Experiences of employment and skills devolution: West of England Combined Authority

The combined authority argues that a devolved approach has made it easier to create stronger links and have more strategic conversations about how and what is delivered, based on need.


The West of England Combined Authority covers a population of over 1.1 million. It is made up of three unitary authorities including Bristol, Bath and North East Somerset and South Gloucestershire. The Combined Authority is also responsible for the Local Enterprise Partnership (LEP), which also includes North Somerset.

The West of England is an economically successful region, but with pockets of deprivation in parts of Bristol and other towns across the wider region. While it is well-connected, some parts have difficulty accessing the centres in which education, training and employment opportunities tend to be based. Particular challenges include BAME communities being locked out of economic success, and an aging population.

The labour market is strong despite the uncertain economic backdrop of UK’s exit from the EU, and more recently coronavirus. It has one of the highest employment rates in the country (79%), and there are over 45,000 businesses. The Combined Authority’s focus is on retaining this strength through sectors such as advanced engineering, aerospace, creative and digital professional services. However, low pay is an issue for 19% of the workforce (100,000 jobs), particularly those without qualifications.

There are four universities and four further education (FE) colleges. It has one of the most highly skilled workforces in the country, with almost 48 per cent educated to at least degree level and businesses report fewer skills shortages than in the rest of England. However, there remain 128,500 adults without a level 2 qualification. The proportion of 16-17-year olds who are not in education, employment or training is higher than average, and attainment and engagement in education for those children who are most disadvantaged is significantly below the national average.

This case study is focused on direct delivery of the  Adult Education Budget (AEB) and an in-work progression pilot called Future Bright.


Approaches

The Combined Authority was established three years ago and has had a directly elected mayor since May 2017. The mayor is responsible for strategic economic development of the West of England, including planning, transport and skills. The Combined Authority has focused on long-term planning and strategic investment. As part of the devolution deal it has an investment fund amounting to £30 million per year over 30 years - a total of £1 billion. This is to be spent supporting economic growth against business, skills and infrastructure priorities and aligned to the ambitions of the West of England Local Industrial Strategy. Additional DWP funding has been secured to deliver the Future Bright pilot.

The Combined Authority took a collaborative approach to developing its Employment and Skills Plan, through the use of a Skills Experts Group. The design of the plan as well as its implementation has been developed in partnership. It holds regular meetings with the skills leads from each of the Unitary Authorities as well as holding quarterly roundtables with the four FE colleges. The independent training providers in the area (including the voluntary community sector) are represented through the Western Training Provider Network. The Combined Authority argues that working together has provided more opportunities and flexibilities to drive its industrial strategy more effectively.

The strength of this partnership can be seen in the structure created by the devolution deal, when the LEP was combined with the Combined Authority to create a single organisation to address employment and skills issues. The Combined Authority argue this allows it to better align activity in the region and draw synergies across LEP programmes, such as a regional Careers Hubs.


Policy changes

Adult Education Budget

Devolution of the £14.7 million Adult Education Budget (AEB) for the 2019/20 academic year has been the most significant change in terms of devolution of employment and skills delivery in the region. Described as a “huge opportunity”, it is the driving force behind much of the skills and employment activity in the region.

The first year of delivery, which was designed to be a transition year, ends in August 2020. This time has been spent aligning with many national rules and maintaining much of the existing provider base, to ensure stability both to learners and providers. In future, the AEB will also deliver in line with industrial strategy and Employment and Skills Plan priorities.

The process of devolving the AEB and the transition of significant powers and responsibilities was “extensive”. It required the Combined Authority to develop new systems to both design and deliver services. This process has involved working alongside DfE officials, with the relationship between local and national government strengthening as a result.

To ensure that its plans meet the needs of local residents, the Combined Authority has worked with partners including FE colleges and plans to increase engagement with local universities. It aimed to take an evidence-based approach, co-designed with the Skills Expert Group so that each intervention had metrics. The Combined Authority also want to develop measurements for collective impact aross a range of interventions - its intention is to continue to build a strategic and impactful approach based on evidence.

In common with other areas, the combined authority reports that the provider base has ‘naturally’ condensed. In general, this has been achieved as a result of removing the ‘long tail’ of providers who worked with only a few participants. The Combined Authority’s relationships with retained providers has strengthened, allowing space for strategic delivery discussions which were not possible before devolution.

A significant issue for the West of England is that the AEB is felt to be insufficiently funded. The indicative allocation from DfE had been £17.6 million, based on performance during the 2016/17 academic year. The £14.7 million budget received was therefore £2.9 million below expectation; a result of underperformance by some providers against allocation. It is felt that this level of now fixed funding will not allow the Combined Authority to fully meet its ambitions for employment and skills in the area.

Future Bright

The Combined Authority secured funding to deliver the Future Bright pilot, a £4 million initiative funded by DWP as part of its devolution package. The programme works with people with complex barriers to develop their skills and support in work progression, which is considered a significant need for the area. The region has a robust labour market and a strong economy, but there is a widening gap between the high-skill economy and the low-waged economy, with a hollowing middle. Future Bright was set up to help people trapped in low paid work (categorised as working and receiving benefits or tax credits) to unlock their potential to progress into better paid, sustainable jobs.

The project works with the Combined Authority operating as a central co-ordinating hub, with the constituent unitary authorities acting as the delivery teams. This means that the resources of career coaches and enterprise coordinators who encourage in-work progression sits within the unitary authorities. Participants are offered a three to six-month programme of support to increase confidence, overcome barriers and access funding for training or career development costs.

While the pilot ends in 2020, devolution has underlined the Combined Authority’s ability to identify local problems and target solutions towards these. Having designed a programme to deliver on the significant issue of progression, it was so valued that the Combined Authority has used its own investment fund to continue the work through developing Future Bright Plus.

A year in, eligibility criteria which were considered too rigid were relaxed to increase referrals. Moving away from DWP funding towards devolved funding may allow the Combined Authority to flex the programme to have even greater impact. This can be seen in the decision to temporarily suspend the eligibility criteria for Future Bright in order to help those people whose income or employment has been affected by coronavirus, either through furlough, redundancy or reduced hours in addition to affected self-employed workers.

The Combined Authority is also now better able to align the programme more closely with other programmes in the area, including a return to work programme for women called Women into Digital Jobs, Education and Training.


Lessons learned

Long-term planning and investment are key

Multi year budgets make planning easier and enable more strategic decisions to meet training needs and skills gaps. Where annual budgets may have been reactive and short term, the Combined Authority is now more able to “plan over a longer time period and that’s really quite important, because we’re working in a complex stakeholder environment…having a significant investment fund to be able to spend in line with strategy is key, and certainly an important and positive difference that devolution has made.”

Benefit of alignment with national/European programmes

The Combined Authority is keen to see responsibility for the Shared Prosperity Fund devolved to regions. The ongoing challenge remains of combining local, national and European Social Fund (ESF) programmes, which have different objectives and reporting requirements. The employment and skills system in England is complex with a mix of national programmes (e.g. apprenticeships and careers) and ESF. The Combined Authority argue that aligning funding and programmes would enable greater tailoring of spend to meet the needs of local people and employers.

Combined Authorities can achieve more together

West of England is keen to work more closely with other Combined Authorities to ensure a strong collective voice on shared issues and to help make a case to government for further influence over funding and delivery.

Aligning reporting between programmes aids future planning

Initially Future Bright was funded by DWP. The move to Combined Authority funding will see a shift in requirements to align Future Bright Plus with other regional employment and skills programmes. Data and learning captured will aid the evidence base for planning future local interventions.

A strategic relationship with providers is important

The Combined Authority argues that a devolved approach has made it easier to create stronger links and have more strategic conversations about how and what is delivered, based on need. It is important to balance the desire for strategic relationships with providers with the need for a diverse range of provision which meets the ongoing and changing needs of businesses and residents.

Involve residents in discussions about possible programmes

The Combined Authority has focused heavily on collaboration with unitary authorities, providers and businesses. However, it wants to reach out more effectively to its residents to ensure that provision meets their needs and barriers to access are better understood.