Local flexibility, national strength: how we can get skills devolution working

This week AELP published its devolution proposal, setting out how further devolution can help build a successful skills system that combines local flexibility with national strength.

Over the last 15 years, devolution has rapidly moved up the political agenda since the first deals agreed under Chancellor George Osborne in 2014. Despite the devolution of significant powers to Scotland, Wales and Northern Ireland, many decisions affecting local economies, skills and employment are still ultimately taken in Whitehall. This centralisation is particularly evident in England, where the devolution of powers to combined authorities has created an uneven picture, with some areas enjoying significantly greater freedoms than others.

The new Prime Minister’s background as Mayor of Greater Manchester has brought fresh impetus to that agenda, with skills set to be an important part of the conversation. AELP welcomes that. There is a strong case for giving local leaders greater influence over skills and employment. They understand their economies, employers and communities, and can bring together relationships and resources in ways that are difficult to replicate from Whitehall.

Getting the balance right

But greater devolution does not automatically mean better outcomes. Getting it right on what should be devolved, what should remain national and how the two should work together is vital. And that’s the thinking behind our new Skills Devolution Proposal.

Our starting point is that devolution is a huge opportunity for skills if it strengthens – rather than fragments – the overarching system. We need to capture the benefits of local flexibility while retaining the national standards, consistency, employer confidence and learner mobility that are particularly important in a modern economy.

Core, Flex and Innovation

To help achieve that balance, we propose a Core, Flex and Innovation model:

Core covers the things that should be available consistently across the country.
Flex gives devolved authorities the ability to adapt and enhance that national system according to local priorities.
Innovation gives places much greater freedom to develop solutions to their unique challenges.

We then apply that model across three broad parts of the skills system: statutory education, work-based skills programmes such as apprenticeships, and the additional interventions needed to help individuals and employers participate in skills and employment opportunities.

What does that mean in practice?

That means, for example, retaining national standards and a national funding foundation for apprenticeships, while enabling devolved authorities to use incentives, top-ups and local support to stimulate participation. Conversely, we see a much stronger case for devolving employment support and locally focused interventions designed to help people move closer to the labour market.

The full proposal sets out a series of practical recommendations for how that balance could work. Among them, we propose:

Keeping the core 16–19 education system nationally defined and funded, while giving devolved authorities greater flexibility to fund additional employment-related activity, employer engagement and provision responding to particular local needs.
Retaining apprenticeships as a national, employer-led programme, with national standards and funding, while allowing devolved authorities to use additional incentives, bursaries and funding top-ups to support local priorities.
Giving devolved authorities the lead role in employer brokerage, particularly supporting SMEs to navigate the skills system, identify their needs and connect with appropriate providers and programmes.
Devolving employment and participation support fully, allowing local leaders to bring together skills, employment and wider services to help people who are economically inactive or further from the labour market.
Using the topslice from the Growth and Skills Levy to support local activity, including employer brokerage, incentives and support to increase participation, rather than simply transferring responsibility for apprenticeship funding itself (NB we would actually recommend that the topslice goes into the national apprenticeship budget – but if that is not possible, this is the next best use of the top slice).
Strengthening the national role of Skills England, ensuring there remains a strong national overview of labour-market intelligence, occupational standards, workforce needs and priorities that cross regional boundaries.

Our proposal also looks at how we get there.

Devolution needs to happen at a measured pace, reflecting the different capacity and experience of individual areas, with opportunities to test, learn and improve as we go. Ahead of Welsh devolution in 1999, Ron Davies, Secretary of State for Wales, argued that “Devolution is a process. It is not an event and neither is it a journey with a fixed end-point.” That is right. And similarly, our proposal is a starting point, not the final word. We want this to be a working document that develops through conversations with AELP members, employers, government, devolved authorities and the wider skills sector.

Devolution offers a real opportunity to improve how our skills system works. The challenge now is to design it carefully enough that we gain the benefits of local decision-making without losing the strengths of a national system.

The Association of Employment and Learning Providers (AELP) is a national membership body, proudly representing organisations operating in the skills sector. AELP members deliver a range of training and vocational learning – including the majority of apprenticeships as well as Skills Bootcamps, 16-19 Study Programme, Adult Education Budget and more.

For further information or interviews please contact Matt Strong, Head of External Communications, AELP, on 07920 161685 or [email protected]