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The Progressive Policy Think Tank

North needs control over skills funding

Northern leaders should be given extra powers.

The North should have more power over local skills strategy, according to a new report from the think tank IPPR North. The report argues for a more localised approach would boost the economy nationwide and allow people to maintain their local roots, preventing a Northern 'skills drain' and tackling the number of people in the north with low or no skills.

The report is published as the latest unemployment figures show northern regions continuing to lag. Earlier this week the Deputy Prime Minister Nick Clegg announced a new round of city deals for the north of England (Mon).

The North of England has a higher percentage of its adult population with no qualifications than the English average. There are over 3 million people of working age in the North with no qualifications. If the North got that down to the English average, this figure would be reduced by 360,000.

o    Greater Manchester City Region has 536,767 people with no qualifications
o    Leeds City Region has 460,491 people with no qualifications
o    North East has 441,170 people with no qualifications
o    Liverpool City Region has 310,064 people with no qualifications
o    Sheffield City Region has 306,926 people with no qualifications
o    Lancashire has 225,485 people with no qualifications
o    Humber has 204,728 people with no qualifications
o    Tees Valley has 124,038 people with no qualifications
o    Cumbria has 100,573 people with no qualifications

At the other end of the scale, the North of England has far fewer people with high skills levels (NVQ4 or above) when compared with the national average:
o    Liverpool City Region has 7. 1% fewer
o    Humber has 6.7% fewer
o    Tees Valley has 6.1% fewer
o    Sheffield City Region has 6.1% fewer
o    North East has 5.4% fewer
o    Leeds City Region has 4.6% fewer
o    Greater Manchester City Region has 3.0% fewer
o    Lancashire has 1.4% fewer
o    Cumbria has 0.2% fewer
Only York and North Yorkshire (1.9%) and Cheshire and Warrington (4.4%) have more highly skilled people than the England average.

IPPR North's new report argues that the budget for adult further education, skills and apprenticeships, which currently stands at £3.8 billion, should be shared out across the country. The report shows how successful local skills strategies can help transform areas and argues that city regions are a sensible scale at which to engage with businesses to develop local networks of training providers, employers and employee representatives, particularly in key growth industries.

The report recommends increasing the provision of local apprenticeship hubs to enable employers to collaborate. It says a priority to improve the supply of high-quality apprenticeship places and ensure that all young people are able to stay on in education and training. The report recommends that there should be a move away from intermediate apprenticeships in favour of advanced apprenticeships and an expansion of pre-apprenticeship training programmes.

The report criticises the lack of a coherent strategy on careers guidance after the end of the Connexions service in 2012. It says that careers advice needs to be improved to get the right information to parents and pupils. It argues that information, advice and guidance to young people and adults is especially crucial for the unemployed and those from deprived communities.

Ed Cox, IPPR North Director, said:

"Nick Clegg should put his money where his mouth is. A localised approach to skills would help boost economic performance in the North and bring enormous benefits to the UK as a whole. Local Enterprise Partnerships need to play a key role in linking up skills, employment and growth in their local area and be given more responsibility over budgets.

"Careers guidance and apprenticeships are vital to this strategy. We need to ensure all unqualified and low-skilled 16 to 19-year-olds achieve a minimum standard of education and that they are encouraged to take up relevant and rewarding learning and employment opportunities."

Drawing from three international case studies, the report argues that skills strategies are fragmented and uncoordinated, and that the current nation-wide approach is failing to boost Northern economic performance. The report argues that Germany could provide a useful model for a Northern Skills strategy. It points to Brandenburg's 'Strengthening the Strengths' project, which coordinated with Berlin to tackle structural changes in Former East Germany by developing a skills strategy  which built on existing regional strengths.

The report also recommends that:
o    In the short term, Local Enterprise Partnerships (LEPs) and their local authority partners should take greater responsibility for linking up skills, employment and growth in their local area. In particular, this requires central government to increase their capacity for gathering robust labour market intelligence.
o    The devolution of a significant proportion of welfare-to-work funding to local authorities and their partners in city-regions and their rural counterparts at scales which make sense. LEPs should be responsible for administering the budget for adult further education, skills and apprenticeships.
o    The government must work to improve careers advice and get the right information to parents and pupils as what they want heavily influences what training providers provide.
o    There should be a move away from intermediate apprenticeships in favour of advanced apprenticeships: the National Apprenticeship Service and its partners should aim to double the number of young people in advanced (level 3) apprenticeships by 2015, from 30,000 to 60,000.
o    This should be accompanied by a major expansion of pre-apprenticeship training programmes in northern further education colleges.

Notes to editors:

IPPR North's new report - Northern Skills for National Prosperity - will be published on Wednesday and available from: http://www.ippr.org/publication/55/10358/northern-skills-for-national-prosperity

The report focuses on Local Enterprise Partnership areas, which it argues should be at the centre of reform to skills strategy. It argues that LEPs should be responsible for administering the budget for adult further education, skills and apprenticeships and that they should have the principal role in orchestrating the connections between skills and employment in their area. LEPs and their local authority partners should be provided with the resources to continue to experiment and develop different models. LEPs need greater resources to be able to gather robust labour market intelligence. An expanded role in skills should be complemented by the composition of LEP boards being widened to include employee representation and the democratic underpinning of LEPs being strengthened.

The report helped support the thinking behind recommendations of the Northern Economic Futures Commission, a private-sector-led, 18-month initiative which, in November 2012, published a 10-year strategy for the future development of the economy of the north of England. The final report of IPPR North's Northern Economic Futures Commission is available here: http://www.ippr.org/publication/55/9949/northern-prosperity-is-national-prosperity-a-strategy-for-revitalising-the-uk-economy

Contacts:

Richard Darlington, 07525 481 602, r.darlington@ippr.org

Tessa Evans, 07875727298, t.evans@ippr.org