---

Skills for Growth

My Lords, I draw attention to my interests as declared in the Register, in particular to my role as non-executive chairman of McDonald’s Education Company. I thank the First Secretary of State, the Secretary of State for Business, Innovation and Skills and the President of the Council for his Statement on the Government’s intentions regarding skills, and for his clear recognition that investment in skills is a vital part of rebuilding this damaged economy and aiding recovery for our country. Skills, of course, are also a means of addressing social inequalities; they can act as the magic bullet to create improved social mobility. Only yesterday, in a remarkable speech honouring the memory of that fine journalist, Hugo Young, David Cameron pointed out that, "““while people with good skills are able to benefit and indeed those who can best capture the opportunities of globalisation see rewards that are off the scale, those without are increasingly shut out of the global economy””." We had been led to expect renewed ministerial commitment to skills after a spokesman from the noble Lord’s department, who spoke on Saturday night and was reported in the Observer on Sunday, said that: "““The skills sector has received record investment in recent years and we will shortly be publishing the skills strategy setting out our long-term plans for investment in skills to contribute to the future growth and success of the UK economy””." After such a build-up, was that really it? In the DBERR paper New Industry, New Jobs, published in April this year, one senses the influence of the First Secretary of State—he is fond of new titles, too—when he remarked that: "““We have maintained investment in the UK’s infrastructure and public services, vital for families and for businesses. Underlying these decisions is a core judgment that despite the tough times, it is better to keep investing in growth and jobs so as to speed recovery and build the manufacturing and services we need for the future””." In the light of such reassuring words it might have seemed to the more trusting among us that we had little to fear and much cause for optimism. Yet, despite these warm words promising investment and concentration on skills, we were informed about some documents at the weekend which appear to adumbrate a gaping chasm between the Government’s rhetoric on skills and their intentions on delivery. Last Sunday, the Observer obtained papers which showed that, rather than commitment to the skills sector, the Government appear to be planning dramatic cuts, including cuts to front-line services. Skills, too, are falling victim to the Government’s economic mismanagement. Apparently, preparations are currently being made for some £340 million of what are euphemistically termed ““efficiency savings”” in 2010-11. The First Secretary of State owes us an explanation. These cuts are planned for services on which the Government had specifically said they intended to focus. Exactly what are the noble Lord and his ministerial team planning? We see, for example, investment for apprentices over 25 may well be cut by 10 per cent, in an area in which the Government have specifically promised to concentrate investment. We also learn that the number of career development loans will be halved and that £25 million may well be cut out of the new Adult Advancement and Careers Service. These areas are vital for adults wanting to re-skill or develop skills in order to maintain employment in a difficult economic climate. Something does not quite tally. It appears that this country is in danger of believing in reassuring promises which are not backed up by real commitment and investment. We are told, and it has just been repeated, that the Government have recognised their commitment to skills, but the facts do not back it up. At a time when help to skill and to re-skill is needed most urgently, this is disappointing, damaging and inadequate. Of course, we welcome some of the proposals announced today. In particular, we welcome any measures that will improve flexibility in training and bring greater focus on individuals and their specific needs. As the First Secretary of State is no doubt aware, proposals moving in a very similar direction were set out in the Conservative Party’s excellent, Get Britain Working. I would offer to send the Secretary of State a copy of this report but, as he has included several of the proposals in his Statement, it would appear that he is already aware of it. I am delighted to see in his place the noble Lord, Lord Leitch, who published an excellent report in December 2006. However, we have been waiting three years for a clear plan of action in response to that excellent report. I am not sure what today’s Statement adds to the document entitled World Class Skills, which was published in July 2007 by the then Department for Innovation, Universities and Skills and which was notoriously high on aspiration but low on detail. We have just had official figures from DBIS; statistical first release shows that in the fourth quarter of the academic year 2008-09, the number of young people starting new apprenticeships was 36 per cent lower than at the same time last year. Between October 2008 and October 2009, the number of new apprentices has fallen by 20,000. I hope that the First Secretary of State will acknowledge that those statistics demonstrate a very worrying trend. It does not help that this Statement is being rushed out on the day before the House is prorogued at the end of the Session, following hard on the heels of the higher education funding review and framework. The Government have delayed their response to the challenge set by the excellent Leitch review too long, and incalculable damage has resulted. In the three years that we have been waiting, we have seen the number of 18 to 24 year-olds not in education, employment or training—the so-called NEETs—rise to a record 835,000. We have seen unemployment figures soar across the board. On this of all days, it is surely poignant but also appalling and unacceptable that we should contemplate now the possibility of another lost generation of young people. Some of these recommendations are welcome. As I say, they are ones that we recommended. Others should be subject to serious examination and scrutiny, but overall they are too little and too late. Finally, does the noble Lord acknowledge that the very real figure that has been published today is the one relating to the number of young people out of work? Despite the sort of commitments being laid out here today as an attempt to deflect attention from those figures, and the all-too-real impending cuts to the skills sector, it will take more than smoke and mirrors to build a world-class high value-added skill-based economy here in the UK. I hope that the noble Lord understands why this Statement leaves me full of misgivings.