Lifetime Skills Guarantee and Post-16 Education

Statement

The following Statement was made in the House of Commons on Thursday 1 October.

“With permission, Mr Deputy Speaker, I would like to make a Statement regarding the lifetime skills guarantee and post-16 education. Ever since I was appointed Education Secretary, I have been determined to raise the status of further, technical and vocational education. In a speech in July, I set out that, for decades, this sector has been overlooked and underserved, playing second fiddle to higher education. All too often, it has not given the young people and adults of this country the skills that businesses are crying out for, or enabled them to pursue the careers they dreamed of.

What we are determined to do, and what we must do, is give people the opportunity to retrain and upskill, so that if one door closes, they will have the key to open others. This Government stand for empowering everyone in this country, wherever they live. We stand for the forgotten 50% who do not go to university. We stand for those who find that their jobs no longer exist because technology has redefined industries overnight. We stand for young and old alike. Talent exists everywhere in this country. We have to ensure that we give it every opportunity to flourish, wherever people come from.

Two days ago, the Prime Minister outlined plans to bring closer alignment between further and higher education, to end the outdated distinction that one is better than the other and to offer world-class education after the age of 16 that is fit for the 21st century. We want every student who has the ability and the desire to go to university to do so, but we also want all young people to be given a real choice in what route they take.

We will introduce a lifetime skills guarantee that will help people to retrain and upskill. This will be the backbone of our Covid recovery and will enable us to come back stronger and build back better. The measures will embed greater flexibility in the technical and vocational system to support not just young people but adults who need to retrain and upskill at any point in their working lives.

This is not merely a response to the pandemic. It is a continuation of our whole-hearted commitment to level up every inch of the country. Our reformed apprenticeships programme already provides a vital route for employers to meet their skills needs and for apprentices to learn and earn through high-quality training programmes and on-the-job experience. We are going to expand apprenticeships, making it easier for people to get a high-quality apprenticeship, and connect them to local employers who know what jobs their industry or community will need in the future.

We know that some employers will be nervous of taking on apprentices in the current climate. We are therefore making sure that we address some of the barriers that employers, especially small and medium-sized businesses, face in taking on apprentices—for example, by making it easier for larger employers to transfer their unused levy funds to smaller employers. Where apprentices have been made redundant as a result of the pandemic, we will ensure that more of them have the opportunity to continue their training. We have just begun the roll-out of T-levels, our new high-quality technical and vocational qualifications, and we have just welcomed the first intake of students, who are taking them in digital, education and childcare, and construction. One T-level is the equivalent of three A-levels, and these qualifications will open up further routes of study or employment for those who take them.

For those who have not achieved the equivalent of A-levels by the age of 18, the chances of proceeding to higher levels of qualifications are, as Philip Augar’s report put it, “virtually non-existent”. The lifetime skills guarantee will therefore fund technical courses equivalent to A-levels for adults, all of which teach skills that are in high demand in our economy. These will give anyone who left school without an A-level or its equivalent the qualifications they need to upskill or to change jobs, and give them a much better chance of finding work, achieving their dreams and doing what they want in life. We have already announced plans to sharpen the job focus and the quality of higher technical education. The process of getting employers to review and approve the best digital higher technical qualifications began last month. We want to invest in, and increase take-up of, these courses as they are developed to meet the skills needs of the economy.

Another key element of the lifetime skills guarantee is to open up funding and alternatives to degrees for students. We are going to transform the funding system so that people can get a loan just as easily for a higher technical course as they can for a university degree, and we will ensure that further education colleges have access to funding on the same terms as universities do. Everyone will be able to call on a flexible lifelong loan entitlement for four years of post-18 education, so any adult who wants or needs to retrain with high-level technical courses can do so, instead of being trapped in unemployment.

Our flexible lifelong learning allowance is going to enable people to study high-quality courses across further and higher education at a level and a time that best suit their life. This will make it easier for people of all ages to do courses locally and to study and train part-time to acquire the skills that can transform their lives. This new arrangement will provide finance for shorter-term studies, rather than people having to study in one-, three- or four-year blocks. People will be able to break up their study into segments, transfer credits between colleges and universities, and take on more part-time study. We will consult on this matter next year and bring forward legislation as necessary later in this Parliament.

We also want to transform our left-behind towns and regions, but we are not doing this just by investing more money in universities. We are going to do it by investing in local colleges. In the spring Budget, we announced an additional £1.5 billion to upgrade the further education college estate. The largest capital investment in the sector in a generation, it will enable colleges everywhere in England to have buildings and facilities that can deliver world-class tuition.

We are setting up 20 employer-led institutes of technology with capital funding for state-of-the-art equipment and facilities. They will be specialist institutions that are a unique collaboration between employers, colleges and universities. They will give businesses the skilled workforce that they need to drive growth and productivity and get more people into rewarding jobs. We have already committed £170 million to establishing the first 12 institutes and are making a further £120 million available for another eight in areas of the country currently without access to one. The competition for the next wave will open shortly.

We are going to inject £111 million in the largest ever expansion of traineeships, as well as an extra £32 million for recruiting extra careers advisers and £17 million for work academies in England. We are also providing £101 million to support school and college leavers to take high-value level 2 and level 3 courses.

Even before Covid, the country faced a challenge in terms of providing the skills that the country needed. We are desperate for more skills in digital, and more electricians and technicians, right across the board, from healthcare to construction. Our productivity continues to lag behind that of our neighbours and competitors—Germany, France and the United States all produce more than 25% more per hour than we do. If we were to match German productivity, it would enable us to recoup billions of pounds that we need to recover from the economic effects of Covid. Put another way, our productivity levels are only 4% higher than they were in 2008.

To bounce back from the pandemic, we will need a lot more people with the vital skills to drive productivity in our economy. Technology is one area with an ever-growing need for skills. This week, the Prime Minister announced that £8 million would support boot camps for digital skills in the West Midlands, Liverpool, Lancashire, Leeds, the south-west, Derbyshire, Nottinghamshire and Manchester. The boot camps will be led by local employers, and from next year we hope to extend the delivery model to other areas and other sectors.

Greater productivity will drive our economy as we seek to build back better after Covid. Businesses will be able to hire more, people will earn more and the quality of life will be much greater for more of our citizens. We will publish a White Paper later this year to take a holistic look at post-16 education and training. It will set out how we will continue to rebalance higher and further education, making sure that people understand the benefits of a greater technical education that offers them flexible ways to get the skills needed to progress and for our economy to prosper.

This is not a subject that just Conservative Members feel passionately about; it is something all Members feel incredibly passionately about. It is something that I think we all recognise is an area that has maybe been neglected a little bit too much in the past, and I hope that there is a sense of will across both sides to work together to make changes and to make improvements for the life chances of all.

I believe this dynamic programme of measures is not just about weathering the Covid storm; these reforms will lay down a marker for the age. They will bring an end to the post-16 career lottery and decades of indifference to further education, and they will set up each and every member of society with the means to get a satisfying and well-paid job. I commend this Statement to the House.”

My Lords, Labour broadly welcomes the contents of the Statement and we certainly share the stated determination of the Secretary of State to raise the status of further, technical and vocational education. However, we cannot welcome his statement that,

“for decades, this sector has been overlooked and underserved, playing second fiddle to higher education.”

That is an attempt by the Conservative Party to spread the blame for the role of successive Governments over the past 10 years in starving further education of the support it needed to make its full contribution to supplying the skills that our economy needs. That and the failure of the advanced learner loan scheme acted as barriers to many young people accessing further education.

For those looking to access training beyond level 3, it seems from the Statement that they will have access only to a flexible loan system. This does not seem to be a Government who listen to what people want and respond to the mistakes of the past. The need for training and retraining is urgent. Last month, the Open University’s latest business barometer revealed that 56% of UK employers continue to experience skills shortages.

I shall repeat some of the questions put to the Secretary of State when he made the Statement in another place last week. My colleague Kate Green MP put several questions to him, very few of which received an answer. I therefore hope that the Minister might do so now. On apprenticeships, the Statement talks of addressing some of the barriers that small and medium-sized enterprises continue to face three years after the apprenticeship levy was introduced. What additional support will be made available to that crucial sector of the economy, as well as to non-levy payers, to enable apprenticeship opportunities to be increased?

The Statement says that the lifetime skills guarantee will bring about equality between the further and higher education sectors. If that is to be the case, can the Minister say whether learners who study for the new funded courses at levels 2 and 3 will be eligible for maintenance support on the same basis as that which applies to higher education courses?

My Lords, this is very good news. I do not have to sit on the Bishops’ Bench to say, hallelujah. As the chief executive of the Association of Colleges said:

“For many years, further education colleges have not received the recognition they deserve.”

In fact, for 20 years or more, we have allowed further education and vocational education to wither. The skills gap is huge: you have to look no further than the Grenfell inquiry, which daily produces examples of people carrying out tasks and supervision far beyond their skill level, with catastrophic consequences. The forthcoming building safety Bill will impose big requirements on design, construction, supervision and regulatory personnel, who will need CPD in-service training, plus a stream of incoming trained starters. There are critical safety gaps at present.

The Chancellor’s scheme of £3 billion to spend on retrofitting energy improvements to homes—which, by the way, is to be done by next April—opens up another huge gap. Most small jobbing builders do not have the full range of skills needed and there are not enough energy performance assessors to prepare or supervise them. Of course, the loss of EU workers is keenly felt in London and the south-east. The work visa plan is unworkable for an industry in which peripatetic working around different jobs with different employers is normal. There is no evidence that anybody has a grip on these issues. That is why this Statement is critical and we hope that “rolled out as promised” or “build, build, build” will be a joke.

An entitlement to a fully funded level 3 qualification and more flexibility in levels 4 and 5 are important steps forward, as the Government begin to implement the Augar review. We very much welcome the proposals on apprenticeship, which have lost their way in recent years. We welcome more training funding for small and medium-sized enterprises and more flexibility on how the levy-paying employers can use their funds. Can the Minister tell us whether the apprenticeship measures will be funded from the existing £2 billion a year apprenticeship budget?

My Lords, I am grateful to both noble Lords for welcoming the Statement. I believe that when I was at the Dispatch Box for the first time, I mentioned that this had for too long been the Cinderella of the sector, but it no longer is. The paucity of investment in this sector has been going on for decades, as the noble Lord, Lord Storey, outlined. However, £1.5 billion of capital investment is going into the FE sector for buildings, which have also been neglected.

There are skills shortages. That is why one hears that, at the heart of the institutes of technology, apprenticeships and the review of levels 4 and 5, there is a need for employers to lead on these technical qualifications to ensure that they fill the skills gaps which both noble Lords mentioned.

As the noble Lord, Lord Watson, outlined, the newly funded courses at levels 2 and 3 are FE courses. Obviously, they are generally more flexible, so, although there is a need for learner support—to pay the costs of travel and, perhaps most importantly, the costs of childcare for people undertaking those courses—they are not funded in the same way as higher education maintenance loans. More often than not, this training is done by people who are already in some kind of employment and are reskilling. Of course, that is not always the case, as some people are claiming universal credit. However, we are fully funding courses, and funding for training will no longer be restricted to those aged 23 or under. That restriction has been removed, so any adult who does not currently have a level 3 qualification will have their tuition paid. That is a dramatic change, recognising that, as I think the Augar report mentioned, if you do not have a level 3 qualification by the age of 18, you will almost certainly not get one.

In relation to support for SMEs and the apprenticeship levy, we have previously made it easier for the larger levy payers to transfer the levy down their supply chain, often to SMEs. We have opened up the apprenticeship service to all SMEs and are looking at further initiatives to try to ensure that SMEs have access to it. We have changed the number of reservations that apply to SMEs. Previously, they could reserve three places; now, they can reserve 10, so that they get the opportunity to hire. We also announced that £2,000 would be made available per young person hired as a new apprentice, in addition to the £1,000 that was previously announced. Only if we ensure that small and medium-sized enterprises can hire the apprentices they need will we see the beginning of the recovery.

Before we commence with 20 minutes of questions from the Back Benches, I point out that a number of Members, both remote and present, have dropped out of the debate so it may be helpful if I read out the order in which I will call speakers. I will first call the noble Lord, Lord Baker of Dorking, then the noble Lord, Lord Knight of Weymouth, then the noble Baroness, Lady Garden of Frognal, followed by the noble Lords, Lord Empey and Lord Aberdare, the noble Baronesses, Lady Bennett and Lady Warsi, the noble Lord, Lord Curry of Kirkharle, and finally the noble Lord, Lord Lucas.

My Lords, I fully support the speech made by the Prime Minister a week ago in Devon, when he set an ambitious target of equalising practical and technical education with academic education. That is a very ambitious target which no Prime Minister since 1945 has had or indeed implemented, and it has my full support. I am very grateful for the mention of the colleges that I support, the university technical colleges. At the moment, they are by far the most able and successful technical schools in the country. We are having a record year in recruitment and we have incredible destinations. Last year, one of our colleges on the north-west coast of England produced 90% apprentices, which is absolutely incredible when the national average is 6%.

The speech that Boris made had a Boris flourish in it:

“Now is the time to end the pointless, snooty, and frankly vacuous distinction between the practical and the academic.”

Of course it is. The trouble is that, since 1945, there has been a huge drive to send people to universities, which is good for social mobility but it means that graduates have had disproportionate esteem, disproportionate political influence and disproportionate reward compared with those who make things with their hands. This is the time when we have to elevate the intelligent hand: to train not only the brain but the hand as well.

I am particularly concerned about the level of youth unemployment today, which for 18 to 24 year-olds is 13.4% and likely to rise to 20%. Nothing could be worse for an 18 year-old than to start their lives on the dole: it is a blemish that will affect them all their lives. My proposal is that, instead of being on the dole, they should engage in a year’s or perhaps two years’ further training for a higher national certificate or diploma, through which they will get skills that will help them to get a better job a year later. At the moment, the youngsters who do that have to take out a loan of £6,000 to £8,000. That should be stopped for the next two years, and these courses should not only be free but should have maintenance grants to help students with their living costs, because they will not be eligible for unemployment pay. I will set out the details when I have more than a minute or two to speak.

I too pay tribute to the work of my noble friend. It was my pleasure to host a round table of UTCs which have been particularly successful. The noble Lord, Lord Storey, mentioned them as well. In fact, a new UTC was opened in September in Darlington. The colleges have been particularly involved in the T-levels, which were introduced to give parity at the age of 16 between A-levels and T-levels, and to make sure that such attitudes are a thing of the past—that those with technical skills or who make things with their hands are viewed with the same esteem as those with academic qualifications. Indeed, 81.6% of our 16 to 18 year-olds are in education or apprenticeships, which is as high as it has ever been.

However, we are aware that it is the young who could be hit hardest during this crisis, which is why there is additional support for employers to take on young apprentices. The Kickstart scheme is open to those who are young and claiming universal credit, and there are 30,000 traineeships, which the department has just begun to procure. These are a work-based progression for young people, to make them ready for work or an apprenticeship. I am sure that I can get a response to my noble friend’s proposal that levels 4 and 5 should be free, but that is not what is being offered at the moment. What is being offered is level 3 tuition fees for anyone who does not have a qualification at that level.

My Lords, this announcement is welcome—as far as it goes. It is logical to start with the unqualified, but what of the many with middle and higher-level skills who are being squeezed by technology and finding that universal credit is catastrophic for them and their families? They cannot fund their reskilling. Has the Government’s National Skills Fund got anything to offer the squeezed middle?

My Lords, in relation to reskilling, there are, as I have outlined, the digital boot camps that we have offered so that people can gain training as they do that work. If they lack that level 3 qualification, they will be able to do that, but, as I say, there has been a particular focus on young people, who are more vulnerable to the effects of what is happening at the moment.

My Lords, I declare an interest as a vice-president of City & Guilds, for whom I worked on vocational qualifications and skills for 20 years. Statements like this have been made by successive Governments for very many years, yet little has been done to promote vocational, practical and technical education and training in schools, where the message must start. Can the Minister say whether league tables will cease to be based on A-levels and GCSEs? Will schools be encouraged to celebrate their apprentices, BTEC and work-based leavers with the same enthusiasm they give to their university entrants? Until schools are proud of all their successes, there is little hope of any real change.

My Lords, these are not just statements of intention; today, I have outlined that the numerous initiatives that have been started by the Department for Education and the Department for Work and Pensions are matched by funding. They will be a reality—some of them are already. The noble Baroness is completely right: in relation to the UTCs, which are important in promoting technical education, there is now a duty on the local authority and on schools to make sure that young people are made aware of that offer. The careers service has a link with employers locally so that they are brought into schools to outline the needs and skills that they have.

Teachers have been assisted to make sure that they are also aware of the apprenticeship offers because, unfortunately, as the noble Baroness will know from a Select Committee we both sat on, many teachers have not gone through these routes. We have been helping and training them and giving them the links so that they can make people aware of these offers. We want a greater take-up of level 3 and, particularly, levels 4 and 5 qualifications and for them to be validated by employers as making people qualified for jobs.

My Lords, I broadly welcome the trajectory of the Statement, but, speaking as someone who had responsibility at home for skills and both further and higher education, I assure my noble friend that simply giving people training on its own is not enough. If it does not lead to a job, there is demoralisation and the young people find themselves going round in circles doing different courses and getting demoralised as they go. Important though apprenticeships are, for employers, it is not simply about money: unless there is an outlet for that apprentice, there is no job.

I personally believe that the biggest problem we face in our broader education sector is snobbery. It has been referred to, and we can call it whatever we like, but that is what it is. We do not value vocational education the same as academic education. When will the noble Baroness tell us what steps will be taken to ensure that those young people do not have their morale destroyed by not having some role? If those people cannot find a job, will her department consider the idea of reintroducing the old-style ACE scheme, where at least people had employment in a social enterprise to tide them over until such time as a job in the private sector became available?

My Lords, I assure the noble Lord that there is no snobbery in the Department for Education; we want to promote parity of esteem for vocational and technical qualifications across our sector. The Prime Minister and the Secretary of State are behind this Everybody has a role to play in ensuring that these skills are seen and respected; television programming over the last 10 years has shown the importance of construction in many of the programmes that they have chosen to produce. We have also invested £900 million in work coaches, who are essential to getting alongside people on a one-to-one basis to help them into work. There is £17 million for the new workplace academy programmes, which are helping people with their CVs and job interviews.

The noble Lord is correct: one of the things we have to do for young people is this review, particularly of level 4 and level 5 qualifications, of which there are over 4,000. I remember sitting with the noble Baroness on a Select Committee and seeing the plethora of avenues and qualifications that were there, so that the pathway is clearer for young people and they get a qualification that an employer says is relevant and equips them for the job that they want. I can only draw attention, once again, to the £2 billion for the Kickstart scheme, which is about jobs for young people who find themselves on universal credit at the moment.

My Lords, the Statement sets out a range of laudable and important aspirations and I very much hope that, unlike so many previous attempts, these will actually be delivered. I have two questions for the Minister. First, the Statement includes funding for extra careers advisers. Can she assure us that this will form part of a comprehensive approach to investing in professional high-quality careers advice and guidance to all who need it, from primary school children to adults of all ages without the gaps that currently exist? Secondly, what will the Government do about the perverse incentives that currently lead schools to try to keep young people in formal education rather than encouraging them to consider apprenticeships?

My Lords, yes, the funding that has been announced for the National Careers Service—that is the adult careers service. The Careers & Enterprise Company is available in schools and I know that additional funding has been given to that to ensure that young people are made aware of those opportunities. In relation to apprenticeships, as I have already outlined, through the Careers & Enterprise Company we are assisting schools to promote those. Fire It Up was our campaign to make sure that young people are aware of those apprenticeships. We are encouraging schools to know their destination data: it is important to know where those young people go on to, so that the best opportunity for the young person is put first by our schools and colleges.

My Lords, I can only express my pleasure that the Government have suddenly been converted to lifelong learning after a decade of slashing the funding and support for it. The Statement refers to the risk that jobs will no longer exist because of technology. I would add that that is also the case because of environmental factors, Covid and many other changes in our society. I have two questions for the Minister. Would she acknowledge that narrowly focused job and skills training is not the right way to operate in this fast-changing landscape, and that employer-focused training that teaches for the jobs of today, rather than preparing people, particularly young people, for decades in a fast-changing workplace, is not the right way to go? What we need is creativity to encourage a love of learning and curiosity. The teach-to-the-test ethos pushed in our schools, focused on exams, is absolutely the wrong direction. What we need is to encourage an enthusiasm for soil, for growing food and other plants, for repairing things, for upcycling and recycling—something like, perhaps, the national nature service that the NGOs have been promoting. Do we not need that broader focus?

We should also acknowledge the fact that so many of our jobs now wear people down. The noble Lord, Lord Storey, referred to the construction sector, where 60% of manual construction workers are self-employed. Just the grind of getting through the day, of finding jobs, of getting an income, makes it very difficult for people to engage in training. We need to look at the broader issues that can keep people from training even if it is available.

The noble Baroness is correct that, obviously, for many people, the concept of a job for life is a thing of the past. People have numerous careers or jobs during their working life. I can assure her that the curriculum taught in our schools is knowledge-based and it is rich. Young people are encouraged to explore nature and to use the outdoors. I know that many schools, whether it is forest schools or woodland schools, et cetera, have adopted that. Obviously, teaching about the environment is an important part of that.

She is entirely right, as well, that employers need to be at the centre of this. That is why there has been this transference on to employers. The institutes of technology will be a partnership of employers, universities and FE colleges. Apprenticeships are employer-standard led, and also there are local skills advisory boards that bring together local employers, the LEPs and others. There will now be a national skills and productivity board, so that we have a structure around employer engagement in these qualifications.

My Lords, I draw the House’s attention to my entry in the register of interests.

I welcome the Statement, particularly the announcement of a flexible lifelong learning loan. Picking up a point raised by the noble Lord, Lord Watson, I ask my noble friend this question, of which I gave notice: when do the Government anticipate this loan becoming available? As we come to the end of the furlough scheme, where many sadly will lose long-term jobs and possibly seek to retrain, do the Government see the necessity of speeding up the consultation process and the legislative process to implement these announcements?

My Lords, as I have outlined, the level 3 entitlement will begin in April next year. I assure my noble friend that we will consult and legislate as necessary as fast as we can. We recognise that the changes happening out there in the workplace are swift, and we will act as soon as we can.

My Lords, my interests are as recorded in the register—in particular, as far as this debate is concerned, a keen interest and involvement in rural issues and agriculture. I have been assisting and sponsoring the establishment of an institute of agriculture and horticulture tier, which receives valuable support from Defra and the Department for Education, and we hope that this will create a vehicle through which the Government can help to deliver its ambitions.

I would like to ask three questions, if I may. First, it is great that the Government have recognised that improving skills is a continuous process, but I would like reassurance from the Minister that the department appreciates the huge potential that remains unlocked within the rural space due to a lack of appropriate skills and fragmented delivery. Can the Minister confirm that rural businesses are involved in the bootcamp pilots that are being arranged?

Secondly, on the rural economy, we have heard from the Minister already that the role of SMEs will be recognised. However, in the rural space we have a much higher proportion of SME businesses; we have a very small number of large businesses, and tens of thousands of very small businesses. This represents a particular challenge in the application of the apprenticeship scheme and the use of the levy. Can the Government be as flexible as possible in the use of the levy to allow greater uptake in these small sectors within the rural areas?

Lastly, the role of LEPs in supporting the Government’s new ambitions in encouraging the uptake of opportunities to improve skills is hugely important. Can the Minister confirm that the LEPs will be playing their part in supporting this agenda?

My Lords, yes indeed. As I have just outlined, the LEPs play their role in the skills advisory board at local level, and we are looking to be as flexible as possible with regard to SMEs and the use of the levy. I can assure the noble Lord that bootcamps are being done in various regions, including, in the next lot, areas such as south Derbyshire. On the question of rural spaces, I will have to write to him in relation to the figures that he required.

My Lords, I congratulate the Government on this Statement and on the commitment it exemplified. Will my noble friend confirm that within this policy we will be supporting the Inspiring Digital Enterprise Award, from idea.org.uk? The award is designed to help people who have had to change career, or who are coming back after a period of unemployment, to realise that they have the potential for a career in the digital sector and to hone their enterprise and employability skills at a basic level—all of which is free. Will my noble friend also confirm that the Government understand that many people, particularly if they have lost a job in a sector that is contracting, will need to start to retrain at a level below that at which they are qualified? They may have a degree and need to go back to level 3 or 4 training to find a new place. Will taking a step back to make a new life going forward be something that the Government will fund?

My Lords, I am grateful to my noble friend. This is precisely why it is a four-year offer, so that those who have a degree might then be able to take level 4 or level 5 training. I regret that, despite copious briefing here, I have not heard of the specific award that my noble friend mentioned, so I will write to him to outline what the department is doing in relation to that.

House adjourned at 8.25 pm.