The Learning and Skills Councils are being replaced with some their responsibilities being taken over by local authorities while the adult skills domain would see more market led approaches. The authors explore the impact of these changes.
Skills are increasingly important in the knowledge economy, but there has been relatively little consensus on how skills provision should be provided. Last week saw some important changes, as the government announced plans to replace the Learning and Skills Councils. The 47 LSCs will – by the time they are finally phased out –have planned and funded programmes worth around ten billion a year for almost a decade. But the common consensus is that their time was up, with the government announcing instead that local authorities would take up some of their functions, being handed responsibility for 16-19 year old provision, while a more market-led system is used for adult skills. This has important implications for our cities and, particularly, the low skilled.
These changes show the growing recognition that geography is important for public services. A spatial aspect to public policy is overdue. Although the LSCs were reasonably local, they were still imposed from above. But as cities across the UK are increasingly entrepreneurial, successful and important to the economy; a consensus has developed that decentralisation may be a way of delivering public services in a more appropriate way, and one which takes the distinctive local context into account. Moreover, this new consensus sees the merit of offering the UK’s towns and cities the tools and flexibility to respond to the changing economic environment of the knowledge economy.
The proposed regime has two important features which reflect this policy agenda. First, it recognises the need to plan skills provision at the scale at which people live their lives. People don’t live according to local authority (or LSC) boundaries - their lives stretch across whole cities or the areas around towns. In particular, the labour market often reflects larger areas which often have a city at their heart, commonly called “travel to work areas”. Addressing this, the review gives authorities the opportunity to “cluster together in sub-regional groupings reflecting travel-to-learn patterns”. It is these units which will then commission training provision, according to a more complete picture of local demand. Basically, this gives cities the powers to ensure training fits their labour markets.
But to do this they need some awareness of the way people live their lives. A second feature of the new system offers them the ability to do this. The groups of local authorities need to “analyse together how learners move across and within their borders”. This is important - one of the key arguments underpinning moves towards decentralisation is that they will be more aware of local circumstances and better able to tailor provision to meet these needs. In many ways, the success of this project depends on the quality of local information available.
Alongside this, the government proposes creating a “Skills Funding Agency” to fund Further Education colleges, which will take an ‘innovative and flexible’ approach to meeting local demand. In the proposals for this body, there is a again a recognition that geography matters – part of the rationale of the new body will be to ensure that resources are delivered flexibly locally, because “skills needs are manifested in sectoral, regional and sub-regional patterns, and rarely follow local authority geographies.”
This is all good on paper. An improvement in the way skills are delivered is particularly important for our cities, while it is vital for the low-skilled. For the city, having a highly skilled population can help the economy adapt to processes of economic change. Cities with highly skilled populations tend to be more productive, more affluent and better able to change with the times. American economist Edward Glaeser has pointed out that the highly skilled cities – such as Boston or New York – are more able to weather economic change successfully. When one industry declines, another grows and takes its place. A highly skilled workforce makes a city a more attractive place to locate for businesses and for other highly skilled workers.
But cities are also sites of deprivation, with the low skilled experiencing problems in the urban labour markets in which they are disproportionately concentrated. With increased demand for high level skills, fewer employment options are open to those with no or low skills: the skilled can work in jobs which require fewer skills, whilst the lower skilled may be forced out of the labour market altogether or pushed into worse jobs than before.
So the focus on realistic labour markets may be particularly important for the low skilled. Helping plan skills need at a realistic scale, and ensuring provision reflects local demand for skills are both measures which should help some of the low-skilled to train more usefully, while hopefully ensuring that more of those who are currently passing through the system do so with the appropriate skills they need to find work.
This does not mean that the proposed system will inevitably succeed. Tensions remain, with questions such as how best to incentivise local authorities to work together. Will the quality of local information really be good enough? Moreover, these problems have been around for a while. The government realised the importance of skills a long time ago, if structural change is still necessary this suggests that the task is difficult. But letting local authorities plan skills provision at an appropriate scale can be an important step forward, and one which recognises that cities should be given control of their futures. If these powers are used well, the government suggests that more may be decentralised. So it is important that local authorities take this opportunity to prove their worth.
