Getting LSIPs right. Why adjusting the current model could reap rewards for skills in England

Local skills and development plans are sorely needed but unlikely to be fully address our skills problems without important changes, writes Ewart Keep

Local skills and development plans are sorely needed but unlikely to be fully address our skills problems without important changes, writes Ewart Keep

7 Jul 2023, 5:00

Across England, employers, providers and stakeholders have been working together to develop local skills development plans (LSIPs) for their region, designed to improve skills provision to meet identified local needs and support local economies.

And it’s clear that they are needed – there is an urgent requirement to improve the skills of the UK’s workforce, not just for the sake of those local economies, but for the wider economy too. Statistics show that there has been a steady decline in skills investment over the last two decades with employer-funded training dropping dramatically. Overall, UK employers invest just half of the EU average in training – a trend which is damaging the UK’s productivity and ability to keep pace with international competitors.

Investment in skills could change this. However, it is not clear that the system of LSIPs will be equipped to tackle the existing problems.

The work and employment expert group, ReWAGE, has published Getting LSIPS Right, a new report that advocates for LSIPs but argues that their existing remit is unlikely to fully address the UK’s skills problems, suggesting three key ways in which it could be adjusted.

Employers as stakeholders, not customers

First, employers need to take a more active role. They do feature largely in the LSIPs system, but as customers setting out their requirements.

In many regions, great efforts have been made to gather employers’ requirements, but only limited responses have been received. The truth is that many employers, especially SMEs, don’t have the skills or resources to set out their future staffing needs in any detail.

LSIPs also aim to link local education and training suppliers more closely to employers. In theory, this encompasses all aspects of both academic and vocational education but in practice most of this activity is linked to FE colleges. Although many FE colleges have positive links to employers, few have dedicated time or resources allocated to these relationships. While LSIPs will provide colleges with resources, if this is another temporary ‘pot’ of funds then it is unlikely to result in long-term impact.

A far better model has employers as co-producers, fully involved in skills delivery and implementation, with appropriate checks (training hours, number of apprenticeships) on activity and quality. Activities could further be strengthened, following the German system, by including worker representatives, trade unions and local authorities as co-producers.

Retraining our focus

Second, there needs to be a greater focus on enhancing the skills of established workers as well as those of new entrants to the labour market. Both are important for the UK’s future competitiveness.

New entrants are a small fraction of the labour market as a whole. and limiting training activity to new entrants means that existing skills shortages are not addressed. Also, it is common in the UK for young people to experiment with various occupations and sectors once in work, so targeting training primarily at young people in the hope that they will stay in the area in which they have been trained is a far from perfect solution to skills shortages.

Training efforts focused on this group will be helpful but they do not make major inroads into overall levels of workforce skills. For that we need to look to employers to provide training for people already in work.

Better guidance for all

Third, good careers guidance needs to be introduced for everyone in work. A previous ReWAGE paper explains the benefits of making effective careers guidance available to everyone of working age. In essence a well-connected and established skills system with career guidance at its heart will support the labour market in meeting future employer demands.

Any investment in England’s skills infrastructure will need to be supported by improvements in a range of other areas, including job design and organisational strategy. And the wider complexities of the UK’s job market also need to be considered; in some sectors, such as social care, it is unattractive pay, terms and conditions that discourage workers and that result in high turnover.

Expecting training and recruitment to solve this problem is a little like pouring more water in to a leaky bucket. It could result (at least temporarily) in more water in the bucket, but it would be far more effective to fix the leak.

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