Government ‘accepts principle’ of Lord Heseltine’s single funding pot

The government has already “accepted the principle” of Lord Heseltine’s single funding pot idea for Local Enterprise Partnerships (LEPs), the Tory grandee told MPs today (Tuesday, February 12).

Members of the House of Commons Business, Innovation and Skills (BIS) Select Committee grilled Lord Heseltine on his proposals to hand over the entire skills budget to LEPs — and he said Chancellor George Osbourne was “committed to the single pot”.

He said: “The government has accepted the principle, but as for the scale and the breadth we will have to wait for a statement around the time of the budget.

“There is the political will to deliver this within the government.

“The chancellor is committed to the single pot and I can’t think of another chancellor who took so active a role in that sort of political and economic activity.

He added: “The understanding that we’ve got to change is very widespread, held across all parties and there is thirst for the opportunity. The length of this recession has shaken many people who had views as to what should be done. We are the only economy that has our centralism.”

Lord Heseltine’s comments came just a day after publication of an FE Week report that revealed the government had launched informal talks on the single funding pot idea with the Association of Colleges (AoC) and the Association of Employment and Learning Providers (AELP). However, both bodies have expressed opposition to Lord Heseltine’s proposals.

Martin Doel, chief executive of the AoC, said: “We want to work with LEPs but I don’t think breaking up college funding and giving it to LEPs is a helpful way to do that because it makes it uncoordinated, lacking coherence and won’t be responsive when money is tight.”

A BIS spokesperson declined to comment on government plans for LEPs, but said a statement on the issue would be made in next month’s Budget.

Lord Heseltine further told MPs today: “My report is not a revolution — it is a big switch in emphasis to involve local people in the decision-making process and to encourage them to add extra resources from largely the private sector to that which the government can afford.”

He added: “Local areas can’t get the skills. Humberside has very exciting prospects of inward investment but they know there isn’t the skills supply so it will come from somewhere else.

“It will come from Europe, it will come from Asia, it will come from wherever — but it isn’t there on the ground at the moment so they have to do something about it.

“There’s a very serious shortage of engineering skills for example, but how long does it take to train an engineer? That’s where the real anxiety is in the economies when I go out to visit — they want more control of the agenda for producing skilled people, trained people.

“The thing that impresses me is that there isn’t a dialogue, effectively, between those who create the jobs locally — whether publically or privately — about what training should take place, by whom and at in which institution.

“There is a £4bn budget at BIS that is constrained by central views and I think it would be much more likely to reflect local opportunities if the people who create local jobs played a definitive role in determining the allocation of funds.”

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  1. Suzanne Green

    Aren’t FE Colleges and independent providers part of LEPs already – strategic boards? Keep the SFA and make it contractually required that colleges and providers engage with and meet the work skills requirements of the local job market as identified by LEPs. LEP priorities met, AoC, AELP concerns addressed