Skills and Post-16 Education Bill [HL]

Report (2nd Day) (Continued)

Amendment 36

36: Before Clause 14, insert the following new Clause— “Personal Education and Skills Account (1) A Personal Education and Skills Account (“PESA”) is an account—(a) held by an eligible adult (an “account holder”); and(b) which satisfies the requirements of this section.(2) An eligible adult is a person who—(a) is aged 18 or over; and(b) is ordinarily resident in England.(3) A PESA may be held only with a person (an “account provider”) who has been approved by the Secretary of State in accordance with regulations.(4) The Secretary of State may by regulations establish a body to administer the operation of the PESA scheme.(5) In the case of each person who is eligible under subsection (2), the body established under subsection (4) must open a PESA for that person.(6) If a person does not wish to hold a PESA, they must inform the body under subsection (4) in writing in accordance with regulations.(7) The Secretary of State must pay into each PESA a deposit of £4,000 during the year in which each account holder attains the age of 25 and a deposit of £3,000 during the year in which each account holder attains—(a) the age of 40; and(b) the age of 55.(8) Further contributions may be made to a PESA by—(a) an account holder;(b) employers; or (c) any other person as may be prescribed by regulations by the Secretary of State.(9) At any time after an account holder has attained the age of 25, they may transfer funding from their PESA to an approved institution for their chosen education or training course.(10) For the purposes of subsection (9) an “approved institution” is—(a) a “relevant provider” under section 18;(b) such other education or training providers as may be approved by the Office for Students.(11) Prior to an account holder making an initial funding transfer, the National Careers Service must offer a careers guidance consultation to that account holder.”Member’s explanatory statement This amendment provides for individual “skills wallets” which may be used by a person to pay for education and training courses throughout their lifetime. The Government will make a payment of £4,000 when an individual turns 25 and then two further payments of £3,000 when an individual turns 40 and 55.

Amendment 36 provides for the introduction of personal education and skills accounts, commonly known as skills wallets. As stressed by many of your Lordships during the passage of the Bill, there is growing discontent about the way in which post-16 education and training are provided and the reality of the skills needed for our population.

We know that in future the average British worker will do several different jobs throughout their lifetime; almost half will retrain completely during the course of their career. Meanwhile, the number of adult learners has fallen dramatically, almost halving between 2004 and 2016. With technology advancing and the world of work always rapidly changing, skills learned at 18 or 21 will not last a lifetime. It has never been more important for people to continually develop new skills. Yet our higher education and student finance systems are still tailored mainly to people taking their first degree or beginning an apprenticeship around the age of 18. Meanwhile, there is a desperate shortage of funding in the FE sector. The current system limits the opportunities, and people do not get the chance to make the most of their talents. Do we not want to empower people to develop new skills, so that they can thrive in the technologies and industries that are key to Britain’s economic future? Championing flexible lifelong learning will give people the power to follow the path that best suits their ability. A skills wallet would be open to every adult over the age of 18 and resident in the UK.

I remind the House of the quite important words of the previous Secretary of State for Education when introducing the lifetime skills guarantee:

“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.”

He went on to say that the Government

“stand for empowering everyone in this country, wherever they live. We stand for the forgotten 50% who do not go to university.”

My Lords, I think there has been a regrouping; I was about to speak on an amendment that seems to have disappeared from here. I have added my name to Amendment 45A from the noble Lord, Lord Watson, which is still in this group, and of course I entirely endorse what my noble friend Lord Storey said about the importance of the skills wallet.

The amendment from the noble Lord, Lord Watson, is on lifelong learning. Of course, we would much rather see the support for this as grants, rather than loans, to attract adults with financial obligations that deter them from accruing more long-term debt—particularly if it is to encourage their own learning. The amendment is designed to monitor how well the lifelong learning arrangements are working. We particularly wish to see how restricting funding for those studying for an equal or lower-level qualification than one they already hold is impacting the nation’s skills level.

Changes in the world of work mean that many people who already have a level 3 qualification, if they are made unemployed and need to retrain, will need to be able to study for a subsequent qualification at this level or below. The lifetime skills guarantee extended the entitlement beyond those aged under 25 to all adults, but only to a limited list of level 3 qualifications and only for those who do not already have one. It is vital that adults are able to reskill at a lower level in a skill area different from the one already mastered, if that will enable them to gain employment.

This really important amendment calls for the Secretary of State

“to publish an annual report on the impact on re-skilling of funding restrictions on those who wish to pursue a qualification at a level equivalent to or lower than one they already hold.”

My Lords, I have also added my name to Amendment 45A from the noble Lord, Lord Watson. During the first day of Report, the noble Lord, Lord Coaker, spoke about previous unsuccessful skills improvement initiatives and asked,

“why will it be different this time?”—[Official Report, 12/10/21; col. 1765.]

Why will the Government’s new skills system, as embodied in the Bill, work better than its predecessors? In my view, one of the answers will need to be a really vigorous and well thought-through approach to reporting, monitoring and evaluating the different elements of the strategy and how they all work together. The lifelong learning entitlement and the lifetime skills guarantee—I think I have those the right way around—are essential elements of the strategy but need to be transformed from slogans into realities. A crucial part of achieving that will be review, review, review.

I might prefer this amendment if proposed new subsection (1) ended slightly differently, to read, “a report on the impact on the overall levels of skills in England and Wales of all the provisions of this Act”, rather than confining itself to

“the rules regarding eligibility for funding for those undertaking further or higher education courses.”

In the meantime, I will content myself with supporting the noble Lord’s amendment as it stands—with its effect of ensuring that the impact of the equivalent or lower qualification rule is at least reviewed and assessed on a regular annual basis—while encouraging the Minister to look at beefing up further the process of reviewing the overall progress of the skills strategy, beyond the performance monitoring and review of designated employer representative bodies described in her letter to us.

My Lords, I slightly unexpectedly find myself to be the first person to speak to Amendment 40 in the name of the noble Lord, Lord Watson of Invergowrie, also signed by the noble Lord, Lord Storey, and me. Amendment 45A calls for a review to look at the issues around a restriction on allowing people to study at a level below that which they already possess. Amendment 40 goes further in removing restrictions.

I would have thought that naturally the Conservative position would be a belief that the person best placed to decide their best course of study would be the individual concerned rather than the state. This is a question of individual choice, about people knowing best their own situation. Therefore, while I very much support Amendment 45A, which at least calls for a review, I would go back to the more fundamental change in Amendment 40.

I am also in favour of Amendment 36 in the name of the noble Lord, Lord Storey. Education is a public good. We hear a lot of talk about investment for levelling up. Well, investment in people is the most fundamental investment of all. It is flexible, it enables people to make choices for themselves. A new or improved railway line or better school facilities are there and accessible to people, but people making their own choices is what investment in education is all about.

I am also in favour of Amendment 48, not yet addressed by the noble Baroness, Lady Sherlock. I will leave her to fully explain this, but it is worth stressing that what does not get measured and focused on does not get funded or supported. That is the principle behind that amendment.

My Lords, as this is my first speech on Report, I welcome the noble Baroness, Lady Barran, to her new ministerial role, and place on record my thanks to the noble Baroness, Lady Berridge, for her hard work on the Bill and her openness and willingness to engage with those of us on this side.

I speak specifically to the government amendments in this group. My noble friend Lady Wilcox will talk about the others in this group. We would have preferred them to be de-grouped, but time is short. However, the Government were planning to bring back for Report detailed amendments on the lifelong loan entitlement. Since they have now decided not to do that, we are left with several questions which I must ask. I apologise for doing so on Report, but we have not had an opportunity to do so otherwise.

In Committee, the Government tabled some amendments which were presented as providing some of the wiring in the basement of higher education that would be needed when Ministers unveiled their renovation plans in the form of the LLE. However, since those plans must wait until another day and, we are told, until more primary legislation, because Ministers want to wait for the consultation first, we are left with some big questions. One obvious question is: when will the consultation happen? Indeed, why is it not already out there? What is holding it up?

Ministers have brought back some parts of the wiring amendments on Report. The LLE is meant to cover courses and modules in FE and HE. Clause 14 amends the Teaching and Higher Education Act to allow for the funding of courses in FE and modules in FE and HE, a lifetime funding limit and for funding not just for an academic year. Clause 15 amends HERA to change the definition of a “higher education course” to make it clear that the regulatory regime applies to modules. Government Amendment 39 defines what a course and a module are. However, at the risk of being nerdy, I point out that the Government have not brought back the parts of an amendment that they tabled in Committee which required the Office for Students to specify fee limits for modules as well as courses. We are told offline that the Government will provide for modular fee limits after the consultation. Will that require primary legislation? Does any other aspect of the LLE require primary legislation? If so, can we have a timescale for it? If not, can the Minister say how and when Parliament will have a full debate on the shape and scope of the LLE absent primary legislation?

Finally, the Bill brings the regulation of modules clearly within the remit of the OfS but there are lots of outstanding questions about what quality looks like for modular provision. The OfS has just closed its second-phase consultation on its proposals for new quality and standard conditions, in which it repeatedly stressed that their new conditions were designed to work for modules as well as courses. It will shortly consult on new quantitative metrics. The current measures—student continuation, completion, and progression to graduate jobs—will self-evidently not transfer across to modules from full HE courses. Is the intention for that consultation to consult on new metrics which will apply to flexible modules as well as full courses? If so, is the Minister concerned that this may pre-empt decisions of this House?

I am concerned that by legislating now on the regulation of flexible provision but holding back on funding and other details, the law is being changed without adequate scrutiny of what the new system will look like. Why have the Government brought these amendments back now? Why not hold off until we have that new primary legislation and Parliament can have a full, informed and coherent debate about how this will work?

My Lords, as the Bill before us today is about education, I hope that noble Lords will not mind me veering slightly off topic for a moment. Today marks the 55th anniversary of the Aberfan disaster, the catastrophic collapse of a colliery spoil tip on 21 October 1966 that killed 116 children and 28 adults as it engulfed Pantglas Junior School. I was a pupil at Pontygwaith Junior School in the Rhondda at that time, another valleys primary school built on the side of a mountain, and as we returned to school after lunch we were sent into the yard and told to put our hands together, close our eyes and pray for the children of Aberfan. I had never heard of Aberfan at that time, but I have never forgotten it since.

I speak to Amendments 40, 41, 45A and 61 in the name of my noble friend Lord Watson, who unfortunately, because of the change to the timetable, is unable to be here today. The Government originally promised to table LLE amendments ahead of Committee, but unfortunately very few of substance materialised. We were told that they would be tabled for Report, but we have now been advised by the Minister and her Bill team that this was not possible and that they intend to consult and pilot the lifelong loan entitlement before returning with new primary legislation. This is disappointing given that the LLE is supposed to be the Government’s flagship policy and is urgently needed, but it is not surprising, because the sheer complexity of what they are trying to build was immediately apparent to all—apart from, it seems, the Bill team.

Perhaps the delay will give the Minister time to reflect on the length of the LLE. At present, it will offer up to four years of equivalent funding for levels 4 to 6, and while for some people this may be enough, for others it simply will not be. Undertaking a foundation or access year plus a three-year bachelor’s degree, which is a common route, would use it all up in one go. Therefore Amendment 41, requiring the Secretary of State to consult on extending eligibility to six years to give greater flexibility, is important. It will be especially important to those studying part-time and help to encourage adult learners to take up an offer to study and upskill. It is supported by the Association of Colleges, training providers and other stakeholders that we have engaged with in preparation for this debate.

My Lords, I thank the noble Baroness, Lady Wilcox of Newport, for reminding us of the tragedy of Aberfan and the terrible loss of life on that day. I will speak first to the amendments in my name on the lifelong loan entitlement and then respond to your Lordships’ amendments.

The amendments being laid today primarily address the technical underpinnings of the LLE and make other minor corrections to enable a strong legislative framework. We are laying them now to introduce the enabling powers for the Secretary of State that are necessary to the delivery of the LLE from 2025. The Government previously set out that we would table additional amendments, as your Lordships have noted, outlining further detail on the modular fee limit policy of the LLE. Following further policy development and engagement with stakeholders, including debate in Committee in this House, the Government have decided not to lay these before we consult. As noble Lords have noted, these are complex issues and it is essential that our final policy approach is informed by the needs of students, providers and all key stakeholders. This complexity was demonstrated in Committee by some of the questions on the detail and implementation of the lifelong loan entitlement. Given the intricate nature of such legislation, we must not pre-empt further policy design or decisions based on the consultation.

The noble Baroness, Lady Sherlock, asked what the consultation will contain. We intend to seek views on our ambition, objectives and coverage. This will include aspects such as but not limited to: the level of modularity —this will cover the minimum number of credits a course will need to bear to be eligible for funding; maintenance support; how to support quality provision and flexible learning; how to incentivise and enable effective credit transfer; and whether restrictions on previous study should be amended to facilitate retraining and stimulate high-quality provision. We intend to bring further primary legislation following consultation. This will allow us to meet the rollout timetable of the LLE from 2025, as originally planned.

Finally, the noble Baroness asked whether it was the intention that a module can be funded via the loan book only if it is part of a full course. The funding of modular loans will be delivered via regulations, using the modified powers to THEA under Clause 14 of the Bill, as noted earlier. The policy intention is for the lifelong loan entitlement to fund whole courses—or their component modules, if taken separately—that meet the necessary regulatory requirements and are provided by or on behalf of a registered provider. All registered providers currently offering loan-funded provision should be able to offer modular learning through the LLE. It is not the policy intention to fund modules that are not component parts of whole courses. The Bill would allow for regulations that could include or exclude from funding modules that are not part of a qualification. We will consult on the scope and policy of the lifelong loan entitlement, including seeking views on objectives and coverage, together with aspects such as the level of modularity.

The noble Baroness also asked about the regulations on fee limits and whether these would be introduced ahead of debate on the primary legislation. Any fee regulations would have to follow an affirmative resolution procedure, so there would be a debate in both Houses if and when the primary legislation has been introduced. I hope that that answers the noble Baroness’s questions, and I thank her for giving me warning of them.

As I was saying, we intend to bring further primary legislation following consultation, and we are still committed to meeting the rollout timetable of the LLE from 2025. As a number of noble Lords have said, we share that vision for lifelong learning to make sure that everyone, no matter where they live or their background, can gain the skills that they need to progress in work at any stage of their life.