Skills and employment with more devolution: how to make the change happen locally

Published: 10 July 2024

The new Labour government has promised a skills revolution”, supported by greater devolution of skills and employment funding. They have also set a mission to break down barriers to opportunity and kickstart economic growth. This will only be possible by ensuring high quality skills and employment opportunities are available to local residents. 
We are committed to devolving adult skills funding to Combined Authorities, empowering local leaders to have greater control of skills development in their areas, alongside a greater role in supporting people into work. Skills England will co-ordinate between local areas to ensure everyone can access all the opportunities available.

Labour Manifesto 2024 

There will need to be a much greater focus on individuals and learners who are most excluded from the current system: this includes people with health conditions and learners with the lowest levels of qualifications. 

Our ten years of experience working on health, skills and employment implementation alongside government at all levels gives us confidence that this devolution of funding is exactly the right approach. Local areas bring an understanding of local employers, population needs and the health system to tackle skills and employment shortages effectively. But we also know this is a new way of working for many local areas. In our accompanying blog, we write about the role health systems must play to improve outcomes for people furthest from work. Here we outline practical suggestions local government can take; drawing on the best practice we have seen and supported across the country.

Improving employment pathways

To support more residents overcome barriers to work into high quality, paid employment, local government should:

IPS is a well evidenced type of supported employment – this means that it focusses on helping someone find a job of their choosing quickly. It has been adopted by the NHS as the best way of helping someone with mental illness to find work, and it’s been rolled out to every drug and alcohol team in the country. This means that IPS is already operating to some degree in every area of England. The good news is the principles of IPS can be equally applied more widely to help more individuals facing barriers to find work. We supported the WMCA to expand their IPS service for people experiencing homelessness, with neurodiversity, and residents in contact with the criminal justice system.

This is crucial to reach the large and growing group of individuals not in contact with the benefit system, or who do not currently have a work-related requirement, who want to work. It will also be important to embed support in settings where people feel comfortable and have trusted relationships, such as in family centres. We also recommend introducing effective front-door and triage processes, so that individuals are directed to the right service. This can build on the work currently underway in 15 areas of the country through WorkWell, enabled by Whitehall, which is developing system wide pathways for employment support.

Due to a lack of alternative support, young people are often staying in college until they are 25, placing pressure on EHCP budgets and creating a cliff edge of support. Supported internship and employment programmes, along with pre-internship training and outreach with families and carers can generate savings to council budgets by reducing EHCP spend, and help more people take on paid, meaningful work. Our work with one London Council identified that every £1 invested in better pathways from school to work for people with learning disabilities, including supported internships, would result in a cashable saving each year of over £3, mainly through reduced EHCP spend.

Improving skills provision

In order to maximise the opportunity from devolved skills budgets and close the skills gaps for people furthest from opportunities, local government should:

Effective devolution of skills budgets to local areas hinges on local systems being joined up, with a strong focus on outcomes. Our experience working on skills audits for three local authorities, has shown us that too often, local government departments, skills providers and employers are working in siloes with no central coordination. This results in inefficiency in the system – with duplication in some skills courses and crucial gaps in others. We worked with one London authority to help them create an outcomes framework which met the needs of employers, community groups, residents and other services and through this, prioritise courses to focus provision on.

Metro mayors and combined authorities must ensure to a) routinely monitor the outcomes of skills provision within their regions to understand who is accessing services and what the job outcomes rate is of skills provision, and b) work closely with employers to set up data sharing arrangements, and clear lines of accountability – to ensure information on vacancies and training budgets are being routinely shared. This data collection will help ensure a culture of learning, improved targeting and development, with the evolution of services to drive stronger outcomes. It will also be important to link these in with the data collected as part of local area Local Skills Improvement Plans processes.

In local areas, skills and employment opportunities are not always reaching those who are most excluded. In one London borough we worked with, we found an under-representation of a certain ethnic minority group; in another borough, skills services were not reaching residents in the most deprived wards, who were routinely experiencing the poorest educational outcomes. It will be important for each area to develop a coordinated strategy to ensure effective allocation of adult skills budgets to areas of greatest need. This could involve rethinking the course mix across providers to encourage take-up by excluded groups, establishing greater join-up with VCSEs to ensure more active outreach, and improved partnerships between job centres, and higher, further and adult education providers.

I work as a receptionist, weekends only. I have 3 kids. I decided to start this course because I want to get the qualification for my CV so I could find a better job. It was time for me to get a qualification because I hadn’t been able to before.

Learner on a local-authority led adult education course, who Social Finance spoke to as part of a skills review 

Devolving funding to local areas doesn’t mean Whitehall bears no responsibility for success. We believe that central government has a crucial role to play in enabling and supporting local areas to deliver their priorities effectively. We have asked central government to take 5 steps to help local areas deliver effective programmes to support people with health needs enter and sustain employment:

  • Continue to fund and expand access to evidence-based employment support, as well as implementation support. This includes ensuring that devolution settlements contain sufficient funding to provide access to Individual Placement and Support (IPS) and supported employment nationwide, and local areas have access to quality reviews, support with recruiting staff, and learning networks and communities of practice.
  • Make innovation funding available for local areas to pilot IPS for new cohorts where the evidence base is promising: this includes people experiencing homelessness, children leaving care, refugees, and people in contact with the criminal justice system
  • Launch an outcomes fund to provide additional funding to help local areas support those furthest from the labour market to access work. This could be used to test and pilot new approaches. 
  • Providing funding to roll out return to work specialists as allied health professionals (AHPs) within GP practices, to support individuals to return to work quickly and save GP time. 
  • Create learning infrastructure through Skills England, to monitor and assess what the new growth and skills levy is being spent on, and how these funds help improve outcomes for people, services and systems.

The ask / next steps:

Social Finance brings substantial experience working with local authorities and combined authorities to ensure that skills and employment programmes are delivered effectively and reach those who most need support. As devolution for these policy areas takes shape, we would be delighted to support more areas to deliver these programmes effectively. 

Want to find out more?

Talk to us about the support we can provide to local areas to deliver high quality employment and skills support, contact Bex at, and Ankita at:

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