Will SAPs really be able to match local skills supply to employers’ needs, or is this just magical thinking, asks Ewart Keep

Sometimes a piece of policy is announced and then vanishes from view for a lengthy period. This often signifies that it is proving hard to design and deliver. A current case in point is the Skills Advisory Panels (SAPs) whose birth was heralded in the Conservative party manifesto in 2017.

The SAPs would, it was claimed, provide the mechanism to ensure that local skills supply was better matched with the needs of employers – a policy goal that we have been pursuing by one means or another for more than 35 years.

With the election out of the way, the Department for Education sat down and tried to work out what SAPs could do, how they could do it and how they might best be structured. The SAPs were extremely vaguely sketched in the manifesto, so this proved to be a major challenge, not least as the government had abolished the preceding infrastructure that aimed to help link supply and demand sector skills councils (SSCs) and the UK Commission for Employment and Skills (UKCES). One strand of thought was to have a single national SAP, but in the end this was abandoned.

Proposals are now, finally, emerging and there are questions as to whether they make any sense. Each Local Enterprise Partnership (LEP) and Mayoral Combined Authority (MCA) is to have a SAP. Each SAP will assess skill demand/need data, manage relationships in order to use the SAP analysis to create a common understanding and move skill priorities forward, and deliver priorities through influencing a more efficient allocation of resources. Sounds easy!

It is hard to identify things that currently do not exist

Three big problems loom. First, the survey data that is supposed to power the SAPs’ deliberations and planning, when broken down by sector or firm size at LEP level, will be weak, and data of any kind to answer some of the questions the SAPs have been set (particularly around firms’ training efforts) is simply unavailable at present.

Second, the SAPs are supposed to be shifting the pattern of provision without any real financial levers. Our marketplace for provision is highly centralised. The vast bulk of funding is controlled by DfE and the Education and Skills Funding Agency at national level and disbursed to providers without any mechanism for local involvement in decision-making. The MCAs will soon have what is left of the adult-education budget devolved to them, but this is a limited pot of money, and its ability to leverage fundamental changes in the pattern of provision, particularly pre-19, is probably close to nil. Government plans talk about the SAPs “identifying levers”, but it is hard to identify things that currently do not exist.

The third problem is that the SAPs are intended to encourage local co-operation between providers. Given the absence of major funding powers to incentivise different behaviours, and given also the marketization of the different strands of provision (14-16, 16-18/19, apprenticeship levy and non-levy, loans funded +19, etc), it is profoundly unclear how this can be achieved. As recent issues of FE Week have illustrated in the starkest possible fashion, the “invisible hand” of contestability and quasi-markets is working its magic with providers in ways that DfE and the architects of marketization probably never dreamed of. The idea that elements of planning and cooperation can be superimposed on often fierce local competition across a range of providers looks like magical thinking.

In Scotland a broadly similar regime has been introduced, with regional skills assessments and sectoral investment plans producing demand forecasts at spatial and occupational levels, and these are then used to negotiate outcome agreements with both colleges and universities that aim to encourage institutions to flex supply to help meet demand.

The key difference is that the Scottish Funding Council negotiates the agreement with the college via a two-way, iterative process, and the agreement is in turn tied to releasing the block-grant funding that keeps the college in business – in other words, funding incentivises everyone to take the process seriously.