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Devo max or devo mess? A skills response

Tom StannardI’m sometimes encouraged to stop talking about the skills crisis facing UK recovery. People don’t seem to like the term ‘crisis’ or the sense it gives that we’re on a downward spiral that will be difficult to get off. But the crisis is real, and we should be worried about trying to make sure that the current mêlée of proposals on devolution helps, rather than hinders, this process.

Recently the City Growth Commission, the Northern Futures summit, Manchester City Deal and others have lit something of a fire under devolution debates. We are witnessing political competition to see who can promise most on devolution. The Scottish referendum provides the backdrop, and this competition is not set to go away quietly.

But we need to be careful about devolution debates that simply focus on ‘devolving what’ and ‘to whom’. In the complex area of skills – the critical people aspect of local growth strategies – much of the recent debate has focused on ‘how much of the adult skills budget can we devolve’ and ‘to whom’.  A lot of discussion then focuses on identifying the best institutional form for this – combined authorities? Mayors? Leps? – but neglects the fact that this budget itself is only one part of the skills equation in the increasingly messy devolution debates.

Currently, investment in skills is very heavily focused on young adults, at the expense of people over the age of 24. Investment in 18-23 year olds prioritises higher education at the expense of other types of learning and skills or those not in learning. Educational outcomes are still too strongly correlated with socio-economic factors and the truth for many people is that ‘if at first you don’t succeed in education, then you don’t succeed’.

Sustainable recovery is dependent on more UK adults

participating in the labour market and doing so later into their lives

An ageing population puts increasingly high demands on adult social care, health, welfare and pensions, but also opens up opportunities with more adults able to contribute to society, communities and the economy for much longer.

Our economy will have 13.5 million job vacancies in the next decade but with only 7 million young people entering the labour force in that period. We are heading for a major labour market imbalance. Tackling the skills and employment support needs of UK adults is therefore now a pressing economic necessity. Sustainable recovery is inescapably dependent on more UK adults participating successfully in the labour market and doing so later into their lives.

The leadership task for local areas in shaping learner and supply side markets is fundamental to tackling this challenge. Work programme debates aside, the adult skills budget itself is only a small part of the equation here, as the latest further education and skills 24+ advanced learning loans figures demonstrate. Here we can see a collapse in the number of people taking part in learning at Levels 3 and 4 – equivalent to A-level and above. This loan system, similar to the loans system for university tuition fees, was poorly promoted and little understood in local government or Leps, but is becoming hugely important to the future of tacking adult skills shortages.

In 2012/13 over 400,000 people aged 24 and over took part in learning at levels 3 and 4. By comparison, in 2013/14 only 57,000 people paid for learning at this level with a loan. These figures are a clear warning that last year was not a blip. Huge numbers of people are no longer participating in learning that will help them to get on in life and in careers which will help the economy to grow.

Making new markets on both the demand and supply side in learning and skills in response means the prospects of there being enough highly-skilled people to do the jobs – now and in the future – that employers are desperate to fill, will improve. It also means, critically, that there are huge leadership development gaps on skills. The increasingly blithe talk of devolving the adult skills budget alone in city deal negotiations is only grasping a small part of the actual fiscal challenge facing new markets in learning and skills.

The National Institute of Adult Continuing Education (NIACE) has recently launched a new package of collaborative work programmes to help local enterprise partnerships, combined authorities and councils tackle adult skills shortages in the working age populations of local areas across the country.

Among other things, this now includes employability, pathways to work, and local work programme support; the European Social Fund; our highly successful mid-dife career review programme, and picking up the loans challenge, learning and skills market development.

We will be expanding our activity across local government into 2015 and beyond to help councils, Leps and emerging combined authorities tackle these challenges and others, as the skills aspect of local growth strategies is absolutely essential to creating a sustainable economic future for the UK.

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