LGA: One million people lost from jobs market could return if schemes are run locally

More than one million people who left the jobs market during the pandemic could be helped to return if fragmented national employment and skills schemes were run locally instead, new research for the Local Government Association reveals today.

Analysis for the LGA by the Learning and Work Institute shows that the number of people improving their skills or finding work could increase by 15 per cent, if councils and combined authorities were better able to coordinate and bring together employment and skills provision across a place.

This in turn boosts the prospects of residents and businesses, improving the health and wellbeing of local communities while reducing costs to the public purse. It would help not just those who left the jobs market directly because of the pandemic, but also job seekers, learners, people seeking a career change and young people working out their careers path.

There are now around one million fewer people in the labour force than there would have been had pre-pandemic trends continued. LGA analysis found that about £20 billion is spent by central government on at least 49 national employment and skills related schemes or services in England, managed by nine Whitehall departments and agencies. This includes programmes such as the Levelling Up Fund, Towns Fund and Help to Grow, as well as support to get people into work and training including Restart, Bootcamps and the National Careers Service.

The fragmented and disjointed nature of these schemes makes it difficult to target and join up provision for learners, unemployed people, career changers and businesses.

The LGA says a single place-based fund, where funding and powers over national employment and skills-related schemes are devolved to local leaders, could better support unemployed people into work, improve residents’ skills and match them up with new and existing vacancies. This would make more sense than councils bidding for separate pots of funding for different projects, which cannot be used together.

By simplifying the system, this should mean an end to competitive bidding and a move to long-term funding attached to specified, achievable targets.

For example, the analysis for the LGA by the Learning and Work Institute suggests that:

• For a typical medium-sized combined authority (a city region with a working age population of 960,000), more effective use of around £270 million investment per year – which represents 1.35 per cent of spend in England –  would mean an extra 2,260 people improving their skills each year and an additional 1,650 people moving into work.

• For a typical large rural local authority (a rural area with a working age population of 750,000) more effective use of around £77 million investment per year – which represents 0.38 per cent of England spend –would mean an extra 1,150 people improving their skills each year and an additional 640 people moving into work.

Decisions about creating jobs locally must go hand-in-hand with how to support local people to have the necessary training and skills to apply for these jobs. The LGA says these decisions can only be done at a local level, with all partners working together and is fundamental to levelling up both people and places.

Councils and combined authorities are the only constant in this continually changing employment and skills landscape, and have used their knowledge, experience and capability to make the best of the current system. With the right powers and resources, the LGA says they can do more. 

Other parts of the UK already enjoy a degree of local flexibility in deciding how best to meet their employment and skills challenges, so the LGA says there is no reason why this cannot happen across England as well.

Mayor Marvin Rees, Chair of the LGA’s City Regions Board, said:

“Empowering local leaders will get the best value for money from the billions currently spent by government on various national schemes to create jobs and encourage people into work or training.

“Every area has its own unique labour market including a mix of jobs, qualification levels, unemployment and vacancies. Councils and combined authorities want to unlock this potential talent, using their unrivalled local insight and knowledge to bring employers, training providers and jobseekers together with their proven track record in delivering more for less.

“They are making the best of the national system, but the Government now needs to do its bit by joining up the system and working with us to plan and deliver more effective support to residents and businesses.

“Communities across the country, who are experiencing an unprecedented cost of living crisis, need a clear and locally relevant jobs and skills offer, coordinated by councils and their partners on the ground, to get the results we need.

“Given the right resources, our research shows that councils can create new jobs, offer new training and spread opportunities to more people, in our shared endeavour to level up the country.”

Notes to Editors

Work Local: The LGA’s ambitious, practical vision for devolved and integrated employment and skills provision.

The cost benefit analysis revealed that by using existing investment more effectively – including the devolution of adult skills, contracted employment support and UKSPF, and more influence on apprenticeships and 16-19 funding – Work Local could result in a 15 per cent increase in the number of people improving their skills or finding work. Based on analysis that £20 billion is spent on employment and skills related provision in England, the LGA estimates devolving a small proportion of this overall spend would make a big difference to communities. The evidence is striking and the case for Work Local is clear. Work Local: benefits of improving employment and skills outcomes.

NB Local government is clear more influence over Jobcentre Plus (JCP) employment support and National Careers Service (NCS) provision is critical to a Work Local approach, however given there is no publicly available data on their budgets or outcomes, the cost benefit analysis was unable to include this. 

£20 billion invested by government on 49 national employment and skills-related schemes or services across England: LGA: National employment and skills related provision

Labour Market Statistics, June 2022 | Institute for Employment Studies (IES) (employment-studies.co.uk)

Case studies

An Essex County Council-led pilot is supporting the transition from fuel-based to electric vehicles (EVs) including a new Electric Vehicle Centre at Harlow College, opening in September 2022. The project will fund 50 free places over a 24-month period for Automotive Technicians to develop the skills and knowledge to maintain and repair EVs, futureproofing local employers. Community learning workshops will raise local awareness about the benefits of EVs and provide EV owners opportunities to understand more about their vehicle including safety awareness. With more funding, they would extend this to include training courses to upskill electricians to install or maintain council-owned charging points.

Tees Valley CA is developing the Teesworks site, the UK’s largest industrial zone, into a hub for future job creation centred around advanced manufacturing, innovation and clean growth that would generate 20,000 jobs. As it is an area with low skills and high unemployment, the CA is working hard to ensure employers recruit local people with the right skills. In 2020, it launched ‘Teesworks Skills Academy’, a consortium of colleges and training providers. Within six months, more than 1,000 local people registered their CVs and more than 200 took up training. It is accessed via the local employment hub, run by Redcar & Cleveland Borough Council.

Central London Forward’s £51 million devolved ‘Work and Health’ programme, ‘Central London Works’, aims to support 21,000 residents with health conditions and disabilities and the long-term unemployed into work. Not only do CLF and Ingeus, the provider, work closely to assess referral numbers, job starts, and the quality of jobs and support, they work with the boroughs to integrate borough-led and JCP provision including through ‘super centres’ in Hackney, Lambeth and Islington, which also helps to support employers’ recruitment needs.

Greater Manchester Combined Authority’s(GMCA) ‘Working Well’ suite of devolved and test-and-learn employment and health related programmes, take a whole-population approach to health, skills and employment. To date, these programmes have supported more than 60,000 people, helping more than 15,500 into work - a success rate of 26 per cent. Crucially provision also supports inactive groups. GMCA recognised from the start that to turn Greater Manchester into a ‘northern powerhouse’, it had to tackle the very high level of economic inactivity, and particularly health-related economic inactivity. It was also a key element of the health and social care devolution deal.

Hampshire County Council’s £3.5 million Apprenticeship levy transfer programme to March 2023 enables it to transfer funds to employers who would not otherwise access it, including SMEs, public sector organisations and key sectors such as health and social care.

One stop models bringing together provision across a place, residents and businesses. ‘No Wrong Door’ between the Greater London Authority andLondon Councils aims to coordinate and integrate the system, so no matter which service someone accesses first, they will be connected to the right support to help them on their journey to good work. Bristol City Council's ‘One Front Door’, delivers a job matching service to help employers, individuals and support agencies match vacancies with jobseekers from Bristol’s most deprived communities. 

Cambridgeshire & Peterborough Combined Authority(CPCA) used its £12 million adult education budget allocation to increase participation by nearly 10 per cent (2020/21), targeting low-skilled residents in deprived areas (Fenland and Peterborough), introduced a £1,200 bursary for Care Leavers aged 19-22, (fully funded ESOL) the first level 2 and 3, as well as the second level 3 for priority sectors and unemployed people.