12. Publish a Skills Devolution Green Paper

Recommendation 12

DfE and the Department for Communities and Local Government (DCLG) should publish a Skills Devolution Green Paper to help clarify responsibilities and priorities and encourage debate about the potential benefits and risks.

The Government’s ambitious skills devolution plans involve the transfer of the entire post-19 education and skills budget outside apprenticeships and higher education to new combined authorities and a corresponding transfer of powers. The aim is to focus efforts and public funds where they will have most effect and to align decisions on skills with other activities to promote economic growth. The target for this reform is 2018 and it will sit alongside some continuing national systems. Colleges are keen to make the new arrangements work, but there are weaknesses which result from the overall approach to devolution.

The process up to now has been deliberately haphazard. Different areas have been offered different powers. Some areas have had frequent revisions to their deals – Greater Manchester has had six. There is a standard skills devolution menu for nine parts of England, but less than two years ahead of implementation there are many unanswered questions. On top of this, there are some areas where the devolution deal has unravelled because of disagreements between councils. Colleges are keen to work with local government and the new combined authorities on shared problems, but are concerned about the uncertainty and the prospect of having to re-explain what they do to a new set of people[1].

The Public Accounts Committee reviewed the overall process in summer 2016 and came up with a sensible range of recommendations including the need for clear objectives, a menu of options, an achievable timetable, budget transparency, work to develop local capacity and proper accountability[2].

There is a strong case for existing plans to continue but a risk that mishandled skills devolution will set the system back. There are already several national agencies overseeing the finance and performance of colleges including: EFA and SFA the FE Commissioner and the Transaction Unit. The devolution deals suggest combined authorities may have a role. There will be some rationalisation of responsibilities once the area review process finishes, but the Government needs to ensure there is a clear structure in future. The skills devolution menu may also change as a result of changes to the European Social Fund and the proposal to devolve business rates. Rates are collected by district or borough councils but the local skills system needs to operate at a county or city region level to secure economies of scale. There may also be a mismatch between areas with high property values and places with large numbers of low skilled working age adults.

 

A good way for Government departments to explore and clarify these issues would be to publish a Skills Devolution Green Paper.

[1] Ewart Keep “The long term implications of devolution and localism for further education in England” FETL/AoC.

[2] Public Accounts Committee “Cities and Local Growth” July 2016.