Rather than pressing for funding powers, LEPs and local authorities could have greater impact by focusing on the quality and relevance of what is offered by colleges and other providers in their areas, says Andy Gannon

Local enterprise partnerships (LEPs) and local authorities have their eyes on adult skills funding, arguing that taking decisions locally would be more effective than the Skills Funding Agency (SFA) regime. But how might this work?

There are two forms to the argument. One is the Heseltine case for a single funding pot in which adult skills is pooled with other budgets and then redistributed locally. The other is that the funding powers of the SFA should be delegated to LEPs, so that different choices are made in different areas.

It is not at all clear how a single pot, managed locally, could benefit adult skills. To increase investment in skills simply requires LEPs to control other budgets from which resources might be vired. Putting adult skills into a single pot would simply let local decision-makers reduce skills spending  — and boost other budgets.

It isn’t the case that adult skills funding has less potential to generate growth than schools or higher education funding — indeed, it is more directly focused on that than other areas of education. Is is because the SFA has less political clout than other education funding bodies?

What, though, of the other argument — the bid to exercise some or all of the SFA funding powers at a local level. The implications become clear if we consider the different elements of funding separately.

There is a case for giving greater scope for LEPs to indicate that certain qualifications are important locally and should be funded in their area”

Is it suggested that each LEP should introduce its own funding formula and set its own rates? This would be bad news for large employers and any provider that works across LEP boundaries. Moreover, since SFA funding seeks to underpin an effective market by reflecting necessary differences in the cost of provision, there would need to be lots of local duplication of effort to develop a similar evidence base on costs or, more likely, sets of rates, giving rise to all manner of perverse incentives.

Is it the SFA role in setting allocations that is sought locally? It’s hard to imagine that the government would want to abandon the rule that funding should follow the learner.  The alternative — funding places whether or not there is real demand for them — risks wasting resources.

Or is it the eligibility rules that those in favour of localism have in their sights? It would be difficult to vary the rules on individual eligibility; rules on residence, for example, are the province of the Home Office. The Department for Business, Innovation and Skills couldn’t fund under-18s whatever locals thought, but, by the same token, couldn’t see whole cohorts of adults ruled ineligible in one county while welcomed next door.

So is it programme eligibility that might be varied? It would be odd if, after years of trying to bring order into the convoluted world of vocational qualifications, the government should stand back and allow local bodies to remove such coherence as exists. There is perhaps a case for giving greater scope for LEPs to indicate that certain qualifications are important locally and should be funded in their area, but that could readily be done by signalling to the SFA. It doesn’t need the creation of 102 new funding bodies.

LEPs and local authorities have a chance to influence provision by providing information about the labour market. They could get involved in assessment, helping to give robust evidence of competence to local employers and providing valuable feedback to trainers and trainees. They could develop  a vision for the development of skills. Any of these would surely make more difference than replicating the current funding mechanism over the country.

Andy Gannon, 157 Group director of policy, PR and research

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