Budget 2024: Business leaders call for LSIP funding extension

‘Hard work’ of creating local skills plans risks being ‘undermined’ without more investment

‘Hard work’ of creating local skills plans risks being ‘undermined’ without more investment


The British Chambers of Commerce (BCC) has urged the government to commit to fund business-led local skills improvement plans (LSIPs) to “at least” 2028.

The appeal forms part of the chambers’ submission to today’s spring budget, which comes alongside a report evaluating the success and teething issues of chamber-led LSIPs.

The BCC says it is seeking an extension of the funding, which expires in 2025, to provide English businesses with more long-term certainty about skills training in their area and to keep LSIPs business led.

“We need the LSIPs to stay business-led, and to remain a key part of the government’s long-term skills strategy,” said Jane Gratton, BCC deputy director of public policy.

“Without that commitment – the hard work already achieved risks being undermined.”

A small business owner in BCC’s evaluation report added: “For businesses seeking long-term certainty and planning, the March 2025 deadline of LSIP funding falls short. We should think beyond short-term solutions.”

First proposed in the FE white paper in January 2021, LSIPs aim to make colleges and training providers align the courses they offer to local employers’ needs.

Last summer, three-year LSIPs were published for all 38 areas of England. Funding worth £20.9 million was made available to employer representative bodies – £550,000 each – to develop, implement and review the plans.

In November, the Department for Education also doled out £165 million from the local skills improvement fund (LSIF) to colleges, supported in most cases by a chamber of commerce. The chambers of commerce are the designated employer representative body leading 32 out of the 38 LSIPs across England.

The LSIF fund was split across two financial years; £80 million was made available for the 2023/24 financial year, split equally between revenue and capital. In 2024-25, £85 million is for capital only.

The BCC published a report last week evaluating evidence from 21 of the 32 chamber-led local skills improvement plans, which identified concerns from participants over “short-term funding” and the bureaucracy involved in drawing up LSIPs.

“Participants across chambers, industries, and local agencies expressed worry that short-term funding and policies, particularly related to business engagement, hampered efforts to improve local skills,” the report said.

It also found “frustration” from stakeholders that funding was “mostly” linked to larger, nationally accredited qualifications despite many LSIPs identifying a need for flexible, bespoke training.

“The research found some frustrations with the limited scope of the plans themselves,” it added. “As the plans were intended by the Department of Education to focus on specific technical skills, at a local level, many chambers found themselves in receipt of employer feedback that they could not act upon.”

Some organisations found barriers around “bureaucratic complexities and overlapping jurisdictions with other agencies and institutions”.

“Differing priorities among chambers, local authorities, and local enterprise partnerships (LEPs) sometimes resulted in varied approaches to skills development, hindering cohesive planning,” the report said.

Gratton added: “There is now a real sense among businesses that they play their part in the skill system.

“This is about a partnership approach and hopefully LSIPs have enabled training providers to hear from and engage with more businesses to help them shape their provision.

“We absolutely need an industrial strategy that underpinned by a skill strategy and LSIPs can be feeding in all of this real granular data around skills needs.”

More from this theme


Revealed: Colleges scoop £165m local skills improvement fund

DfE green lights employer-backed skills projects led by colleges

Anviksha Patel

Your thoughts

Leave a Reply

Your email address will not be published. Required fields are marked *

One comment

  1. JustSaying

    Either an appropriate plan with clear objectives has already been created with the LSIP funding or it hasn’t. If it has been created why do you need more funding? If you haven’t already created such a plan, then you shouldn’t be trusted with any more funding anyway!