Technical and Further Education Bill
Lord Watson of Invergowrie ExcerptsMonday 27th March 2017
(7 years, 1 month ago)
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“Financial support for students undertaking apprenticeships
(1) The Secretary of State must by regulations made by statutory instrument make provision for—(a) making a person undertaking a statutory apprenticeship, as defined under section A11 of the Apprenticeships, Skills, Children and Learning Act 2009, a qualifying young person for the purposes of child benefit; and(b) extending the Higher Education Bursary provided for by section 23C(5A) of the Children Act 1989 to a person who is a former relevant child undertaking a statutory apprenticeship, as defined under section A11 of the Apprenticeships, Skills, Children and Learning Act 2009.(2) Statutory instruments under subsection (1) are subject to the affirmative resolution procedure.”
Lord Watson of Invergowrie (Lab)
My Lords, in the absence of noble Lords who have business other than the Technical and Further Education Bill to consider this afternoon, I shall move Amendment 1 and speak to other amendments in the group.
The proposed new clause was devised after debate in Committee and would enable families eligible for child benefit to receive it for children aged under 20 who are undertaking apprenticeships. It is slightly disappointing that it is necessary to debate the matter again on Report. The noble Baroness, Lady Buscombe, offered to set up a meeting with Ministers from both the Department for Education and the Department for Work and Pensions, but I regret that no such meeting has materialised, so here we are. We have altered our approach in the amendment to call for the Secretary of State to use regulations to make provision to ensure that apprentices are regarded as being involved in approved education or training.
We are now just five days away from the creation of the Institute for Apprenticeships, the introduction of the apprenticeship levy and a changed landscape of technical education as the Government attempt to address the skills gap inherent in the economy. To achieve success in that, they have set the ambitious target of 3 million apprenticeship starts by 2020. I am certainly not critical of that target—it is better to aim high—but if it is to be reached, it cannot be in anyone’s interest for doors to be closed to young people keen to embark on an apprenticeship, but that is what is happening, at least for those from families reliant on some form of social security. In some circumstances, parents may prevent young people taking up apprenticeships because the economic consequences for the family of loss of benefit payments in various forms could be considerable.
This concerns a relatively small number of young people—primarily those from the most disadvantaged backgrounds—but it touches on a broader issue: that of apprentices being treated like second-class citizens in comparison with their peers who choose to pursue courses at further education colleges or universities. Apprentices are denied thousands of pounds in financial support available to college or university students, and are excluded from other means of support available to their counterparts in further education institutions. This is on the basis that they are employed and thus in receipt of wages.
It might be instructive for noble Lords who are unaware of it to learn that next week, the national minimum wage for apprentices aged under 19 increases to £3.50 an hour—considerably less than for other workers of the same age. Even then, as reported by the Low Pay Commission in January this year, 18% of apprentices said that they were being paid less than their legal entitlement. Even that legal entitlement, based on a 37-hour week, equates to about £6,900 a year—interestingly, precisely the maximum amount of the maintenance loan available to students living at home. The student year lasts only 30 weeks, leaving them able to work full-time, should they choose, for the remaining 22 weeks—apart, that is, from the paid employment that many students are already forced to find during term time. Those earnings do not disqualify a student’s family from benefits, and the amendment is intended to achieve parity of esteem of all post-school young people who are setting out on a route of learning designed to equip them with the skills for a productive working life.
However, in addition to being ineligible for Care to Learn childcare grants, unlike further education students, some apprentices also missed out on travel discounts, council tax exemptions and student bank account packages. The reason is that apprenticeships are not classed as approved education or training by the Department for Work and Pensions, but apprentices must spend at least 20% of their contracted work hours off the job—or at least, they will after 1 April—which means at a college or with a training provider. What is an apprentice supposedly doing in such situations if he or she is not receiving approved education or training?
In the case of apprentices who live with their parents, the families could lose out by more than £1,000 a year in child benefit. Families receiving universal credit could lose more than £3,000. Why should families suffer as we seek to train young people desperately needed to fill the skills gaps that I mentioned earlier? University students receive assistance from a range of sources. Apprentices currently do not receive many of these benefits and are continually excluded from definitions of approved learners. How can an apprenticeship not be regarded as an approved form of learning? The Bill is aimed at unifying apprenticeships with technical education, yet obstacles have been placed in a way that will prevent the aim being fully achieved. The system must be changed so that apprentices and students are treated equally, and there is genuine parity of esteem between all educational and apprenticeship routes.
The Parliamentary Under-Secretary of State, Department for Education (Lord Nash) (Con)
My Lords, I am very pleased to be able today to speak about this legislation, which will help lay the foundations for transforming technical and further education, ensuring that all our young people have the same opportunities to travel as far as their talents may take them, move to a lifetime of sustained employment and provide the skills that British business needs. I am grateful for the remarks made by the noble Baroness, Lady Cohen. I share her sentiment: this Bill is the greatest engine of social change that can be imagined, or at least we hope that it will be. I also express my thanks to noble Lords for their continuous engagement in the Bill, which, as the noble Baroness said, has all-party support.
In Committee, we had some very interesting discussions on some of the broader aspects of the Bill, and on the operation and delivery that will turn this legislation into reality. My ministerial colleague Robert Halfon and I have found this scrutiny extremely helpful in refining our thinking for this next stage of the legislation—the transition. Minister Halfon was looking forward to being able to join today’s discussion, as he has done previously, but unfortunately has been called away as he needs to participate in the public sector apprenticeships debate.
I turn now to the first group of amendments, tabled by the noble Lords, Lord Watson and Lord Hunt. I welcome the sentiment behind this amendment: that young people who choose to take up an apprenticeship should not be financially disadvantaged and that, in particular, young people who leave care should be encouraged to enter apprenticeships. I believe, however, that we have already established sufficient safeguards and support to deliver these aims. Following a 3% increase in October last year, the national minimum wage for apprentices is now set to rise again to £3.50 an hour from April this year. Most employers pay more than this minimum. The most recent Apprenticeship Pay Survey, in 2016, estimated that the average gross hourly pay received by level 2 and 3 apprentices in England is £6.70 an hour. Moreover, apprentices receive training which, together with their paid employment, sets them up for increased earnings in the future.
Lord Watson of Invergowrie
I wonder whether the Minister is going to respond to the point I made about apprenticeship pay. At the beginning of the year, the Low Pay Commission reported that 18% of apprentices were not getting even the national minimum wage.
Lord Nash
The noble Lord has raised that before. As we discussed at that time, it is illegal to pay below the minimum wage. We and HMRC are focused on ensuring that it does not happen. We all share the noble Lord’s concern about this. I assure him that we will do everything we can to stamp out such practices.
One of the core principles of our reforms is that an apprenticeship is a genuine job. As such, apprentices are treated accordingly in the benefits system. Child benefit is intended to provide financial support to parents to help with the extra costs of raising a dependent child. It is payable to parents until the end of the academic year in which their child turns 16. After that, payment can be claimed for children up to the age of 20 if they are in approved education or training. From April this year, undertaking an apprenticeship at minimum wage will pay more than five times the maximum child benefit rate. Therefore, an apprentice’s parents are not eligible for child benefit for supporting that employed young person. These rules have been a long-standing feature of the welfare system.
Moving to paragraph (b), on extending the higher education bursary to statutory apprentices, while I understand the intentions behind the proposal, it is not correct to equate being on an apprenticeship to being in higher education, where a student is making a substantial investment in their education and has appropriate access to student finance. Apprenticeships, by contrast, are real jobs and those undertaking them are employees who earn a wage, unlike participants in HE who are students and treated as such by the benefits system. Although apprentices generally spend a fifth of their time in training, it is part of the minimum wage regulations that they are paid while undertaking that training, so I cannot share the suggestion of the noble Lord, Lord Watson, that the training equates to being in HE. They are still being paid.
Consequently, our focus continues to be on ensuring that there are incentives for employers to recruit care leavers as apprentices. An additional £1,000 is paid to employers who take on a care leaver as an apprentice, as well as their training providers. Furthermore, the funding system ensures that, for all care leavers aged under 25, the full training costs related to undertaking an apprenticeship are met by the Government in recognition of their particular vulnerabilities.
I hope that I have provided sufficient reassurance that reflects that apprenticeships are real jobs, pay a wage that is more than sufficient to offset any household income reductions through the loss of child benefit, and are funded to ensure accessibility for care leavers.
Amendments 14, 15A to 15C and 16 concern the protection of students at independent training providers in the event of their closure. I am sympathetic to the intention behind these amendments that the interests of learners must be at the heart of the system.
Turning to the detail of Amendment 14, I think that it will be helpful also to consider Amendment 15, which would amend it. As currently drafted, Amendment 14 would apply only to further education bodies, which the Bill defines as further education corporations and specialist designated institutions in England and Wales, and sixth form colleges in England. Private providers would not fall under the scope of this amendment, although we need to consider that Amendments 15A to 15C would make this change so that private providers are within scope of the amendment.
As noble Lords will be aware, the main purpose of this part of the Bill is the introduction of a special administration regime which will prioritise the needs of learners. It places an overriding obligation on the education administrator to take the action that best avoids or minimises disruption to the studies of existing learners. This will apply to all students—fee paying as well as non-fee paying. The special objective focuses, rightly, on giving learners the opportunity to continue and complete their studies having set out on their journey to gain new skills or qualifications. That is what individuals will be most concerned to achieve rather than the repayment of any money for which they have not received provision.
Of course, fee-paying students typically pay for their courses in stages, as they do via advanced learner loans, and quite often in arrears, so it is likely that the student will not be significantly—if at all—out of pocket. But, through the special objective, the education administrator will be working to identify opportunities for learners to complete their studies, whether by rescuing the college or transferring the individual to another provider, meaning that the learner can continue on their study path.
We know that noble Lords are interested in the idea of a fund or guarantee to support students in the event of private provider failure, especially where they have paid money in advance. Following recent cases highlighted in the press. I will now say a little about what we are doing to provide support for those affected. Our priority is to support learners whose providers have ceased trading. I want to make it clear that we will take every step we can to ensure that learners are given the opportunity to complete their studies, be that with their current provider if possible or with another provider. In the rare cases where providers fail, the Skills Funding Agency and the Student Loans Company work together to identify solutions for any individuals affected. They make direct contact with learners to inform them of the help they will get. I am happy to say that this is already current practice and is an integral part of the contractual arrangements between the funding agency and the provider. There are many cases where those learners who are affected are successfully transferred to alternative providers.
Students’ new providers may receive funding to deal with necessary administrative costs relating to transferred learners to ensure that they are not out of pocket. We have taken further action to protect learners due to recent cases of private providers going into liquidation. For those who have not completed their course, and while we work to make transfers happen, they will not be required to start repaying their loans during the 2017-18 tax year.
I shall now look at the detail of Amendment 16. I believe, as a number of noble Lords have said, that we should approach the regulation of independent private training providers with caution. These are mostly private profit companies and, unlike the further education bodies which are the subject of this part of the Bill, they are not part of the statutory FE sector and are created by their promoters and owners with no hand from government. They are not subject to the same intervention arrangements as the statutory sector. Furthermore, while they may receive state funding, that funding does not have the same breadth of purpose as the funding for the statutory sector and is paid on a different basis. In particular, the funding is contractual and normally paid in instalments linked to attendance, which limits the financial risk which this amendment is seeking to address.
There are around 400 private providers, of which the vast majority are financially sustainable. I am delighted to join with the noble Lord, Lord Storey, in his comment that many of them provide very good quality education.
Providers must be listed on the SFA’s register of training organisations to receive advanced learner loans funding, while successful approval includes due diligence to assess providers’ capacity to deliver contracts to the required standard and to determine whether they are financially robust. Providers delivering only loan-funded provision must have a financial health assessment rated as good or outstanding. Once on the register, the SFA closely monitors providers’ financial health and achievement rates, with providers having to comply with robust funding and performance rules.
However, I accept that there could be rare cases where a private provider fails and students suffer as a result. Although learners choose their private provider as consumers, “buyer beware” may be thought an unduly harsh response to that predicament. That is the concern which noble Lords are seeking to address through this amendment. I understand the concern, but at the moment I am not convinced that the imposition of significant new regulation on a fully private part of the sector is either a necessary or proportionate response to it.
As far as I am aware, a banking or insurance market for the guarantees referred to in the amendment does not exist and would have to be developed. We do not know whether and how fast this might happen, or at what cost. However, much more significantly, the nature of this sort of financial protection is that it puts a burden on the vast majority of healthy providers, where it is not needed, as well as on those few where it is. In aggregate terms, it would mean substantial sums of money, much of it originally public money, moving from the education sector to the insurance and financial sector, which is not necessarily what the taxpayer would want for the sake of a safety net in very rare cases of failure. Moreover, as the noble Lord, Lord Aberdare, said, it would lead inevitably to an increase in the cost of these courses.
Private providers and their representatives will also have views on this of course, and there has not been the opportunity to seek them or reflect on these matters since the amendment was laid, so we are by no means ready to accept that legislation is an appropriate response to the risk that noble Lords have helpfully highlighted. However, I would be delighted to discuss this matter further with the noble Lord, Lord Storey. We are looking into this carefully, but we need to take proper time to consider our policy response, which may not require legislation.
I will now discuss Amendment 20. I am grateful to the noble Lords, Lord Watson and Lord Hunt, for this amendment. I understand their concerns, but I hope that I can reassure them that this amendment is not necessary. The Government are doubling investment in apprenticeships because we know that they provide employers with the skills they need to grow their businesses and benefit the economy. Through the funds raised by the apprenticeship levy, we will be able to invest twice what was spent in 2010-11 in apprenticeships by 2019-20.
The institute’s responsibilities include ensuring that the quality of apprenticeships available to employers reflects employer needs and the Government’s priority for apprenticeships to be a high-quality programme. It will need to work closely with the Department for Education, employers and other stakeholders to make that happen. Its responsibilities also include advising on the pricing of apprenticeship standards to ensure that government funding supports the delivery of high-quality training. The institute will work with employers and providers to understand the cost and value of apprenticeships to inform their advice. The institute does not have responsibility for the apprenticeship budget or how much of it is spent. This resides with the Secretary of State for Education and her department’s agencies.
The Government are fully committed to comprehensive investment in apprenticeships. The apprenticeships budget is set at the spending review. That provides certainty on the forward spending profile for the duration of the Parliament, as well as ensuring affordability of the programme and that the taxpayer receives value for money.
Tying a commitment on spending explicitly to the levy receipts could mean adverse funding consequences for the programme as a whole. The 2016 Autumn Statement revised down the projections for income from the apprenticeship levy over the next five years, but this does not impact on the agreed budget that the department already has as part of the spending review settlement. For example, the provisional budget for spending on apprenticeships in 2019-20 for England and the devolved Administrations totals in excess of £2.9 billion, versus the projected levy income of £2.8 billion. Having certainty over the funding for apprenticeship training is preferable to directly linking the funding on a year-by-year basis to the wider performance of the economy. As described earlier, levels of spending will be determined by the choices that employers make.
I hope that noble Lords feel reassured enough by my responses to these amendments not to press them.
Lord Watson of Invergowrie
My Lords, I thank the Minister for his response and all noble Lords who have participated in this debate. On the three amendments that carry my name—our amendments to Amendment 14, in the name of the noble Lord, Lord Storey—the Minister said that we will have an opportunity to consider that further. That is to be welcomed.
On Amendment 20, I feel the Minister rather overegged the pudding. I said that I do not think the levy will be undersubscribed or short of applications. He seemed to be saying that this would depend on monetary fluctuations. The fluctuation that would concern me would be, if not enough applications for the fund came forward, what would then happen to any so-called surplus that would remain? I am not unhappy with his response. I am optimistic that the levy will be fully taken up.
I am not so optimistic about the Minister’s comments on Amendment 1 and apprentices being described as approved learners, as I think they should be. He mentioned apprentices as being employed and receiving—or at least being entitled to receive—the national minimum wage of £3.50, but that is the figure that will apply next month. For any other worker aged up to 18 the rate will be £4.05; for those aged between 18 and 20 it will be £5.60. Despite that very low level, apprentices are paid less than their peers who, for whatever reason, are not in apprenticeships but are working. I do not think that argument carries a great deal of weight.
The Minister also said that he is not willing to support extending the higher education bursary of £2,000 for apprentices to those leaving care. Surely any barriers to young people taking up apprenticeships should be removed or at the very least mitigated. On those two issues, the Minister did not show any willingness to do so. He said there were sufficient safeguards to ensure that apprentices and their families do not lose out by dint of the young person taking up an apprenticeship. That is palpably not the case. Further education colleges have already drawn to the attention of the Association of Colleges a number of cases of would-be apprentices being dissuaded from applying for—or, having applied for, then taking up—an apprenticeship when the financial consequences become clear. That is through pressures within their families. Whatever the rates in place, there are not sufficient safeguards. That deters some young people from taking up apprenticeships. That they are not regarded as approved learners is surely a glaring loophole which the Government must at some stage move to close.
I regret that the Minister has demonstrated no willingness even to acknowledge that there is an issue, far less a willingness to find a means of resolving it. We regard that as unsatisfactory. For that reason, I wish to the test the opinion of the House on Amendment 1.
“Report on quality outcomes of completed apprenticeships
(1) The Institute for Apprenticeships and Technical Education must report on an annual basis to the Secretary of State on quality outcomes of completed apprenticeships.(2) A report under subsection (1) must include information on—(a) job outcomes of persons who have completed an apprenticeship;(b) average annualised earnings of persons one year after completing an apprenticeship;(c) numbers of persons who have completed an apprenticeship who progress to higher stages of education;(d) satisfaction rates of persons who complete an apprenticeship with the quality of that apprenticeship; and(e) satisfaction rates of employers which hire persons who have completed an apprenticeship, with the outcome of that apprenticeship.(3) The Secretary of State must lay a copy of any report under subsection (1) before each House of Parliament.”
Lord Watson of Invergowrie
My Lords, again, this is an issue that we considered in Committee. Indeed, it was also discussed in another place. But the fact that we continue to seek a greater level of reporting surely makes it clear to the Minister that we do not accept the responses given by him and his honourable friend the Skills Minister, Mr Halfon. We do not resubmit amendments without believing that they would enhance the Bill. I stress that there is no political point-scoring involved in amendments such as this. The Minister will know that when his arguments convince us—as, indeed, from time to time they do—we do not return to matters that have been taken as far as they usefully can be. But we do not believe that to be the case here.
The amendment is largely self-explanatory so I shall not rehearse the arguments that I used previously, but quality of outcomes will be absolutely key to the extent to which the skills gaps in the economy are able to be filled by UK workers trained for these jobs— initially in the decade ahead but also far beyond that point. The duties that would be placed on the institute by Amendment 2 are hardly onerous. The Minister stated in Committee that they are unnecessary as the Enterprise Act 2016 will require the institute to report on its activities annually. Of course that is the case—but not to the level of detail that we seek here.
The institute is about to come into being and will need some time to find its feet. But the Department for Education’s own website states that, according to the Bill, the institute will ensure, inter alia,
“high quality standards and assessment plans, which will lead to high quality apprenticeships”.
The extent to which the institute is successful will depend on assessing the job outcomes of those completing apprenticeships and the earnings that will result from those or from moving on to higher education. The rationale for the amendment is to go further than the basic reporting required by the Enterprise Act and to make public the extent to which both apprentices and employers believe that training and levels of employability are being strengthened and deepened as a result of the new landscape.
Surely the Secretary of State would expect nothing less than an annual report from the institute on the quality of outcomes from completed apprenticeships. So we ask, why not have that in the Bill? It follows, particularly when the Government are in pursuit of their target of 3 million starts by 2020, that Parliament should have the opportunity to receive and debate the report. If the Government want quality rather than quantity to be the driver, as they say they do, they should welcome the maximum amount of transparency in that regard. The fact that the amendment will require the institute to collect information from the department should be a positive and should be welcomed by the Government as a sign that it is meeting expectations. That is what Amendment 2 is designed to achieve.
Amendment 3 also requires reporting by the institute. I hope that the Minister will not again tell noble Lords that it is not necessary. Noble Lords will note that we are not asking the institute to do anything more than request from the department information which the department already holds. The purpose of doing so is to ensure that the institute is achieving success in turning round the situation identified by the Government’s Social Mobility and Child Poverty Commission, as it was then known, a year ago. It warned that the Government’s drive on apprenticeships was failing to deliver for young people and pointed out that almost all the recent increase in apprenticeship starts related to people over the age of 24, with the number of young people starting apprenticeships showing little change since 2010.
It also noted that, unlike academic courses, youth apprenticeships typically do not represent a step up. Most A-level-age apprentices do GCSE-level apprenticeships and almost all—97%—university-age apprentices do apprenticeships at A-level equivalent or lower. The commission also highlighted that most youth apprenticeships are in sectors such as health and social care, business administration, and hospitality and catering, which are characterised by low pay and, often, poor progression.
The Commission on Social Mobility also welcomed the Government’s efforts to improve the quality as well as the number of apprenticeships but said that there needed to be a real focus on improving the quality of apprenticeships for young people. It called on the Government to increase the number of young people doing higher apprenticeships to 30,000 by 2020 compared to the present 4,200 19 to 24 year-olds. It also called for a UCAS-style apprenticeship gateway that would give young people much better information on what apprenticeships are available—and, crucially, where they might lead.
Some advantages will be identified as a result of the establishment of the institute, but throughout the passage of the Bill here and in another place we have heard many fears expressed that the drive to 3 million apprenticeship starts risks double or even triple-counting some apprentices. There is a need for improved data transparency so that it is clear how many apprenticeships the starts data relate to. That is what the amendment seeks to achieve and why it makes the connection with those in receipt of the pupil premium, so as to be able to monitor the effect that completed apprenticeships have on young people’s lives in comparison with their more advantaged counterparts.
The Government consistently say that they are committed to social mobility. On that basis, I would say to them that they should embrace this opportunity to demonstrate the success of that aim. I beg to move.
Baroness Garden of Frognal (LD)
My Lords, I will speak to Amendment 21 in this group, which is in my name and those of my noble friend Lord Storey and the noble Lord, Lord Lucas, and add my support to Amendments 2 and 3 to which the noble Lord, Lord Watson, has just spoken. Our amendment came out of discussions with the CBI, which has a great deal of interest and expertise in the future of apprenticeships—indeed, its engagement is vital to the success of this scheme. It expressed the concerns of its members that the new institute will need monitoring and overview, particularly in its early days.
The amendment aims to ensure that there is regular reporting back to the Secretary of State on the quality of apprenticeships and technical education, calling for,
“a response … containing any actions to be taken as a result”.
Those “any actions” are particularly important because having action plans in response will surely make the difference. There needs to be ongoing communication. There is a weight of responsibility on the institute and high expectations that it will be a real engine for change and will counter generations of undervaluing practical, work-based skills. We need to ensure that there is transparency and accountability from the Government over the quality of technical and further education, and this amendment would help to ensure that the very welcome focus on the technical and further education sector is not lost after the Bill passes into law. I look forward to a positive response from the Minister.
Lord Nash
My Lords, I am grateful to the noble Lords and the noble Baroness for the amendments on reporting issues for the institute. I start by discussing Amendment 2, tabled by the noble Lords, Lord Watson and Lord Hunt. Being able to assess how well the apprenticeship reform programme is achieving outcomes is of course essential. We need to know whether those undertaking apprenticeships or technical education qualifications are receiving the benefits that we would expect them to receive. To be able to do that, we obviously need the right information to help us make such an assessment. How the institute reports on its work is a topic that we discussed in Committee, but I remain convinced that the provisions already in the Bill are the right ones and that they are sufficient. I am sorry to disappoint the noble Lord, Lord Watson, but I therefore still do not believe that an amendment to the Bill is necessary to achieve that objective.
As I have said, the amendment was discussed in Committee and on Report in the other place, and in Committee in this place, and both the Minister of State for Apprenticeships and Skills and I have given sound justification for why it is not necessary. The institute will be required to report on its activities annually under the Enterprise Act 2016, and the report must be placed before Parliament. This will include information on how the institute has responded to the statutory guidance. In addition, the Enterprise Act includes provisions enabling the Secretary of State to request information from the institute on any topic.
The information set out in the amendment is already collected and published by the Secretary of State on the performance of the FE sector, which includes apprenticeships. In order to inform its activities, we would expect the institute to make good use of these data in its annual report when it assesses its performance and impact each year. Indeed, the shadow institute has explained in its draft operational plan that it,
“will make more use of learner, employer and wider economy outcome data when reviewing the success of standards”.
The institute’s core role is to oversee and quality-assure the development of standards and assessment plans for use in delivering apprenticeships and, we expect, from April next year, college-based technical education. Much of the information that the amendment proposes that the institute provide goes well beyond what is in scope of its remit. It would therefore be inappropriate for the institute to be asked to provide this type of information, and an unnecessary duplication of effort, given that this information is already collected and published by the Secretary of State. It is right that the Government collect and monitor that information, but where it falls outside the remit of the institute, it cannot reasonably be expected to provide it.
I turn to Amendment 3. Improving social mobility is integral to our apprenticeship reforms. The Institute for Apprenticeships is supporting this by helping to create a ladder of opportunity based on quality apprenticeships for people across the country. This ladder will ensure that, no matter where you are born or who your parents are, if you work hard and apply yourself, you can get ahead, succeed and shape your own destiny.
To support this aim it is of course critical that reporting measures are in place to enable us to assess how well the programme is achieving positive outcomes for a range of groups, including young people. I agree therefore with the spirit of the amendment, which proposes that such information is monitored, measured and reviewed regularly. However, I believe this amendment is unnecessary to achieve that.
We want an education system that works for everyone and drives social mobility by breaking the link between a person’s background and where they get to in life. Our defining challenge is to level up opportunity.
On 18 January, the Secretary of State for Education set out her three priorities: tackling geographic disadvantage; investing in long-term capacity in the system; and making sure that our education system as a whole really prepares young people and adults for career success. That is why the Government are delivering more good school places, making school funding fairer, strengthening the teaching profession, investing in improving careers education, transforming technical education and apprenticeships and opening up access to our world-class higher education system.
The Department for Education already publishes a range of data on apprenticeships through a number of reports broken down by starts, achievements, sector subject area, framework and standard, geography, gender, age, ethnicity and other diversity and disadvantage markers. These data are published as national statistics by the department and intended to provide transparency.
It would be more appropriate for the head of profession in the department to consider how and where breakdowns of disadvantage for apprenticeships data are published, in accordance with the code of practice for statistics set by the National Statistician. Additionally, the department is considering publishing new data and measures required to support the Secretary of State’s three priorities. The department is committed to publishing disadvantage measures such as the pupil premium, but needs to be free to find the most appropriate for each age group, programme and purpose.
Data are already helping our work to improve social mobility. For example, we know that 10.5% of those starting an apprenticeship in 2015-16 were from a black and minority background, and we have set an ambitious target to increase the apprenticeships started by people from BAME backgrounds by 20% by 2010. In addition, the department publishes 16-to-18 performance tables that cover classroom-based provision within schools and colleges. The 2016 performance tables were reformed to report five headline measures for students taking A-levels and vocational qualifications at a similar level. Further reforms are planned for 2017 performance tables. This includes extending the performance tables to include outcomes for students still studying at GCSE level and reporting outcomes for disadvantaged students, the definition of which is those who were in receipt of pupil premium funding in year 11. This will have the effect of linking key stage 4 pupil premium information with 16-to-19 outcomes. In 2018-19, we will include only GCSE-level equivalent qualifications that are on the technical certificates list.
The institute has been given a clearly defined role, in which it will be responsible for setting quality criteria for the development of apprenticeship standards and assessment plans—reviewing, approving or rejecting them; advising on the maximum level of government funding available for standards; and quality assuring some end-point assessments. While we expect data to be at the heart of the institute’s operations, the collection and publication of the data in this amendment goes beyond that remit and would create an undue burden on the institute, preventing it from carrying out the range of its other duties effectively.
I am grateful to the noble Baroness, Lady Garden, and the noble Lords, Lord Storey and Lord Lucas, for tabling Amendment 21. I completely agree with the spirit of the amendment, but there are already measures within the Bill that require the institute to monitor, measure, review and report on performance on a regular basis. I hope that after I have explained this further, the noble Lords and the noble Baroness will feel able not to press the amendment.
The institute will be a sustainable and long-term governance body that will support employers, individuals and others and will, among other things, uphold the quality of standards. I am grateful to my noble friend Lord Baker for his comments on the strength of the board and its governance. Although the institute will have wide-ranging autonomy across its operational brief, and will be able to carry out its functions in relation to apprenticeships independently, the Secretary of State will retain strategic oversight of the reformed technical education system and will be able to give directions and statutory guidance where appropriate. Of particular relevance to this amendment, the Secretary of State may direct the institute to prepare and send to the Secretary of State, as soon as reasonably practicable, a report on any matter relating to its functions. It may be in that context that the idea to which my noble friend Lord Baker referred, of a letter, would be most appropriate.
The institute will be required to report on its activities annually under amendments made under the Enterprise Act 2016, and that report must be placed before Parliament. This will include information on how the institute has responded to the strategic guidance provided to it by the Secretary of State. While the institute will collect and report on relevant data and information, the Secretary of State will also continue to collect and publish a range of data on the performance of the FE sector, including apprenticeships. We would expect that, to inform its activities, the institute would make good use of those data when it assesses its performance and impact each year, and compiles its annual report. The Enterprise Act has made amendments that also include provisions enabling the Secretary of State to request information from the institute on any other topic that she deems appropriate in relation to their functions in relation to apprenticeships. Through this Bill, those provisions extend to technical education.
Therefore, although ultimately the Secretary of State will retain sufficient powers to ensure that government retains overall control in relation to technical education and will provide strategic guidance in respect of both apprenticeships and technical education, we would expect that, in the exercise of its functions, the institute would assess its performance and take action to address any issues identified. I am confident that, with the governance that it has managed to line up, that should happen.
I hope that noble Lords and the noble Baroness will feel reassured enough on the basis that I have explained not to press their amendments.
Lord Watson of Invergowrie
I thank the Minister for his comprehensive reply—almost half the debate on this group of amendments was from his lips—which in some ways was not unencouraging. I welcome the contributions of two former Secretaries of State for Education, which are always informative. Although my noble friend Lady Morris was very supportive, the noble Lord, Lord Baker, was supportive only up to a point. He said that he did not believe this needed to be on the face of the Bill, but welcomed what Amendment 2 seeks to achieve. I noted that the Minister said it was likely that the request by the noble Lord, Lord Baker, for a letter from the Secretary of State would be taken up, and that is to be welcomed.
I also welcome the supportive contributions of the noble Baroness, Lady Garden, and the noble Lord, Lord Lucas. We are trying to make the point—expressed strongly by my noble friend Lady Morris—that the institute is just being established and needs to build its reputation. One way it will do that is by being as open and transparent as possible. The Minister said that collecting the information mentioned in Amendments 2 and 3 would be an undue burden. However, Amendment 3 provides only for the institute to ask the department for information which it already holds, which is not particularly burdensome.
The transparency mentioned in Amendment 2 is important because it will build confidence, as my noble friend Lady Morris said. Many employers and training providers—all further education colleges—as well as putative apprentices, are looking to the institute to raise the quality of apprenticeships. Why not demonstrate that as effectively as possible by both assembling and publishing the information mentioned in Amendment 2? The Minister said that the activities of the institute will be monitored, measured and reviewed but not reported on in the detail we have asked for. The Department for Education will have the information but apparently it does not want to give it to the institute to publish in its reports, which seems slightly odd.
Nevertheless, the Minister said quite a lot. I need to read his words in Hansard but he seemed to be mentioning quite a lot of benefit which will be seized on by those in the sector who have a genuine desire to make the Institute for Apprenticeships successful—to get it off to a good start and then build from there. There was certainly some positive input from the Minister, which I welcome. On that basis, I beg leave to withdraw the amendment.
Lord Watson of Invergowrie
My Lords, I thank my noble friend Lord Young of Norwood Green for submitting these amendments. I have added my name to Amendment 4. I do not think there is a great deal to add to what he has said, but some of this impacts on the arguments that I advanced on the previous group of amendments. It is about accessibility of information and careers advice on apprenticeships. It is also about the institute being seen as an open and accessible organisation. I think we all agree that we want it to meet its aims and to do so as successfully and quickly as possible. Asking it to provide information and to report to Parliament is not radical; it is about building the sort of confidence that I referred to on the previous group of amendments.
Monitoring how many small and medium-sized enterprises employ apprentices is also important because those employers will be key to the Government reaching their target of 3 million starts by 2020. Quite possibly this will be included in the list of categories mentioned by the Minister in his response to me on the last group of amendments, and perhaps he could say something about that in his reply. To some extent, SMEs have been the elephant in the room: they have not been referred to in our consideration of the Bill to anything like the extent they should have. They will play a very important part in apprenticeships—in small numbers, inevitably, and company by company—but overall they will make an important contribution.
I agree it is important that not just the number of apprenticeship starts but, as my noble friend Lord Young said, the number of employers taking on apprentices are listed. If those figures are not collected, how can the network being established by the institute be measured? The kind of information that I refer to will surely be collected, so I ask the Minister: why would the institute not make it publicly available and do so willingly?
I would like to add to what my noble friend Lord Young said by mentioning the apprentice contract and, to some extent, its status. He talked about complaints and the need for a helpline when apprentices need to pass on their concern about the quality of the apprenticeship being offered. There is no regulator in this sector and I ask the Minister whether the apprenticeship contract will be subject to the Consumer Rights Act 2015. The contract will be fully entered into by both parties, and that Act will play a part in the higher education sector as a result of the Bill before your Lordships’ House. A preliminary investigation led to universities being required for the first time to produce information on the cost of courses and so on, and that would be helpful. If the Minister cannot reply immediately, I shall be quite happy to receive a letter on the status of the apprentice contract and whether it will be subject to the Consumer Rights Act 2015.
Lord Lucas
My Lords, I would certainly like an apprentice who is having a hard time getting what they want or a proper education, particularly in an SME, to be able to communicate that, and unless there is an established route for them to do so, as described in the amendment of the noble Lord, Lord Young of Norwood Green, it will be very difficult to ask someone to invent one. There needs to be someone the apprentice can talk to first; otherwise, it will be just too difficult and we will never get to know the quality of the apprenticeship. Anything that became a regular reporting mechanism might well take up a lot of time but not produce any good. However, something should be in place so that, when things are really going wrong, the person at the wrong end of that can have a voice. It seems to me that that is worth including.
Baroness Garden of Frognal
The noble Lord, Lord Young, has tempted me, because I, too, bear the scars of the diploma, GNVQ and various other misguided projects of different Governments. He is quite right that my Amendment 28, which is in the next group, will be relevant here, too. I urge the Minister to consider just how sizeable this task is. We should not demolish existing vocational qualifications—as we were calling them—because many of them have great reputations and have served people well. If we are to build a new bright tomorrow for such qualifications, we need to use all the tools that we already have, which are serving the country well, and expand them into the next range of T-level qualifications.
Lord Watson of Invergowrie
My Lords, I thank my noble friend Lord Young for moving this amendment, which I am happy to support. In broad terms, we believe that the recommendations of the Sainsbury review should be fully implemented and funded. In the short term, there are three clear funding needs from the skills plan: fair funding for colleges; costs associated with finding and managing work placements, because they involve an individualised service to young people and employers rather than education to a group; and the cost of the transition year. A two-year full-time course would be the standard model under the plan, but with the expectation that some school leavers would need to take an additional transition year. This implies a full-time three-year programme. The current 16-to-18 funding system assumes a full two years and then administers a 17.5% cut in the third year. A sensible step, therefore, would be to maintain the full rate for three years for those students taking the transition year.
In his letter to noble Lords dated 22 February, the noble Lord, Lord Nash, stated that there are currently around 3,500 vocational qualifications. Most professionals in the sector have cited a figure of more than three times that amount, but more important is how the transition to the new regime is managed and funded. The Minister also said in his letter that the reforms would be phased in progressively, with the first routes available for delivery from September 2019. That apart, the transition was not set out and the amendment in the name of my noble friend Lord Young would enable that to happen. It would be a positive move and we believe that it is incumbent on the Minister to commit to it by accepting this modest amendment.
Lord Nash
My Lords, I am grateful to the noble Lords, Lord Watson and Lord Young, for tabling this amendment. I fully understand their concerns and hope that I might be able to provide an explanation that will put their minds at rest. I was grateful to the noble Lord, Lord Young of Norwood Green, for his kind comments about our branding as T-levels.
We know that colleges, students and awarding organisations will need to know in good time the arrangements for existing qualifications as the new qualifications are introduced. As the noble Lord, Lord Watson, has just said, we plan for the first new technical routes to be introduced in autumn 2019, with the full range of programmes coming on stream soon after. Additional hours will be available for the new programmes as they become available and we will announce further details in due course following further engagement with employers, colleges and other key stakeholders.
In implementing the reforms, the Government will consider in consultation with the institute how best to manage the transition from legacy qualifications to new technical qualifications approved by the institute and intend to involve stakeholders and set out plans for this in due course.
Given that the new technical education routes will be subject to phased introduction, it would not be sensible or appropriate to commit to a fixed timescale for publishing detailed proposals for transition. I reassure the noble Lords, however, that once the institute has approved a new qualification, the Department for Education will consider future funding for the current, similar qualifications on a case-by-case basis. We will not withdraw funding for a student who is part way through their course. I therefore hope that the noble Lords, Lord Watson and Lord Young, will be sufficiently reassured to consider not pressing their amendment.
Lord Baker of Dorking
My noble friend Lord Lucas’s amendments are an addition to the clause that I introduced in Committee, but quite a useful one. The purpose of the clause is to ensure that schools have a duty to accept—and cannot reject—various people going in and talking to students at the ages of 13, 16, and 18 about the various types of training and education they provide, which is the most effective way to improve careers advice. I have sat through several Governments who have tried to create careers advice by legislation, and it just does not work. You cannot expect many teachers to know a great deal about life outside because they leave school, go to a teacher training college and then go back to school. You have to have real, live people going into schools and talking about what life is like in a factory or a business complex and offering the opportunities—and we will now have this.
In September this year, for the first time, not only the heads of university technical colleges but those of studio schools, career colleges and FE colleges, as well as apprenticeship providers, will have a right to go and speak to 13, 16 and 18 year-olds and explain to them the opportunities that are available to them other than just getting three A-levels and going to university. That is a major change. I strongly support the amendments in the name of my noble friend Lord Lucas. Groups such as Women in Engineering spend a lot time trying to persuade more women to get into engineering. We have courses in the UTC movement to persuade more girls to go into engineering, and the numbers are going up all the time: we sometimes get over 20% or 30% girls. We like that because when a girl decides to be an engineer, she is usually very determined and confident, and in many cases the brightest member of the team. This will help in all of that, so I support it. Careers advice in FE colleges is largely an unknown area, frankly, and they should certainly improve their advice. But they have the advantage of being able to go in and talk to schools from September of this year.
Lord Watson of Invergowrie
My Lords, with Amendment 17, I am in the slightly alarming position of being the meat in a Liberal Democrat sandwich as far as the Marshalled List is concerned. This of course is a follow-on from the very valuable amendment to which the noble Lord, Lord Baker, just referred, which now forms Clause 2 of the Bill. We have just further benefited from his wisdom with his remarks on this amendment. I wholly concur with his view that there is a need not so much to improve as to establish careers advice in further education colleges. I very much agree also with the comments of the noble Lord, Lord Storey, in introducing this group of amendments about this being about preparation for careers rather than just giving information.
The quality of what colleges are able to provide is key to so many young people, but much will depend on the ability of Ofsted to carry out inspections of FE colleges to make this amendment effective. It rather surprised me in the debate that followed the announcement of which providers had been successful in gaining access to the register of apprentice training providers last week that before the register came into force, there were 793 apprenticeship providers. The register has nearly doubled that, with 1,473 organisations now in the frame for inspection when the register goes live in May. But that is not the extent of the burden being placed on Ofsted and its responsibility to inspect, because the process for applying to the register is due to take place four times every year, and it is expected that the number will soon rise perhaps to well over 2,000. It was quite instructive that when asked about the implications of this, Ofsted’s new chief inspector, Amanda Spielman, responded:
“It is a huge challenge”.
I think she was being politic because she must have real concerns. Unless the Government plan to increase Ofsted’s resources to enable it to inspect the new environment effectively, there will be very real gaps, which will be a huge shame.
I hope the amendment will be taken seriously by Ministers. It is important that the very least they do is recognise that there has to be a proper system of careers advice being offered by colleges to ensure that young people get the start in life that they deserve.
Lord Watson of Invergowrie
My Lords, I wish to say a few words about this group. My name appears on seven of the nine amendments before your Lordships, but I want to speak only on the question of copyright. The noble Baroness, Lady Garden, spoke to this group most effectively and I will not attempt to repeat any of her remarks because that is not necessary, but intellectual property is an important issue and we believe it must be protected.
I am aware that the Government have quoted the OECD as stating that the area of course development is not suitable for the market. It is perhaps counterintuitive for a socialist such as myself to criticise the Government for turning their back on the market in favour of introducing a monopoly. However, on this occasion I have to say—perhaps somewhat grudgingly—that I believe the Government are wrong, as there appears to be no convincing answer to the question raised by noble Lords in Committee as to what would happen if an awarding organisation failed and ultimately collapsed. The Government appear to have no plan B for such a situation, which is a very real matter for concern, not just for noble Lords but for awarding organisations.
Equally, the universally respected City & Guilds has highlighted significant concerns about its future. I think it is fair to say that at various stages in our deliberations on the Bill noble Lords have commented on the need to have qualifications and awarding organisations with some immediate recognition among the population in general. If you went out on to the street and did a vox pop asking people what City & Guilds were, you would get a pretty high proportion giving a reasonably accurate assessment of it. Therefore, I do not think that we should enter lightly into a situation where City & Guilds could be compromised. The organisation has written to noble Lords—as indeed the Minister may have seen—setting out a worst-case scenario, which could mean the end of City & Guilds as an awarding organisation in England and could signal the end of it as an awarding organisation in the devolved nations and internationally. It has also pointed out the potential negative impact on it as an apprenticeship awarding organisation due to a diminished role in the technical education route.
We believe that that should not be allowed to happen. The Bill could be amended but still achieve the aims of the Government’s skills plan through the Institute for Apprenticeships retaining copyright of the occupational standards and common qualification design criteria but allowing licensed qualification providers to retain copyright of the individual qualifications, as mentioned by the noble Baroness, Lady Garden, and the associated assessment materials.
The amendments in this group would provide some safeguards. I hope that the Minister will appreciate the spirit in which they are presented by noble Lords from across the three main political parties and take them on board, undertaking at least to come back at Third Reading with some proposals to mitigate those concerns.
Baroness Vere of Norbiton
My Lords, I am grateful to the noble Baroness and the noble Lords for tabling these amendments. I understand their concerns and hope that I might be able to provide an explanation that will put their mind at rest.
All these amendments relate to the copyright measures in Schedule 1. I know that how we implement the copyright measures is a cause for concern for awarding organisations, but it is important to understand that we would not be proposing these measures were they not vital for the success of the technical education reforms. I reassure noble Lords, on the record, that the legislation as set out in the Bill ensures that there is already a substantial amount of flexibility in how to implement the new system.
I should also say that it is not our intention to introduce legislation that disadvantages awarding organisations. They make a huge contribution and play a vital role in our technical education system, and we will continue to work with them to implement the reforms in the most appropriate and sensible manner. That work is ongoing and we are working with stakeholders to develop a commercial strategy that sets out in more detail how we will ensure a competitive and well-managed market for technical education qualifications. The Bill as drafted already allows us to do this.
I will take each amendment in turn. Amendment 24 would mean that the Institute for Apprenticeships could approve a technical qualification only when it had identified documents relating to,
“standards and common qualification criteria”,
and that these documents should be subject to the copyright transfer. As drafted, the legislation requires that copyright should apply to “relevant course documents”, by which we mean documents relating to the teaching and assessment of the qualifications. The Bill allows the institute the flexibility to define what is meant by “relevant course documents”. This will form part of the ongoing work to determine exactly how the measures will be implemented.
If the institute does not own the copyright for relevant course documents that are central to the delivery and assessment of a qualification, the reforms to technical education will be substantially undermined. There are a number of reasons for this. First, the new qualifications will be based on occupational standards and outline qualification content that have been developed by employers as convened by the institute. The institute will own the copyright for these. Documents relating to the teaching and assessment of qualifications that are developed by the awarding organisations will be extensions of these original documents.
Furthermore, the licensing model will succeed only if there is continuity in the system. Our intention is that, at the end of a licence period—and indeed if an organisation happens to fall into financial difficulties—there will be a new organisation, and the incoming organisation should not have to develop a completely new set of qualification documents, when the existing documents are likely to continue to be relevant or require only minor updating. In addition, it would simply not be a good use of taxpayers’ money to be paying for the development of a full suite of new materials every few years. Indeed, this defeats one of the aims of these reforms. The institute will make sure that the terms of the licence reflect the costs of developing and delivering a qualification. We have a duty to make sure that our skills system works in the interests of students and employers, and we have a responsibility to do so in the most cost-effective manner.
Amendment 25 would require the institute to make appropriate inquiries into the persons entitled to a right or interest in any copyright that could transfer. While I appreciate the intention behind the proposed changes, I hope to persuade noble Lords that it is unnecessary. New Section A2DA allows the institute, if it considers it appropriate, to approve a technical education qualification. As the legislation is currently drafted, the copyright of relevant course documents would transfer to the institute.
We recognise that there might be multiple contributors to the development of a technical education qualification, and that they are likely to want a say in matters that relate to their particular part. It would clearly be impracticable for the institute to obtain the individual consent of multiple contributors—it may not know the identity of many and they may have been subcontractors. We therefore expect that the organisation granted a licence to deliver a qualification would ensure that the authors of documents have given their consent.
The provisions as drafted already allow for the intention behind the amendment to be achieved. It requires that the institute is satisfied that each person who it thinks is entitled to a right or interest in the copyright agrees to that right or interest being transferred to the institute. We expect this to be part of the licensing arrangements too. We do not think the institute could not be satisfied that persons have agreed to the transfer unless it has received the information, which may necessitate an inquiry. Therefore, the amendment does not add anything.
Amendment 26 would replace “transferred” with “assigned”. Taken in isolation, we accept that this is unlikely to have any material effect on the proposed measures relating to copyright. However, the measure makes a similar provision to the transfer of copyright for relevant course documents as we have already done for the transfer of standards and apprenticeship assessment plans. The use of the term “transferred” in both measures is therefore designed to assure the reader that these provisions are consistent with each other.
We anticipate that the institute will hold an open competition inviting organisations to submit outline proposals to develop a qualification against pre-set criteria. Once the qualification is developed in line with the institute’s requirements, full approval would be granted with certain terms and conditions attached, including in relation to copyright of the documents defined as “relevant course documents”. The contract is likely to be a concession agreement, whereby the successful organisation enters into an agreement with the institute to have the exclusive right to offer the qualification for the duration of the contract period. At the end of the approval period, the institute would run another open competition, giving both the incumbent and other organisations the opportunity to put forward a bid.
Education: Nursery and Early Years
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Lord Watson of Invergowrie (Lab)
My Lords, if the Government really are serious about social mobility, then children’s first four years is where they should be concentrating—and doing so relentlessly. As the noble Lord, Lord Storey, said, early years teachers are crucial to the development and effectiveness of childcare. In the workforce strategy, launched earlier this month and to which the Minister referred earlier, the Early Years Minister, Caroline Dinenage, said that if we are to prepare “the best” for our children,
“in their earliest and most formative years, we must … value”,
and train adequate staff to ensure their development. That is fine—that is as it should be—but the Family and Childcare Trust recently reported that one in 10 nursery workers do not receive the national minimum wage. Will the Minister work with Ms Dinenage and other Ministers to ensure that all childcare workers are properly and fairly paid and that public, taxpayers’ money does not go to employers that are breaking the law?
Young Carers
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Lord Watson of Invergowrie (Lab)
My Lords, the Children’s Commissioner recently reported that four out of five young carers were not receiving support from their local authority and that not enough local authorities take steps to identify children in their area who may be providing care. Too often, it seems that funding under the Care Act is used for assessment purposes rather than providing support and activities that would allow young carers to enjoy some aspects of the childhood that every child surely should have. Will the Minister say what steps the Government are taking to ensure that young carers receive appropriate assessment and support, no matter where they live, through inspection and other forms of monitoring?
Lord Nash
The noble Lord makes a very good point. We welcome the Children’s Commissioner’s report. We have just concluded our analysis of its findings and are considering what more we can do. We know that many local authorities are making great progress in their data analysis and capabilities but, as the noble Lord says, there is more for us to do. We are considering that in the light of the Children’s Commissioner’s report.
Industrial Training Levy (Engineering Construction Industry Training Board) Order 2017
Lord Watson of Invergowrie Excerpts(7 years, 2 months ago)
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Lord Watson of Invergowrie (Lab)
My Lords, I thank the Minister for his introduction to this order, which I think it fair to say is not particularly controversial and need not detain us for too long.
Preparing for this took me back some time. In a previous guise, I was the full-time official of a trade union in the engineering sector, and I well remember dealing with many industry training boards on a number of different issues. When the Department for Business, Innovation and Skills published its final report in December 2015 on the combined triennial review of the industry training boards, it mentioned the background to the industrial training levy itself, which was introduced as part of the Industrial Training Act 1964. That is of course where the industry training boards can be traced back to as well.
It is to be regretted that there are now only three industry training boards left. I certainly remember that there were more than 20 in the 1980s, and they were significantly reduced by the Industrial Training Act 1982. Apart from the film sector, only the Construction Industry Training Board and the Engineering Construction Industry Training Board are still in place today, both of which are of course accountable to Parliament. They raise most of their funds through training levies and various commercial activities. In 2016, the ECITB raised £32 million in levy and returned £28 million to the industry. It is interesting that the ECITB itself made the proposal to reduce the industrial training levy rate for employers, which appears to be a direct result of the impending introduction of the apprenticeship levy. That is reasonable and I understand the thinking behind it.
I made notes but if I read them out I would largely repeat what the noble Viscount said in his introduction, and I see little purpose in doing that. However, the listed exemptions seem reasonable and are set at reasonable levels with regard to the overall pay bill of establishments. I was interested to hear the noble Viscount say that a total of 275 establishments would qualify for the levy, with 120 exemptions. I will not mention the details of the exemptions, but they meet the needs of the industry. It is instructive that the consultation carried out by the ECITB found that 78% of levy payers were in favour of the proposals, and together they will pay a total of 87% of the value of the forecast levy. There is fairly broad support, therefore; I certainly have not been made aware of any opposition.
As the noble Viscount himself pointed out, and I thank him for doing so, less than 10% of the engineering workforce is female. Again, going back to my days as a trade union negotiator, I remember the attempts that were made to get more women into the union, particularly the predominantly engineering-based union that I looked after. It was very difficult, and I pay tribute to WISE—Women into Science and Engineering, which is backed by my union, Unite. We want as many women as possible to come forward and fill jobs in the manufacturing sector, particularly in engineering.
This issue goes back to the requirement for qualifications, particularly STEM qualifications, and will impact on what I am going to say about the next set of regulations for consideration. The pressure on schools to find enough teachers to make sure they can deliver teaching in these subjects cannot be ignored. A lot more work has to be done on that, because they provide the building blocks to get the initial qualifications to get women into university, or through the technical routes into engineering. It is important that the Minister highlighted that, and it is to be welcomed.
The order is not controversial and is to be welcomed. It has been welcomed in the industry, and on that basis I can only hope it will achieve what it sets out to achieve and assists the development of the industry.
Viscount Younger of Leckie
My Lords, I thank the noble Lord, Lord Watson, for his comments and for his contribution today. I was particularly interested to hear of his background, which I did not know about. I appreciate his general support for the order.
Before I make some very brief concluding remarks, I shall pick up on his very important point about the need to encourage more females into engineering. I am delighted that my noble friend Lord Nash is in Committee today because I am sure he agrees with me that this is a very important part of what the Department for Education is doing. It is starting from the very early years to encourage more women to study STEM subjects and then, through proper career guidance, to encourage them to take roles in science and engineering. It is one of the major priorities and major thrusts—the noble Lord is right about that.
Noble Lords will be aware from previous debates that the ECITB exists because of the support it receives from employers and employer interest groups in the sector. There is a firm belief that without this levy, there would be a serious deterioration in the quality and quantity of training in the engineering construction industry, leading to a deficiency in skill levels. It continues to be the collective view of employers in the engineering construction industry that training should be funded through the statutory levy system in order to secure a sufficient pool of skilled labour. I commend this order to the Committee.
Motion agreed.
Immigration Skills Charge Regulations 2017
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Lord Watson of Invergowrie (Lab)
My Lords, the Labour Force Survey showed that by 2014 the number of workers participating in training courses away from their own workplace has collapsed since 1992. I will not repeat the figures that the Minister gave, but this feeds into a pattern. In general, UK employers underinvest in training relative to comparable countries. It is therefore understandable that the Government should decide to incentivise employers to invest in training so as to maximise the number of jobs available to the domestic workforce. In that aim, we support what the Government are attempting to achieve through these regulations.
However, the Secondary Legislation Scrutiny Committee was critical of the fact that the Explanatory Memorandum laid with the instrument said nothing about the opposition to the proposals voiced by most of those consulted by the Migration Advisory Committee. The Secondary Legislation Scrutiny Committee was also critical of the fact that the Explanatory Memorandum provided little or no detail about the impact of the charge on those employers likely to be affected. That led the committee to conclude that the process of policy formulation for the proposals was not complete and that the Government were not in a position to supply Parliament with sufficient information about the implementation and impact of the proposed charge. If that is not the source of some embarrassment to the Minister and his officials, then it ought to be.
As far back as May 2015, the then Prime Minister announced the intention to introduce the charge, and in March 2016 the scope of the charge was set out. Why then was the DfE not ready when the regulations came to be submitted? Given the array of staff in the department, there is surely no excuse for this. I hope that the Minister will apologise and give an assurance that in future his officials will be better prepared.
Since the charge was first proposed almost two years ago, we can discount any suggestion that it had its roots in what I regret to say is the increasingly anti-immigrant rhetoric that since last year’s referendum has characterised some government policy. The Government’s generally hostile approach towards migration—and the definition of it, as evidenced by their attitude on the Higher Education and Research Bill in relation to international students—risks further fuelling discrimination and social tension.
Changes to migration policies should be developed through consultation with employers and trade unions and, once agreed, should be introduced with adequate lead-in time to allow employers and employees to plan accordingly. That allows short-term gaps in the labour market to be filled while other measures are taken to address long-term training needs in the domestic labour market. It is to be hoped that that is what this charge will achieve.
Last week, during the briefing session on the charge, the Minister for Skills, Mr Halfon, explained that it will be used to address skills gaps in the workforce. In terms of the resources available to do so, and to some extent reflecting what the noble Baroness, Lady Walmsley, has said, the Minister said he anticipated an annual surplus of around £100 million once the Home Office had deducted the costs involved in collecting the charge.
Identifying those skills gaps is at the heart of these regulations. The UK Commission for Employment and Skills’ Employer Skills Survey 2015 shows that, while overall employer investment in training, in kind and cash, increased between 2011 and 2015, per employee expenditure flatlined at £1,600, despite a period of economic recovery and business growth. That was the last survey to be published, and I regret to say that it will remain the last survey to be published because earlier this year the Government closed the UK Commission for Employment and Skills. We no longer have a national overview. Perhaps the Minister will explain the rationale behind what appears to be an extraordinary step. What will replace it?
The Employer Skills Survey 2015 highlighted what it termed skill-shortage vacancies by sector and listed 13. The top five were: construction; manufacturing; electricity, gas and water; transport and communications; and agriculture. Interestingly, health and social work were only in seventh place, despite the regular reports of difficulty in filling vacancies. The noble Baroness, Lady Walmsley, has stolen a bit of my thunder here, so I will not repeat the thrust of her argument. Certainly, the proportion of NHS staff who are not UK nationals is high, although already in decline following last year’s referendum. It seems questionable, at the very least, that the list of exempted occupations listed in the regulations does not include doctors or nurses at a time when the NHS is under real pressure in filling posts in these areas. I acknowledge that the noble Baroness, Lady Walmsley, said that it goes wider than doctors and nurses. Enforcing the levy would effectively penalise the NHS for recruiting workers from outside the EEA to fill gaps in an already stretched workforce in an essential public service. I accept that to some extent the NHS has over the years gone for the easier option of hiring from outwith the UK, but the pressures currently being experienced there will be as nothing two years hence. I urge the Minister to consider what the noble Baroness, Lady Walmsley, said and what the pressures on the NHS will be if the charge is applied across the board for that sector.
Science, technology, engineering and mathematics are also areas where there are skills gaps, not least in schools, where recruitment also remains a problem. I shall not repeat the comments I made in respect of the Engineering Construction Industry Training Board in a previous debate. Few teachers will earn above the £30,000 cut-off for the charge, and so non-EEA nationals will be unable to be used to help fill these gaps. From memory, Mr Halfon—or perhaps it was officials—said that there are only about 150 non-EEA nationals in that bracket. I accept that that is not a big number, but none the less these gaps need to be filled. With maths and ICT demonstrating digital skills shortages for the jobs of tomorrow, there could have been a case for relaxing the charge in these areas.
One suggestion I shall make concerns the follow-through on the charge, which we all hope will meet its aims. Could employers not be eligible for some sort of rebate on the charge for employing a non-EEA worker? There is an element of double-charging. If an employer has identified a gap for a group of employees, so that he or she has to take on workers from outwith the UK and, I assume in this case, from outwith the EEA, while doing that, the employer is meeting the aims of this charge by bringing through young, or perhaps not so young, people to train them up to the necessary level. So he is paying the charge for them to be employed and to be trained, and he is also paying a surcharge for those outwith the EEA who he is using temporarily. So in a sense he is training people for the long-term good of the business and of the UK economy, and there does seem to be an element of double-charging, particularly when the £1,000 rises over the years to a maximum of £5,000—leaving aside the charitable sector—when the employer is in fact doing what the Government want him or her to do: training employees.
My other question for the Minister is: when will the charge be reviewed? I do not know whether there is any significance in the fact that the assumption in the regulations is that it covers only non-EEA employees for up to five years. I am not clear whether that is to be a maximum. But there may be a case for, in effect, a sunset clause so that after five years the regulations could be reviewed and some assessment made of the charge’s success. As I said earlier, all of us in this debate, whatever our views and however critical we have been, want to see the outcome that the Government intend. I would be interested in the Minister’s views on that point. I do not expect him to respond just now. I do not expect his officials to give him a response just now. If it is more convenient, I am more than happy to receive something in writing.
Overall, I certainly want to see this charge introduced effectively and fairly, leading to a situation where there are more UK workers able to fill the gaps that are evident now and likely to be even more evident in the post-EU years ahead of us. To that extent, I do not do this often but I wish the Government well because I think their intentions are good, but there are certainly some rough edges in this charge which could perhaps be smoothed down to make it more palatable and perhaps even more effective.
Lord Nash
My Lords, I thank all noble Lords for a really interesting debate. We welcome this feedback. I come back to my opening remarks: the investment in skills is crucial to a productive, strong UK economy—an economy which gives people from all backgrounds the opportunity to fill today’s skilled roles as well as those in the future. Migration has a role to play in supporting the development and supply of expertise and skills and we want to continue to attract the brightest and the best, but through the immigration skills charge we want to incentivise employers to invest in training. I am grateful for the support that has been expressed today for our desire to upskill our workforce. I am afraid that I will not cover all the points that have been raised but I will write to all noble Lords present today.
The noble Baronesses, Lady Walmsley and Lady Hamwee, asked why this impacts particularly on the health service. The MAC was clear in its view that the charge should apply to the public sector. It is not sustainable to rely on recruiting overseas staff and the Government are committed to building home-grown skills. All employers need to look at how they meet their longer-term skills needs, and the long-term strategy must be to train and retain our own nurses and doctors in the UK. Steps are being taken to address the shortage of nurses, including continued investment in training, retention strategies, and a return to practice campaign. We are introducing a new nursing degree apprenticeship. Health Education England has increased nurse training places by 50% over the past two years and is forecasting that more than 40,000 additional nurses will be available by 2020. Similarly, Health Education England is forecasting that more than 11,000 additional doctors will be available by 2020. The noble Baroness, Lady Walmsley, asked about the number of nurses impacted by the charge: 2,600 certificates of sponsorship were used for nurses in the year ending August 2015.
The noble Lord, Lord Watson, asked about the delay in publishing the impact assessment. As the charge is classified as a tax, we have not been required to carry out a formal impact assessment. It is also difficult to do so because it is difficult to anticipate how employers will respond to the charge and to wider changes to tier 2. In addition, the charge does not sit as an isolated measure—it is part of a wider skills programme to develop a strong, productive economy. On the noble Lord’s point about how we will assess and evaluate the impact of the policy and whether the charge will be reviewed, we will monitor the operation of the charge and will undertake a review of the policy after one year, as covered in the Explanatory Memorandum.
Lord Watson of Invergowrie
Before the Minister finishes, I mentioned the UK Commission for Employment and Skills, and that apparently it has been disbanded. Perhaps the Minister can give me a commitment that he will also write to me about that. I am happy to leave it at that just now.
Higher Education and Research Bill
Lord Watson of Invergowrie ExcerptsWednesday 8th March 2017
(7 years, 2 months ago)
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Baroness Wolf of Dulwich (CB)
My Lords, I rise to speak to Amendments 62 to 66, 88 and 93, tabled by the noble Duke, the Duke of Wellington, and Amendment 72, tabled by the noble Lord, Lord Blunkett, to all of which I have added my name. I declare my usual interest as a full-time professor at King’s College London, but also note that I am a founding editor and editorial board member of Assessment in Education, a leading international academic journal in the field.
I have listened with interest to all the remarks made by other noble Lords and have agreed with the overwhelming majority of them. I just want to comment on an issue that is at the heart of the amendments to which I have added my name. It concerns the profound difference between using a single composite measure and having a wide variety of measures that are reported separately.
One of the prime rules of assessment—indeed, of measurement—is that you do not throw away information if you can avoid it. The Government have, rightly and repeatedly, emphasised their commitment to transparency and to giving students better information about teaching quality and other aspects of the higher education courses to which they might or do subscribe. But the trouble is that a composite measure is the opposite of transparent. It is also a problem that it is seductively simple: three stars, four stars—how can one resist it? We believe it is somehow objective because that is how we respond to a single number. In modern societies, we love rankings. But if we add up measures of different things and produce a single number, we are not being transparent and we are not being objective. What we are presenting to people, first, throws away large amounts of information and, secondly, imposes our value judgment on those different measures. When we use different indicators, add them up and create a single rank or score, we are denying other people the chance to see how it was done. It is irrelevant whether you gave equal weight to each measure or decided to do all sorts of clever things and weighted one thing at threefold and another at a half; the point is that by doing that, you have imposed your judgment. The students for whom these are designed—the students we want to help—may have different interests from you, as the noble Lord, Lord Storey, has pointed out.
That is why I support the proposal from the noble Lord, Lord Blunkett, that a scheme to assess quality must report individual measures individually. It is also why I completely agree with the noble Duke, the Duke of Wellington, that the last thing we want to do is impose on Governments, quite possibly for the next 30 years, the obligation to create rankings.
In this case, we are not even adding apples and oranges, which at least are both pieces of fruit. We are adding up things that are completely different. If the numbers are measuring or representing different things—and doing so with varying degrees of error, as is always the case—adding them up will compound the error. Obviously it would be nice to have a wonderful single measure, but the fact that we would all like one does not mean that it is better to have an unreliable one, rather than not have one at all. On the contrary, it is worse.
We know why most universities have signed up to this. On Monday, the Minister pointed out that if they do not agree to link TEF scores to fees they will,
“lose £16 billion over the course of the next 10 years”.—[Official Report, 6/3/17; col. 1140.]
Universities are in a corner and over a barrel—as we have heard, that is exactly how you would feel if you were the vice-chancellor of Warwick.
It seems to me that this is all quite unnecessary. The Conservative manifesto did not commit to rankings, to a single measure or to labelling people as gold, silver or bronze. It said that students would be informed of where there is high-quality teaching. That is something to which everybody in this House would sign up. I very much hope that the Government will continue to listen and will move away from a current commitment that can only be harmful, for all the reasons that people in this House have talked about so eloquently this afternoon.
Lord Watson of Invergowrie (Lab)
My Lords, this has been a passionate debate, which reflects accurately that this is the most contentious part of the Bill—certainly the email traffic that all of us have experienced would bear that out.
As we have heard from many noble Lords, the metrics proposed for the TEF are flawed, and confidence in their effectiveness remains extremely low among academic staff, students and more than a few vice-chancellors. The noble Duke, the Duke of Wellington, referred to the University of Warwick. I have to say that that is more reflective of the general view than that sent out in the rather unconvincing letter from Universities UK and GuildHE a few days ago.
We on these Benches have consistently said that we are of course in favour of a mechanism that enhances the quality of teaching and of the general student experience. But, due to the differentiation of tuition fee levels, the TEF as it stands—even with the improvements made thus far—is not fit for purpose. In view of these uncertainties, and because the reputation of UK higher education institutions needs to be handled with particular care in the context of the upheaval that will result from our impending departure from the EU, it would be inadvisable to base any form of material judgment on TEF outcomes until the system has bedded down.
That is why Amendments 67 and 68 in the names of my noble friend Lord Lipsey and the noble Lord, Lord Lucas, calling for delays in the implementation of the TEF and the linkage of any fee increases to it, are sensible. As we on these Benches have argued consistently, we do not believe that there should be such linkage. In many ways, using student feedback as part of a framework that leads to fee increases, while at the same time purporting to represent and embody the interests of students, is contradictory. My noble friend Lord Blunkett has outlined why it is appropriate for the Secretary of State and not the Office for Students to bring forward a scheme to assess the quality of teaching.
In Committee, we tabled an amendment which sought to ensure that any rating scheme had only two categories: “meets expectations” and “fails to meet expectations”. So we welcome the fact that that principle is incorporated in my noble friend’s amendment. The amendment has the benefit of being straightforward without a confusing system of three categories, all of which would be deemed by the OfS to have met expectations—to different extents, of course. However, as many noble Lords have said, that is not how it would appear either to potential students, to those awarding research grants or to the world at large.
Amendment 72 also highlights the need for consistent and reliable information about the quality of education and teaching at institutions. The fact that what is proposed in the Bill would guarantee neither is a major reason why so many have opposed the TEF in its current form. The requirement to have the data and metrics on which the TEF is based subject to evaluation by the Office for National Statistics was advocated in Committee, but it merits reconsideration today. Without a firm base on which to establish the TEF, it is unlikely to gain the confidence not just of institutions but of staff and students, on whose futures it will have great bearing.
The future standing of higher education in the UK will depend on the Government rethinking their approach to these issues. It has to be said that not one noble Lord in the debate this afternoon has spoken in favour of the TEF as proposed. I ask the Minister and his colleague Minister Johnson to give that fact due weight of consideration.
Careers Advice and Guidance
Lord Watson of Invergowrie Excerpts(7 years, 2 months ago)
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Lord Nash
My noble friend makes an extremely good point. I know that my ministerial colleague Jo Johnson is very focused on this. I remember Andreas Schleicher telling me that we are the worst country in Europe for aligning courses at universities with the jobs available. We believe that our plans under the Higher Education and Research Bill will make students much more focused on what are worthwhile occupations.
Lord Watson of Invergowrie (Lab)
My Lords, a few moments ago the Minister referred to the Technical and Further Education Bill, which is in Committee, and that he had accepted a cross-party amendment which means that from September this year all state-funded schools in England must provide access to a range of education and training providers. That was very much welcomed by all those in Committee, but in that debate the Minister said:
“Our careers strategy will not be effective unless schools and colleges are held to account for the quality of their careers provision. Ofsted has an important role to play in this regard”.—[Official Report, 22/2/17; col. GC 70.]
With schools that were previously reluctant to have their pupils advised about routes other than those that lead to university now being obliged to do so, does the Minister accept that when this comes into effect Ofsted should give an overall “good” or “outstanding” rating to a school or college only if it considers that the careers advice provided by them is of a good or outstanding standard?
Higher Education and Research Bill
Lord Watson of Invergowrie ExcerptsMonday 6th March 2017
(7 years, 2 months ago)
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Baroness Bakewell (Lab)
My Lords, I, too, support the amendment. We need to have a status of title that puts universities and higher education in an elevated place in our society. We know that “students” comes trailing clouds of all sorts of other implications that may not be appropriate. Education and universities are serious, hard-core activities on which this country depends, and they deserve respect.
Lord Watson of Invergowrie (Lab)
My Lords, I am sure that the noble Viscount will ask that the amendment be withdrawn, and I can understand why from his point of view—but it does not stand up to scrutiny to maintain that the name of the body should be the Office for Students. In response to my noble friend Lord Lipsey’s amendment in Committee, the noble Viscount said:
“This Bill sets out a series of higher education reforms which will improve quality and choice for students, encourage competition and allow for consistent and fair oversight of the sector”.
Many noble Lords may have doubts about anything other than the second of those objectives, but the noble Viscount was correct to point out that, in introducing the Bill, the Government had those three distinct objectives—so why were they unable to come up with a title that encompassed more than one of them?
The Minister also said in Committee that it was the Government’s intention,
“to put the student interest at the heart of our regulatory approach to higher education”—[Official Report, 9/1/17; cols 1840-41.]—
hence the name. That claim does not withstand close scrutiny. If that had been the case, why did the Bill not contain provision for at least one student on the board of the OfS? Why did it require vigorous argument by the Opposition in Committee in the other place before the Government came up with a rather weak amendment to Schedule 2 providing for the OfS board merely to,
“have regard to the desirability of”,
someone with,
“experience of representing or promoting the interests of individual students”.
It does not provide for such representation; it just says that it is desirable.
In that context, the name “Office for Students” is not without some irony. It is certainly inappropriate because it is a misnomer. If the Minister wants the amendment to be withdrawn, it is incumbent on him and his Government to come up with a name that more accurately reflects the duties that the body is about to assume.
Viscount Younger of Leckie (Con)
My Lords, I appreciate having a further short debate on this matter, but I find it a little ironic how in Committee many noble Lords sought to omit “standards” from the Bill, but now this amendment would add “standards” to it. I would argue that the name relates to the OfS’s core functions and purpose. In response to concerns that the mission of the Office for Students is not sufficiently focused on the interests of students to merit its name, let me assure noble Lords that the Bill places a clear duty on the OfS to consider the interests of students in every aspect of its operations.
The OfS has duties to have regard to the need to promote greater choice and opportunities for students and to encourage competition between higher education providers where this is in the interests of students and employers. It is therefore entirely appropriate that the body should be called the Office for Students—dreary or not—and that its title should signal the fundamental refocusing of the regulatory system towards the student interest which the reforms are intended to bring about.
Higher Education and Research Bill
Lord Watson of Invergowrie Excerpts(7 years, 2 months ago)
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Lord Young of Cookham (Con)
My Lords, I come to the campus of this Bill as a fresher, in the footsteps of my noble friend who, by contrast, is competing a postgraduate course. But I have had some taster sessions, listening to the Bill from the Front Bench, and I have read the exchanges in Hansard and in Committee.
It has always been our intention that the Bill will lead to greater diversity, choice and flexibility for students. The noble Lord, Lord Stevenson of Balmacara, proposed an amendment in Committee requiring the OfS to waive the fee limit condition in respect of accelerated courses. I have read his speech, which was highly persuasive. The Government, therefore, are introducing these amendments to support the growth of accelerated courses by enabling Parliament to remove a key barrier to them.
Amendments 46 and 202 create a clear definition of an “accelerated course” and allow Parliament to introduce a higher cap for these courses. Separately, the remaining amendments clarify that, when setting fee limits for any type of course under Schedule 2, whether accelerated or not, the Secretary of State may establish different higher, basic and sub-levels for different types of teaching provision—for example, sandwich and part-time courses. That reflects the approach taken under current legislation whereby, for example, the higher amount set for part-time courses is fixed at a lower level than for full-time courses.
Accelerated courses offer students the opportunity to study their course over a condensed period—for example, completing a three-year degree course over two years. We know that accelerated courses appeal to students who may not otherwise choose to pursue a degree. That includes mature students who want to retrain and enter the workplace faster than a traditional full-time three-year degree would permit, and those from non-traditional backgrounds.
An accelerated course must meet the same quality expectations and achieve the same outcomes as a comparable, traditional course. However, accelerated courses typically involve tuition through the summer period, requiring the same resources as a traditional course over a shorter period. Evidence from independent research and our call for evidence tells us that a number of English providers are interested in providing more accelerated courses. However, many providers are unable to grow or introduce accelerated courses because of the existing annual tuition fee cap; they simply cannot afford to offer accelerated courses. Therefore, these amendments will enable Parliament to set a higher annual fee cap for accelerated courses—and accelerated courses only—compared to the annual fee cap for standard degree courses. They also serve to provide flexibility with regard to other types of provision.
Let me be very clear: our clear intention is that accelerated degrees that are subject to fee limits under the Bill will cost students less than an equivalent degree, not least because students will claim less overall in maintenance loans. Students undertaking an accelerated course borrow less money over a shorter period and forgo less earnings, as they are able to enter the workplace sooner.
We are creating a new definition for accelerated courses, and we intend to consult with the HE sector on where to set the fee cap and how to grow further accelerated course provision. Any higher fee cap for accelerated courses will be subject to parliamentary scrutiny via the affirmative resolution procedure. We will seek to stimulate the market for accelerated courses by agreeing a fee cap that provides adequate funding for providers while ensuring the student and the taxpayer get a good deal. I beg to move.
Lord Watson of Invergowrie (Lab)
My Lords, we welcome the fact that, as in respect of other parts of the Bill, the Government have listened to what has been said during the progress through both Houses. My noble friend Lord Stevenson moved an amendment in Committee that sought to allow funding flexibility and aimed to incentivise the provision of accelerated degrees. He made it clear at that time that it was a probing amendment and, in withdrawing it, invited the noble Viscount the Minister to come forward with one of his own to achieve something similar. So it is natural that we welcome this group of amendments, which should insist on ending the present rigid structure of the type of undergraduate courses on offer.
It is fair to say that we have had some concerns about the kind of new so-called challenger institutions that will appear as a result of the Bill. Our main concern is what might drive them—that is, the profit motive, rather than the education motive. It will not be the case with all but it could be the case with some. However, it is only fair to confess that I was particularly concerned until I met people from the Greenwich School of Management and spoke at length with them about what they offer. I now see that body as engaged in widening participation; it attracts students from backgrounds that have not traditionally engaged in numbers with higher education, which, whatever the situation, has to be welcomed. The university itself cannot validate its own degrees—that is done by Plymouth University—but that is an issue for a separate day.
I have to say that the Greenwich School of Management surprised me. My only knowledge of it prior to my meeting was that the hedge fund or venture capital company with which the noble Lord, Lord Nash, was involved had established it. That might explain to noble Lords opposite why I was somewhat doubtful as to the motives—but none the less I have to say that it is an example of a new university serving its community.
We accept that there is a need for courses that offer students the opportunity to complete full degree programmes in two years of intensive study, enabling them to enter or return to work as quickly as possible. That is key, particularly for those students from less well-off families, who simply cannot afford the time to be out of full-time work for longer than two years. That is a message that the Government appear to have accepted. We hope that the financial penalties that have prevented students from enrolling in two-year courses up to now will be brought to an end, paving the way for their increased and increasingly diverse participation.
Lord Judd (Lab)
My Lords, I join those who warmly congratulate universities that have made arrangements, and express considerable disappointment about those that have not so done. It surely is simply unacceptable in an electoral system to have some universities where this has been done and some where it has not. That is not a fair and open approach to electoral matters. I believe it is impossible to do other than support the amendment.
Lord Watson of Invergowrie
My Lords, the amendment moved so ably by my noble friend Lady Royall proposes to make it mandatory for all higher education institutions to offer students who are enrolling or re-registering the opportunity to be put on the electoral roll. The question surely is: why not? As we have heard, some universities already encourage their students to do that and it would be logical for all of them to do so. The reason given by the noble Baroness, Lady Goldie—as alluded to by the noble Lord, Lord Lexden—was, I think, that such a measure would be a bureaucratic burden on institutions, whether that was cost-based or not. How any activity that increases the number of people who participate in our democracy can be dismissed as a burden I fail to see, and I do not think that is in any sense the appropriate way to look at it.
The noble Baroness, Lady Goldie, also listed a number of universities in addition to the University of Sheffield, whose pilot the Government part funded, and a number of other institutions which are already implementing the system voluntarily. That is all well and good but there seemed to be a complete lack of urgency on her part on behalf of the Government, given that she said that the Government had committed to write to other HE and FE providers later this year, as if that were something they might or might not get round to. It is absolutely inappropriate for there to be any delay. Democracy does not take sabbaticals. We will have elections very soon and they have a habit of keeping on happening—by-elections or whatever. It is inappropriate that people who have the right to vote for whatever reason—I do not in any way discount personal responsibility—should be prevented from doing so.
Another figure from our earlier debate that stuck in my mind was that given in response to my noble friend Lord Stevenson, I think. The noble Baroness said that 60% of students register at home rather than where they attend university. That is fine but it leaves 40% who do not. As we have heard, that amounts to almost a quarter of a million students at any one time who will not be able to vote. That is far too many. Action needs to be taken urgently. That is why my noble friend’s amendment is necessary, and is necessary now.
Lord Young of Cookham
My Lords, I am grateful to the noble Baroness, Lady Royall, and other noble Lords who have spoken in this debate and have set out the reasons why we should increase the franchisement of students. The Government entirely share that aim of increasing the number of students and young people registered to vote. As part of our drive to create a democracy that works for everyone we are taking a number of steps which I will touch on in a moment, such as funding the National Union of Students to the tune of £380,000 in 2015 to increase student electoral registration.
We listened carefully to the concerns raised by noble Lords when the amendment was debated during Committee. While we agree with the objective of this amendment and understand the intention behind it, we firmly believe that this Bill is the wrong vehicle to achieve greater student electoral registration, and that the scheme as proposed in the amendment has serious drawbacks. The Government have an alternative plan to address student registration which we believe will be more appropriate and effective; again, I will come on to that in a moment, the Government having considered it in the light of the debate in Committee a few weeks ago.
Both Universities UK and the Association of Electoral Administrators have told us that a one-size-fits-all approach to electoral registration, which this amendment would be, is not necessarily the best solution. The AEA does not want further unnecessary prescription introduced into the electoral registration process. Some universities have also signalled that they do not support the system that this amendment seeks to mandate. Seeking to achieve this objective in this way is unnecessary and risks complicating the Government’s relationship with electoral registration officers, as it contradicts our stated objective to give them greater autonomy in how they choose to conduct their statutory duty of maintaining the completeness and accuracy of the electoral registers. Choice is the key point here. It is for HE providers and the electoral service teams, who are the acknowledged experts in registration, rather than Parliament—whether through the Bill or other means—or the OfS to determine what the right approach is for their local area.
Furthermore, this system simply will not work for electoral registration officers in London and other large cities since many students have a term-time address in a different registration area from their university or HE provider. For that reason alone, the amendment simply will not work. This is a significant issue given the numbers of students in London, where approximately 376,000 students could be living across all 33 London boroughs. Only the borough in which both the university and the student are located would have the necessary data required to complete an application. Students can participate in the democratic process by actively choosing to register to vote at either their university or home address. As the noble Lord has just said, research has suggested that 60% of students may do so.
We have a commitment to increase student electoral registration. To date we have undertaken a range of steps to encourage it, most recently ahead of the EU referendum. In addition to those steps, I can commit today that the Government will, in their first guidance letter, ask the OfS to encourage institutions to offer their students an opportunity to register to vote by providing a link to the online registration page so that students can apply to register quickly and easily. I think that this is a user-friendly solution that avoids some of the problems in the amendment which I have touched on. I understand that in Committee the noble Baroness, Lady Brown, stated that this was successfully applied at Aston University, and other providers have done so too.
However, we have also heard the calls for urgency, repeated by the noble Lord from the Opposition Bench, and we do not want to wait until the OfS is in place. That is why I can confirm that the Minister for Universities, Science, Research and Innovation, Jo Johnson, will write to HEFCE before Third Reading to ask it to work with the sector to encourage best practice and to actively promote student electoral registration.
To inform our activity, the Minister for the Constitution hosted a student round table in January at which he heard about the barriers to registration that students face. Since then, we have embarked on a plan to further our aim of maximising student electoral registration and we will continue to do so ahead of the local elections this May and beyond. I can now confirm to noble Lords that in the forthcoming weeks we intend to meet university vice-chancellors to that end. We will also write to the higher and further education sector to promote the outcomes due to be published from the different models available, to encourage take-up and to continue to facilitate greater co-operation between providers and local electoral service teams.
For the reasons already given, I believe that this voluntary and collaborative approach is the right one. However, if the evidence is that it is not working, it will be open to the Government and the OfS to consider other options in future, including, perhaps, the use of appropriate and proportionate registration conditions, requiring providers to comply with any such condition or explain why they cannot comply. The Government will also work with sector partners, such as Universities UK, to promote different options and encourage take-up.
The Government have already committed to publishing and promoting the outcomes of the University of Sheffield pilot, which we part funded, as well as other models, all of which are currently being evaluated, and we will publish the results at the earliest opportunity. As I wrote to the noble Lord, Lord Rennard, an indicative assessment shows that this project had successful outcomes. However, ICT software costs are a prohibitor, and some universities have already told us that they will not implement this model for that reason.
In addition, the amendment rests on the provider informing “eligible students” of their registration rights and local authorities providing various details regarding those students. An “eligible student” is defined as someone entitled to vote as an elector at a parliamentary election, but it is not clear who determines eligibility. Given that the amendments suggest that it is the provider who has to take specified actions, it looks as though it has to be that same provider who determines eligibility—something it surely is not, and indeed should not be, resourced to do. For all those reasons, we are confident that a voluntary approach is the best option and we are confident that more of these agreements can be reached in this way.
As the noble Baroness, Lady Garden, previously stated, many other institutions are already taking steps to encourage young people to ensure that they are on the register. In fact, numerous HE providers have, of their own volition, already implemented a model similar to that used by the University of Sheffield, including, as the noble Baroness, Lady Royall, said, the University of Bath. Nor should we lose sight of the fact that students can choose where they are registered, and some students might not wish to have their data shared.
We are also committed to increasing registration among all underregistered groups, of which students form only a part. This will be part of our democratic engagement strategy, which will be published in spring 2017.
Therefore, I say to the noble Baroness who moved the amendment that the Government have genuinely thought about the arguments put forward in Committee. We have come forward with a new set of proposals, which we think meet the objectives that we all share. Against that background, I ask her to consider withdrawing her amendment.
Technical and Further Education Bill
Lord Watson of Invergowrie ExcerptsWednesday 1st March 2017
(7 years, 2 months ago)
Grand CommitteeRead Full debate Technical and Further Education Act 2017 View all Technical and Further Education Act 2017 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 88-III(a) Amendment for Grand Committee, supplementary to the third marshalled list (PDF, 54KB) - (28 Feb 2017)
“( ) Sums guaranteed under subsection (1) shall include statutory pension obligations payable to staff employed by a further education body subject to an education administration order.”
Lord Watson of Invergowrie (Lab)
My Lords, Amendment 56 would ensure that staff employed by an FE college continued to accrue statutory teachers’ pension scheme and local government pension scheme pension obligations during an education administration. The first of those is self-explanatory, and FE colleges are legally obliged to offer either that or LGPS membership to their staff. The latter is the scheme for the large number of so-called support staff, from learning support assistants, caretakers and catering staff to administrators, cleaners and IT technicians. It would be completely unacceptable if, as a result of an insolvency, staff pension rights or their potential pension rights were to be adversely affected.
When this amendment was considered on Report in another place, the Minister, Mr Halfon, said:
“As with any administration, once the administrator has adopted the employment contracts of the staff they decide to keep on, they are personally liable for the costs of those ?individuals, such as their salary and their pension contributions. They would take on the appointment only if they were confident that sufficient funds were available to meet the costs. Some pension contributions will continue to be made and benefits accrue”.—[Official Report, Commons, 9/1/17; col. 115.]
Although that sounds like a firm commitment, it has not assuaged those with staff directly involved in colleges—namely, the Association of Colleges and the University and College Union. If that is what the Government understand the position to be, I suggest they can have no objection to placing it in the Bill. The Minister in the other place did not provide a reason why that could not be undertaken, and I hope the Minister today will state the case one way or the other.
There are wider issues regarding pensions relating to the Bill. There is concern within the FE sector that the insolvency regime outlined in the Bill is already discouraging partnership and investment by making banks hesitant to lend to colleges. Some colleges are facing issues with proposed mergers arising from area reviews because of difficulties with bank lending linked to local government pension scheme liabilities, which now have to be shown on colleges’ balance sheets.
The area reviews under way are aimed at rationalising the FE sector. That process has been more problematic than it might have been, but at least no colleges have been closed thus far. A number have been merged and often that has worked well, with both partners approaching the future with greater confidence. However, that has not always been the case. For various reasons some projected mergers have not been completed, and one such example is currently the subject of some controversy. Other than to say that they are based in the same city, I will not identify the colleges because that might serve to exacerbate an already difficult situation, but the major stumbling block in that case is the pension scheme, more so at one college than the other. The local LGPS has changed the colleges’ deficit repayment terms from a 22-year plan with no interest to a 10-year plan with an interest rate of 4.3%. As a result, banks are refusing to advance the necessary funds to allow the mergers to go ahead. Essentially the increasing potential for colleges to become insolvent and the proposals within the Bill mean that colleges are now being viewed as high-risk employers, making both pension schemes and banks look on them less favourably and undermining area review outcomes where these have otherwise been agreed.
I have already mentioned the two schemes that apply. When incorporation began some 25 years ago and colleges were removed from local authority control, part of the deal was that by regulation they were obliged to offer one of the schemes as appropriate to existing staff. For new staff, colleges have often held contracts of employment with a wholly owned subsidiary company that may or may not be part of either the teachers’ pay pension scheme or the local government pension scheme—more often, for obvious reasons, it has been “may not”. So, provided that a college keeps paying for current staff, pension costs in respect of new staff will slowly be reduced as they are put on significantly worse pension schemes.
The college area review process has caused problems because often the local fund of the local government pension scheme requires the scheme’s debts to be met by the new entity. This becomes more complicated where mergers cross local authority borders, involving different strands of the LGPS. Differing LGPS regions have significantly different policies on past service deficits, and impose differing contribution rates. They might even insist upon any deficits being paid off in full.
An example of this has been brought to my attention by Sandwell College in West Bromwich. The West Midlands local government pension fund has notified all colleges in its region that, because of its interpretation of the Bill, it intends to increase the risk banding of all colleges. Sandwell College has been rated financially outstanding by both the DfE and the SFA and, in the area review, the further education commissioner decided that it should remain a viable independent institution. Despite all that, the West Midlands pension fund still believes that, because of the insolvency regime that forms the bulk of the Bill, Sandwell College is now at high risk, when it is palpably is not.
Baroness Buscombe
I thank all noble Lords who have taken part in this important debate and will do my very best to reply and, I hope, reassure—notwithstanding that I think that noble Lords accept that some of the important issues raised go beyond the scope of the amendment.
I recognise the well-intentioned purpose of the amendment, which is to ensure that those staff employed by a further education body in education administration continue to accrue their pension entitlements. I hope to reassure the Committee that pension rights will be protected in the unlikely event that the further education body becomes insolvent and is placed in education administration.
In developing the special administration regime, the Committee will see that we have sought to mirror many of the provisions that exist in the ordinary administration regime that applies in the event of a company insolvency. As noble Lords will know, in an ordinary company administration, the administrator has 14 days to decide whether to adopt staff contracts. Those who continue to be employed by the company will continue to be paid in accordance with the contract, including payment by the company of any pension contributions that fall due. These payments are an expense of the administration and continue until the staff are transferred to a new employer, if the business is sold to a new owner, as is often the case, or until their contract is terminated. We propose to adopt similar provisions for an education administration.
We have been clear that, for the education administration to be successful—for the special objective to be achieved—it will be necessary for the Government to provide funding to achieve the special objective: for example, to allow the college to continue to operate while the education administrator prepares his proposals for the college’s future. The Bill provides at Clause 25 powers for the Secretary of State or Welsh Ministers to provide that funding, where necessary, whether through loans or grants. In addition, the Secretary of State or Welsh Ministers may choose, where they consider it appropriate, to give indemnities under Clause 26, or guarantees under Clause 28, during the education administration.
Any funding provided under Clause 25 can be used to meet the cost of the education administration, including ongoing staff salaries and associated contributions, such as employer pension contributions. For as long as pension contributions are being made in accordance with staff contracts, pension entitlements will continue to accrue. The education administration changes nothing in this regard. However, once contributions cease, so too will the accrual of benefits. This would happen where staff were made redundant during the education administration. As with any employer pension scheme, once an individual’s employment ends they can no longer continue to pay into that scheme, but that does not mean that the benefits individuals have accrued in the scheme at that point are lost. Although they can no longer be added to, the benefits accrued will remain in the scheme and increase, as provided for by the terms of the scheme. Individuals will be able to access these benefits as and when the terms permit.
I believe that the way in which the regime will operate in practice means that the amendment is unnecessary. The Secretary of State may not provide a guarantee during an education administration, whereas it is almost inevitable that the Secretary of State or Welsh Ministers will provide funding through a loan or grant during an education administration. This funding will enable the continued operation of the further education body, and this in turn will mean that pension contributions continue to be made for all staff, whether teachers, caretakers, cleaners or support staff. I hope that that gives some reassurance.
I turn to some of the wider issues raised by the noble Lord, Lord Watson, and the noble Baroness, Lady Cohen. Further education colleges report that they are seeing a marked increase in the risks attached to their LGPS pension deficits. The question is: what are we going to do to counteract that? Further education bodies underwent the triennial revaluation of their LGPS pension deficit positions last year, and are still in the process of receiving and reviewing their results. We are aware of the outcome of a few, but not the majority, of the positions of colleges across England. The picture we have is mixed, with some coming out with results better than anticipated, and a minority even seeing their deficit repayment cost reduced for the forthcoming period. Others are seeing their costs increased. In some cases, that may be because they did not increase substantially in the previous revaluation period. There is residual adjustment being made in this period.
The assessment of repayment obligations is a function of many factors, including fund performance, the size of the deficit and fund managers’ overall analysis of the financial position of the relevant college. Reports from colleges received so far suggest that in only a few cases has a pension fund’s assessment of the risk of further education insolvency specifically contributed to revaluations with significantly increased repayment costs. Further education bodies have freedoms and flexibilities in law to be financially and operationally independent of government and are therefore classified by the ONS as private sector. Pension revaluations are a matter for negotiation between individual FE colleges and their pension fund, and final revaluations are normally based on a variety of factors as assessed by actuaries.
The noble Lord, Lord Watson, mentioned Sandwell, and I shall reference that and West Midlands. Only two of the 91 LGPS pension funds expressed in response to our consultation that the special objective in the insolvency regime was inappropriately formulated, one—which was actually West Midlands—suggesting that creditor protection should be placed on a par with learner protection and the other suggesting that creditor protection should be prioritised over learners. The others that responded to the consultation supported the premise of learner protection or were silent on the point.
As was set out in our response to the consultation, it is right that learner protection is prioritised and that approach is widely supported, even by other creditors. That is the point of the special objective. A few pension funds also questioned not limiting the length of the time for a SAR. We are clear that this is so as to not constrain the education administrator. In reality, an education administration may well last a similar length of time to an ordinary administration. Ordinary company administrations often last at least 12 months and then are often extended for a further 12 months or so, so an education administration lasting this length of time would not be unusual for insolvency proceedings. Several pension funds, as well as other creditors, sought greater certainty on how a SAR would be funded, and the Government responded by providing additional flexibility in the funding power set out in the Bill, removing the requirement that loans from government be made on a basis of priority to other creditors. So the Government can choose, in each individual case, to pay for the costs of the SAR up front by a loan and to not require that loan to be repaid unless any funds remained after other creditors had been paid out, meaning that the assets normally available to creditors remain available to creditors in the usual priority. This will be a matter to be decided case by case, but it does not appear that all pension funds have taken this change from the stricter position in normal insolvency into account in their assessment of the risk.
With regard to the wider issues, which go beyond the scope of the amendment, I hope that I have been able to reassure noble Lords. If there are issues outstanding, I shall write to noble Lords and place a copy in the Library for the benefit of all. On that basis, I hope that the noble Lord withdraws his amendment.
Lord Watson of Invergowrie
I thank the noble Baroness for that comprehensive response. On the first part of the response relating to the amendment, to a significant extent she repeated the words of Mr Halfon in another place but, equally, she repeated his failure to give a reason why this should not be in the Bill. She said that the Government propose to adopt similar provisions—
Baroness Buscombe
I may not be able to reassure the noble Lord, but we simply do not feel that it is necessary to have this in the Bill.
Lord Watson of Invergowrie
Yes, but that is not giving a reason. The proposal is very important, and it fits in with the provisions in Clauses 25 to 28. No harm can be done in having it in the Bill; if it gives reassurance to those working within the sector, I would suggest that, in the absence of any reason not to do it, that should be sufficient reason for it to be included.
I accept that the other points that I raised were beyond the scope of the amendment, and I thank the Minister for indulging me in her response. I praise the perspicacity of the officials sitting behind her, who obviously had an answer pretty much prepared, without knowing that I was going to raise these issues. Maybe it just came off the top of their heads—but either way it was impressive and very detailed.
I will want to take some time to consider what the Minister said. There may well be a case for seeking a report from the Government Actuary on funds that have acted strangely because, if I heard her correctly, she said that two out of 91 funds have suggested that they foresee problems as a result of the provisions of the Bill. I had not realised that it was that narrow. There is still the potential for other funds to adopt a similar position. Perhaps they are holding fire until the Bill becomes law. Can the matter be referred to the Government Actuary for a report on the potential outcome as well as the actual outcomes? At the moment, it seems that problems are being created for some colleges. If they are mainly in the West Midlands, so be it, but the point is that it could happen elsewhere. Will she look at that possibility? On the basis of what she has said to me, we will decide whether to revisit this issue. I beg leave to withdraw the amendment.