Employers struggle in overly centralised skills system

Local knowledge too often fails to influence skills funding, according to a new skills commission report

Kate Parker

Why the skills system needs to be locally led

Employers are struggling to engage in an overly centralised skills system, new research claims today. 

In a report published by the cross-party skills commission, entitled "England’s skills puzzle: piecing together further education training and employment", the commission calls for the government to give skills and lifelong learning renewed attention through devolution and the new productivity board.

The report is a result of a 12-month inquiry, coordinated by Policy Connect and the Learning and Work Institute, and co-chaired by Conservative MP Sir John Hayes and Labour MP Barry Sheerman. 


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In the report’s foreword, Hayes and Sheerman say that the UK's lagging productivity and unfilled vacancies in key sectors "tell us the skills system is not working for workers or employers".

They add: “The FE and skills system is characterised by an overly centralised funding regime where local knowledge can have no bearing or influence on the provision. This commission heard too many examples of a mismatch between what the FE and skills sector is told to provide and what employers and local areas say they need. We must do better.

“FE and skills requirements vary between and within the different parts of our country. We must utilise local area intelligence and data to plan, forecast and organise FE and skills provision. This will help employers have confidence that the FE and skills system is agile, flexible and can be tailored to what is needed – a one-size-fits-all model is not fit for purpose.”

'Reprioritising FE and skills'

The commission is calling for the newly formed skills and productivity board to be led by “senior and experienced politicians from across the political divide, business leaders and representatives from FE and skills, local government, key sectors and the workforce.” The report says that the board should report to the Cabinet Office and Parliament every two years.

It also recommends that all providers receive a multi-year education budget from the Education and Skills Funding Agency (ESFA) and devolved authorities to provide long-term certainty to deliver the required local learning and skills. 

Sir John said it was vital to "reprioritise" FEand skills in this Parliament. He added: “I want to see the new skills and productivity board established as a statutory body with cross-party backing, as a means to keep this government and future administrations on track to meet our ambitions to level-up all areas of the country and ensure we have a skills system that works for small and medium-sized enterprises.” 

Barry Sheerman said that the government’s high ambitions for FE needed to be matched by resources. 

He said: “A concerted national campaign to recruit and retain talent and expertise in the sector is also required. World-class teaching and learning cannot be achieved without supporting the workforce.”

The recommendations in full 

  1. "England should have a long-term framework for skills and lifelong learning. This should be underpinned by medium-term 10-year and long-term 20-year targets for skills and productivity, set out in legislation that also puts the newly established skills and productivity board on a statutory basis as a non-departmental body.
  2. To provide the basis for a truly employer-led system, stronger geographical and sectoral skills needs analyses are required, coupled with new devolved commissioning powers. 
  3. Providers should receive multi-year adult education budgets from the ESFA and devolved authorities. This will provide longer-term certainty to deliver the required local learning and skills. Furthermore, funding settlements should incentivise and require providers to meet local learning aims and skills gaps, competing on quality, not student capture.
  4. To seed-fund collaboration projects and partnerships between providers and employers, the government should establish a new collaboration fund for localities. The fund and bidding process should be designed to encourage cooperative behaviour and build local capacity.
  5. The Department for Education’s welcome Taking Teaching Further initiative should be expanded into a national campaign. This campaign should be aimed at encouraging experienced and skilled technical tradespeople to pass on their expertise to the next generation by retraining to teach in FE. Training bursaries should be offered to help attract such people into the teaching profession and to strengthen ties between FE, work and new technologies.
  6. Learners and employers need a better understanding of career pathways arising from local and national economic trends, especially if we are to improve social mobility. Careers information, advice and guidance should be coordinated and signposted at the local level, based on local skills needs analysis and developed through the local collaboration model.
  7. The government should use new, secure technology to pilot Personal Learning Accounts with local area partnerships that have the right governance arrangements. These pilots could be initially targeted at areas where there are identified skills shortages. Ultimately these should allow for individual and employer co-investment as a means to develop long-term solutions for stimulating through-life demand for retraining and re-skilling."

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Kate Parker

Kate Parker is a FE reporter.

Find me on Twitter @KateeParker

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