Written evidence from Semta
SUMMARY
— We prefer a sector-led approach to skills
over the expansion of regional influence, which the previous administration
was implementing. — We have serious concerns that the proposed
LEP structure will compound complexity for companies, particularly
those with a geographical spread to their premises. It will also
increase administration costs. — It will be important that
key sectors in a locality are able to influence their LEP, and
that this "sector voice" is coherent across wider areas.
— The LEPs may play a useful role in tailoring
the "message" of skills benefits to appeal to local
employers.
— We hope that successful elements of regional
working, such a Labour Market Information provision, will be maintained.
Sector or region?
We welcome the support for a sector-led approach
which appears to be gaining favour with the government. Sectoral
approaches to policy such as representation, business support,
etc are credible with employers, who prefer to associate themselves
with others in their industry more than by region. Employers also
respond more positively to guidance which comes from organisations
and individuals with sector knowledge. We hope that the reduction
in regional bodies and policy-making will strengthen sectoral
energy and influence.
Simplification or complexity?
The replacement of RDAs with LEPs is potentially
a multiplier of complexity in terms of skills policy. We know
that "sector leadership" and business support will not
form part of the LEP remit, but there is a real danger that they
will have influence in how these policies are applied in a local
area. Employers had enough difficulty understanding the different
RDA skills funding and priority flexibilities (and the original
LSC local structure was turned into a regional one because of
the complexity of applying different rules at local level). Perhaps
one solution would be to have a "lead" LEP in each region,
which could also provide central administration for all the LEPs.
Otherwise, there will potentially be a multiplication of admin-type
activity, at high cost but little added value. It is a shame that
the Government Offices for the regions are also being removed,
as they could have provided "shared services" to support
the LEPs.
We are also concerned that the voice of small
employers may not be strong, as large employers in a locality
have an bigger influence. The SME sector in engineering is particularly
important, and Semta would like to see serious consideration given
to the process by which SME views can contribute to any LEP activity.
While the criticism of Regional Development
Agencies regarding their competitive nature in some arenas (eg
inward investment and overseas marketing) was valid, we are now
concerned that dozens of LEPs may enter into similarly damaging
competitive practices, especially given the dwindling pot of public
resource for which they will have to bid. Large companies which
operate across multiple LEPs will need to influence each one in
order to ensure a coherent approach.
Enabling existing organisations support a local
approach
Semta has strengthened its regional support
structure, and worked with public funding to provide face-to-face
support for companies. Thanks to this, we are effective at regional
and local level, but other SSCs are not so well placed. Last year,
this Select Committee's predecessor recommended that the UK Commission
for Employment and Skills examine the regional capacities of individual
SSCs as part of the re-licensing process. While SSCs are not core-funded
to engage at regional or local level, Semta has managed it by
using additional funding through Sector Compact, which comes from
Train to Gain funding.
Making the sector voice heard
The basis for LEP creation—Local Authorities
and businesses/business groups—leaves the needs of the sector
distinctly on the periphery. It will be important that those involved
are able to consider the wider implications of any action, and
look beyond their immediate local needs. Mobility of individuals
will inevitably play a part in economic growth, and all of Semta's
sectors operate in local, regional, national, UK-wide, European
and global markets.
True additionality
Where LEPs might be able to contribute something
new is through local campaigns to raise employer demand, where
barriers relate to local issues. These would still need a sectoral
"flavour" to really resonate, and sector-specific support
to follow up.
Building on regional success
An area where Semta has felt particular frustration
is in the collection and collation of Labour Market Information
(LMI) at a local level. We are well aware that individuals and
agencies involved in careers guidance would very much value local
"granularity" in our LMI, as people are not necessarily
able to move or travel significant distances to take advantage
of skills shortages. However, the cost of providing this is prohibitive,
and more specific datasets are not available under the current
rules for data collection and presentation that Sector Skills
Councils currently have to work to. We have worked successfully
at a regional level in many cases, and would be sorry to lose
the regional observatory work on LMI, without consideration of
the additional costs of "localising" LMI.
13 August 2010
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