Charlotte Morgan, Senior Policy Researcher, New Local

What did last month’s Spending Review tell us about the future of skills devolution in England? It confirmed that, under a UK Government with strong centralising instincts, very little is likely to change.

Although local skills partners – such as local authorities, colleges and universities – are the organisations that deliver programmes to respond to place-based skills needs, national government remains the body that holds the purse strings and decides when to open them.

The biggest challenges the country faces – the COVID-19 crisis, workplace automation and adapting to new post-Brexit arrangements, to name but a few – all have significant implications for local labour market requirements.

The emphasis is on ‘local’ because not every part of the country has the same skills needs and provision, nor the same make-up of sectors and types of job opportunities available.

When the impacts of immense challenges vary between places, we should not expect a ‘one-size-fits-all’ response. Yet that is what our over-centralised system of government favours.

In England, too many powers and budgets affecting decisions and delivery in local skills systems are still held in the hands of the UK Government. Although there has been some skills devolution to mayoral combined authority areas and Greater London in the last few years, what has been devolved is relatively small compared to what has remained in Whitehall. Most areas outside large city regions find themselves shut out of the process because they do not meet the Government’s top-down ‘criteria’ for devolution.

The key to a well-functioning post-16 skills system is to ensure that autonomy over decision-making and delivery is aligned as closely as possible to place-level variation.

New Local’s latest report,"No Strings Attached: How community-led devolution would transform England’s sector", presents our vision for a model of more comprehensive further skills devolution that puts local skills partners and communities, rather than central government technocrats, in the driving seat.

 Centralisation has held back local skills systems and the potential of English devolution

In New Local’s conversations with people working in England’s post-16 skills sector over the last three years, we have heard very similar messages about the problems caused by over-centralisation of skills policy-making and resources.

They say there is too much fragmentation within local skills systems, which makes it difficult for employers and communities to navigate and become engaged. Policy and financial frameworks incentivise competition between skills partners rather than strategic collaboration at place level.

Frequent national reforms and centralised control over policy-making and budgets put obstacles in the way of local efforts to streamline skills provision and integrate it with other services, such as healthcare and housing support.

But further skills devolution will not correct over-centralised decision-making if it continues under the model that currently exists within England.

English devolution is too piecemeal and miserly in the powers and resources on offer; too obsessed with governance, institutions and reorganisation than local power and outcomes; too dominated by transactional deal-making than the forging of new centre-local relationships; and too slow and bureaucratic to hold the interest of devolution’s proclaimed beneficiaries – local communities.

Community-led devolution: Founded on the principles of subsidiarity, place-based accountability and community power

New Local’s proposed ‘community-led devolution’ is based on the principle that power devolved is power shared with people and communities, without strings attached by the centre. This axiom moves devolution closer to its conceptual roots as the enabling arm of ‘subsidiarity’.

Usually, subsidiarity is defined as an organising principle holding that political decisions and actions should be taken as close to citizens as possible. Taking inspiration from the work of the Nobel Prize-winning economist Elinor Ostrom, we expand this definition further and argue that subsidiarity also requires the centre to reform.

Rather than resorting to paternalism or deferring to market forces, the state should become more facilitative and lay the foundations for community power to grow and thrive.

A similar lesson is directed at the local state. If national government should only carry out tasks that cannot be effectively performed locally, local government and partners should only carry out tasks that have been subject to real engagement and participation from communities.

For post-16 skills development, community-led devolution has three principles:

  1. First, devolution of powers and budgets is determined by subsidiarity.
  2. Second, governance is designed more flexibly to enable horizontal accountability, collaborative partnerships and participation of communities.
  3. Third, devolution is a means to enhance community power.

How community-led devolution would enable more alignment and collaboration in the post-16 skills system

We see the following as some of the advantages that the successful implementation of community-led devolution would generate for the skills sector, employers and learners.

1. Local strategies and services can be joined up more effectively.

If the devolution of powers and budgets is genuinely determined by subsidiarity, there would be a significant increase in decision-making powers and resources affecting matters such as 16-19 education, careers advice and retraining support devolved to local areas.

Community-led devolution would therefore align existing local skills strategies with the powers and budgets that local partners need to implement them. It would also allow local partners to anticipate and respond to future demand; create a more targeted and joined-up vocational, careers and progression offer across a place; and integrate a range of local services more effectively in order to prioritise preventative and whole systems approaches.

For example, joining employment and skills support for people experiencing complex social disadvantage to health and/or housing services as part of a wraparound programme of care.

2. Partnerships-based governance incentivises strategic collaboration rather than competition.

Community-led devolution favours the creation of partnerships – a more flexible governance arrangement founded on relationships of trust and place-based accountability – rather than the establishment of hard structures and new institutions that incentivise competition. Whole systems approaches require organisations operating within local systems to work together as equals.

Partnerships-based governance would allow areas outside large city regions to access skills devolution and mitigate the risk that devolution would create new ‘local centres’, where power is held by the local authority rather than shared across the local skills system. It would also provide a platform for policy and financial frameworks that incentivise collaboration.

One of the first steps to implementing a community-led approach to skills devolution would require national government to identify funding streams supporting devolved areas of responsibility, top-slicing them from across Whitehall departments and pooling them locally in ‘single pot’ place-based budgets. This ‘single pot’ system would support collaboration and preventative approaches as the risks of investment and the rewards of savings are contained within one budget.

Some locally-agreed ringfencing would give partners confidence that the money they need to deliver programmes will not be redirected to competing priorities, but a significant tranche of the single pot would be non-ringfenced. If partners across a place achieve outcomes in one stream of the single pot budget that enables savings to made in another stream, they would be able to keep and reinvest the extra funding in their area rather than watch it trickle upwards towards the Treasury.

3. Communities would have a more prominent role in local skills systems.

Community participation in decision-making and the design, commissioning, delivery and evaluation of skills interventions is the most effective way to ensure that policy and programmes produce optimal outcomes for learners, employers and their local areas. Participatory mechanisms would allow communities of interest within the system (communities of learners and communities of employers) as well as communities of residents to articulate their skills needs to shape place-based strategies and schemes.

The concept of ‘community’ has an even greater role to play in the skills system than this. Interpersonal and cognitive skills that cannot be performed by automated machinery, such as team-working, originality and fluency of ideas, are as sought-after by employers as technical qualifications. These so-called ‘soft’ skills are developed and honed when people have regular and meaningful face-to-face contact with members of their local community.

Community-led devolution creates a mutually enhancing bond between community activism and local skills development. Devolution strengthens community power by encouraging people to come together and influence local decision-making and skills policies; while the act of bringing people together for a shared purpose enables interactions that require people to work as a team and practise those hard-to-teach ‘soft’ skills.

England does not just need further skills devolution. It needs further skills devolution to take place under a different modus operandi.

The simple truth is we cannot continue with the current approaches to devolution and skills policy-making in England. If the country waits for the pandemic to disappear before changing its approach, it will be too late. The change needs to be fundamental – not tweaks to the existing system, not an extra devolved budget or two – but an overhaul. Anything else would be like the Spending Review: a sticking plaster over the cracks of a structurally fragmented skills system.

The most innovative and effective solution that national government could deliver is to implement a process of comprehensive, community-led skills devolution. Ultimately, this is about freeing up local skills systems to deliver better outcomes:

  • Aligning skills and training programmes better with local vacancies and employers’ current and future skills demands.
  • Reducing fragmentation so that services can be integrated better across a place and part of a whole-systems approach to prevention.
  • Ensuring that learning is genuinely the gateway to career progression and social mobility – the great ‘leveller’ in this UK Government’s levelling-up agenda.

Community-led devolution would achieve this by directing the flow of power and resource out of institutions and into the hands of the communities – learners, businesses and residents alike – whom the skills system is intended to benefit.

Charlotte Morgan, Senior Policy Researcher, New Local

New Local’s research was kindly supported by FETL

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