As policy statements go, the blunt language within December’s English Devolution white paper is hard to beat. Westminster “hoards power”; central government “stifles initiative” while presiding over deep regional inequalities; government will “rewire England” in response, by devolving power and money. All that is just from Deputy Prime Minister Angela Rayner’s foreword. Many similar adjectives follow.
Comparable candour was shown by skills minister Jacqui Smith, whose Association of Colleges (AoC) conference address declared that she had “heard, loud and clear that the current hands-off approach to the skills provider market has failed”, resulting in providers “spending more time competing over shrinking pots of money, and dealing with reporting burdens”.
Government regards devolution as critical to accelerating growth and achieving its five missions. Jacqui Smith seems keen to shift post-16 provision from a competitive system to coordinated in responding to skills priorities.
It was against this backdrop that AoC invited us to undertake a project that sought to identify:
- The main lessons from devolution in England to date.
- What we can learn from the way other nations manage tertiary budgets and accountabilities.
- How existing governance, funding, accountabilities and incentives for FE colleges help or hinder the contribution they make.
- How a national and local skills system might be best designed to meet the needs of learners, employers and communities.
Through a desk-based review and consultation with a wide range of stakeholders, we developed 19 recommendations for an optimal devolved post-16 system. It is intended to motivate colleges, officials, ministers and mayoral strategic authorities (MSAs).
Piecemeal progress
Devolution to date has been largely piecemeal, incremental and bolted onto existing policy. College relationships with MSAs are mainly positive and highly valued but largely transactional in nature, not strategic. MSAs have largely replicated the Department for Education’s ‘low trust, high compliance’ model of provider management. With some exceptions there have been limited major skills developments by MSAs outside of devolved adults skills budgets. Overlapping local skills strategies and plans often present a confused picture about local priorities and the actions needed in response.
We recommend that devolution of 16-19, apprenticeships and sub-degree higher technical education is accomplished via a comprehensive local planning approach to the offer. The adult skills fund should be devolved together with capital funding, excluding that which relates to condition. But serious work is also needed to reduce bureaucracy for providers. Three-year skills plans should inform three-year funding settlements for providers. There is an argument to pilot devolution of apprenticeship funding to grow volumes, align the provider infrastructure and improve progression from 16-19 programmes.
Accountability statements (or planning agreements) should be extended to all providers and be approved by the MSA. Employer-led priorities via employer representative bodies (ERBs) is the right path but the single statutory local skills plan must be owned equally and approved by the MSA, reflecting its local growth plan. Learning from LSIPs can be developed to strengthen the capacity of ERBs and MSAs to provide skills system leadership. Similarly, there is much good practice in college accountability statements to extend to other providers.
Unlocking growth
MSAs and ERBs should stimulate employer demand for skills using mayoral influence, the power of other local budgets and employer leadership. Debilitating falls in employer investment in skills must be reversed if we are to see substantial productivity growth.
This all relies on a well-developed national skills strategy shaped by the already-published national industrial strategy which leaves room for local priorities. DfE and Skills England will need excellent cross-government working to reflect the requirements of the Department for Work and Pensions, the Migration Advisory Committee, the Ministry of Housing, Communities and Local Government, the Department for Energy Security and Net Zero and others.
We should all recognise that we are building a skills system which must be coherent, functional and above all complete at national and local levels. Gaps, duplication or confusion in the system will mean certain underperformance. We hope that our recommendations provide a model that AoC can develop with its national and local partners.
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