member of the council of City & Guilds. It is good to see a skills Bill here so early on and being tackled with such impetus—it gives me great hope for what this Government might achieve—although I celebrate IfATE’s achievements and our own achievements, and I join the noble Baroness, Lady McGregor-Smith, and my noble friend Lord Effingham in what they have said about that. But this Government clearly think we must do better—a phrase I recognise from my school reports. I hope that the Government will start by taking the advice of their own excellent Science Advisory Council and the Chief Scientific Adviser, Professor Viner, and establish from the outset of this change a set of metrics that will enable them to know how well they are doing and assemble the evidence of what works, understand where the gaps in that evidence are and what they are going to do about it, and fundamentally evaluate the process that they are setting out on, from the start, so that whatever happens we end up with a really good body of knowledge as to how to improve the skills system in this country. I hope that the Government will work back through the conclusions they arrive at on skills in their schools policy. I have been gently disturbed recently by some of the cuts made in science spending in schools. I share with the noble Lord, Lord Hampton, the thought that there are some basic skills that we are not teaching in schools at the moment which are pretty fundamental to the subsequent skills agenda. At a time when we are reforming the Civil Service—the future fast stream will be 50% STEM rather than 10%, as it is at the moment—we need to look right back into our school system to see where these skills are going to be coming from. I hope too that the Government will take a critical look at our qualifications landscape. I like T-levels, but we need BTECs alongside them because we are not providing for anything but the brightest students if we insist on T-levels. I hope we will look at university courses that say they are teaching skills. If you go back a few years, the Next Gen. report showed that 80% of the courses at universities which said that they were something to do with the computer games industry were rubbish and just using that in their titles as a way of seducing students. The same situation pertains. If you are looking—as doubtless many noble Lords have—to help your children choose a university course, the titles are there but there is no information as to what children go on to do afterwards. Is this a good course for getting into the industry that it says it is about? Is it actually teaching what those industries want? The information is not there. Given how much students are investing in their education, we really owe them better information on which to make those decisions. At the other end of the scale, I hope the Government will pay attention to the developing world of micro- credentials. The idea that you can pick up someone, give them a relatively short bit of training and have them ready to go and be useful is the structure of training in a lot of industries—it certainly is in IT and a lot of the creative industries. We need to work out how to work with that. What IfATE has done to help bring the bigger qualifications up to speed more quickly is admirable, but the world is changing so fast—for instance, in artificial intelligence and cybersecurity—and we need to understand how to move at that pace and how to offer pastoral support to people whose careers start to be made up of an accumulation of bits and pieces that there happens to be a demand for at the time. To pick up on what the noble Lord, Lord Ravensdale, said, I hope that we will see an emphasis on local skills, but somewhere in my town of Eastbourne there is a nuclear engineer, and that will never be picked up by a local skills policy. We need to understand the needs and talents of children and young people and not just the needs of the local industry, and make sure that we are offering the education that our children need, rather than just the education that their employers are after. I turn to the abolition of IfATE. I very much support all that the noble Baroness, Lady McGregor-Smith, said about it. I saw the previous Government on several occasions do the exact opposite, but it is hugely important to preserve the network of relationships that has been built up by an institution which is being supplanted. It takes a long time for these personal relationships to subsist; they exist at not only the senior level but the junior level. Those relationships need to be preserved; you do not want to have to rebuild them from the base up. We also need to build a structure—which is not easy in the Civil Service—where such relationships can be maintained. We cannot have endlessly rotating civil servants responsible for maintaining long-term relationships with industry. A sense of career and institutional memory has to be built into this. A last question for the Government is this: how does the Careers & Enterprise Company fit into this?

21:03:00

My Lords, I am delighted to speak at the Second Reading of this Bill. It gives me the first opportunity to welcome my noble friend the Minister to her place. I should have had that opportunity last week, in Thursday’s Questions, but unfortunately illness prevented me attending the House. I thank my noble friend Lord Watson of Invergowrie for asking the Question on my behalf. I congratulate my noble friend Lord Beamish on an excellent maiden speech and an introduction to the open-air museum which brings the history of north-east England to life. I note that we have an excellent open-air museum in south Wales, St Fagans, and I highly recommend it to your Lordships. I am sure that many noble Lords will be familiar, after my time spent in debates such as this, with the fact that education is at the heart of my lifetime’s experience: I served as a teacher for almost 35 years. I know that education is at the centre of Labour’s mission to spread and expand opportunity. From our earliest years through to learning or retraining as adults, gaining knowledge, skills, qualifications and exploring our interests and abilities, it enables us to build the lives that we want and the society that we wish to share. Labour will track progress on its education mission through three stages of education. These are: to boost child development, with 500,000 more children hitting the early learning goals by 2030; to see a sustained rise in young people’s school outcomes; and to build young people’s life skills, with an expansion of high-quality education, employment and training routes so that more people than ever are on pathways. The ONS, which is based in my home city of Newport, released updated data this summer. The percentage of all young people not in education, employment or training in April to June 2024 was estimated at 12.2%, up 0.9 percentage points on the year. It is clear evidence that over 14 years the former Tory Government did not develop the appropriate apprenticeships and skills pathways that allow youngsters to develop, coupled with an inability for adults to reskill and upskill throughout their lives. The result is that we have too few people with the skills we need for growth. The former Government’s levy saw millions of pounds that should have been used for skills training going unspent, even as businesses reported growing skills shortages. Labour’s plans, giving businesses flexibility, would ensure that money could be best spent on a greater range of training courses, including basic English, maths and digital skills, so that businesses can fill those gaps and people can gain new skills. The Bill’s technical changes set out what is needed to begin to redress this serious imbalance in our opportunities for growth in the economy. The transfer of IfATE’s powers to the Secretary of State will enable closer integration of employer input with broader government strategies and policies. Skills England has been tasked with driving forward a national ambition to meet the skills needs of the next decade. This will be driven by pushing power and decisions on skills spending out from Westminster to local communities, so that those communities can better match up skills training with their local business needs and grow local and regional economies. It will transform the skills system to make it truly world-leading. It will help to build a high-skill, high-productivity workforce that is matched to employers’ needs, and ensure that everyone, regardless of their background, can access the opportunities they need to thrive, and deliver change by bringing together formerly disparate functions into a single organisation, with a single feedback loop into government. It will be an executive agency. It will be legally part of the Department for Education and will have a role in convening education providers, employers, unions and regional and national Governments, which is the sort of social partnership approach that sector bodies have been pushing for over many years. It also changes the overly prescriptive functions, and the DfE believes it can make the skills system more responsive. It is about speeding up the amendment or introduction of standards and assessment plans, bypassing what can be an arduous exercise of lengthy reviews involving employers, awarding organisations and multiple layers of officials. We cannot afford to continue to let overly complex bureaucracy stand in the way of growth and opportunity. I draw on my previous experience as a senior A-level examiner when developing new specifications. I remember the level of detail and delay that went into such changes. A minimal tweak could delay the introduction by a whole academic year. People are ambitious for their futures. They want to learn new skills to get new jobs. We will reverse the trend of the past 14 years and give businesses the flexibility they need to train people up with new skills, from digital technologies to the green skills needed to tackle climate change. Understandably, there are always concerns in the sector when any changes are proposed, but the department has noted that any possible temporary disruptions affecting learners and apprenticeships during the transition would be limited and has promised to address the impact. From digital skills and green skills to childcare and social care—this Labour Government will harness the talents and abilities of the British people so that we can strengthen our economy and break down barriers to opportunity. I was extremely pleased to read last month’s first report on Skills England and to note that Richard Pennycook, the interim chair, said that while it is called Skills England, the UK skills needs do not change or stop at Chepstow or Carlisle. Skills England intends to work closely with colleagues in the devolved nations to ensure that students and employers have a seamless experience across the UK. Indeed, the whole relationship between the UK Government and the Welsh Government, in terms of engagement, has been transformed in the last three months, notwithstanding the establishment and successful first meeting of the Council of the Nations and Regions just two weeks ago. Let us harness the changes needed in the education system by changing those persistent skill mismatches. Let us change the high proportion of the working-age population who lack essential skills for work and redress the undersupply of highly technical training. This Government will provide more training opportunities so that people can gain new skills, access better jobs and grow our economy. That is the difference we will make, and the technical changes in the Bill begin an important and necessary part of the journey.

21:11:00

My Lords, I thank all the organisations that sent excellent briefings. I also congratulate the noble Lord, Lord Beamish, on his maiden speech. I was fascinated by his final comment about traditional skills, which we often forget. I know that Liverpool’s Anglican Cathedral is desperate for masons to repair the sandstone blocks. When I drive round Cumbria, I always wonder where we are going to get the skills to repair those dry walls. The Minister kicked off this Second Reading by referring to harnessing opportunities for our young people. I thought we would all be agreeing with each other and was quite surprised that that was not the case. However, on reflection, we did in our own ways agree with each other, albeit from different angles. My noble friend Lord Addington talked about what to do when things go wrong and how to make sure that they are put right. The buck will stop with the department that takes all these powers. The noble Lord, Lord Aberdare, referred to things being rather cosy, with Skills England, the director-general and the Civil Service, which does not have any public profile and operates behind closed doors. Where is the grit in this figurative oyster? That was also picked up by the noble Baroness, Lady Evans. The right reverend Prelate the Bishop of Leeds talked about apprenticeship levies and how it was difficult to navigate around them. I shall come back to that in a moment. The noble Lord, Lord Blunkett, was very sure that Skills England needed the independence, the force and the fundamental clout to make things happen, although there are two powerful Ministers in charge of delivery—a Minister in this House and a Secretary of State. I am always fascinated when the noble Lord, Lord Hampton, talks, with his knowledge of state education. He went off-script a little bit and rightly asked where we were going to get these 1,000 new teachers from. My mantra has always been that one thing that is holding back the creative industries has been the wretched EBacc. We were promised that T-levels would be a practical opportunity for some young people, and perhaps they are too technical. I, too, pay tribute to the noble Baroness, Lady McGregor-Smith. Perhaps the title IfATE, given what its fate was to be, was a bit ironic. She talked about apprentices being passionate about what they do, but foundations are being put in place there that are going to be hugely important to the future and where we go. My noble friend Lady Garden was, as usual, in her own inimitable style, very direct. She talked about the potential power of Ministers in this regard, and rightly raised the issue of lifelong learning, which matters now more than ever, and what will happen to lifelong learning entitlements. The noble Lord, Lord Watson, started off by saying that, like me, he thought this was one of those few uncontroversial Bills, and like me he was quite surprised by the tenor of some of the comments made. I thank the noble Lord for raising the issue of Scotland and Wales. I scratched my head about that and thought, “Is this yet again a purely English thing?” But I did not know about Clause 10 of the Bill—so I thank him for raising that. The noble Lord, Lord Ravensdale, talked about the jobs that we need. Not just in his sector but in all sorts of sectors across the UK, there is a huge skills shortage and jobs shortage. He wanted to know how Skills England would operate at a regional level. I was absolutely fascinated by the point that the noble Lord, Lord Lucas, made that the Government need to set up metrics for how well we are doing so that we can evaluate progress. I want to come to that at the end of my contribution. I hope that, if they do that, that metrics or evaluation will be published on a regular basis. As a nation, we develop and prosper by nurturing, educating and training our young people. We have been very successful at developing those young people of an academic disposition but less so for those young people who want or need to follow a vocational route. At a time when we need people with particular skills and have skill gaps in many industries and businesses, we seem constantly to wrestle with the problem, slow in identifying the skills needed and even slower in providing the training and opportunities for those skills. I am still scarred by Objective 1 in Merseyside in the 1970s. Merseyside was one of the poorest regions in Europe, measured by its GDP, and as a result it received literally millions of pounds from the EU. But in terms of training, Objective 1 money was spent on hairdressing and beauty courses. Why? Because those courses could easily attract and enrol students and give a much-needed income stream to the FE college. The college that needed the revenue did not have the financial security to develop courses that would provide the skills for the developing industries. That is, I hope, a lesson that we have now learned. I relate that historic situation because it shows that FE needs to have resources, finance and flexibility to provide skills not just for today but also for tomorrow. We are probably not aware of the skills that are required for the future. We were not aware of AI five or 10 years ago. We probably thought that it was a Geordie expression, “Wey aye, man”. That did not go down well—I shall refrain from doing jokes; it is not my forte. We are not opposed to the Bill, but we have concerns and we would like reassurances. We also have ambitions that could be picked up by this Bill. Currently the institute is responsible for bringing employers together to develop the apprenticeship standard and what apprentices need to learn—in short, the apprenticeship plan. They are good at this and the employer input is very important to ensure that consistency in training, assessment and outcomes. I ask the Minister: who will set the apprenticeship standard and who will regulate assessment plans developed by awarding bodies? We need to avoid inconsistencies of outcome. We need to be reassured that Skills England develops a partnership with business skills bodies to secure that quality and consistency of apprenticeships and that there is a partnership involving employees, giving industry skills bodies a formal role in the skills system, to set standards and assessment requirements. We were getting to the position of seeing the regions working with FE, understanding the needs of industry and understanding SMEs. We have to be sure that the new arrangements do not lead to unintended consequences and that the progress and working relationships that are beginning to be successful are not lost. The Government need to invest in skills and training. Any business will tell you that the apprenticeship levy does not work. They often cannot get the funding they need to train staff and the ridiculous situation whereby hundreds of millions of pounds of training funding goes back to the Treasury at the end of the year if it is not spent is absolutely crazy. We also believe that the lower minimum wage for apprentices should be scrapped and that they should be paid the same minimum wage as those other employees of their age. Apprenticeships are critical for social mobility and ensuring that people from a diverse range of backgrounds can access high-quality training. They can tackle skills gaps and help learners of all ages to upskill and reskill. The Open University, interestingly, carried out a survey that found that 72% of apprentices received a pay rise on completion, and 71% gained promotion. When the apprenticeship scheme was conceived— I think it was by the coalition Government—it was aimed very much at 16 to 18 year-olds. But, over the years, the number of 16 to 18 year-old apprentices dropped dramatically, and they are often the ones in the most vulnerable situations. I hope that the new Government will try to ensure that there are plenty of opportunities for that age group. To go back to the noble Lord, Lord Hampton, at the end of his contribution he made the point that if the Government got this right and delivered what they said, it could be one of the major successes of this Government, which will be lauded for generations to come. We want this to be successful. We are not here hoping that this will not work, we want it to be successful and, never mind turning around the health service, it would be absolutely amazing if they could turn around the skills sector and the skills shortages. It would be something that would be remembered for years to come.

21:23:00

My Lords, as I rise to speak at Second Reading, I say first how much I enjoyed the maiden speech of the noble Lord, Lord Beamish. I look forward to the insights he will bring to your Lordships’ House. The goal of improving our skills system and meeting skills gaps is not a new one. Indeed, today, as my noble friend Lady Finn said, it is an international one. Under successive Governments, we have seen work to simplify the system, achieve parity of esteem with academic qualifications, place employers at the heart of the system and improve the quality of skills-based qualifications. In their manifesto, His Majesty’s Government committed to establishing a new body, Skills England, to deliver their skills strategy, but unfortunately this Bill merely abolishes the Institute for Apprenticeships and Technical Education and transfers its functions to the Secretary of State; in effect, absorbing them into the Department for Education. We have no details on the plans for Skills England itself, nor on how the Government’s proposed changes to the funding of skills-based qualifications will work in practice. On these Benches, we have three main concerns. First, we do not believe that the proposed machinery of government changes are likely to make the difference that the Government hope they will. In the last 50 years, there have been no fewer than 12 skills agencies, or 13 including Skills England. If the creation of a new body was alone enough to address our challenges in this area, surely one of the earlier iterations would have been the answer. Secondly, as we have heard across the House, we believe that the powers of the Secretary of State created by this Bill are too wide-ranging, have little accountability and will risk directly damaging the status of these qualifications. Thirdly, we have real concerns that these changes will lead to harmful delays in addressing some of the most important strategic issues in skills development that the Government face and have set out. Given that all noble Lords want the most effective approach to developing our skills system, it is important to recognise the achievements of the last Government and the key challenges that remain so that the new Government benefit from the institutional memory of this House and avoid repeating any past mistakes. The last Government delivered on a major simplification of the system in relation to T-levels, higher technical qualifications and apprenticeship standards. We raised the value of skills-based qualifications in the minds of students and employers, particularly in relation to apprenticeships, which we put on a statutory footing for the first time. The noble Baroness, Lady McGregor-Smith, spoke eloquently about the importance and effectiveness of putting employers at the heart of the system, which IfATE brought as well as the creation of local skills improvement plans, which linked employers and providers for the first time. We improved the quality of qualifications across the board, including for the missing middle which your Lordships have referred to, and we laid the foundations for lifelong learning through the skills Act and the lifelong learning Act of 2023 so that options for training and retraining were available at every stage of a person’s career. I hope the Minister will confirm that the Government will not discard the progress of the past 14 years but build on it and focus on the key challenges of the future. If we look at the challenges of improving our skills system, I am genuinely baffled as to why one would start by creating a new agency within the DfE and abolish IfATE. I am not sure how this helps build demand for newer and less well-established qualifications such as T-levels and HTQs. I am not sure how it addresses the workforce pressures in further education or the decline in investment in training by employers or how it will help the Government realise the potential of the lifelong learning Act. How does it quickly set out the plans for the new growth and skills levy which the Government promised in their manifesto, so that we avoid a hiatus in skills development and investment, as alluded to in their impact assessment? Can the Minister explain why the Government could not have achieved their goals of co-ordination with the industrial strategy council and the Migration Advisory Committee through IfATE rather than placing Skills England within the DfE, with all the time, cost and reorganisation that would have avoided? If we had a blank sheet of paper—in the words of the noble Lord, Lord Hampton, perhaps a sheet of paper that was nimble, agile and other good adjectives—and had to choose between an independent, employer-led body and an internal team within a government department to create the best skills system, I am pretty sure that most people would naturally assume that the former would be more effective. It would help if the Minister could give the House examples of where such centralisation of power has actually delivered on the Government’s aspirations. We are also really concerned about the powers of the Secretary of State and expect to come back to these in Committee. In the King’s Speech, the Government committed to creating a new body, Skills England, but as noble Lords have noted, the Bill does not do that. Far from simply replacing the institute, the Bill abolishes it, leaving the Secretary of State in control. We now understand that Skills England will not be on a statutory footing and therefore will unquestionably be less independent than IfATE. The Bill gives the Secretary of State sweeping powers to prepare apprenticeship standards and plans, either personally or by commissioning others. Clauses 4 and 5 make it possible for the Secretary of State to bypass industry groups and employers entirely. In her opening speech, the Minister helpfully set out some examples to reassure the House about some of the limitations on how those powers might be used, but can she explain what the barrier is to putting them in the Bill if the Government are clear on what those limits are? Secondly, we should be concerned about the potential impact on the quality of technical qualifications. Clause 6 removes the requirement for reviews of technical education qualifications, standards and apprenticeship assessment plans to be published at regular intervals. What will the arrangements be to do this in future, and why has the duty to publish been removed? This flexibility is supposedly to align qualifications with employers’ needs, but we know that without rigorous and independent oversight, standards can slip. Can the Minister tell the House how she plans to ensure that we have standards that are recognisable and high, without that regular independent review? There is the further risk of dilution of quality via Clause 7, which removes the requirement to have a third-party examination of a standard or apprenticeship assessment plan before approval, leaving the power for the Secretary of State to appoint one if she sees fit. What should we expect from this? How often does the Minister expect this power to be used and under what circumstances? It would also help if the Minister could clarify under what circumstances the Secretary of State would use her powers set out in Clause 8 in relation to Ofqual. Clause 9 is also of concern, as my noble friend Lady Evans of Bowes Park pointed out, quoting the Attorney-General. Through regulation made by statutory instrument, it allows for the Secretary of State to make provision that is consequential on other provisions in the Bill. This is a very broad Henry VIII power, applying to existing and future legislation passed in this Parliament. I would be grateful if the Minister could give an example of how Clause 9 would be used. Perhaps she could commit to listing the existing legislation where Clause 9 will apply. The assumption of power by the Secretary of State reverses the reforms of the Enterprise Act 2016 and risks severely eroding the parity of esteem between academic and technical qualifications. Imagine the outcry if A-level standards were directly controlled by the Education Secretary—I hope your Lordships see the point I am making. Yet the Bill gives ministerial control over all technical qualifications, which risks undermining their credibility and status. Leaving the specifics of the Bill, we are genuinely concerned that Skills England will not achieve its goals. The Government are actually creating not one but three new bodies with an interest in skills: Skills England in the DfE, the Labour Market Advisory Board in the DWP and the new Industrial Strategy Advisory Council. How will these three—or four, if we include the Migration Advisory Committee—potentially competing bodies work together? This approach raises so many questions. Can the Minister reassure the House about the level of seniority the head of Skills England will have? How will Skills England, sitting in a corner of Sanctuary Buildings, have the authority to influence other government departments? How will it work with the devolved Administrations and the mayoral combined authorities? How will it interact with the Office for Students? It is of great concern and regret that the objectives and limits of the new body are not clearly set out in statute, and we will seek to gain as much clarity as possible on these points during the passage of the Bill. I ask the Minister again: where is the evidence that such an approach has ever worked in this country before and will be successful now? My belief is that, if His Majesty’s Government were serious about progressing quickly with the urgent strategic issues around skills reform, they would build on the success of IfATE, rather than dismantling it. The real risks here are, first, that the Government will unwittingly create confusion, lower standards and erode trust in technical qualifications; and, secondly, that the time and cost involved in creating yet another overcentralised agency in the DfE delays addressing the big opportunities and challenges that need to be grasped in this area and leaves us with an unwieldy, unaccountable and ineffective approach. The Bill threatens to undo much of the progress made under successive Conservative Governments in building a world-class apprenticeship and technical education system. I have no doubt that the Minister wants the best for our skills system and those who learn and work in it, but I have grave doubts that this Bill will deliver the system that the country needs and that she wants. I hope very much that the Minister will listen to these concerns and act to address them when the Bill reaches Committee.

21:37:00

My Lords, I thank noble Lords for their contributions and acknowledge the many passionate and informed speeches that we have heard and the expert knowledge that this Chamber has brought to the debate. I particularly welcome and give a special mention to the maiden speech of my noble friend Lord Beamish. He and I served together in the other place. I remember the breakfast meetings that he used to have in the tea room—particularly when I was Chief Whip, because no Chief Whip likes to know that there is plotting going on in the tea room. My noble friend was a steadfast colleague and a strong supporter of the Government. As he outlined in his maiden speech, he used his real enthusiasm to challenge the Government on issues relating to defence and to protect those affected by the Post Office scandal. Based on his maiden speech and what I know about his history, I know that he will certainly play a very important role in this House, and I am very pleased to welcome him. The Government’s first mission is to grow the economy. To succeed, we need to harness the talents of our people. A skills system fit for the future can enable people to learn the skills that they need to seize opportunity and businesses to access the skills in the workforce that they need to grow. I join the noble Earl, Lord Effingham, in celebrating both those who are taking part in apprenticeships and those who are delivering them. There is excellent work going on across the country, which I often have the opportunity to celebrate, where providers and employers are providing a splendid apprenticeship opportunity. The noble Earl asked me, as did the noble Baroness, Lady Barran, to celebrate the last Government, but I have to point out that apprenticeship starts peaked in 2015-16 at 509,360 and in the most recent year were at only 337,140—in other words, a 34% reduction on the levels seen in 2015-16—so I do not think it is enough for us simply to rest on what the previous Government have done. In fact, we need a fundamental change in our skills system if we are going to ensure the potential of our people and our economy. On the specifics of the debate, I will start with the number of contributors who have asked questions about how we maintain an employer-led approach to the skills system. The noble Baroness, Lady Finn, the noble Earl, Lord Effingham, and the noble Lord, Lord Storey, asked questions about that. I reassure noble Lords that employers will continue to play a central role in the design and delivery of apprenticeships and technical education. Indeed, it is crucial that apprenticeships and technical qualifications reflect the needs of employers and that employers have confidence in them. That is why, through Skills England, we will ensure that there is a comprehensive suite of apprenticeships, training and technical qualifications for individuals and employers to access, all of which will be informed by what employers and other partners tell us that they need. The default will be that employers will set standards and assessment plans—I hope that responds to the point made by the noble Lord, Lord Storey. It is not the case that this legislation enables the Secretary of State to rewrite a standard on a train, even if she were to have the time to do that. Employers remain fundamental. In fact, regarding standards and assessment plans, the legislation states that the Secretary of State will be able to prepare these only where she is satisfied that it would be more appropriate than using a group of persons. Each time the Secretary of State does this, she will need to make such a consideration and she will not be able to proceed without doing so. That approach will be taken in only a minority of circumstances where there is a clear rationale for doing so, some of which I outlined in my opening speech and all of which I will be very happy to go into more detail on in Committee. I think the important point was made by my noble friend Lady Wilcox, who, using her experience, identified some very good examples of the need for flexibility in the system, as was also recognised by others in the debate. My noble friend Lord Watson asked about the Ofqual amendment. This amendment will ensure that, should the Secretary of State wish to in the future, she could grant an exception so that Ofqual can consider whether it is appropriate to accredit certain types of technical education qualifications. It will therefore reintroduce in a managed way the potential for Ofqual to exercise its accreditation power for technical education qualifications. Where the Secretary of State deems it necessary to maximise the quality of and confidence in technical education qualifications, it will become possible for the full suite of regulatory options to be applied to them, helping to put them on an even footing with other academic and vocational qualifications. On the specific point about Clause 9 raised by the noble Baronesses, Lady Barran and Lady Finn, these are not sweeping powers. This is not an undermining of the correct exhortations made by the Attorney-General on the use of delegated powers. Clause 9, in introducing Schedules 2 and 3, details the primary legislation that we are amending simply to remove references to IfATE as a result of its abolition. We have attempted to identify all the primary legislation that will need to be amended as a result of the Bill and the Henry VIII power that is included in the Bill exists solely in case we uncover any other Acts in need of consequential amendment after the passage of the Bill, so there is no way that this could be called a sweeping use of delegated powers. To return to the nature of Skills England, at its heart will be the role of employers, alongside an important partnership to ensure that we are developing the most effective skills system. The noble Earl, Lord Effingham, questioned whether trade unions should play an important role in that, but my noble friend Lord Blunkett rightly identified the enormously important contribution that trade unions have made to the development of skills for their members, citing in particular the important work done by the Union Learning Fund. We make no apology for including trade unions in our work to improve the jobs and skills that their members will get. It is also a feature of high-performing systems across the world that trade unions are involved. My noble friend Lord Watson talked about the role of higher education. We certainly believe that it has a very important role to play in this partnership with Skills England. The noble Lord, Lord Ravensdale, talked about regional flexibility and the excellent work that he identified. Skills England will collaborate with combined authorities as well as with equivalent bodies in places which have devolution deals but where there is no combined authority present, and it will also work with a wide range of regional organisations as well as other local and regional partners, such as employer representative bodies. It will support them to construct skills systems which reflect and feed into both local and national priorities. That is the partnership that Skills England will bring together to deliver the impact we need to see in our skills system. I turn to the charge made by several speakers in the debate that, somehow or another, as an executive agency Skills England will not have the independence or, frankly, the oomph that it will need. That is wholly wrong. As an executive agency, Skills England will have operational independence from the department. A permanent chair and board members will be recruited to oversee Skills England. I am glad that my noble friend Lord Blunkett recognised the status, experience and impact that the current chair, Richard Pennycook, is already having in this role, and I can tell noble Lords that we have had several hundreds of applicants for the board of Skills England—clearly, people understand the significance of that role and the impact that it will have. I am sure that the noble Baroness, Lady Garden, did not mean to suggest that I was a “here today, gone tomorrow” politician with no clue about what I was doing, despite the fact that that is what she said.

I assure the Minister that it was not personal.

Okay. I do not note any other Ministers in the Chamber—but anyway, in that case I will not take it personally. The important point here is that, once in place, it will not be Ministers who decide the day-to-day activity of Skills England; the board will provide scrutiny that Skills England is operating effectively within the agreed framework and will provide assurance functions as well as leadership and direction. However, while operationally independent, it is critical that Skills England, for many of the arguments made in the debate, has sufficient proximity to government to directly influence and inform policy decisions, as many have argued for. This will allow Skills England to use its insights to influence skills policies and funding decisions. It is important that they are retained by the Secretary of State, but Skills England will have a crucial role in informing them. For further reassurance, I say that we do anticipate the relationship between the Department for Education and Skills England will be set out in a publicly available format and updated periodically. I expect us to talk about this more in Committee. People have argued that we know little about Skills England and its functions —the noble Baronesses, Lady Evans and Lady Barran, for example—but having been set up only in July, Skills England has already produced a report which, as others have mentioned, outlines its functions and ways of working. That is how we expect Skills England to operate in the future. I thank the noble Baroness, Lady McGregor-Smith, for the excellent work she has done in leading IfATE. I echo her thanks to the board and the chief executive for that work. In talking about how employers will remain at the heart of Skills England, I hope to learn from the way in which IfATE has done that. However, bringing the functions currently held by IfATE into Skills England is essential to address complexity and fragmentation in the skills system. The majority of IfATE’s functions will be transferred to the Secretary of State but will be exercised by Skills England unchanged, so we will be able to ensure continuity of skills delivery through the transition process. My officials are working very closely on this with IfATE’s senior leadership team. The noble Baroness, Lady McGregor-Smith, has been very clear about this, as she was when we met. She has been very engaged in ensuring that there is a transition plan which will ensure minimal disruption to learners, employers, providers and IfATE staff, and which will safeguard the good elements of the work that IfATE has already done, which she outlined. It is absolutely not our intention to allow the transfer to cause a delay or drop in apprenticeship numbers. We will mitigate the risk of that through the transition plan I have talked about. On the point raised by the right reverend Prelate the Bishop of Leeds, any approvals by IfATE will transition and will not have to be redone as a result of this legislation. These decisions will continue to stand until such time as the occupational standard, apprenticeship or technical qualification in question is reviewed under successor arrangements and a new decision is taken. The noble Lord, Lord Aberdare, also raised points about the sharing and transferring of IfATE’s functions. We have been clear that we expect the functions of Skills England to include broad continuation of the core work IfATE does with employers. I will be very happy to talk more about that in Committee. My noble friend Lord Watson asked about the engagement between Skills England and Scotland on UK-wide organisations such as the Migration Advisory Committee and the Industrial Strategy Council. We have had close collaboration with devolved Governments, as was recognised by my noble friend Lady Wilcox. This is critical to ensuring that there is an effective skill system regardless of where in the UK you live, work and train. We have had regular meetings with senior officials from all four nations to share best practice and approaches and their long-term strategic goals. These relationships will be important to Skills England’s success, as has already been set out by Richard Pennycook in his role as the chair. My noble friend Lord Layard and the right reverend Prelate the Bishop of Leeds rightly talked about the significance of young people and how we can ensure that we improve our skills system for them. This is where our commitment to developing a youth guarantee is very significant, and my noble friend Lord Layard once again made his strong call for the apprenticeship guarantee, which I have discussed with him on numerous occasions. He is pushing us further as a Government than we are able to go at this time, but he continues to make a strong case and I will continue to listen to him. However, we have of course already started to think about how we reform the apprenticeship system to ensure it better serves young people, who have particularly seen the numbers of apprenticeships fall off. That is why we recently announced that we would develop foundation apprenticeships to provide a route into apprenticeships for young people who have not been able to benefit from apprenticeships up to this point. We have also heard calls with respect to the growth and skills levy. Our reformed growth and skills levy will deliver greater flexibility for learners and employers, including through shorter duration and foundation apprenticeships in targeted sectors. We will want Skills England and the employers it engages with to have a crucial role in determining how that skills levy is spent. I also recognise the significance of the role of further education, as outlined by my noble friend Lord Watson and others in the discussion, and I can assure him that we will continue to do more than perhaps has been the case for FE previously to raise the status and significance of that sector, because it is so important for young people. We will include more about our overall role in the post-16 strategy, which we are currently working on. The role of schools is really important, as my noble friend Lady Wilcox and the noble Lords, Lord Aberdare, Lord Hampton and Lord Lucas, outlined. I can assure noble Lords that the curriculum and assessment review will look at the significance of digital skills, creativity and how enterprise can be developed in our schools. If we are to meet the skills gaps that persist in our economy, we must address the fragmentation in our skills system. To respond to the challenge of the noble Baroness, Lady Barran, I do not believe we can do that by simply building on IfATE. We need, with Skills England, to make sure that we do more than the excellent work that IfATE has done. We have to make and maintain an authoritative assessment of national and regional skills needs in the economy, now and in the future, combining the best possible insights from employers and other key stakeholders. This legislation will enable Skills England to build on IfATE’s work but will also enable us to build that broader partnership and assessment that will help us to transform our skills system. This Bill is an important milestone in the delivery of the Government’s manifesto commitment to establish Skills England. I look forward to further discussion through the passage of this legislation.

Bill read a second time.

Commitment and Order of Consideration Motion

Moved by

That the bill be committed to a Grand Committee, and that it be an instruction to the Grand Committee that the bill be considered in the following order: Clause 1, Schedule 1, Clause 2, Schedule 2, Clause 3, Schedule 3, Clauses 4 to 13, Title.

Motion agreed.

House adjourned at 9.59 pm.