The writer is a Labour member of the House of Lords Select Committee on Youth Unemployment, whose report Skills For Every Young Person was published last week. Lord Clarke, another member, also contributed to this article.
The reform of skills is in the air again. The government’s Skills Bill is going through the Commons, carrying transformative amendments added by the House of Lords. But it is independent-minded Tory MPs who will decide whether or not we get real change, by defying the government and voting to approve our proposals.
What is at stake is the skills of half of our young people — the 50 per cent who never go to university. By the age of 18, nearly 22 per cent of 18-year-olds are neither in education or employment which involves training. According to many economists, this lack of workplace skills is the biggest source of the high wage inequality in our country — and of our low national productivity.
The report of our Lords’ committee on youth unemployment tackles this issue head on. The fundamental problem is the huge shortage of places for the “other 50 per cent” to study and train. The contrast with the academic route is blatant. In universities, the basic principle (ever since the epoch-making 1963 Robbins report on increasing access to higher education) has been that there should be enough places for every qualified young person who wants to study. But for the rest, there is no such comparable provision.
This is one of the greatest injustices in our public life, and grossly inefficient.
Take funding first. Down the academic route, this automatically follows the student. If a sixth form or a university takes in a student, the money comes to the institution automatically — with the student. This produces a dynamic system where providers are constantly considering what new demand they could meet, knowing that if their idea is right the money will flow in. By contrast, in further education colleges, which offer mainly vocational courses, the funding is capped by the Treasury. Disgracefully, the FE sector’s funding for people over 18 is in 2021/2 one half of what it was in 2010/11. By 2023/4 the Spending Review will have closed only a third of the shortfall in real terms.
Further education should be funded in the same way as the academic route — the money should come automatically (at a national tariff rate) — for any qualified student studying an approved curriculum. The government has already introduced a Lifetime Skills Guarantee, up to the equivalent of A-level for those who have not already reached that level of qualification. But such a guarantee is meaningless unless it is automatically funded.
Similarly, apprenticeship places need to be reoriented towards young people. When the Apprenticeship Levy on employers’ payrolls was introduced in 2017, its main purpose was to improve the opportunities open to the young. But the opposite has happened. The number of apprenticeships started by those under 25 had fallen, and half of all apprenticeships now begin after that age.
Much of this is in-service training which should be funded by employers. And the evidence is clear — the benefit/cost ratio is highest for apprenticeships under 25. So at least two-thirds of apprenticeship money should go on people under 25 taking qualifications up to the equivalent of A-level.
To make the government’s promised “skills revolution” happen there has to be some overview, at national and local level. Nationally, our committee recommends an annual assessment of the skills that will be needed. But crucially, the new Local Skills Improvement bodies should also be accountable for securing enough places to meet the needs of young people in their area.
Finally, there is the issue of qualifications. The government are introducing the new vocational T-levels as a route to skill through full-time study. But to make this succeed, ministers are proposing to abolish other well-established qualifications like BTEC. The defunding of BTECs has already been pushed back by a year in response to protests. Destroying what works is madness, very un-Conservative, and opposed by almost everyone. Parliament should insist that T-levels prove themselves in open competition.
We appeal to MPs as they consider the next stages of the bill to support amendment 25, which includes the first two key recommendations above: on automatic FE funding and on directing two-thirds of apprenticeship funding to under-25s.
We are at a crucial moment, when MPs can decide whether we have an actual skills revolution or just talk about it. Let’s hope they choose right.