Industrial Training Levy (Engineering Construction Industry Training Board) Order 2007

I greatly regret that I did not receive the letter from the noble Viscount, Lord Colville. I will, of course, respond to it fully. However, he underestimates the brilliance of my officials, who have been able to pass me a good deal of information about Bircham Newton that I hope will address most of the points that he made. I will amplify my answers in the letter that I will send to him. It is important to explain the background to the issues faced by Bircham Newton college. As the noble Viscount rightly said, the facilities at Bircham Newton are in need of substantial renovation in order to comply with current legal and other requirements. It simply will not meet the requirements unless it is modernised. The sum of money at stake is quite large: it is estimated to be about £15 million. The ECITB had planned to fund this, partly by selling off unneeded parts of the site for housing development, and it applied for planning permission to the local authority for this purpose. The planning authority refused that planning permission, and the ECITB appealed to the Department for Communities and Local Government. The DCLG planning inspector rejected the appeal, despite letters of support emphasising the national importance of the college both for my departments and for those of the DTI. We did our utmost to support what appeared to be a thoroughly credible proposal for raising the funding, but the planning system took its proper course and the proposal was not accepted. This has left the ECITB with the major challenge of Bircham Newton college’s future. The college has not closed. The noble Viscount may have been informed that the ECITB was meeting today. That is correct: the ECITB met today to consider options. No decision to close the college has been taken, and I am informed that the ECITB has been invited to set up a working group to consider options, with a report due in October. I cannot say with absolute certainty whether the ECITB adopted that proposal, but I am told that that was very likely. I will see that the noble Viscount’s comments are drawn to the attention of the ECITB and the working party as they conduct that review with a view to a report in October. I am told that the options do indeed range from complete closure—I should be quite frank about that; that is a serious option on the table—to other options that might enable the college to continue. The sums of money at stake are, however, substantial, and the ECITB will have to weigh up all these issues. The noble Baroness, Lady Walmsley, rightly drew attention to the fact that the ECITB now represents under 50 per cent of employers. She said that consultation had shown that there was still significant support, but she also drew attention to the fact that the number of very large employers was very small. As she rightly said, however, although the employers who are members of the board now constitute only 48 per cent of leviable employers—that is, they are beneath the 50 per cent threshold, hence the need to go to the second condition to invoke the power to set the levy—together they are likely to pay 86 per cent of the total levy, which further justifies our decision to proceed with the levy request, even though the figure is under the 50 per cent threshold. I noted that the noble Baroness supported our taking that step because of the importance of training in this industry. The noble Baronesses, Lady Walmsley and Lady Morris, talked about apprenticeship completion rates. They are quite right to draw attention to the fact that, historically, completion rates have not been satisfactory; they have been at the 50 per cent level, as the noble Baroness said, and are not what should be achieved. I am glad to say, however, that there has been a significant improvement in completion rates. Under the CITB-ConstructionsSkills managing agency, completion rates are now running at 65 per cent, which is a huge improvement on the 2003 figure, which was as low as 29 per cent. We have set a target to increase the number of completions to 75 per cent by 2008, and the CITB is working with further education colleges to enable the key skills tests to be taken earlier in the apprenticeship, which we hope will also lead to higher-end completion rates. We believe that the programme-led ““Pathways”” initiative will also contribute significantly to an improvement in the completion rates by providing college-based apprentices with the opportunity to acquire site experience, which is a requirement to complete their apprenticeships. Participants in the programme-led ““Pathways”” initiative tend to be older, and older participants tend to be more likely to complete their apprenticeship framework. We therefore hope that the 75 per cent target that we have set, which will be a welcome further improvement on the 65 per cent completion rate, will ensure that we have a better story to tell. The noble Baroness, Lady Morris, drew attention to the provisions of the Further Education and Training Bill, which will, we hope, streamline the procedures, including the necessity for our annual debate in Grand Committee. Under the existing Industrial Training Act, industrial training boards, "““may from time to time submit to the Secretary of State proposals for the raising and collection of a levy””." The Act does not specify any set frequency, but it has become normal for each ITB to submit such proposals annually. The Further Education and Training Bill will enable ITBs to submit proposals for levies only every three years, with provision, should economic or other external circumstances change significantly, for a board to come back to a Minister to change its order. There is general consensus that this is a more satisfactory regime than the one that we have at the moment. I entirely concur with what my noble friend Lord Jones said about the importance of the manufacturing industry, and perhaps I may pay tribute to the work that he has done in this area, not least his own services to the aerospace industry. The manufacturing industry, as he knows, is not directly covered by the orders, but we hope that the good example that is being set in these sectors will be taken account of in other sectors, including the vital sectors that he highlighted. I completely concur with the view that we still need more level-3 work and high levels of training and achievement. Nonetheless, they are significant agents of training in these sectors. The £148 million that the levy raised in 2006 paid for, among other things, 40,000 apprentices; grants to 20,000 employers to train their workforce; 9,500 visits to small businesses to help them to identify and address their training needs; and a marketing programme to encourage young people to consider a career in the industry, which contributed to more than 20,000 online applications for apprenticeships. The £11 million levy income, which the levy generates for the ECITB, led last year to there being 1,250 apprentices in training, 2,900 units of craft training for existing workers and for new-entrant adults, leading to 108 level-2 and 500 level-3 and level-4 units, supervisory and project management training for 1,300 people, and a new programme of 1,100 discretionary grants for employer-specified training. I could go on. A substantial body of training is made possible by the sums raised by the levies, and we therefore strongly support their continuation. The noble Baroness, Lady Morris, talked about the extension of levies to other industries. As she rightly said, our recent White Paper stated that, "““where both sides of industry in a sector agree, we will help to set up a statutory framework for training””," which could lead to our approach towards these industries being extended to others. I am glad to say that, as the noble Baroness mentioned, the film industry has expressed a positive interest. Consultation with employer organisations and other partners in the film industry showed unanimous support—to secure unanimous support in such an industry is, I suspect, quite a high hurdle—to work with the Government to set up an ITB that will have the powers to raise a training levy. My officials are preparing an order that will establish a film ITB for England and Wales, which will be brought to Parliament for approval later this year. We see this as a significant step in the direction that Leitch set out. I am afraid that, like my noble friend Lord Davies, I am unable to give the noble Baroness, Lady Walmsley, an immediate response on her point about small and medium-sized enterprises, which are vital areas for the two training boards. I am sure I have a good catalogue of measures that they support that I can tell her about, but I shall have to do so in writing. On Question, Motion agreed to.