Technical and Further Education Bill

Kelvin Hopkins Excerpts

Money resolution: House of Commons & 2nd reading: House of Commons & Programme motion: House of Commons & Ways and Means resolution: House of Commons
Monday 14th November 2016 Commons Chamber

[The Secretary of State for Education (Justine Greening)]

I beg to move, That the Bill be now read a Second time.

The background to the Bill is that the Government have worked tirelessly over the past six years to embed our school reforms so that we can raise standards and ensure that an excellent academic route is open to all students. That work continues. Thanks in no small part to the hard work of the teaching profession, over 1.4 million more children are now being taught in schools rated as good or outstanding compared with 2010. This is vital if we are to be a country in which everyone not only has a level playing field for opportunity, but has their potential unlocked and can thereby do their best. This transformational progress has been great news, particularly for those young people who choose to build on their time at school by pursuing an academic route through Britain’s world-class universities on their way to joining the workforce and making a contribution to the economy. The truth is, however, that half—last year, most—of our young people, often those from disadvantaged backgrounds will choose not to go to university, but to follow a less purely academic route, or perhaps one that plays to their individual strengths, talents and interests.

[Kelvin Hopkins (Luton North) (Lab)]

The Secretary of State will know that we are failing nationally to train enough graduate engineers to serve our own needs. One reason is the teaching of mathematics and the failure of young people to acquire skills in that subject. A lot of effort has been put into improving the quality of mathematics teaching in schools. Are we now starting to see the fruits of that extra effort?

[Justine Greening]

I believe that we are. Not only have we seen investment in more effective mathematics teaching—through some of the Mathematics Mastery work, for example—but we have tried to widen participation by making sure that girls do maths and science courses, thereby better balancing our engineering careers between men and women. Alongside that—this is why the Bill matters so much—we must recognise routes into such professions that are not purely academic which, for many of our young people, will take the form of technical education.

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[Tristram Hunt (Stoke-on-Trent Central) (Lab)]

It is a great pleasure to follow the hon. Member for North Swindon (Justin Tomlinson).

I do not see many exciting opportunities arising from the UK’s decision to exit the European Union, but if we are feeling optimistic, as I always try to be, a rebalancing of educational provision and opportunity is one of the elements that we need to look to as we think about a new political economy for the United Kingdom, and part of that has to be a more effective technical and vocational education system.

In his great work “Our Kids”, which I urge the Secretary of State to read if she has not already done so, Robert Putnam charts the decline of social mobility in rust belt America, hinting at what has happened in recent days. He is clear that if people are interested in tackling inequality and promoting social mobility, the two areas to focus on in respect of Government provision are high-quality early years support and an excellent system of technical and vocational education. Those are the two elements that really make a difference in terms of inequality.

[Kelvin Hopkins]

My hon. Friend mentioned Brexit. Since the referendum, the pound has depreciated to a much more sensible level, such that manufacturing is starting to grow. Does he agree that it is vital that as manufacturing returns to its previous strength, as we hope it will, we have a good technical education system so that we can provide industry with all the skills it needs?

[Tristram Hunt]

I knew I would not get away with my Brexit comment with my hon. Friend sitting there. Yes, we need to provide the human capital to revive our manufacturing industry and to make sure that we succeed, but in the modern era of manufacturing, with components coming from across the single market, we are going to take a hit on inflationary pressure in relation to some of the manufacturing competitors—

[Kelvin Hopkins]

rose—

[Tristram Hunt]

But we are not going to go down that road too quickly.

I welcome large parts of the Bill. It is good to see the focus on technical and vocational qualifications. I pay tribute to the work of Lord Sainsbury, and in so doing alert the House to what is in the Register of Members’ Financial Interests. He has been a passionate supporter of technical and vocational education, and his time as science Minister taught him that one of the blocks for achieving excellence in British science was making sure that we have not just top-flight research chemists, physicists and biologists, but high-quality technicians in our science-based industries. We are not producing those level 4 or 5 qualified technicians who are fundamental to the success of the science base.

As my hon. Friend the Member for Wolverhampton South West (Rob Marris) pointed out, productivity and economic growth demand that we invest more effectively in technical and vocational education. We should also see it as an opportunity. The Edge Foundation has shown time and again that we are going to see a huge growth in jobs in science, engineering and technology, and we need to provide the professionals to fulfil those opportunities. Much of our education system works against that. Whether we think of Progress 8, EBacc or the Ofsted inspection requirements, we have on the one hand a demand for an education system almost on the model that the British set up in Germany to provide our technical and vocational system, and on the other hand every element of incentive in our education system working strongly against that.

I am excited by the addition of the technical component to the Institute for Apprenticeships. I urge the apprenticeships Minister to visit the institutes of technical education in Singapore, which are doing a phenomenal amount on cutting-edge technical and vocational education, as that economy, too, begins to think about the kind of provision it needs to fill the skills gap and about the very demanding requirements on the sector.

My reservations are as follows. First, having the divide at 16 is a missed opportunity. My passion in the next few years will be to see whether we can create a consensus in this House on committing ourselves to ending GCSEs by 2025 and to getting rid of a school leaving qualification for people who do not leave school. We should strip out an examination that is an anomaly across Europe and America and that is not providing our education system with the academic or technical, vocational learning it requires. I urge the House to think much more creatively and imaginatively about having a 14-to-19 framework that includes an academic baccalaureate and a technical baccalaureate. That would get over some of the criticisms levelled at the Bill about having too narrow a focus on educational provision from 16 to 19. A broadly constituted baccalaureate between 14 and 19 would work, so I urge the Secretary of State to think big and to set up some kind of bipartisan thinking about how we—in exactly the same way that countries such as Singapore and Finland manage their education systems—can reach a national consensus in a decade that the GCSE model, having served its time, is no longer necessary. The introduction of differing pathways at 16 in the Bill is interesting, but I urge us to think now about how we put that upstream and have some of those differing pathways from 14 to 19.

Secondly, following on from my comments to my hon. Friend the Member for Bristol South (Karin Smyth), careers guidance is so important in this. When we think about accessing UTCs or further education colleges, having decent and effective careers guidance is really significant. The last Secretary of State had a clever plan —a sort of careers guidance and business thing—that was going to work. I do not know what has happened to it, or whether it is coming under review by the new Secretary of State, and I more than accept that there was no great golden age of careers guidance, but if we want technical and vocational education to work, we must have effective careers guidance. We have to make sure that parents and young people not only have the career immersion in primary school, but have effective careers guidance early on in secondary. That is the way they can access FE and UTC provision.

Thirdly, the Secretary of State valiantly defended retakes for English and maths GCSEs. I want English and maths to continue in education until 18, but—I see this in my constituency, and I think colleagues see it in theirs—young people are retaking and retaking GCSEs on a highly academic syllabus, which the right hon. Member for Surrey Heath (Michael Gove) introduced. We can debate its merits, but it is really not useful or effective in terms of young people’s career pathways. What these young people need is a good level 2 post-16 qualification that gives them the English and maths skills they need, but does not give them an academic syllabus that they do not necessarily require. I am all for people pursuing the academic pathway, just as much as the technical, vocational pathway, but if we are forcing them to do that at great expense, and causing them to be frustrated about their learning, that is one element of the previous Secretary of State’s system that the current Secretary of State might want to think about.

When it comes to technical and vocational education, we create a lot of institutions: UTCs, FE institutions and career colleges. As I understand it, UTCs were not part of the FE review, so we have divided up the review of further education colleges without taking account of UTC provision, even though there is a lot of crossover between UTCs and further education colleges. In Sheffield, for example, the further education college sponsors the UTC. If the Secretary of State is looking for savings, overprovision and institution-building are prevalent in the English education system, and a bit of co-ordination among those institutions would be a good idea.

That leads me to my final point, which is that the best way to achieve that aim is to devolve educational provision. We are beginning to devolve skills policy to combined authorities and directly elected mayors, but we need to think much more creatively about devolving schools policy to directly elected mayors and combined authorities. The needs of the Cornish economy are different from the needs of the Birmingham economy, which are different from the needs of the Northumbria economy. If we devolve some of the authority to a local level, we will end up with a more effective technical and vocational education system.

I admire some of the principles in the Bill, and I admire the direction of travel, as we now say. I urge the Secretary of State, as she begins to think big, to push this upstream and think about the 14-to-19 technical and vocational pathways.

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[Peter Kyle (Hove) (Lab)]

It is a pleasure to follow my hon. Friend the Member for Scunthorpe (Nic Dakin), who shared with us his professional experience of guiding many young people towards the paths that they need to take. It is a shame that we have not given greater priority to further education in the past, because the skills challenge that we face remains acute, as it has been for a very long time. My hon. Friend the Member for Ashton-under-Lyne (Angela Rayner), the shadow Minister, shared with us her own rocky path from secondary education to a career and secure work. A number of people find it a difficult path. That is the challenge that the Bill seeks to meet, and many of us are supportive in respect of both the path and the challenge.

I left my school in Bognor Regis—ironically, the constituency of the Minister for School Standards—with almost no usable qualifications. I had to return to secondary school at the age of 25 to obtain the qualifications that I needed in order to return to the education system. I know from first-hand experience that for many young people, the door to education is slammed shut and needs to be broken down. We all tend to assume that the doors to education, and indeed to all our public services, are open all the time. I am very keen to remind Labour Members, as well as others, that doors are often shut and that it is our job to break them open, rather than expecting individuals to remove the barriers to getting the best out of our public services the first time round without waiting for the second.

[Kelvin Hopkins]

My hon. Friend is making a strong point. Some years ago, funding for adult education at sixth-form colleges was taken away. Excellent teachers and wonderful facilities are no longer used in the evenings, which used to enable adults to go back and take A-levels, for example, and possibly go to university after that. The door was shut very firmly some years ago, and it should be reopened.

[Peter Kyle]

My hon. Friend makes a good point.

This door being slammed shut, often in the faces of young people who do not have the skills to break it down or a background that encourages them to break it down, is one of the reasons why we have ended up with a society where those who are asset-rich will succeed in life and those who are talent-rich but asset-poor will very often not succeed. That is why it is incredibly important that we get this Bill right. It is of paramount importance for the Government’s plans for technical education, apprenticeships and the apprenticeship levy, which is now only a matter of months away from being launched.

It has long been my view that the levy as currently formatted is too rigid to fully take into account the skills challenges facing our country. When taking evidence on the issue of skills as a member of the Select Committee on Business, Innovation and Skills and as chair of the all-party group on further education and lifelong learning, it became clear that some sectors will struggle with the way the levy is currently formulated. The technology sector, for example, needs to invest very early, right back to the early years. I have visited many technology companies that are investing in nursery and primary education, and in secondary education. It is a sector that needs programming skills, and it needs imagination, flair and creativity in the way that people develop those skills. Often in such sectors post-16 is just too late. I support the apprenticeship levy, but we need to get it right, and if we are not careful we will end up with a perverse incentive in the system whereby technology companies are forced to invest in post-16 education, and in order to pay for it they will be withdrawing their support for pre-16 education, which would be a tragedy for our economy, particularly in the post-Brexit era when we might find that such companies struggle to secure investment and recruits from abroad with the right skills. We are entering tricky territory and we need to get this right first time. On mention of the word “Brexit”, I am very pleased to see my hon. Friend the Member for Luton North (Kelvin Hopkins) is still in his place.

It also concerns me that existing spending on employer-sponsored degrees or graduate schemes will not be recognised by the levy. That risks closing those routes in favour of what could be entry-level apprenticeships in order for companies to get back what they pay for the levy. The Bill creates an institute for apprenticeships that also covers technical education. I want to see that institute play a strong role in ensuring that standards remain high in apprenticeships and technical education. I still have real concerns that the levy, along with the Government’s pledge to have 3 million apprenticeship starts—starts, not completions, I note—risks incentivising a dash for quantity rather than quality.

I listened with great interest to the hon. Member for North Swindon (Justin Tomlinson), who made a fantastic contribution about the role of apprenticeships in providing productive pathways into the workforce for people with disabilities. At a recent surgery I was visited by the mother of a young woman who is trying to apply for an apprenticeship. She has a very specific disability that has always prevented her from succeeding in maths. It is an extremely difficult disability for her to live with, but all through the education system she has been provided with specialist support and allowances that have enabled her to succeed. However, she cannot apply for any apprenticeships because she does not have the maths qualification. She is applying for a dog grooming apprenticeship. It seems absurd to me that she is prevented from taking this incredible pathway into work because of her disability. I have raised this with Ministers in writing, and I hope that in his winding-up speech the Minister will show a willingness to inject a little common sense for those few people who struggle with the current system. Although this has an impact on very few people, it is a profound impact.

I have pressed the previous Secretary of State and the previous Minister for Skills on these matters. I should like to join other Members in wishing the hon. Member for Grantham and Stamford (Nick Boles) well. He stood as a parliamentary candidate in Hove in the 2005 general election, in which I played a key role in the winning candidate’s campaign. I got to know the hon. Member well at the time, and I say with all sincerity that I and all those who worked on the campaign wish him a very speedy recovery.

I pressed him and the then Secretary of State to introduce a target for the number of apprenticeship starts at level 3 and above, because that is where the training will really address our skills needs. It is nice to know that someone has been reading all the parliamentary questions that I have been submitting on this subject, because the Policy Exchange’s report on apprenticeships, which was released on Friday, calls on the Government to do just that. I hope that the present Minister will take heed of that report. I would support him in embedding targets for quality as well as quantity in the Government’s plans.

I have also pressed the Government to set a target for apprenticeship completions, which I am sure we all agree is the key figure. There is no point in getting 3 million people to start apprenticeships if a significant number of them simply drop out. The Minister has not previously shown any interest in setting a target for completions, but I noted that the Secretary of State was more conciliatory on this point when responding to an intervention today. I hope that means that the door is still open and that such a target will now be considered.

The Institute for Public Policy Research report calls for an assurance that the Institute for Apprenticeships and Technical Education will have the necessary resources and power properly to enforce quality standards. I totally agree with that. Only last week, I asked the Minister for details of the staffing levels for the institute. I hope that we will get clear answers to these questions during the passage of the Bill. Given the imminent closure of the UK Commission for Employment and Skills, which did a great deal of work with employers to utilise labour market information to map out skills gaps and sectoral needs, it is vital that the institute is able to fill that void. If it cannot, we will be much worse off.

The Bill also introduces a new insolvency regime for FE colleges, with the aim of protecting students if such an institution should become insolvent. The Government say that this follows on from the area reviews, which aimed to ensure that all FE colleges within a certain area were on a solid financial footing. In Brighton and Hove, we are lucky to have three excellent colleges: BHASVIC, City College and Varndean College. Our area review, covering Sussex, started last year, but despite an expectation that the final report would be published some months ago, it still has not seen the light of day. I hope the Minister can offer some reassurance to me and my neighbouring MPs, as well as those in other areas who are waiting for their reviews to be published, that they will be released shortly. Providers and students are anxious to know what the future holds for the institutions in which they work and study. In the Budget in March, which feels like a very long time ago, the Government pledged to

“review the gaps in support for lifetime learning, including for flexible and part-time study.”

Will the Minister update us on that, too. When can we expect the results of that study?

I welcome the Bill as a chance to focus on technical and further education, which often feels neglected in the overall educational landscape in this place and beyond. However, the Bill and the Government’s policy priorities leave a lot of questions unanswered, and I hope that the Bill’s passage through Parliament will give us a chance to remedy that.

[Kelvin Hopkins (Luton North) (Lab)]

It is a great pleasure to speak in the debate and to follow my hon. Friend the Member for Hove (Peter Kyle). He is currently the chair of the all-party parliamentary group on further education and lifelong learning—a job that I had many years ago. I have had a long association with the further education and post-16 sector. I taught in further education more than 40 years ago, and while I was teaching a basic statistics course I discovered that one of the major problems with education in Britain is the poor level of mathematics teaching. The students I taught had difficulty with basic computation, multiplication and division. I found that quite shocking at the time, but the problem has continued.

Some 20 years ago, the great Lord Claus Moser produced a report on numeracy and literacy, finding that more than 50% of the population was functionally innumerate. He illustrated that point by saying that 50% of the population did not understand what 50% meant, which is quite surprising—if not shocking. More recently, I asked the former Secretary of State, the right hon. Member for Surrey Heath (Michael Gove), why we were having to recruit so many qualified engineers from abroad and he said that it was because our mathematics is not good enough to produce sufficient engineers. There is a serious problem.

[Rob Marris]

Does my hon. Friend agree that part of the problem with mathematics is down to English culture? It is still acceptable for people to say words to the effect of, “Ooh, I don’t do maths,” without that being seen by their interlocutors as an admission of abject failure. It is just seen as a bit of a joke. It is a cultural problem. This is about not only the education system, but our culture, particularly in England. It is appalling.

[Kelvin Hopkins]

I agree with my hon. Friend, but it is changing and I am optimistic about that. People such as me who are good at maths are regarded as being a bit of a geek, but what is wrong with being good at maths? In the country of Isaac Newton, Isambard Kingdom Brunel and Alan Turing, why should we be ashamed of being good at maths? That is being addressed, but we are still having to recruit thousands of engineers from abroad because people cannot do the maths to become engineers through our education system.

As I said, I taught in further education 40 years ago, but I also spent four years as chair of governors at the then Luton College of Higher Education when we were producing hundreds of qualified engineers doing ONCs, HNCs and then AMIMechEs and so on. They were good engineers and they could do the maths. It may just be that we have declined in some areas because the manufacturing demand is not as great as it was. We are now trying to pick up the manufacturing sector again and we are realising that we have missed out on maths.

I am happy to say that Luton College of Higher Education went on to become the University of Luton and then the University of Bedfordshire. The vice-chancellor is now Bill Rammell, a former colleague in Parliament, and its chancellor is Mr Speaker—the greatest honour of all—and I am absolutely delighted about that. I have also been a governor of the superb Luton Sixth Form College for 25 years. It does brilliant work and gets better and better every year.

Barnfield College is also in my constituency. A dozen or so years ago, it was the first ever general FE college to be given beacon status, but it went into serious decline and wound up almost collapsing into a state of failure a year or two back. It has now been picked up by its great new principal Tim Eyton-Jones and I am sure that it will be revived, but it needs Government support. It should never have been allowed to get into that situation. The neglect of colleges was criminal. Barnfield is now on the up and will be great again, but it needs the active support of Government, particularly in finance.

In Parliament, I was for some years chair of the all-party parliamentary group on further education and lifelong learning—lifelong learning is also important—but I am now chair of the all-party parliamentary group on sixth form colleges and am pleased about that. Colleges in general, FE colleges in particular, have been neglected over decades. Colleges represent an abused sector of education, and one reason for that is that so many people in the political sphere have no connection with further education. They go to posh schools—grammar schools, public schools, whatever—and then to university. Indeed, some become special advisers—a former Spad is in our midst now—and then go into politics never having touched further education or understood what it is about.

[Rob Marris]

Does my hon. Friend recall the reorganisation of Government Departments in about 2007—sadly under a Labour Government—when the Department for Innovation, Universities and Skills was set up? It took a week for the Government to realise that they had not put further education in either of the two possible Departments.

[Kelvin Hopkins]

There is another story, which may not be true, about what happened when incorporation was introduced in 1993. When the legislation was going through, the then Education Secretary was asked what was going to happen to sixth-form colleges and he said, “Oh, shall we put them in the FE sector?” It was a last-minute thought just to drop them into that sector. Sixth-form colleges are really schools and had they stayed with the local education authorities, we would by now have a lot more of them because LEAs would never have given away all the sixth-forms from their schools to create new sixth-form colleges because they were a different, independent sector.

Unfortunately, LEAs, and indeed, councillors are possessive about their institutions and do not want to give them away. I have experience of that, because when I was chair of governors of the Luton College of Higher Education, we had a battle royal to get that college into the higher education sector—out of LEA control and into the Polytechnics and Colleges Funding Council. The chief education officer threatened to sack the college principal for pursuing that avenue, and I had to intervene to say to the CEO publicly, “If you sack the principal, you will have me to contend with and I will fight you all the way.” He backed off and we got what became the University of Luton and, subsequently, the University of Bedfordshire. LEAs are, understandably, possessive and they are not going to give away their sixth-forms to move towards sixth-form colleges. Had they done that, our education system would be much better, but that is another story.

[Simon Hoare (North Dorset) (Con)]

The hon. Gentleman makes an important point about people’s understanding or experience of the FE sector, but may I just invite him to reflect on the statement he made a moment or so ago? He said that the Conservative Benches are full of posh boys and girls who went to posh schools. A good four or five of us sitting on the Parliamentary Private Secretary Bench this afternoon paid no fees at all for our education and are products of state school, hard work and good teachers.

[Kelvin Hopkins]

I thank the hon. gentleman for his intervention, but I think the majority of Members, probably on both sides of this House, have not gone through the further education sector. A small number have, and they understand this, but a high proportion are not very familiar with FE and the vast contribution it makes to our society, in all sorts of ways.

[Karin Smyth]

I agree with my hon. Friend. I went to an FE college to do my A-levels, but what he is saying applies not just to politicians, but to people in our media, our legal establishment and throughout other walks of life. They do not have experience of going through that sector, which means that it is often the forgotten sector.

[Kelvin Hopkins]

I agree with my hon. Friend about that, and of course another cultural factor is the fact that we are not aware of things. As my hon. Friend the Member for Wolverhampton South West (Rob Marris) says, there is this idea that mathematics is something we do not do; we say, “Oh, I can’t do maths”. People do not boast about how they cannot read. I want to make sure that everybody can read, and we should have adult education to make sure that everyone can. There is a problem with our mathematics, and I invite Ministers and shadow Ministers to visit the wonderful sixth-form college where I am governor to find out how to do things well, because so much that goes on in our college is brilliant.

[Lucy Powell]

My hon. Friend is making some good points. I did an A-level in not just maths, but further maths. [Hon. Members: “Ooh!”]

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[Lucy Powell]

I find myself feeling how I did during my A-levels, when I was the only girl in the class doing science A-levels—it has taught me well for this place. Does my hon. Friend the Member for Luton North (Kelvin Hopkins) agree that the issue of maths teachers is now a looming crisis in this country? Someone who has a first or a 2:1 in maths is a very desirable potential employee, and therefore the teaching route is just not as attractive as it once was and we are facing a crisis in maths education.

[Kelvin Hopkins]

My hon. Friend is absolutely right about that. One of the most interesting things about Britain is that we produce more accountants than almost any other country in the world. People who are numerate can become an accountant and with an accountancy qualification they can earn a lot more money than they can by being a teacher. An accountancy friend of mine said years ago, “The reason we have so many accountants in Britain is that we are so bad at maths, we need accountants to do our work for us—our tax returns and so on.” I am digressing.

[Oliver Dowden (Hertsmere) (Con)]

The hon. Gentleman mentions teaching, and I have been waiting patiently for him to refer to his own experience of teaching at the excellent Oaklands further education college, to which many of my constituents send their children. As a comprehensive-educated special adviser, there I got a lot of experience of the excellent education one can get at a further education college.

[Kelvin Hopkins]

Indeed. In my day, it was certainly an excellent college and we did our very best.

I keep digressing from the points I am trying to make. One problem we have is that we try to pick up problems in mathematics post-16, in further education—as shown in Alison Wolf’s report—when the real problem is lower down. If someone misses out on maths in primary education, they will have much more serious problems later on. Picking it up later is much harder than picking it up at six, seven, eight or nine. My two granddaughters are studying at a wonderful school, and they are very good at maths. One was doing her long division, or whatever, yesterday, and she got everything right, because they are being well taught now. I hope that that will feed through the system, but it certainly was not the case all those years ago when I was teaching.

At the sixth-form college—I hope that this can happen in FE colleges as well—we are putting massive resources intensively into retakes for GCSE maths. The retake results, as in most places, were appalling until about two years ago; then we introduced a system with extra resource and the best possible teachers and we doubled the pass rate for GCSE retakes. That means that many more youngsters can go off to university or to apprenticeships with a maths qualification at A to C. It can be done, but it is hard work and takes more resource. I hope that the Government will recognise that. If they want to get the maths results up post-16, resource has to be put in. That means recruiting more teachers and ensuring that we have the best teachers teaching maths—people like my hon. Friend the Member for Manchester Central (Lucy Powell), who feel comfortable with the subject. Someone who is comfortable with maths is more likely to be a good teacher of maths than someone who feels uncomfortable or who has it as an add-on to something they have been doing elsewhere.

There are many other points I wish to make, but some have been made by my hon. Friends and by honourable colleagues on the Government Benches. The contribution that sixth-form colleges must make to our communities and our economy is vital for our future. If we do not get it right, we will not have the successful future we should have. We will see a declining scientific and technical culture, which we cannot afford. We must ensure that our maths is good and that our maths teaching is good at every level. Picking it up in further education has to be done, even though it is difficult, and I support Alison Wolf and her report, but we have a long way to go to ensure that we catch up with some of those other countries.

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[David Rutley]

Indeed.

The Bill is timely. After strenuous efforts to stabilise the economy following the financial crisis, the UK faces a new opportunity—and some challenges—in Brexit. If we are to make a success of leaving the EU, it is increasingly urgent that we tackle our long-standing productivity gap compared with other leading economies. The challenge is to upskill the existing and future British workforce. It is interesting that the Chartered Management Institute says that one in four jobs was left vacant in 2015, owing to skills shortages.

[Kelvin Hopkins]

The hon. Gentleman is right to focus on our poor productivity level, but poor productivity often results from the availability of cheap labour because employers are not forced to invest in modern technology. That is a factor in the equation. Low productivity and low-priced labour are a problem for us.

[David Rutley]

The Government have already put in place improvements to the national living wage and will do more in that arena. Productivity is about a lot more than wages. From contributions that the hon. Gentleman has made in previous debates, I know that he is fully aware of that, too. The situation is more complicated.

One in four jobs left vacant in 2015 were due to skills shortages. The CBI has found that one in five employers want candidates for jobs who not only have academic qualifications but can demonstrate other skills as well. So the Government must ensure that their efforts to close the skills gap inspire and motivate those who would gain most—those in training and businesses that need their skills. If we are to strive to achieve the greater parity of esteem that we have talked about and to get businesses actively involved in education and training, we need to motivate more young people who are planning to pursue the non-academic track to gain the skills that will transform their lives. Only then will we secure the prize of greater national productivity. Wages have a role to play, but so, increasingly, does motivating young people to want to acquire these skills.

The key to promoting technical training will be the Government’s drive to provide 15 clear routes to 3 million quality apprenticeships. These routes are set out in the post-16 skills plan, which was published in July. It is a strong plan; my hon. Friend the Member for Grantham and Stamford (Nick Boles) deserves real credit for setting it out, and I join the hon. Member for Hove (Peter Kyle) in wishing him a speedy and full recovery from his current health challenges. Those routes—or “occupational categories” as they are called in the Bill—will signpost such sectors as construction, catering and hospitality, and vital ones such as engineering and manufacturing. The obvious, recognisable nature of these categories will give young people the assurance they need that apprenticeships are, and will be, focused on delivering identifiable careers and are relevant to their own fields of vocational interest. Relevance is absolutely key.

Confidence in these routes as genuine career paths can be bolstered only by involving businesses in their design. Fostering links between business and schools, and between business and the rightly reconstituted Institute for Apprenticeships and Technical Education, has never been more urgent. The Government have taken the initiative in encouraging businesses to step up to the plate and to deliver employer-led technical education that addresses the skills gap. I hope businesses will now seize this opportunity—it is vital that they do.

The Bill should be seen as part of a process of going further in breaking down the barriers between education and business—between school lessons and work experience. I have talked to my right hon. Friend the Minister about this. We need to get more young people out of school and into business, and more businesses into schools and further education. Indeed, schools themselves need to be made more aware of the options for, and the importance of, motivating young men and women in the classroom about wider opportunities to develop skills and career options.

No one in the House wants schools to feel they are being imposed on by the Bill; we want them to recognise the benefits of the Bill for the futures of the young people in their care. It is important to establish, as set out in part 3 of the Bill, an information-sharing relationship between the Department, schools, academies, colleges and other providers. Businesses, too, will need to find it easy to engage with education providers to be motivated to participate. Those relationships will need to be forged—in some cases, from scratch.

Fortunately, there is good practice—from existing schemes to introduce business skills into schools—to learn from and extend. For example, Young Enterprise and Enabling Enterprise provide teachers with opportunities to link up with business, and supply model exercises in flexible, transferable life and work skills. Young Enterprise already has relationships with over 50% of secondary schools. I shall be interested to hear—although this is not directly relevant to the Bill; it relates to the wider issue of what we can do to engage and motivate people—what role my right hon. Friend believes these schemes will play in this vital area of motivating more people.

There is much more that we need to do to close these skills gaps. In South Korea, for example, there is a clear difference between the skills gap among 55 to 65-year-olds, nearly half of whom are low-skilled, and among 16 to 24-year-olds, who have a much higher skills base. In England, however, about 30% of the 16 to 24-year-old age group and the 55 to 65-year-old age group are classified by the OECD as having low skills. It is clear that we are not closing the gap for the different age cohorts, and the Bill will be fundamental in taking that work forward.

My right hon. Friend is absolutely keen to move things forward on social mobility and to play his part in the party for the workers, which he has helped to articulate in recent years.

--- Later in debate ---

[The Minister for Apprenticeships and Skills (Robert Halfon)]

I welcome the thoughtful contributions to the debate from Members on both sides of the House.

This important Bill has two purposes: to provide high-quality technical education to students; and, when colleges are suffering extreme financial difficulties, to provide clarity in the unlikely event of insolvency while protecting students as part of the process. The Bill has the protection and best interests of students at its heart, which is why David Hughes, the chief executive of the Association of Colleges, has stated that he is

“pleased that the Government is continuing to take forward the measures outlined in the Post-16 Skills Plan”.

The Bill is vital because we face serious challenges: a chronic shortage of high-skilled technicians; acute skills shortages in science, technology, engineering and maths; and low levels of literacy and numeracy compared with other OECD countries. A number of Members have raised an important issue about maths. We do not yet require all 17-year-olds who have not achieved an A to C in maths and English to resit the qualifications. Students who achieve lower than a D grade at 16 may take other qualifications. We are looking at functional skills. I want functional skills to be better and for them to be as prestigious to employers as other skills.

[Kelvin Hopkins]

rose—

[Robert Halfon]

I ask the hon. Gentleman to hold on one second, because he said that he wanted resources for maths, and we have invested £67 million to recruit up to 2,500 additional maths and physics teachers, and to upskill up to 15,000 non-specialists. We are investing the resources.

[Kelvin Hopkins]

rose—

[Robert Halfon]

I will not give way because of the shortage of time.

A number of hon. Members mentioned the Maynard reforms. We will implement those as soon as we possibly can, particularly with regard to the issue of maths for those with disabilities. We will inform the House as progress is made.

The hon. Member for Hove (Peter Kyle) talked about the levy and technology. The thing is that if companies have apprentices, they do not pay the levy, and they get 10% on top. This is about changing behaviour and raising money to fund millions of apprenticeships in our country.

We have substantially grown apprenticeships, with 619,000 starts, which is why we have the levy. It will have an impact on employers with a pay bill of £3 million or more and help to fund the quantity and quality of apprenticeship training. We are dramatically reducing the number of technical qualifications available, ensuring even better quality for students.

A lot has been said about FE funding, but by 2020 more will be spent on FE and skills participation than at any time in our island’s history—£3.4 billion in the year 2019-20. My hon. Friend the Member for Dover (Charlie Elphicke) correctly described FE as a ladder of opportunity for young people.[Official Report, 20 December 2016, Vol. 618, c. 11MC.]

We are adopting the Sainsbury report, as has been suggested, and will put in place 15 high-quality technical routes to skilled employment. Those will be implemented by the Institute for Apprenticeships and Technical Education, which will oversee the employer-led reforms.

We are proud of the university technical colleges. There is clearly a debate here, as some Members want those for pupils at 14 and some for education at 16. That debate will no doubt continue, but we allow flexible entry to UTCs in certain circumstances.

My hon. Friend the Member for Macclesfield (David Rutley) asked about the role of business. We have created the Careers & Enterprise Company to boost businesses’ linking up with students in schools.

The hon. Member for Wolverhampton South West (Rob Marris) talked about representation. I am very keen for all kinds of organisations to be represented. I am a trade union member myself, and I am very proud that this Government give Unionlearn £12 million. It has an incredible fund that supports thousands of learners and apprentices. I very much hope that trade unions will be involved in the Institute for Apprenticeships and Technical Education. The institute will ensure that all technical provision, across both apprenticeships and college-based courses, matches the very best in the world.

Technical and Further Education Bill (First sitting)

Kelvin Hopkins Excerpts

Committee Debate: 1st sitting: House of Commons
Tuesday 22nd November 2016 Public Bill Committees

[Tracy Brabin]

Q David, I have been told that in some circumstances members of staff such as receptionists without relevant qualifications or training are carrying out careers guidance in colleges as a tick-box exercise. Are you concerned that there is no careers guidance provision in the Bill?

David Hughes: I am very concerned if that story about reception staff is true, because it is an incredibly important area of education and, of course, it does not start at 16; it starts a lot earlier. I would echo a lot of what Alison was saying. We need to think about key stage 4 rather than just look at age 16-plus, because the decisions that get made by young people and their parents and carers are critical to their future. We need to think about introducing them to the world of work rather than just providing them with some information about courses, so the work experience and work placements that the Sainsbury report and the skills plan rightly concentrate and focus on are really important to consider for key stage 4, rather than just waiting until 16. We want some of the best young people with good achievements at GCSE at 16 going into the technical route and apprenticeships rather than what we have now, which is mostly that if you do well at GCSE at 16, you take an academic route.

We know that probably about £1 billion is wasted when young people go on an academic route for a year and then move off it because they find it is not suitable for them. We need to stop that happening because that wastes money and, more importantly, young people are using up a year of their life on something that does not stimulate them or motivate them. We have got to go back into key stage 4 rather than just wait. It is critical that we get college information, advice and guidance right, but let us think about careers education through school, not just right at the end, and let us think about persuading the best young people to do technical if that is the right thing for them, because it should be high-quality to attract them.

[Kelvin Hopkins (Luton North) (Lab)]

Q What David Hughes and Professor Fuller have been saying is striking. I recall comparisons made some 25 years ago by the National Institute of Economic and Social Research and Professor Sig Prais between technical education in Britain and in Germany, Italy and Spain in particular, where they had up to 30 hours a week of contact-intensive pedagogic teaching over a period. In Britain it was nothing like that.

The underfunding of technical education and 16-to-19 education is noticeable. By contrast, at universities—I went there many years ago—you have a few lectures and a couple of seminars and tutorials, so the contact hours are much lower but the funding is much higher. Do you not think we have got this the wrong way around?

David Hughes: For lots of the technical routes, we are getting 12 to 14 hours of contact time, and that pales into insignificance compared to most of our competitors in the OECD. It is a really important issue. It is not just for technical, though; we have now got young people being offered only three A-levels rather than four AS-levels, and that is really shameful. It means that their opportunities to explore at 16 have been limited.

We really must address the investment issue to get the level of support that is required for young people. We are talking about young people who might have careers lasting 50 years-plus. They need a broad education to allow them to become learners, to think about continuous professional development, to change career probably two or three times and to be able to move when technology moves. I do not think that 12 to 14 hours of contact time for the 16-to-19 phase is enough. I do not think that the quality will be high enough or that the choice, even on A-level routes, is good enough, given the funding that is available.

Professor Alison Fuller: I am sure others will want to speak, but I would hate to say, just because we maybe think there is a big contrast in the numbers, that higher education is overfunded. I certainly would not want that message to come through.

There are a couple of other points. One is that a lot of vocational education—I still say that—happens in universities. The expansion of higher education has largely been in relation to vocational higher education courses in applied areas. A big cost of that is in equipment—lab space, technology, machinery and so on—and that same argument is behind suggesting that further education should really be better resourced. Good-quality technical education does not come cheap; the reality is that it is extremely expensive. We need very highly qualified vocational teachers—I include those who are moving in and out of employment, and I am sure Richard will speak about that, because he was part of the very influential report a couple of years ago from the commission chaired by Frank McLoughlin. It is a case of being serious about what it costs to provide a good-quality technical education, in terms of the people, resources, equipment and facilities.

[Kelvin Hopkins]

Q I wonder whether Mr Watkin would like to say something about sixth-form colleges and the squeeze on funding there.

Bill Watkin: We published a report recently about the impact of the current funding levels, which, although the Government have set them at a certain level, are set at that level following three significant cuts which have cost the sector about 17% since 2011. As David just said, we find that the number of A-levels being offered is increasingly only three rather than four; that minority subjects are being lost—it is not just the high-profile archaeology and history of art, but modern languages and sciences—and that the enrichment support, pastoral support, the activities after college and the careers guidance are all at risk because of low funding levels.

We are also finding, exactly as has been said, that international comparisons show we are not funding enough hours of tuition per week. In Singapore and Shanghai, for example, they are funded for approximately 30 hours a week, whereas in New South Wales it is 26 hours a week. In England it is about 15 hours a week. Of course, the impact of that is that students from more disadvantaged backgrounds will find it harder to use the untaught time. It is not just that there is not enough teaching time to cover the qualifications, but that the non-taught time has to be used effectively. It is much more difficult for young people from disadvantaged backgrounds to use non-taught time well.

[Kelvin Hopkins]

Q It is a major factor. When Michael Gove was Secretary of State, I asked him why we were having to recruit so many engineers from abroad. He said that we were not training enough ourselves because our mathematics was not good enough and we could not get them up to the standards required. Resource is surely what the problem is.

Bill Watkin: It is certainly one of the problems. There is also the shift in what qualifications are available. To move away from apprenticeships and technical professional education for a moment and talk about the academic curriculum, we have just seen, for example, the loss of use of maths and the loss of statistics from the range of qualifications available. That means that young people coming into a sixth-form curriculum looking to study maths only have one route available for them at the moment. That is almost a commercial decision made by awarding organisations, but it is enormously unhelpful to young people who want to support their studies in engineering and physics by following a course of maths because the only course available is an A-level in maths. We would like to see, for example, a core maths qualification and a part 2 core maths that has A-level branding and equivalence, so that there is an alternative to an A-level maths qualification.

[Mike Kane (Wythenshawe and Sale East) (Lab)]

Q This is an interesting panel because it represents sixth forms and FE colleges. In Greater Manchester, where my constituency is, further education is a devolved function but sixth forms are not. We have just gone through an area review process, which I supported. Fortunately, we have strong civil servant and political leadership in Greater Manchester, but I can only describe the process as tortuous and complicated. It has come out of a number of reviews around mergers and synergies of FE colleges—it does not affect sixth forms. You get to that position and then have to enter negotiations between the FE colleges about co-operation. That really is a process of herding cats, in my opinion. There are things I would like to say, but this is an ongoing process so I will not say them in public for now, but the Government’s area review programme is going to be rolled out in places that are less well organised than Greater Manchester. It could be a recipe for chaos. Do the panel want to comment on that?

Richard Atkins: It would be best if I started. As you probably know, I have been the FE commissioner for about four weeks. I was not involved in chairing or attending the Greater Manchester review, although I know Theresa Grant, who chaired it. I am going to Manchester in the next three or four weeks to see how things are going and to talk to the individual colleges. I sat and observed the Education Committee scrutinising area reviews about two weeks ago. Generally, I think the process has worked reasonably well. Clearly they begin from a premise that each college is an independent corporation and therefore is able to make its own views. I accept that that can lead to what you describe as tortuous negotiations, because each college needs to be convinced and persuaded of the right solution.

We have now done waves 1, 2 and 3 of the five waves. Nearly 200 colleges have been through area reviews; some 88 of them are working towards merger, 50 of the sixth-form colleges are considering becoming academies, and 62 colleges have confirmed that they want to go for stand-alone status. We have done that in a remarkably short period. Colleges that are changing the nature of what they do can apply for a restructuring facility to support that. We have done that with a remarkable amount of co-operation and good will. I do not think the process is in any way perfect or a silver bullet that will resolve all the structural problems.

It became obvious in the Education Committee that it is different in each area. There are 37 area reviews, based on the local enterprise partnership areas, and experiences genuinely differ from one area to another. If you had told me at the beginning that at this stage, two thirds of the way through, we would have 88 colleges considering merger and that 62 stand-alones have had to carry out a rigorous analysis of their own data to be sure that they can stand alone financially—. I hope that what emerges from the process is a network in which more colleges are financially sustainable. I do not disagree that having those independent corporations gives governors the opportunity to make decisions for themselves, and therefore a high level of persuasion and influence is required to try to get the best results for learners.

In my new job, with my team of advisers, I am currently seeking to ensure that as often as possible, we get the right solution. I do not think it is a silver bullet. I do not think at the end of it we will have the perfect set of colleges across England, but I do think we will be in a significantly better place than we were when the process started only just over a year ago.

David Hughes: The Government have a choice. In Wales and Scotland, the Government decided to impose structural change, and in England they did not. There are pros and cons with both. We have to remember that we have had for the past 25 years in post-16 a managed market and a managed competition. It is probably fair to say that in the past four or five years, the management bit of that has been getting smaller and smaller, so we do have competition post-16. We recently challenged a decision by a regional schools commissioner to open a new sixth form in east London, because we think that sometimes competition really goes against the interests of young people in terms of quality and breadth of curriculum.

As Richard says, the area review process has been variable across the country. In some areas, it has helped enormously to move things forward quickly; in other areas, it has been more difficult and more awkward. We have got to think about the 2,100 school sixth forms, over half of which recruit fewer than 100 learners into year 12. The Government’s guidance suggests that you need at least 200 to make it both financially and educationally viable. In our autumn statement submission, we have asked, and we keep saying again and again, that if it is right for area reviews to happen for colleges with the rigour that Richard talked about and with really detailed five-year financial plans, why not do that with school sixth forms?

We have hundreds of thousands of young people learning in very small school sixth forms; you can make that work, but it is really difficult to get the breadth and quality right. We would really like to see that same rigour applied to school sixth forms. We know that some local authorities are starting to do that themselves, and it would be great to see Government supporting that and getting a framework for it across the country. You do not have to do it all at the same time but it would be nice to see that rolled through, in the interests of young people in terms of the quality and offer that they get.

Bill Watkin: I should just reiterate the difference between sixth-form colleges and school sixth forms, because they are not the same thing at all. I entirely agree with what David was just saying. To give an example, a sixth-form college straddles—usually successfully but sometimes slightly awkwardly and uncomfortably—two sectors: the FE sector and the schools sector. A sixth-form college offers a school-type curriculum, but it does so with economies of scale. For example, I recently visited a college that has 1,000 students studying maths A-level, and another where there are 400 students studying psychology A-level. These are not the small school sixth forms that David was just talking about; they are large colleges that are incorporated and therefore usually included in considerations about the FE sector. They were also included in the area review process, and there are those who say that it was not entirely helpful not to include school sixth forms while including sixth-form colleges—that did not necessarily make a great deal of sense.

The other consequence of straddling those two sectors is the relevance of the Bill to sixth-form colleges. Much of what is in the Bill will have only a very limited impact on a small number of colleges, and most of them will not be hugely touched by it. There are two areas of particular interest to sixth-form colleges: one is the insolvency regime and the impact on their finances, and the second is the applied general qualifications, which are enormously important to sixth-form colleges. Applied A-levels, BTECs and applied general qualifications are an enormously important part of a blended curriculum offered to students in sixth-form colleges as a pathway to high-end destinations such as universities; two students recently got into biomedical degrees at Russell Group universities with entirely BTEC provision. That is the sort of curriculum that sixth-form colleges offer.

--- Later in debate ---

[Gordon Marsden]

I will not ask you about your experience with the banks.

Ian Pretty: Don’t ask! There are sections of the proposed legislation that talk about indemnities and guarantees given by the national authority, be it the UK Government or the Welsh Government. Again, that is fine. I am sure it must be giving some comfort to the creditors, but the risk, of course, is that the Government become the guarantor of last resort. It is noticeable that other sections of the legislation refer to the college that is in administration having to re-fund. It depends on the sums of money that are involved, but if you do that you run the risk of never getting out of the insolvency cycle.

[Kelvin Hopkins]

Q Two issues have been raised in the past few minutes. One is mergers, and I think that David Hughes suggested that there could be a case for not enormous colleges staying as independent colleges; some might merge, but each could be judged on its own merits. But that should not be elided with the issue of sixth-form colleges doing A-levels and the contrast with small school sixth forms. I should say that I am a 25-year governor of a sixth-form college, a former teacher in further education and the chair of the all-party group on sixth-form colleges. The statistics produced by the Sixth-Form Colleges Association overwhelmingly show that sixth-form colleges do better in educational achievements and in value for money, and the Government would do well to persuade schools, local authorities or whoever to pool their sixth forms and create many more sixth-form colleges. That would be enormously advantageous to the country, to education and to young people.

The other issue is governance, which Ian Pretty talked about. I agree strongly that we ought to have breadth in our governing bodies. I have to say that the governing body of which I am a member has invariably had at least two members qualified in accountancy and at least two with legal qualifications, as well as members from the education sector, including primary and secondary schools, and from local businesses. It is small, tightly knit, monocultural governing bodies—perhaps drawn only from small local businesses—that tend to get out of control and that do not do too well. There was one glaring example of that in my constituency—I will not mention its name, but many of you will know about it. It got into a disastrous state, although it has now been picked up by a superb new principal. That breadth of governance, with all sorts of skills as well as commitments, is crucial. I wonder whether you accept that that is a sensible way of doing things.

Richard Atkins: Shall I begin? First, on interventions and area reviews, the quality of governance is critical to the success of the college—more critical than many governors realise. I see that when I go into colleges that are not doing well. Getting the sort of governing body that you describe, with a broad base of skills and knowledge, is essential. I pay tribute to the chairs and to the role they play in the area review. They are giving up a huge amount of time and showing enormous commitment to their colleges by coming to all the steering group meetings and taking part in this. Governance is critical to the quality of colleges. I agree with David that the size of a college is not the key determinant; we have some successful big colleges, but we also have some very successful small, niche colleges. Logically, you would think “How do they survive?” but actually they are doing very well.

Another point that I did not make earlier is that, although area reviews are leading to these 88 mergers—I am thinking about the area review that we are about to start in your constituency; I was talking to the two principals last week—in some areas we are simply generating collaboration short of a merger at a level that we have not seen for a long time. I happen to know that those colleges in your area have already been to see me to talk about a new form of collaboration. If that is the best solution for that area, and the data underpin that, we will support it. Merger is not the single blind answer in every case; collaboration short of a merger may well be the best solution in certain cases.

David Hughes: I want to assert that governance in the FE sector is very strong. I know that the Minister is very interested in helping to improve it, but we have a sector with very strong governance. These are independent organisations taking big business decisions over the long term, and in the vast majority of cases they deliver a very high-quality service and achieve a surplus. For many years, in the Learning and Skills Council and the Skills Funding Agency, I did a job that was not dissimilar to the FE commissioner’s: overseeing all the colleges that were getting into difficulties. It is quite striking that, despite all the funding cuts and all the competition, there are still only 20 colleges in financial difficulties. That is a very familiar number; it was not dissimilar through the noughties and into this decade. Despite all those challenges, FE and sixth-form colleges have proved incredibly adaptable and have responded really well to the funding environment.

Let me just go back to the fact that higher education is generating a surplus of more than 4% every year. The Higher Education Funding Council for England thinks that that is a problem, because it is only 4%, but FE has had a deficit in the last two years. That is not a commentary on the lack of good leadership and governance, but on the competition and the funding levels. We need to address that; otherwise, we still will not have the technical and academic education we need for young people and adults in this country. These are really important issues. It is not easy, because the economy is not doing as well as anyone wants. We are looking to the autumn statement this week and perhaps the Budget in the spring. As Lord Sainsbury said this morning, how do you properly fund technical education in this country, possibly for the first time ever?

Bill Watkin: I will respond to your comments about the growth of sixth-form colleges in the context of the economies of scale they offer, the quality of qualifications, their outcomes and their support for young people. I would also add that, with the population shift, the number of 11 to 16-year-olds is growing.

There is an interesting example of a proposed merger between a sixth-form college and an academy chain. The school, which has a large sixth-form provision, is looking to shift all of its sixth form across to the sixth-form college, and then to build capacity for 11 to 16-year-olds to serve the community. That is an example of a successful outcome of an area review recommendation. There is also the opportunity for sixth-form colleges to roll out their successful brand and open up a free school 16-to-19 provision, as happened in Pontefract.

I am pleased that the Government are reviewing the approval process for small school sixth forms. We have been invited to contribute to that review. I sincerely hope that there will be a different way of considering applications to open up schools’ sixth forms.

Professor Alison Fuller: I certainly do not want to downplay the importance of governance and efficiency—we are talking about public money, after all—but I do not want us to lose sight of the issue of efficacy and quality, which we started the session off with. The initiatives in the Bill will potentially achieve a step change in quality if we get this right. We know how much this matters, because the population performs very poorly in the OECD’s programme for the international assessment of adult competencies survey—the adult skills survey, which is administered to 27-year-olds. The added value from 15 to 27 is very weak, in terms of the age range, when you compare us to countries that have strong upper secondary and strong vocational and technical systems. The legacy effects that we are suffering as a consequence of the current system and what happened historically are playing through into the economy, life chances and wellbeing more generally. The prize is huge, but so is the challenge. I am a little concerned that an over-emphasis on governance may deflect from the really difficult thing—the quality issue.

Ian Pretty: Can I build on the discussion on mergers, which I think is a healthy one? To me, the merger is the merger. It is very easy to say, “We are all going to merge together. It’s all going to be wonderful, and the world is going to be fantastic,” but if you look at the statistics across all sectors—commercial and public—only 25% of mergers ever achieve their objectives. Post-merger integration is the most difficult thing. Part of that is that you have to understand the logic of the merger—is it a logical merger or a “shotgun” merger?—because that can have an impact. The studies show that, when they are successful, it is because of culture and cultural fit. Within the FE sector, some colleges are more likely to be able to culturally fit with another than others.

Having been on the receiving end, when I was in government, of ministerial decisions to merge, I can attest to the fact that it is difficult. The merger between Inland Revenue and Customs and Excise was an interesting experience, to say the least—I promptly walked out the door and went to the private sector.

You have to look at the logic of the merger, and then there is the whole point about post-merger integration. We have talked about whether there is enough funding, and all that sort of stuff, but do you have the right leadership? Do you have the right cultural fit that will make the merger work? Does the merger have the right objectives?

The other thing that is worth looking at is that we see regional college groups merging, and we see alternative versions of collaboration. Devon recently announced the launch of the Devon Colleges Group. The colleges have not merged together; they are collaborating. That is quite significant. You will then see that some college groups are working very well as merged entities or as groups. Hull, for example, is a successful college that has HE sections and FE sections. Warwickshire has merged a large number of colleges together, but it has not got rid of the place. It can therefore maintain community.

Going back to one of my earlier points, it is worth looking at the experience of places like Scotland. North East Scotland College has been a highly successful regional college group around Aberdeen and Aberdeenshire, and it has campuses that are 40 miles apart and still work—it still succeeds. It is worth looking at those models, but it is about the objectives of the merger. There must be a clear post-merger integration plan, because that is where you are going to get more success, rather than just saying, “We need to knock this together to get a smaller number of colleges.”

[Justin Tomlinson]

Q Building on Ian’s comments about the mergers, we had a similar discussion this week in the centre of the universe that is Swindon, where New College and Swindon College are considering whether to merge formally, whether to collaborate further or whether to continue with the status quo. Ian highlights that the success rate is only some 25%, and it comes down to leadership. What more can be done to engage with local employers? They could provide expertise and leadership in the next wave of governors—colleges are all chronically short of that—thereby improving the culture. Crucially, that could lead to opportunities for the students later on, because too often employers are not being engaged. What more can be done?

Technical and Further Education Bill (Second sitting)

Kelvin Hopkins Excerpts

Committee Debate: 2nd sitting: House of Commons
Tuesday 22nd November 2016 Public Bill Committees

[Mr Jayawardena]

Thank you.

[Kelvin Hopkins (Luton North) (Lab)]

Q I will give a bit of background first. For 23 of the past 25 years I have been a governor of a sixth-form college and, before incorporation, I was chair of governors of a larger college of higher education, which was largely FE. In the sixth-form college we had internal expertise of the highest order. The previous experience was less good. I have said many times now that one of the important things for a governing body is for it to have accountancy expertise, with at least two independent qualified accountants and at least two independent legally qualified people. That makes a difference. In the college I am at now, the vice-principal in charge of finances is a chartered accountant and does a superb job.

Do you take an interest in the internal financial controls of colleges or do you just say, “Well, if they get into difficulty, we’ve got the security of the college assets and we’ll just take some of that”? Do you take an active interest or stipulate any kind of requirement about how finances are managed internally in the colleges?

Richard Robinson: Absolutely, yes. The quality of management and governance is one of the key criteria we look at when we are assessing the risk. We do not just lend the money and then disappear; this is a relationship for us. We go and see our college clients several times a year to talk about what is happening in their business and the challenges to the sector.

One thing we do is help management with their skill sets. For example, what has happened in the sector over the past couple of years, with the challenges it has faced, is new to a lot of managers. It has been quite difficult to manage through that process. We bring to bear the experience we have of dealing with lots of businesses to help them with that process.

We have often pointed out that maybe they do need some different experience on the board—people with different skill sets. I agree that there should be governors with a diverse set of experiences. That should definitely include accountants, as having people with financial literacy is very important.

Gareth Jones: Our approach is very much the same as Barclays, in the sense that the governance structure of the college, the key management team and our appraisals make us consider our overall lender proposal and whether we are willing to advance funds to that college. Fundamentally, it is the management who are in control of the college and their strength is strategically important to our lending decision.

[Kelvin Hopkins]

Q All that being said, I know of one college in recent times that came to the brink of disaster, until the principal was effectively chased out of town. It has now been picked up and restored but it was in a parlous situation with internal financial abuses—I can speak freely because we are private in Parliament; that is what was going on. Clearly someone was lending money to the college, presumably, but it was effectively out of control. Is that a concern to you, that such a thing can still happen?

Richard Robinson: We work very closely with the management teams and with the SFA and the EFA. If we were in a situation where we thought that the management was doing inappropriate things or had been run out of town—

[Kelvin Hopkins]

Q Even illegal things, I may say.

Richard Robinson: Even illegal. That is the sort of thing that would cause us quite a lot of concern. We have a close working relationship with the agencies and that is the sort of thing we would discuss with them. We do not have powers as a lender to remove people. We do have the ability to go and talk to governors, so if there were an issue with the principal, another of the things that we would do is speak to governors about that. We would also have conversations with the agencies. I do not know the college in question, but that does sound like an extreme position.

[Kelvin Hopkins]

Q Do you think Government ought to take much more of an active interest in what is going on in their colleges? Do you think an appropriate clause in the Bill might be helpful, to ensure that internal procedures are appropriate and disciplined?

Richard Robinson: Governors or Government?

[Kelvin Hopkins]

Q Both really: management and Government. Do you think there should be something specific in the Bill saying the sort of things I have said about having qualifications among governors and an inspection regime that works—as it did not in that case—to ensure that financial arrangements are not being abused?

Richard Robinson: I am not a governance expert, so I do not know if there is a clause that can be put in to help that. I do agree that the sector can always improve management and governance. No business can say it has perfect management and governance, so constant improvement in those is a good thing.

Richard Meddelton: I think the insertion of a clause in the Bill along the lines you have suggested would certainly help and be welcome, although, like the other Richard, I am no legal expert.

I would answer your first question in terms of how we look at the governance and management of a college. From a Lloyds banking perspective, we take a great deal of interest in the make-up of the management of the college. That would include the expertise of the board of governors. That is an ongoing practice in what we do. We have not got down to stipulating how many accountants or lawyers need to be there, but we would certainly look for a good mix, so that they are professionally managed and so that we have a fruitful long-term relationship over many years.

[David Rutley (Macclesfield) (Con)]

Q It is interesting to hear your views. It seems as if there is broad support, at least at the right end of the table, for the direction of travel here. One of the proposals in the legal framework is the role of education administrator, ensuring that the quality of educational provision is continued. Could each of the panel members describe whether they are comfortable with this role as being a helpful addition and whether it should be changed or enhanced in any way?

Richard Robinson: Obviously we know what a normal administrator does, in a normal administration situation with companies. We do not know what the education administrator is going to do, beyond what is written in here—the legal, written thing versus the practical reality. For us, the role seems to be broadly balanced between making sure that the interests of learners are put at the front, which is the right thing to do, and making sure that creditors are not forgotten. There are probably two other things that would certainly help, and both have been touched on by other people. The first is some clarity about who funds the administration—who funds the insolvent college during insolvency—because that could be for a number of years. It is very important for us to know that when making lending decisions. The second point is the legal position of secured creditors, which Richard has mentioned. Again, further clarity about that would be helpful. Other than that, I think it is pretty clear in the draft Bill.

Gareth Jones: From Santander’s perspective, overall we were supportive of the draft Bill and of that role as well.

Richard Meddelton: I have got nothing further to add.

Stephen Harris: If I can just clarify, your question was about the role of the insolvency office holder as an education administrator—

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[The Chair]

I have to hurry you, Mr Harris. We have another panel of witnesses and a question to go yet.

Stephen Harris: I cannot answer for my respected colleagues from the banks. It is an environment in which people generally try to work together to do good things for the community as a whole. We are looking here at a minority of situations—I hope it is a minority—where there will be tensions. Ultimately, lenders, taxpayers and the appropriate national authorities are all in the same country together, but I do not speak on behalf of the banks.

Richard Robinson: I think your question was about what we would like to see. All the various options that are in here are helpful; it is one of the strongest parts of the Bill. Mr Harris is right that we, as a lender, would want to work with the college and the authorities in that situation to find the most appropriate path. The issue is that it does not specify where that ranking lies. That, for us, is very important. Although it could rank at the back, it could also rank ahead of us. Obviously, being bankers, we have got to think about the worst-case scenario, and the worst-case scenario is that it is ahead of us. We are making lending decisions today for a long time in the future, and therefore we need to work on the assumption that the worst-case scenario will come to fruition.

The other point was about security. Security is important to us to ensure that we know what our rights are as a secured creditor. If the loan and the security are going to be transferred to another provider, having that option is really helpful. We would want to explore ensuring that it was in the best interests of everybody that we did that. We would also want to ensure that it was not transferred to someone we were less comfortable with. So having that legal certainty about our rights at the outset is very important to us.

Stephen Harris: I can possibly add a little more colour to this question. I was mulling this over and trying to identify in my own mind a situation in which, for totally understandable reasons, somebody might say, “I really, really want to be at the front of this queue,” in a particular situation. In some organisations you really do not know what all the liabilities are when you first approach a situation. Sometimes, when you have travelled a little way on your journey through the insolvency, you discover that there are some very unusual liabilities, which you had not really bargained for, attached to a certain site or situation.

I have some empathy with the idea that, in structuring a funding loan for an administrator early on, and not having total visibility over the level of liabilities that might rank in a particular situation, somebody might want to proceed with caution initially and perhaps take a view on things when the assignment has progressed. At moment zero you do not always know who your liabilities and your contingent creditors are. I do not know whether that is helpful context for these clauses.

[Kelvin Hopkins]

Q You are talking about lending to bodies that are in theory independent incorporated bodies but are actually largely funded by Government. Sixth-form colleges are funded entirely by the Government. That must make you feel a little more comfortable; the Government do not want these colleges to go under, so your money is relatively safer than if you were investing in a burger bar—if that went under, the nation’s health might actually improve and you would just take the assets and sell them off or whatever. How much are your lending policies influenced by the fact that these are quasi-public bodies?

Richard Robinson: It is an important factor. The income they receive comes from the Government and they are doing something that is of strategic importance to UK plc, and all of those are factors. We need to put this in context. Although it is harder for us to support them in the way we used to, that does not mean that we are not supporting them or that they cannot get money; it is just on different terms from how they used to get it in the past. The relative position is an important one and it is well recognised by us, as I am sure it is by Lloyds and Santander. That relationship with Government is one of the key strengths, and that does bear out in our risk analysis of the sector.

Richard Meddelton: I would echo the fact that they are, as you put it, quasi-Government bodies. We do take great comfort from that, as is obviously evidenced by the fact that we are a major lender in the sector.

[Kelvin Hopkins]

Q This is a bit of a mischievous supplementary question: does that mean you are less concerned about how the college behaves internally, in terms of its funding and spending, compared with a private body that might go under, where you would lose all your money?

Richard Meddelton: That is a fair question. Obviously I can speak only for my own bank on that. The answer is no, we are not less concerned. The reality is that we are lending very much on a relationship banking perspective. We are looking for longevity; we are not looking for any funding out from that. We certainly carry out the same rigorous credit and risk assessment and ongoing assessment as we would for a corporate.

Gareth Jones: The level of due diligence we apply for a further education college is exactly the same as the level we would apply to the burger bar—to return to your reference. Further education colleges might sit at the better end of the risk profile of Santander’s book as a whole, but actually the diligence we apply internally is exactly the same.

[The Chair]

If there are no further questions from Members, I will thank the witnesses. Thank you very much, gentlemen. Your agony is now over and we will move on to the next panel.



Examination of Witnesses

Shakira Martin, Shane Chowen and Bev Robinson gave evidence.

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[David Rutley]

Q Do you believe that businesses are currently engaged enough in helping to define those categories or routes, and are the mechanisms in place to ensure that will happen?

Bev Robinson: I believe it is. The panels are not there to represent a particular business. Shane alluded earlier to the fact that the panels can sometimes be too narrow, as we have seen with the early trailblazers. Lessons learned from that would suggest that you are on that panel because of your engineering expertise, not because you happen to work for AA Engineering Ltd. It is about keeping that currency and making sure that you are representing not your company but the engineering field. Also, because it is co-creation, having educationalists there as well to make sure that pedagogy is also at the heart of the design of these products.

Shane Chowen: I have nothing to add on that.

[Kelvin Hopkins]

Q A very important question: what measures should be put in place to protect the quality of education received in a college that is struggling financially?

Shakira Martin: As I said, I welcome the fact that learners are being considered in the insolvency regime. The NUS did put forward some recommendations in the consultation—I think that maybe some of that has not been considered before but, within this process, that is vitally important—of an independent FE ombudsman. When students do go through this process, if they are not satisfied with the end result, what steps do they take in appealing that decision to ensure that they get the best? At the moment there is nothing out there to represent students in that way. I am not really familiar with the HE sector and whether there is the equivalent there, but I am sure that there is probably something in place. After the process has happened and a student has been placed in a college and is not happy with that position—what next? How do they challenge that? I would strongly recommend an independent ombudsman.

Shane Chowen: For me, if it has got to the stage where there are crisis meetings looking at how to recover teachers and get students to a place to learn, at some point along the way the system has already failed. The whole idea behind the commissioner’s office, for example, is to ensure that learners are protected long before a college even starts looking at insolvency as an option. The flags that are highlighted within the Department and the Skills Funding Agency at the moment to trigger a visit from the commissioner, should offer those protections long before an insolvency process.

Bev Robinson: I agree with that; it is about early intervention, not waiting for a failure—it is seeing the signs and making appropriate interventions.

[Kelvin Hopkins]

Q Pushing that argument further, you quite rightly said that colleges are now businesses after the incorporation in 1993. They have to perform like businesses, even though they are largely publicly funded. We may have a debate about whether that was a good idea or not, but nevertheless that is the situation we are now in. If a principal wants to make money, one way of making money is to squeeze more students in per class, to reduce the quality of the teaching by having less qualified teachers, to put people on courses and not worry about whether they turn up or not—to do all sorts of things that get the money in, but do not actually do the job particularly well.

I speak from some knowledge of a case exactly like that, where a college got into a terrible crisis. The principal disappeared and is now being picked up; I will not mention any names, but you may have been aware of it—it was a notorious national scandal. What is to prevent principals, especially with weak governing bodies, from behaving like this? Many students are not in a position to challenge and staff feel nervous about challenging, because if there is a wilful principal they might choose to get rid of staff, who cannot afford to lose their jobs, and so on. There are those possibilities, unless there are some controls. What would you suggest?

Bev Robinson: What you are citing there is an extreme example.

[Kelvin Hopkins]

But a real extreme example.

Bev Robinson: I appreciate that it was not fantasy—I appreciate that it was real—but such cases are an absolute minority. There are two golden threads in further education corporations—quality and finance—and it is about the balance of the two. In terms of what measures one could put in place, you have highlighted something: governing bodies—making sure that governing bodies are looking at the two golden threads of quality and money. It is about making sure that there are enough checks and balances within an organisation to allow for challenge; any good organisation would have that. I guess, ultimately, as we mentioned about the FE commissioner before, you would say the FE commissioner again, alongside Ofsted. Remember that with the desk research they do, they would spot within 12 months—if it was a dramatic example, as you cited—that quality suddenly went down very rapidly. That would be a red flag and a trigger. I would like to think that that would not happen, but obviously it does happen in a minority of cases.

[Kelvin Hopkins]

Q Earlier today I was talking about governing bodies, having had 25 years’ experience on a sixth-form college governing body and some years before that on a college of higher education—which was really a high-powered FE college, with some HE and some FE. With that experience, I know that having the right governing body with the right kind of membership is absolutely crucial so that principals cannot get into that situation.

At the beginning of incorporation, all those years ago, the Government wanted small, tightly knit governing bodies made up of local businesspeople, thinking that that would make it work—the businesspeople would somehow guide the college into producing the right students. It did not actually work, and in the end the Government changed their mind and wanted broader based governing bodies including, of course, students— certainly, at the college I am at, the student council elect their own students on to the governing body—plus some accountants, some lawyers, and some headteachers from local high schools and primary schools. There was a whole range of different skills, so that the college is properly accountable— without having an elected body, but they do appoint their own governors. That approach is a way forward. Can we put that sort of thing into the Bill, to ensure the legislation is improved? I know that you and Gordon know each other very well. I am interested to know what your governing body is like.

Bev Robinson: I am thinking of the unintended consequences. It is very easy to say that we can dictate exactly the constitution of a governing body, but if we are looking at further education corporations across the country, some of them are very different. My own, for example, is an outstanding college. We are very strong financially and so on, and we benefit from the mix and balance that we have on the board: we benefit from our business community and from two very able students on the board. I am hesitant about mandating exactly what that board would look like, because it varies by college. If, for example, I were a land-based college, I might want a slightly different mix, so I am hesitant about fully supporting that.

Shane Chowen: There is an interesting overlap in what you are saying, in terms of what the new accountability and regulatory landscape would look like after the Bill, with the various new bodies. How does Ofsted interact with the institute? How does the OFS interact with the institute, which interacts with Ofsted? Who inspects HE, given that Ofsted does not have a role within that? There is definitely something in cleaning up that landscape and giving the roles and responsibilities within the sector some very clear and defined lines.

We have not spoken much today about the devolution elements within the Bill—I have been here all day, by the way; I’m a superfan. If you are devolving significant sums of money to combined authorities, the Government are absolutely right, on behalf of the taxpayer, to expect some level of accountability and assurance about that. That should be not only raw numbers of how many people are doing qualifications and at what level, but also the extent to which those funds are being managed and accounted for. There might well be another layer of accountability under devolution.

Having said that, combined authorities and LEPs often have representatives on college corporations, so they should be responsible, as governors, for noticing when something is awry—for example, a spike in student complaints when they get their spreadsheets. I am not sure the Bill currently delivers that, so it could be looked at in future.

Shakira Martin: Can I remind everybody that FE has been cut to the core for a long time now? There might be some mismanagement, but when you are cut to the core and trying to change people’s lives on a budget, this is the kind of situation we get into. There is a big call for investment at the moment. I am going to flip this and talk about money and why we need it. Something I picked up from David Hughes this morning is the point about stability and certainty. We are often known as a Cinderella sector. It was welcome to hear the new Secretary for Education put FE at the heart and say that it is a priority. However, investment is needed in that area.

[Kelvin Hopkins]

Q There were some striking figures this morning about the enormous difference between the spending per student in FE, post-16 and A-level students and in universities. I made the point that at university, you often have a small number of lectures with a couple of tutorials, whereas in FE, and particularly in A-levels and BTECs, you have constant contact with teachers. The level of engagement is much greater between teacher and student.

Shakira Martin: Definitely. There is another thing that is quite frustrating. I welcome the money being put into the adults skills budget, but that is not an investment directly into further education, so I would like the Committee to consider direct investment in FE institutions.

[Kelvin Hopkins]

In my case, you are preaching to the converted.

Shane Chowen: It might be worth pointing out, just on that point, that there were also figures out last week showing participation in FE and skills, and in the last 12 months we have had the biggest drop in adults participating in basic English and maths training that we have had in six or seven years. That comes at a time when—I think Professor Fuller mentioned this earlier—the UK is ranked bottom of the OECD league tables for literacy and second bottom for numeracy. At a time when we have to send out negotiators and a Secretary of State for International Trade to fly the flag for the UK, those figures look really bad.

[The Chair]

Order. May I just interrupt here? The questions have to pertain strictly to the provisions in the Bill, as Mr Hopkins well knows. I know it is slightly difficult, but could you keep this answer as short as possible, so that we can move on to questions that do pertain to the Bill?

[Kelvin Hopkins]

Apologies, Ms Dorries. I have finished now; thank you.

Shane Chowen: I would argue that there would be opportunities in the Bill to place extra emphasis on those kinds of issues that the country faces in international trade negotiations, such as basic literacy and numeracy.

[Gordon Marsden]

Q I would like to ask this, while remaining within the scope of the Bill. There has been some interesting discussion about priorities, adult skills, training and so on. I want to return us to discussing the institute. If you had been here earlier, Shane, you would have heard a number of questions put to Peter Lauener about the nature of the institute, what its capacity might be and so on. I want to talk about one thing that strikes me about what the Bill is trying to do.

The institute had an interesting genesis, because it did not start out as an institute at all; it started out as a wish list in the Enterprise Bill by the previous Government as to who could actually look after apprenticeships. At one stage, it was going to be trading standards. Obviously, that subsequently was decided not to be the way forward, so the Government brought through, in the Enterprise Bill, the first genesis of the Institute for Apprenticeships, and like Topsy, it has just growed—very beneficially, I think, but that does raise some interesting questions that go to the heart of skills policy and of the new structure that will be set up, so I would like to ask the three of you, from your different perspectives, to answer this. We have heard a lot about apprenticeships. Obviously, that was discussed this morning with Peter Lauener. The technical qualifications are coming into this institute anew, but they bring with them the issue of how many people—actually, adults—need to be retrained and reskilled, the issue of what technical means for them. What should the balance be between the new institute focusing, obviously, on apprenticeships because that is a key Government target—

Technical and Further Education Bill (Third sitting)

Kelvin Hopkins Excerpts

Committee Debate: 3rd sitting: House of Commons
Thursday 24th November 2016 Public Bill Committees

[The Minister for Apprenticeships and Skills (Robert Halfon)]

Thank you, Mr Bailey—

[Kelvin Hopkins (Luton North) (Lab)]

rose—

[The Chair]

Order. Mr Hopkins, is this in support of the point of order?

[Kelvin Hopkins]

It is further to that point of order, Mr Bailey. I just want to support my hon. Friend the Member for Blackpool South. I arrived at the House fairly recently and picked up the paper from my office, but I have not had time to read it, and it is clearly lengthy. I entirely support what he said and hope that the Minister will be accommodating.

[Robert Halfon]

The existing policy statement has already been on the gov.uk website for several weeks, as has the delegated powers memorandum. What was provided last night was an expanded refresh, but we have provided information on the policy, and that is the key point.

--- Later in debate ---

[The Chair]

I had not seen the statement either, so I will invite the Minister to explain, but first I call Kelvin Hopkins.

[Kelvin Hopkins]

Just for clarification, if it is accepted that we can table amendments to clause 1 and schedule 1 today, does that mean we will not take the stand part debate on clause 1 until later in our sessions?

[The Chair]

The situation is that Members can table amendments if the Committee has not moved on, but if schedule 1 has been taken, they cannot. I call the Minister.

[The Chair]

I will move on to some preliminary announcements. Today we begin line-by-line consideration of the Bill. Members may remove their jackets during Committee meetings. Please ensure that all electronic devices are turned off or switched to silent mode.

The selection list for today’s sittings is available in the room and shows how the selected amendments have been grouped for debate. Grouped amendments are generally on the same or similar issues. The Member who has put their name to the leading amendment in a group will be called first. Other Members will then be free to catch my eye and speak to all or any of the amendments in that group. A Member may speak more than once in a debate. I will work on the assumption that the Minister wishes the Committee to reach a decision on all Government amendments.

Please note that decisions on amendments take place not in the order in which amendments are debated, but in the order in which they appear on the amendment paper. In other words, debate occurs according to the selection list and decisions are taken when we come to the clause that the amendment affects. I hope that explanation is helpful. I will use my discretion to decide whether to allow a separate stand part debate on individual clauses and schedules following the debates on the relevant amendments. If any Member wishes to make a declaration of interest, he or she may do so at this point.

[Kelvin Hopkins]

I do not know whether my membership of the governing body of a sixth-form college is relevant, but I declare it anyway.

[The Chair]

Thank you. I remind Committee members that we will consider the clauses and schedules in the order set out in the programme motion that we agreed on Tuesday morning, which is set out at the end of the amendment paper.

Clause 1

The Institute for Apprenticeships and Technical Education

--- Later in debate ---

Colleges and providers deserve clarity on these issues, particularly because of the back story. I could go on about the list of things that have not so far been clarified about the institute, but I will not. I merely emphasise that we would like to be positive and enthusiastic about it; but at the end of the day, this is not about whether the Opposition are confident and enthusiastic, but about what the punters out there think. It is about what the providers, the sector skills councils, the further education colleges and the employers—particularly small and medium-sized enterprises—think. And, of course, it is about all the young and older people who the Minister and I hope will fill the ranks of the 3 million apprentices by 2020. We owe it to all those people to get the capacity and the capability right. Frankly, we need a lot more transparency and information about this issue than we have had so far.

[Kelvin Hopkins]

It is a pleasure to speak in this very important debate. I support what my hon. Friend has said. I have long been concerned about the problems with apprenticeships. Many of them are insecure and poor quality, and it has been alleged that they are sometimes simply a disguise for low-paid labour for young people. I would like to think that the institute will challenge that and ensure that we have good-quality, secure apprenticeships in the future, so we can build an economy that will compete effectively with those of other industrialised nations, which approach these things in a more rigorous way than we do.

In the evidence sessions, I drew attention to the research that Professor Sig Prais and others produced at the National Institute of Economic and Social Research in the 1980s and early ’90s, which contrasted Britain with Germany, Spain, Italy and other European countries, where the rigour of educating apprentices was so much greater and the quality of the employees who came out of that rigorous experience was much higher. Some documentary television programmes illustrated that, too.

Apprenticeships cannot be done on the cheap. We need much higher teacher-student contact hours, and we should have more rigorous and intensive pedagogic teaching. That is one thing that came out of Germany and other countries, where apprentices get many hours of rigorous teaching, so they must have, first, good teachers and, secondly, enough of them to do the job. I hope that the institute will look at that, too.

The chief executive of the Association of Colleges drew attention to the low funding per student in further education, in contrast with higher education. I made the point that in higher education in my days we would have one or two lectures a day, perhaps, and a couple of seminars or tutorials during the week, but we were left to our own devices to write our essays and do our maths and statistics projects. The intensity of teaching was much more restricted, although it was high quality and we had some very impressive lecturers. It is not like that in further education, where constant attention needs to be paid to the youngsters, who are sometimes not as academic as those of us fortunate enough to go through higher education.

In 1969, I moved to Luton—I now represent it—which was then a major industrial town. General Motors in Luton and Dunstable employed about 38,000 people. Every year, hundreds if not thousands of young people went into genuine secure apprenticeships. They were taken in at the age of 15 or 16, and they were sometimes pretty raw from school, but after five years of experience in industry, they came out with pretty good qualifications and secure jobs. They would be at different levels. Some would go on to take examinations—ordinary national certificate and higher national certificate—and some would even go on to associate membership of the engineering institutions. It depended on their abilities, but they would look forward to a good life of work within General Motors or other companies, with a good pension at the end of it. That kind of secure manufacturing experience has long disappeared for most people in Luton. The incomes of the people who live in my constituency have declined significantly in relative terms.

Electrolux and SKF, which makes bearings for cars, have declined. Some companies kept a nominal presence in the constituency. Electrolux used to make washing machines and vacuum cleaners. Indeed, my first experience on being elected to Parliament in 1997 was Electrolux getting rid of the last of its manufacturing; it was shipped out to Hungary, where labour was cheaper. We fought to oppose that, but we did not win, although Electrolux kept its office headquarters in my constituency, which pleased me. No doubt it still makes very fine equipment, but not in Luton. SKF still has a small number of people making high-quality bearings. They are kept only because they make such high-quality bearings; the mass of thousands of people making large numbers of bearings for industry has long since gone.

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[The Chair]

Order. This is a fascinating discourse, but the hon. Gentleman is straying rather a long way from the purpose of the clause. If he could refocus slightly, that would be helpful to the Committee.

[Kelvin Hopkins]

Thank you, Mr Bailey. I was aware that I was straying from the subject. As I said, I taught in further education myself. I have taught a small number of day-release students as well, mainly A-levels in economics, politics and statistics. My experience was not very long—three years or so—but it was a great experience that has coloured my politics ever since. I know the difficulties of training young people.

Another problem that we have had is that, because of the reduction in employer size, there are fewer employees, and it is harder for a small employer to sustain an apprentice without a proper levy system with heavy state subsidy. I think that the levy system is exactly right; I would like it to be more extensive, so that we can give apprentices secure employment with reasonable pay, while they are working and studying. Apprenticeships across the board need to be properly sustained financially and a levy system is the way forward. We are moving in that direction.

I have come across another problem. Small garages, for example, might take on an apprentice as a car mechanic, who might stay there for three years, but then that small garage might suddenly find that its apprentice has been poached by a big garage that does insurance work, which would be very lucrative and much more highly paid. The small garage loses out because it has put a lot of work and finance into training somebody who has been lost to a bigger employer. We ought to be training more people and giving more security to small employers to ensure that they can sustain an apprentice with similar and appropriate pay for a longer period.

There is a lot for the institute to address. I welcome the fact that we are moving in the right direction, but we must ensure that apprenticeships are high quality and secure, not just because our young people should have the right to good training, education and skills, but because our country and its economy needs those people to do well.

[Robert Halfon]

I could listen to the hon. Member for Luton North for a long time on this subject, because he speaks with a lot of wisdom. I have been to the north-east of England to see young people on five-year apprenticeships in companies, doing exactly the things that he talks about.

I will just say that the public and private sectors will be following the same standards. We have exactly the same standards on training and quality, and we are introducing a public sector target from April 2017 in all areas to increase the number of apprenticeships in the public sector: 30,000 by 2020.

I will respond to the points made by the hon. Member for Blackpool South. He is kind about me and it is good to be opposing someone who also cares passionately. I very much enjoyed the visit to Blackpool and the Fylde College. What it is doing is extraordinary, not just for students but for the long-term unemployed.

I will comment on a few things, given that we are about to discuss amendments. The hon. Gentleman said that the levy was an administrative challenge for the IFA. It is important that it has only an advisory role on funding caps. The implementation of the levy is for the Department and the Skills Funding Agency.

The hon. Gentleman talked about the apprenticeship target and how difficult it was. It is worth remembering that there have been 624,000 apprentice starts since May 2015. We have 899,400 apprenticeship participations in the 2015-16 year. That is the highest number on record. Of course, it is a challenge to reach a 3 million target, but we are on the way.

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[Gordon Marsden]

I will refocus to the extent, Mr Bailey, of saying that all the issues I describe have a consequence on the effectiveness of the Institute for Apprenticeships and Technical Education, which we are being asked to approve to set up as a new body. The Minister has not convinced us that that new body will have the capacity it needs to deliver all this. I have explained some of the reasons for that.

[Kelvin Hopkins]

I agree with my hon. Friend. Would it not be intelligent to look at what is done in other countries that are more successful at training people—notably Germany, which would be a good place to start—to compare the quality of apprenticeships and the resource that goes into training apprentices in those countries?

[Gordon Marsden]

Of course my hon. Friend is right, but one would also hope and think that the Department had done that already. There is a healthy industry of comparative studies out there, not just in the public sector but in the private sector. No doubt, the Department takes advantage of that. My point is that, if we want the institute to progress properly and to do everything it needs to do—what it says on the tin—we need more reassurance.

The final area on which we need reassurance is the implications of Brexit. Hon. Members might ask what Brexit has to do with the Institution for Apprenticeships and Technical Education. Well, a lot. If the Government do not manage to get the sort of money from, for example, European structural funds, which have traditionally supported the expansion of apprenticeships and small businesses in areas of the country with strong local enterprise partnerships, the Government’s ability to reach that figure will be affected. That is why we have to ask those questions about capacity, capability and join-up.

I have not even talked, you will be relieved to know, Mr Bailey—

Technical and Further Education Bill (Fourth sitting)

Kelvin Hopkins Excerpts

Committee Debate: 4th sitting: House of Commons
Thursday 24th November 2016 Public Bill Committees

[Gordon Marsden]

My hon. Friend has been in the House for only a relatively short period of time, but she is making some absolutely excellent and spot-on points. In this context, we are concerned with the specific ways in which the measure will affect people’s ability to take up apprenticeships, and that is what I will focus on.

This is about more than information in schools; it is also about who can come into schools to influence people’s career choices. I, for one, have praised a number of companies for what they have done to offer apprenticeships to adults. In terms of young people, British Gas, for example, has for a number of years had a crack team of female ex-apprentices who go into schools and colleges to break down gender stereotypes. Without suggesting that the institute should be prescriptive in that respect, I think that it could and should encourage the breakdown of gender stereotypes in terms of applications for apprenticeships.

It works the other way around, as well. There is a young man in my constituency, a nurse, who has been very active in the campaign for NHS bursaries. We need more men in the nursing professions and the caring professions, and many of those people can come through apprenticeships. Again, there is a role for the institute. Incidentally, another issue is the commitment to continuous professional development, in which the new institute, particularly the technical education side, will play a role. We must be careful there as well to extend continuous professional development outwith the usual groups of people from a professional background.

Those are some of the issues of which we must take cognizance when considering the amendment. Unfortunately, the representative from the National Society of Apprentices was unable to give evidence on Tuesday due to a family illness, but the National Union of Students —it is important to add that the NUS figures are not dissimilar to those from the Industry Apprentice Council—has stated:

“We want the…government to invest in a truly national careers system that delivers impartial careers information, advice and guidance”,

and that in surveys, 21% of apprentices said that they had never received information about apprenticeships.

The NUS draws attention to a point that will not have escaped the Minister’s attention—I know that he was questioned closely on it by the Sub-Committee on Education, Skills and the Economy. The NUS found that the current approach to careers advice is exacerbating skills shortages. Those are some of the arguments that we believe it is important to take on board when considering the amendment.

I had a similar discussion in Committee with the Minister for Universities, Science, Research and Innovation. We did not always agree, but we came to some convergence of our views. It is important when establishing a new organisation to give some direction or guidance in the Bill establishing it, in this case in schedule 1. There should be some emphasis on the signals sent to the outside world about what sort of organisation it is going to be. Will it simply be a bog-standard Government quango or non-departmental public body, or will it be a forceful campaigning institution? We had a debate this morning about how campaigning it could be with a relatively modest workforce, but that makes the issue all the more important. Given the references that the Minister made, perfectly reasonably, to the range of people who will not be members of the institute but will be supportive, it is extremely important to send out the message in the Bill that the institute must have regard to that function.

That is extremely important, because governance in this area is relatively underdeveloped, when compared with governance in higher education, which the Minister for Universities, Science, Research and Innovation and I discussed during the Higher Education and Research Bill Committee. It may have been reasonable for him to have told me in that Committee that there was no need for me to worry about putting a measure in the Bill regarding the OFS, because the Government had been doing all these other things for years in that area. I did not agree with him, but he had a point. The point about this measure is that although we are not exactly in the stone age when it comes to access and participation, we are certainly nowhere near as far down the line as in higher education.

Amendment 10 continues that theme, but in more specific fashion. It would require the Government to specify in its apprenticeship targets the proportion of new apprenticeship starts for those who were looked-after children, and for people with disabilities. It would ensure that the Institute for Apprenticeships and Technical Education increased the number of apprenticeship starts by care leavers and people with disabilities, so it is linked to the strategy arguments for access and participation that we put in amendment 9.

It is curious how targets are sometimes set; the Government already have targets to increase the proportion of black and minority ethnic apprentices by 20%. It might make sense for them to do the same for people with disabilities and care leavers, though I do not say what the proportion should be. We also seek clarification from the Minister on the progress on the BME targets, if he has those figures to hand. Those targets were set under the previous Government and were never formally incorporated in legislation. It would be helpful if the Minister could confirm that the Government were still working to meet those targets. My right hon. Friend the Member for Tottenham (Mr Lammy), having fought the good fight, with others, on apprenticeship funding in disadvantaged areas—the Minister listened to his arguments—has also been pressing on these issues due to the nature of his constituency.

The Government’s apprenticeship funding proposals last month recognised that 19 to 24-year-old apprentices who had previously been in care, or who had a local education authority health and care plan, might need extra support. The majority of respondents to the Government survey supported that, with more than twice as many agreeing with the proposal than disagreed: 53% to 26%.

I make a more generic observation that it would be helpful for the Minister to consider: in recent years, in debates on apprenticeships and where they should be focused, a dichotomy has often been proposed between adult apprenticeships for those who are over 24, and apprenticeships for those who are 16 to 18-year-olds, with a greater focus on the latter. I have sometimes felt that we needed to shine more light on 19 to 24-year-olds generally as a target area, because that range often includes people who have had all sorts of problems, sometimes of their own making, and sometimes absolutely not; I am thinking of family circumstances and issues of bereavement, and a number of them have been carers. I know of nearly 1,000 young people in Blackpool who are actively caring for family members.

I have always taken the view that the 19-to-24 range is a crucial cohort from which we should be recruiting apprentices. Even though those young people might have fallen by the wayside before 19 for whatever reason, they often bring with them zeal, experience of hard knocks, and a desire to do even better during the apprenticeship period. That is particularly important. Of course, the Government have recognised the importance of looked-after young people by extending the remit of their care plans up to the age of 25. I pay tribute to the Minister for Vulnerable Children and Families for that. It is a good start, but it is important to guarantee that every necessary step is then taken to ensure access and opportunity for care leavers.

Looked-after children achieve less highly at GCSE than their counterparts and often miss out on parts of education. There may be a history of abuse in their background.

[Kelvin Hopkins (Luton North) (Lab)]

I am interested in my hon. Friend’s comments on looked-after children. They may have been held back in education not because of a lack of ability, but because of their disturbed personal circumstances. Given a secure environment, they can in fact progress, probably more rapidly than others, and become very effective employees and good citizens.

[Gordon Marsden]

My hon. Friend is absolutely right. He raises a whole subset of questions that we cannot go into this afternoon about the strength of support in schools for young people in those circumstances. That ties in with what I was coming on to say. The Special Educational Consortium, which has submitted evidence to the Committee, along with Barnardo’s, has made some important points. There are real challenges, because less than half of disabled people are in employment, compared with 80% of the non-disabled population, and only 5.8% of adults with a learning disability who are known to local authorities are in a job, which underlines the importance of the Maynard review. On top of that, the proportion of apprentices with learning disabilities has decreased: it was 11% in 2010-11 and is only 8% now. But the good news is that for all apprentices, the success rate of completing their frameworks has risen considerably, and that is true for those with disabilities as well.

The climate for advice on apprenticeships for those with disabilities has declined markedly. Jobcentre Plus’s own disability employment service has a ratio of only one adviser providing support for every 600 disabled people, which was a key cause of concern highlighted by a Work and Pensions Committee inquiry in 2014. In answer to a written question in October 2015, Ministers revealed that the number of jobcentres employing at least one full-time equivalent disability employment adviser had fallen from 226 in 2011 to just 90 in 2015. The Minister may be familiar with the comprehensive Little and Holland review that in 2012 made some 20 recommendations in this policy area. We are not here today to solve the problems of the Department for Work and Pensions or jobcentres, but all that underlines the importance of those targets being firmly in the mind of the institute and, indeed, in the minds of the Minister and his colleagues.

--- Later in debate ---

[Justin Tomlinson (North Swindon) (Con)]

It is a pleasure to serve under your chairmanship, Ms Dorries. I just want to add a few comments about disabled people, which will come as no surprise given my former role. I echo the comments on the importance and, crucially, the opportunities that apprenticeships provide to predominantly younger disabled people. That context is right: 81% of non-disabled people in this country expect to be in work, and for those with a disability that is 48%—up 4% since we came to office and an increase of 590,000 jobs in the past three years. That equates to about 500 to 600 extra disabled people into work a day. For those with a learning disability, though, the figure is about 6%.

All political parties and Governments of all persuasions have tried tweaks but very little changes. I saw on my visits that those with a learning disability need patient, one-to-one support to get them into work, and to me, that was an apprenticeship. That is the whole point of an apprenticeship—to give those tangible, real-life skills. I went on some brilliant visits to places that provided the equivalent of an apprenticeship, such as Foxes Academy hotel near Bridgwater. As many as 80% of their students remained in work at the end of their three-year course. The only limitation was that the third year in-work training—the equivalent of the apprenticeship —did not qualify for apprenticeship funding and it was too expensive to have an unlimited cap on those numbers. Of that 80% who stay in work, 48.8% were paid. Not all of them were paid or in full-time work but, having spoken to their parents, I know that that made a real difference to each and every one of them.

That is why I triggered the review carried out by my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard). I was delighted to see the outcomes. The then Minister for Skills, my hon. Friend the Member for Grantham and Stamford (Nick Boles), and I signed it off three days before the reshuffle because we had a feeling that it was important to do that quickly in case something changed. I would welcome an update from the Minister on how he will ensure that the institute prioritises spreading that information. My understanding is that someone who has a learning disability will be exempt from the requirement for a C grade in Maths and English GCSE, which is a hurdle too far for many of these young adults.

During consideration of a previous amendment there was some talk about a target. I understand targets; I did A-level maths, so I get quite geeky with numbers—that is how I remember all these stats. However, I gently caution Members that we need to learn the lessons of HE figures. At each general election, each political party used to suddenly announce that we would have a slightly higher proportion of people going to university. It was like an arms race with students. The reality is that some people who have gone to university to meet those targets would have been better served doing something like an apprenticeship. The wheel has gone full circle, and here we are now.

We do not want to shoehorn some people artificially into doing what we think is the right thing when it is not right for them. A lesson I learned as Minister for Disabled People is that each and every person is an individual with their own unique challenges and opportunities. As tempting as it can be to have targets, because they focus minds, I would be more assured if the Minister committed to meet institute representatives twice a year with this matter the first item on the agenda, and if we as individual MPs met these organisations and sought to hold them to account.

The hon. Member for Blackpool South made a fair point about disability advisers, but the DWP did listen and make changes. Disability advisers are now returning to every single jobcentre—there are roughly 500 more—so we are basically back to where we were at the very beginning. We can call that a score draw. Even when the Department reduced the number of disability of advisers, it was not to have less support for people with disabilities; the idea was that all staff would be trained to be fully disability-aware, but it has been recognised that having somebody with specialist skills in every jobcentre is probably better, so things have gone right back to how they were.

[Kelvin Hopkins]

It is a pleasure to see you in the Chair again this afternoon, Ms Dorries. I strongly support the amendments tabled by my hon. Friend the Member for Blackpool South and the case he made for them. I am also sympathetic to what the hon. Member for North Swindon said.

I have some knowledge of these issues. In general, it is so important for all citizens to have a sense of worth, and having some form of education or having a job gives us that. Without that sense of worth, we can become not only alienated and miserable, but difficult people in society. All sorts of problems arise when people do not have a proper role in society. Even if one has disabilities, to be able to have a real role among one’s fellow human beings is so important.

I particularly wish to discuss adults with moderate learning difficulties. Some 15 years ago or so, a friend invited me to speak to a class of young adults with moderate learning difficulties at my local college. I spoke fairly briefly about politics and about what I did and then they asked questions. I have to say that I could not answer the first two questions, which were very perceptive and intelligent. One was about benefits—they were very conscious about benefits and the rules governing them. I was not up to speed on that, so I was in difficulty there. The young man’s second question was why Tony Blair had abandoned socialism. I have to say that on both counts I was completely floored. I had to say that I could not speak for the Prime Minister, but that I had not abandoned socialism.

That experience showed me that these young adults were not daft. They had things to say and they had an understanding of the world. With the right courses and, if possible, the right apprenticeships, they could find some employment at some point. For example, recently, in one of our supermarkets, the young man who collects the trolleys and pushes them to the collection points for customers has moderate learning difficulties, but he has a job; he is a character; everyone knows him and he is happy. We ought to organise the world so that such things can happen.

Amendments such as the one tabled by my hon. Friend the Member for Blackpool South ought to be on the face of every Bill relating to education, training and employment, so that it becomes deeply embedded in our culture. Some employers and teachers, although they would not necessarily discriminate wittingly, might do so unwittingly without such things in their mind. They need to be aware that they must be fair and provide equal opportunities. Some employers are notorious for discriminating against women. That is changing, but we still have some way to go to ensure that women have equal shares with men. We do not have equal pay yet.

We have also talked about minority ethnic communities. Again, it is particularly those who are unemployed and live in poorer areas who sometimes get into difficulty or trouble. If they had jobs, it might be different. There was a time in my own town when anybody could literally knock on the door at Vauxhall and get a job. It might not be a very skilled job, but they could get one.

On the difficulties on the streets, an interesting statistic featured in The Guardian some years ago: when unemployment rose to 3 million in the early 1980s, street disorder and street crime took off like a rocket. It is not surprising. All those young men whose energy would have been absorbed putting wheels on cars or doing whatever they would have been doing were on the streets, with nothing better to do than cause trouble. I have always been a passionate believer in organising society to ensure full employment. Some years ago, I was chair of a Back-Bench group with outside members called the Full Employment Forum, started by the renowned Bryan Gould, one of the leading Labour politicians, who is still a friend.

On looked-after children, I said in an intervention that it is important for them to be given extra advantage, because they have had disadvantages in early life. Perhaps their education has been disrupted by their being absent from school, moving house or being generally disturbed and unhappy in education, but they might have abilities way beyond the level of education that they received, so it is important that they are given an extra boost through an apprenticeship or a college education. Providing them with security, hope for the future and a stable and predictable environment in life is important to giving them a sense of optimism and increase their self-worth.

I think these two amendments should, in one form or another, be made. I hope that at some point—maybe today, or maybe not—such amendments can be incorporated into the Bill in its final form. I am happy to support them, and I congratulate my hon. Friend on moving them.

[The Minister for Apprenticeships and Skills (Robert Halfon)]

It is a pleasure to serve under your chairmanship, Ms Dorries. I will respond to some of the issues raised. The hon. Member for Batley and Spen talked about careers guidance in schools, and I agree with her. The first ever speech that I made in the House of Common was about the problem of careers guidance in schools not encouraging people to do technical education or apprenticeships. We must consider the issue holistically, from primary school all the way through. Although it is not part of the Bill, I am considering from the start how we deal with the issue.

That said, we are investing £90 million in careers. The Careers & Enterprise Company has 1,190 enterprise advisers and a £5 million careers and enterprise fund. I have seen myself how they go into schools to boost provision on technical education and apprenticeships, to encourage work experience and to build links between businesses and schools. There is also a separate £12 million mentoring fund, which I am very keen on.

Technical and Further Education Bill (Fifth sitting)

Kelvin Hopkins Excerpts

Committee Debate: 5th sitting: House of Commons
Tuesday 29th November 2016 Public Bill Committees

I know, as I am sure the Minister does, that that does not directly connect with a huge problem for small and medium-sized employers, but it is indicative of the concerns in the sector that a quarter of providers did not want to compete for an SFA contract to deliver training to small and medium-sized businesses. At the risk of overstating the point, that is the reason why amendment 28 has a particular emphasis on gender issues, the importance of large employers and, in particular, the need to ensure that small employers are strongly represented in the groups of people preparing the standards. I do not suggest that this would be a deliberate policy or outcome of the institute but, given the concerns I have expressed, the Government would do very well to ponder that and, from that point of view, it might be helpful to place those priorities in the Bill.

[Kelvin Hopkins (Luton North) (Lab)]

It is a pleasure to see you chairing our proceedings again this morning, Ms Dorries. I support the amendments tabled by my hon. Friend the Member for Blackpool South.

I do not want to be immodest, but I do have considerable experience in this field. I spent four years as the chair of governors at Luton College of Higher Education, which had welcomed thousands of apprentices through its doors. I have spent a total of 30 years on post-16 education governing bodies so I have very definite views. I have worked in the trade union movement; I was at the TUC for five years and I taught on trade union courses, so I have seen the involvement of the TUC and the trade unions in education. I spent 18 years working for NALGO and then Unison, which had a large department of education and undertook correspondence courses for local government officers.

I have seen a whole range of activities that are relevant to apprenticeships and post-16 education in the broadest sense, and I have definite views on what governing bodies should be like. They should not be too small or too large; they can become ungainly and unco-ordinated if they are too large. Equally, if they are too small and narrow in experience, they do not do a good job. I have seen both.

There is an optimum size for governing bodies, but I am talking about educational institutes, rather than the board of the institute. That board, however, will need the same kind of representation and a range of skills, and I have spoken in previous sittings about the importance of not having too narrow a field. If one has only a particular kind of business-led model, with small numbers of businesspeople of the same mindset and no challenge to that view, they will not necessarily pick up all the important issues that need to be discussed and considered when the board makes decisions and recommendations. Having a small body from a narrow field is not right.

The 1993 incorporation of post-16 education bodies—further education and sixth-form colleges—came from the then Government insisting on small, business-led governing bodies, which was a mistake. The governing body of which I was a member did not follow that model; we had a range of people with educational skills, a good degree of gender balance, and people from the community who were skilled in their fields and visibly representative of the very diverse community in which I live and which I represent. That is important as well. We also had skilled people with legal and financial qualifications. All that is so important in having a successful governing body.

One has to submit oneself to challenge if one is leading an important body, and intelligent, competent people have to be on board who have a range of views and will challenge things from time to time, but who will work positively and be supportive. The body should not go off in one direction, not be challenged and make mistakes. Mistakes have been made.

Even back in the 1990s, there were mistakes and some principals and leaders of educational institutions got out of control. They started paying themselves vast salaries and travelling abroad—ostensibly to recruit students, but actually they were just on jollies and looking after themselves. The Conservative Government of the time realised they had made a mistake and in the end came round to the kind of governing body that we had in the sixth-form college. It was a body of about 14 or 15 people, with a range of skills and representation. It is very important for the Government to recognise this point and to recommend, either in the Bill or through secondary legislation, what governing bodies and the board of the institute should look like. In particular, there should be representation from women, minority communities and trade unions, all of whom have expertise that will make the board function much better than if it was just led by a small group of businessmen.

As we know, the Confederation of British Industry and the Federation of Small Businesses often have different perspectives on business representation. The CBI typically represents global corporations, big business, banks and so on, whereas the FSB has an understanding of what it is like to be a small businessperson and of the needs of small companies. As my hon. Friend the Member for Blackpool South said, it is very important that small companies are represented, as well as large companies, and that we have those different perspectives.

I have probably said enough to reinforce my hon. Friend’s points and to try to persuade the Minister and the Government that what we are saying is sensible. It should be recognised and, at some point, included either in the legislation or recommendations by the Government. With those few words, I shall conclude.

--- Later in debate ---

[Robert Halfon]

No, because this is about technical and professional education. There are 15 routes, and people have many other ways of doing the vital training for the other areas that the hon. Gentleman mentions. People can do an individual apprenticeship, they can do part of the Government’s training scheme or they can do work experience. This is about addressing our skills deficit and, similar to what happens in other countries, ensuring that we have the technical education that our country needs.

On capacity, the institute will ensure that arrangements are in place for evaluating assessments. There are different options for employers and others to develop the standards. We will discuss the assessments later, but I will set out the current figures on apprenticeship assessment. On standards, some 61% of all apprentice starts have an end-point assessment organisation available to them, whether or not they are close to needing an end-point assessment. That figure rises to 94% for all apprentice starts, including those who are expected to reach the gateway—the end of their apprenticeship—within the next 12 months, where an organisation is close to being put on the register. We are considering a number of options and we will discuss them later, but the situation is not as bleak as has been said in respect of the assessment organisations and what is being planned and done.

The hon. Gentleman addressed the levy and the autumn statement, and I am pleased to say that we will still have £2.5 billion available for the levy, regardless of the announcements in the autumn statement. The Government are determined to create an apprenticeship nation, and by 2020 the spending will have doubled to £2.5 billion. We have discussed the providers, but I am happy to reflect on action that could be taken to ensure that SMEs are offering training that is relevant to their apprentices. I am pleased by the response from the providers so far.

The amendment raises other issues of concern. We need to learn from previous models, but there is a risk that requiring specific representation on the panels may not always be appropriate and may result in standards that do not have labour market currency. The purpose of the reform is quality, not quantity. If the panels try to do too much to please too many different groups, ultimately they might not support young people and adults in getting high-quality technical education to progress into skilled employment. The problem is that there is a proliferation of qualifications.

I agree that the groups should be as representative as possible, however. The Sainsbury report makes it clear that the institute will be best placed to ensure that the right people are brought together to develop the standards. Institute staff with expertise in specific occupational areas will know which employers and other stakeholders are suitable to develop standards that are representative of the occupations within the specific routes. The institute is independent. It should be for the institute to manage the composition of groups, and we should not constrain that process.

As for the approval of the groups that are not convened, it is for the groups to come together to put proposals to the institute. That has been the hallmark of the employer-led reforms, which, again, have been based on best practice in other countries. The groups should be flexible enough to reflect the requirements of specific occupations. In some occupations, such as blacksmithing, there are few large employers, while there may be other occupations in which there are no smaller employers or in which there is a bias towards a particular gender. On that point, I remind the Committee that 53% of apprentices are women, which shows that we are making significant progress, although of course we need to do a lot more to get women into STEM—science, technology, engineering and maths—and other key areas.

There are other ways in which views can be taken into account through the institute’s wider structure. Crucially, each route will have its own panel making decisions about the provision within that route. Standards will also be subject to peer review, the purpose of which is to ensure that the proposals meet wider needs. The institute’s board is open to applicants with a wide variety of interests. We hope to announce the composition of the board—genuinely—in the very near future. I firmly believe that once that announcement has been made, the hon. Member for Blackpool South will agree that there is important representation.

[Kelvin Hopkins]

Does the Minister agree that it is important to appoint the right person as chair of the board of the institute? We have had big, forceful characters in the field of public education, and sometimes they get it right and sometimes they get it wrong, but choosing the right person with the right skills and the right character to lead is crucial.

[Robert Halfon]

The hon. Gentleman is absolutely right. The board and the chairman are both incredibly important. The person has to have incredible knowledge of the field, as well as the charisma, connections and ability to drive the institute forward so that it can transform technical education in the way that we hope it will.

The Secretary of State will provide advice to the institute once a year on how it should carry out its functions, and the institute will have to have regard to that advice. As I have often mentioned, we will consult on the draft of the first guidance letter and provide advice on who the group of persons should be. We plan to encourage the institute to ensure that others with relevant knowledge and experience are included, as well as employers, professional bodies, sector experts, providers and assessment organisations—the more FE representation the better. The institute will need to explain in its annual report how it has taken that advice into account or, if it has not done so, explain why. I hope that that provides reassurance.

On amendment 13, the decisions to convene the panels will be driven by a robust evidence base. If the evidence shows that there is a need for a standard to be developed, the institute will be able to convene a group of persons if the trailblazer group has not already come forward. The need for the standard to be developed will be driven by the relevant occupational map. There will be an occupational map for each category of occupations or route. The maps will be underpinned by analysis of the labour market information and will illustrate how occupations are grouped together according to their shared requirements for skills and knowledge. The occupational maps will therefore provide the evidence base for all the provision within the route.

--- Later in debate ---

[Gordon Marsden]

The amendments take us back to the heart of the principle that we think should be guiding the establishment of this institute. There is no broad difference between the intentions of the Minister and indeed the Government about the need to involve a broad range of stakeholders. The issue is perhaps—though I hope not—how we create mechanisms that effectively deliver that process. The Minister and you, Ms Dorries, will be familiar with the proverb, “If wishes were horses, beggars would ride.” I am not suggesting that the Government want to put in place a beggarly structure for the institute, although some of the issues around capacity still need to be resolved. It is fundamental to make sure that groups developing apprenticeship assessments have adequate representatives of all relevant stakeholders. I do not think we can simply do that by saying, “We can leave it up to the individual groups.”

I have served on enough Committees in this House to know the danger of prescribing particular quotas for people from certain areas. I am not going to take us too far down memory lane, but in the early 2000s, when the then Government were developing policies on further education, we had lively debates on some of the new structures and whether, for example, there should be a trade union person on every area council. I am acutely conscious of the dangers of tokenism in quotas.

[Kelvin Hopkins]

I understand the point my hon. Friend is making, but surely the sensible way forward is to have broad guidance, either in the Bill or in subsequent secondary legislation.

[Gordon Marsden]

My hon. Friend is absolutely right. He has huge experience in this area and in the structures that have come and gone. It is about getting the balance right. I come back to something I said on Second Reading: when one is establishing new institutions, it is important not just to set frameworks and assessments but to set the tone. It is the tone that will determine whether the Government, or in this instance the institute, get the buy-in and involvement that will make that institute a success.

When we discussed the issue of capacity, the Minister was absolutely right to say, “Well, it’s not simply a question of who’s on the board. It’s all the various other groups of people who are involved on the various sub-groups, and all the rest of it.” However, the buy-in will depend upon those groups feeling that it is made very clear in the Bill that there is a place for them. As I say, it does not have to be a sort of automatic quota-type thing, but it has to reflect something solid and positive.

We had a relatively lengthy discussion of this principle under the Higher Education and Research Bill, in relation to the office for students and who in that new office should be involved from the student body. The thing that got the headlines was about putting students on the office for students board, but the amendments that were tabled during discussion of that Bill referred to other bodies as well, such as the assessment groups.

That discussion is relevant to the present one because the issues are broadly similar, with the exception that in the higher education world the principles and the organisations that allow involvement by other stakeholders have been far more developed than they have been in the technical education world. Therefore, we think it is very important that matters such as the contribution of other stakeholders to the assessment process, as well as trade unions, colleges and providers, should be put in the Bill. In the Higher Education and Research Bill Committee, the Minister’s colleague said, “Well, yes, it’s really important that all these things happen,” but they had to happen miraculously, without being put in that Bill. The Committee divided and the Government had their way, but I am glad to say that the Universities Minister went away, reflected, and tabled an amendment on Report which, although it did not give us everything that we and other stakeholders might have wanted, established the broad principle that students should be involved on the board.

I ask the Minister today to think carefully about this issue in the context of other advice that he might have received from elsewhere. I also say to him that it is much better at this stage to send that signal to stakeholders, some of whom are already concerned about whether they are part of this great step forward, than it is to shelter behind the idea of, “Well, we don’t want quotas, so we don’t want to have at least one person who comes from a broad range of employers in a given occupation, or at least one relevant person from the trade unions, or at least one person who can represent or promote the interests of students.”

Getting the tone right at the beginning is absolutely crucial to get the buy-in that everyone who wants this institute to be a success needs. If the institute is going to be accretive in its first year, when it will deal principally with apprenticeships, and in the second year it will take on the elements for technical education, then the Government have time to put the practical implications of this amendment into practice. There does not have to be a big bang, and then officials will say, “Well, how do we identify these people? How do we do it?” That is the point of amendment 15.

As with amendments 16 and 14, we still regard it as imperative to see who is assembled to prepare an apprenticeship assessment plan. It is also valuable to be able to experience that process in real time and to see what it takes to introduce and check assessment plans. Those are the principles underlying an addition to the Bill that is modest, but extremely important in setting the tone and sending the message about all the good and generous things that the Minister talked about only a few minutes ago such as inclusion and ensuring that all talents are taken on board. If faces are set against the measure, there will be much disappointment among stakeholders.

We and the Government want the institute to start off with that broad co-operation—not co-operation through gritted teeth, with people saying, “This is what you’re doing as a Government, so we’d better knuckle down and get on with it.” We want people to say, “Yes, they’ve got it right. We want them to go forward with this.” Amendment 15, which is a modest proposal, would be a great benefit in that respect. That is why we are moving these amendments.

[Kelvin Hopkins]

I will speak briefly in support of my hon. Friend. The reality is that those who have become chief executives and chairs of organisations—those with leading roles—are frequently strong characters who want their own way. Some will not want to include in their organisations and structures people who are likely to challenge them. I have seen at least one notorious leader—he has now left, I am pleased to say—who wanted his own way. He would have liked acquiescent, docile and amenable people in his organisation, not people who put alternative points of view, which is actually often a healthy thing. In this place, we want people to put forward alternative points of view and have a range of opinions, even within parties, so that we get things right. We can make mistakes if we allow a wilful leader to have their own way without ever being questioned, let alone challenged.

My hon. Friend is right. We do not want to cause problems within these bodies, but it is important that a range of insights into what is being done is represented within them. I have concerns about giving too much power and freedom to wilful individuals who may not wish to be constrained by having, for example, a trade unionist on the board. Indeed, there are those who will not want a trade unionist on a body, whether that body is a board or a committee deciding on apprenticeships. I strongly support my hon. Friend and hope that the Minister can be persuaded.

[Robert Halfon]

This discussion is incredibly important. I understand that the hon. Members for Blackpool South and for Wythenshawe and Sale East who tabled the amendments want a quality, fair, open and genuinely representative institute at all levels. For me, this is not an argument about quotas. There are three issues: that the institute gives us high-quality technical education that meets our skills deficit; that the institute is independent, but employer-led because, as the Sainsbury report argued, that is how we will achieve that goal; and the question of the best way to achieve representation.

I welcome the intention behind amendment 15, which is to ensure that the groups who develop assessment plans are representative of the sector and others with an interest in ensuring high-quality assessment that really tests the achievement of the standard. That is what we want to do. The experience of the past few years from running our own trailblazer process is that the vast majority of groups that have come together to develop the standards and plans have been representative of the sector. Like the hon. Member for Luton North, I am not opposed to trade unions. I am a union member and very strongly support Unionlearn, which the hon. Member for Blackpool South mentioned. I hope very much that the trade unions will be involved in some way or another.

[Kelvin Hopkins]

I know very well the Minister’s record and admire the fact that he is a trade unionist, but not all politicians in this place are quite so at ease with trade unionism. Indeed, in the world outside not all are as admirable as the Minister in his support of trade unions.

[Robert Halfon]

I thank the hon. Gentleman for his comment but I think the issue is about how to create that representation. That will be the point of discussion between us.

In the institute, we have designed an organisation that will be able to carry out apprenticeship functions independent of Government, so that the decisions have credibility with employers. The Enterprise Act 2016 gave it autonomy in determining who should be approved to develop each standard and related assessment plan. The idea was to ensure that it had the flexibility to respond differently to different sectors and ensure that the groups are representative. Although it is right that the institute is independent and can make its own choices about how it operates, it is incredibly important that the Secretary of State is still able to give it guidance through a written statutory notice. The institute must have regard to the statutory notice and must justify its actions if it chooses to disregard the advice.

We will shortly consult on the draft of that guidance and that will provide advice on who the group of persons should be. I very much want to encourage the institute to ensure that others, beyond employers, with relevant knowledge and experience are included. As I said in the previous debate, that would be professional bodies, other sector experts, FE providers, other providers and assessment organisations. I strongly encourage hon. Members of all parties to engage in the consultation and give their views.

On amendment 16, I appreciate the interest in ensuring that the institute must be transparent in why it convenes groups and develops an assessment plan. It is essential that we avoid the proliferation of new standards and assessment plans, learning from the experience of previous apprenticeship frameworks. The whole purpose of the reforms is to ensure quality over quantity.

I am sure that hon. Members are aware that in formal technical education, standards form the basis of both apprenticeships and college-based technical education courses. With reference to the previous debate, the quality will the same whether it is the assessment of an apprenticeship or classroom-based education. It just reflects the nature of the different delivery between apprenticeships and college-based courses. Quality is everything; it is the whole purpose of the reforms.

In addition to employer demand, the need for the standard will be informed by the occupational maps. There will be an occupational map for each category, and the maps will be underpinned by labour market information. That is the best way to provide an evidence-based road map for all the provision within each route. The institute must ensure that standards exist for all skilled occupations that need them. Where an approved group of employers and other persons is not available, the institute will be able to convene a group to develop a standard and an assessment plan where necessary, but the occupational map must be the primary factor for determining whether a group of employers is convened. The occupational maps, as well as the approved standards, will be available on the website. The institute can convene a group to develop a standard only if one has not come forward organically, motivated by employer demand. The only other criterion that the institute will use to convene a panel itself is the occupational map, which is publicly available. Therefore, the information that the amendment requests is unnecessary.

The amendment could also have the effect of requiring the institute to publish its set of criteria for who should form the group of persons who will develop the assessment plan. As I said response to amendment 15, it is up to the institute as an independent organisation to decide the detail of how it carries out its functions, but I will reflect seriously on what has been said. I believe in strong representation in all parts of the institute, and we can suggest that it be part of the Secretary of State’s guidance to the institute. For that reason, I hope that hon. Members will feel reassured enough to withdraw the amendment.

Technical and Further Education Bill (Sixth sitting)

Kelvin Hopkins Excerpts

Committee Debate: 6th sitting: House of Commons
Tuesday 29th November 2016 Public Bill Committees

[Gordon Marsden]

We have a weaker version of that. The Education Committee interviewed the chief inspector-designate of Ofsted and was not satisfied, but the Secretary of State was satisfied and that process went ahead. Amendment 17 is not proposing some form of constitutional innovation; it is something that goes on already.

Sometimes the Minister or the Secretary of State agrees with the view of the Select Committee and sometimes, if the Select Committee has said no, they do not. I do not have a problem with that. In terms of raising the profile of the institute, which is surely what we all want to do in the run-up to its formal launch in the spring, this would be a very useful measure for the Government to agree, which would send out a signal.

As I said, this is a probing amendment. If the Minister were to say, “It is probably more appropriate for just one of them—the chair or the chief executive—to have it,” we would not argue with that. Agreeing to this measure would send out an important signal about how important the Government consider this issue to be. The Select Committees have already shown interest in apprenticeships, technical education legislation and the apprenticeships levy, as the Minister well knows because he has been before them, so I cannot believe that they would not be happy to perform this duty. That is the basis on which we tabled the amendment.

[Kelvin Hopkins (Luton North) (Lab)]

I support what my hon. Friend says about amendment 17. It is very important to have representation by an apprentice or someone who has recently been an apprentice, so the board gets feedback from someone who has been on the receiving end of the experience, rather than just from people who think they know about it, but may not know it all. An apprentice who has spent considerable time going through the system will have a lot to offer to the board, so that is very important.

It is important to have members of the board who are different from the rest of the board. In the past, having one woman on a board—nowadays, we have many more than that, I am glad to say—made a difference to the nature of the discussions. Having representatives from minority communities on boards makes a difference by broadening the discussions and making them better. Assumptions that might have been made if the board were made up of small “c” conservatives and middle-aged white men in suits—I am one of them—can be challenged. We see too many people like me, and not enough of other people—[Interruption.] I said people like me, not necessarily me personally. It is important to recognise that there are other voices and other views, and the way to get those views represented is to have such people on the boards. Having at least one apprentice on a board is a good idea, although it should be someone who is experienced—someone who is coming to the end of their course or has just completed it, not someone who is at the beginning of their course. I strongly support what my hon. Friend said, and I hope the Government take cognisance of his views.

Turning to amendment 32, I have chaired two confirmation hearings and I sat on a committee interviewing an appointee before they went for their confirmation hearing. I think it is an extremely good exercise that has improved the quality of the appointments in recent years, so I very much welcome it. Occasionally, the people have not been ideal for the job and have chosen to stand down before going right through the process; I think that shows wisdom. Sometimes the Government and Ministers have been reluctant to let go of appointments, but they have now done so, and I think they are pleased with the job that Select Committees have done on confirmation hearings. I really do think that this would be a very good idea.

It is particularly important to have confirmation hearings for the chair, although perhaps the chair should deal with the chief executive. The confirmation hearings I chaired were to do with that role. It might not have been a chair—it might have been a director or something—but we were essentially interviewing for the chair role. It was extremely interesting and very useful, and I think that in each of those hearings we got the right result. I support amendment 32 in principle, even if my hon. Friend does not press it to a vote.

[Robert Halfon]

Let me begin by saying that if there were more people like the hon. Member for Luton North in education and skills, we would be in a very good place indeed—whatever their age may be.

[Kelvin Hopkins]

I should correct myself. I said “middle aged”; I think that is rather beyond me. [Laughter.]

[Robert Halfon]

I thank the hon. Member for Blackpool South for tabling these amendments, particularly amendment 17, which is a very thoughtful amendment. He may be interested to know that even before they were tabled, when we were discussing these matters, I made some of the points that he just made.

Regarding advertising and interviewing for the board members, we have had 281 applications to the board, representing a wide spectrum of apprenticeship experience. I believe that once the board is finalised the hon. Gentleman will be happy with the membership—we have a few rubber stamps to go yet, but I think he will be happy. He will know that the board is responsible for ensuring that the interests of apprentices and students of technical education are well represented.

I have thought about this issue very seriously—long before we discussed it in Committee—but I cannot go so far as to say there should definitely be apprentices on the board. In part that is because board members need to have experience and they carry a great deal of governance responsibility; they also come under press scrutiny, which is not easy. In addition, the board needs to represent the interests of all apprentices of varying levels, ages and sectors, so a single recent apprentice would be unlikely to speak for all apprentices. We do not think that the amendment offers the best way to represent the interests of apprentices and those in technical education.

I think we can square the circle by agreeing that the institute should draw on the experiences of apprentices, so I am pleased to announce that we expect the institute to invite apprentices to establish an apprentice panel, which would report directly to the board. The panel would be made up of apprentices from different occupations and experiences. The panel would decide for itself which issues to focus on, and it will challenge and make recommendations to the board. That squares the difficult circle of wanting experience but also having the vital input from apprentices up and down the country. The Institute for Apprenticeships and Technical Education will ensure that the first panel is in place before the institute goes live in April 2017. The institute will consider how best to engage with apprentices on an ongoing basis and how best to represent technical education students ahead of it taking on that responsibility in April 2018.

I am also pleased to report that there are plans to recruit three apprentices to work at the institute, which will review that number periodically. While I am in this post, I will certainly look at this issue with an eye to expanding the number of apprentices who work for the new institute.

Regarding amendment 32, I understand that it is looking for scrutiny of these crucial appointments—the hon. Member for Luton North spoke about how important these appointments are. However, given the size and scope of the institute, and even after the addition of the new functions in the Bill, I do not agree that the amendment is necessary. Generally, appointments that are subject to confirmation hearings by Select Committees are to much larger organisations. Furthermore, the appointment of the chair is subject to a code of practice set out by the Office of the Commissioner for Public Appointments, as the hon. Gentleman no doubt knows, and is already subject to a high degree of scrutiny.

In line with requirements, the Secretary of State has approved the launch of a recruitment campaign for the chair and the public appointment selection panel. The panel is chaired by a public appointments assessor, and as the appointing Minister I am kept informed every step of the way. A shadow chief executive is in post; the recruitment of the permanent chief executive will follow established civil service rules, with fair and open competition. Also, the Enterprise Act 2016 is clear that the chief executive will first be appointed by the Secretary of State in consultation with the chair and thereafter by the institute itself. The chair and chief executive can of course be called on by the relevant Select Committees to give evidence to Parliament and account for their actions

I do not think the amendment is necessary as I believe that the appointments will be subject to appropriate scrutiny, consistent with established public appointment rules. I hope that the Committee agrees on the need for the institute’s leadership to be established without delay, especially given questions posed by the hon. Member for Blackpool South about the institute’s capacity, whether it will be set up in time, and so on. I hope that the Opposition are sufficiently reassured by that information to withdraw the amendment.

[Gordon Marsden]

I will treat the Minister’s two responses separately. On amendment 32, which deals with the appointment of the chair and chief executive, yes, there is always the argument that because we are speeding towards setting the institute up—I do not criticise that—there is not time for a confirmation process. I hope that I do not misrepresent him, but I think that is the gist of what he said.

All these things are contextualised. I do not want to open old wounds, but the Institute for Apprenticeships has not had a great record with shadow chief executives—not because of their calibre, but simply because of the time for which the first stayed and the fact that the second, Peter Lauener, is doing the job two days a week. To be blunt, that has aroused scepticism—or to put it positively, a wish to be reassured—among stakeholders across the board about whoever the new chief executive is. It seems to me that an appointment hearing would be neither inappropriate nor unreasonable.

The Minister cannot have it both ways. He tried to persuade me the other day that I did not need to worry too much about the institute having only 60 employees because an enormous number of other people were doing things, but if that is the case, it is a rather more significant organisation than the Minister’s bald figures and comments suggest. To be frank, I am not sure that is the strongest of arguments.

[Kelvin Hopkins]

There is not necessarily a correlation between the importance of an institution and the number of people involved. Some institutions may be quite small but extremely important. As my hon. Friend says, size is not so significant.

[Gordon Marsden]

My hon. Friend may well be right. Significance is the important thing, and I just think a confirmation hearing would be appropriate for a new organisation such as this. As the Minister said, such a hearing may well take place in some shape or form with a Select Committee anyway, but we will see. We will not press amendment 32 to a vote at this point, but we reserve the right to return to it on Report.

Let me turn to amendment 17. I listened carefully to what the Minister said in addition to his point about the proposed apprentice panel to report directly to the board, and I am bound to say—this is an instant comment, not a considered reflection—that I think that is a positive and enlightened approach. It addresses many of the issues that concern us and I think will concern apprentices, and although the devil is always in the detail, it could be an elegant way of squaring the circle, to use the Minister’s phrase. We will see how things go and wait to see the list of appointments.

Incidentally, our proposed amendments are not comments on individuals. I always take the view that we are making legislation for a generation and we have to make it for all individuals. Having said that, I am particularly encouraged and pleased with the Minister’s response. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the schedule be the First schedule to the Bill.

--- Later in debate ---

I am not saying that that is automatically a recipe for confusion, but the Minister will understand that, given those potential overlaps and the potential for choice that that offers people in those areas, in terms of providers or employers—I referred to that earlier as one of the factors that worries me about the capacity issues not being easily determined for the new institute—it would not be unreasonable for him to say a little more about how he and his Department envisage the overlaps being creative rather than chaotic. It would be helpful if the Minister touched on that in his response.

[Kelvin Hopkins]

I will not speak for long, but I want to support the three new clauses.

I feel very strongly about new clause 3, because there has been a lot of talk in recent years about apprenticeships that do not really deserve the name—the quality of them was so poor that they were really forms of cheap employment and nothing more. Quality is important. Apprenticeships have to have a high reputation so that when people are offered an apprenticeship, they know that they will get something of real value from the experience. Therefore, reporting back information about apprenticeships—about how individuals are doing and about the quality of apprenticeships—is very important. We have to raise the status of apprenticeships and not allow that to diminish.

On new clause 5, which is about consultation, we want feedback from everyone concerned with apprenticeships to ensure that the institute and, indirectly, the Government have proper information about what is going on on the ground. We want to know what is actually happening and to be able to say that we are making progress and having success.

On new clause 4, I congratulate my hon. Friend the Member for Batley and Spen on her excellent speech; it was first class. Nothing more needs to be said, but I just want to reinforce what she said about the lack of careers advice.

When I was at school, there were two courses: either we were going to stagger on towards university and higher education or we were told, “Go and work in a bank.” That was all that was given. Indeed, an extraordinary number of my school friends ended up working in banks. Whatever their talents, many of them finished in a bank. I had friends who had superb writing skills or were natural cartographers and could have done all sorts of different things, but they finished up working in banks because that is where they were guided to by our school. They were almost dismissed. The school was really interested in those going on to higher education, and so to anyone else it said, “Go and work in a bank.” It really was not good enough. I was one of those who eventually staggered through higher education, otherwise I would have no doubt finished up in a bank—[Laughter.]—not as a senior banker, but just a clerk.

Over the past 10 or 20 years, I have seen a wonderful careers service in my town of Luton, where I knew most of the careers advisers as personal friends, being dissolved. It has been dismantled bit by bit, and the advisers have ended up doing other things. One has become a headteacher of a school, which is fine. She went on to retrain as a teacher after the careers service disappeared. That means young people are not getting the advice they need.

We are talking about apprenticeships and post-16, but lower down, in schools, we want children to be aware of the immense possibilities and tremendous variety of work, so that they can match their skills. If someone can write, they can then get into something that involves writing. If someone is naturally mathematical, they can move into that area. If someone is naturally bent towards engineering and mechanical things, they can be guided into all sorts of interesting jobs. However, if there is no advice, they might finish up doing the wrong thing and spending their lives being a bit frustrated because they really wanted to do something else. That is a very important point.

My two granddaughters are only eight and nine, but they are already talking about what they are going to do when they are adults. They fortunately come from a background where their parents talk incessantly about all sorts of interesting things and what they can do in life, but not everybody has that opportunity. Many children have parents who are not so well informed and cannot give advice, so they depend upon professionals giving advice.

Advice should cover the whole range of abilities, not only highly skilled jobs and professions. There are millions of jobs that are much more basic, but that are equally valuable to society. We depend on everybody and every type of skill, and we should present all our children and young people with a full understanding of the possibilities of life, so that they can not only enjoy life and fulfil themselves, but make the most effective contribution to the economy and to our world. What my hon. Friend the Member for Batley and Spen said was first class, and I hope that the Minister will accept it.

[The Chair]

Before I call the Minister to respond, I remind Committee members that any decisions on new clauses are taken at the end of the Bill.

--- Later in debate ---

[Gordon Marsden]

I thank the hon. Gentleman for his intervention, and for the penetrating questions he put to the witnesses. Hopefully that will be a by-product of the process, and that is entirely right. I am also bound to observe that there are other factors pushing it down this route. One of those other factors is the underlying financial weakness of the sector. When the further education commissioner gave evidence—he talked of 82 or 84 colleges in a merger position—he was, to be blunt, far more optimistic and gung-ho about the outcome of those mergers than I would be. From memory, some other members of the Committee expressed a different point of view. The truth of mergers is that they do not always work out well, and this was commented on by Mr Pretty from the Collab Group. He made those observations based on his own experience. There are a number of factors here. Changing priorities in public funding is a reduction, it is how some colleges have struggled with large debts or partially completed capital investment projects. The latter partly reflects weaknesses in the planning and financing of capital projects under the former Learning and Skills Council.

[Kelvin Hopkins]

Two or three points were made about mergers during our evidence sessions. One was that it is not just a question of scale. Sometimes colleges are not enormous, but they still work well separately. Sometimes mergers take place where a weak college is merged with a strong college, which turns them into a joint weak college, not a joint strong college. So there are all sorts of possibilities, probabilities and problems with mergers, and they should be judged carefully on their own merits.

[Gordon Marsden]

My hon. Friend is right, and what he says is underpinned by his great experience in this area. I am not saying that every area review that produces merger proposals will automatically result in colleges finding themselves in a financially weaker position and therefore more in need of the insolvency clauses in the Bill than otherwise, but it is part and parcel of that aspect.

It is not just FE colleges feeling the strain. It was helpful to have the presence of the Sixth Form Colleges Association in the evidence session. It, too, mentioned courses having to be dropped as a result of funding pressures. Three quarters of colleges have limited the size of their study programmes and more than a third do not believe that next year’s funding will be sufficient to provide the support for educationally or economically disadvantaged students.

In my neck of the woods, as well as the excellent FE college, Blackpool and the Fylde College, which the Minister visited, is Blackpool Sixth Form College, which is also an excellent college that has, over the years, done splendid work on the vocational side, in traditional qualifications and with the previous Aiming Higher programmes. Although the college is outside of my constituency—it is just in the constituency of the hon. Member for Wyre and Preston North (Mr Wallace)—it takes students from three or four constituencies. It has done splendid work, but the previous principal and the current principal have had to juggle the finances very carefully indeed to complete some of the programmes they wanted to do for the college and for the physical infrastructure. Sometimes the physical infrastructure of such colleges is 30 or 40 years old, and needs renewing.

I am reflecting on the various factors that give rise to the clauses we are passing into legislation. I want to focus us on the detailed conversations we will have when we move on. The picture of fragility that I described makes it even more important that the insolvency clauses and the position of the educational administrator, which we will talk about in considerable detail in due course, are a real answer to this problem, rather than something that sounds good on paper but does not do the business in practice.

[Kelvin Hopkins]

I have some experience in these matters. There have been funding pressures in all spheres of post-16 education, although not necessarily in universities, which seem to be well funded compared with other areas. In spite of the fact that there are advantages of scale in producing wide ranges of subjects in whatever qualification one is taking, some of the smaller subjects are, even now, dying. We are getting to a point where subjects such as modern European languages are being lost entirely from an area because no college or school will teach them any more. That is tragic. We should be creating more variety of opportunity in technical and academic education, not less.

My second major speech when I first came into this place was about funding for sixth-form colleges and the fact that they did a superb job. I said that funding constraints were in danger of killing the goose that lays the golden eggs: the sixth-form college sector. They do a fabulous job and I know from experience that we should have created more of them. Sadly, a view was held that we should create lots of schools with small, less efficient sixth forms with much narrower subject ranges, instead of sixth-form colleges. I think that went in entirely the wrong direction. I hope that I can persuade the Minister and others that we ought to look more favourably on sixth-form colleges and FE colleges if we are to make serious advances in educating and training our young people better than we have done in the recent past.

[Robert Halfon]

May I put some things in context for the hon. Member for Blackpool South before I speak directly on the clause? No one denies that there have been funding pressures, as the hon. Member for Luton North pointed out, but, even with such pressures, 80% of colleges are either good or outstanding, and 79% of adult FE students get jobs, move to apprenticeships or progress to university. Some 59% of institutions are in good financial health and 52% are operating with a surplus. That does not mean everything is rosy, but it puts things into context.

Technical and Further Education Bill (Seventh sitting)

Kelvin Hopkins Excerpts

Committee Debate: 7th sitting: House of Commons
Thursday 1st December 2016 Public Bill Committees

[Gordon Marsden]

Good morning, Mr Bailey. It is a great pleasure to serve under your chairmanship. The Minister is right to say that we welcome the concept of the insolvency regime. We think it is necessary in the context that I talked about at the end of the last session, so we do not intend to oppose the principle of it in any shape or form. However, as the Minister has observed, we intend to probe—more sharply on some aspects than others.

If I may, Mr Bailey, I will speak to the two amendments we have tabled separately; although they are linked, they have rather different focuses and emphases. Amendment 1 aims to ensure that an appropriate assessment is made of any potential impacts on students and their education if an education administrator puts a further education body into special administration and takes action such as transferring students to another institution, or keeps an insolvent institution open for existing students. We recognise that the decision whether to transfer students to another institution or to keep an insolvent institution open for existing students is fraught with potential difficulty and will certainly demand great skill and finesse on the part of the education administrator. The Minister may wish to bear that in mind when we consider later Opposition amendments, which will probe him a little more on the nature, experience and qualifications of the education administrator.

The crux of the amendment relates to some of the matters we discussed when considering similar provisions in the Higher Education and Research Bill. The amendment would ensure that the entitlement that the Bill gives students to continue their education works in practice. We know that cases of colleges failing or other crises have arisen both in FE and in HE. I do not want to exaggerate those issues, because I take on board the points made by the Association of Colleges and other college organisations that the vast majority of FE colleges conduct their affairs in a very wholesome and satisfactory fashion, as my hon. Friend the Member for Luton North has mentioned previously.

[Kelvin Hopkins (Luton North) (Lab)]

Amendment 1 is very simple and I hope the Government will be minded to accept it in some form. Have we had any response, contribution or advice from the Association of Colleges or the Sixth Form Colleges Association? Do they broadly agree with the Government’s proposals? Are they agreeable to our amendment?

[Gordon Marsden]

My hon. Friend is right that we need to get support from those organisations. The AOC has raised particular issues relating to later Opposition amendments, such as amendment 34 to clause 15. Some of those concerns will be explored when we consider those amendments.

The ambitions of the special administration provisions are noble, but amendment 1 is intended to serve as a safeguard against any unintended consequences. As we know, even isolated incidents of colleges that hit the headlines can have a deleterious effect on the sector. The sector is in a delicate state at the moment—I will not put it any stronger than that—so if this provision is needed, we should do what we can to avoid problems with the impact on students and education.

As far as I understand it—I say that with due modesty, because some of this is quite technical—the education administrator will be given four options for supporting students to continue their education if their college becomes insolvent: selling assets to keep a college afloat; bringing in another body to take on functions of the college; transferring students to another college; and keeping the college

“going until existing students have completed their studies”.

That last phrase is rather ambiguous, and it would be good to hear the Minister’s thoughts on it. Whether in his response to the amendment or later this morning, it would be useful to hear whether there are any thoughts on the timeframe of that option.

All the options are sensible. I do not think that any member of the Committee would suggest that they should not be pursued by the education administrator if students’ education were put in jeopardy by insolvency, but there are questions about the finessing of those options, about which option the administrator thinks it best to pursue, and about the timeframes. Again, the Minister may want to say something about potential timeframes as we go along. Sometimes the education administrator might need to use more than one of those four options, perhaps at different points in the process. Our amendment addresses what that will mean for students in those different circumstances. To do that, we propose that an assessment be made of the impact of the administrator’s decision on students and the local community, enabling any negative impacts to be appropriately mitigated.

We are realistic. We know that sometimes difficult situations bubble up over a long period of time and there are amber warnings, but sometimes, because some of the problems have been concealed, they blow up very rapidly and hit the headlines. Ministers, the new institute or, indeed, the Skills Funding Agency may have to move swiftly in such circumstances. We understand that. We do not want this to become an over-bureaucratic, long-winded, time-consuming process, but we believe that a definitive assessment is needed somewhere in the process.

We have several concerns. If an administrator keeps a college going so that existing students can finish, for example, one can see the potential benefits for the students. While it will depend on the nature of their contract—the University and College Union and others have previously raised concerns that the FE sector is becoming a mélange of shorter term contracts—there will be lecturers and staff on contracts of significant duration, and it would be understandable, perhaps highly probable, that they would seek to leave. After all, the involvement of an education administrator is essentially a sign of a potentially failed college and that their employer, at least in the way that he, she or it employs them, will either close or change in the near future. Any exodus of staff in such circumstances could have untold impacts on the quality of education that students receive. We, and I am sure the students at such colleges, want to know what transitional measures are envisaged to maintain the delicate balance needed to protect the quality of education that students receive at a college that is being kept open on life support. That is option 1.

Option 2 is an administrator deciding to begin selling off college assets to address the insolvency issues, or just to keep the college afloat. What protections will there be so that resources that are integral to a learner’s studies will not be sold off? I understand that it is impossible to make an absolute judgment in every case on whether an administrator should do one or the other. It will obviously depend on the individual circumstances and assets and so on, but computers and ICT—I think “digital services” is the more up-to-date term—spring to mind. Often worth a significant sum, they may be an attractive asset that is easy to sell quickly for a good taking; on the other hand, selling them off could leave less equipment to share between the college’s remaining students, which would have a negative impact on their learning experience.

Additionally, the area reviews and mergers need to be thought about in great detail. In our evidence session I traded questions with the FE commissioner on the impact of that. He takes a more sanguine view of that process than the Committee and I do, but time will tell. What we know is that in circumstances where learners need to be transferred to another college—that does not necessarily mean that the whole body will close, as someone suggested—the college building could continue but, for whatever reason, the students in a particular department or area are transferred to another college, possibly for economies of scale. It is not necessarily that one particular college is closed and absorbed into another.

[Kelvin Hopkins]

These events would be of great concern to students and staff alike if they happened, but we hope they will not and we will try to ensure that they do not. However, if there are to be changes, would it not be wise—or essential—to make sure they take place during the long summer vacation, so that they do not disrupt students in the middle of courses during in the academic year?

[Gordon Marsden]

My hon. Friend, as always, makes a good and practical point. I have two observations. One is that crises cannot always be managed and sometimes they blow up from nowhere. My other observation is that among the pressures on FE colleges these days is the fact that the long summer break is becoming less long. That is true for FE students as well as other students. However, my hon. Friend’s general point is absolutely right and needs to be taken into account.

There are plenty of questions to be answered for students. How close to their home and their old college would the new college or facility—it may not be a completely new college—be? How much more expensive and time consuming would it be to get there? We know that college students have to spend a considerable amount of money on travel and we know that the mechanisms for supporting them are highly variable, particularly with local authorities’ discretionary spending being cut to the bone in a range of areas. There is already a risk of making some education and courses inaccessible for the less well-off.

What financial support does the Minister envisage might be available to help such students to access education at a new institution if it turns out that the challenges are considerably greater? For example, would the new college have the capacity to respond to any influx of new students? As I have indicated, insolvency might result in some students finding themselves forced to travel longer distances to continue their studies, but there is no reference in the Bill to mechanisms by which they might be supported or compensated. I understand that that is not something that should necessarily go into the Bill, but while I appreciate that a lot of things must be worked out, it is a bit worrying that it seems that, even at this stage, not much thought is being given to some of these issues. If it is, I apologise.

Mergers between colleges can be harmful to the social fabric and social mobility, particularly for young people in rural and suburban areas, and might force them to travel 30 or 40 miles to college. I raised this point in Westminster Hall about a year ago with the Minister’s predecessor, who seemed to be somewhat miffed that I referred to his predecessor, the right hon. Member for South Holland and The Deepings (Mr Hayes), being decidedly agnostic about the prospect of mergers. That was the case, however, and it was because the right hon. Gentleman’s constituency is very rural, so he has a lot of knowledge and concern about the issue.

We must make a distinction between the geographical situation when there is insolvency and the mechanisms to deal with it. For example, when two colleges merge in a suburban or rural setting, the implications for the ability to maintain courses, and thus viability, will be significant if issues such as travel loom large and make it impossible for existing students to go there or for future students to want to go there. Even in urban areas—parts of Greater Manchester, for example—public transport is not necessarily good. In my constituency, travelling west to east or east to west on public transport tends to be more difficult than going north to south. There is a range of concerns.

We have seen during the ongoing area review process that the Government have encouraged colleges either to merge or to close. The new FE commissioner said in evidence that provision at levels 1 and 2 in particular needs to be as local as possible to learners, whether in an urban or a rural area, but he accepted that if people do not have the wherewithal to travel, they will not be able to do so. Shakira Martin of the NUS said in the evidence session:

“It is also not clear how the Government will make sure that the education the student receives in the college is kept open and to a high-quality standard. For example, the area review process may have unintended impacts. There will be fewer colleges, further apart. How will travel costs and access”—

time is an issue as well, not simply cost—

“be addressed?”––[Official Report, Technical and Further Education Public Bill Committee, 22 November 2016; c. 51, Q69.]

In evidence, Bev Robinson, the principal and chief executive of Blackpool and The Fylde College, who was a member of—[Interruption.]

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[Gordon Marsden]

I was talking about how travel costs and access would be dealt with and I was about to quote the comments of a witness, Bev Robinson, the principal and chief executive of Blackpool and The Fylde College. She said:

“I would wish to make sure that learning within a reasonable travel-to-learn pattern was protected as well as students.”––[Official Report, Technical and Further Education Public Bill Committee, 22 November 2016; c. 51, Q70.]

I see nothing in the Bill about where the funding to support this process will come from, and Ministers have not said a great deal about it.

Research released in 2015 by the National Union of Students and the AOC showed that only 49% of further education students can always afford their travel costs. The average travel time for those surveyed was two hours and 48 minutes a day, for an average distance of 11 miles. Many young people—about 40%—rely on financial support from parents or guardians for travel costs. The problem is of course exacerbated by the lack of national funding schemes to get young people to college. Even the minority of councils that offered discounted travel for young people on a discretionary basis are now less likely to do so, following major Government cuts. The amendment would require those matters to be considered so that appropriate measures could be put in place, although such issues are difficult to legislate for and there are unknown consequential effects. Invoking education administration powers may affect students, but that is precisely the point of the amendment: it would ensure that whatever impacts the powers have in practice, they are assessed within the local circumstances of the college in which the powers are needed. That is an important part of the education administrator’s responsibilities.

If students have to travel longer distances to college, incurring higher costs, it strengthens our argument that education maintenance allowance should be reintroduced to help cover those expenses.

[Kelvin Hopkins]

My hon. Friend makes a very strong point. For poorer students travel to colleges is expensive even now, particularly in sparsely populated rural areas. The closure of a college in one town and having to go to a town many miles further on will cause great difficulty in financial terms and in terms of the time spent travelling and the reliability of public transport.

[Gordon Marsden]

My hon. Friend again makes a very good point. It underlines our concerns and why we think such issues need to be taken into account.

Amendment 2 is designed to ensure that, within the circumstances in which the process takes place, all relevant stakeholders are fully consulted about decisions taken by the education administrator in respect of the future of the institution. This touches on a theme not dissimilar to that which we discussed during the debates on schedule 1 to the Higher Education and Research Bill, where consultation with staff and students was a high priority.

The amendment would ensure that there is full consultation with various bodies or groups representing further education staff and students. Members of the Committee might ask, “Is this necessary? Surely the students and the student body are bound to be informed,” but I have to say—Members may have experience of this—that is supposed to be the case when businesses fail and companies go bust or when something cataclysmic happens, but often workers or employees are not kept in the loop. We should legislate for the worst scenarios and the worst employers, not for the best.

It is important that the education administrator should consider representations from relevant stakeholders such as students and staff, as they have invested two or three years of their time and money in studying and their livelihoods will depend on the institution in question. It is surely not too much to ask that the education administrator should have the responsibility placed on him or her to consider those representations, too.

The other group it is vital to consult are recognised trade unions at the further education body. The positive influence of unions on training and skills in the workplace and in colleges is another key reason why unions should be consulted. Research by Unionlearn has shown, as I have mentioned before, that the union effect on skills across the whole economy is significant and has strengthened in recent years. I am obviously referring to the training that goes on at work, but often the trade union representatives who operate in a college will be either union learning reps themselves or closely associated with union learning reps. That point needs to be made. On the union learning fund, an independent evaluation has demonstrated a range of new findings about the positive impact of union learning for both employers and employees. That also has a bearing on the necessity and advisability of consulting the recognised trade unions at the further education college in question.

I will finish with those remarks, but I ask that the Minister gives some thought to both amendments. These are things that should happen, and by making the amendments we would ensure that they do happen.

Technical and Further Education Bill (Eighth sitting)

Kelvin Hopkins Excerpts

Committee Debate: 8th sitting: House of Commons
Thursday 1st December 2016 Public Bill Committees

[Gordon Marsden]

I beg to move amendment 5, in clause 22, page 10, line 7, at end insert—

“(2A) The education administrator may, in performing his or her functions for the purpose of achieving the objective of the education administration, request information, advice or guidance from practitioners with an understanding of education regarding the management of a further education body.”.

This amendment would allow an education administrator who, under the eligibility outlined in clause 15, might not necessarily be an education specialist to supplement his or her knowledge.

The amendment pursues an issue that we have already discussed, but in the context of the experience or knowledge of higher education that the education administrator will need. The Minister and I had a useful exchange about the capacity of the education administrator to reach out, either within an organisation or peripherally to it. The amendment would allow an education administrator who meets the eligibility guidelines outlined in clause 15, but might not necessarily be an education specialist, to supplement his or her knowledge.

Our friends in the National Union of Students were particularly anxious for the amendment to be tabled, and we have taken their points on board. As the Minister will know, the NUS has welcomed the provisions that relate to insolvency, but it, too, is nervous—well, “nervous” is perhaps the wrong word, but it is certainly concerned. It believes that the process should be underlined as strongly as possible and that, in the twists and turns of what will inevitably be a fraught and taut process for all concerned, the administrator should be able to take further advice, even if he or she has some past experience. The amendment would make it clear that the educational administrator may seek that advice.

The Bill does not require the person appointed to deal with the college’s insolvency to know anything about colleges or the FE sector; under clause 15, they need only be an insolvency practitioner. We do not dissent from that, because we have already had a conversation about it and we are entirely reassured by the points that the Minister has made. However, the education administrator will have substantial powers over the future of an education body and its students, and indeed over the education body’s management, as clause 22(1) sets out.

Bearing in mind that the period of time for which they might have to manage the FE body’s affairs will be somewhat elastic, it would seem sensible to ensure that the administrator can get advice from people who actually know how to run an FE body. Better still, obviously, would be to have an administrator who was either very close to or within the FE sector. That was the intention behind amendment 34. After all, the Bill is designed to recognise that context, which is why it includes the education objective and entitles learners to continue their studies. Amendment 5 would just ensure that the Bill makes that provision and allows the education administrator access to whatever information and advice they may need to fulfil their duties. I am sure that the Minister wishes that to be the case. We suggest that it is a fairly obvious point—the Association of Colleges and the NUS think so—but it is not obvious in the Bill currently.

Without straying beyond the narrow lines of the amendment, I merely say to the Minister that there are many options for practitioners who could be called upon with an understanding of further education management. That could include chairmen or governors of FE bodies, former FE commissioners, or perhaps even retired people from those areas or from awarding bodies. Will the Minister give us some further details about whom he imagines an education administrator might wish to consult? Whatever avenue he wants to go down to assure us in that respect, it is important that the administrator has the advice of experts to make the correct call.

[Kelvin Hopkins (Luton North) (Lab)]

I will be very brief. I support my hon. Friend. One of the problems for the FE sector and, even more, for sixth-form colleges is that the whole sector has been bedevilled by decisions being made by people who are unfamiliar with those sectors. Many people involved in politics have come through a school or university environment; they have not been through further education. Many areas do not have sixth-form colleges, so people are not quite sure what they are. It is important that we have people with knowledge of the sector—educationally and organisationally —to make judgments on these matters. I just wanted to support my hon. Friend with those few words.

[Robert Halfon]

I appreciate the amendment. I raised these issues in the previous sitting. I go back to the quotation from Stephen Harris, the insolvency expert, who said that

“it is worth standing back and recognising that insolvency practitioners are not train drivers, or people who spend their life in the railway or the London Underground”––[Official Report, Technical and Further Education Bill Public Bill Committee, 22 November 2016; c. 46, Q60.]

Those people are expert insolvency practitioners, but many have some kind of educational link or work for a company that has a good link with and expertise in education.

It would be inconceivable that any education administrator would not consult—I strongly expect them to—key stakeholders, particularly the FE commissioner, student bodies, governors, parents and any relevant sponsor or other stakeholder involved with an insolvent college. That is expected as a matter of course, but I will reflect on what the hon. Member for Blackpool South said. On those grounds, I hope that he is happy to withdraw the amendment.

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[Gordon Marsden]

I beg to move amendment 6, in clause 22, page 10, line 10, leave out “have special educational needs” and insert—

“(a) have special educational needs;

(b) are care leavers;

(c) are parents;

(d) are carers, carers of children, or young carers, as defined by the Care Act 2014; and,

(e) have other particular needs that may be determined by the appropriate national authority.”

This amendment would make provisions for the particular needs of additional groups of existing students to be considered by an education administrator in pursuing the objective of an education administration.

Having touched on the issues of special needs, we want to probe a little further and more broadly beyond what has been said. The Minister has already given strong assurances on the general issue of special educational needs, but he will be aware of particular circumstances affecting some categories of people who take the big step, given their experiences, of engaging with further education. I am sure that everyone would agree that we do not want those groups of people, in particular, to be disadvantaged, and we certainly do not want them to suffer more disadvantage than students ordinarily would in the circumstances.

I accept that lists can be invidious, but we feel that care leavers, parents, and

“carers, carers of children, or young carers, as defined by the Care Act 2014”

are three groups that may be particularly vulnerable to disruption in their studies, as we have discussed. The amendment is designed to signal to the administrator the importance of taking those groups into account.

[Kelvin Hopkins]

Earlier my hon. Friend made a point about distance of travel. Groups such as parents and those with caring responsibilities will definitely be affected by travel over longer distances. I am sure that he has that in mind.

[Gordon Marsden]

My hon. Friend is right. He has read not only my mind, but my postbag. Only half an hour before coming here I received an email from Unison, which raised some of those issues with respect to its members who fit into one or two of the categories in question. It made precisely that point about distance, which I was anxious to make in my exchange with the Minister about the education maintenance allowance. It was not simply about cost; it was also about time.

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[Gordon Marsden]

I beg to move amendment 7, in clause 23, page 10, line 31, at end insert—

“(2) The education administrator may not transfer assets of any further education body to a private company where he or she considers that more than half of the funding of the acquisition of the asset came from public funds.”.

This amendment would ensure further education bodies with a track record of accruing assets publicly, could not be transferred to a private company.

We come to an amendment that is longer than the clause it seeks to amend. That might suggest that the amendment is otiose, but I do not think it is; I think the clause ought to have been expanded a little more— but then I would say that. I want to focus some attention, at a certain length, on this issue. On our side of the Committee, that raises some really big issues about what would happen to the transfer of assets from a further education body to a private company.

Information produced by the Department for Business, Innovation and Skills on the dissolution of an FE corporation specified that assets should be transferred only to charitable bodies:

“The Secretary of State and the CESF are concerned with the appropriate use of those capital assets that have been acquired/developed/redeveloped with public funding and the conditions for their transfer and usage…FE corporations are advised to undertake early discussions with the Skills Funding Agency to identify the relevant assets and any potential repayment of some, or all of the associated grant or proceeds of sale…The regulations include a requirement that the FE Corporation publish the proposed arrangements for the transfer of the property, rights and liabilities of the FE Corporation…The Dissolution of Further Education Corporations and Sixth Form Colleges Corporations (Prescribed Bodies) Regulations 2012”—

that would have been an interesting secondary legislation Committee to sit on—

“lists the bodies to which an FE Corporation can transfer its property rights and liabilities upon its dissolution. It is expected that all transfers should be made to charitable bodies, and for the purpose of education.”

It is on that point that I want to focus my remarks on the amendment. The document continues:

“Where the bodies are not charities then it must be transferred in accordance with the charitable purposes of the trust.”

It then links to a whole list of prescribed bodies to which assets could be transferred, including sixth-form colleges and governing bodies.

The point I start from is that to say it is “expected” that all transfers should be made to charitable bodies is not the same as saying it is “required”.

[Kelvin Hopkins]

My hon. Friend makes a good point. Is the stronger case not that such properties should be transferred back to local authorities? That is where the property came from in the first place.

[Gordon Marsden]

My hon. Friend makes an interesting point, and possibly opens up a new area for policy discussion in certain political parties. The reality of the situation is that in practical terms most local authorities would struggle to take on those responsibilities at the moment, but he is absolutely right to make the point—I will expand on it—on the genesis of the assets.

Given the genesis of those assets and their development over the years, we need to look with extraordinary care at any circumstances in which they might go into the private sector. Incidentally, that does not necessarily mean that we are saying that the bona fides of the private sector potential acquirers are bad. We simply recognise the fact that it would be the transfer of something that is largely of public value into the private sector without taking any account of the genesis and development.

I want to explain why I think this issue is so important. When colleges were incorporated in 1992, it took them formally outside the aegis of local authorities, as my hon. Friend the Member for Luton North said, but we have to take into account that that asset base of building in many cases was built up with local authority support and funding over a 20 or 30-year period.

The Minister has visited my local college, Blackpool and The Fylde College. I think he went to the Bispham campus, which is right at the other end of town and not in my constituency. When he arrived, the Bispham campus no doubt looked nice and shiny and new, but it did incorporate—I am not sure how much it still incorporates—buildings and elements that go right back to the 1950s and 1960s. Indeed, when the Building Colleges for the Future process was taking place in the 2000s, that was one of the arguments for demolishing that building and relocating it in the centre of town. It did not happen for a variety of reasons. At the time I was rather annoyed that it did not happen, but nevertheless I am just illustrating the point that many of the buildings that we are talking about have accreted their estate either on an active financial basis or by the ceding of lands by local authorities and other organisations.

Apart from that, over the years since then large sums of public money have often gone directly to support and build the estates of FE colleges. In the 2000s, the then Labour Government brought forward the major programme of Building Colleges for the Future. Despite the fact that the programme was curtailed and certain places, including my own, missed out on the final stages, it was a commitment of literally hundreds of millions of pounds—other Members in the House got their completely new college and everything that went with it—and that is without taking account of the other areas of non-private sector funding. Sometimes that was through very complex relationships that might involve lottery-associated bids. Sometimes it was through the significant sums of money put in under the old regional development agencies. As I know well, having shadowed the regional growth funds in my previous portfolio, sometimes it was through regional growth fund developments, and sometimes there are offshoots of European structural funds. It is important to remember all of that.

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I want to leave the Minister in no doubt that the point we are making is based on what has happened in the past. There is an old saying, “once bitten, twice shy,” and in this instance we should be very shy of allowing private providers simply to come in and acquire a significant amount of publicly acquired assets in a case of insolvency without us looking carefully and extracting some price in return.

[Kelvin Hopkins]

I strongly support my hon. Friend’s case. This is something that I am alarmed about. The reality was that, at incorporation, hundreds of thousands of acres and hundreds of buildings were transferred without charge from the local authority and incorporated in bodies that still seemed to be essentially in the public sector and were still largely funded by it—sixth-form colleges are entirely funded by the public sector. The idea that they could be sold off to speculators for profit, with development value acquired and millions of pounds made, is completely unacceptable. If anyone ought to have that asset, it is the public sector: either local authorities or a central Government Department. If they so choose to sell land off, at an appropriate value—if it has planning permission for housing or whatever—that development value should accrue to the public purse as well.

I have some experience and, as always, knowledge of what has been happening recently. Indeed, one college had a large area of land associated with it that had been a sports field that was still used for sports but was also a local leisure amenity. The principal wanted to sell that land off for housing development, making a vast amount of profit, and the implication was that he might have benefited personally. He was known to be assiduous in making sure his pocket was well filled. I think he managed to pay himself the highest salary of any college principal in the country even though his was not one of the largest colleges. Be that as it may, he eventually left in some disgrace and the college is now recovering, but selling off land for personal profit was a temptation that clearly affected him.

The principal was also building an academy chain by getting schools to become academies and then trying to get them into his ambit. It is interesting that two of the schools had land attached, and when, some way through the deal, it was decided that he could have the schools but not the associated land, he lost interest in getting them into his academy chain. It was clear that he was interested in the land associated with those schools, not in the education of the children, the success of schools or whatever. When big money is involved, college principals and others involved in college life can be tempted by the prospect of substantial personal financial gain. That has to be guarded against, and the way we do that is by ensuring that the assets stay in the public sector and that any benefit, financial or otherwise, accrues to the public sector.

The amendment therefore goes some way towards what I would like to see, and I will certainly support it should my hon. Friend the Member for Blackpool South press it to a vote, but I think we ought to go further and ensure that those kinds of practices cannot happen. We are talking about public assets, built up by the public sector over decades, if not scores of years or generations, and to see them simply handed over to private speculators without any benefit to the public sector is absolutely unacceptable.

We have to separate out capital assets from revenue costs. Revenue costs become too great if students disappear or the college is not being run efficiently and so on. We can deal with that. Capital assets, on the other hand, should be treated as precious and retained for the public sector and for public benefit; they should not be for the benefit of property speculators who could make millions, if not billions, out of such assets across the country, if allowed to do so.

With those few words, I express my strong support for the amendment. I hope that at some point the Government will recognise this issue so that we can go further and make the principles behind the amendment even stronger in legislation, whether in this Bill or in others.

[Robert Halfon]

I thank the Opposition for the amendment and the hon. Member for Luton North for his contribution. I will make a couple of general points before I go on to the specifics.

As has been observed, and I repeat, without the Bill there is no protection for students or from the seizure of college assets. The hon. Gentleman talked about hundreds of millions in government funding, but the general point is that college insolvency is likely to be a very rare event, so the portion of government assets that might transfer to a private sector company is likely to be small. The priority, as I say, has to be protecting students. Such a transfer is right if the education administrator is fulfilling his special objective and believes that it protects the students if he has the ability to do so.

On solvent dissolution, assets must go to a charity that has educational purposes. In insolvency in a special administrative regime, transfers go to bodies prescribed in regulations, all educational, which can include private education providers, or, as the hon. Gentlemen will be pleased to know, local authorities. As the FE Minister, I always have colleagues coming to me with suggestions about how the local authority might be involved with the FE college.

The Bill is not about private providers; it is about statutory bodies and companies that run designated FE institutions—that is, designated by the Secretary of State. For independent training providers offering provision to those with advanced learner loans, there must be a register of training organisations, they must have at least satisfactory financial health, they must pass capacity and capability requirements, and they have to have evidence of, and a track record in, education and skills delivery.

To go back to the question asked by the hon. Member for Batley and Spen, transfer schemes are a feature of other special administrative regimes. They allow for assets to be transferred to another body without the agreement of a third party which would otherwise be necessary—for example, leases without the consent of the landlord. That means that the scheme can be used to prevent a third party from blocking a transfer that is intended to facilitate the achievement of the special objective. The special administration regime’s delivery of the public policy objective—in this case the protection of students—should not be subject to third-party agreement. The education administrator will use a transfer scheme only if that is necessary to achieve the special objective.

It is important to note that the Secretary of State must approve any such scheme before it is used. Even if the education administrator does not use a transfer scheme, it is open to the Secretary of State to challenge the administrator if he or she feels that the administrator is not performing his or her duty to protect students.

[Kelvin Hopkins]

A thought occurs to me. If charitable organisations were brought into play, would it not be possible for assets to remain publicly owned but be allocated to such organisations on a rental basis rather than an ownership basis?

[Robert Halfon]

We are looking at cases of insolvency. We have the protection of students at heart, but we also want to be fair to creditors. I am passionate about the Bill because I believe it assures the protection of students, but I acknowledge that we have to be fair to creditors as well, and I do not think that would be the case if we did what the hon. Gentleman suggests, although in an ideal world that would of course be a lovely thing to be able to do.

The FE body itself cannot be sold. It is a statutory body. If it is insolvent and must therefore close, the protection of students must come first; the sale of the asset would be to protect students first and creditors second.

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[Gordon Marsden]

The Minister has been characteristically courteous. If I were able to take his reassurance as the end of the matter, I would, but unfortunately it is not the end of the matter. I will make a few brief points.

The Minister says that the proportion of public assets that might be disposed of to the private sector in the event of a college insolvency as a total is very small, percentage-wise. We could trade figures on what that percentage might be, but none of us knows. The fact of the matter is that it is about the area where that happens and the impact there. A college that has tens of millions of pounds’ worth of assets built up in a particular area and is crucial to the local community may be basically forwarded on to a private provider.

I accept what the Minister said; we are not saying that all private providers are bad or are leeches, but that is not the issue at stake. The issue at stake is whether private providers should be allowed automatically to take on valuable assets that have been accrued via the public sector in the event of an insolvency. The Minister said himself that it is not about private providers, but he also said that transfers could include private education providers.

In terms of real-life events, private providers are well equipped normally with lawyers and accountants. Who will monitor the detail of this? Will it be a slightly harassed education administrator? Will it be officials in the Minister’s Department? I doubt it.

[Kelvin Hopkins]

As a member of a local authority many years ago, I saw the representatives of a town shopping centre—an asset that was owned by the council but rented on a long-term basis—who were skilled financial advisers, run rings around the local authority treasurers, who just could not cope with the power ranged against them. We have to be very careful, because when big money is involved, companies will get the best brains to ensure they win.

[Gordon Marsden]

My hon. Friend is absolutely right. If it were not for the track record of problems in the FE sector over the past three to four years that I have described, we might be more sanguine, but this is a really important principle that should be established on the face of the Bill. I am afraid that on this occasion, I will not withdraw the amendment and will press it to a vote.

Question put, That the amendment be made.

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[Gordon Marsden]

I entirely understand that. I was not suggesting that people are slothing on the job; I was merely making the reasonable point that the Bill necessarily involves a lot of administrative time—I put it no stronger than that—and that raises in my mind some ongoing concerns about the capacity, either of the Department or of some of its institutions, to take some of these things forward. I will leave it at that.

[Kelvin Hopkins]

I just want to say that I am deeply disappointed that we cannot discuss the regulations in detail. Perhaps I am alone in that.

[Gordon Marsden]

All I can say is that my hon. Friend is a shining example to us all. He shames us deeply.

Let me make my own brief and pathetic response to clause 30, in the context of the Stakhanovite task that my hon. Friend has just suggested we undertake. I have a practical question for the Minister. On clause 31, the policy note talks about the way in which the power will be used to make decisions. For simplicity, I say to the Minister that although I am making this point specifically about clause 30—it affects chapter 4, which is very important because it is the special administration chapter —my question is generic and may be relevant to other clauses as well. It is very straightforward. When these revised instruments and regulation-making powers are brought forward, will there be consultation in any shape or form with the various stakeholders—FE bodies, the Association of Colleges, the Collab Group and others?

That is not for the sake of consultation itself. There have been occasions in the past, although I am not suggesting in this particular Department or area, when the lack of such consultation on detailed regulations between representative bodies—it normally has to be done at that level—and officials from the Department has produced anomalies that subsequently have to be rectified. It would be interesting to hear if the Minister can offer any reassurance on that.

[Gordon Marsden]

I beg to move amendment 8, in clause 37, page 18, line 14, at end insert—

‘(1A) The Secretary of State must ensure the list of disqualified officers is made publicly available.”

This amendment would ensure that a list of disqualified officers was publicly available.

The amendment is fairly straightforward, so I will not detain the Committee long. Again, we hope that these situations will be very rare, and we certainly hope it will be very rare that people are disqualified as a result of them. However, if disqualified people are involved, the principle of transparency is extremely important. This is a probing amendment, to find out how this might be effective.

Perhaps it is worth mentioning what the explanatory notes say about clause 37:

“This clause gives the Secretary of State the power, in relation to further education corporations and sixth form college corporations, to make regulations that have the same or similar effect to the Company Directors Disqualification Act 1986. This will mean that, like company directors, members (i.e. governors) of those corporations can be disqualified from acting as such in the future and the power allows the Secretary of State to make provision so that when a person is disqualified as a director of a company they can also be prohibited from acting as a member of a further education corporation or sixth form college corporation.”

I repeat that we all hope and assume that these occurrences will be irregular. However, would it not be logical for the list of disqualified officers to be made publicly available, to ensure transparency and to allow colleges to easily assess applicants to their own corporations in the future?

[Kelvin Hopkins]

I support the amendment. In my experience of life, it is often the rogues who are most plausible and we have to have lists of people to make sure that people do not get through the net, move to a different part of the country and take up a job, before we find out that they have twice been a rogue, not just once.

[Robert Halfon]

The disqualified officers to whom the amendment refers are those members of an FE body that is a statutory corporation who have been disqualified by the court on the grounds that they have been found liable by the court of wrongful or fraudulent trading or other similar offences under the Insolvency Act 1986 as applied by the Bill. Wrongful and fraudulent trading are provisions of insolvency law that will be applied to governors and others involved in running FE bodies that are statutory corporations in the same way as they apply to directors of, and those who run, companies. That is the purpose of the amendment.

It is right that a list is kept of those individuals who have been disqualified and that such a list is available to the public, so that it is evident which individuals should not be appointed as governors of colleges in the future. However, there is no need to provide for that specifically in the Bill. There is provision in the Company Directors Disqualification Act 1986 for a register of disqualification orders to be kept by the Secretary of State and for that register to be open to inspection—as we continue to refer to that Act, I propose that we use its acronym, the CDDA.

Clause 37 will allow us to replicate provisions of the CDDA; therefore it already allows us to achieve what hon. Members seek with the amendment. I have made it clear that I intend to consult on secondary legislation made under the Bill. That includes regulations made under clause 37, so it will be transparent that we will include a provision in regulations that is the same as, or similar to, the provision that exists in the CDDA, modifying it as necessary to make it work effectively for disqualified members of college corporations. On those grounds, I hope that the hon. Member for Blackpool South will feel able to withdraw the amendment.

--- Later in debate ---

[Gordon Marsden]

I thank the Minister for that explanation, in particular on subsection (2), which I had circled and was going to ask him about. He has now answered the question, so we have no problems with the clause. Indeed, it is very important, at a time when the Government continue to embark on devolution initiatives in this area, that a national database should be maintained.

The only observation that I would make—I think this view would be shared by a number of my colleagues—is that the process that is going ahead is somewhat piecemeal and somewhat curious in its restrictions. Some of us might like to see rather more rapid action, and rather broader and more ambitious ways of ensuring that, in the future, not simply adult skills but a much broader range of issues are devolved. However, that is outside the scope of the Government’s amendment and the clause, which we are very happy to support.

Amendment 18 agreed to.

Amendment made: 19, in clause 38, page 19, line 9, leave out “(4)” and insert “(3)”.—(Robert Halfon.)

This amendment is consequential on amendment 18.

Clause 38, as amended, ordered to stand part of the Bill.

Clauses 39 to 45 ordered to stand part of the Bill.

New Clause 1

Further education bodies: senior management

“A further education body shall be required to include in its senior management team a person or persons with professional financial qualifications having specific responsibility for oversight of financial management in the body.”—(Kelvin Hopkins.)

Brought up, and read the First time.

[Kelvin Hopkins]

I beg to move, That the clause be read a Second time.

[The Chair]

With this it will be convenient to discuss new clause 2—Further education bodies: governing bodies—

“A further education body shall seek to ensure that its governing body includes a minimum of two members with professional financial qualifications.”

[Kelvin Hopkins]

It is a pleasure to rise to speak to these new clauses, which I drafted myself and are borne of my own experience in college governance and teaching. That is particularly the case for new clause 1, which is about having internal experts with professional qualifications who would suffer severe reputational damage if they did not make sure that the college accounts and financial matters were all in order.

When I was chair of governors of what was then Luton College of Higher Education—it became the University of Luton and then the University of Bedfordshire —the principal decided that the accounts were not really up to scratch, and so spent a summer going through every detail of the college’s finances. He found many thousands of pounds unaccounted for, which he was then able to use to the benefit of the college. He happened to be a graduate in mathematics, which meant that he was at least numerate and could deal with accountancy, but accountancy is a specific skill.

As a student, I was taught economics by a former Treasury official whose next-door neighbour was an elderly lady who wanted him to deal with her accounts. He had to explain that an economist is not an accountant; it is a very precise skill and not something that one can just pick up at will. My closest university friend was a professor of accountancy. I know only too well that accountancy is a professional skill that needs great minds. I also understand that some of the people with the highest IQs in our country are accountants. Clearly accountants are important people, and it is important to have them involved.

At Luton Sixth-Form College, one of the deputy principals is a qualified chartered accountant. She is a superb member of staff who makes absolutely sure that all the forecasts and all the financial details are under control. We have been guided by her for many years now. It makes us feel at ease. We know that the finances are well under control, well understood and thoroughly explained to us on all occasions. Many years ago, before she was employed, I was on the finance and general purposes committee, and I remember the problems I had just getting to grips with it, and I am a numerate person with a degree that includes economics and maths. It was difficult stuff, but we had some good accountants on the governing body.

This is an important issue. If one wants to avoid insolvency, the best thing to do is ensure that one has someone with the skills to ensure one does not get into that situation in the first place, and that alarm bells are rung. As governors and politicians and Government Members, we are all well aware of what the problems are. If a principal is wilful and wants to do things beyond what they should be doing, and they have a weak financial adviser without professional qualifications, they will get away with it. There is also the question of competence; a principal may not be competent at dealing with accountancy.

Accountancy is extremely important. It sounds very boring, but I am glad that accountants are there. I would not want to have the responsibility of making decisions on financial matters without the advice of serious professionals. I have no doubt that some members of the Committee are qualified in accountancy. I am not asking Members to put their hands up, but they are about.

I have been a governor of Luton Sixth-Form College for 23 years continuously. I was also a governor there for two years in a previous period. I have been comforted by the fact that we have always had at least two qualified accountants on the governing body who can question and check the accounts and assure us that they are right, that we are not making mistakes, and that the college is in good financial order, especially when we are under pressure. We are under financial pressure; there has been the VAT issue, which I will not go into now, but we have debated it on many occasions. It is a great comfort and reassurance that we have professionals sitting on the governing body who can look at an account, make sense of it, and ensure that we are doing the right thing. It is not just a question of numeracy, which I have; it is about the specific skill of accountancy.

New clauses 1 and 2 would make a very valuable addition to the Bill. I hope that the Government will accept them or build requirements of that kind into the Bill to ensure that colleges are well governed and well managed in financial matters.

[Gordon Marsden]

I congratulate my hon. Friend on speaking to the new clause with his customary insight and from past experience, which are powerful advocates for the mechanisms he proposes. There are not many vehicles in the House for the regular praising of accountants. I am tempted to say that if we were in the middle ages and my hon. Friend, with the passing of years, were to pass away, he might be subject to a posthumous cult of the patron saint of accountants. The serious point is that everything my hon. Friend said is valid. Whether what he proposes is done in a formal way, as he suggests, or by strong direction, the Government would do well to take on board his proposals.

[Robert Halfon]

I thank the hon. Member for Luton North for the new clauses and for his wise contributions throughout the Committee. Rather than the role of banker, I think he has taken on the role of the Gandalf of the technical education and further education sector. There will therefore be no danger of his passing as the hon. Member for Blackpool South described.

The hon. Member for Luton North has tabled two important new clauses. In an ideal world it would be a good thing if all or even some members of governing bodies had important financial qualifications, but I remind him that the head of Blackpool and The Fylde College, when asked about that, said:

“I am thinking of the unintended consequences. It is very easy to say that we can dictate exactly the constitution of a governing body, but if we are looking at further education corporations across the country, some of them are very different. My own, for example, is an outstanding college.”—

I have seen it for myself, and it certainly is—

“We are very strong financially…we benefit from the mix and balance that we have on the board: we benefit from our business community and from two very able students on the board. I am hesitant about mandating exactly what that board would look like, because it varies by college. If, for example, I were a land-based college, I might want a slightly different mix, so I am hesitant about fully supporting that.”––[Official Report, Technical and Further Education Public Bill Committee, 22 November 2016; c. 60, Q80.]

When I asked her about the best way to achieve what she had done, she said what is needed is an expert to manage finances: not necessarily, dare I say it, someone with an educational background—we were talking about the education administrator earlier—but someone with a good understanding of finances. Where colleges are doing better even with all the financial pressures, I suspect that is because they have brilliant financial teams as well as the brilliant leadership of the principals and the advice of the governing body.

It is the governing body of the college that is best placed to ensure that effective management is in place that meets the needs of the college, but it must be the principal who puts her team in who has the day-to-day responsibilities. When colleges fail, as the hon. Gentleman will know, the proper intervention system is in place, with the education commissioner and suchlike.

The introduction of the insolvency regime will change a lot of this anyway, and it will serve to emphasise the importance of sound financial management. Although the Government are committed to the protection of learners, corporations are ultimately responsible for ensuring the financial health of their institutions.

I am wary of imposing such a measure, but I have a lot of genuine sympathy with the hon. Gentleman’s intentions. I commit to continue working with the sector to strengthen the financial acumen of governing bodies and the capability of financial directors. That will protect the interests of not only the colleges, learners and employers in the local communities but the taxpayer, which is incredibly important. On that basis, I hope the hon. Gentleman will withdraw the motion.

[Kelvin Hopkins]

I thank the Minister for his assurances and for his acceptance of the points I have made, if not of the new clauses. Even if nothing arrives in the Bill, I hope that guidance to colleges will, in one form or another, make sure that proper financial governance and financial management takes place so that insolvency is avoided at all possible costs.

[Robert Halfon]

I should have said that we are lucky in the sense that we have the Association of Colleges, the Collab Group and the Education and Training Foundation, and all those organisations are doing everything they can to improve financial leadership in colleges up and down the country.

[Kelvin Hopkins]

I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

Technical and Further Education Bill

Kelvin Hopkins Excerpts

3rd reading: House of Commons & Legislative Grand Committee: House of Commons & Report stage: House of Commons
Monday 9th January 2017 Commons Chamber

[Gordon Marsden]

Possibly a full meal, for those of a vegetarian instinct.

[Kelvin Hopkins (Luton North) (Lab)]

My hon. Friend and I, and indeed other Members, tabled a number of amendments in Committee that the Government do not appear to have taken on board. They were not pressed at the time, but we had hoped that the Government would bring some of them forward as their own amendments. Is he somewhat disappointed by that?

[Gordon Marsden]

I am always slightly disappointed when intimations of progress in Committee are not met with specifics on Report. Of course, the Government have the opportunity this evening, in commenting on our amendments, to do something about it, and indeed to accept some of them in principle. If they think that the amendments are defective but the basic principle is fine, they should take them on board.

--- Later in debate ---

Figures have been bandied about, and I do not know the exact figure—perhaps other right hon. or hon. Members do—on the proportion of NHS employees who were trained abroad. I think we would all concede that it is quite a high proportion. Those people often, though not always, come from countries that can ill afford to lose them. The United Kingdom as a rich country ends up, because we have not got our technical education and apprenticeships architecture correct, poaching skilled labour from countries that desperately need that labour to build their own economies.

[Kelvin Hopkins]

My hon. Friend is making very thoughtful points. He may be aware that there is now a fairly successful political party in Lithuania that is against emigration, not immigration, for that very reason.

[Rob Marris]

I am not surprised about that. In the last Parliament but one, I had the joy of visiting Lithuania with what was then the Trade and Industry Committee, and that was the sort of issue we talked about. In those days, Lithuania was already starting to import labour from Moldova—outside the European Union—because so many Lithuanians had come with their skills particularly to the United Kingdom and Ireland to ply their respective trades, and I specifically mean trades.

What my hon. Friend the Member for Blackpool South (Gordon Marsden) has sought to do from the Labour Front Bench is to beef up the Bill in two ways. One is to introduce even greater confidence in the new system that we will have, and part of that confidence building means moving towards national standards. This partly addresses the issue raised by my hon. Friend the Member for Gedling (Vernon Coaker) about parity of esteem. We talked earlier this afternoon about parity between mental and physical health, but in this case, we are talking about parity of esteem between the vocational and the academic.

Having been a semi-skilled worker for a number of years as a professional driver and a bus driver, I faced a fork in the road. Was I going to go down the vocational route—I had my eye on being a plumber—or was I going to go down the academic route with an eye to being a lawyer? I went down the academic route and I became a lawyer. I do not regret that at all. One reason I did so related to esteem or lack thereof, and another reason was that lawyers get to work indoors whereas plumbers sometimes have to work on building sites outdoors—and I do not like the cold. I am talking about quite a while ago, and the money was better in law than it was in plumbing. I am not sure whether that remains the case nowadays.

We live in a capitalist society. Part of what needs to be done to move towards parity of esteem in a cultural sense is the sort of thing that the Minister has attempted to do during his tenure of office and through this Bill; and, frankly, in a capitalist society, part of it is about paying people more. If we want parity of esteem, we should start paying people equal amounts of money—and pay plumbers as much as lawyers. Given that we live under capitalism, we are moving towards that because of skills shortages.

On new clause 1, I quite understand the Minister’s point that some of the information is already published as a result of the Enterprise Act 2016, but I believe that building this into the Bill as my hon. Friend the Member for Blackpool South has proposed, would be helpful for sending out the right message about confidence. It is the same with new clause 2, so that the representative panels can become more representative when they are put in place. I welcome the Minister’s assurance this afternoon that those panels will be in place by April, and I hope they will have a breadth of representation that should, I think, be built into the Bill. I asked the Minister a similar question in a slightly different context about the involvement of trade unions. This is not just a tit-for-tat along the lines of “You have the bosses there, so we have to have the workers there,” although that is important; it more about getting buy-in to the new regime from all sections of our society to build towards addressing the skills shortages that we will face, as I have said, under Brexit.

Under Brexit, there is no mistake about it: the price for staying in the single market would be free movement of labour and people; and the UK population has said that it is not up for that and does not want free movement of people or labour. We will therefore not be in the single market, but we will not have free movement either, because there will be restrictions—whether Members like it or not. We should use these circumstances in a positive way, so that local people can train up for jobs and so that we do not keep poaching skilled people from abroad—whether from Lithuania, as my hon. Friend the Member for Luton North (Kelvin Hopkins) mentioned, or elsewhere. For that, we need national standards.

When it comes to confidence, we need proper advice. Careers advice in England has certainly been, to say the least, patchy over the years. I remember when my Government set up Connexions, which was not exactly a resounding success—certainly not in the west midlands. I urge the Minister to think again about new clause 4, which is all to do with building confidence. That is particularly clear in paragraphs (b) and (d) of new clause 4(3). These highlight the fact that the Secretary of State should seek to

“ensure that such information, advice and guidance may be taken into account by relevant authorities and partners to meet the needs of local or combined authority areas”

and to

“monitor the outcomes of such information, advice and guidance for recipients.”

It is part of confidence building that we have a regime that is sensitive to local labour markets, which will change greatly from April 2019 when we are out of the European Union.

This Bill is part of the Government—surprisingly, given what is not happening in other areas—showing a bit of foresight, on which I congratulate the Minister. If only we had such foresight about Brexit ramifications for other areas of public endeavour; we do not, but this Bill is a step forward and part of that jigsaw. I am not saying that this is why the Minister has sought to introduce the Bill, but I do think we should look on it positively in that way, and I think that new clause 4 would help to build confidence in the new system, by ensuring that it would be reflective and flexible.

In referring to amendment 9 and others that my hon. Friend the Member for Blackpool South said were in a sense under its umbrella—amendments 10 to 16—the Minister talked about employers having freedom and flexibility. Amendment 9 deals with “recognised technical qualifications” and these are connected, certainly for England as I said, with national standards. We need those standards as part of the confidence-building measures, but also to make sure that we get the right people with the right skills—in a sense, workforce planning.

This country is pretty poor at workforce planning. The one area where we could have excellent workforce planning because the number of employees is so enormous and they almost all work for the state is in healthcare delivery, yet it is absolutely appalling. We do not have enough doctors trained here; we do not have enough dentists trained here; we certainly do not have enough nurses trained here; we do not have enough professions allied to medicine—whether radiographers or phlebotomists and so forth—trained here. Yet this is the one area of workforce planning that the Government could get right. I do not mean that only this Government have singularly failed. Under the coalition Government, things went backwards when some nurse training places were shut down. Figures on the number of employees working in the NHS in England alone are so huge that we could take social trends into account and do some pretty good workforce planning on the kind of skills that will be needed in five years or the 10 years that it takes to train a doctor, and so forth.

Arguably, we have been absolute rubbish at this since 1948. Having national standards is important not just for confidence, but for workforce planning. That is why I again urge the Minister to have another think about the import of amendment 9, if not its wording. It is all very well having flexibility and freedom for employers. These were the sort of words that the Minister used—he will correct me if I am wrong—when he explained why he thought amendment 9 was unnecessary and invited my hon. Friend the Member for Blackpool South to withdraw it. In my view, however, the Minister should have another think about that, because I believe that national standards are important. Again, I draw on my own experience. When I qualified as a lawyer, I took a national exam that had to be taken by all those seeking to become solicitors in England and Wales. For most of us, if we passed, that led to what was, in a sense, the equivalent of an apprenticeship. It was called “articles of clerkship”, and it involved two years in a solicitor’s office. What had been a national exam taken by everyone who wished to be a solicitor in England and Wales then became a moderated Law Society final exam. My hon. Friend the Member for Cardiff Central (Jo Stevens) will remind me what it was called. [Hon. Members: “Legal practice course.”] Yes. It became a legal practice course, and standards went down. I say that having talked to people in post-secondary institutions at the time and having trained articled clerks who had experienced the later system when national standards no longer existed.

National standards are not, of course, a guarantee of quality output, but they can be used by any Government, legitimately and properly, to ensure that we have confidence in the system and to ensure that those who undergo an apprenticeship process and emerge from it fully qualified have a qualification that is worth their having as individuals, and worth our society having.

--- Later in debate ---

[Justin Tomlinson]

Absolutely. That is at the heart of the points that I am going to make. People need time to develop the necessary skills, and employers need to be able to provide suitable opportunities for individuals with learning disabilities. All Governments, in all generations, have tried their best to give opportunities to people with learning disabilities. The proportion has stayed rigidly at about 6%, which is the worst percentage involved in any disability and therefore presents us with the largest challenge.

When I was Minister for disabled people, I visited Foxes working hotel in Bridgwater. I was incredibly impressed by the fact that it had managed to get 80% of its young students into work. Its three-year course involved two years in a working hotel, where the students learned how to acquire independent living skills and how to work towards obtaining jobs once they had finished. They were acquiring skills that were needed for their local towns, involving restaurants, hotels and care homes. We all have our own skills gaps in our constituencies, so the skills would be adapted accordingly.

The students spent their final year continuing their learning directly in the workplace. My hon. Friend the Member for High Peak (Andrew Bingham) mentioned employers. That final year gave employers an opportunity to receive support. Foxes academy provided training and advice for employers, and for the staff with whom they would be working. Young lads and ladies were able to learn their skills patiently over the year, which seemed to me to constitute an apprenticeship: they were learning skills on the job.

I invited the team to my Department. I said, “This is amazing: why can we not increase numbers?” I was told, “We could increase numbers, but that final year is so expensive, because we have to support the employer, that we have to cap them.” I think that if we could rebadge the system as an apprenticeship, we could access the funding that is being created through the apprenticeship levy, and bring about a huge number of additional opportunities. I met the then Minister for Skills, my hon. Friend the Member for Grantham and Stamford (Nick Boles), who agreed with me, and we set up the Maynard review. I am delighted that the Government have accepted every one of its recommendations, and I pay tribute to both Mencap and Scope for the huge amount of proactive work that they did, as part of the review, in helping to shape real, tangible opportunities.

Having spoken personally to the Minister, I know of his passionate desire to see all that through. We touched on the issue in the Bill Committee, but let me urge him now to crack on with those pilots. Every young adult will seize the opportunities which—as I know, having met hundreds of young people with learning disabilities—they are desperate to be offered. I ask the Minister to continue to make this a priority, and, in his summing-up, to explain where we are, what is the timetable, and what more we can all do to raise the issue with local employers.

[Kelvin Hopkins]

It is a great pleasure to speak in this important debate. I, too, was a member of the Bill Committee, and I am somewhat disappointed that Government amendments have not been introduced at this stage reflecting some of the points made in Committee, especially as they seemed to be accepted at the time, in broad terms, by the Minister. I therefore hope that amendments will even now be brought forward in another place to reflect some of the discussions we had in Committee, and, indeed, some of the points made this evening, particularly by my hon. Friend the Member for Blackpool South (Gordon Marsden) on the Front Bench, who made a tour de force speech introducing all his amendments. It is surprising that there are no Government amendments or new clauses on Report; that is very unusual.

All the amendments and new clauses have been introduced by my hon. Friend on behalf of the Labour Opposition—and they are all splendid and I support them all. The lack of Government amendments is disappointing, even though there is a degree of agreement on the value of this legislation, and we all know we have to do something about improving apprenticeships and training our young people for the future. As my hon. Friend the Member for Wolverhampton South West (Rob Marris) said, we have to train our own rather than just poach people from abroad.

New clause 1, requiring the Institute for Apprenticeships and Technical Education to report annually, is specifically about the outcomes of completed apprenticeships; it is about the quality of apprenticeships, not just other, broader measures of success. The quality of apprenticeships is vital, to ensure that they lead to the development of skills for quality, long-term jobs after their completion. Young people who complete their apprenticeships must be desirable to their own and to other employers; they must be able to command good jobs for the long term and to look forward to relatively high pay and advancement in those jobs. It is very important to make sure that apprenticeships are high quality not just in words, and that apprentices can do the things they are required to do after they have qualified.

I remember the days, many decades ago now, when we had full employment. I taught in further education during that era, and in many ways it was a better and happier period than we are in now. Everybody who wanted a job got a job, and teaching in further education was a sheer joy. It has been more painful and stressful since then, I have to say, and less well paid, and the conditions of employment are less good than when I was teaching. But that was several decades ago, back in the early 1970s. We also had large companies, mainly in the manufacturing sector, and the giant public utilities, which were then in public ownership, employing thousands of apprentices every year. They had to train their own and they wanted to make sure they were good. Some of those they trained moved off to other jobs, of course, but it was nevertheless beneficial to those doing the apprenticeships and to wider society.

Our society did well because we were training our own, but we have failed to do that in recent times; we have left things to the market, and the market does not always work well in these matters. A degree of Government intervention is required, and it is significant that the Prime Minister has used a phrase not used by any Government for a long time: she has talked about the need for an industrial strategy. I absolutely support that, and we had a debate on industrial strategy just a few weeks ago, which the hon. Member for Warwick and Leamington (Chris White) led very well.

The subject we are discussing now is part of that industrial strategy. We have to train these people, to make sure we rebuild industry. We do not produce enough any longer, particularly in the manufacturing sector; we do well in services, but not in manufacturing. We have a gigantic trade deficit because we cannot produce enough and we have to buy in from abroad. We must rebuild the manufacturing sector, not so that it becomes the dominant force necessarily, but at least so that it produces sufficient to have a sensible trade balance, which we do not have at present.

Apprenticeships have always been insecure in recent times because companies are much smaller now than they were and they are less secure because of economic crises. I have many anecdotes from my own experience. Just after the 2008 crisis, I was being driven to Heathrow for a parliamentary visit and the driver had an apprenticeship in the construction sector, but the company he had been with had collapsed and he finished up being a cab driver, which he could have done without doing an apprenticeship.

I have heard of fears, too, such as small companies training apprentices who are then poached by larger, more financially lucrative companies. That is particularly the case in the motor trade, where there are skilled small companies training their own people who are then poached by large companies that do lucrative insurance repair work, which can pay a lot more.

[Robert Halfon]

I thank the hon. Gentleman for, yet again, making a thoughtful speech. I do not have the figures to hand, but the evidence suggests that apprentices in companies are more loyal to that company than those on any other training scheme or in work experience or doing early-career jobs, and that they tend to stay with the companies they do their apprenticeships in.

[Kelvin Hopkins]

I am sure the Minister is right in the majority of cases, but for some there is pressure to move on—for instance as a result of what is happening with house prices at the moment, as one can imagine. Certainly in Luton I know of companies, such as small motor repair firms, that employ apprentices who are under pressure to get a home, and if they can earn a few thousand pounds more at a larger company nearby to help them get on the housing ladder, they will do that. I agree that loyalty is important and many of them want to be loyal, but if the financial pressures on their lives are such that they have to move, they will in the end move.

I particularly want to support the point made by my hon. Friend the Member for Blackpool South about the need for a strategy for improving career education and new clause 4. We must ensure that when young people are at school or in further education they are aware of the enormous range of opportunities out there and they do not just look at a narrow field. In Luton too high a proportion of students want to get into the legal profession, for example; they want to be professionals and do not appreciate that there are highly paid, highly skilled jobs in manufacturing industry.

Vauxhall Motors still has a plant in Luton, and almost all its senior executives started as apprentices, leaving school, doing apprenticeships and going up the ladder, eventually doing higher qualifications such as higher national certificates and higher national diplomas and becoming highly paid senior executives in the company. Those opportunities are out there, and young people must be made aware of them. We must have a careers strategy making sure that every young person knows about all the thousands of different roles they could assume in life, rather than just going into the professions, or, indeed, just going into a local company; there are lots of things young people can do.

Life can be very exciting, and it is important that all of us do something we enjoy. I am very fortunate in that I was fascinated by politics in my early life and I finished up in Parliament where I wanted to be; I do not regret a moment of it. But sometimes people are not aware of the enormous range of possibilities in life. Having a powerful careers advice strategy is vital not just for young people’s lives, but for the economy. If people are happy in their work, they will work better and the economy will work better, and the world will be a much better place.

I have one more story that explains something tragic that has happened in Luton. We were a town that trained thousands of apprentices, and I know many of them personally. Recently I visited a small manufacturing company that makes components for Formula 1 and Jaguar. It could not find one toolmaker; it wanted one toolmaker from a town of over 200,000 people that used to be dominated by manufacturing, but could not find one. It is a disgrace that we have failed to train sufficient numbers of people in these areas.

There are many other things I would like to say—I could speak for an hour unaided, I am sure—but as others want to contribute, I will leave it there. I hope the points I have made are of interest.

[Vernon Coaker]

I was not a member of the Committee, but I know that the Technical and Further Education Bill has generated a lot of really good debate and positive views on how we might achieve what we all want, which is an improvement in the technical and vocational education in this country and in apprenticeships. The fact that there is no division between us on that was illustrated by the contributions from the Minister and my hon. Friend the Member for Blackpool South (Gordon Marsden), among others.

--- Later in debate ---

[Robert Halfon]

My hon. Friend, whom I thank for his work on the Committee, is absolutely right. We introduced the apprenticeship levy to change behaviour and involve businesses in supporting apprenticeships, we have created the institute and the employer panels, and we are giving huge financial incentives to businesses, especially small businesses, to ensure that they hire apprentices.

The Bill also introduces an insolvency regime for the further education sector that will, in the unlikely event of a college insolvency, provide clear-cut protections for learners to minimise disruption to their studies as far as possible, while offering certainty to creditors. During oral evidence, we heard from representatives of the Association of Colleges, Collab and others, who supported the insolvency regime and the protections that it includes for learners. Although there were issues about which the banks had questions, many spoke in support of the clarity provided by the proposed measures. Santander told us that it was keen to lend more to the further education sector, and said:

“On the Bill and the proposed insolvency regime, we are actually supportive of the clarity that they provide.”––[Official Report, Technical and Further Education Public Bill Committee, 22 November 2016; c. 38, Q41.]

[Kelvin Hopkins]

As the Minister will remember, I suggested in Committee that all colleges should have professionally qualified members with financial skills in both management and governorship, so that skilled eyes would be trained on the finances to ensure that at least mistakes were not made internally.

Technical and Further Education Bill

Kelvin Hopkins Excerpts

Ping Pong: House of Commons
Wednesday 19th April 2017 Commons Chamber

[Robert Halfon]

This Bill was introduced to transform the prestige and culture of technical education, providing young people with the skills that they, and our country, need. It provides necessary protection for students should colleges get into financial difficulty, and ensures that the most disadvantaged are able to climb the ladder of opportunity. It left this House after thoughtful scrutiny and, after similar diligence in the other place, I am delighted that it returns for consideration here today.

I ask hon. Members to support the Government on all amendments made to the Bill in the other place except amendments 1 and 6, where we have tabled an amendment in lieu. Amendment 1 impinges on the financial privilege of this House. I urge the House to disagree to that amendment and will ask the Reasons Committee to ascribe financial privilege as the reason.

The amendment, costing more than £200 million per year by financial year 2020-21, would mean that the parents of apprentices aged under 20 would continue to be eligible for child benefit for those young people as if they were in approved education and training. It is an issue in which I have a great interest. Apprenticeships provide a ladder of opportunity, and we should seek to remove obstacles to social mobility wherever we can.

A young person’s first full-time job is a big change for them and for their family, and it marks a move into financial independence that should be celebrated. I know that the adjustment can be challenging for the young person learning how to manage a starting wage and new outgoings and for parents who may experience a fall in income from the benefits they previously received for that dependent child. One of the core principles of an apprenticeship is that it is a job, and it is treated accordingly in the benefit system. It is a job that offers high-quality training and that widens opportunities. Moreover, more than 90% of apprentices continue into another job on completion. Most apprentices are paid above the minimum wage. The 2016 apprenticeship pay survey showed that the average wage for all level 2 and 3 apprentices was £6.70.

[Kelvin Hopkins (Luton North) (Lab)]

Although what the Minister is saying is correct, in that those apprentices will be paid, taking child benefit away from low-income families will be a disincentive for them to take up apprenticeships. Those families will be pressed to stay in education so that they can continue to get child benefit. Is that not the case?

[Robert Halfon]

The crucial point is that the vast majority of level 2 and 3 apprentices are paid more than £6.30 an hour, and 90% of them go on to jobs or additional education afterwards.

The apprenticeship programme already supports low-income groups. The funding system gives targeted support to the participation of care leavers, and this year we are making £60 million available to training providers to support take-up by individuals from disadvantaged areas. We are committed to ensuring that high-quality apprenticeships are as accessible as possible to people from all backgrounds. We will take forward the Maynard recommendations for people with learning difficulties and our participation target for black and minority ethnic groups.

With regard to the amendment’s suggestion of a bursary for care leavers, I understand that some young people have greater challenges to overcome. That is why we are providing £1,000 to employers and training providers when they take on care leavers who are under 25. We will also pay 100% of the cost of training for small employers who employ care leavers. There is scope for apprenticeships to benefit social mobility even more. We are working across Government to use the apprenticeship programme to extend opportunities.

I am grateful to Lord Storey for tabling Lords amendment 6, which introduces a new clause into the Bill to require Ofsted to take into account the quality of the careers offer when conducting standard inspections of further education colleges. I welcome the work that Ofsted has already done to sharpen its approach. Matters relating to careers provision feature in all the graded judgments made by Ofsted when inspecting FE and skills providers. Destination data—published in 16 to 18 performance tables for the first time this year—are also becoming an established part of college accountability. Those are important steps.

I pay tribute to the good work that is already being done throughout the FE sector to prepare students for the workplace. Ofsted’s annual report for 2015-16 cites the excellent work of Derby College, which has set up employer academies so that learners benefit throughout their course from a range of activities, including workplace visits, talks from specialist speakers, masterclasses and enterprise activities. However, Ofsted noted in the same report that the quality of information, advice and guidance in FE providers can vary and does not always meet the full range of students’ needs. That is why I want us to take this opportunity to go further.

Lords amendment 6 signals our determination to ensure that every FE student has access to good-quality, dedicated careers advice, which I know this House supports. That is vital if we are to tackle the skills gap and ensure that we make opportunities accessible to everyone. We have proposed some drafting changes to the amendment to ensure that it achieves its intended effect. The amendment makes it clear that in its inspection report Ofsted must comment on the quality of a college’s careers provision. I urge hon. Members to accept the amendment. FE colleges are engines of social mobility, and this is our chance to ensure that students from all backgrounds can access the support they need to get on the ladder of opportunity and to benefit from the best skills education and training.

I will now turn to the amendments that the Government are asking the House to accept without any further amendment. The Government support Lords amendment 2, which requires schools to give education and training providers the opportunity to talk directly to pupils about the approved technical education qualifications and apprenticeships they offer. I would like to place on the record my significant gratitude to Lord Baker of Dorking for tabling the amendment, and for his unstinting support for the Government’s technical education reforms. As I have explained, high-quality careers advice is the first rung on the ladder of opportunity and will play a key part in realising our ambition for high-quality skills education and training. The amendment will strengthen the Bill by ensuring that young people hear much more consistently about the merits of technical education routes and recognise them as worthy career paths. I urge the House to agree to it. I hope that never again when I go around the country will I meet an apprentice who was refused access to the school they were taught in to talk about apprenticeships.