Devolve the National Skills Fund to Elected Mayors and LEPs

From the Adult Education Budget to the National Skills Fund

The additional opportunities the National Skills Fund will offer are welcome. This, in conjunction with our newly devolved Adult Education Budget will start to address the decline we’ve seen in the adult education participation rate in the North East, which according to the Learning and Work Institute has the lowest proportion of adult learners in 2019.

Any new money that is coming into the Combined Authority from central government is a fraction of the money that a decade of austerity has taken away. These are our taxes being returned to us. As the IFS has stated, the proposed £600m per year National Skills Fund would ‘reverse about one fifth of the cuts to total spending on adult education and apprenticeships since 2010’.

Safeguarding the Skills of our Workforce

By devolving this fund to Mayoral Combined Authorities (MCAs), regions will be empowered to safeguard the skills of their workforce and will be trusted to make the best decisions for the future prosperity of their region.

This additional investment is sorely needed. Industrial Strategy Council analysis has found that by 2030, about 20% of the labour market could be under-skilled for their job requirements. If skills mismatch in the UK’s labour market is projected to worsen, then we need to mitigate against this by making lifelong learning the norm.

These lifelong interventions will vary by sector and job role, but workplace skills set to experience the most acute under-skilling in 2030 are basic digital, STEM and social and emotional skills. Unison has identified that digital, supervisory and management skills are most needed in the workplace, with older workers needing more computer and digital skills.

The National Skills Fund is ideally placed to respond to these skills needs. The Fund shouldn’t be prescriptive in the courses or sectors it will support and be flexible enough to allow each MCA to respond appropriately with the best fit provision for lifelong learning, through the appropriate learning providers.

Creating Synergy within the North of Tyne Combined Authority

We are keen to avoid duplication and ensure alignment of skills interventions. There is an obvious synergy between a National Skills Fund targeted at adults and the work ongoing devolution of the Adult Education Budget.

From August this year, the NTCA will become the funding commissioner for the Adult Education Budget in Newcastle, North Tyneside and Northumberland. This allows us to focus funding of approximately £22million on the current challenges facing our region; high levels of worklessness and economic inactivity, low employment rates and high in work poverty.

In the longer term, our economy will shift toward growth in sectors such as digital and technology, financial and professional business services, health and life science, energy, offshore and advanced manufacturing and tourism, leisure and culture. We are going to work with our providers to drive our residents toward opportunities in these sectors.

We will also be supporting already excellent local provision. There will be ongoing skills replacement needs as people leave the workforce, with analysis showing that the North of Tyne area also has skills shortage vacancies in Transport, Business Services & Education and the wholesale & retail sectors. We are also mindful of economic shocks that may be forthcoming and be ready to respond to these through our provider network.

And we will be working with further education colleges and local authorities based in and around the North of Tyne area to address these challenges, whilst also working with innovative and high-quality providers selected through last year’s procurement activity. Ideally more local and smaller providers should be involved upskilling their workforce, the National Skills Fund is an opportunity to support smaller business that have difficulty accessing training and development opportunities through other channels.

The National Skills Fund will provide wraparound support for this activity by taking our residents beyond their initial levels of training and build a culture and habit of lifelong learning and opportunity.

It makes sense for MCAs to take on this commissioning, to ensure that it complements, and does not compete with, existing skills interventions in a region. This will ensure that we make adult education meaningful and tailored to the individual, not the institution. A route to richer lives, not just better trained workers.

Recommendations

1: Devolve the National Skills Fund to Regions and LEPs

The £600m per year National Skills Fund should be devolved to and commissioned by Mayoral Combined Authorities (where they exist) and Local Enterprise Partnerships.

2: Use the National Skills Fund to Assist Small Firms to Train

The National Skills Fund should be available to support smaller businesses that have difficulty accessing training and development opportunities through other channels.

3: Use the National Skills Fund to Fund Flexible Provision

The National Skills Fund should not be restricted to courses or sector and be flexible enough to allow each region to respond appropriately with the best fit provision for lifelong learning.

Jamie Driscoll, Mayor, North Tyne Combined Authority