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The key point is the individual learner. The learner has to come first in this post-16 world. At the moment, the learner does not always come first, because they do not have the choice of institutions necessary to progress their studies at 16. Partly as a result of incorporation, FE colleges have become much more focused on survival and finances, and on protecting their own market, to the extent that they will put pressure on the local learning and skills council to ensure that no new sixth forms open in their neighbourhoods. That issue must be resolved. I welcome the proposals in the Bill to place a duty on the learning and skills councils to rise above the pressures put upon them not to deliver more choices in post-16
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education and to take notice of what parents and learners want, rather than of what local vested interests may want or require. There is nothing wrong with opening up opportunities for people at 16. This is not about being more competitive in terms of the different courses available in different colleges and schools; it is about saying that local people need variety and choice if they are to achieve their full potential. I feel very strongly that the LSC needs to take a more strategic view on those matters, and it needs to learn to put the learner first.

One of the more positive developments in the Bill is on foundation degrees. So far, mention has not been made of the fact that 61,000 students were provisionally on HE-funded foundation degree courses at the beginning of this academic year. The number of entrants has grown more than eightfold between 2001-02 and the current academic year. That in itself is testimony to the success of foundation degrees, which are delivered and assessed by further education but validated by universities. The success of the foundation degree over five or six years means that we can trust further education not to only deliver and assess foundation degrees but validate them as well. If it is good enough to do the one, we should have confidence that it can do the other.

If higher education has a problem with the quality standards applied to the validation by further education, let us by all means put the safeguards in place that have been demanded by the other place. However, if HE is so doubtful of the standard, why is it not questioning the quality of the delivery of foundation degrees in our FE institutions? I am not aware that that is the case. I would welcome the Minister’s comments on that.

Another important point is that the delivery of foundation degrees in FE institutions means that we are opening up education opportunities at level 4 for a range of people who could not have accessed those opportunities had we kept them enclosed within an HE system. I live in a city with two first-class universities; I am lucky in that respect. But the town in which I was born and bred has no HE institution; many parts of this country do not have HE institutions. We have to deliver HE opportunities in a range of locations and contexts if we are to meet the skills challenge and develop the potential of all adults and young people.

The majority of people on foundation degrees are part-time learners; they work; they are single parents; they are mature students. Most importantly, they are often from working-class families. A far higher proportion of those enrolled on such courses are from working class backgrounds than in any traditional HE institution. The importance of that cannot be underestimated. If we are to meet the skills needs of the nation, we need to be responsive and flexible and maximise participation.

Provision must be of a high quality. Another important provision is the Bill’s requirement that the principal of a college must have a leadership qualification. That is a long overdue measure and is already in place in our schools; it was introduced by the Government for head teachers and has been a great success. If we are to value FE and give it parity with school education, we must recognise that principals need to be as highly qualified and as expert in delivering leadership to their institutions as any head in
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any school. The leadership of the FE college is critical to whether the ethos, quality and consistency are right in terms of delivering standards. FE can occasionally be found wanting in that respect, just as schools can be, and the key to resolving the problem has to be the leadership of the college or school. I very much welcome that measure.

I want to draw attention to what has been called mission drift. Mention was made of this in the other place as a result of the power to award foundation degrees and so on. I entirely disagree with that accusation. In my view, the mission of FE is to play a crucial role in delivering the potential of all our young people and of people of all ages who need to access FE’s facilities and opportunities. It is about lifelong learning and meeting the skills challenge. That is the mission of our FE colleges and the Bill ought to be approved. I look forward to it going into Committee, where I hope that the clauses taken out in the other place will be reinstated.

6.55 pm

Mr. Brian Binley (Northampton, South) (Con): First, I pay tribute to the hon. Member for Sheffield, Hillsborough (Ms Smith) whose speech was long but very thoughtful. I was particularly grateful to hear of the concerns for the over-60s. That made me feel wanted and that I was still useful to society.

I thank the hon. Lady for her remarks about employers and their involvement in the process, because one of the weaknesses of the Bill is their lack of involvement. The Bill talks at length about consultation, but not enough about involvement; there is a sizeable difference there about which I want to speak.

Before I do, I pay tribute to my hon. Friend the Member for Daventry (Mr. Boswell). He is my neighbour and it was particularly good to hear his very informed comments on this debate. I particularly liked what he had to say about my hon. Friend the Member for South Holland and The Deepings (Mr. Hayes), because I have had the good fortune to be present at two of his important speeches on this subject. I know that members of the further education profession enormously appreciated his contributions, which were vital to the discussion.

I declare an interest, which is relatively straightforward and people know of it; I am a business man from a business background. I have built up two companies that I am delighted to say are successful and employ reasonable numbers of people. That is reasonably well known in this place but I am not sure that it is as well known that both of those businesses rely totally upon new entrants with relatively high degrees of numeracy and literacy, yet both suffer from skills shortages in those subjects. I recognise that we live in an age where employment is high—that needs to be taken into account— but it is becoming increasingly difficult to recruit people with the basic skills levels that those two businesses need.

I am equally pleased to say that both are in the SME sector, which I believe is the most vital sector to Britain’s future. We are in the middle of a 10-year cycle, in which we are seeing sizeable changes to employment in this country. It has been said on a number of occasions that plcs in the UK as a sector will be
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shedding 1.5 million jobs in that 10-year period. As a business man from the SME sector, I am delighted to say that we would be in serious trouble were it not for that sector, which is expected to add 2 million jobs over the same period. We are discussing a sector that is vital to Britain’s future.

Within those figures, we need to set the background to the challenge that Britain faces as a commercial and industrial nation, which is the growing and potentially overwhelming competitive challenge over the next 30 years from emerging countries. I do not need to tell the Minister that it has been projected that India and China alone will control 60 per cent. of global trade by 2050. Bearing in mind the figures that I have quoted, Britain’s future depends on the strengths of the SMEs. The sector is important in terms of not only job growth, but creativity—much of the creativity of British industry and commerce emerges from it, and it creates much of our commercial and industrial well-being.

SMEs are massively important in terms of supply chains to plcs. For example, Airbus directly employs 13,000 people, but it has been reckoned that there are a further 135,000 jobs in the supply chain that keeps it going. That means many hundreds of SMEs working together in a team scenario to create Airbus’s success in this country at this moment. It is vital that we understand that background before we discuss the role of further education in skills training.

If we are to compete, we must be a highly skilled, high-tech nation that does not directly compete with third-world manufacturing. The old days are gone, and we need to recognise that and to build the impact of that statement into our plans for the future. We need a knowledge-based economy that matches that of the USA, Germany and other advanced nations, if we are to have any place at all. An advanced economy needs advanced skills. That is a truism almost too simple to need repeating, but it is vital that we do. The alternative to becoming an advanced economy based on an advanced skills set is to continue the drift down the competitive ladder, and I know that the Minister does not want that particular drift to occur for our children and grandchildren.

Today, we are discussing the long term, and I want to turn my attention to skills training for the long-term, starting with the basic areas. Let us consider the Government’s record in that respect over the past 10 years. The Government say that they have increased spending on education, which is, of course, completely true, but it does not highlight the fact that one in six adults do not have the literacy skills expected of 11-year-olds. That is not directly the fault of this Government—my hon. Friend the Member for Daventry has said that Opposition Members have the habit of saying that everything bad started in 1997 and that everything good started before that point, which is nonsense and does not take us any further forward. More importantly, more than half of adults do not have the levels of numeracy expected of 11-year-olds, which underlines the point made by the hon. Member for Sheffield, Hillsborough about the importance of
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not only our basic educational structures, but the second-chance structures, which she discussed so eloquently.

The figures show that each year around 120,000 11-year-olds leave primary school unable to read or write properly. That figure is not from a Conservative pamphlet—it is from The Independent. We are not creating the basic skills that we require for an advanced economy. The Government have told us that more money is being spent on apprentices, of whom we have more than 250,000 in England alone. Unfortunately, however, 50 per cent. of them did not complete their full programme in 2005-06. Indeed, the take-up of advanced apprenticeships has now fallen to below the 1997 level. I do not say that to attack the Minister and the Government; I say it because it should concern us all. We need to get the issue right irrespective of party politics, because, as I have said, it is vital for the children and grandchildren who will follow us and whom we are thinking about today.

The fact is that we are not creating the necessary vocational skills for an advanced economy. The Government have told us about the money that they have spent on the youth employment programme, which is true, but the number of 16 to 18-year-olds not in education, employment or training—the so-called NEETs, who have been referred to on a number of occasions—has risen by 27 per cent. since 1997. None of us wants to live in a society where inactivity among the young is increasing rather than decreasing. The Government have told us that funding for FE colleges has increased, which is also true. However, only 14 per cent. of British employees have intermediate level vocational qualifications compared with, for instance, 46 per cent. in Germany.

I hope that that has set the background to the task that we all face in this place. The previous Government, this Government and Governments to come share responsibility for ensuring that the figures that I have quoted in response to the Government’s spending statements are improved dramatically and quickly, if we are to face the global challenge that I explained earlier.

We need to recognise that money is not everything. It is not enough simply to identify a problem, allocate money, create objectives, set targets and think that the problem has been solved. If life were as simple as that, we would all believe that we could solve the problem in a couple of hours and go for a drink before half-past 9. In many respects, a decision made within a set of parameters is not absolutely vital. What is vital is how one manages, monitors, assesses and polices once a decision has been made within a given framework.

We have seen too many failures of management to ignore the importance of management within the context of further education. The Government need to recognise that we need to manage FE better, a point which a number of hon. Members have made today. The Government need to monitor and police more effectively; they need to evaluate and assess more effectively; and they need to fine-tune and be more flexible. Whatever system they decide to implement, they need to take account of management qualities, which are so important to the outcome of decisions made in this House.

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If we did that consistently, we would not need continually to reorganise. This is the fourth time that the Government have restructured the skills network since they came to power. I am sure that they do not want to be in that position or to have had unnecessarily to spend so much money on restructuring. We want to get it right and to do so by adopting management practices of the kind that I outlined. The fact that the Bill does not mention those requirements is a sadness and something that the Government need to think about if they hope to get FE right on this occasion. They need to recognise that, as noted by the British Chambers of Commerce, we have a massive skills crisis. I am not saying that we did not have such a crisis 10 years ago or that the previous Government handled the matter with all the necessary skill and success—they certainly did not. However, we face the problem now. It is vital that we eradicate complacency and ensure that this legislation is not yet again seen as a missed opportunity in 18 months’ time.

Let me turn to what I consider to be the most important oversight in the Bill—its undervaluing of the potential role of business managers, especially those from the SME sector and especially with regard to their involvement in the nation’s skills training programme. We can talk about consulting management, but I want to go much further, as, in truth, does the hon. Member for Sheffield, Hillsborough, who wants more involvement from business. She agreed with me when I asked her about placing responsibility on businesses’ heads, and I was delighted to hear it. Business is not accepting its responsibility in this area of our nation’s life as much as it should. Sadly, the Bill centralises skills training and removes controls over it from the local arena. It fails to recognise that SMEs operate locally, not nationally, unlike plcs. Transferring responsibility from local skills councils to regional councils makes it harder for SMEs to be involved in skills planning, skills delivery or the creation of training programmes.

SMEs have a massive role to play not only in the provision of skills training but as benefactors of the skills that are provided. The Minister should be aware of the results of a British Chambers of Commerce survey that touches on the issue of skills for industry and commerce. I want to cite a few of its findings. It says that more than 55 per cent. of SMEs find it more difficult to find skilled staff than they did five years ago. That is partly the result of an economy that has less unemployment than 20 or 30 years ago, but it is still an indictment of our further education and skills training programme. There is immense support for training from the SME sector: more than 80 per cent. of SMEs spend £100 or more per annum per employee on external skills training, and 50 per cent. spend £250 or more per annum per employee. That is a sizeable amount of money, taken in the round, and it should be used more effectively. More than 75 per cent. of SMEs spend time identifying training needs for their staff. More than 60 per cent. evaluate the effectiveness of training that they have paid for. Most said that the main barrier to training was the lack of financial resource and the absence of staff involved in training. I welcome the Government’s promise to pay up to the level 2 stage to make it free. Only 3.8 per cent. of SMEs said that training was not a priority. That massive set of facts shows that SMEs are committed to training and that they spend significantly on it but have limited
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resources to go further. They are ready, willing and able to help to create a trained, skilled work force and a knowledge-based, advanced economy.

As to whether colleges of further education are successful at working with business, 80 per cent. of businesses surveyed used independent advisers. One said:

Sadly, only 20 per cent. of SMEs use FE colleges. That suggests a sizeable breakdown in communication somewhere, if not all on one side, which must be put right. I recognise that some of the other 80 per cent. will be in receipt of Government funding, but the figures make it clear that the situation is ad hoc and there is no real assessment of effectiveness. We cannot afford to put up with that in view of the importance of skills training in the challenges that this country faces. The numbers achieving level 3 qualifications dropped from 42,000 in 2000 to 28,000 in 2006. That further underlines the fact that we are missing out in that crucial area of activity.

As a business man, I welcome train to gain—it is a good package and a good product—but only 5.8 per cent. of SMEs have taken part in it. I recognise that it is new; it has been rolled out for only a little under a year. Of those who did take part, however, 87 per cent. were satisfied or very satisfied with the product, so it is worth while. However, despite considerable advertising, 67 per cent. of the sector was unaware of its existence. There is a problem in relation to marketing correctly, communicating and connecting. As regards skills councils, 68 per cent. of SMEs were unaware of councils that represent them in their sector, and only 16.7 per cent. had had any contact from a skills council. Am I making my point, Mr. Deputy Speaker? I can see that I might be boring you now. There is a massive breakdown in the connection between Government training schemes and the SME sector and I fear that the Bill does not pay enough attention to that. We can talk about structures or money, but unless we talk about getting people together we will continue to fail.

Let me make some suggestions that the Government might consider in Committee and before Third Reading. We should face the problems head on by creating structures that allow vocational and skills training to focus much more on the needs of the world of work. That means greater involvement of SME managers locally in creating such processes.

Vocational and skills training should be workplace driven and local business needs should motivate and direct local vocational programmes. If we do not get together, that cannot happen. It will not happen if we do not communicate or involve business enough, and if business does not accept its responsibilities enough.

We must simplify the processes that we create and concentrate on the need to involve quality business management from across the business sector. If that requires sizeable outreach, so be it. Outreach must be designed by business managers for business managers and the emphasis must be on benefits, not features. The Government are for ever selling features but we need to emphasise benefits. Any salesman of note will say that one never sells on the basis of features—one sells on the basis of benefits.

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Training programmes that business managers and educationists create jointly must fulfil local needs, and learning and skills councils must be prepared to deliver the programmes in the workplace if necessary. Many SMEs and small businesses cannot reach out in the way in which we would like. Again, the hon. Member for Sheffield, Hillsborough made the point that, in many areas—including important industrial areas—people cannot get to a centre of skills training. We must reach out to them.

All too often, ill-designed packages have been created and delivered away from the workplace and are distant from the ethos and culture of the working environment. That applies not only to new products and service sectors but many of our traditional, locally based manufacturing businesses, which have contracted in the past 30 years but continue to represent an important part of local activity.

In my town of Northampton, we have shoemakers of international repute. You will forgive me for advertising in this place, Mr. Deputy Speaker, but Church’s and Crockett and Jones make wonderful products. However, 30 years ago, they had a sizeable pool of experienced craftsmen on which to draw. Whenever they advertised, they had many responses. That pool has shrunk because the industry has shrunk, yet they tell me that, when they ask for on-site training, which they have to do nowadays, there seems be no interest from our colleges of further education or other Government skills bodies. They tell me that there is little understanding of their problem.

We cannot afford another missed opportunity to deal with a massive problem, the solution of which is vital to the future of our nation. I therefore genuinely urge the Minister for Higher Education and Lifelong Learning and the Government to reconsider the Bill seriously in the light of involving business managers in creating and delivering training locally for local business.

We all know that time is running out if we are to meet the challenge of globalisation. Action is urgently needed. We can make more of the Bill and I hope that the Minister will pay attention to that plea and perhaps take action in Committee so that we can proceed more confidently with skills training.

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