Experiences of employment and skills devolution: West Midlands Combined Authority

The combined authority argues further devolution, whether of careers education or, as in Greater Manchester, of health would allow better join up and tailoring: “I think that is an absolutely critical missing piece of the skills and education devolution at the moment.”


West Midlands Combined Authority has a population of approximately 2.8 million over seven constituent authorities: Birmingham City Council, City of Wolverhampton Council, Coventry City Council, Dudley Metropolitan Borough Council, Sandwell Metropolitan Borough Council, Solihull Metropolitan Borough Council and Walsall Council. The Combined Authority covers three Local Enterprise Partnership (LEP) areas.

It has the UK’s youngest population, and the most diverse outside of London. There are high wealth areas such as Solihull and areas of of investment and growth such as Birmingham and Coventry, but other towns have been ‘left behind’, incluing the Black Country which has areas of high deprivation. Within the Combined Authority the BAME population is more likely to be unemployed and have lower qualifications.

The West Midlands boasts the largest UK regional economy outside of London, worth £99 billion per year. The automotive industry, with its big manufacturing supply chain dominates. The Black Country is home to SMEs, micro-businesses, and older manufacturing. Birmingham hosts lots of business and professional services, as well as a growing digital and creative sector. The region has seen the highest level of foreign direct investment into a region outside of London. Other events such as the Commonwealth Games in 2021, and the development of HS2, have led to an increase in construction as well as investment in transport infrastructure.

Prior to the coronavirus crisis, the West Midlands had the lowest employment rate of any combined authority at 71.7 per cent, but it is increasing faster than the UK average. The West Midlands is home to 21 further education colleges as well as universities including Birmingham, Warwick, Aston and Wolverhampton. The proportion of the working age population with no qualifications however is 11%, higher than the UK rate of 8%. Just under a third (32%) of the working age population are qualified to level 4 or above, lower than the national average. These gaps have been closing over recent years, but there is still progress to be made, in part due to pockets of deprivation.

This case study focuses on the experience of devolution with particular reference to the role of place and looks at the specific policies of the Construction Gateway and the Apprenticeship Levy Transfer.


Approaches

Elected in May 2017, the Mayor made ‘jobs for local people’ a key objective of his incumbency. The Combined Authority’s size and scale means that the Mayor’s office has the ability to have meaningful conversations and be accessible to businesses and providers. It is argued that the mayor’s democratic mandate adds a level of accountability and connection.

Central to the Combined Authority approach has been the alignment of the delivery of budgets, including £126 million Adult Education Budget (AEB), a £5 million Construction Gateway, a £5 million Digital Retraining Programme and a £5 million employment support pilot. An example of this alignment has been linking transport and skills remits, facilitating the planning of transport routes around the transit of people to employment.

The Combined Authority contract with all 21 FE colleges and 28 other private and voluntary sector providers through the AEB. This includes predominantly local providers and some with national reach. The AEB is seen as key to driving change through devolution in developing a skills ecosystem.

The Combined Authority identified sectors with skills needs and aimed to take a collaborative approach to brokering relationships between employers, universities, training providers and colleges, to discuss and shape provision. “I think it comes down to [being] small enough to get people in the room…but what we are [also] able to do is use those funds and use the levers we’ve got to meet the challenges.”


Policy changes

Construction Gateway

The Construction Gateway is a £5 million fund allocated to the Combined Authority from the National Retraining Scheme. Since delivery started 18 months ago, 1400 people have gone through the Gateway, with 700 moving into employment after completing the course.

As part of the devolution deal, funding was allocated to create a ‘Mayor’s army’ of construction workers to support the relatively strong construction industry. The Combined Authority pushed for the monies to be given as a Section 31 grant so it would have more freedom about how it was spent.

The Construction Gateway was designed collaboratively with employers and the Combined Authority worked with the CITB to analyse the skills needs of the area. This involved drilling down into identifying the key occupations that residents would be able to fill, an example of which is grounds work required in big builds. Every college or training provider involved delivers a consistent programme, so construction employers in the West Midlands taking on someone from the Construction Gateway who has been trained in grounds work knows exactly what training programme they have experienced.

This required a different way of working. The Construction Gateway was the first joint project the FE colleges did as ‘Colleges West Midlands’. Each college developed one of the six curriculum strands and shared it with the others; they agree the delivery and apportioning of aggregate targets between them. Other partners are involved, including four independent training providers, the National Careers Service and Jobcentre Plus. On-site training centres (construction hubs) at projects such as the Athletes Village for the Commonwealth Games, HS2, Midland Metropolitan Hospital in Sandwell and residential developments on Broad Street in Birmingham have been created.

Employers are engaged through a Construction Taskforce, chaired by a member of the senior team from Balfour Beatty, driven by the Mayor and including many of the region’s large construction companies. The Combined Authority and its constituant local authorities also use ensure local people have access to jobs created through public procurement.

Apprenticeship Levy Transfer

The idea of a Apprenticeship Levy Transfer came from feedback from large employers with unspent funds. The ambition is to have £40 million of unspent Levy committed back into the West Midlands and so far £6.9 million has been transferred to 269 employers in the region during its first 12 months.

The initial Combined Authority suggestion was that employers transfer their levy to other companies, given that national policy already allows this. However, construction companies were concerned that if they transferred their levy to the supplier chain it would make creating fair future tendering for sub-contractors difficult. Large companies also did not want to ‘pick’ some employers over others.

Instead, unspent levy is invested, through the Mayor, into a regional fund for apprenticeships. The Confederation of British Industry (CBI) were very supportive of the idea and helped bring in employers. This fund created an opportunity for SMEs to take on apprentices without having any training costs, though the process revealed they needed extra support to take on an apprentice. Many were positive about the idea of an apprentice but valued impartial advice to talk them through the process.

The Levy Transfer Fund raised the profile of apprenticeships across the region, and provided the West Midlands with the ability to shape the mix and balance of apprenticeship provision. It has also allowed the Combined Authority to attract new apprenticeship providers into the area. For example, there were very few digital apprenticeships in the West Midlands (only 900 across the Combined Authority), despite an increase in tech businesses. The Combined Authority recently ran an event encouraging new providers to come to the West Midlands and make use of the Levy Transfer Fund.


Lessons learned

Controlling a budget creates bigger opportunities

Being the funder, whether with AEB or other programmes, has ‘opened doors’ for the Combined Authority to wider conversations. This has been possible as a result of the ‘deeper relationships’ that have been created with employers, colleges, providers and universities, and has enabled discussions in other areas where the Combined Authority do not have oversight of the budget. Without devolution, the Combined Authority note “you can have really good conversations, but you can’t really influence and shape.”

Sense of civic leadership and regional pride

The Mayor has been important in highlighting the value of skills in the region. The Combined Authority feel that this has created a culture of accountability which is more than just a contract or set of performance measures. These are important, but the Mayor can provide a focus for vision and leadership: “with the people that lead seeing their role in civic leadership alongside the Mayor, I think that gives us a real opportunity to build leadership of a place…there’s a chance for all our skills providers and employment providers to be part of shaping the place in which they live.”

Partial responsibility can be challenging

The Combined Authority argues further devolution, whether of careers education or, as in Greater Manchester, of health would allow better join up and tailoring: “I think that is an absolutely critical missing piece of the skills and education devolution at the moment.”

Building trust with the provider base is essential

The Combined Authority argued that AEB devolution had helped build relationships with providers, allowing them to call on providers to deliver in an emergency: “Last week, I spent most of the week on the phone to providers saying ‘can you go to the new Nightingale hospital? Can you train people in cleaning, manual handling and portering skills? And, by the way, I need you to be there tomorrow.’” Strong providers, partnership approaches, and understanding of local need are essential to making this happen.

Utilising expertise

Devolution has supported the expertise in the Combined Authority, including that of college principals, Vice Chancellors in universities and the owners of training providers to develop local solutions. These local leaders have wanted to have more input into skills policy, and devolution has given them a platform to do so.

Economic conditions can impact delivery

The Construction Gateway is currently being challenged by the coronavirus crisis: “nobody’s taking anybody on in a construction site and everything’s being shut down [so] it really limits the success of your project.”

Vital to get engage employers early

“The biggest lesson learned is the work that we did up front in terms of getting buy-in”. The involvement of employers and the Construction Industry Training Board and SECA was vital to the success of the Construction Gateway. The Combined Authority invested a lot of time initially engaging with local stakeholders and employers, and credit this work as critical to later success in implementation.

‘Hide the wiring’

Setting up the Levy Transfer Fund required the Combined Authority to ‘hide the wiring’ from employers. Contributors transferring their levy funds did not want recipients to know who the levy had come from and did not want to be held accountable if apprenticeships delivered with their levy received low marks from Ofsted. There was a lot of process involved in making the scheme run smoothly.