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Mr. Bob Blizzard (Waveney): I thank my right hon. Friend for giving way. As well as being responsible for training, the training and enterprise councils perform economic development functions. Some of their budget deals with their enterprise agenda. My constituency has had substantial funds from the Norfolk and Waveney TEC, which have been used to match-fund European structural funds. What will happen to that enterprise budget as we move to the learning and skills councils?
Mr. Blunkett: The budget will be protected. We have made it clear that the continued use of discretionary funds at local level is essential. That includes securing the funds that would have been available in the years to come, which at present rest in training and enterprise council reserves.
We have therefore been discussing with our colleagues in the Department of Trade and Industry and the Department of the Environment, Transport and the Regions how we can ensure that, through the Learning and Skills Council and in co-operation with the Small Business Service and the sub-regional economic development arm of the regional development agencies, we can do joined-up work at local level to ensure that intermediate labour market and other economic development programmes are sustained, and that they are linked to the skills needs of the area.
Mr. Tim Boswell (Daventry):
Does the right hon. Gentleman concede that, according to a recent written answer, the overall situation of the TEC movement is one of deficit, not of reserves, by accountancy criteria? Will he therefore make it clear to the House that it will be impossible for him to pass on or to raid TEC reserves, if overall they do not exist?
Mr. Blunkett:
There are two key points. First, revenue reserves vary enormously across the country--some TECs hold several million pounds worth of reserves in the bank. Secondly, the totality of reserves includes capital stock, such as the premises and the land held by TECs. In my view, those are part of the reserves and will be realised as we develop the new system. Certain properties can be released on assignment as the headquarters of the 47 learning and skills councils at sub-regional level, replacing the existing 72 TEC headquarters.
Mr. David Chaytor (Bury, North):
On the transfer of some of the TEC functions to the learning and skills councils, will the LSCs still have the powers to apply directly for European streams of funding and for single regeneration budget funding?
Mr. Blunkett:
The necessary mechanisms for match funding for European and related funding will be in place. It would be foolish of the Government to remove mechanisms at regional and sub-regional level for achieving that. As part of the overall spending review, we shall also address the issue of ensuring that match funding is available through other sources at Government level to secure the full match funding available, which we have
The present system is succeeding--where it works--despite, rather than because of, the structure. People find ways round anomalies and structural difficulties, but struggle with funding regimes that result in, for example, three-year modern apprenticeships in engineering costing between £3,000 and £10,500, and in business administration costing between £2,600 and £7,500 of public money--all to achieve the same goal, but through different TEC or FEFC-funded regimes. That kind of nonsense clearly cannot continue. One of the great savings--at least £50 million a year--that will accrue from combining the existing regimes will be achieved by ironing out such anomalies and disparities.
When new legislation is introduced and new structures are developed, the structures--the machinery of delivery--inevitably receive attention, but I stress that, although that is true of the Bill, clear policy objectives override everything else. We are bringing about change not for change's sake, but to ensure that we can determine a new, slimmed-down system that will enable us to meet the goals that I have set out. To do so, we need to change the structure and the systems and break down the barriers between what used to be called schedule 2 and the remaining areas of adult learning. We must do so to achieve a proper synergy between the commitment of employers and business and the public investment, which is substantial.
As we have set out previously, £5 billion of expenditure will be available through the Learning and Skills Council and its sub-regional arms and we estimate that, on average, £100 million will be available at sub-regional level, which will engage partners in such sums for the first time. In two years, £6 billion of expenditure will be available through the national and sub-regional arms and that substantial money will be aimed at transforming the life chances of individuals across the country as well as the labour market.
We seek a public-private endeavour, and I want to reinforce what we have guaranteed previously. We have said that two fifths of the council, nationally and sub-regionally, will contain those with recent or current business experience. The corollary is that we ask businesses themselves to be prepared to match that intent by offering their employees opportunities to train and to gain new skills. The significant investment of public money needs to be matched by the private sector at every level--by small industries as well as large--and businesses must be prepared to take on the challenge of investment in opportunity for the future.
That commitment extends across the country, and I hope that, as well as participating in the new structure, businesses will encourage other businesses to be part of the delivery mechanism in terms of ensuring that their responsibility is seen to be carried through in action. The gas industry has given a first-rate lead in overcoming some of the real difficulties faced by small operators, such as their fear that people whom they have trained will disappear when they finish their apprenticeships--if they did, they would have been a deadweight cost. The experiment with the gas industry, in conjunction with the
financial institutions, is an example of how small businesses as well as large can contribute to the skills needs of their sector while protecting individual companies from the risk of seepage. I want to encourage other parts of the sector, including the national training organisations--of which there are now more than 70--to ascertain what can be achieved in their sector.
Mr. Richard Allan (Sheffield, Hallam):
The Secretary of State may know that the national training organisations have expressed concern about their representation on the LSCs at national and local level. What role does he think that the NTOs should have in the LSCs, so that they are involved in policy making?
Mr. Blunkett:
As the hon. Gentleman knows, we have not assigned places to particular organisations and structures, but we are mindful of the need for national training organisations to be represented. They pull together particular sectors of the economy, and should be represented in the sub-regions that include that part of the industrial structure. It is helpful to put that on the record. The same is true of the important role of local government at sub-regional level and nationally. We need to bring together the skills and adult learning endeavours and the economic development functions to which my hon. Friend the Member for Waveney (Mr. Blizzard) referred.
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