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Having emphasised the distinctive character of the situation in Wales, I have to say that I believe Welsh policymakers should share almost all the ambitions and major recommendations of my noble friend’s report—that is, the need for a high-skilled, hi-tech labour force; the real need for economically valuable skills; and, in particular, the necessity to find out the needs and demands of employers—and deliver on them. Therefore, I support the noble Lord’s proposed commission with one major proviso: the commission should accurately reflect the different regional and nations’ employers, not just the great, the good and the large; otherwise, it will be just another quango. I hope that my noble friend will ensure that that happens.

We should support the proposed new duties and responsibilities on the skills councils, but, again, with a major proviso, which my noble friends, including my noble friend Lord Leitch, spoke about. The skills councils are not resourced or robust enough, and perhaps not even representative enough, for those duties and responsibilities. Certainly, in Welsh terms, I do not believe that they are. Therefore, it is very important that, if we are to place these duties on skills councils, they are capable and truly representative of the employer network.



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Behind all my noble friend’s proposals in this regard is the concern and feeling that the skills presently being delivered—the frameworks and apprenticeships—do not reflect employers’ or learners’ needs. My noble friend recommends that we have half a million apprentices. I do not think that we need a target of half a million. The content of those apprenticeships is equally important. Are the frameworks fit for purpose?

No longer in Wales is the average apprentice a 16-plus year-old going into manufacturing or the public utilities, the great traditional apprenticeships of the 1950s and 1960s. The overwhelming majority of Welsh apprentices are 19 years old plus. They do not go into those traditional industries but into a diverse range of service sector industries—food, tourism, retail and warehousing—where there has not been a traditional ethos of established apprenticeships, which is why one finds the most remarkable variation in completion rates between sectors. Because of that, there is no established idea of apprenticeships in a lot of the new service sectors. We need to address that to make sure that the apprenticeship frameworks are fit for purpose. It is quite clear that some of these failure rates reflect not a lack of interest or commitment but that apprenticeships are not appropriate and fit for purpose.

Training providers have been blamed at various times for trying to foist inappropriate programmes on employers—the supply side as opposed to the demand side. All that training providers are doing is delivering the programmes that the awarding and funding bodies specify. Those specifications need to be examined and addressed. It would be invaluable if the Leitch recommendations could drive that message through and that programme forward.

There must be a skills agenda to address the 7.9 million people of working age who are economically inactive nationally. In Wales and in the communities that I represent, that is a horrifyingly disproportionate number. A skills agenda has to address that. Since I left the other place, I have seen lone parents and long-term unemployed people who have never been anywhere near the labour market get into sustainable employment as a result of skilfully delivered numeracy and literacy programmes with job-specific qualifications attached and motivational programmes. It is happening, but it can happen more. There has to be more success.

Since my noble friend Lord Leitch’s report has been published, there has been a second report by Mr David Freud on reducing dependency and increasing opportunity. I had hoped that his report would complement my noble friend’s, but unfortunately it does the opposite. As my noble friend states on page 4 of his report:

The Freud report will chop and change, seeks to uproot, radically alter and centralise.

Perhaps I may send one simple message to my noble friend on the Front Bench and to the Ministers who will be responsible for carrying this agenda forward: please embrace Leitch but not Freud.



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1.48 pm

Baroness Sharp of Guildford: My Lords, I, too, congratulate the noble Lord, Lord Leitch, not only on initiating this extremely good debate, but on writing a report which, as the noble Lord, Lord Sawyer, said, is accessible, understandable and comprehensive. From the point of view of this House, the comprehensiveness of the report is important. We perhaps tend to concentrate too much on the higher education sector and we hear relatively little about the vocational skills sectors. I am delighted that we have been able to devote this three-hour debate to the vocational skills sector because it has not had the publicity that it should have in this House. On these Benches, we have long maintained that investment in people is the most important investment that we can make and that as a nation we cannot afford not to make it.

In many senses, the Leitch report presents this country and us with some inconvenient truths. As the report stresses, it is urgent that we all raise our game, which means working in partnership; that is, partnership between government, industry and the individual. For a start, he suggests that the Government should set some extremely ambitious targets. Many of us gulp when we look at those targets and ask, “Is it really possible to achieve them?”. The noble Baroness, Lady Lockwood, talked about the higher education target; but the higher education sector shows how the targets can be achieved and, picking up on a point made by the noble Baroness, Lady Morris, how a culture can be changed. Twenty-five years ago the ivory-tower culture of our universities was in place, but look at how they are now working side by side with industry to fulfil its needs. There has been a total change in culture by our universities. It can be done, and the noble Lord, Lord Bilston, recognised the degree to which our further education sector has risen to the challenges and started to change its culture. But I do not underestimate the huge change still to be achieved.

Among the ambitions is the wish to do something about the Careers Service. Here I echo the sentiments of the noble Lord, Lord Ramsbotham. Over the past five to 10 years careers services have not served the best interests of this country. As the noble Baroness, Lady Valentine, mentioned, it is vital to bring together the Careers Service and Jobcentre Plus to serve the community. As the noble Lord, Lord Rowlands, pointed out, some 7.9 million people are not in work. They need help in finding out where they can go.

People may have underestimated the degree of revolution suggested in the report. What has not had much mention is the suggested shift to a demand-led approach to skills. There are two aspects to demand, that of employers and that of individuals. Most of the money the Government use to subsidise training goes through Train to Gain into the hands of employers, while the reintroduction of individual learner accounts will put money into the hands of individuals to drive their own demand. It is vital that these two aspects of demand push forward the agenda in skills. However, we on these Benches depart a little when

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considering the hurdles to be overcome in the implementation of this, which must be thought about.

For example, what do we mean by “economically valuable skills”? Employers are continually asking for a workforce that is rich in creativity and communication skills, and good at analytical thinking and problem-solving. If truth be known, I have a lot of sympathy with the Universities UK briefing, which claims that this is precisely the set of generic skills that universities try to instil in their students, and that the graduate premium and high employment rates among graduates attest to the value placed by employers on these skills. Given that, is there a danger that we may move too far from the present position, where universities train students in generic skills and companies then train them in company-specific skills, to one where the individual, and ultimately the economy, is locked into a narrower and more specific skills set? That underlines a point made by the noble Lord, Lord Leitch, in his introduction: the need for whatever mechanisms are introduced to be flexible so that there is a chance for movement as the economy itself moves forward. However, it is not always possible to align the interests of the individual with those of employers or indeed the nation.

Let us take the commitment to train up to 95 per cent of the workforce up to the full level 2 standard, the equivalent of five GCSEs, which the report regards as the “platform” for employability. At present only 70 per cent of the workforce has achieved this level of qualification. The assumption is that most people would seize the opportunity of training to this level, free of cost. Yet the conundrum is that they do not, and there may be some rationality in that. As Mick Fletcher, writing in the Guardian a year ago, put it:

We know also that a level 2 qualification does not add much to the pay packet. People have to achieve level 3 or level 4 qualifications to increase their pay. It may not be easy to persuade the 11.5 million adults currently lacking level 2 qualifications that it is worth their sweat and worth their while to take them up, even if employers sign the pledge and push them through the courses.

Equally, employers may not be so keen on releasing workers to gain these qualifications because the qualifications themselves may seem irrelevant to employers’ needs. I echo the plea by the noble Baroness, Lady Valentine, that qualifications need to be relevant. A letter I received from the Business Services Association said:



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In the light of that, I want to raise the question of small and medium-sized businesses. What is the benefit to SMEs? A five-person business cannot afford to lose 20 per cent of its workforce to train for a week. What are we going to do about such businesses? Exempt them from the rigours of the pledge?

The noble Lord, Lord Rowlands, mentioned the wide variations between apprenticeships, which is an important issue. At the moment, to gain a level 3 advanced apprenticeship in engineering takes an average of 156 weeks. The same advanced-level apprenticeship in business administration takes 74 weeks, and 64 weeks in the retail sector. For a level 2 qualification, equivalent to five GCSEs at grades A to C, it takes 88 weeks to achieve the qualification in the electro-technical sector, 74 weeks in construction and 43 weeks in catering. There are already real problems about the notion of equivalences across our national qualifications. This also raises difficulties in relation to devolving these responsibilities to sector skills councils. Some equivalence has to be maintained.

I should also like to pick up on the point made by the noble Lord, Lord Dearing, about adult education. If 70 per cent of the workforce has already finished its education, it is clear that we are going to have to train adults, and it is madness that we are currently discriminating against part-time education. Many adults want to come back into part-time learning, but part-time further and higher education for adults currently enjoys very little in the way of subsidy.

Members on these Benches warmly welcome this report, which presents us with an enormous agenda. While there are challenges in that agenda, let us see it go forward.

1.59 pm

Baroness Morris of Bolton: My Lords, it gives me the greatest pleasure to thank the noble Lord, Lord Leitch, for introducing this crucial debate and to congratulate him on his impressive speech and excellent review. We have had a high-level skills debate and I pay tribute to all noble Lords who have spoken so knowledgeably. The constraints of time will not permit me to give all of them the attention that they deserve, but I would like to mention the noble Lord, Lord Low, who as always has been an articulate champion for the disabled. I agree with him, the noble Baroness, Lady Prosser, and the noble Lord, Lord Ramsbotham, that we must develop the potential of all our people. The noble Lord, Lord Ramsbotham, was also right in what he said about the Careers Service.

I wholeheartedly agree with the noble Baroness, Lady Morris of Yardley, that we must value vocational education. I support the noble Baroness, Lady Valentine, and my noble friends Lord Hunt of Wirral and Lord Sheikh when they call for a less complex system and for training and qualifications that are responsive to employers’ needs. In answer to the noble Lords, Lord Haskel and Lord Sawyer, yes, I was hooked on “The Apprentice”.

It is now widely acknowledged that Britain’s future will be as a skills and knowledge-based economy. We have in front of us a massive opportunity, but one that can be grasped only by a step change in the

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nation’s skills. When his review was published last year, the noble Lord, Lord Leitch, said:

He added that the case for action is “compelling and urgent”. So I am surprised and disappointed that such a serious piece of work has waited seven months for a government response—seven months in which the number of apprenticeship enrolments has fallen, the number of NEETs has risen and we have fallen further behind our international competitors in intermediate and high-level skills.

The delay in itself would be bad enough but, simultaneously, the Further Education and Training Bill embeds the Learning and Skills Council in the management of skills, in complete contradiction to the Leitch review’s core message of simplified, employer-driven skills with a streamlined LSC. It is therefore hardly surprising that many of the people to whom we speak are unhappy that there has been such a delay. We on these Benches share their frustration, not for political advantage but for the 1.3 million young people who are falling behind as every week and month passes and for the countless employers and employees who are confused and alienated by the complexity of the current structure.

Given that we have just debated a half-hearted Further Education and Training Bill, what we need, if the review of the noble Lord, Lord Leitch, is to be taken seriously, is clarity and boldness from the Government. We need to know how the schools programme will be structured, how it will be funded, what the balance of responsibility will be between employers, the state and individuals, and what the priorities will be. This is where the Government will have to be bold. Are we going to put more into training the existing workforce, or are we focusing on core and life skills? These are tough decisions.

In order to deliver a demand-led system, the Government will have to address the proposal of the noble Lord, Lord Leitch, for a fundamental change in the role of the planning bodies, with less complexity and easier navigation for all involved.

So what of the future of the Learning and Skills Council? The Government are currently proposing the fourth reorganisation in five years and, through the FE Bill, the council has been given many more powers, even though it is not given its first mention until page 73 of Leitch. In the recent House of Commons Trade and Industry Committee report, Better Skills for Manufacturing, questions were raised as to whether a region-led system of provision is compatible with the new powers being given to sector-based, employer-led bodies that operate nationally. If the Government are serious about employer and learner demand-led skills, they need to tackle the problems of too much bureaucracy and too many fingers in the pie, which stifle initiative and limit the powers of employers and learners to drive the system. The relationship between the LSC and the sector skills councils must be addressed; otherwise, there is a danger of establishing parallel structures

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which will fail to make the system more cost-effective and simple and which will lead to further confusion.

Our economic competitiveness group, led by my right honourable friend John Redwood, last week outlined a suggestion for a system of allocation of skills funding that would make the LSC redundant. It proposed that taxpayer funds should be allocated in accordance with the choices made by trainees rather than by the training providers. It is envisaged that such a framework will encourage trainers to tailor their course content to better reflect the needs of the market. This submission will be considered along with the work of our policy groups. I hope that this demonstrates our commitment and the thought that we have given to the skills agenda.

We welcome the proposal of the Leitch review to give greater responsibility to the sector skills councils while acknowledging that some SSCs are better than others. There is also a contradiction in the remit of the SSCs, which currently have too much to do and are increasingly becoming servants of the Government instead of champions of employers and employees.

Under the Leitch proposals, Train to Gain would play a major part in helping people to climb the skills ladder, with the whole adult training budget—with the exception of community learning—being funnelled through it. Yet significant concerns need to be addressed. The Association of Colleges questions whether it is necessary to spend £40 million a year on brokers, and the 157 Group of leading FE colleges can demonstrate that the vast majority of training that it has conducted under the scheme was generated by the colleges themselves, without the support of a skills broker.

Edge, the independent foundation that aims to raise the status of practical and vocational learning among 14 to 25 year-olds of all levels of ability, believes that there is a genuine risk that Train to Gain will simply accredit skills that people already have rather than adding to their skills. This fear is shared by many college principals, who say that Train to Gain is more about assessing than teaching. If this is so, we will waste a good deal of taxpayers’ money on simply handing out certificates rather than adding to the skills of the workforce. We believe that this could be overcome if the Government embraced the learner accounts, for which the noble Lord, Lord Leitch, is a powerful advocate. This would give individuals much greater control over training and counterbalance the emphasis on the sometimes narrow objectives of Train to Gain.

We need to explore where as a nation we prioritise our skills programme. It is estimated that there will be 600,000 fewer young people aged 15 to 24 entering the UK workforce between 2010 and 2020. The Leitch review’s analysis of demographic trends suggests that, as fewer young people enter the job market, it becomes vital that we retrain and upskill the existing workforce. Currently, much emphasis is placed on core skills and life skills. While I can appreciate the Government wanting to give people who have been failed by the system a second chance, it begs the question: why have they been failed in the first place?



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At the same time, there has been a marked fall, as the noble Lord, Lord Dearing, said, in adult learning, participation in FE and work-based learning. There has also been a particularly worrying decline in apprenticeship enrolments, which may reflect the fact that many frameworks do not require dedicated workplace training under an experienced mentor. If any noble Lords care to read our further thoughts on apprenticeships, I direct them to the excellent pamphlet written by my honourable friend John Hayes MP and Dr Scott Kelly and published by the Centre for Policy Studies.

The Leitch review wishes to “embed a culture of learning”, and we certainly need a long-term, sustained campaign to change cultural attitudes towards training and skills. Many people are turned off education by bad experiences at school. Edge believes that people need to know that learning by doing is as important as learning by listening. I completely agree with the sentiment that in order to change the culture of a nation we have to start at school.

Last Friday, I had the pleasure and the privilege of being the guest of the noble Lord, Lord Haskel, when he received a much deserved honorary doctorate from the University of Bolton. In his speech, the vice-chancellor Dr George Holmes spoke of the university being in the real world and preparing people for the real world. He said that it would respond to Leitch by providing high-level skills for a strong economy in the exciting way that was so vividly described by the noble Lord, Lord Bilimoria. Universities and colleges have a vital role to play.

We, too, want to play our part in the consensus of which the noble Lord, Lord Leitch, spoke passionately, because we care passionately about skills, not only because of the good of the economy but because we care about individual empowerment. When our new Prime Minister spoke in Manchester last week, one of the most moving passages in his speech was about the values that his parents had taught him and that would never leave him. He said that each and every one of us has talent and that every one of us should have the chance to develop that talent. He said:

I, too, grew up with those core values. They are values that the Conservative Party shares. That is why we believe in developing the whole person and esteeming and valuing people in all their diversity and why we support the noble Lord, Lord Leitch, in his ambition to equip people with the skills to be flexible and to take advantage of their opportunities.

2.10 pm

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