On 24 November, the Mayor published his draft skills and adult education strategy for London. The strategy is in anticipation of devolution of the Adult Education Budget (AEB) to the Mayor from 2019 but also considers skills challenges and actions across the whole skills system. This briefing sets out the main elements of the strategy and the implications for London boroughs.
London Councils, working with boroughs through sub-regional partnerships, has been working closely with the Mayor and the GLA to prepare for the devolution of the Adult Education Budget (AEB) from 2019/20. The AEB is estimated to be around £400 million per year in London. Transforming the skills system will require close working between boroughs and the Mayor – bringing together pan-London and local knowledge, expertise and relationships, as well as political leadership at these levels. The majority of boroughs are also providers of adult community learning (ACL) provision, funded via the AEB.
The Mayor’s draft skills strategy is an important step in preparing for the devolution of the AEB – it will provide a strategic framework for this but also set out ambitions for other parts of the skills system such as 16-18 technical education, apprenticeships and careers services. The draft strategy is out for consultation until 2 January 2018.
The strategy sets out the skills challenges for Londoners, business and the skills system. For Londoners these include:
- Disparities in unemployment rates and pay for particular groups in London. Young people, disabled people, BAME groups and women have high unemployment levels in the capital and gender, race and disability pay gaps are persistent.
- In addition, employment rates and incomes vary between and within London boroughs, so there is a need for the strategy to respond to local needs and circumstances.
- High levels of in-work poverty, with one in five workers in London paid below the London Living Wage. High childcare costs also limit participation in the labour market.
- Too many Londoners with no or low skills, particularly in literacy, English language, numeracy and digital.This means that too many Londoners are not progressing in or into work.
For employers, the challenges are set out as:
- Changing future skills requirements, due to both technological changes such as automation, but also due to the potential impact of Brexit, which may significantly reduce access to skilled workers.
- A significant requirement for higher level skills that is currently not being met by the skills system, which focuses on equally needed lower level skills.
- A low and declining level of investment in the skills system by employers.
These challenges cumulate in a skills system where there is a misalignment in supply and demand for skills across London. London needs an agile skills system that can:
- Respond to London’s economy and employers and meet the challenges ahead;
- Provide clear progression routes for Londoners choosing technical education, informed by a good careers information, advice and guidance, to provide higher level skills and give Londoners social mobility opportunities.
For many years, the delivery of skills has been left to market forces, but the strategy suggests that this alone cannot deliver inclusive growth or meet the needs of employers.
Priorities and objectives
The Mayor’s vision for skills is ‘A city for all Londoners – making sure Londoners, employers and business get the skills they need to succeed in a fair, inclusive and thriving economy.’ The strategy identifies three priorities and sets out objectives and proposed actions to achieve them.
Priority 1: Empower all Londoners to access the education and skills to participate in society and progress in education and work
- Reduce barriers to participation in lifelong learning and progression in work, through the creation of an all-age careers offer. The Mayor will build on ‘London Ambitions’ to develop an all-age coherent career offer in the capital, expanding the London Enterprise Adviser Network and working with the National Careers Service to ensure adult careers advice is locally responsive. He will also improve London’s STEM offer.
- Increase targeted support to the most vulnerable groups, so they are better equipped to access education and work. This includes maximising the use of the current European Social Fund (ESF) by using it alongside the devolved AEB; lobbying with London boroughs for a devolved UK Shared Prosperity Fund (replacing European funds) in London; working with borough sub-regional partnerships to explore how devolved skills funding could be better aligned with the devolved Work and Health programme and undertaking a strategic, pan-London review of special educational need and disability (SEND) provision.
- Increase the number and diversity of adult learners in London gaining the skills they need to progress into further/higher level learning, work or an apprenticeship. Actions include working with London boroughs to identify priorities and outcomes for adult community learning to ensure it is meeting the needs of the most disadvantaged groups; driving up participation and progression in English and maths provision, identify new and more diverse sources of investment in ESOL, investing in Early Years Hubs and better understanding progression pathways of young people post 16.
Priority 2: Meet the needs of London’s economy and employers now and in the future
Objectives and actions include:
- Promote productivity by supporting employers to develop and make best use of the skills of their current and future workforce. This focuses on the apprenticeship levy - calling for devolution of the levy to London government as a broader skills levy and more flexibility in the way the current levy operates, as well as working with business to maximise the use of the levy in the capital. It also focuses on the Mayor’s Good Work Standard, encouraging businesses to invest more in skills training and adopt inclusive employment practices.
- Working with employers to ensure the devolved AEB and wider technical and vocational education system delivers for the London economy. The Mayor will improve the availability of information on current and future occupational skills needs at both a London and sub- regional level and take a sector-based approach, including setting up a London sector-skills board.
- Increase employer engagement to improve the relevance and quality of London’s key sectors and occupations - by working with different sectors, specifically via a Digital Talent Programme, a construction academy scheme and skills plans across the creative industries.
Priority 3: Delivery a strategic city-wide technical skills and adult education offer
This section sets out how the Mayor intends to change the skills system, working closely with boroughs through London Councils and sub-regional partnerships.
- Help improve access to information to support learners and employers to make informed decisions and to enable a more strategic approach to commissioning skills provision. The Mayor will work with sub-regional partnerships to create an on-line London Skills and Employment Hub that will publish skills data at a London and sub-regional level to better inform employers, providers and learners. This joint work with boroughs will continue to create a more strategic and collaborative skills system, considering London’s specialisms, working again with employers and providers.
- Improve progression pathways into intermediate and higher-level skills. The Mayor will raise awareness of the benefits of regular re-skilling and up-skilling among Londoners, promote access to financial support for this, such as Advanced Learner Loans and promote and support the establishment of Institutes of Technology in London, encouraging proposals focused on technology and digital skills, life sciences, construction and STEM provision.
- Raise the quality of facilities, teaching and leadership in London’s further education sector and ensure its sustainability – by continuing to make capital investments in FE, promote Continuing Professional Development (CPD) for further education leaders and governing bodies and promoting workforce development.
The strategy finishes with a commitment to lobby for further devolution of funding and powers around skills (given that AEB is only a small part of the skills system in the capital), including 16-18 technical provision, careers services, the apprenticeship levy and the UK Shared Prosperity Fund.
The draft skills strategy makes some important commitments to working with London boroughs via London Councils and sub-regional partnerships and acknowledges that a devolved skills system needs to be responsive to London’s diverse local communities in its analysis of London’s skills challenges. The strategy acknowledges that changes in the skills system should be a joint endeavour between regional and local government, stating that ‘Given the scale of London and the diversity of skills challenges and opportunities across London, City Hall will work closely with boroughs and sub-regional partnerships to engage a broad range of employers to inform provision. Such local leadership will help develop the necessary partnerships to achieve the identified changes needed in the skills system.’ (pg 49). This is welcome and will be developed further through the proposed joint governance arrangements between boroughs and the Mayor around the devolved AEB. The final skills strategy should draw out the distinctions between areas within London further. It should include more information on the skills challenges and opportunities between different sub-regions of London and their skills priorities. These sub- regional priorities should then be reflected in the annual skills and funding statement. London Councils and sub-regional partnerships will work with the GLA to achieve this.
The strategy indicates that the GLA will change the approach to allocating funding within the AEB, moving towards outcome based commissioning. This shift from outputs (qualifications) to outcomes is welcome. It provides challenges for skills providers, including boroughs as ACL providers, where outcomes tend to focus on improving social integration and cohesion, well-being and health. London Councils is working with boroughs to consider how to set clear priorities for ACL funding and measure its outcomes effectively.
Given that London will have devolved skills and employment provision by 2019, the final strategy should expand more on how these two types of provision can be better aligned and work together for Londoners. One of the key benefits of devolution is the opportunity to align local services to support individuals in a way that cannot be achieved by national government, with different departmental responsibilities for skills and employment.
The focus on particular sectors of London’s economy is understandable given its size and it is right that the Mayor focuses on new and growing sectors such as digital and tech, life sciences and creative industries. However, it will be important to consider other sectors such as retail and health and social care, which employ large numbers of Londoners and will potentially be significantly affected by Brexit and automation in the future.
The draft strategy is a mixture of existing or proposed initiatives and projects, alongside ambitions for more systematic change. The final skills strategy should make a clear distinction between the two and set a clear timetable and process for making the systematic changes that the Mayor has stated that he wants to see in the skills system in the capital.
The skills challenge is significant in London but AEB devolution will be an opportunity to make changes to the system to try and build provision that is more agile and responsive to London’s community and employer needs. London boroughs will be vital partners in achieving this change and the strategy acknowledges this. However, this will require an ambitious and clear agenda to be set out in the final strategy and for London government to continue to push for more skills devolution, given that the AEB is only a small part of the overall skills system.
London Councils will be responding to the draft skills and adult education strategy. We would encourage London boroughs to respond as well. The deadline for response is 2 January 2018.