Responsive delivery of local skills could drive sustained growth24 November 2015
The recent publication of NIACE’s Local People: Local Growth paper sets out six devolution asks that aim to foster local talent and drive sustained growth. One of the key asks was how best to enable responsive local delivery of skills funding – a topic The Centre for Cities recently published a report on.
The level of skills matters more to the long term economic performance of UK cities than almost any other condition for growth. Skills levels are also highly “sticky” i.e. they are difficult to change. Cities which have a large proportion of highly skilled residents tend to educate, attract and employ more of the same, whereas highly skilled people in struggling cities tend to move looking for job opportunities in other more economically buoyant cities, and leave less well educated neighbours behind.
Figure 1: Relationship between highly skilled residents and productivity growth.
Source: Centre for Cities 2010, Firm Intentions
While better links between supply (skills providers) and demand (businesses and the economy) have long been called for, there has been a renewed emphasis on devolving responsibilities over skills delivery to local areas over the last few years through city and devolution deals. It follows that by organising skills delivery at the level of a functioning local economy – the city – it can better match that city’s business needs, future strengths and challenges.
An effective demand-led employment and skills system anticipates and responds to the changing needs of the labour market – by understanding and involving business’s needs. Over the past decade increasing recognition of the importance of demand-side interventions has been reflected in changes to government policy, including giving employers a greater role in shaping skills policies and introducing measures to stimulate demand. There is also a growing consensus that local partners can play an important role in delivering more demand-led employment and skills systems.
Through their city deals and continued devolution of powers cities are aiming, and being empowered to deliver, responsive and flexible local employment and skills strategies that support job creation, local economic development and labour market inclusion.
Our report identified six key elements of a demand-led local employment and skills system:
These six factors are self-reinforcing elements which, taken together, are key for making local employment and skills systems more effective and demand-led. For instance, partnership working (1) is the basis for greater employer engagement (2) and developing shared objectives (4). But performance management (6) and the ability to affect change through better alignment (5) should also provide further impetus for partnership working (1). It is not a linear process and ways of working are built up over time with new approaches tested in different local areas.
To varying degrees, the recent developments of City Deals, Growth Deals and Devolution Agreements have enabled cities and local partners to:
1. Adapt national policy to local criteria and priorities
2. Fill in gaps in national provision to meet local needs
3. Experiment with new programmes and policies and approaches agreed as part of negotiations to localise employment and skills.
If appropriately evaluated the variety of different approaches tailored to different local conditions should lead to greater experimentation and opportunities to share expertise and experience. A more effective and responsive local delivery of skills should help local areas better foster local talent and drive sustained growth in their areas.
Andrew Carter is the Deputy Chief Executive of Centre for Cities