Local Enterprise Partnerships, Skills Strategies and Austerity

In this post Jonathan Payne introduces a CURA-funded scoping study that he is carrying out with Phil Almond and Jonathan Davies into the role of local enterprise partnerships in developing skills strategies in a context of austerity

Many commentators on skills policy in England have long argued that the approach has been too narrowly focused on boosting the supply of skills without paying sufficient attention to employer demand for skill and the need to ensure that skills are put to productive use in the workplace.  The approach reached its height during the New Labour years when government set national skills targets and tried to use the power of the public purse to boost skills supply. By 2010, this approach was clearly running into problems, with major issues around ‘over-qualification’ and the ‘under-utilisation of skills’. Indeed, the UK Commission for Employment and Skills has argued that unless these problems are addressed, the UK will struggle to address its ‘productivity problem’.  Put simply, skills policies are likely to work better if ways can be found to integrate skills supply, demand and utilisation. This means linking skills supply with economic development and business improvement.

Progress has been very slow, and it might be argued that austerity only makes matters more difficult. However, the fact that government now has little money to throw at the ‘skills problem’ may open up opportunities for new thinking and approaches. The current government also wants to develop ‘employer ownership of skills’, which really means getting employers to pay more for training rather than relying on government support. Again, however, substantive progress is unlikely to be made unless ways can be found to raise employer ambition around skills. This essentially means impacting on local economic development as well as the way employers compete and design jobs which shape their actual skill requirements.

Enter local enterprise partnerships (LEPs), the new kid on the block when it comes to sub-regional economic development. LEPs bring together local councils and businesses around a wide ranging agenda, which includes economic development and skills, and occupy a complex institutional landscape involving Combined Authorities, City Deals, City-Regions, Enterprise Zones and more.

Amongst other things, LEPs are grappling with the challenge of developing more locally responsive, ‘demand-led’ skills strategies which feed into their strategic economic plans. However, they have courted controversy in terms of whether they are locally accountable, and whether they have sufficient powers and resources at their disposal to make a difference. What local actors understand by a ‘demand-led’ approach to skills is also unclear. Is it about responding to employer needs through better skills matching or is about raising employer demand for skill? How can ‘employer demand’ and ‘learner demand’ be combined, and does the current funding regime for skills help or hinder matters? For example, more adult funding is being routed through LEPs, while adult loans prioritise individual choice, with labour market intelligence and careers advice expected to square the circle. National targets and priorities also remain, in terms of the number of apprenticeships for example, while the new ‘apprenticeship levy’ is national rather than local in approach.

Policy has responded to criticisms around LEP capacity by boosting their core funding and is seemingly prepared to devolve more to ‘city-regions’ if they can make a strong case and satisfy certain government criteria. The question is whether this is a real step forward and if it goes far enough? Is central government serious about decentralisation and localism, or is it just handing local actors a set of problems without the means to really address them? Are we talking about the devolution of power or the offloading of responsibility? Local actors, with varying capacities, however, may try to run with this and see what can be done. An important question for research then is what progress can they make in developing an integrated, demand-led approach to skills which is long overdue, given the current policy dispensation?

Jonathan Payne, Jonathan Davies and Phil Almond are currently exploring these issues through a CURA-funded research project looking at the skills agenda for LEPs in the Midlands. Scoping interviews are currently being conducted with LEPs, local authorities, further education colleges and employer bodies with a view to understanding the issues on the ground, what progress is being made and the challenges local actors are coming up against.

On the 16th and 17th of May CURA will be hosting a workshop on Local Economic Development to discuss research agendas around local economic development and skills in England, if you are interested in attending please email Suzanne Walker swalker@dmu.ac.uk to register your place.

Jonathan Payne is a CURA member and Reader in employment studies at De Montfort University.

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