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This partnership approach, in which we shall engage learners and employers, is crucial to the new culture we are seeking to create. Without it the nation will not
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meet the targets we are setting out. Failure is not an option. That is why Lord Leitch proposed that in 2010, the new commission for employment and skills should review whether we are making satisfactory progress or whether we need to introduce a statutory workplace training entitlement. I can confirm today that we will carry out such a review in 2010. However, let us make every effort to achieve our ambitions without legislation.

Our proposals benefit employers and employees alike. The business case for investing in skills stands in its own right. It makes sense for Government to work with employers purely for the economic benefits and improved competitiveness it will bring. However, we must not forget that for many people, improved skills are the route to better jobs, higher incomes, reduced child poverty and improved social mobility. If we enable parents on low incomes to raise their aspirations and to have the opportunity to improve their lives, we can be sure that their children will have higher aspirations and better opportunities too.

Lord Leitch challenged us all to raise the nation’s skills base, build productivity, increase social inclusion and improve economic competitiveness. With employers, employees and other learners, unions, colleges, universities and training providers, we will meet that challenge. As our new skills campaign on television and in the press so rightly says: “Our Future. It’s in Our Hands”. I commend the paper to the House.

Mr. David Willetts (Havant) (Con): I thank the Secretary of State for advance sight of his statement. Of course, we share the Government’s aim of achieving world-class skills. We agree with the powerful statement by Lord Leitch in his report that

However, the Government have been making big promises about skills for years. In Budget after Budget, the Prime Minister launched initiative after initiative—initiatives that are supposed to be rising to the skills challenge. In his 1999 Budget statement, he said:

In fact, even before Labour came to office, in 1996, he said:

Today we are told that our aim is to be in the top quartile of OECD countries—I guess that is what 10 years in government does to people.

Perhaps one reason for that downgrading of ambition is the uncomfortable evidence that some key problems have been getting worse. The number of 16 to 24-year-olds not in education, employment or training has risen from 1.08 million in 1997 to 1.25 million today. That is a 15 per cent. increase. The statement should have recognised that we need a change from the failed approach of the past. Both Lord Leitch’s report and the Secretary of State use the right language. They talk about a demand-led system; we completely agree. They talk about its being employer-driven; again, we completely agree. However, in order to deliver that type of system, we need a tough-minded and rigorous assessment of how our skills policies need to change, which is not, I am afraid, what we have had today.

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The report and the Government talk about a flexible employer-driven system, but the Government are keeping the panoply of controls that we have in our current centrally planned system. They will still set their plans for specific qualifications region by region, level by level and subject by subject, and further education colleges will still have to comply, churning out the paper qualifications that the Government want them to produce—when too many of those paper qualifications are not valued by employers, who understand that, sadly, a qualification is not always the same thing as a skill.

FE colleges, about which we have heard very little from the Secretary of State, are desperate to have more freedom to respond to local needs so that they can be employer-driven, but instead they have 17 different regulatory bodies telling them what to do. As we heard in the Foster report only last year:

That is what the FE colleges are calling out for. Instead of tackling the 17 bodies that already supervise FE colleges, the Secretary of State has just announced the creation of an 18th—the new UK commission for employment and skills.

Sitting on top of that structure is the Learning and Skills Council. I think that if Lord Leitch had been given his head, he would have wished to get rid of the Learning and Skills Council. Instead, the Secretary of State has announced today a fifth reorganisation—reforming the remit of sector skills councils. What are the Government really going to do about the Learning and Skills Council? After the latest reorganisation in Whitehall, will the Secretary of State tell us what he expects its long-term role and function to be?

If the Secretary of State had stood at the Dispatch Box and said that central planning had not worked, and that he was genuinely shifting to a demand-led, employer-driven system, we could have supported him, but sadly his statement today does not rise to that challenge.

Let me ask the Secretary of State about specific aspects of his statement. He set out several numerical targets—“ambitious” targets, he called them—that arose from Leitch, but it is noticeable that he did not give a target for apprenticeships, despite the fact that the then Chancellor said, as recently as in the 2007 Budget, that

In his December 2007 pre-Budget report, he again talked about apprenticeships rising to 500,000. Has the Secretary of State dropped the target, either because he no longer believes in such central targets for apprenticeships, or because he is afraid that he will not reach it? After all, the number of apprenticeships has fallen from 135,000 to 123,000 in the past 18 months. If he is committed to the target, why did he not refer to it in his statement?

The Secretary of State referred to focusing on adults—rightly so, because many of the people whose skills we need to raise are already in the work force. However, we really need to know what the Government are doing about the catastrophic fall in the number of FE adult
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learning places, which is down by 1 million. We cannot talk about the importance of adult retraining and reskilling when the Government’s mechanism for financing FE colleges shifts those colleges away from helping adults. He also talked about making “train to gain” a broad service, but is he aware that a criticism made of “train to gain” is that it has a very high dead-weight cost? A lot of that cost goes on programmes and training that would have happened anyway.

I am sure that, like me, the Secretary of State enjoys reading Institute for Fiscal Studies appraisals of his policies, and I am sure that he will recognise its statement that there is no “systematic evidence” that the programme had

The appraisal estimated that about 85 to 90 per cent. of “train to gain” costs could be dead-weight. It went on to say that it could be that

Why are the Government putting more money into “train to gain” when evaluations show that it has such a high dead-weight cost? Of course, the former Secretary of State for Education and Skills responded to that challenge by saying:

It appears that the current Secretary of State has changed that approach; “train to gain” is no longer to be targeted on smaller businesses, in an attempt to respond to the problem of dead-weight cost. Why does he believe that his new general approach will improve the situation in any way?

We welcome the Secretary of State’s comments on the new skills account. It could be significant, and it could give individuals much greater control over their training. We look forward to seeing the detail of that proposal, and we hope that lessons have been learned from the failure of individual learning accounts. However, I have to say that the statement does not rise to the challenge of providing an employer-driven, individually focused service to improve the nation’s skills. It does not rise to the challenge of his new Department.

Mr. Denham: Obviously, to some extent I am slightly disappointed by the tone that the hon. Gentleman has adopted, but it is important to explore the claims that he makes so that we can see whether his response deserves to be treated as having any credibility. He attacked the Government for their failure to make progress on skills over the past 10 years—but as I said in my statement, the reality is that there has been considerable progress since we inherited a disastrous situation from the Conservative Government.

It is a bit rich to hear questions being asked about apprenticeships, because in the early 1990s, the reality was that one could go from one end of the country to the other and barely find a young person who was entering an apprenticeship, because the entire system had collapsed. We had to rebuild the apprenticeship system, not just in terms of the number of people
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involved, but in terms of the success rates and completion rates, which have gone up dramatically over the past two or three years. We have brought 1.14 million adults up to level 2 in the past four years. We have taken 1.75 million people through the skills for life programme. There were 250,000 people on apprenticeships in England last year, compared with only 75,000 in 1997—and those 75,000 had only just begun. We have every reason to be proud of what we have achieved from a very difficult starting point, but we have the honesty to set before the House the scale of the challenge that faces us in the years ahead.

As for whether what we have said matches up to what is needed, we accept some of the issues that the hon. Gentleman raised about FE colleges, but he will know that work is under way to design and introduce a lighter-touch regulatory system for them, and I hope that we can make more progress on that in the months to come. He criticised us first for expanding “train to gain”, and secondly for failing to introduce a demand-led system that responds to the needs of employers. If he does not like “train to gain”, he will at some point have to tell us what a demand-led system shaped by the interests of employers would actually look like. “Train to gain” is designed to make sure that the money in the skills system is used to ensure that FE colleges and other providers offer the training provision that employers actually want and recognise, and qualifications that employers value.

The hon. Gentleman was somewhat dismissive of what we said about taking a look at vocational qualifications, but to me that issue is central. There are employers who say that they are not sure that level 2 qualifications give them what they want, so our plans to work with the commission for employment and skills to overhaul the sector skills councils are central if we are to have a skills system that delivers what employers want.

The issue of dead-weight, particularly in the employment training pilots, has been raised. We will bring forward more detailed plans to extend “train to gain” in the autumn, and we will then need to set out how we intend to keep an eye on the issue. Of course, we do not in any way want to lose the quality of service offered to smaller employers, which they rate very highly, but it is right that the same responsiveness should be offered to a wider range of employers. I hope that I have covered the fundamental points raised by the hon. Gentleman. Incidentally, I should say to him that the target of 500,000 apprenticeships is set out prominently in the document. That is a UK target, and my commitment today is on meeting England’s share of that overall target, but in no sense has the UK target disappeared from our ambitions and aspirations.

Stephen Williams (Bristol, West) (LD): First, may I explain that my hon. Friend the Member for Brent, East (Sarah Teather), who would have responded to the statement, is unavoidably detained elsewhere by a family illness?

I guess that the Secretary of State spent the last two weeks immersing himself in the details of the Leitch report, because much of his statement is simply a rehash of the many targets in that report, and a repetition of many old announcements made by previous Ministers. However, the one issue not addressed in the statement is
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whether there is a meaningful future for the Learning and Skills Council. Nine initiatives are mentioned in the statement, but time only permits me to comment on a few of them.

The main legislation that will follow from the statement will have to do with increasing the education and training participation age to 18. The draft legislative programme, published by the Prime Minister a couple of weeks ago, referred to compulsion for individuals, a duty for parents, enforcement, penalties and sanctions. Is that the right language to use when encouraging more young people to take part in education and training? Would it not be much better to talk about giving them meaningful entitlements and incentives?

There are voluntary pledges for employers until 2010, but we are talking about enforcement against individuals and their parents.

No assessment has been given of the cost of implementing the increase in educational participation or how that cost is to be shared by the state, the individual and crucially employers. Will the Secretary of State please address that?

A second tangible announcement in the statement is old news. It is about increasing the free entitlement from 19 to 25 to level 3 provision. That pledge was made at least twice by the Prime Minister when he was Chancellor of the Exchequer, but we still do not know whether there is any new money to back it up. In his first statement in his new role, the Secretary of State announced £400 million of additional support for students in higher education. What additional support are the Government pledging for level 3 provision?

The statement is full of warm or tepid phrases about how the Government intend to implement the Leitch report. It refers to refocusing the efforts of sector skills councils, and more universities collaborating with employers. What on earth does that mean? I know that the Secretary of State is probably still getting to grips with what universities do, but I know that most universities, if not all, already have extensive collaboration programmes with employers. That is the basis of foundation degrees, and many employers and universities collaborate on cutting-edge degrees, such as in gaming technology, in which Britain leads the world. What more do the Government expect higher education to do?

On the voluntary skills pledge to which employers are meant to sign up by 2010, the statement speaks of stepping up the drive. Again, what on earth does that mean? We know that the former Chancellor appointed his new comrade, Lord Digby Jones, as the skills champion who will charge around the country exhorting employers to sign up to the pledge. Now that he has another role, will the Government please explain to us who will be exhorting employers to sign up to the pledge and how, over the next two and a half years up to 2010, they will assess whether employers have met that pledge in sufficient numbers and to a meaningful extent before they can decide whether legislation is needed?

The Liberal Democrats welcome the announcement of a universal adult careers service, but where is the money to back that up? The statement is silent on whether new resources will be put behind the service, or
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whether it will be a re-aggregation of existing budgets. Will the Secretary of State recognise that many people start on their career paths before they become adults, when they are 14 or 16? Does he agree that he needs to co-operate with his ministerial colleague in the Department for Children, Schools and Families to set up an independent careers and guidance service for 14-year-olds and 16-year-olds to complement the work being done with adults?

The right hon. Gentleman set out an ambitious agenda for his new Department, but there are three strands to the Department. Higher education and science are backed by billions of pounds of Government resources, but there is a risk and a perception out there that the adult skills element of the Department is the Cinderella. He will have to work hard to redress that perception. The most compelling change that needs to take place is more engagement and more investment by employers. Unless the Government are willing to back up the statement with action rather than exhortation, the ambitious target of being in the premier league by 2010 will be very hard to achieve.

Mr. Denham: I thank the hon. Gentleman for his questions, which are all pertinent. I shall try to address them all. Of course I understand why the hon. Member for Brent, East (Sarah Teather) is not able to be present today.

The hon. Gentleman asked about the Learning and Skills Council, so I shall take the opportunity to set out the position. As he knows, the funding for school sixth forms, sixth-form colleges and the contribution of FE colleges to 14-to-19 provision will transfer from the LSC to local authority ring-fenced budgets. My estimate is that we will not be able to give effect to the full legislative changes until the academic year 2010-11, so the legal responsibility will remain with the LSC over that period. We will co-operate sensibly and closely with the Secretary of State for Children, Schools and Families to make sure that provision is delivered effectively both for young people in that age group and for adult learners.

For post-19 education and training, we will consider how best to deliver the functions and services that support the FE system, and I want to build on the progress made with the LSC over recent years in developing a demand-led approach. As we do that, we will work closely with the LSC and other national partners, and consult schools, colleges and providers to ensure that the new arrangements are introduced smoothly. We will take the opportunity to review how the funding and accountability framework can best support initiative and high performance at institutional level and across the FE sector as a whole.

On participation to 18, the set of principles are similar to those that I discussed in my statement. We would rather not use compulsion, but we cannot rule it out if sufficient progress is not made. That must be the approach to young people in education and training. The detailed allocation of costs will depend to some extent on the balance between employer-based and work-based training.

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