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Further Education and Training Bill [HL]

My Lords, before commenting on the Further Education and Training Bill, I declare my interest as the chief executive of London First, which has members from the commercial and educational sectors. It is from the perspective of fostering closer working relationships between business and education that I shall contribute to the debate. I shall begin by making some observations about the Bill and then move on to address briefly the broader skills issues that have been raised by the publication of the report by the noble Lord, Lord Leitch, and by the Chancellor of the Exchequer’s Pre-Budget Report last week. Overall, the Bill represents a welcome, if relatively modest, step forward in enabling the further education sector to become more effective in providing the skills that this country needs to compete globally. Among its specific provisions, businesses and other employers will, I am sure, appreciate the move to open the market for government-funded trainingto more competition and hence widen the choice of training provider for learners and employers. However, an important proviso is that it will be vital to ensure that principals of further education colleges are given the additional powers and flexibilities that they need to respond to increasing competition. In short, a more open contest for skills provision on a level playing field is a good thing, so long as some of the players do not have one hand tied behind their back. It is also good news that the Bill increases the ability of employers to guide the funding and development of training courses in line with requirements as they see them. It also seems a sensible development to provide for sector-wide training levies, where the majority of the employers in that sector support the proposal. There is a more general provision to ensure consultation with employers over the development of the Learning and Skills Council’s regional skills strategies. However, the process for that consultation is not defined in the Bill and, somewhat ominously, it will be covered by further guidance from the LSC. All too often, the large print giveth and the small print taketh away, and I hope that during the passage of the Bill, we shall have some assurance about the nature of the guidance. I am delighted that the Bill enables the formation of the London Skills and Employment Board. Essentially, that devolves the responsibility for developing a London-wide skills strategy and steering the capital’s adult education training budget to a new board chaired by the mayor and with the majority of members being London business employers. That is a significant development, not only for London, where it will bring decision making about skills training closer to the social and commercial realities of the capital but for the rest of the country, where it will provide a pioneering step towards devolution that I am sure others will want to follow. The Bill provides the much-needed legislative basis for the board. I support the noble Baroness, Lady Hamwee, who noted that new Section 24B provides that the Secretary of State ““may”” provide for the establishment of such a board. I suggest to the Minister that substituting the word ““shall”” for ““may”” would deliver the Government’s stated intention of giving the mayor, "““a statutory duty to promote adult skills in London””." To coin a phrase, that would be a small step for the Department for Education and Skills’s drafting department but would be a giant leap for the future of skills training in London. My final point is to note with approval the Department for Education and Skills’s accompanying assurance, in the guidance notes, that no additional expenditure or manpower will be required to bring the Bill into force. However, I also note with some concern its estimate that up to £4 billion will be required for investment in the new shared support service systems described in the Bill. That is a significant figure in anyone’s budget, and I ask the Secretary of State to review the plans in this area particularly carefully to ensure that the investment is truly necessary and that the taxpayer is receiving a full return on investment. The Bill, the publication of the Leitch review and the Chancellor’s Pre-Budget Report last week have once again brought to the fore the role of skills in creating and maintaining our national prosperity. I shall make three observations before I close. First, I welcome the conclusion of the noble Lord, Lord Leitch, that this country must develop a world-class skills training system that will enable our economy to compete with the best. I also share his view that our current skills system is not delivering what is required. It must be driven much more strongly in future by the needs of the job marketplace, and we must prioritise government spending to place a much higher value on the economically valuable skills that the noble Lord, Lord Leitch, speaks about so eloquently in his report. In that context, I look forward to Sir Digby Jones’s involvement as head of a new national skills and employment commission. The very phrase, ““skills and employment”” implies the Government’s intention to provide joined-up thinking and better integration between the Department for Education and Skills and the Department for Work and Pensions who are currently, so far as many businesses are concerned, working on disconnected agendas. Secondly, I agree with the observations of the noble Lord, Lord Leitch, about our current qualifications system. In a nutshell, the system is far too large, obscure and detached from the jobs market. More than 22,000 vocational qualifications are recognised by the national Qualifications and Curriculum Authority, and more than 500 different qualifications are available in literacy and numeracy alone. So I strongly believe that the noble Lord, Lord Leitch, is right to emphasise in his report the critical importance of the employer as skills consumer. However, I fear that his recommendation to set national numeric targets for this country to achieve in level 2, 3 and 4 skills by 2020 runs exactly in the opposite direction. That represents a return to the centralised predict-and-provide approach and is couched in language that is understood by educationists but is incomprehensible to the wider world. The decision about whether skills policy in future is to be driven primarily top down and by central planning or primarily by the dynamic needs of the marketplace is the most important issue for the Government to address as they consider their response to the recommendations of the noble Lord, Lord Leitch. Lastly, I shall quote briefly from a previous government report on skills and international competitiveness: "““We find that our most formidable international assailants are the best educated peoples ... For some time past, whilst we have advanced, they have advanced faster still””." That was in 1884. The urgency remains.