A wide-ranging report from the Tory grandee Lord Heseltine (right) questions the role of the Skills Funding Agency, instead calling for devolved powers and funding to be handed to regions through local enterprise partnerships.

The former deputy prime minister suggests that almost £48bn of government cash in different Whitehall departments should be placed in a single local funding pot. He also proposes adding a further £9bn of EU cash, arguing that EU spending was bureaucratic and inefficient.

The 39 partnerships would then bid for the cash to spend on meeting local needs “free from Government diktat”.

One of the 89 recommendations in Lord Heseltine’s No Stone Unturned report says: “The budget for vocational training for learners aged 19 and over, and all funding currently set aside for apprenticeships for those aged 16 and over, should be devolved to local areas through the single funding pot.

“This therefore calls into question the continuation of the Skills Funding Agency (SFA). Each partnership should incorporate skills’ needs within their local economic plans driven by the needs of local employers and the practical experience of FE colleges.”

free from Government diktat”

His report was released just over a month after the Association of Colleges (AoC) warned that the partnerships were failing to take advantage of the “fantastic” education resources offered by colleges.

An association report said that there was “patchy” engagement between the two, with a lack of college representation on partnership boards and a lack of understanding of the role that FE played in economic growth.

“We very much agree that growth needs to be at the forefront of government activity, but we do not want to see added layers of bureaucracy brought in that could actually hinder college responsiveness,” Martin Doel, AoC’s chief executive, said.

“Suggestions that money should be handed directly to local authorities who would then distribute it would add extra complication to an already intricate funding system. Any disassembly of the SFA could lead to more labyrinthine structures. This would be yet more change for the sake of it.”

He said that much of the association’s research suggested that, “with a few notable exceptions”, partnerships almost completely ignored education and training in their area, which would hamper the growth agenda.

“We will wait and see what action is taken by government in light of this report and stand ready to contribute to the debate on the way ahead.”

Mark Ravenhall, the National Institute of Adult Continuing Education’s director of policy and impact, said: “No one feels skills’ mismatches more heavily than the thousands of people unable to access adult learning due to narrow funding rules.

“But despite some salient weaknesses, there is much to be commended in the current system, particularly more recently with some flexing of funding rules. We hope this continues, with learning providers given more freedom to plan and show accountability to their communities.

“This was the vision put forward by Lady Sharp last year.”

Lord Heseltine’s 228-page report, launched on October 31, sets out a comprehensive economic plan aimed at improving the UK’s ability to create wealth.

It makes the case for a major rebalancing of responsibilities for economic development between central and local government, and between government and the private sector.

“For the UK to face up to the challenge of increasing international competition, we must reverse the long trend to centralism. Every place is unique. Local leaders are best placed to understand the opportunities and obstacles to growth in their own communities,” Lord Heseltine said in the report.

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