My Lords, first, I express my gratitude to noble Lords who have already attended meetings with me and the Minister for Apprenticeships and Skills, Robert Halfon, or who have met with officials from my department to discuss the Bill. Across those meetings, there has been support for the principles underpinning the Bill. I welcome this and look forward to working with noble Lords to scrutinise the detail of the Bill to ensure that it meets our shared ambitions.
The Technical and Further Education Bill aims to build a high-quality technical education system that rivals the best in the world, providing the core skills our country needs to thrive. The measures in the technical education part of the Bill take forward the recommendations made in the independent review by the noble Lord, Lord Sainsbury of Turville, and indeed support the work of the noble Baroness, Lady Wolf of Dulwich, to increase the prestige and value of technical education. Currently, the technical option is undervalued —the poor relation to its academic cousin. Too often, those choosing technical education find that it does not provide a clear route to employment or equip them with the skills they need to get the job they aspire to.
The measures in the Bill will work to provide a genuine choice between a technical or academic route, whereby people can feel confident that either route will equip them for sustained employment. Indeed, when the noble Lord, Lord Sainsbury of Turville, gave evidence in the first committee session during the Bill’s passage through the other place, he talked of the international lessons to be learned about parity of esteem between technical and academic routes:
“In most of the successful countries you find the two routes are equally well valued, so there is not a problem of the technical education route being considered inferior. You can have these two routes and both of them be highly valued”.—[Official Report, Commons, Technical and Further Education Bill Committee, 22/11/16; col. 13.]
That is what we are trying to achieve.
The technical education measures in the Bill extend the role of the Institute for Apprenticeships to give it responsibility for classroom-based technical education in addition to apprenticeships. It will be renamed the Institute for Apprenticeships and Technical Education. The institute will put employers at the heart of the technical education system, empowering them to identify the knowledge, skills and behaviours needed for particular occupations. This fundamental shift in the way that technical training courses are designed will enable people to get themselves into employment and provide our country with the skilled workforce it needs.
Part 2 sets out, for the first time, a clear process to be followed in the unlikely event of a further education college insolvency. These measures were carefully developed through consultation over the summer of last year. They apply the normal insolvency procedures
to colleges, and in so doing provide much needed clarity for creditors, which they have welcomed. But, importantly, the Bill puts in place protections for students through the introduction of a special administration regime that will have the special objective of avoiding or minimising disruption to the studies of existing students at affected colleges. These measures will ensure that students are protected if a college becomes insolvent.
That is not to say that we expect this process to be regularly used. The current programme of area reviews is well under way, working to put the further education sector on a better and more sustainable financial footing for the future. Part of the review process is to encourage colleges to consider needs and provision locally. That will help to ensure that the right provision is available in the right places. As I said, we do not anticipate that the proposed insolvency regime will be used often, but it is necessary to introduce greater rigour to the further education sector. We forecast that we will have spent approaching £140 million propping up failing colleges by March this year—money we can ill afford to spend.
Being clear that we will no longer bail out colleges that become insolvent will encourage improved financial management in FE colleges which may have performed less well in the past. We know from schools that often, those running poorly financially also do so educationally, so we can expect to see a further benefit in improved educational performance.
Part 3 includes a measure to amend existing legislation to ensure that, after the devolution of further education functions and the adult education budget to a combined authority, FE providers and others will continue to submit relevant information to the national data system. This will ensure the continued availability of relevant data needed to make intelligent and strategic policy decisions about investment in further education.
The Bill received constructive challenge in the other place and, although it was not amended, we made changes to our approach outside the Bill on the basis of that challenge. I welcome the further scrutiny that this Chamber will provide, and I look forward to hearing the views of noble Lords as the Bill makes progress through your Lordships’ House. The reforms in it will ensure that we improve the skills base in our country, increase economic productivity and protect students, while encouraging greater rigour regarding the finances of the further education sector. I beg to move.
3.45 pm