My Lords, I thank noble Lords for the opportunity for this important debate on the provision of skills to those who may not have got them earlier in their lives or who are seeking to retrain. I hope I can give noble Lords quite a bit of comfort in that the Government broadly concur with many noble Lords’ ambitions around lifelong learning in this area. That is backed up by some clear policy statements and funding commitments. It is not necessary to specify such requirements in the Bill.
Amendment 76, tabled by my noble and learned friend Lord Clarke of Nottingham, seeks to provide free access for approved courses up to level 3 for any person if they have not already studied at that level, including automatic in-year funding to providers to cover these students. It may help if I explain the current position. Up to the age of 18, participation in education and training is fully funded. For adults aged 19-plus, the adult education budget fully funds or co-funds provision from pre-entry to level 3, to support adults in gaining the skills that they need for work, an apprenticeship or further learning. This includes a significant amount of fully funded provision, including English, maths and digital courses, the first full level 2 and level 3 for learners aged between 19 and 23, and fully funded training up to and including level 2 where learners are unemployed or in receipt of low wages. The noble Baroness, Lady Garden, referred to this category of learner, which includes learners who have already achieved level 2 or above but need to retrain to improve their job or wage prospects. I will cover my noble friend’s final but important point about level 3 funding for those aged 24 and above, which I have not covered yet, when dealing with Amendment 80, in the name of the noble Lord, Lord Watson.
A number of noble Lords spoke to the part of the amendment relating to apprenticeships. From August 2020 to January 2021, 16 to 24-year olds accounted for 53% of apprenticeship starts. In the same period, level 2 and level 3 starts made up over two-thirds of starts, so across the programme we are already meeting the aims of this amendment by focusing on younger and entry-level apprenticeships. However, that does not mean that every employer should meet that goal. Legislating in the way proposed will reduce employers’ ability to meet their individual skills needs, and reduce opportunities for individuals, including older workers who may need to retrain or want to progress in their career.
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Noble Lords made a number of further points around apprenticeships. I was sad that the noble Lord, Lord Adonis, was not here in Committee on the day when we had an in-depth discussion in response to his question about what the Government are doing to encourage the take-up of apprenticeships. However, I am happy to repeat some of that for him today. Since last August, as part of our plan for jobs, the Government have had incentive payments in place for employers
taking on new apprenticeships: £2,000 for under-25s to focus more support on younger apprentices, and £1,500 for those aged 25 and over. Over 52,000 incentive payments have been claimed so far and, from April until the end of September, that incentive has been increased to £3,000 per apprentice of any age.
As my noble friend Lord Lucas alluded to, we are also launching a £7 million fund to support more apprenticeships through the flexi-job apprenticeships scheme, which is aimed at sectors with more flexible employment models, such as the creative industries, to encourage them to take up the apprenticeship offer. All small and medium-sized enterprises can now reserve funding for up to 10 new apprenticeship starts in 2021-22, and from August, employers who pay the levy will be able to transfer levy funds in bulk to other employers, including SMEs, with a new pledge function supported by a new online service to match them with SMEs. Noble Lords are right that we must do more to have a wider range of employers and to encourage young people to take up the opportunities of apprenticeships. The Government are very conscious of this and are acting on it.
Amendment 80, tabled by the noble Lord, Lord Watson, and the noble Baroness, Lady Garden, among other things, seeks to put the lifetime skills guarantee on a statutory footing and provide retraining opportunities. Noble Lords will know that, in addition to the entitlements through the adult education budget, which I have just described in response to my noble friend, as part of the Government’s skills reforms and as in the skills White Paper, any adult aged 24 or over can access about 400 free, fully funded level 3 courses, as part of the lifetime skills guarantee.
It is right that we focus first on those who have not already achieved these advanced level skills, as they have a significant amount to gain. An estimated 11 million adults aged over 24 are currently without a level-3 qualification. We know that there are real benefits to people getting a level 3. Achieving a full level 3, on average, gives an adult wages that are 16% higher, and a 4% increase in the chance of being employed. However, I know from the amendment that noble Lords have a keen interest in ensuring that people can not only train but retrain throughout their lives. The lifetime skills guarantee offers opportunities not just to gain a level 3 qualification through this “free courses for jobs” offer but to train and retrain in digital, construction and other technical skills through expanded skills boot camps, which are co-designed with employers and offer a guaranteed interview to participants. Those who wish to retrain through studying for a further qualification at level 3 may apply for an advanced learner loan, for which repayment is dependent on income.
Additionally, my noble friend Lord Baker raised the skills gap at level 5. The Bill is bringing forward the legislation to incorporate levels 4 to 6 in technical qualifications into the lifelong loan entitlement, as part of the lifetime skills guarantee. As noble Lords will be aware, this will be introduced from 2025, providing individuals with a loan entitlement that is the equivalent of four years of post-18 education, to use over their lifetime.
I will now respond to a few more specific points raised by noble Lords. The noble Lord, Lord Baker, asked some questions about the national skills fund, on which I hope I can give him some reassurance. We launched a consultation on the national skills fund, which will run until 17 September, to gather evidence that will inform future investment in adult further education. That is focused on the free courses for jobs offer, skills bootcamps and meeting critical skills needs. However, funding is still available through the national skills fund this year while that consultation is under way, including £95 million for the free courses for jobs offer, which is the level 3 entitlement that all adults can access.
The noble Lord, Lord Watson, referred to the fact that the level 3 entitlement is an entitlement to a level 3 course from a list produced by the Government; he said that there may be gaps in that list or other courses that are not addressed through that offer. We have focused the level 3 offer on courses which offer good wage returns or meet strategic skills priorities, or offer a combination of both, and which are focused on skills that employers need. However, we have committed to regularly reviewing the courses included, twice over the coming academic year, to ensure that the list continues to meet labour market needs. Where mayoral combined authorities, the Greater London Authority or others have suggested additions to the list, they should make submissions supported by evidence and of course we will consider those as part of our review work.
Finally, on the point about the FE funding system, which is also covered in the initial amendment from my noble and learned friend, we recognise that the system is often perceived as complex and inflexible. That is why the White Paper published earlier this year committed to reforming the system. We are looking at how we can deliver a funding system which is simpler and clearer, places fewer burdens on providers, is more closely aligned with the needs of the economy and society, and delivers high-quality outcomes for learners. So, while we may not agree with the precise mechanism in this amendment to address funding, we are committed to looking at that through the skills White Paper.
I hope my remarks have provided noble Lords with some reassurance that the Government are looking at improving the skills offer for those who will benefit from it most, that the new lifetime skills guarantee extends level 3 qualifications to those aged over 25 who could not previously access a free entitlement to a level 3 qualification, and that we are doing more to encourage apprenticeship opportunities and support employer choice. I therefore hope that my noble and learned friend will feel comfortable in withdrawing his amendment and that other noble Lords will not feel the need to move theirs when they are reached.