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Mr. Denham:
The development of the skills funding agency will give us a more flexible vehicle for delivering policies that we have already announced. Earlier in the autumn, in setting out the priorities for skills funding, I was able to say that we wanted greater flexibility for colleges to deliver courses below level 2. We will introduce further flexibilities in Train to Gain for those with older qualifications that need to be refreshed. While the Queen's Speech is essentially about structure, we are moving the skills funding system towards greater flexibility, which
brings greater professional autonomy to college managers. That is a process that will develop over time, but I am sure that it will help to tackle the important problem that my hon. Friend identified and which we need to address.
Our investment in higher education is not only a sound investment for the future but it enables universities and higher education institutions to offer immediate and practical help to businesses and individuals in the downturn. I commend to the House the document produced last week by Universities UK, GuildHE and the Higher Education Funding Council. It gave a business contact for every single higher education institution, and it set out the practical support available from our universities.
The ProfitNet programme introduced by the university of Brighton brings together 500 companies across Sussex, and it has helped create supply chains, new processes and joint ventures. The business evolution service provided by the university of Staffordshire supports skills development and training at different levels, depending on employer requirements. Changes to the rate of VAT mean that universities, like other registered charities, will benefit financially for the 13 months in which the lower rate remains in force. Both Brighton and Staffordshire universities have said that the VAT cut will help them to step up their efforts on behalf of their local communities, and I very much welcome that.
Mr. David Willetts (Havant) (Con): As the Secretary of State knows, I gave him advance notice that in our debate on universities I hoped that he would take the opportunity to tell the House authoritatively how many students in 2009-10 will have a lower maintenance grant entitlement than in the current year, 2008-09. We have been trying for weeks to get that elementary fact out of the Secretary of State, so will he take the opportunity to give the House that figure?
Mr. Denham: The figures that count are as follows. Compared with the announcements that I made in July 2007, we will invest a further £100 million in student financial support. Two thirds of students will get a full or partial grant. The percentage of students getting a full grant will not be the third of students that I anticipated, but 40 per cent. All students will receive more grant than they would have done in 2007 up to the threshold of £50,000 a year of household income and, in the same range, all will receive more total support than they would have had in 2007. That is a demonstration of our commitment to improve the student finance system. It is quite true that we have had to make adjustments and that some people who would have received some grant will not do so in the next year, but we have been straightforward in our commitment to deliver two thirds of students receiving a full or partial grant, which we believe we will achieve next year.
Whether people lack basic skills, or have high level skills which need to be refreshed, everyone from time to time needs to improve and update their skills and education. That is why we will bring in a new right for those in employment to request time to train—a new right for about 25 million people across Great Britain—and I am pleased that the devolved Administrations in Scotland
and Wales have indicated support for similar measures. That new right will encourage a discussion between individual employers about skills development. A key requirement is that training should help improve business performance and productivity in the organisation concerned.
Dr. Ian Gibson (Norwich, North) (Lab): Before my right hon. Friend moves on, it would be characteristic of him to remember that international students come to these islands, and that our educational institutions are a magnet for them. They go back home, and take the message with them, which is a very important way of developing relationships with developing countries and so on. They come here because of the quality of education, which is superb.
Mr. Denham: My hon. Friend is absolutely right. The overseas students who come to study here are not only welcome but are an important part of our education system. They enrich the institutions to which they come to study. It is fundamentally the investment that we have made as a Government in higher education that enables that to be true, and we need to maintain our commitment to proper investment in higher education and not repeat the mistakes that were made in the not-too-distant past but which too many people appear to have forgotten.
Most businesses regard investment in training as investment in their own productivity. Employers spend £38 billion a year on training, which is many times more than the Government themselves spend, so time to train goes with the grain of what good businesses already do. I believe that asking for time to train will often become part of an employee’s annual review process, and it will help to instil a culture of learning in every workplace. Apprenticeships, too, are an important way of unlocking talent and building skills in the work force. Ten years ago, apprenticeships were close to collapse. Only 75,000 people started them, and most of them did not finish. We as a Government have rescued apprenticeships. Last year, about 180,000 people started apprenticeships, and we are on target for 130,000 completions a year by 2010-11. Apprenticeships are back. Expanding the number of apprenticeships will help the economy to emerge from the recession stronger.
The children, skills and learning Bill will give all suitably qualified young people a legal right to an apprenticeship from 2013, and it underlines our commitment to entitle young people who have the ability and desire to take an apprenticeship to do so. The Bill will strengthen apprenticeships by establishing a coherent legal framework that will define the programme and set the standard. We believe that fulfilling our apprenticeship commitments will lead to around one in five young people starting an apprenticeship, with further growth for older workers, too. To support this entitlement, we will, through the Bill, establish a new national apprenticeship service, which was called for a couple of years ago by the Lords Select Committee. For the first time ever, we will have a dedicated service for apprenticeships.
Investment in apprenticeships will rise to more than £1 billion next year, but we need to take further measures. As my hon. Friend the Member for Wolverhampton, South-West (Rob Marris) said earlier, we need a big drive to increase the number of apprenticeships offered
in the public sector. We have already set targets for central Whitehall Departments. Radical new models of supporting apprenticeships, such as the London Apprenticeship Company, a community partnership including the City of Westminster college and Westminster Kingsway college, are being considered. That partnership intends to recruit apprentices who will be made available as a flexible work force to employers and other host companies. We have also set up a matching service for construction apprentices whose employers cannot keep them on, to place them in new employment and training. We are looking at developing a similar service in other sectors.
The Government need to use the leverage of public procurement. When we use taxpayers’ money to build a new college, school or hospital, we do not want just to create new buildings. We want to help build the skills base of the construction industry. Following the announcement in the pre-Budget report, whenever Departments and their agencies let new construction contracts, they are now encouraged to consider making it a requirement that the successful contractors have apprentices as a proportion of the project work force. All successful contractors in Building Colleges for the Future, worth £2.3 billion, are now required to have a formal training plan for the project work force and provide access to apprenticeship places. We will build on this approach in other sectors, hopefully including IT, where Government will spend nearly £14 billion this year.
The Department for Communities and Local Government is also taking action on construction. The Local Democracy, Economic Development and Construction Bill will strengthen local democracy, promote regional and local economic development, and ensure fairness in construction contracts. It will improve current legislation on commercial contracts to provide a fairer system, and more cash flow for construction companies. The legislation will be especially important for small and medium-sized enterprises, which play a key role in local economies. The Bill will transfer greater power and responsibility to regions, local authorities and citizens in times of economic hardship. It is important that decisions can be taken by those who are closest to the issues, and the Bill contains important measures to encourage a more diverse range of people to take up civic positions, strengthening local democracy. The Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Hartlepool (Mr. Wright), will address many of those topics in more detail when he winds up the debate.
As I said at the outset, the Government are determined to do whatever is necessary to support families and businesses through the downturn, and to ensure that we invest properly and wisely now for the upturn so that this country comes through stronger, fairer and more competitive—
John Howell (Henley) (Con): I thank the Secretary of State for giving way. It is very generous of him. Will he answer the question posed by my hon. Friend the Member for Havant (Mr. Willetts) earlier? How many students will be worse off as a result of changes to maintenance grants? We would like to know that before he finishes.
Mr. Denham:
The hon. Gentleman knows, if he has been listening, that we will invest £100 million a year more than we planned when we announced changes in
2007. Also, significantly more students—we think 40 per cent. rather than 33 per cent. of students—will get the full grant, and all students will receive more grant, up to £50,000 a year household income, than they would have received in 2007. The Opposition should recognise the significant improvement that has taken place in the grants system, compared with that which existed just a few years ago.
I know that others wish to speak in the debate—
Mr. Ellwood: And will ask the same question again.
Mr. Denham: It is not for me as Secretary of State in any way to seek to determine the questions that Opposition Members ask. That may or may not be the case.
The measures that the Government announced in the legislative programme in the Queen’s Speech and the measures that they support are in stark contrast with the message that we have had so often in the past few weeks that nothing can be done to help families and businesses at the time that they need Government most.
6.44 pm
Mr. David Willetts (Havant) (Con): Members in all parts of the House who have an interest in skills and training and housing have had an unusual number of changes to the timing of the debate. We all understood the passions of the House on the very different matter that we have just debated. The present debate was originally planned for Thursday, and we are at last having it now, until 11 pm. One of the compensations of holding the debate today is that my hon. Friend the Member for South Holland and The Deepings (Mr. Hayes) was not able to join us on the Front Bench on Thursday. He had a commitment to take part in the Moulton village pantomime in his constituency, “Flinderella”, in the starring role of Baron of Boston. We are grateful that he is able to join us after his theatrical triumph last week.
Contrary to the extraordinary straw man so savagely attacked time after time by the Secretary of State, the Opposition fully understand the scale of the crisis facing our country as the economy heads into recession, and we fully understand the need for serious measures to tackle the crisis. The first thing to do is recognise what is going wrong with skills and training in our country. The Secretary of State was far too complacent about that. He spoke, as he so often does, of the extraordinary success in the number of apprenticeships, but the number at level 3—which is what apprenticeships are in many advanced western countries, not level 2; advanced apprenticeships, as they are now called—has been falling in each of the past seven years. The number has fallen from 112,00 to 110,000 to 105,000 and in 2006-07 it was down to 97,000. The Secretary of State failed to engage with the problem that there is a decline in the number of level 3 apprenticeships, compensated for only by an increase in the number of level 2 apprenticeships, which would not even have been called apprenticeships in the past.
Mr. Denham: Does the hon. Gentleman accept that what really matters is the number of people who complete their apprenticeship, and does he accept that the number of people completing a level 3 apprenticeship has at least doubled?
Mr. Willetts: We are talking about the Government’s figures for the number of advanced apprentices in training, and that number is going down. The Secretary of State has renamed what in the past were youth training schemes and the youth opportunities programme. They are now called apprenticeships instead, so that he can claim a higher figure. We are entitled to draw attention to the problem with level 3 apprenticeships.
There is also an increase in the number of young people not in education, employment or training. After 10 years of economic growth and billions of pounds spent on the new deal, the number is up by 132,000 compared with five years ago. So we have a decline in the number of advanced apprenticeships, an increase in the number of young NEETs, and for older learners in the past few years we have had a loss of no fewer than 1.4 million adult learning places. Mature workers losing their jobs and perhaps thinking of retraining and taking up a new career need to be able to access those adult learning places.
We have a crisis in our training provision that matches the growing crisis in our economy. Instead of addressing that, the Secretary of State painted a caricature picture of what the Opposition stand for. As for the proposals in the programme put before the House in the Gracious Speech, most of the proposals in the children, skills and learning Bill are simple reorganisation, or to be more accurate, re-disorganisation—yet more change in a skills system that has already seen an enormous amount of change in the past 10 years.
It is worth recording that the Secretary of State praised the achievement of the Learning and Skills Council, which the Government created in 2001, and which they are to abolish. Having created it in 2001 with 47 local learning and skills council branches, they reorganised it in 2003 at a cost of £53 million. In 2005 they reorganised it again at a cost of £35 million. In 2007 they passed the Further Education and Training Act 2007, which formally replaced the 47 local branches with nine regional centres, and now another year on, there is to be legislation abolishing the LSC entirely and replacing it with three other quangos. This is endless reorganisation in the absence of a real strategy for improving the level of skills in our country.
If the Secretary of State will not take it from the Conservatives, he might accept it from someone for whom I suspect both he and I have considerable respect—Chris Humphries, the chief executive of the Commission for Employment and Skills, who produced a report that the Secretary of State himself cited. Chris Humphries said:
“I don’t think there is an employer in the land who understands what the new systems are”.
When asked by the Financial Times how many skills bodies there were in Britain, Mr. Humphries, one of our leading experts on skills, said:
“Honestly, I haven’t got the foggiest idea”,
but he estimated that there were “many hundreds”. Instead of a skills policy, the Government have created an extraordinarily complicated structure that they expect employers and individual learners to navigate in order to access the training that they need, especially in tough times. What we desperately need is simplification; instead, the LSC is being replaced by a multiplicity of other bodies—a skills funding agency, a national apprenticeship service and a young people’s learning agency—and there is a new role for local authorities.
The Secretary of State praised incorporation—the new freedoms that we gave to further education colleges in 1992—and I was pleased to hear him do that. I sat on the new corporate body of Havant college for six years and I know how much FE colleges appreciated the new freedoms that we gave them. However, his changes will take away those freedoms by once more putting FE colleges under the control of local authorities, which is not what they want and is not in their interests. What we therefore have from the Secretary of State is a reversal of the changes that he himself praised in his own speech.
What we believe in doing—our approach—is having more training and investment in skills by enabling FE colleges once more to serve their local communities and their local employers as genuine community colleges that are responsive to local employers and stakeholders. That is the right approach, and we believe in a simple funding structure with a body such as the further education funding council allocating funding: a single body allocating funding to FE colleges, not the multiplicity of different local authorities that they will have to deal with—and that is simply for the money going to 16 to 18-year-olds.
When the Secretary of State produced his White Paper earlier this year, he estimated that some FE colleges could be taking students from an area covering 100 different local authorities. That remark was made in his own document. How on earth are they supposed to access funding from so many different agencies? It is going to be a bureaucratic nightmare, and once again it will fall to the Conservatives to sweep away the complexity and bureaucracy and give FE colleges the straightforward, simple funding arrangements that they wish for. [ Interruption. ] The Secretary of State seems to doubt what I said about 100 local authorities; let me find what he said in his own document, “Raising Expectations”. He said:
“Colleges in particular can draw from a very wide area—sometimes from over 100 local authorities.”
If so, that is why the new funding arrangements will be such a nightmare for them.
I believe that the only reason why the Government are embarking on all this reorganisation is that they accept privately that the Learning and Skills Council and the endless reorganisations have not worked and that their system has failed to deliver. The same is true of their proposals for “time to train”, which reflect the failure of Train to Gain. The latter was supposed to achieve results by rewards and incentives and has failed to do so. The Ofsted report, “The impact of Train to Gain on skills in employment”, was, it must be said, one of the most critical reports that it has produced on any aspect of our education system. It said of Train to Gain, on which the Government are supposed to be spending more than £1 billion, that
“the survey found little evidence that the programme was driving up the demand for training among employers.”
The Ofsted report says the following about the job brokerage service, on which so much of the budget goes:
“On the evidence of the provision surveyed, the brokerage service had a minimal impact on the number of employees starting a Train to Gain programme, or on the number of genuinely ‘hard to reach’ employers that were participating.”
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