Future direction on devolving responsibilities

We know that the different roles and responsibilities at each level can make the whole system difficult to understand, and its complexity can get in the way of the very collaborative approach we need. We are also clear that labour market areas are the best level to organise effective and relevant services for individuals and employers.

Partnerships are now emerging that have the capacity and commitment to make a real difference to how services are delivered. Where that is the case in future we will increasingly look to pass control to them. Given the diversity of approaches across the country, we would not want to over-prescribe what a partnership should look like or be called, or how it may develop. But for the sake of clarity, the Government believes the following elements are important:

  • partnerships should reflect the geography of their local labour markets. They will therefore usually be smaller than regions, which contain several labour markets. And they will usually be larger than local authorities, as labour markets generally cut across local government boundaries;
  • the MAA process will normally be the means by which DWP and DIUS will conduct any dialogues with local areas about devolving responsibilities;
  • the Government would expect to see a strong employer representation, including an employer-dominated body, within an MAA before considering devolving particular responsibilities;
  • partnerships should have strong relationships with partners at other geographical levels, such as Regional Development Agencies and Local Strategic Partnerships;
  • they should be developing value-adding proposals for their local areas that are evidence-based and set in the context of the wider economy; and
  • the partners should be using discretionary funding, such as the Working Neighbourhoods Fund, in approaches that complement core employment and skills programmes.

Where these elements are in place we expect partnerships to have a meaningful say in the services funded by DIUS and DWP in their area, to ensure that these services truly meet the needs of the local area now and in the future. In return these partnerships will be challenged to set out the outcomes they will strive to achieve in their locality.

The White Paper "Raising expectations; enabling the system to deliver", published on 17 March 2008, proposes to create a new streamlined Skills Funding Agency, close to Government and assuming post-19 functions from the LSC in 2010. It will empower customers so that demand can lead supply and give a strengthened focus to delivering integrated employment and skills services in new ways to meet the needs of those both in and out of work. The proposed new Skills Funding Agency will therefore further support the approaches that we are setting out in this document. Proposals referring to the Learning and Skills Council in this document will be taken into account in its development.

The central role of employers

To make a success of devolving responsibilities we have to put employers at the heart of our employment and skills system. They are best-placed to identify the needs for the future development of our workforce and we are committed to providing real opportunities to shape the support available to them and to individuals. In return we will expect them to get involved, and help us to identify the skills needs of the future. This includes at national level, for example, helping to influence the kinds of qualifications that will be funded. But also locally, getting involved with colleges and providers in their area, engaging them in delivering the kind of training provision that will meet their current and future skills needs.

In 2007 we deliberately adopted a light touch approach to Lord Leitch's proposals on employment and skills boards to allow partners to develop models that suited them. We still believe there is no one-size-fits-all approach. It is important that employers are involved in decision making at different levels and in a way that best meets local needs.

Nonetheless we recognise that for the future we will need greater clarity on the opportunities for employer-dominated bodies to influence the system. We will encourage all MAA areas with an employment and skills element to include an employer-dominated body. The London Skills and Employment Board has statutory powers to set the strategy for the LSC in London. Some proposed MAA areas have expressed an interest in having a similar responsibility. We will consider these requests from MAA areas only where it is clear that a strong employer-dominated body is embedded within the partnership.

It is essential that employers have a prominent role in helping to increase the employment, skills and productivity of their areas and in local decision-making. We need to make them a credible offer to get involved. In part this will be down to the partnerships that develop on the ground but we will look at ways to share best practice. We would also welcome and consider proposals from employers or other partners that will help us transform the system. We will ask the UK Commission for Employment and Skills in its 2010 review of the integrated employment and skills system to consider whether more needs to be done to put employers at its core.

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