3 Skills Strategies|
71. As we set out at the beginning of this Report,
the Government's decisions on priorities and objectives for further
education will be informed by national and regional plans. The
UK Commission for Employment and Skills (UKCES) will advise Government
about the future strategic skills needed at the national level,
with Regional Development Agencies (RDAs), working in partnership
with Local Authority Leader Boards, Sector Skills Councils and
others, producing regional skills strategies.
National Strategic Skills Audit
72. The National Strategic Skills Audit will be prepared
for the Department by the UK Commission for Employment and Skills
and will be delivered on an annual basis. The first National Strategic
Skills Audit, Skills for Jobs: Today and Tomorrow, The National
Strategic Skills Audit for England 2010, was published on
Wednesday 17 March 2010.
In it, the UKCES articulated its hope that the Audit would:
help those working in the skills system, employers
and individuals not only to respond effectively to current needs,
but to be better able to anticipate future requirements, and even
to actively shape them.
73. The annual Audits will take a long-term perspective
on skills needs; provide clear messages about current and future
skills needs in England; identify key drivers of change and important
trends; and consider areas for action and direction for the future.
Michael Davis, the Director of Strategy and Performance at the
UK Commission for Employment and Skills, told us that the Audits
would provide "insight and foresight about emerging skills
needs for the medium term" and that this would be "informed
by the work of Regional Development Agencies, the labour market
and the Sector Skills Councils.
He also confirmed that they would assess "the long-term view
about where we see future skills opportunities for the labour
market and about where there may be mismatches in skills currently".
74. Once published the Department would use the Audits,
along with information on regional skills priorities, to determine
its overall skills investment plan, which would in turn be delivered
by the Skills Funding Agency.
In its memorandum, the Department explained how these Reports
would influence funding strategies:
the skills priorities identified by the UK Commission
for Employment and Skills (UKCES) and set out in the regional
strategies will be agreed by BIS and confirmed in the annual ministerial
Skills Investment Strategy, against which the Skills Funding Agency
will fund colleges and training organisations.
75. Although the UKCES will produce Audits, the Minister
confirmed that the policy decisions would be made by Ministers,
and made clear that there would be no obligation on Ministers
to accept the findings of the Commission.
The Minister assured us that the Audits would be taken into account
but argued that:
Ultimately, when that information comes to Government
then Ministers will need to take decisions on what the priorities
should be. It would be perverse not to take decisions based on
all the information from a system set up to provide one with it,
but as ever there are nuances with any decisions Ministers must
Regional Skills Strategies
76. Regional Skills Strategies will be produced by
Regional Development Agencies (RDAs), working in partnership with
Local Authorities, with Local Authorities having joint sign-off
responsibility for the plans.
Through their co-chairing of the Regional Planning Groups, Local
Authorities and Regional Development Agencies will be expected
to ensure a clear alignment between Local Authority 14-19 provision
and the Skills Funding Agency provision of funding.
77. The South East of England Regional Development
Agency (SEEDA), the RDA which takes the lead on further education,
argued that this new relationship:
provides a significant new opportunity to streamline
strategy setting; ensuring skills are embedded in economic development
more widely and enabling all partners and stakeholders to contribute
through a single process.
78. SEEDA confirmed that in carrying out this role,
RDAs would work with the new Skills Funding Agency to ensure the
deliverability of regional priorities.
However, the LGA was concerned about the involvement of the SFA.
It argued that there was a lack of clarity on the role of the
SFA, in particular:
how the new Skills Funding Agency will operate
below the national level; and
how the Skills Funding Agency will relate to
the role of Regional Development Agencies (RDAs).
SEEDA explained that the Regional Development Agencies
were already working closely with the shadow Skills Funding Agency
on how regional skills priorities could influence the planned
spend of the Skills Funding Agency in 2010-11.
It went on to say that Regional Development Agencies would work
with the UKCES to ensure that the Skills Funding Agency had access
to both sectorally and spatially specific data.
79. Both our witnesses from the UKCES and SEEDA were
clear that close working between the two on the regional plans
and the national strategy would be an important factor in their
success. Pam Alexander, Chief Executive of the South East of England
Development Agency explained that RDA research would "feed
[...] into the work that the UKCES and the Sector Skills Councils
are trying to do, as well as using it to drive our own regional
skills strategies". 
80. Oona Muirhead, also from the South East of England
Development Agency, stressed that there would be a significant
level of information exchange between the UKCES and the RDAs:
I would really want to stress that we are all
intent on using the same data and evidence and sharing it. This
is not about us each producing a strategy based on different evidence
from employers, et cetera. [
] We are pooling all
of this [
] so that we are basing that regional as well as
national and local perspective on the same set of evidence and
Tensions within the skills strategy
81. The skills strategies offer the potential to
provide Government with much needed evidence-based information
on the future skills needs of the UK at both a national and regional
level. However, for that to be realised, wide and relevant consultation
with interested parties, organisations and business will be a
vital component. A number of organisations wrote to us with their
concerns about this engagement.
82. The University and College Union gave a cautious
welcome to the new responsibilities but was concerned that the
system would be "cumbersome and somewhat opaque".
It argued that "a clear communications strategy on the part
of the Government, RDAs, the SFA and Local Authorities will be
essential and an urgent requirement".
In a similar vein, the Association of Colleges questioned "the
viability of such a complicated chain for consultation".
It was also concerned that the relationship between the SFA, RDAs
and Local Authorities would vary from region to region which could
undermine the delivery of further education:
Some regions are more cohesive entities than
others; some are more effective than others. There is a risk that
a greater role for RDAs in an already complicated system could
slow up decision-making and make it more difficult for Colleges
to respond to employer and community demand.
83. Other organisations were concerned about the
level of input from colleges and business. The 157 Group warned
that involvement by colleges was crucial to the success of the
Colleges are central to the regional skills strategies
and to the proposed single integrated strategies. We would encourage
discussion on how FE should be represented at the table.
84. At the same time, the Alliance of Sector Skills
Councils was of the view that "listening to the needs of
employers will be key to achieving the aims of the Skills Funding
The Alliance was unconvinced that the new structure would be able
to engage with business:
There is a real danger that the new system will
be just as complex and baffling as the old one, with too many
organisations with overlapping and unclear roles. There are an
increasing number of employer-facing organisations working in
each region, and this poses significant difficulties for clear
and consistent engagement and communication with industry.
Furthermore, the Alliance highlighted its own expertise
in Labour Market Intelligence (LMI) which it believed was currently
underused by Government. It wanted to see that part of its work
used "as a primary resource to inform future planning and
85. Pam Alexander, Chief Executive of the South East
of England Development Agency, was confident that the new approach
would be to the benefit of employers and business. She asserted
that the RDAs were established to:
represent the business voice and we work with
businesses all the time. They are the key players in determining
what we see as the business needs that will drive economic development.
SEEDA also acknowledged the importance of drawing
on the expertise and knowledge of the FE sector when shaping these
skills strategies and priorities. 
86. The Minister was of the view that it was "absolutely
essential" that business had a strong voice through both
the Regional Development Agencies and the Sector Skills Councils
and that without it "the plans will not be effective".
He also acknowledged that tensions between national and regional
priorities were a possibility but asserted that his role was to
ensure that the system worked. He told us that he had made clear
to the Regional Development Agencies, the Local Government Association
and the Sector Skills Councils that they were expected to work
together and not propose "special pleading for their particular
sectors or the bodies they represent".
Furthermore, he made clear that he was "last resort to resolve
87. The national and regional plans produced by
the UKCES, the RDAs and Local Authorities have the potential to
provide the Department and the SFA with a valuable insight into
the skills needs of the UK at a national, regional and local level.
However, the structures which have been put in place appear complex
and cumbersome. They also appear to be highly concentrated on
public sector organisations. It is vital that the views and needs
of business are represented to the fullest extent, not just through
the Sector Skills Councils, which are also part of the process,
or through their involvement with RDAs, but at local level as
well. If they are not, then the plans will be of little use to
learners, employers or colleges and will not be able to inform
the priorities of the Government and the SFA. The Government needs
to demonstrate that these plans have the full engagement and support
of the business community.
88. The Government must also be prepared to move
quickly to simplify the process underpinning the national and
regional skills plans should the fears of some of the partners
in that process be realised and the increased complexity prevent
effective delivery of a skills strategy in specific local labour
107 UK Commission for Employment and Skills, Skills
for Jobs: Today and Tomorrow, The National Strategic Skills Audit
for England 2010, March 2010 Back
UK Commission for Employment and Skills, Skills for Jobs: Today
and Tomorrow, The National Strategic Skills Audit for England
2010, March 2010, p 4 Back
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