Devolution and Local Skills Budgets: What Training Providers Need to Know

What Is Devolution and How Does It Affect Skills Funding?

Devolution involves transferring certain powers and responsibilities from central government to regional authorities, allowing decisions to be made closer to the communities they affect. In the context of skills, devolution means that local authorities have greater control over funding allocations and programme priorities.

Key areas impacted by devolution include:

• Adult Education Budget (AEB): Many combined authorities, such as Greater Manchester and the West Midlands, now control their portion of the AEB, tailoring its use to address local skills needs.
• Skills Improvement Plans: Local Skills Improvement Plans (LSIPs), developed in collaboration with employer groups, influence how devolved funds are directed to address regional labour market demands.

This shift empowers local leaders to focus on bespoke solutions for their regions, but it also requires training providers to adapt their strategies to align with these decentralised approaches. This includes funding values which can, in some instances, be set by mayoral combined authorities to address specific shortfalls within the labour market.

The Challenges of Devolution for Training Providers

Devolution introduces several complexities for training providers operating across multiple regions. Challenges include:

• Varying Priorities Across Regions: Each devolved authority sets its own priorities, which may differ significantly. For instance, one region might focus on green skills while another prioritises digital upskilling.
• Complex Funding Criteria: Providers must navigate varying eligibility criteria, application processes, and reporting requirements for each authority.
• Engaging with Local Stakeholders: Success in a devolved environment often depends on strong relationships with local authorities, employers, and community organisations.

Without a clear understanding of these factors, providers risk submitting bids or proposals that fail to meet the nuanced expectations of individual regions. We're moving away from a "one size fits all" training model and different regions now expect training providers to tailor provision to more local and regional requirements.

Opportunities in a Devolved Landscape

While devolution presents challenges, it also offers significant opportunities for providers that are agile and proactive. Local control often enables quicker decision-making and a stronger focus on practical, outcome-driven solutions. This gives opportunity for smaller, more connected, training providers to work in an agile way that responds to the emerging trends within a devolved region.

Key opportunities include:

• Tailored Programmes: Providers can design and deliver bespoke training programmes that directly address the skills gaps identified in a region’s LSIP.
• Stronger Employer Links: Devolution encourages collaboration with employers, offering opportunities for providers to co-develop training initiatives with local businesses.
• Access to Localised Funding Streams: Many combined authorities introduce additional funding streams beyond the AEB, such as innovation grants or sector-specific initiatives.

By positioning themselves as partners who understand and align with local priorities, providers can unlock these opportunities and ensure their offer is mapped to grown areas in local and regional labour markets.

Strategies for Success in a Devolved Skills System

To thrive in a devolved environment, training providers should focus on the following strategies:

1. Understand Regional Strategies: Study the LSIP and economic development plans for each region where you operate. This will help you align your bids and programmes with local priorities.
2. Build Local Partnerships: Strengthen relationships with regional authorities, employer groups, and community organisations to enhance collaboration and credibility.
3. Customise Your Approach: Develop flexible, modular training programmes that can be adapted to meet specific regional demands.
4. Stay Informed: Keep up to date with policy developments, funding announcements, and opportunities arising from devolution.

Devolution and the shift to local skills budgets mark a significant evolution in the UK’s approach to skills funding and delivery. While this presents challenges, it also opens up exciting opportunities for providers willing to adapt and innovate. By aligning with local priorities, fostering partnerships, and staying informed, training providers can position themselves as key contributors to the regional skills agenda.

If you’re navigating the complexities of devolution and need support in aligning your bids or programmes with local priorities, contact us to learn how we can help you plan for the future in your region.