Devolution is an opportunity to unleash the power of colleges for transformative skills growth in England, finds report

A new report published today (Friday 4 April), shows that with modest changes to the devolution system, colleges can be unleashed to deliver so much more for local communities and economy.

The Devolution of England: A new skills system report by North West-based consultancy Think, commissioned by AoC, sets out a national and local skills strategy, and says strategic authorities should have greater control over skills funding and policy decisions, moving away from the ‘Whitehall knows best’ model.

With targeted devolved funding, the report says, colleges can tailor their adult skills programmes to meet the specific needs of their local labour markets, empowering them and the communities they serve. For instance, a college in a region with a growing tech industry could develop specialised IT and coding courses, directly aligning education with local job opportunities.

Three-year skills plans, informed by national priorities, should be introduced and three year funding settlements for providers should also be brought in, based on accountability statements.

Steve Rotheram, Mayor of the Liverpool City Region said:

“Our region is living proof of what can be achieved when you give local leaders the power - and trust - to make decisions that work for their communities. But we know that too much of our country’s skills system still works from the top down, not the bottom up.

“This report is a timely call for change - towards a more joined-up, locally led approach that puts people before process. By backing collaboration over competition, we can help more people get on in life, support our businesses to thrive, and build a fairer, more prosperous future for everyone - no matter where they live.”

The report also calls for a Department for Education-led ministerial skills committee, focused on the national missions and economic growth. This will allow departments such as the Ministry of Housing, Communities and Local Government to have insight and input into how strategic authorities and colleges are feeding into wider national priorities, aligned with the government’s five missions.

David Hughes, Chief Executive, Association of Colleges said:

“This report shows that with sensible changes to the devolution system, so much more can be delivered to enhance local economic growth and opportunities for people. The recommendations are designed to support the government's ambition to shift power from Westminster to local communities and to move from a market-led skills system to a more collaborative and coordinated system.

“At its heart, we believe that strategic authorities have a vital leadership role to bring together colleges, employers and other key regional stakeholders to work towards jointly agreed goals and priorities. Within that system, colleges can play a pivotal role in regional development, economic growth and progress.

“This blueprint is a crucial next step in showing how communities will thrive when colleges are given the trust, support and accountability to provide businesses with a skilled workforce to boost their local economies. Colleges will be the catalyst in driving the government’s five missions and with the right systems in place, devolution can unlock their potential.”

James Farr, Managing Director, Think said:

“Government wants what it describes as ‘a permanent shift in power’ in England away from Westminster to accelerate growth and prosperity. Extending devolution to more areas of England and deepening the powers and budgets transferred to existing devolved authorities will create opportunities and challenges for the further education sector, strategic authorities and Whitehall alike.

"Our team has gathered evidence from across the sector to identify learning from devolution to date, and to consider the role of the existing competitive FE quasi-market model, which the Minister believes has failed as an approach. Our recommendations show the way that a reformed post-16 system might best ensure that further education maximises its contribution to growth and prosperity – benefitting learners, employers and places."

There is also a need for collaboration over competition, with a plan-led approach encouraging joined up working between colleges and local employers. This could lead to more internships, apprenticeships, and job placements for students, providing them with practical experience and smoother transitions into the workforce.

Hannah Larsen, British Chamber of Commerce said:

"This report recognises that tackling skills shortages is key to boosting local and national economic growth. Local skills improvement plans (LSIPs) are helping to achieve this, by aligning employer skills needs with local training provision and investment. A single skills plan – as proposed by this report - underpinning the local growth strategy will help bring about the transformation we need and support more firms to provide more training for more people."

Key recommendations:

• Shift to a plan-based skills system
• Move from a competitive to a collaborative funding model.
• Devolve funding while maintaining current programme structures (adult 19+, apprenticeships, 16-19, higher education).
• Strengthen local collaboration and accountability
• Implement a plan-led approach to adult skills, 16-19 education, and apprenticeships.
• Require accountability statements approved by strategic authorities to shape curriculum offers.
• Develop a national and local skills strategy
• Establish a national vision for technical education linked to local ‘actionable’ skills plans.
• Ensure alignment with the Industrial Strategy, national skills strategy, local growth plans, and LSIPs.
• Improve funding and oversight mechanisms
• Introduce three-year local skills plans informed by national priorities.
• Implement three-year funding settlements for providers based on accountability statements.
• Reduce bureaucracy and compliance burdens
• Use Skills England to streamline funding rules and audits.
• Minimise overlapping local skills strategies that create confusion for employers and providers.
• Enhance system leadership capacity
• Support strategic authorities, employer representative bodies, and college leaders in managing a plan-led system.
• Provide data and occupational tracking for better-informed decision-making.

Notes:

See full report and recommendation here: Devolution in England a new skills system

Background:

• The 2022 Levelling Up White Paper provided for the first time a framework for further expansion of devolution across England, seeking to devolve responsibilities (including in relation to skills and the labour market) to more areas of the country.
• This noted that the UK has larger geographic inequalities in productivity, pay, educational attainment and health than most other developed nations. It diagnosed an ‘over-concentration’ of growth and productivity in South East England (relative to other areas), promising to challenge the ‘unfairness’ that ‘while talent is spread equally across our country, opportunity is not’.
• The election of the Labour government in summer 2024 appears likely to result in a significant acceleration of the scope and geography of devolution in England. The English Devolution white paper, published in December 2024, set out a plan for Strategic Authorities (SAs) within every area of England under a ‘devolution by default’ approach. The white paper cites several reasons why Government is keen to pursue devolution at pace and at scale.

About Think:

Think is a post-16 education and training consultancy established in 2015. Their team provides policy and labour market analysis to clients spanning further education colleges, universities, combined authorities, local authorities, local enterprise partnerships, charitable trusts, and mission groups. Their expertise is built on decades of experience developing, delivering and managing skills and employment programmes.