We Can Work It Out

Local authorities should channel funding to areas of skills training that will most benefit long term employment and economic growth in their locality.

The economic downturn has seen unemployment in the UK rise to 7.9%, with almost 2.5 million people out of work, just under a million of which are aged between 16-25. In a new report, NLGN argues that a place-based approach is needed for employment and skills, with greater local economic activism by councils to steer funding towards particular sectors to stimulate new jobs.

It recommends that ‘skills accounts’ are reshaped to give individuals more choice over the training they receive and councils greater democratic strategic control, by enabling them to vary the public subsidy for different skills training options based on current and future local economic needs. With such a system, a local authority seeking to diversify the local economy to make it more resilient in the future may, for example, wish to increase jobs in renewable technologies, and could direct skills funding to meet the skills needs of that particular sector.

The report also advocates streamlining some existing skills quangos to create an integrated and less cluttered employment and skills system. It suggests merging current national and regional skills agencies into one organisation – the UK Commission for Employment and Skills – and devolving all operational functions to local authorities.

Report author Nick Hope argues that councils must also do far more themselves to stimulate demand for jobs, by creating the environment for new dynamic business opportunities and acting themselves to forge a new era of municipal entrepreneurship. He suggests that the Government should take forward proposals in their Smarter Government White Paper to allow councils to use their trading powers to create commercial opportunities.

Report author Nick Hope said:

“We must urgently and fundamentally reconstruct the architecture of the skills and employment system, to allow a far more devolved and flexible approach that is not based around programmes, age-categories and funding streams but around the specific needs of particular places and, crucially, individuals.”

“We need to move beyond the concept of “demand-led” skills, where employers and learners drive learning but risk perpetuating a short-sited approach that reinforces industrial weaknesses, towards a “place-led’ era, rooted in an area’s unique assets, characteristics and economic potential. Local authorities must be at the heart of this new era, working collaboratively to orchestrate opportunities and drive economic growth.”

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