Power over post-16 technical education should be devolved to the “maximum possible extent” to mayors and leaders of new strategic authorities, MPs on parliament’s business and trade committee (BTC) have said.
The committee has also urged the government to transfer skills funding and policy at a national level to the Department for Business and Trade (DBT) to “attune” it more to the needs of employers and align with the upcoming industrial strategy.
And the minister for skills role should be a joint ministerial job across the DBT and Department for Education (DfE) to ensure better coordination between the “disconnected” departments.
The committee made the recommendations following an inquiry into the industrial strategy, which is set to highlight key sectors of priority to drive growth. This will be the first industrial strategy for eight years.
Ministers were set to present it this week along with a multi-year spending review, but reports suggest the release of the strategy has been delayed to the end of June.
The BTC’s inquiry heard that “substantial” skills shortages across the economy are “acting as a barrier to growth and are deterring investment in the UK”.
Expert evidence suggested there is a “strong case to further devolve responsibility for skills to local leaders”.
Around 60 per cent of the government’s adult education budget has been devolved to mayoral combined authorities since 2019. The government has already proposed further devolution of adult skills funding to more areas through the English devolution white paper.
Mayors have repeatedly called for control of more skills pots, including apprenticeships and 16 to 19 education.
While the white paper did not commit to devolution of different types of skills funding, skills minister Jacqui Smith told the BTC there was “potential for further devolution” as she admitted to “tensions” with mayors over skills funding powers.
Multiple mayors said the full responsibility for education and training post-16 should be devolved.
Greater Manchester mayor Andy Burnham said: “You can create stronger technical education pathways when you can work with the actual employers in your city region who will be employing the young people or older workers who will come through. We are the only ones who can create those meaningful pathways and who can commission colleges according to the actual sectoral strengths of our economy, yet that is still being resisted.”
Sector experts have however warned that releasing further budget lines to mayors would lead to more “bureaucracy” and “inequalities”.
The BTC concluded that skills shortages are “holding back growth and deterring investment across large parts of the economy, including within the UK’s growth-driving sectors”, adding that the skills system is “too fragmented and inflexible”.
Local leaders are “best placed to know the needs of local employers and work with training providers to adapt provision accordingly”, the committee claimed.
It called on the government’s plans in the devolution white paper to “go further”, specifically that “responsibility for technical education and training post-16 should be devolved to the maximum possible extent to mayoral combined authorities and newly created strategic authorities, once they have demonstrated capability to manage local systems”.
Tackling ‘fiefdoms’
The business and trade committee’s inquiry also heard there is “a real disconnect in government”, adding that departments like the Treasury are treated like “fiefdoms” as they “close their doors and they are not interested in listening to other departments”.
There is also concern over “different soundings” from the DBT and the DfE on areas like apprenticeships and there is “still a little bit of government thinking that becomes quite siloed along departmental lines”.
Alan Johnson, a senior vice-president at Nissan Motor Corp, told the BTC there is a need for the industrial strategy “to provide a framework that can be properly deployed and cascaded, such that you get consistency across the different departments”.
Brian Holliday, managing director for digital industries at Siemens plc, echoed this plea for cohesion and called for the DfE’s new agency Skills England to sit “directly alongside” other topics of “innovation, energy, energy prices, and access to finance as critical enablers to deriving growth from the industrial strategy”.
To tackle this, the BTC said responsibility and funding for skills policy at a national level should be transferred to the DBT and the minister for skills “should be a joint ministerial role across the DBT and the DfE to ensure there is a coordination between the two departments, as people transition from school to post-16 education and training”.
Responsibility for FE and skills was under the remit of the former Department for Business Innovation and Skills (BIS) until then prime minister Theresa May moved them to the DfE in 2016.
