PARLIAMENTARY DEBATE
Skills England - 9 October 2024 (Commons/Westminster Hall)

I beg to move,

That this House has considered Skills England.

It is an honour to serve under you as Chair, Sir Christopher. I am so glad to have the opportunity to raise the urgent need to reset our adult skills system in England, to press my case for my constituency and region, and to seek further information about the Government’s plans. The argument I will make today is this: Skills England cannot be just another quango. We need a confident and directive organisation that takes what our economy needs, directs provision, drives learner uptake, and delivers more workers with higher skills ready for better jobs on higher wages. I will also press the case for my constituency, for the Black Country and for the wider west midlands. Judging by the number of people here, there is some interest in this topic, and perhaps we should seek further opportunities to talk about these issues. I am sorry that in my inexperience, I asked only for a 30-minute debate.

We are here today because the Conservatives oversaw a decade of decline in skills, and it has made our country poorer. Employers are unable to fill job vacancies, more than a third of vacancies are down to skills shortages, learners cannot get the training they need and industry is left without the skills to tackle the challenges of the future. That is why Labour have pledged to overhaul our skills system and set up a new body for skills: Skills England. Skills England is a central part of our plan for growth, good jobs and prosperity. It will have three key jobs: to assess skills needs, to oversee the suite of qualifications and courses on offer, and to co-ordinate all the players in the sector, of which there are many. The point is to bring order to the skills system, joining it up and making it more responsive to what employers need.

I want to say a bit more about the nature of Skills England and how it goes about its job. I have five key points. First, Skills England must spot and respond to genuine skills needs through the best available data and intel. We sometimes forget how hard it is, caught up in the day-to-day, for employers to predict the shape of the market for their goods and services in the future, how the supply chains will change and what that means for their workforce, products and quality. I hope that Skills England, alongside our industrial strategy, can help with that.

One of the aspects of Skills England I am most pleased about is that it will be tripartite, with unions on the board as of right. Our movement has always taught working people to read, write, do maths and, more recently, use computers, to help them get on in life. As we face another industrial transition out of energy-intensive and carbon-reliant industries, we need to plan and manage with workers and use their insights too. Workers’ voices need to be around the table on skills, and with this Government, I know that they will be.

Secondly, Skills England must be co-ordinated across Government and, most importantly, with the Migration Advisory Committee and the industrial strategy. I looked at the shortage occupation list this morning and it is frankly an indictment of our skills system that so many vital jobs in manufacturing and construction are listed: bricklaying, welding—something those in my own area are expert in—roofers, carpenters, joiners and retrofitters. No more. Skills England must start to direct support to fill these skills gaps so that we can grow our own. Above all, Skills England must work hand in glove with our new industrial strategy and deliver the skills training that will make the strategy real.

Order. It is helpful if you address your remarks through the Chair, rather than turning away. Apart from anything else, it makes it difficult for Hansard to record what you are saying.

As my hon. Friend might expect, I agree with him on all those points. I hope very much that our current Skills Minister’s tenure is significantly longer than the average, and that Skills England proves long-lasting and effective in responding to the industrial strategy.

We expect the Green Paper on industrial strategy perhaps as early as next week, but certainly by the Budget. This may be a tangent, but it is important. I want an industrial strategy that makes choices and sets out which sectors are our priorities—yes, clusters where we are already world-beating, or could be, but also places that are our priorities for industrial development and catch-up. Good growth must level the playing field, and national growth cannot be at the expense of left-behind places like the one I represent.

However, Skills England must respond not just to industrial strategy and migration, but to all of Government, as it touches skills such as our agenda for getting people back to work. We want people helped into real jobs that offer a route out and a route up, and not just any job. That means no more jobcentres running their own skills and education programmes separate to the priorities of Skills England.

Third, we need a Skills England that is directive, not hands-off; one that sees its role as supporting training that meets the industrial strategy, not courses that do not. I will give an example: one shortage occupation is lab technicians for our world-leading life sciences sector. If the gap is lab technicians, then it is Skills England’s job to make sure that the courses for lab techs run, are funded, are supported and are filled. If that means that young women in an area cannot do low-level hair and beauty courses that set them on a path to a life on the minimum wage, but are instead channelled into a higher-wage, higher-skilled job that offers a career path, such as being a lab tech, so be it. That is Skills England doing its job.

It may be easier and cheaper to run a business management course in a classroom at a college, but given the shortage occupation list and the industrial strategy, we need bricklayers and welders. Yes, it will cost more to make the facilities available and we may have to pay the lecturers a bit more too, but that is what is needed.

Does my hon. Friend agree that to achieve any of the outlined Skills England missions, we need a levelling of the playing field over time for further education, in particular for wages in the sector, and that we should work to rectify that, particularly in teaching sectors that are challenging to recruit for, such as critical minerals, as we see in Cornwall?

I absolutely agree with my hon. Friend. I was heartened to see that in her letter to the School Teachers Review Body my right hon. Friend the Secretary of State for Education referenced the need to ensure that the implications for further education teachers are taken into account. I hope that, over time, we may be able to hear a little more about the plans in that area.

My most recent point raises a number of questions because Skills England does not hold the resources, although maybe it should—or at least some. I will leave that with Ministers.

Fourth, we need a Skills England that is relentlessly co-ordinating and engaging. As a country, we are still working out how to move away from the hugely over-centralised government machine, not least in places like my own west midlands where we are still in the infancy of having a set of institutions, people, power and money that help us determine our own future. I hope that Skills England will be a trailblazer not only for skills, but for a model of real partnership between regional and national where combined authorities can actually input into national policy.

I have three specific asks for the west midlands. Would the Minister consider moving responsibility for commissioning local skills improvement plans to combined authorities? Combined authorities such as ours could have more of a role in shaping the growth and skills levy. Finally, combined authorities are not just one of a range of stakeholders for Skills England; they should be represented at board level and in working groups as part of its structure. If this work is led only from Whitehall, missed opportunities will mean that local places are left behind. Those places may well be best placed to support the join-up required for coherent labour market policy, strategy and delivery when different Departments are intervening in the same place.

I will say one further thing—my fifth point—about how Skills England must work: it has to see its role as levering more money into training, pushing employers to do more and making it easy for them to do so. Employer investment in training has fallen over the past decade. Investment per employee is down 19% since 2011. I hope that a clear skills strategy will start to change that, sitting alongside, for the first time in a number of years, a stable Government giving business the confidence to invest. Skills England has to see its role as not just anticipating but driving demand among learners. It should raise hopes and aspirations and make it possible for young people to get the skills they need, as well as for people in their 30s, 40s and 50s to retrain and get on in life.

I will mention the role of unions again, because one of the least comprehensible acts of the previous Government was the sheer vandalism of ending the union learning fund in 2020. In 2020, 200,000 workers were supported into learning or training through the union learning fund. It was open not just to union members or in union workplaces, but to everyone, and it worked. Union learning reached people that other initiatives just did not. Most importantly, it reached basic skills learners. In union learning, over two thirds of learners with no previous qualifications got their first qualification. The fund added over £1.4 billion to the economy through the boost to jobs, wages and productivity. It cost £12 million, and that £12 million levered in £54 million from employers, unions and training providers in its last year. I very much hope that our new Government—so clear about the role of unions in social partnership—will make use of the reach of unions to workers and into workplaces that may otherwise not be reached by learning.

I will finish by setting all this in the context of my constituency of Tipton, Wednesbury and Coseley in the west midlands. We are industrial towns shaped by factories, foundries, mines and canals. In my area, 42% of young people leave school without English and maths at grade 4 GCSE, and 2.5 times the national average have no qualifications. Round our way, 40% of job postings are looking for people with level 4 skills and above, but just 16% of the applicants have a level 4 qualification. That is why our wages lag behind the national average, employment rates are low and poverty rates are high.

I have—indulge me—three skills priorities for Tipton, Wednesbury and Coseley. The first is manufacturing skills, and I wear the “Made in Britain” badge. In Sandwell, 1,000 firms and 21,000 jobs are in manufacturing, and we could make so much more than we already do with a determined effort to get local people into the right manufacturing skills courses to position us for advanced manufacturing supply chains across our region.

The second skills priority is construction. Our aspiration as a Government—something that is so close to my heart—is to build 1.5 million homes in the next five years. For that, the construction industry training board tell me that the current workforce needs to grow by 30%, with 150,000 more people working in construction. Everywhere in the country will need construction workers, but if we seek to bring up areas that have been left behind, we could turn that massive skills need into an opportunity, train those workers and bring those jobs to places such as ours.

Thirdly, we hear much about higher-level skills, but I am also always here to champion basic skills. Having solid literacy and numeracy skills gives workers a massive wage return and makes a big contribution to our economy. We could add over £2 trillion by the end of the century if we ensure that all young people get good basic skills by the end of the decade. I will always stand for high skills, good jobs and decent wages in Tipton, Wednesbury and Coseley. I hope hon. Members have heard from me today what approach Skills England should take to deliver for the country and for areas such as mine—it must deliver for areas such as mine.

It is a real pleasure to speak in this debate. I congratulate my hon. Friend the Member for Tipton and Wednesbury (Antonia Bance) on securing a debate on this important subject. I am delighted to be the first Minister in this Parliament to respond to a debate on skills, which I am sure everyone across the House will agree are crucial to both individuals and our economy.

The honour of being Minister for Skills actually falls to my noble friend, Baroness Smith, who has recently laid a skills Bill before the other House. I know that she has already been out and about in her short time in the role, meeting people at the sharp end of skills delivery: providers, colleges, teachers and also students, young people taking T-levels and apprentices. It is for those people—people of all ages and backgrounds—that we need to ensure that the skills system is working.

As this is a debate about skills, I must mention the fantastic results that the UK achieved in the World Skills event in Lyon last month. Students and apprentices from across the UK competed with the best from around the globe and won two silver and two bronze medals, as well as 12 medallions for achieving the internationally recognised standard of excellence. The team finished 10th in the medal table out of 60 countries, which demonstrates the real commitment to excellence of our young learners. I pay tribute to them.

We need to ensure that learners like that—indeed, all learners—have access to the right opportunities. We know that the skills landscape is ever changing, and that new technologies, businesses and approaches all bring new skills needs. However, we have not always kept up with that need. The current system is incoherent, and too many people are unable to benefit from it.

I have the excellent MidKent College in my constituency, and they tell me that there has been constant change in the skills landscape over the last 10 years, with qualifications being removed and then reintroduced. They have put it to me that more certainty would make for much better long-term planning, not only for students but for colleges.

I thank the hon. Member for mentioning the college in her constituency of Maidstone and Malling. She raises a concerning factor that should have been dealt with, so I am pleased to say that in July the Secretary of State announced a review, led by Becky Francis, of post-16 qualifications. Skills policy has too often been made in isolation, which has made the system confusing, as she has mentioned in relation to MidKent College.

Just for the information of MPs from the mainland here, Northern Ireland supplies construction workers to the mainland, who come over to London by plane every week on Monday morning or Sunday night. If we can produce workers in Northern Ireland who do work in London, perhaps some contribution should be made to our construction sector and our colleges back home so that we can keep producing workers of great skill.

I thank the hon. Gentleman for that very interesting point. I have not grasped the whole of that issue, so I would be happy to have a further conversation with him about it.

The lack of a clear plan has led to confusion and widespread skills shortages, which hinder economic growth. The lack of basic skills among adults and reduced employer investment limit our ability to meet domestic skills needs. Too many people have been unable to access the benefits of quality post-16 education and are more likely to face unemployment, lower wages and poorer health. That is why meeting the skills needs of the next decade is central to delivering the Government’s five missions: economic growth, opportunity for all, a stronger NHS, safer streets and clean energy. We aim to create a clear, flexible, high-quality skills system that supports people of all ages, breaks down barriers to opportunity and drives economic growth.

On economic growth, nearly 50% of UK businesses have experienced a cyber-security breach in the past 12 months, and cyber-attacks cost the UK economy £27 billion annually. The country faces a shortage of 93,000 cyber-security professionals, so does the Minister agree that cyber-security skills development should be prioritised in Skills England’s agenda?

I thank the hon. Lady for that important and pertinent point. Skills England’s very purpose—[Interruption.] Indeed, I will come on to speak about that. It will ensure that there is training when employers identify skills gaps and those jobs are needed.

Skills England will ensure that we have the highly trained workforce we need to meet the national, regional and local skills needs of the next decade, and it will be aligned with the upcoming industrial strategy. That is a critical part of the Government’s mission to raise growth sustainably across the country, support people to get better jobs and improve their living standards. Skills England will provide an authoritative assessment of national and regional skills needs in the economy now and in the future. It will combine the best available statistical data with insights generated by employers and other key stakeholders. It will ensure that there is a comprehensive suite of apprenticeships, training and technical qualifications for individuals and employers to access, which will align with skills gaps and what employers need. As part of that, it will identify what training should be available via the new growth and skills levy, which will replace the rigid apprenticeship levy, as many have been calling for, to ensure that levy-funded training delivers value for money, meets the needs of businesses and helps to kick-start economic growth.

I absolutely agree with my hon. Friend and join him in celebrating all of Grace Gourlay’s achievements.

Skills England will work together with combined authorities and other places with devolved deals, as well as with other regional organisations such as employer representation bodies, to ensure that regional and national skills needs are met at all levels, from essential skills to those delivered via higher education, in line with the forthcoming industrial strategy.

To support our aim to ensure more local say in skills provision, local skills improvement plans, or LSIPs, provide an agreed set of actionable priorities that employers, providers and other stakeholders in the local area can get behind, to drive change and help to make technical education and training more responsive to local labour market and employer needs.

Since autumn 2022, the designated employer representative bodies leading the LSIPs have engaged thousands of local businesses on their skills needs, helping to forge new and dynamic relationships between businesses, skills providers and other stakeholders in the skills system. The plans are a valuable source of information and will provide important intelligence for the newly established Skills England.

A £165 million local skills improvement fund has been made available across all areas of the country to support providers to respond collaboratively to the skills needs identified in the plans. I am aware that a local collaboration of colleges in my hon. Friend the Member for Tipton and Wednesbury’s local area, which is led by Solihull College and University Centre, has been awarded £10.3 million of funding to support the west midlands LSIP’s priority actions. For example, Dudley College of Technology is leading a project that has received £2.1 million to support an expansion of the regional electrification and engineering technical training offer, capital investment is being used to upgrade existing facilities and offer new provision.

Will the Minister give way?

I am afraid that I will not, as I really need to make progress.

The west midlands LSIP has been recognising local challenges, as well as opportunities, including the advancement of the country’s fastest growing tech sector, facilitating emerging strengths in clean tech and green energy, and stimulating growth in priority growth clusters identified by the West Midlands Combined Authority, and creating a pipeline of new entrants into the logistics and distribution industry by increasing the availability of apprenticeships.

Offshore wind is a new technology that is being deployed around the UK, including in the Celtic sea. It is estimated that up to 5,000 new jobs could be created in the area from the new supply chain. Skills that will be critical to this industrial progress include welding, marine vessel operation and cable laying.

It is good to know that Truro and Penwith College wants to explore this sector. I know that green skills are a priority for the college, with its focus on electric and hybrid vehicles, renewables and retrofit for construction. The college also leads the local skills improvement fund project for Cornwall, which focuses on upskilling in these fields. We encourage colleges, including those in Cornwall, to utilise their full adult skills fund allocations. Colleges can grow their allocation by overdelivering on their formula-funded provision by up to 110%.

I again thank my hon. Friend the Member for Tipton and Wednesbury for securing this debate, on a matter that we both agree is important. It has given me the opportunity to talk about our plans for Skills England and for skills more widely. I am sure that in the coming months and years there will be more discussion and debate about skills, because they are critical to the prosperity of our businesses and employers, the prosperity of individuals, and indeed the prosperity of the nation. As I have set out today, we are already starting to make reforms to the skills system with the introduction of key measures, such as establishing Skills England to ensure that we have the highly trained workforce needed to meet the national, regional and local skills needs of the next decade and beyond.

Question put and agreed to.