The author is a Labor member of the House of Lords Select Committee on Youth Unemployment, whose report Skills for each young person was published last week. Lord Clarke, another member, also contributed to this article.
Skills reform is in the air again. The government’s Skills Bill goes through the Commons, with transformative amendments added by the House of Lords. But it is independent Tory MPs who will decide whether we get real change or not, 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 percent who never go to university. By the age of 18, almost 22 percent of 18-year-olds is not in education or work involving 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 Lord’s committee on youth unemployment tackles this issue head on. The fundamental problem is the huge shortage of places for the “other 50 percent” to study and train. The contrast with the academic route is blatant. In universities, the basic principle (from the epoch-making 1963 Robbins report about increasing access to higher education) was 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 extremely inefficient.
Take funding first. On the academic route, it automatically follows the student. If a sixth form or a university takes in a student, the money automatically comes to the institution – with the student. It delivers a dynamic system where suppliers are constantly considering what new demand they can supply, knowing that if their idea is right, the money will flow in. In contrast, in further colleges of education, which offer mainly vocational courses, the funding is cover by the Treasury. It is shameful that the FE sector’s funding for people over 18 in 2021/2 is half of what it was in 2010/11. By 2023/4, the Expenditure Review will have closed only a third of the deficit in real terms.
Further education must be funded in the same way as the academic route – the money must come automatically (at a national rate) – for any qualified student studying an approved curriculum. The government already has a Lifelong skills guarantee, to the equivalent of A-level for those who have not yet reached that level of qualification. But such a guarantee is meaningless unless it is automatically financed.
Similarly, apprenticeships need to be reoriented towards young people. When the Apprenticeship Levy was introduced on employers’ payrolls in 2017, its main purpose was to improve the opportunities that are open to young people. But the opposite happened. The number of apprenticeships started by those under 25 has dropped, and half of all apprenticeships start now after that age.
Many of these are in-service training that needs to be funded by employers. And the evidence is clear – the benefit / cost ratio is the highest for apprenticeships under 25. So at least two-thirds of apprenticeship money should go to people under 25 who take qualifications up to the equivalent of A-level.
To the government’s promised “skills revolution”Happens there needs to be a bit of an overview, at national and local level. Nationally, our committee recommends an annual assessment of the skills that will be needed. But crucial is that the new local skills improvement bodies should also be responsible for ensuring enough places to meet the needs of young people in their area.
Finally, there is the issue of qualifications. The government sets the new career T levels as a route to proficiency through full-time study. But to make it happen, ministers are proposing to abolish other well-established qualifications such as BTEC. The defining BTECs has already been pushed back by a year in response to protests. To destroy what works is madness, very un-conservative, and almost everyone opposed. Parliament must insist that T-levels prove themselves in open competition.
We call on MPs as they consider the following phases of the bill to support Amendment 25, which includes the first two key recommendations above: on automated FE funding and to target two-thirds of apprenticeship funding to under-25s.
We are at a crucial moment when MPs can decide whether we have a real skills revolution or just talk about it. Let’s hope they choose right.