Firstly, thank you very much for inviting me to address the AELP conference today. It’s a great pleasure to meet again, with so many people dedicated to developing the next generation.
Skills and apprenticeships are of national importance. Our nation simply cannot achieve its potential without a functioning and dynamic skills sector and so I would like to start by saying thank you to everyone in this room who has made a difference to a learner’s life.
I’d also like to thank the AELP for their contribution to the sector. The AELP is an important and influential organisation which provides a powerful and knowledgeable voice regarding issues affecting the sector.
I am conscious that Jane has announced that she is standing down, but I would like to put on record my gratitude for the persistent scrutiny and advocacy for the sector that Jane, Simon, Nikki and all at AELP have done and will continue to do.
The need to ensure that more people make best use of their abilities is an economic and social imperative for our nation.
Whether with independent providers or FE Colleges assisting learners to fulfil their potential in ways that other parts of our academic infrastructure has often failed to achieve, is the skills sector’s USP.
But the talents and commitment of those in the skills sector have too often been undermined by the government’s approach to both funding and bureaucracy which have led us to the skills crisis I hear about from employers every day.
Seeing people who work across the skills sector, and meeting learners on a voyage of discovery, is the very best part of my job.
It still seems farcical to me that the one significant piece of legislation affecting the skills eco-system in this parliament, barely even mentioned apprenticeships.
But though the government, apparently see few imperfections in the current landscape, Labour, will offer reforms that many employers and providers have been crying out for.
As colleagues may know Keir Starmer announced that under a Labour government, Labour would bring forward increased flexibility by reforming the apprenticeship levy into a growth and skills levy.
This new levy will ringfence 50% of the funds to be used purely on apprenticeships and allow employers the flexibility to use the other 50% for non-apprenticeship high-quality training.
As I’ve outlined to this conference in previous years, we continue to regard apprenticeships as the gold standard and our commitment to them is undimmed.
Our aim is to ensure that more young people across our communities have the opportunity of an apprenticeship.
But too much of the apprenticeship levy ends up being returned to the Treasury unspent, and now less money is being spent by employers on workplace training than it was in 2010.
IPPR research showed that £3.3Bn of apprenticeship levy funds were returned unspent to the Treasury in the last three years.
That’s criminal, at a time when not a week goes by without me attending a different industry roundtable to hear employers questioning what they can do to address their skills shortages.
An incoming Labour government will aim to ensure that every penny of that crucial revenue is spent on skills.
I want to clarify three things about the changes that we propose:
- There will be no reduction in the amount of funding available to fund non-levy payers apprenticeship funding. One of the big failures of the apprenticeship levy has been the reduction in apprenticeships at SMEs.
Both the uncertainty of funding and the complexity of bureaucracy are cited as reasons why SME apprenticeship numbers have fallen. And so a future Labour government will look to assist providers to drive up SME apprenticeship numbers. I repeat that if we are successful in helping levy-payers to spend more of their levy this will not reduce the annual budget set for SME apprenticeships.
- The second thing to say about the growth and skills levy is that employers who are already utilising much more than 50% of their levy on apprenticeships can continue to do so. They can continue to use the entire levy for apprenticeships if they wish, it is just that there will be greater flexibility around that second 50%.
- Thirdly, it is important to clarify that the additional 50% will need to be spent around measures that add to the employability of the learner in general not just to their usefulness to their current employer.
A new body, Skills England, led by industry experts will identify appropriate courses for the expanded Skills and growth levy.
Alongside supporting more modular, industry-recognised qualifications we could also envisage employers utilising it to take on pre-apprenticeship trainees and help tackle the failure that sees too many people excluded from the Labour market at the same time that employers are unable to find staff.
There has been a sixty percent increase in the number of children on EHC plans in our schools since 2015 and so it is a national imperative that children with special needs at school don’t become tomorrow’s unemployed, our more flexible growth and skills levy will help employers and providers work with them to find meaningful employment.
We also want to support the industry to tackle the unacceptable apprenticeship incompletion rate.
The causes of this are manyfold. But it is not right that under the current system a provider who takes on a new apprentice, works with them to successfully enter the industry with a recognised qualification; is then classed as failing when neither they nor their employer, see an incentive to complete the course.
So we will review the extent to which qualifications and industry needs, marry up and we will act.
And while I welcome the decision to upgrade some of the exceptional funding band reviews announced this week, it is clear that the current system is far too slow to serve industry needs.
Labour sees a role for public and private providers, but we must make it easier and more realistic for all employers, who are committed to investing in their staff, to be able to contribute to training up the next generation;
Our qualifications and the needs of industry need to be better aligned and we cannot continue to have catastrophic skills shortages because no supplier can afford to offer a course that industry needs.
There has been a huge hollowing out of lecturers from the FE sector and recruiting and retaining the trainers that the nation needs is also an urgent necessity.
It is essential that there exists, a skills framework that encourages engagement and collaboration rather than pits providers against each other.
So many apprentices that I meet tell me that they weren’t told about apprenticeships at school. Many say that that they left school without engaging with employers and without knowing the opportunities on offer in their local community.
Labour believes that every young person should leave statutory education ready for work and ready for life, able to make informed choices about courses and qualifications which set them on the path to success.
Independent careers guidance at all stages of a child’s school career ,which increases awareness of apprenticeships and other workplace opportunities will go hand in hand with appropriate statutory work experience placements to reduce the gap between the school classroom and the world of work.
So under a Labour government the commitment to investing in our next generation of workers will be re-doubled, with the greater flexibility that levy-paying employers demand, being married up with a renewed focus on boosting SME apprenticeships.
A new industry-led body informing a more strategic approach to skills development in a system that encourages collaboration between all sectors.
I look forward to working with you all to deliver the more responsive, better resourced skills system our country needs.