Skills Devolution and Post-16 Area Reviews

  • By Souraya Ali

As London government negotiates a skills devolution deal with central government, the Mayor and the boroughs are preparing to play a leading role in a series of area reviews of post-16 education and training across London. Part of a national programme of reviews designed to deliver a rationalised and more responsive Further Education sector, London’s area reviews are an opportunity to secure a more resilient and sustainable base of providers to deliver the skills outcomes that London needs.

Overview

The government has announced a series of area reviews of post-16 education and training provision to deliver a rationalised Further Education (FE) sector, comprised of fewer, more financially sustainable institutions that are more responsive to local economic need, and that deliver high quality professional and technical routes to employment. Reviews will focus primarily on general FE and sixth form colleges, but other post-16 skills providers will be able to opt in.  Reviews will take place in waves across the whole country and are due to be completed by March 2017. 

A national framework has been set out to ensure a level of consistency across the reviews, but the government has proposed a differentiated approach to local involvement. This will enable areas with strong governance and levers to take a leading role.  London has been identified as one such area following the announcement in the March 2015 budget that the government would devolve further powers over skills to the Mayor of London.

London government (the Mayor and the boroughs) made a case for the devolution of further powers and funding streams for adult skills as part of the London Proposition on devolution and public service reform submitted to the Treasury ahead of the Comprehensive Spending Review.In that proposition, London government committed to working with central government on area reviews to deliver a streamlined, resilient and responsive skills system, but emphasised that this would need to be part of a broader process of reform and devolution of the skills system.

The skills devolution proposals centre on the need to transform London’s skills system to be more responsive to labour market need. The aim is to boost economic growth and employment, and reduce welfare dependency, by focusing investment in provision that will increase productivity and progression into and within work. The proposals are designed to achieve an outcomes-focussed, labour market-led system, with shared responsibility between employers, individuals and government, greater integration and alignment with local services (particularly employment support services) and greater local accountability. There has not yet been a formal response from central government to London’s devolution proposition, but given their potential impact, London government is proposing to take a leading role in area reviews. 

Area reviews: the national picture 

The government’s programme of area reviews is motivated by both policy and financial imperatives: 

  • From a policy perspective, the government has announced two major planks of reform in the post-16 sector to address the challenge of stagnant productivity. Those are: 
    • To develop clear, high quality professional and technical routes to employment, alongside robust academic routes, which allow individuals to progress to high-level skills valued by employers
    • To ensure better responsiveness to local employer needs and economic priorities, for instance through local commissioning of adult provision.
  • From a financial perspective, the government has identified an increasing number of colleges in financial difficulties, due to a combination of factors including declining funding for adult skills provision. The Adult Skills Budget has come under significant pressure in recent years, with a reduction in funding for non-apprenticeship learning of 24 per cent announced in February this year, followed by another 4 per cent reduction announced in July.  In addition, all funding for mandated provision of English for speakers of other languages (ESOL) will be withdrawn for the 2015/16 funding year[1].  With further cuts expected through the Comprehensive Spending Review, the financial difficulties that providers face are only likely to increase without a programme of serious reform.

The government proposes to use the area review process to address these issues by identifying opportunities to rationalise and streamline provision, reducing duplication and increasing specialisation. Usually led by the FE Commissioner, reviews across the country will seek to achieve this through:  

  • Analysis of local economic need to identify broadly what post-16 provision is required. 
  • Analysis of current provision and delivery arrangements across all post-16 provision in the area to build a picture of whether this need is being met.
  • Curriculum analysis of the institutions in scope (primarily general and sixth form colleges) to reduce duplication and improve delivery including through specialisation.
  • Analysis of estates and back office services to identify opportunities for rationalisation and more efficient service delivery.
  • Recommendations for future delivery arrangements. 

The process is likely to recommend college mergers, federations and alternative structures, and result in fewer, larger, more specialised colleges. Due to their status as independent bodies, it will be up to the governing bodies of each individual institution to decide whether to accept the recommendations of the review. Government has, however, made it clear that following the reviews, they would expect funding agencies to only fund institutions ‘taking action to ensure they can provide a good quality offer to learners and employers, which is financially sustainable for the long term’[2]. 

Area Reviews: the London approach 

Area reviews will provide an opportunity for London to secure a more stable, efficient and resilient provider base with which to work under a devolved skills system. Mindful of the prospect of skills devolution to London and of the unique challenges posed by the city’s sheer scale and complexity, London government has been developing proposals for a different approach to area reviews in the capital. Consultation and negotiation on these proposals is still ongoing, but it is proposed that:

  • London will have a series of area reviews conducted on a sub-regional basis. The starting point for these will be the geographies of existing sub-regional partnerships or groupings of boroughs. Where boroughs are not currently members of a sub-regional partnership, discussions are underway to agree their inclusion in borough groupings for the purposes of the area review process. 
  • The sub-regional area reviews will be led and overseen by a pan-London steering group, chaired by the Mayor and deputy chaired by a nominated borough leader. This will have representation from central government, the LEP, local government and the post-16 sec­tor. The pan-London steering group will ensure a strategic view across the city, and con­sider the recommendations and findings of each review within this broader context. Each area review will also have its own sub-regional steering group with representation from central and local government as well as the post-16 sector and employers. These sub-re­gional steering groups will report into the London-wide steering group. 
  • The reviews will begin early in 2016. They will be conducted relatively close together to enable recommendations to be considered collectively against the pan-London context. They will, however, need to be staggered to take account of the resourcing available from central government, the Mayoral election and college term times.  

Commentary

The proposed approach of sub-regional reviews in London overseen by a London steering group should provide the balance between the need for local input and accountability, and the need for a strategic pan-London view. While existing sub-regional partnerships and groupings of boroughs will form the starting point for the geographical basis for the reviews, these will need to be flexible to take into account cross-border issues such as travel to learn patterns and existing and emerging working arrangements between different colleges.  

Although a key driver of area reviews is the need to rationalise post-16 provision, demand for post-16 education and training in London is expected to increase in the coming years due to the city’s changing demographic. It will be therefore be important to make the case for sufficient provision, and funding, to meet this need through the review process. 

While the focus of area reviews will be on general FE and sixth form colleges, London will want to consider the wider post-16 landscape, taking into account the offer of school sixth forms, studio schools, University Technical Colleges, and independent training providers, as well as adult and community learning providers. This wider provision will be taken into account in the analysis for the reviews, but will not be covered by the reviews’ recommendations unless the individual institutions choose to opt in to the reviews, which they are being encouraged to do. Local authorities with their own adult and community learning services will want to consider whether these services should be full participants in the reviews. 

While there are risks inherent in any rationalisation process, London government’s involvement in area reviews will be an important opportunity to secure a more resilient and financially sustainable base of providers to deliver the skills outcomes that Londoners and London’s businesses need. This will require a strong evidence base but also political leadership at both city-wide and local levels. London Councils will therefore continue working closely with the GLA to ensure that London government has a strong voice in the process, and to lobby for further reforms as part of our devolution negotiations with central government, so that we can bring about real change in the skills system. 

1. This will have a significant impact on London which accounts for 50 per cent of ESOL provision delivered across the country. 

2.  HM Government, ‘Reviewing post-16 education and training institutions, guidance on area reviews’, July 2015. 

Souraya Ali, Principal Project and Policy Officer