Skills: Importance for the UK Economy and Quality of Life

Secondly, there are specific work or job-related skills, including technical and practical skills, for which training may be delivered by FE colleges, independent training providers or employers themselves. The much-needed green skills belong in this category.

Thirdly, there are the skills variously described as life skills, soft skills or transferable skills. The Skills Builder Partnership identifies eight essential skills: speaking; listening; problem-solving; creativity; aiming high; staying positive; teamwork; and leadership. It has developed a universal framework resource for teaching and assessing these, which is being used in a growing number of schools. These are increasingly important in the modern world, in both our work and personal lives. They are also the skills which employers are crying out for most of all: 57% of employers say they value transferable over technical skills. Employers find that the education system prepares students well for academic progression, rather than vocational pathways, on which there is insufficient focus. Yet 98% of teachers recognise essential skills as important for their learners’ employment opportunities and 86% agree that the national curriculum should include them.

The Local Government Association identifies no fewer than 49 national employment and skills-related schemes or services across England. They spend an estimated £20 billion in total and are managed by at least nine Whitehall departments and agencies. The Minister will have a lot to cover in her response.

I will briefly mention three initiatives within the remit of the DfE about which I feel strongly. Apprenticeships are a key part of skills policy. The apprenticeship levy is an important means of securing employer funding for skills training. There has been a disappointing decline in apprenticeship starts in recent years—from more than 509,000 in 2015-16 to about 337,000 in 2022-23. I will highlight two concerns about the current system. First, the number of apprenticeships for young people aged under 19 has declined even more steeply—from more than 131,000 to less than 78,000, as has the number of entry-level—level 2—apprenticeships, which are most suitable for many in this age group. The levy, in effect, incentivises employers to offer more expensive higher-level apprenticeships, often to upskill or reskill existing employees. This is also important, of course, but the balance seems wrong and needs to be adjusted to ensure a greater intake of younger apprentices, especially at level 2.

Secondly, there is a long-standing need to reduce the barriers of cost, complexity and bureaucracy which deter small employers from offering apprenticeships. Many employers are calling for greater flexibility as to how levy funds can be spent—for example to cover other forms of accredited training. The Government have made some improvements, but take-up by SMEs is still much too low.

A successful skills system depends on the availability of first-rate careers education and information for everyone from primary school age to adulthood. Much progress has been made in recent years, thanks largely to the efforts of the Careers & Enterprise Company and other careers organisations. Some 92% of schools are now part of local career hubs. More than 3,000 careers leaders have been trained, and the average number of the eight Gatsby benchmarks of good career guidance achieved by schools has risen from 2.1 to 5.5 in the last five years. Encouragingly, schools serving the most disadvantaged groups perform above the average. There is still much more to do in improving the quality of careers provision and business engagement, especially at local level and outside schools, tackling barriers to progression into jobs, and firmly establishing careers education as the bridge between young people and business.

The Skills and Post-16 Education Act 2022 led to the creation of local skills improvement plans across all 38 areas of England—most of them are led by chambers of commerce—which set out actionable priorities to tackle local skills needs. My noble friend Lady Lane-Fox, who is the president of the British Chambers of Commerce, will talk more about them. These should be a powerful tool for understanding and addressing skills needs and opportunities across England. Perhaps the Minister could tell us how implementation of the plans will be monitored and assessed. Should there not also be an NSIP—a national skills improvement plan—to ensure that, taken together with LSIPs, they are meeting identified national skills priorities and that programmes at national and local government levels are effectively co-ordinated?

Later speakers will doubtless mention other skills-related government initiatives, such as T-levels, the lifelong learning entitlement and the advanced British standard. We will also hear about some of the Labour Party’s proposals, including for a national skills taskforce. My impression is that existing initiatives add up to rather less than the sum of their parts, rather than a coherent and comprehensive package for tackling skills needs. They seem fragmented and lacking clarity about how different schemes are supposed to work together.

There are also many excellent organisations outside government helping to develop young people’s skills. The National Citizen Service, along with the Duke of Edinburgh’s Award, recently launched a report in Parliament on the enrichment activities they offer. The Scouts seek to empower young people with skills for life. WorldSkills UK, which is this morning announcing the young people selected to represent Team UK at this year’s Skills Olympics in Lyon, described one of its aims as “championing future skills” and helping the UK become a “world-class skills economy” so as to remain globally competitive. I say amen to that.

This Government do not seem keen on strategies, but no well-run organisation of any size would be without a human resources strategy. We, as a country, need a skills strategy to fulfil a similar role. What might such a strategy look like? First, skills should be recognised as a priority for any Government—national, devolved or local—and every area of policy needs to include provision for developing required skills. Secondly, the strategy should be evidence-based, built on sound data about current and anticipated skills needs, shortages and opportunities. There needs to be a process for monitoring and reporting on implementation and progress.

Thirdly, the strategy should be comprehensive and joined up across relevant government departments—I mentioned the nine that have programmes in this area—and across the nation, taking account both of local plans and of regional and national priorities, and seeking complementarity with the devolved nations, from which there may be valuable lessons to be learned.

Fourthly, and very importantly, the strategy should be matched by an education system fully aligned with its goals at all levels from primary to tertiary and beyond. This must recognise and seek to meet the need for skilled technicians and tradespeople, as well as university graduates, and give all of them a strong grounding in basic and essential skills. It is high time for the holy grail of parity of esteem between academic and technical/vocational education to be seized—although I am not sure whether that is the right thing to do with a grail. Of course, the implications of a skills strategy for education deserve a debate of their own.

Fifthly, a strategy should incorporate measures to increase teacher motivation and recognition by allowing them greater flexibility, to teach in a way that best suits their own abilities, experiences and interests. Highly skilled, highly motivated and highly regarded teachers must be a central plank of any skills strategy.

Sixthly, employers must be deeply engaged, both in defining and in delivering the strategy, including by ensuring that their own skills needs are recognised, and through offering work experience placements and apprenticeships.

Finally, the strategy should be vigorously promoted and publicised to individuals, employers, teachers, schools, parents and everyone concerned with skills. Such a strategy should aim to raise skills much higher up the public agenda and recapture some of the passion for education and skills that drove the success of Griffith Jones’s schools. Developing and delivering it would be neither easy nor quick and would depend on attracting the co-operation and commitment of all parties with a stake in raising skills—which is basically all of us. It might be supported by a high-profile campaign to build enthusiasm for pursuing the skills that young people and our economy need and to incentivise and celebrate investment in skills. The DfE’s existing Skills for Life campaign seems lacking in ambition and impact.

I am conscious that I have barely scratched the surface of the issues we are debating. I have every confidence that subsequent speakers will fill many of the gaps. I hope that this House, with the benefit of all the wisdom and expertise that it embodies, will continue to work doggedly with government, education institutions, employers and others in pursuit of policies to make the UK a world leader in skills.

When Napoleon supposedly described us as a nation of shopkeepers, I believe it was meant more as a recognition of our commercial talents than as an insult. Now is the time to apply our talents to a new challenge—to show ourselves to the world as a nation of skills builders. I beg to move.

In the UTC movement, we have devised a way of bringing technical education into ordinary schools. We want to introduce a sleeve of 14 to 18 technical education into an ordinary 11 to 18 year-old school. That sleeve will have its own classrooms, teachers and equipment and will be separate from the academic route. We will of course continue to teach English, maths and science—as academic subjects, they will probably be shared with the academic route—but there will be a technical route in the school. It will have separate examinations and will be supported by the local university and local companies.

The department has known about this scheme for over a year. We have found 10 schools that want to do it and the Secretary of State and the Minister have been provided with their details. We are waiting for a decision. I believe this will be the only way for whoever wins the next election to get technical education into schools. It means you have to abandon and scrap Progress 8 and EBacc. In the last two years, there have been seven reports advocating exactly that, including two from Select Committees in this House, which said that EBacc and Progress 8 should be abolished and that the exam system of GCSEs should be reduced dramatically and reformed, or even ended.

There is a letter in the Times today from the headmaster of Bedales, which is a very successful school, describing how it is slowly moving away from GCSEs altogether. There is a private school in west London, Latymer, which is going to offer only two GCSE exams in three years’ time—just English and maths. The rest are going to be assessed; the subjects will go on.

As a result of not having the pressure of exams in the summer term, you will get two extra teaching terms. The spring term is now all revision and the summer term is all exams. You abolish all that and you will get extra time for very interesting new subjects such as anthropology, philosophy, archaeology, the history of south-east Asia, graphic design and even the history of pop music. You can get that by abolishing the GCSE system. I would like to see it, but it is not going to happen.

I am holding in my hand an application from the Bede Academy, a school in Newcastle and one of the best in the north-east—each year they get some students into Russell group universities. Those in the Bede Academy want a sleeve specialising in engineering, energy and health. It is a very good 12-page thing. They worked out entirely the quote for the next three years: what sort of teachers they want and the cost of it, including the buildings. They have the strong support of Northumbria University on health, and to introduce the health changes they need £200,000. They also need two digital computing units to teach artificial intelligence and virtual reality, which are not taught at all in Newcastle’s schools. They want six engineering rooms, metal-working and welding workshops, mechatronics workshops, CAD workshops, laser cutting and 3D printer sites. They want all of that and they have put the cost at £1.5 million to £1.8 million.

This, Minister, is an enormous bargain. If you wanted to set up a technical college in Newcastle, it would cost £12 million to £15 million. This is for only £1.5 million to £1.8 million. Before I sit down—and I am about to sit down—I will give this application to the Minister. I do not know whether she has received it or read it. I will give it to her and I hope that, before she sits down, if she is listening to me, she will be able to say when she is going to give approval to it.

We have heard that there has not been a properly developed strategy for skills since 2014, and it was spelled out just what needs to be in that strategy. One of the recurring things that we heard in all the committee meetings was that this need for skills branches out into so many aspects of ordinary, everyday living that we must have cross-departmental approaches to evolving this strategy. It is no good leaving it to the Department for Education, or science and technology or whatever it is. This impacts on the whole of our lives. It needs a dedicated body of people to look at this constantly in relation to the various departments of government. Formal cross-government evaluations seem to have stopped. They need to be reworked and rebegun.

The Government, of course, cannot be expected to solve everything, but they can achieve much by showing interest in driving change against clearly defined objectives. The committee said:

“We have no confidence that this is happening. Senior political leadership to drive joined-up concerted action is sorely needed”.

I could go on, but the reports are there. I place the underlying questions of my intervention in the hands of the Minister in the hope that she can give us some concrete evidence of progress in these areas. It will also reinforce my confidence that the work of our Select Committees gets heard and is implemented, and that their ideas are taken forward.

Colleges, which do the lion’s share of teaching skills, are too often sidelined by a Government who are obsessed with academia and with learning facts, not skills. Like the noble Lord, Lord Aberdare, I graduated from Oxford with a passion for medieval French, which has never been of any use to me whatsoever later in life. Colleges and their hard-working tutors deserve a much better deal, given the key part that they play in generating the skills which we all need. Universities should never be seen as the only respectable route for young people to take. Even ivory towers need plumbers and bricklayers, and academics need hairdressers and caterers.

I have already referred to the creative industries as major players but, as the noble Lord, Lord Baker, bemoaned, music, art, dance and drama have disappeared from many state schools, as they have to conform to the demands of the baccalaureate, which squeezes such skills out of the timetable. Can the Minister tell us what consideration the Government have given to tempering their obsession with knowledge and making a place for practical skills in the school curriculum? What consideration is given to the happiness of students as they master skills and produce things other than exam results?

I worked for 20 years for City & Guilds. Founded in 1878 by the City of London and 16 of the livery companies to promote training in trade and skills, the organisation continues to award millions of certificates every year in work-based subjects, all, of course, designed by employers. I say to the Government that T-levels are not unique in this respect. Every work-based qualification since time began has been designed by employers.

The City of London still puts great resource into encouraging financial, professional, sustainability and digital sectors and, like the livery companies, promoting apprenticeships. I declare an interest as a past master of the world traders livery company, which is a modern company. I am very proud that this year’s Lord Mayor is one of our past masters. Livery companies are major contributors to education and charity. I am delighted to see that we have another past Lord Mayor here—in the noble Lord, Lord Mountevans—taking part today, because the City and the livery companies are major players in these areas. Like many others, they would love to see the apprenticeship levy reformed, so can the Minister say what steps are being taken to make the levy more conducive to take-up and more relevant to actual apprenticeships?

I mentioned colleges being essential to improving skills, yet their funding is always less generous than that of schools. The Open University and the WEA also provide invaluable support to those wishing to acquire skills later in life, for jobs but also for life and for contributions to the community. However, they always have to do battle for any government funding.

May I add my voice to the support for BTECs? The Government are obsessed by their new-found T-levels; they are untried, untested and currently with only some 26,000 students enrolled, as compared to 280,000 students studying at least one applied general qualification. BTECs provide a more effective, tried-and-tested route to higher education or skilled employment than A-levels or T-levels. It would be an act of vandalism to stop funding them and would exacerbate the shortage of qualified, skilled people in the workplace. Will the Minister do all she can to stop the Government from ruining life chances for the next generation and weigh in behind BTEC, City & Guilds and traditional apprenticeships to ensure that we can find qualified people from among our own workforce, both doing rewarding jobs and gaining satisfaction from their skills?

I will end with some stats from Open University, which reported that

“58% … of organisation leaders … report a mismatch between young people’s skill levels and employer expectations in the past three years. A decline in soft skills (54%) such as communication, teamwork, time management and technical skills … suggests there is a need for more investment in preparing this generation, that account for 20% of the current workforce, for the workplace”.

So, can the Government please rethink their response to our committee report and give us some hope for the future and the quality of life of young people?

As well as the new roles that will be created by the net-zero transition—the CCC estimates this to be up to 700,000 jobs by 2030—a recent report from Bain & Company estimates that around 4 million workers will need reskilling by 2030 to prepare for the new green economy. The Association of Colleges briefing, which noble Lords received, highlights the need for reform of the UK’s tertiary education system to help address future skills gaps, which could be a major constraint in delivering on the plans and commitments that the Government have made. Practically, if we are to deliver the Government’s target of 600,000 heat pump installations by 2028, how are we going to train enough heat-pump engineers when we have 3,000 at the moment and it is estimated that we need 27,000 to deliver on the Government’s promise?

It is also extremely important that we do not leave behind those who work in high-emitting sectors at the moment, whose transferable skills could be redirected very easily to the low-carbon industries of the future. If we do not reskill them, we will lose them to other countries which are developing their own green energy projects.

During debate on the Offshore Petroleum Licensing Bill, we discussed an amendment which proposed the publication of a green skills retraining plan for the 30,000 or so oil and gas workers still working in our declining North Sea basin. This included a skills passport which would provide financial and practical support so that those workers who wish to do so can easily—and without additional cost to them—reskill and retrain. In that debate, the Minister confirmed that the Government are “keen to take … forward” such a plan and are supporting the delivery of work being led by Offshore Energies UK, which includes a skills passport. When she replies, can the Minister let us know when this work will be delivered? It is now two years since the industry-led integrated people and skills strategy recommended it. Will there be financial support for workers looking to move into green jobs?

As noble Lords will have gathered, I am a man of faith, so entering the Chamber for the first time from the Moses Room was very special to me. I was raised in a traditional Jewish household, where my parents—both businesspeople—left a deep impression on me of the pillars defining Judaism: belief in God, kindness to others, charity, justice and prayer. I have, over time, increased my observance and religiosity to become what is known as shomer Shabbat: someone who guards and observes the Sabbath, which is the most wonderful 25-hour weekly digital detox. I highly recommend it to everyone. As a hard-working entrepreneur, I like to say that I am available 24/6.

On Tuesday, we remembered the Holocaust, with our annual Yom HaShoah events around the country. It is with great sadness and despair that within living memory of the Holocaust, anti-Semitism has returned around the world. Like many Jews in this country, I am horrified and frightened by what I see, what I hear, and what I feel, whether on the streets, through social and other media, or of course in our universities.

I am therefore very grateful for the outpouring of support from noble Lords of all religions and backgrounds, who have been united in their condemnation of this. If we fight together and fight hard enough, we can and will stamp out this virus. I am also particularly thankful to our Prime Minister for his unwavering support of the Jewish community and for everything that he and the Government are doing to ensure that anti-Semitism has no place in society, including today meeting university leaders to ensure a zero-tolerance approach to anti-Semitic abuse on all campuses.

Although I went to a grammar school, my academic interests waned somewhat towards the end, shutting off the option of a university education for me. That was actually no big deal, as I was itching to embrace the world of commerce. I have been blessed with a successful career building a number of substantial companies, mostly in disruptive technologies—even taking one of them to the London Stock Exchange—and have always learned along the way from inspiring colleagues and clients. My business of the last 10 years has been at the forefront of corporate innovation, bringing talented start-ups to the attention of multinational companies and creating an environment for collaboration between David and Goliath. However, it was the skills I learned at school that prepared the way for my career. I therefore congratulate the noble Lord, Lord Aberdare, on bringing this important debate to the House.

In my business, I am privileged to see thousands of technology and manufacturing solutions from around the world and to witness real innovation. While I believe that you cannot teach the drive, ambition, risk-taking and work ethic that makes an entrepreneur, you can teach them the skills they need to build and run our unicorns of the future. As the report outlines, essential skills include teamwork and communication, which all companies need in order to thrive. Likewise, the many people who believe that skills are particularly important in overcoming adversity and difficulties in life should not be overlooked. Many do not have the privilege of an easy or affluent childhood, but that should never be a barrier to success in future life.

Indeed, we all have a moral duty to ensure that we take the resilience that is often endowed as a result of a challenging childhood and combine it with everything a person needs to succeed, including apprenticeships, which I know can be a lifeline and bridge to a much happier world. Ensuring that young people are properly trained and equipped with the skills that suit their capability and temperament will facilitate favourable outcomes, whether entering the factory floor, rising up the corporate managerial ladder or building their own businesses. That must be the number one goal for UK plc.

The report also addresses levelling up, which I am completely in agreement with. Of course, it does not refer only to the north. The imbalance in skills across the country means that many areas are left behind, which leads to proportionately lower investment in innovation and R&D. However, some of the most successful companies, old and new, have thrived in some of the poorer parts of the country. I know that because I built my first company in Nelson in east Lancashire, one of the most deprived areas in the UK. However, we became an employment magnet and rewarded the workforce with training and career progression, and I am proud that many of our employees rose through the ranks at my company or transferred their skills to find new, exciting jobs elsewhere. We should gravitate to the leaders of these companies, embrace them and learn from them, so that we can copy the formula that works, thereby encouraging more businesses to open and relocate to these areas, which, in turn, addresses the economic imbalance and provides a marketplace for skilled workers. That, in turn, creates wealth, attracts more investment, improves the quality of life and raises the standards of living and education. As John F Kennedy said:

“A rising tide lifts all … boats”.

My only disappointment on joining this House is that I have not been able to spend time with the towering late Rabbi Lord Sacks, a true spiritual leader and a sage of our time. He was—and still is—my inspiration on all matters Judaic and, indeed, in life. He was taken away from us far too early. I will devote my final words to something he said:

“Where what you want to do meets what needs to be done”

is your mission in life. I hope that my contribution to public life, through my attendance in this House and participation in future debates, enables me to do exactly that and, in turn, to make a valuable contribution to this wonderful country.

We have discussed BTECs in this House before, and I informed the Minister that I would raise with her the assurance that she gave us in a debate in this House on 7 April 2022:

“I know that noble Lords are all interested to see the provisional list of qualifications that overlap with waves 1 and 2 T-levels. I want to be absolutely clear to your Lordships today that through this process we expect to remove public funding approval for just a small proportion of the total level 3 offer, including BTECs. This will be significantly less than half”.—[Official Report, 7/4/22; col. 2202.]

That quotation from Hansard was the assurance she gave us approximately two years ago. I would be very grateful if she could update us on how the defunding of BTECs is progressing. It is possible that, in her statement to us two years ago, when she referred to “this process” she was not referring to the full defunding of BTECs but simply to overlap. I would very much like to hear the Government’s estimate of the total number of BTEC and other advanced qualification enrolments, after they have completed the full defunding process. A useful baseline is the 248,000 BTEC/AGQ enrolments in 2022-23. What is the Minister’s latest estimate of how many BTEC courses will be defunded? How many people will be enrolling on BTECs at the end of the full process of defunding BTECs, compared with that baseline of 248,000? As I said, I gave the department advance notice of this question and very much hope that, in the light of our previous debates, we will get those estimates today.

I also ask the Minister—given the slow take-up of T-levels, and given that we now know the Government do not see T-levels as part of a long-term framework—whether they are in turn going to be replaced by this new advanced qualification. Is there not an even stronger case for pausing the defunding of BTECs to reduce the risk that tens of thousands of young people might find themselves without any suitable qualification that they can study and end up not in education, employment or training? It would be a tragedy if the defunding of BTECs have that result. Given the latest information on the uptake of T-levels, I very much hope the Minister will be able to make some concessions on that.

The second issue I want to briefly touch on is degree apprenticeships. I very much welcome degree apprenticeships—they are an important part of the options available. It is just worth, again, putting the figures in context. There are now about 40,000 enrolments in degree apprenticeships, but half those are by people aged over 25. They seem to be particularly taken up by mature learners. We have about 20,000 young people starting degree apprenticeships, about 10% of the total number starting in higher education.

The noble Lord, Lord Aberdare, rightly raised the question of the apprenticeship levy and the pressures on it. Degree apprenticeships are funded out of the apprenticeship levy. They are particularly expensive programs. If they are a significant claim on the apprenticeship levy, their growth is surely part of the answer to the question put by the noble Lord, Lord Aberdare: why are we seeing such a decline in the number of young people doing apprenticeships and apprenticeships at levels two and three? The answer is that this fixed pot of money is being increasingly deployed for degree apprenticeships.

I wish to see more expansion—as the noble Lord said—of apprenticeships for younger people and at lower levels. I urge the Government to consider funding degree apprenticeships out of fees and loans, just like the rest of higher education, to liberate funding for more apprenticeships. That would also have the side effect that, instead of trying to drive people on to degree apprenticeships by scares about the fees and costs of higher education, we would have a shared interest in explaining to young people that they do not pay for their higher education courses upfront and they should have the option of a growing number of degree apprenticeships alongside other higher education qualifications.

If you leave school without a level 3, our society turns its back on you. As a citizen, you have a right to a free education while you are 18, but not when you were 20, 25 or 30. This is a travesty—it is a travesty in terms of equal treatment of citizens and a travesty in terms of any coherent skills policy. In the Augar review, on which I was privileged to serve and contribute, we strongly recommended that every citizen should have a right to a free level 3. So have many others, including the Economic Affairs Committee of this House. The current Government, back in 2020, did not make a formal commitment to an entitlement, but they acted fast in launching a new funded program which in practice made this available, on terms that made it feasible and attractive for colleges to plan and launch new courses, which is always a high-risk decision. Why did they do so? It was not because there was a sudden blast of light one day, but because earlier there was written into the manifesto a new £3 billion skills fund to be spent over the Parliament, which Treasury could not just wave away. I am 100% sure that without that manifesto commitment nothing would have happened.

Crucially, access to this programme was simple. If you did not have a level 3 qualification, it was open to you—just as now, if you are offered a place at a university, you have a right to Student Loans Company support. Normally in our skills system, working out what you can access at this middle level, and whether you have to pay and what you have to pay, is a moving minefield. Not surprisingly, most people walk away. It is not that people do not want to train or upskill, but the system is completely non-transparent. In other words, it is designed to cut off our skills pipeline at the ankles. Of course, one programme did not transform things, but it was a major step in the right direction. I say “was”, because now the DfE is announcing new restrictions that will make most of these programmes completely unviable. Why? Well, some poor official has written the usual guff about better targeting, but it is actually because the DfE needs to find some money and it is looking for things to cut. As always, the simplest place to look is skills programmes.

This Government have, in my view, done some very good things for skills—and not only when they were listening to me—but I want to emphasise that these things happened because there was a ring-fenced pot and a very clear commitment in a manifesto. No Minister and no Front-Bench spokesman is going to make a commitment of that sort to me today, so I am not even going to ask the Minister to do so. However, if we enter the next election with only high-level uncosted aspirations and with no clear commitments to access to those mid-level skills for people who do not already have a level 3, five years from now we will be making the same speeches—and, if anything, things will be worse.