Reforming London’s Skills Systems: Lessons from around the World

  • By Jamie Saddler

As the London Area Review process comes to a conclusion, attention is  now turning to what “phase two” of  the  reform  of  London’s  skills  system  should look like. Negotiations with government have resumed over  a  skills devolution deal and discussions are also underway on how to implement the Area Review recommendations and design the structures needed to deliver a reformed system. This briefing provides an overview of analysis carried out by the Learning and Work Institute for London Councils on three international models of skills delivery that London can learn from and could replicate as part of this process.

Overview

In July 2016, the Learning and Work Institute (LWI) was commissioned by London Councils to conduct research and analysis to help support and develop local government’s input into the London Area Review process. This work focused on what a future delivery model for London might look like and included analysis of three different international models that London could learn from or replicate.

Case studies were chosen that provided learning in three key areas – delivery and structure, outcomes and impact and engaging employers. The models chosen are:

  • New York City Career Pathways (Delivery and Structure)
  • Workforce Training Results, Washington (Outcomes and Impact)
  • Netherlands Vocational Education and Training (Engaging Employers)

The report looks at evidence of impact and for specific lessons in relation to the tools and actions available to London Councils.

New York City Career Pathways

In 2014 New York’s Mayor, Bill de Blasio, found that the city’s skills system was struggling to address a series of challenges. Workers (particularly those with low or no qualifications) were struggling with stagnating wages and adverse work conditions, while employers were complaining about a shortage of skilled labour. This has a number of parallels with the current situation in London.

The Mayor led a drive to work with employers to integrate services and programmes along pathways in key sectors. This included setting up a taskforce to review the challenges and propose pragmatic, implementable solutions.

The taskforce found that the system was too focused on job placement and lacked a strategic focus on high-value sectors. The existing ‘workforce system’ was complex and confusing – with at least 15 distinct brands – and aggregating performance data across programmes was virtually impossible. Systemic change was required.

The Mayor’s Office for Workforce Development was created to coordinate the city’s workforce initiatives and a “Jobs for New Yorkers” Task Force was convened to determine the objectives for the system. The Mayor also wrote to New York households (“Dear New Yorker…”) to communicate this plan and set it in the context of helping people get on and helping New York maintain its growth prospects.

Two of the key approaches for delivery in this system are Industry Partnerships and Career Pathways. Industry partnerships consist of industry experts in six key sectors (accounting for half of all jobs in New York City), and addresses local gaps between labour supply and employer demand with a focus on the skills, qualifications, training and credentials employers need. Career Pathways is a framework designed to align education and training with specific progression opportunities (see Figure 1). It requires agencies to work together more effectively and move from a focus on job placement to career progression. This approach has seen higher investment in training programmes for people in low-paid work, with training costs for businesses covered if they pledge to raise wages for participating workers.

Figure 1: Moving through the Career Pathways Framework

The introduction of career pathways has also seen the introduction of system-wide outcome data, focusing on rewarding job quality not just quantity. The new system has led to improvements in particular sectors, such as the healthcare sector, which has moved from failing to anticipate staffing needs and struggling to engage with training providers to creating new entry points and progression opportunities as well as integrating healthcare skills training with basic education to expand its services to low-skilled New Yorkers.

The new approach provides clearer pathways, designed for employers, which have helped to encourage philanthropic investment and also deliver higher earnings for participants.

What can London learn from this model?

New York’s Career Pathways model offers a clear vision with a breadth of emphasis and a clear local focus. It has attracted philanthropic investment – something for London to consider given the expected cut in the soon-to-be-devolved Adult Education Budget. Participants are also shown to have higher earnings, though the central lesson is around building clear pathways for people. At present in London, pathways are unclear in many areas, particularly for progression both in work and into work. Many pathways simply don’t exist so many people get stuck in low paid work. The New York model offers a blueprint for changing this and creating pathways into work and careers that are developed and endorsed by employers. This starts to build the system from the point of view of the individual and better helps to identify gaps. This has many similarities with the approach the government are adopting with the new Post-16 Skills Plan.

London has an opportunity to pioneer this approach in the UK. The London Challenge showed, for schools, that a big difference could be made when partnerships were formed between institutions and best practice shared. Developing a variation on this model that works for London could do likewise in the FE sector.

Washington: Workforce Training Results

The Workforce Training Results programme in Washington is one of four state programmes identified by the National Skills Coalition (NSC) as exemplars of data-driven Workforce Investment Boards.

Created in 1991, the Workforce Board established standards for evaluating the performance of nearly 20 workforce development programmes and developed a Dashboard for reporting key performance outcomes, including data on the employment and earnings of learners in particular programmes and institutions, compared to a control group of similar people.

The Dashboard is publicly available and used by individuals and employers to inform their decisions of where to learn. For example, particular institutions will have delivered better results for some sectors or types of people than others.

Dashboard information has been presented at State legislative sessions and the data has informed legislative decisions to expand successful programs and rethink service delivery in areas with weaker results.

Washington also uses supply and demand reports to help plan skills training investment. One report revealed an extreme shortage of registered nurses. In response, the number of programmes to train and certify more registered nurses was increased. After seven years of this targeted investment, there were enough new registered nurses to fill new job openings.

What can London learn from this model?

Qualifications drive the UK skills system, with macro-level evaluation of the impact they have on learners’ employment and earnings, but little institution-level data to guide investment or commissioning decisions. There is also relatively little data on the impact of community learning.

The Washington dashboard model, by contrast, has a clear focus on outcome data. Such data now exists in some form in England, by linking HMRC data on employment and earnings with Individual Learner Record data. However, it is currently not being used as an active marketing tool for individuals and employers or to inform commissioners’ decisions.

The Washington model shows the difference having this data can have in managing programmes and institutions. When it showed that apprenticeships were successful in boosting people’s pay and job prospects, that programme was expanded. When it showed that basic skills provision was not having this impact, a special focus was put on developing a new way to deliver this.

In developing a new skills system in London, decisions on delivery structures will need to be based on evidence of performance against agreed outcome measures. The Washington model shows this can help maximise the impact of public investment and flag up problems. There is also a clear focus on the financial benefits for individuals, which makes the value of studying clear. In a London context, this approach could help to increase the historically low take-up of Advanced Learner Loans.

Netherlands: Employers Vocational Education and Training

In the Netherlands there is a coordinated approach to vocational education. School-based and work-based vocational learning sit under the same framework and the interests and needs of employers are central to the system. This promotes progression, makes the transition between the two strands simpler and means that colleges and employers work together more effectively at the local level.

The college system is very closely allied with employers, and students spend a significant proportion of their course in a working environment.

Post-16 vocational training mostly takes place within 42 state-funded super colleges – Regional Education and Training Centres (ROCs) – with up to 35,000 learners, and more than 350 vocational courses offered. Before the creation of ROCs, the Netherlands, like the UK, had many smaller colleges, which from 1996 were gradually merged.

Central to the effective engagement of employers in the Netherlands is the key role they have in identifying skills gaps and supporting the commissioning of provision. This is delivered through 17 Knowledge Centres that gain employer input and drive the content of courses. A quarter of employers are accredited to deliver training and get a tax rebate from Knowledge Centres when they do. A number of sectors also have voluntary levies, independent of government.

Despite a recent rise, the Netherlands still has a comparatively low youth unemployment rate. It is perceived that part of the reason for this is the strong emphasis on vocational pathways and preparation for the labour market, as well as high levels of voluntary part-time jobs supported by social-partner agreements and employee protection.

What can London learn from this model?

The Netherlands model has a number of similarities to our own, with provision consolidated into a smaller number of larger providers in a similar way to the current Area Review process in England. Frameworks for both school and work-based vocational education and training are identical in the Netherlands to ensure that employers drive content, there are clear progression pathways and it is easy to move between the two. The government’s post-16 skills plan appears to be moving England towards a similar model.

The involvement of employers in this model is systemic and supported by intermediary bodies. There is a balance between employer involvement (which requires time investment), the risk that intermediaries become “part of the system” and gaining real “bite” on the system through design of qualifications and courses.

One in four employers in the Netherlands is accredited to provide training, and again, England may move towards this outcome as the Apprenticeship Levy is rolled out next year. The Dutch model also provides a rebate to employers that ensures staff have access to skills support. As business rates control is devolved, London government could consider ways this tax could be used to incentivise employers to invest in training.

Commentary

London Councils is grateful to LWI for carrying out this research on our behalf. We will continue to use this research to inform our discussions with sub-regional partnerships, the Mayor of London and central government regarding skills devolution and redesigning our skills delivery system in the capital. In particular this research will be used to inform our input into the London Skills Strategy and the sub-regional strategies that will feed into the city-wide document.

Members interested in the topic may like to know that one of the breakout sessions at the upcoming London Councils summit (Saturday 26 Novemner) will focus on the skills challenges for London. The session, called ‘Skills - No Londoner left behind’ will explore how boroughs can improve the life chances of all Londoners by creating a skills system that works. Speakers, including LB Lambeth leader Cllr Peter John; London Councils corporate director Dick Sorabji; Association of Colleges President Ian Ashman and Staurt Fraser of Stuart Fraser Consultancy, will discuss the challenges and opportunities presented by devolution and how boroughs can work with local colleges and businesses to best match skills with industry needs.

You can register for the skills breakout and read more about the rest of the programme here.

Links:

Full LWI Report on International Comparisons of Skills Delivery Models

Member Briefing – Sainsbury Review and Post-16 Skills Plan

Member Briefing – Skills Devolution and Post-16 Area Reviews

 

 

 

Jamie Saddler, Policy and Projects Officer