Training Programme (Wales) (Hansard, 23 July 1990)

§ Mr. Ray Powell (Ogmore)
I congratulate the Minister of State, Welsh Office on avoiding all the shuffling that has gone on over the past 24 hours and coming out on top. I also congratulate him on the sympathetic ear he usually lends us when we are discussing training, employment and unemployment in Wales.
I hope that during this short debate the Minister will take note of the introduction of the new scheme under employment training and the contracts that have now been issued to those who have been managing employment training in Wales for some years.
Although this is the last debate on the Consolidated Fund (Appropriation) Bill, I am sure that it is of great importance to Wales, the House and the nation.
The Department of Employment issued a document about the challenge of jobs and unemployment. It referred to the Madrid European Council in June 1989 and said: 12 Community countries put the creation and development of jobs and the reduction of unemployment at the top of Europe's agenda for the people of the Community. All Community countries know that creating more jobs will do more than anything else to improve living standards … because throughout the Community it is unemployed people whose living standards are the poorest. With over 14 ½ million people unemployed in the Community, over half of whom have been out of work for a year or more, the importance of jobs should cover everything we do as a Community. On vocational training it said: If Europe is to prosper in the 1990s, investment in training for skills and jobs is vital … We know we cannot afford our work force to be undertrained and undereducated compared with our competitors. We need to place new emphasis on the importance of vocational education and training throughout working life. It said that the Government must help young people in the transition from school to work, help the unemployed to learn the skills to find jobs and establish an education system which meets the needs of the labour market.
On that basis, it is important for the Minister, the Welsh Office and the Government to appreciate that more funding is needed for employment training in Wales. Because of the shortage of time I recommend that all hon. Members re-read the third report of the Select Committee of Employment on employment training. I cannot go into detail because of the lack of time, but it is necessary to mention that report. The Committee spent considerable time examining witnesses and took a great deal of time to prepare the report. I commend it to hon. Members. It highlights the problems of employment training throughout the United Kingdom.
When we talk about employment and unemployment we should mention certain people who are in employment. In particular, we should mention the people who met hon. Members last week when they presented a petition signed by 1,500 Remploy workers and 10,000 members of the public calling for increased taxpayer support for Remploy so that the company can pay its workers a decent wage.
Remploy was set up in 1946. It is supported by the taxpayer and its main remit is to provide useful sheltered employment for people with disabilities. Over the past 10 years the level of support has been cut and that in turn has led to lower wages. Under the agreed pay formula, the basic rate should be £124 a week. At the moment it is only £96.54. The latest review proposes to raise it to £105, but 264 that has been rejected and the workers are currently holding a ballot to decide upon industrial action for the first time in their history. That is an indictment of the Welsh Ofice and of the Government.
In the short time left, I want to refer to the CATO organisation in Ogmore in the Ogwr borough. As a result of the escalation of unemployment in my constituency in 1979, we set up CATO to combat the massive redundancies at the Port Talbot steel works and those arising from the closure of so many collieries in my constituency. When the Welsh Office and Ministers refer to the reduction in unemployment, they should be aware that they are reducing the unemployment that they have created since 1979. We used to have 3.7 per cent. unemployment in Ogmore, but within two years it escalated to 23 per cent. As a result of that, CATO was set up to retrain the large number of people who were made redundant.
CATO was set up in 1980 and within two years we had 650 places and 150 on YTS. That provided employment for nearly 800 which we would not have had without the establishment of CATO.
The Minister visited a farm in the Garw valley which CATO, a registered charity, had set up. CATO purchased 88 acres of agricultural and horticultural land to train people in those areas. Its investment commitment was £100,000. However, overnight the Government decided to relegate the importance of training agricultural and horticultural workers to the third standard of priority. Despite all its investment on employment training, CATO is no longer recommended for consideration, despite the fact that only a few years ago it appeared high on the list.
CATO provides different training routes including modern office technology, horticulture, agriculture, graphics, computers, driving instruction, motor vehicle technology, caring, catering, caretaking, child care, plastering, carpentry, bricklaying, painting, music, drawing office practice, literacy and numeracy.
Within a matter of days CATO was offered a 44-week contract under the new scheme, which meant, in effect, that the number of places that it had in employment training would be reduced from 280 to 217—a loss of 63 places. In his answer to a previous question by me, the Minister of State claimed that CATO had not filled all those places. One of the reasons for that was that, under the new scheme, it was not allowed to fill its own places—they had to be recommended by the training agents. It was not allowed to recruit at the start of ET. Now it is allowed to recruit, and it could get well over the number that it was allocated on the old scheme.
The new scheme, with a loss of 63 places, with a loss of grant per trainee of 98p, and with a grant over the 44-week period, would have meant CATO accepting a contract at a loss of more than £109,000. All training agencies throughout Wales are suffering as a result of the new contract that the Government have offered.
In Mid Glamorgan the training managers association has met and outlined numerous problems with the funding of the new contract. Its main concern is a serious cut in funding brought about by a cut in the number of places allocated to each training manager, and no increase in the allowance per trainee to take into account inflation since 1988. Training managers are being penalised because the number of trainees directed to them by employment services are low. Subsequently, they have had to use their own limited resources to recruit. Training managers are 265 expected to supplement income by placing trainees with employers. In practice, as ET is a voluntary scheme, trainees refuse to go on placement with employers who may be approved for practical training.
Many trainees are low achievers, and have personality, character and domestic problems. Following interview by potential host employers, they are found to be unsuitable. Many training managers feel that 60 per cent. of their intakes fall into that category. In addition, many training managers are owed large sums from employers who have taken trainees for practical experience. Deductions are now being made in the allowances afforded to training managers for unauthorised absences of trainees. Overheads still have to be met by training managers, even if the trainee is absent. The Minister of State should take that point into consideration.
Many large companies do not wish to participate in employment training for fear of internal personnel problems such as using trainees to fill job vacancies. The Government have greatly publicised their dedication to providing training for the future work force of the country. Why has funding across the board been cut at the level of the organisations that are expected to provide the quality training that they demand? Again, there has been much publicity of the Government's eagerness to see women returners to the labour market. Why have those people been categorised as non-mainstream trainees? If the Government are so keen to see them back into the world of work, why are the training providers' number of places limited to such returners?
It is obvious that the Government expect quality training with recognised qualifications. Surely they realise that the 12-month period allowed on ET does not give enough time for all trainees to achieve such qualifications. Although extended training may be allowed in exceptional circumstances, the numbers that CATO is allowed to offer are limited.
I have a great many notes which I shall have to throw away as a result of the curtailment of the debate. Part of the problem of training organisations in Wales is not just the financial problem and the contract for which they had only a few days to accept, sign and agree. Part of the problem is that the Training Agency is holding back the up-front funding, which has put all the training agencies into arrears. As a consequence, they have had to borrow from the banks and to arrange overdraft facilities to pay the salary bills. The Minister should consider that problem soon.
We all know about the Tory record on training, but Labour plans to introduce a properly funded scheme for young people with real qualifications at the end of it and union rates of pay while on placement. I feel like an Opposition Front-Bench spokesman describing what Labour will do, while speaking from the Back Benches. The new opportunities training scheme will enable people in work to have the chance to gain new skills or retrain with paid time off work. We will give unemployed people, including those over 50, the chance to train in the most marketable skills with a training allowance equal to the national minimum wage. We shall give women the chance to retrain in the new skills needed when they return to work after having children. We shall ensure that all children have equal access to higher education.
We will give priority to developing skills in the new industries that will spearhead the development of the 266 British industry. I hope that it will not be long before we are in government to introduce the schemes on employment training that I have outlined.

§ Mr. Paul Murphy (Torfaen)
I congratulate my hon. Friend the Member for Ogmore (Mr. Powell) on introducing the debate. One of my hon. Friend's greatest heroes was Aneurin Bevan who talked about the commanding heights of the economy. We all agree that, now, the commanding height of the economy is the training of our young people in preparation for 1992 and the next century.
In Wales training in the manufacturing and engineering industries has unquestionably declined in the past decade. In 1981 there were 8,000 manufacturing trainees, but by 1988 that figure had dropped to 3,500. In 1978 there were 896 trainees in engineering, but now there are about 310.
The past decade has been marked by the Government's miserable training record. Our schools have been under-resourced and we face a massive shortage of skilled workers, but compared with other countries, fewer young people under 16 now stay on for education and training. A third of such young people stay on in Britain, compared with 44 per cent. in West Germany, 68 per cent. in France, 87 per cent. in the United States and a record 89 per cent. in Japan. There are fewer trainees in Britain than there are in South Korea or Taiwan, which suggests that we had better have a serious rethink about our training policies.
In Wales we do slightly better than the United Kingdom as a whole. However, only 36 per cent. of young people stay on at school or college after 16–48,000 out of 130,000. We believe that the Conservatives' remedies, designed to improve training, have signally failed. There has been no overall strategy—we have been treated to schemes, more schemes and nothing but schemes.
We do not believe that market forces provide the answer. The TECs are wholly unrepresentative, their budgets have been reduced and their targets already ditched. In Wales the budget of the Training Agency has been halved from £10 million to £5 million. The sell-off of the Skills Training Agency amounts to nothing short of a public scandal.
The youth training scheme has been cut by 40 per cent. In the Principality only three out of five trainees obtain any sort of qualification from YTS and 27 per cent. go back on to the dole.
Many of us believe that employment training has become almost a joke in the Principality. There has been a 15 per cent. cut in its budget, but there are thousands of vacancies. Above all, our young people are disillusioned by, and lack confidence in, the training schemes.
I declare an interest as a consultant for the further education teachers' union. Having said that, I remind the House that in the years that I spent in further education in Ebbw Vale in south Wales, the greatest problem for young people was unquestionably that of trying to get a decent training after the age of 16. That has not changed in all these years.
My hon. Friend the Member for Ogmore mentioned what Labour's plans are likely to be. We will set up "Skills Wales" for adult training with training and enterprise councils. Training and enterprise councils will be more broadly based and will include representatives of trade unions and of local authorities and communities. We shall 267 set up clear, nationally accredited training qualifications. We will end any compulsion to participate in ET, and we do not believe that such training should be related in any way to benefit.
Training is not about massaging the unemployment figures but about securing the future of Wales and its young people, and we are grateful to my hon. Friend the Member for Ogmore for bringing the matter to the attention of the Principality and the House.

§ The Minister of State, Welsh Office (Sir Wyn Roberts)
I thank the hon. Member for Ogmore (Mr. Powell) for his opening remarks. I am glad to hear the hon. Member for Torfaen (Mr. Murphy) at least say that if the Opposition were returned to government, they would retain the training and enterprise councils that the Government have set up.
Let me make it absolutely clear that the Government attach enormous importance to training. We regard it as the most important factor contributing to the development of Wales in the years ahead. Government expenditure on training is nearly three times more in real terms than it was in 1978–79. It has increased by 60 per cent. over the past four years, while over the same period unemployment has fallen by 45 per cent.
It would be unrealistic to expect the previous high level of expenditure on training to be maintained while unemployment has fallen dramatically. It is only to be expected that there should be some downward adjustment in the Government contribution to training, simply because fewer people now need support on Government training programmes. The case load is down and therefore expenditure is down. Opposition Members may find that unpalatable, but they cannot argue with the logic.
Nevertheless, the funding is considerable: for training and enterprise programmes, it is more than £91.5 million this year. The combined budget for youth training and employment training is more than £76 million. Those are substantial sums of money, particularly when set against the fact that unemployment in Wales has tumbled by no less than 94,000 over the past four years.
The hon. Member for Ogmore mentioned the recontracting process between the Training Agency and its training providers. Much of the concern arose at the start of the negotiating process into which the Training Agency 268 entered with training providers, but in the event, I am glad to say, it has proved possible to reach agreement on almost all cases and most contracts have been signed. In fact, in the end, the main providers have settled at higher levels of funding. The purposes of the recontracting exercise were to introduce new flexibilities into the funding and delivery of employment training to prepare the ground for TECs to take them over; to pave the way for the introduction of the new youth training scheme from May 1990; and to reduce overcapacity and introduce better cost-effectiveness.
Our primary concern has been to ensure that the right sort of training is available for individual people and we shall continue to cater for a full range of clients.
The hon. Member for Ogmore is well known for his work as a director of Community Activities and Training in Ogwr, or CATO. It is true that there has been a decline in the number of places offered, but that is because the places previously on offer were not completely taken up. The occupancy rate for 1989–90 had declined from a peak of 292 to 220 by 9 May this year. So the offer for 1990–91 is for 217 places.
I understand that the Training Agency has held a constructive and amicable meeting with CATO at which certain problems were identified and possible solutions discussed.
The hon. Gentleman also referred to Remploy. It is not a training agency as such: it provides sheltered work, not training, but I shall bring his remarks to the attention of my right hon. Friend—