Trailblazer Deals – a breakthrough in devolved skills policy?

Andy Westwood

Andy Westwood is Professor of Government Practice and Vice Dean for Social Responsibility at The University of Manchester. He is also the lead on The Productivity Institute’s Institutions & Governance theme.

In a recent interview with the Centre for Cities, Andy Burnham described new powers over skills announced by Jeremy Hunt in the recent Budget as ‘the big breakthrough of this trailblazer deal’ and ‘the single biggest piece of the Greater Manchester jigsaw’. Arguably the two main priorities Burnham has had as Greater Manchester’s first Metro Mayor, have been to manage and run a city region wide transport system (including control of local trains and buses) and also to build what he describes as England’s first ‘integrated technical education system’. The ambition to control more of the skills system has been shared with Andy Street, Mayor of the West Midlands, who had also prioritised this in his negotiations with DLUHC, Treasury and DFE.

Local control of skills policy

There have been three main arguments for city regions such as Greater Manchester and the West Midlands taking strategic and practical control of their local skills systems – as I set out in a blog before the Trailblazer Deals were announced in the Budget. Firstly, local economies and labour markets are quantifiably different in different places – and a ‘one size fits all’ model developed at the national level will not be sufficiently sensitive to these differences – especially in England where regional and local inequalities and differences in productivity are so pronounced. Secondly, at the city region level it is much easier to co-ordinate – or to integrate – the skills system with other actors, institutions and policies. Thirdly, England’s track record in skills policy over recent decades has been relatively poor – especially when compared to other countries with more decentralised skills systems. Allowing mayors to oversee local arrangements can hardly be any worse. Or as Evan Davis memorably asked at the recent Convention of the North, ‘who doesn’t believe that Andy Burnham couldn’t do a better job on skills than the Department for Education?’

The ‘trailblazer deals’ with Greater Manchester and the West Midlands have now been duly agreed in the Budget on 15^th March after being first announced in the ‘Levelling Up’ White Paper over a year ago to ‘deepen devolution’ and to ‘act as the blueprint for other mayoral combined authorities (MCAs) to follow’.  In these year-long negotiations – covering three prime ministers and four chancellors – both Andy Burnham and Andy Street had put further control over skills policy high on their list of demands. Both Greater Manchester and West Midlands now have nearly full control of the post-19 skills system and new ‘co-control’ of 16-19 policy too. Across the deals as a whole they also have the promise of ‘single pot funding’ in the next spending review, so that if they wish to commit more funding to skills – or any other area – they will be able to do so.

“Perhaps mayors and city regions can make a stronger case for more investment when the Treasury next undertakes its Spending Reviews? They may be better placed to argue for the impact on tackling regional inequality and poor productivity than the DFE has been. It will be a crucial moment – perhaps even more so than the agreement of the trailblazer deals and the principle of ‘single pot’ funding allocations this time around.”

The local skills system in practice

‘Co-control’ or ‘joint governance’ with the Department for Education (DFE) appears to be a significant a step forward, although it is not a completely new mechanism. In skills, it echoes arrangements agreed with London and Manchester in 2008-2009, where both cities gained agreement for joint strategy and delivery through an Employment and Skills Board. In the end, only London’s got off the ground before the 2010 General Election. But the joint commissioning model is also similar to the approach taken in health devolution in Greater Manchester, where national and local leaders, together with clinical and delivery experts made up a health and social care board.

In practice this ‘strong joint governance board’ will now provide oversight of post-16 technical education and skills in both city regions and have four main roles:

1. To improve the ‘responsiveness’ and ‘alignment’ of the skills system;
2. To develop and implement the Local Skills Improvement Plan (LSIP);
3. To develop and share relevant local and national data;
4. To develop and deliver an all age careers strategy in each city region.

As in Greater Manchester’s health and social care arrangements, the involvement of providers in the board – alongside employers through local chambers of commerce – and national and regional leaders is to be welcomed. Andy Burnham has described the nine FE colleges in Greater Manchester as ‘a really important building block’ in local thinking. It will help to build much needed capacity and understanding into local systems and strengthen the role of colleges more broadly to act as strategic partners, not just in skills and human capital, but also in their important contribution to economic development and civic infrastructure in their local communities. This aligns with recent TPI research with the Gatsby Foundation and also with the ‘Levelling Up’ white paper’s focus on the importance of ‘institutional capital’ in its ‘six capitals’ framework. It also sends an important signal to policymakers overseeing the skills system nationally for whom this role for FE colleges has been undervalued for many years.

Ben Verinder on Productivity Puzzles: Skills, Innovation, and Productivity: Further Education Colleges and Place.

But what will integration – or better co-ordination – actually look like in practice? A properly integrated system means that 16-19 and 19+ (typically the least well funded parts of the education system) can be better integrated into 1) Greater Manchester and West Midlands economies and labour markets 2) with employment system and programmes 3) Greater Manchester strategies including the Local Industrial Strategy and the GM Inequalities Commission – and also spatial priorities eg ‘Atom Valley’ – this means it can align more effectively with key sectors and priorities in GM – including advanced manufacturing, life sciences, business services and the cultural/digital sectors. It also means integrating more effectively with nationally driven policies in these areas, such as increased R&D investment and changing tax and regulation approaches (so, taking one example, GM can now bring together planning for ‘Investment Zones’ with tailored skills provision).

What will devolved skills policy look like in the future?

It is this potential for better integration with local priorities that is most significant and in Andy Burnham’s words, allows the ‘GM community to articulate the needs of our economy and labour market to the technical education system’. He is perhaps more ambitious for what this might eventually mean than the wording in the deal, describing the potential for new pathways that link to high quality jobs in GM, e.g. cyber, content creation and retrofit. He has also talked about developing a ‘Manchester Baccalaureate or MBACC’. Overall, he describes the agreement as ‘a paradigm shift’ hoping that GM can now provide a model for other city regions by developing such an ‘integrated technical system’.

But for all of this to happen, the partnership with national government and its agencies and regulators must be a genuine one. It can’t just be a new forum where the Department for Education simply reasserts existing strategies, such as LSIPs, T Levels and higher technical qualifications (HTQs), and then Combined Authorities remain the junior partners tasked mainly with their implementation. So there will be concern that, of the four key responsibilities for the board, LSIPs are already being delivered throughout England with the expectation – a statutory requirement for colleges – that they align local provision with what they set out. So if the trailblazer deals are to be really meaningful, then they must do more than this might suggest. Joint governance should require more policy experimentation and innovation – as well as better integration with other policy objectives in city regions. New pathways and qualifications or greater flexibilities for colleges could be sensibly tested out. Greater integration into innovation activities and R&D strengths, e.g. through locally designed and led Innovation Zones could also be key.  Such policy and delivery thinking is much needed in English skills policy, because it is often monolithic and/or frequently too detached from other economic and social objectives.

A further and related issue will inevitably concern funding – as FE in particular has been poorly resourced in recent years compared to other public services (including other parts of the education system). Mayors will only be able to achieve so much if given limited spending settlements. This is especially the case given that both the West Midlands and Greater Manchester already lag behind national averages in human capital (as measured in their respective qualification levels).

Perhaps mayors and city regions can make a stronger case for more investment when the Treasury next undertakes its Spending Reviews? They may be better placed to argue for the impact on tackling regional inequality and poor productivity than the DFE has been. It will be a crucial moment – perhaps even more so than the agreement of the trailblazer deals and the principle of ‘single pot’ funding allocations this time around.

For it to be a truly transformative stage in ‘stop and start’ progress towards greater devolution and ‘levelling up’, both DFE and the Treasury must approach these new arrangements in the right way. They must take the opportunity to be ambitious, innovative and flexible, and to support new strategies and initiatives in Greater Manchester and the West Midlands and then look to extend this approach to other parts of England. This is not a moment to think that now negotiations are over, officials and ministers can return to running the majority of priorities and policies from Whitehall with the assumption that these existing agendas can be preserved or reinforced. These deals – if they are to be truly transformational – must mean an end to that approach.