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

Earl of Effingham Excerpts

2nd reading
Tuesday 22nd October 2024 Lords Chamber

[The Earl of Effingham (Con)]

My Lords, I look forward to hearing the maiden speech from the noble Lord, Lord Beamish. The apprenticeship model is a win-win that builds a skilled labour force while at the same time stimulating local economies and creating jobs. There are surely few better ways to foster innovation, enhance productivity and drive growth. IfATE was part of our commitment to deliver employer-led apprenticeship standards.

Since 2010, 5.7 million people have started an apprenticeship—our system is working, and we were on track to building a skills and apprenticeships nation. We would have increased investment in apprenticeships to £2.7 billion per year by 2025. Leading companies agree with our policy: Amazon, Specsavers and Premier Inn all make the most of their levy funds to recruit talent. In fact, 98% of the apprenticeship budget was spent over the last two years.

More than 690 apprenticeships are now available for a broader variety of jobs than ever before. We train nurses, lawyers and scientists, with around 750,000 people currently on apprenticeships. These apprenticeships are all designed by employers, so apprentices can be confident that they are learning skills valued by businesses. A national survey of apprentices revealed that 92% of respondents felt that the employer-defined knowledge, skills and behaviours they are required to learn through their apprenticeship would equip them to succeed in the future, while 80% said they felt empowered to have successful careers in their industry.

One has only to look to Preston in Lancashire, where BAE Systems has a vast college in which it trains apprentices on its fighter programmes, or to Barrow-in-Furness in Cumbria, where they train on submarines. BAE’s number of apprenticeships has nearly tripled since 2017. Higher apprenticeship levels 4 to 7, from foundation degrees to master’s level, increased from 27,000 to 112,000. These levels give apprentices the opportunity to earn a degree, combined with enjoying many years of work experience at top UK firms, and the benefit of avoiding taking on significant student debt.

In February this year, BAE Systems and the University of Portsmouth launched the UK’s first ever degree apprenticeship in space systems engineering. Not content with stopping at space systems, IfATE is also helping heritage industries such as stonemasonry. In 2020 just one person took up an apprenticeship. Last year, that number jumped to 53. In March this year, we pledged to create a new £60 million investment fund to enable up to 20,000 more apprenticeships, including for young people and small businesses.

Our record speaks for itself, so we have concerns around various proposals in the Bill. It is not yet clear whether Skills England will be established in statute as IfATE was, which raises questions about its independence from the Department for Education and its ability to galvanise other government departments. How will it be able to pitch for the money needed from the Treasury to fund the skills gap that we know we have? Can the Minister please enlighten the House on this?

Clause 4 gives the Secretary of State the power to prepare apprenticeship standards either herself or to commission others. It would therefore technically be possible for an apprenticeship standard to be prepared without the input of employers, providers or industry groups. The Secretary of State could even close down or fundamentally change Skills England without the consent of Parliament. Can the Minister explain what failsafe measures will be put in place to avoid this happening to the detriment of employees, employers and the many people who currently benefit from the apprenticeship programme?

There are concerns that the Bill may decrease the standards of technical qualifications because Clause 6 removes the IfATE requirement that reviews of approved technical qualifications should happen at regular intervals. The reason given in the Explanatory Notes is

“to enable flexibility to review standards according to priorities and employers’ needs”.

But how can the Government guarantee to maintain the high standard required if this clause is left in place? A regular review process significantly improves performance via proactive feedback, identifying areas for improvement and setting clear and achievable goals. We designed an apprenticeship programme to encourage personal and professional growth, which ultimately leads to enhanced productivity and job satisfaction. Will the Minister please explain whether there will be a guaranteed minimum amount of reviews per annum?

The Bill’s impact assessment states that there may be a drop in apprenticeship starts while IfATE’s functions are transferred to the Secretary of State and, ultimately, Skills England. It states that this will disproportionately impact adult apprentices and disadvantaged learners and regions. AI and technology are transforming the nature of work and the skills people need to be successful. Many older people need help to be better with technology. We have more than 5 million older workers in the UK who are thinking of retiring early and, of those, circa 500,000 said that they could not keep up with the skills needed. These are the people who will be hit, according to the impact statement. What assurances can the Minister give us that this negative impact will be mitigated as much as possible?

There are also concerns that the unions will have a disproportionate influence over Skills England, to the detriment of employers. The senior deputy general secretary of Prospect welcomed the launch of Skills England, but argued that it

“won’t achieve its objectives without engaging and involving trade unions at every level”.

What reassurances can the Minister give the House that there will not be undue involvement of the unions, to the detriment of employers and learners?

The Government have said that they will build 300,000 new homes every year, but we do not have the electricians, plumbers, bricklayers or roofers needed to build that number of homes every year. Their skills cannot be conjured up; they need training and apprenticeships, which take time.

In March this year, the current Secretary of State for Work and Pensions announced that Labour would fund 1,000 new careers advisers in schools and a number of employment advisers in new young futures hubs. The Government committed to 1,000, but what is the timetable for getting them all in place?

In the Government’s manifesto, they set out plans to reform the levy and allow businesses to use 50% of their funds for non-apprenticeship training. But analysis has shown that, if you allow employers to use half the funds for other skills training, you materially reduce the number of apprenticeships. Are the Government still taking this course of action and, if yes, why?

Apprenticeships and technical qualifications are the engine room of the UK economy. A successful programme leads to innovation, productivity and growth. This must work, so that everyone in the country feels the benefits. We very much look to forward hearing from the Minister on our concerns.

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

Earl of Effingham Excerpts

Consideration of Commons amendments and / or reasons
Wednesday 30th April 2025 Lords Chamber

[Lord Storey (LD)]

My Lords, it is not often that you are involved in a Bill and everyone agrees what the outcome should be and realises that the issue is more important than anything else. I commend the Government for coming into office and realising straightaway that, if we are to get economic growth, we need the skills to provide it. The noble Lord, Lord Aberdare, was quite right to say that it is not only about having a set of skills and saying that this is what we as a nation need; we need it regionally as well. The needs of the north-east will be very different from those of, for example, the north-west or the south-east.

I hope we can now get on with the job of delivering this. I thank those with whom we have worked closely: the noble Baroness, who has jetted back from Australia, where she has picked up some ideas on skills; and the noble Lord, Lord Aberdare, who has been stalwart in bringing us together. I particularly thank the Minister for always giving of her time to listen to us—to both disagree and agree. Finally, I must not forget to thank the Bill team for their work, and Adam Bull in the Lib Dem Whips’ Office.

[The Earl of Effingham (Con)]

My Lords, I thank the Minister and all noble Lords who have been involved in the passage of the Bill. His Majesty’s Official Opposition remain concerned that the Government have removed the amendments in the name of my noble friend Lady Barran. Other noble Lords also expressed concerns that Skills England will be overly focused on administration, resulting in it being unable to prioritise its central strategic tasks. By allowing a year to pass between the creation of Skills England and the abolition of IfATE, we would create sufficient time for the effective transfer of functions and ensure that Skills England could take on its role successfully.

We would suggest that it is a mistake for the Government to ignore these concerns. In both your Lordships’ House and the other place, there has been cross-party support on this issue, and we cannot hide our disappointment that the Government remain unconvinced on this focal point. We on these Benches are worried that the transition period as planned will have a damaging impact on apprentices.

At the same time, we recognise that this is a manifesto commitment. We will, of course, while challenging constructively, work with His Majesty’s Government to progress their skills programme, and we do not intend to push this issue any further. We will continue to remain vigilant on the transition to Skills England and ensure that it is working for the very people it aims to help. Should our concerns increase, we will endeavour to raise them in your Lordships’ House. It is now up to the Government to ensure that Skills England is able to run effectively and does not become overwhelmed with the weight of the accreditation and assurance process.

We are indeed grateful that His Majesty’s Government have listened to some of the key points that have been raised across your Lordships’ House, and the Bill has been strengthened accordingly. A report on the exercise of functions conferred or imposed on the Secretary of State has now been included, which is important for accountability. The Government have listened to the concerns about the Secretary of State preparing apprenticeship plans and assessments, and will, as such, publish information about the relevant matters that have been taken into account.

We thank the Minister for her engagement throughout consideration of the Bill, and we thank all noble Lords who have made such valuable contributions and worked constructively on its scrutiny.

[Baroness Smith of Malvern (Lab)]

My Lords, I am grateful for the support of noble Lords and the continued challenge of those who have made the Bill better during its passage through this House.

On whether Skills England is ready, I reassure noble Lords that it is ready to take on the functions currently exercised by IfATE, where appropriate. Detailed transition plans are in place to ensure continuity throughout the transition. There will be continuity in staff and team structures, which will ensure a smooth operational transition and maintain vital links to employers. Staff are eager to contribute their expertise and valuable insights, to feed into Skills England’s broader purpose from day one.