My Lords, it is very hard to disagree with anything that has been said in the last hour. Obviously, we all want to see that skills are promoted. We all agree that we need more green skills. We all agree with Amendment 8 in the name of the noble Baroness, Lady Neville-Rolfe, that we want to see more digital innovation, engineering and built environment skills. She has a catch-all of
“any other fields the Secretary of State deems relevant.”
So, in case the noble Baroness feels that she does not have enough powers in the department, she can have almost anything she likes under paragraph (e). Who would want to disagree with Amendment 9 in the name of the noble Baroness, Lady Bennett of Manor Castle, that we should include the food system and ecomanagement systems? We all agree with all those things.
However, in essence, this is all fiddling while Rome burns, because the Government do not require any of these powers to promote skills. They have all the powers they require to promote skills. They do not need any additional funding powers. They have funding powers, and they directly control all the funding levers. They appoint all the people to the various quangos. The whole of Clause 1 on these local skills improvement plans appears to me to be a substitute for actual action on improving skills.
Obviously, we will have a lot of generation of plans now. Consultants are salivating; I know because I spoke to one last week who told me that he is already starting to put bids in writing. The people who will actually do these skills improvement plans are not all the big employers and those others we have paid tribute to. They will be consultants, who will be paid by those people, who want to start bidding for the money to start producing all these plans. Now that they might have an even longer list of things they have to produce—particularly with the amendment in the name of the noble Baroness, Lady Neville-Rolfe—my goodness, the fees these consultants will charge will go through the roof as they start to produce them.
It is motherhood and apple pie. No one is going to disagree with any of these things. The fact is that they will not make any difference: the Government could do it all already. They have had years to do it. They do not require any of these powers. They do not require local skills improvement plans for employers to be brought together locally. Indeed, as we ascertained in Committee, the actual groups of employers that are going to be brought together do not exist at the moment. In the White Paper, which I recommend that noble Lords read, there was a great tribute to chambers of commerce. They might be able to bring these together—except that the box on page 15 of the White Paper says:
“Case study: German Chambers of Commerce”,
because, for the most part, chambers of commerce do not exist in this country due to chronic failure of policy over the last 150 years.
This is all fine; we can carry on like this and make all these legal provisions and probably nothing much will change. But we face a real crisis in the real world. The noble Lord, Lord Bird, referred to apprenticeships. The route by which most young people who do not go to university get on a career ladder to get well-paid jobs in this country is, or should be, apprenticeships. While we are talking about local skills improvement plans and new employers’ bodies that do not currently exist and which are going to produce all these plans, in the real world there is a deepening apprenticeship crisis at the moment. I looked up the figures before coming into the House. The latest figures published by the ONS in May this year show a 19% drop—I repeat, a 19% drop—in the number of apprenticeship starts in the first two quarters of 2020-21 compared with a year before. The drop in intermediate-level apprenticeships, which is by and large those people who most noble Lords would think of as apprentices—that is, school leavers who are getting on a work and training route which will get them an apprenticeship—dropped by even more. The apprentices mentioned by the noble Lord, Lord Bird, are now few and far between.
By the way, none of these local skills improvement plans will make much difference to this, because apprenticeships are largely created directly by employers, whereas the local skills improvement plans we are talking about are guidance to public providers, predominantly FE colleges, on what sorts of courses they should provide. But the number of actual apprenticeships—which are the things that, for the most part, will get young people jobs—is declining. We went through the reason why they are declining earlier, but we have not yet had any satisfactory account from the Government about it. It is because of the chronic misdesign and failure of the apprenticeship levy. The apprenticeship levy, which was dressed up by George Osborne as a levy on all employers to require them to train more apprentices, has led to a systematic decline in the number of apprentices, for two reasons.
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Unless and until their own training needs have been exhausted, employers keep the money from the training levy. They have had an incentive to gold-plate their own training, because if they do not do that, they must give the money to the Treasury or to other employers. I can assure noble Lords that most employers are much keener to keep the money themselves. Therefore, we have had an explosion in management courses and have even had MBAs being paid for under the apprenticeship levy. The Government have limited the ability for this top-level management executive education to be done on it, but none the less, the number of higher-level apprenticeships—which are basically the high-level training which employers were already doing but with more money put into them, so that they do not have to give the money to generate more apprentices—have been systematically undermining what was already a weak apprenticeship system.
None of these skills improvement plans give any confidence whatever that a difference will be made to this situation. When it then comes to the wider range of skills, it is all very well having consultants producing reports saying all kinds of motherhood-and-apple-pie
things about digital innovation, engineering, the built environment and any other fields that the Secretary of State may deem relevant, but unless there are employers out there offering these apprenticeships, and with the incentives to do so, particularly to create new apprenticeships, nothing will change and the last hour, the eight hours that we spent on amendments such as these in Committee, and the long debate at Second Reading, will have been entirely wasted.
The reality of the crisis that we face is accepted by the Government. The way that Governments allocate money is always the best indication of what they really care about and what their priorities are. The Chancellor, the guy who controls the money, in his Budget this year highlighted the problem concerning the creation of apprenticeships despite the apprenticeship levy, so even though there is formally more money going in, there have been fewer apprentices. He introduced, separate from any of these local skills improvement plans or anything of that kind, new incentives for the creation of apprenticeships. I ask the Minister to give an account of this to the House, because this is the acid test of what is going on in the real world.
Under the Chancellor’s Budget, a £3,000 special incentive was going to be offered to employers for each additional apprentice taken on between 1 April and 30 September this year, in addition to the numbers in the previous year. Since 30 September has just passed, we should now know what has happened in the real world as a result of actual government policy with actual financial incentives for the last six months, as opposed to what may happen at some point in the next five to 10 years when all these employer bodies have been set up, the consultants have been paid, and they have started producing reports.
Can the Minister tell us, so that we can be sure that we are not completely wasting our time this afternoon, how many of these £3,000 incentive payments were made in respect of apprentices under the Chancellor’s Budget this year for new apprentices? That is the acid test that things are going in the right direction, because the great and depressing feature of this Bill is that, with the best will in the world—and all of us here have the best intentions—we are presiding over an increasingly failing state and state-led apprenticeship system which will further widen the gap between the opportunities that graduates have in our economy and those of non-graduates, and nothing that has been said so far during the Bill’s passage gives any confidence whatever that this situation is not going to worsen.