3 steps to Economic intelligence: The key to successful outcomes

The Government’s 2014 consultation – Outcome Based Success Measures – signaled a big change for the FE sector

Spelling out their vision for the future, the Government says it is looking for the sector to become more “responsive to the needs of learners and employers, complemented by a rigorous accountability regime.”

If this new regime is implemented by 2016, as planned, colleges will find themselves being assessed not on the number of graduates they produce or the level of qualifications, but rather on how effectively they are meeting the skills needs of their local community.

Fleshing this out a little, the consultation goes on to spell out the criteria by which colleges will be assessed, namely how well they supply:

• The skills that employers and businesses need and value
• The skills individuals need and value to gain employment, change employment, progress in work or function in society
• The strategically important skills the nation needs (and in which businesses and individuals might invest)
• Value for money for businesses, individuals and the state

It might be tempting to roll one’s eyes at yet another initiative and yet more change, but despite some of the issues surrounding how this will be implemented, I very much see it as a welcome challenge to the sector.

The Government – and by the way this was in the pipeline even before the coalition Government took office – is laying down the gauntlet to colleges and effectively saying: “We believe that colleges should be economic dynamos in the heart of the community they serve. Now go and prove that’s what you are.”

Now, whilst I would hope that all colleges already see themselves as economic dynamos in the heart of their communities, believing this about ourselves is one thing, actually living up to the claim and evidencing it is another matter altogether.

The question is, what steps can we take to achieve this?

If we are going to be assessed on how well we are meeting the needs of our local economy, one of the most crucial challenges will be to get to grips with what is going on in that labour market, which will mean becoming much more acquainted with local economic intelligence than we perhaps have in the past.

For most of us, local labour market intelligence has in the past perhaps been seen as something desirable but not necessarily of paramount importance.

However, once outcomes-based success becomes a reality, for those that really want to thrive and succeed in the new environment, specialised economic intelligence of our local communities and regions will no longer be an option, but a necessity.

At East Durham College, we have been aware of this for some time and have taken several steps to make sure we are ahead of the game. One of the major planks of our strategy was to commission the Labour Market Information company, Economic Modelling Specialists International (EMSI), to undertake a study comparing our curriculum to the skills needs of our community.

The resulting report – Labour Market Research & Course Alignment Analysis – compared our curriculum with the skills demands of the labour market – not just the labour market in general, but rather the labour market in our area, and not just high-level industry demand, but delving right down to the most specific industry classifications to identify what their skills needs are.

1. Avoid the over-supply or under-supply of workers

The report told us which areas we, as a college, were over-supplying or under-supplying workers. So for instance, one conclusion the report came to was that there is likely to be significant skills needs in our local area for industries such as agriculture / equine; arboriculture and forestry; and environmental conservation, and that there was room for expansion in our curriculum to meet this demand.

We were able to use these findings in our successful bid for funds to redevelop our Houghall Campus – our land-based studies campus – so that we are now in a position to expand provision in exactly those areas where our local economy really has needs.

In other words, by using local economic intelligence to quantify the skills demands in our area and comparing it to what we were offering through our courses, we are now far better placed to influence successful learner outcomes than we were before.

2. Support Career Aspirations

However, if we are to be really successful in influencing learner outcomes, it is not just colleges themselves that need good local economic intelligence, but also the learners themselves and those thinking of coming to college. It’s one thing to adjust courses to reflect the skills needs of the local community, but without giving career aspirants solid details about the labour market they are hoping to enter, how can we expect them to make choices that will lead to sustainable careers that actually exist?

To address this situation, again we have partnered with EMSI, introducing their Career Coach tool into the College. This gives people information on what occupations actually exist out there in the area, how much they pay, what training they need to get into that occupation, and what similar occupations exist using similar skills.

This kind of information is just what people need in order to make informed choices as to the training and careers they want to enter into, and I believe that this sort of thing will become indispensable as we move towards outcomes-based assessment.

3. Measure Impact

There is one final aspect of economic intelligence that is perhaps not as obvious as shaping curriculum and informing learners, yet which is of crucial importance in an outcomes-based environment: measuring impact.

One of the Government’s criteria mentioned above is value for money for businesses, individuals and the state, and of course the Government will measure this according to their data and standards.

However, it is also important that we in the sector are able to articulate the value we give, and the impact we have on those we serve.

This is something East Durham College did earlier in the year, again with the help of EMSI. By commissioning an Economic Impact Study, we were able to quantify not just the operational effect of the College, but to also establish – through an investment analysis – the affect we have on various stakeholders in society.

For instance, the study found that:

• Every £1 learners pay for their education at the College yields £6.30 in higher future wages.
• Society receives £5.60 in benefits in return for every £1 invested in the College.
• Taxpayers see an average annual return of 11.4% on their investment in the College.

Information like this provides clear evidence of the value the sector has for businesses, individuals and the state, and in many ways shows that colleges are indeed economic dynamos in the heart of their community.

However, as a sector perhaps we have been too complacent about our role and have been content to rest on our laurels. We really are economic hubs, but there is much, much more we can do.

Through the careful use of local economic intelligence, spurred on by the move towards outcomes-based assessment, we have a fantastic opportunity to show just how important we are to the life of our communities, and to the country as a whole.

Suzanne Duncan is Principal and Chief Executive of East Durham College, a role she has held since September 2012