3. Devolution will contribute to our capacity to achieve the
growth and reform ambition set out in the GM Strategy
• Our ambition is to achieve sustainable
economic growth, where all residents
contribute and benefit from sustained
prosperity
• Connecting our people and
neighbourhoods to growth
• Transforming services to meet the needs
of local residents and to meet the financial
challenge of 2015/16 and beyond
• Becoming financially self sufficient,
recognising the role public service reform,
as well as growth, will play in achieving
this goal
4.
5. Devolution: Principles
A fantastic opportunity for GM to enhance the work of the Skills & Employment Partnership, to
work collaboratively to improve the ability of the skills & employment system to better respond
to labour market need and economic priorities.
• GM is keen to reduce duplication within the skills and employment systems,
• In doing this GM will create the right conditions for all residents to have access to appropriate
provision which will move them along their employment pathway and enable them to benefit from
growth
• We will work with providers to ensure provision responds to the needs of residents, employers
and GM growth sectors at all levels.
• Removing disincentives in the system which have a perverse effect on delivery.
• Also we will work with providers to better understand and target provision for the unemployed,
ensuring relevant flexible courses that are not qualification driven progress residents into
employment.
• We will work with employment providers to better integrate skills and employment provision
across GM. We will use the Complex Dependency proposal and ESF to better respond to those
residents furthest away from the labour market
• GM will work with employers to understand the needs of businesses and the disconnect
between the demand and supply side, but also challenge businesses to invest in all level skills to
enable progression for employees.
6. Skills Devolution: The specifics…..
The HMG proposal is:
• To work with GM to directly re-shape and re-structure the FE provision within GM so
a new, forward looking FE system is in place by 2017; and
• To devolve the Apprenticeship Grant for Employers (which currently pays the
employer £1,500 per qualifying apprentice) to Manchester so that it can make its own
determination regarding priorities.
• On the AGE grant, to improve incentives in the skills market immediately, the GMCA
will assume responsibility for the Apprenticeship Grant for Employers which will
enable the Combined Authority to vary the level of financial support available to
different types of learner, sizes of business and subject areas in apprenticeships. The
total size of the AGE grant is £85m across England and it pays £1,500 per qualifying
apprentice. BIS/DfE will work with GM to identify an appropriate share.
7. Skills Devolution: The specifics…..
• On reshaping and restructuring FE provision, our goal is to improve the ability of the system to
respond to labour market need and economic priorities. This re-commissioning process will be led
by GMCA and Government (BIS, DfE, SFA and EFA), and will work collaboratively across GM,
reporting to Ministers and the CA.
• It will identify the future shape and funding (including pricing of adult skills budget courses) of FE
provision in the GM City region. Any changes need to be cost neutral.
• It will start from December 2014, and run throughout the 2015 spending review so that it can start
to deliver a revised curriculum offer from 2017.
• As agreed, funding and rates for 16-19 vocational training remain set at national level. The EFA
will be part of the work on future of the FE sector as one of the biggest 'funders' of the sector in
GM. GM, working with EFA, SFA, DfE and local actors, can make recommendations to the
government about future curriculum in line with their economic strategy and in line with decisions
on funding for the adult skills budget in GM.
• Also as agreed, the offer excludes apprenticeships, traineeships, sixth form colleges and schools.
You also asked for clarity that the offer includes private training providers and I can confirm that it
does. While these specific aspects will not be explicit in the published agreement, we will clarify
these points in response to any follow up questions received from the sector.
8. Complex Dependency Devolution
The Working Well pilot will go through a staged expansion from summer 2015, subject to
performance gateways demonstrating success. Greater Manchester will be rewarded for
performance by a payment by results mechanism, up to a fixed DEL limit and funded
from a combination of the Greater Manchester budget, European Social Fund and a
central government payment by results mechanism. By the time it is fully rolled out, the
pilot would cover 50,000 individuals and have a £100 million budget comprising £36
million from Greater Manchester, £32 million from the European Social Fund and up to
£32 million from central government via payment by results.
We expect Greater Manchester to share the AME risk of underperformance. To help
tackle long-term unemployment in Manchester, the government will also design the Work
Programme in a way that allows Greater Manchester to be a joint commissioner with
DWP for the next phase of the Programme.
10. Skills & Employment in GM
• It is unwise to only look at single elements of the ‘deal’, as this will lead to an
uncoordinated approach to work and skills across GM; something we have currently.
• Devolution has allowed us to take stock of current activity and truly link this together
so that GM can design a system that will support economic growth and reform.
• In order to do this, the following slide looks at the full spectrum of work & skills activity
from 14-65 year olds. By doing this it becomes clearer as to the interconnectivity
each system has with the other and hopefully GM can move to a position whereby
one systems failure doesn’t become another’s burden.
11. Policy Context
Unleashing Metro Growth: City Growth Commission; (Oct 14)
• “Metros should administer Adult Skills Budgets with reference to evidence-based skills strategies and other advice prepared
by the Local Enterprise Partnership (LEP). Ultimately, devolution of skills funding should extend to 14-to- 19-year-old
provision so there are seamless employment and skills pathways for young people.”
Growth Through People: UKCES; (Nov 14)
Priorities for action:
• 1. Employers should lead on skills and government should enable them, 2. Improving workplace productivity should be
recognised as the key route to increasing pay and prosperity, 3. ‘Earning and learning’ should be the gold standard in
vocational education, 4. Education and employers should be better connected to prepare people for work, 5. Success should
be measured by a wider set of outcomes not just educational attainment
Rigour and Responsiveness: DfE & BIS (2013)
• “develops ‘rigour’ and ‘responsiveness’ in the system making sure that vocational qualifications qualify a worker to practise in
their chosen role and ensuring that learners and employers have control over what is provided”
Wolf Report: Review of vocational Education (2011)
• “Vocational education today includes, as it always has, courses and programmes which teach important and valuable skills
to a very high standard.”
• “But many vocational students are not following courses of this type. Alongside the many young people for whom vocational
education offers a successful pathway into employment or higher education, there are hundreds of thousands for whom it
does not.”
• “The staple offer for between a quarter and a third of the post-16 cohort is a diet of low-level vocational qualifications, most
of which have little to no labour market value. Among 16 to 19 year olds, the Review estimates that at least 350,000 get little
to no benefit from the post-16 education system.”
• “English and Maths GCSE (at grades A*-C) are fundamental to young people’s employment and education prospects. Yet
less than 50% of students have both at the end of Key Stage 4 (age 15/16); and at age 18 the figure is still below 50%. Only
4% of the cohort achieve this key credential during their 16-18 education. Worse, the funding and accountability systems
established by government create perverse incentives to steer 16+ students into inferior alternative qualifications.”
12. GM Priorities and current activity
Raising Participation Age (RPA)
Ensuring young people participate and reducing NEET are of paramount importance to young people, to society and to our economy.
Young people who are currently not participating are more likely than their peers to have low skills, to go on to be unemployed in the
future, to earn less and to suffer from poor health or depression, which can impact well into adult life, joining the adult cohorts that GM’s
PSR activity is working hard to address.
The Raising Participation Age Strategy, agreed to four strands of work which are all interlinked when GM is looking at a redesign of the
FE system. To stimulate demand for GM’s Growth sectors and ensure employability is in built in all young people, Information Advice
and Guidance has never been so important. Giving young people the right opportunities along with guidance of the correct pathway for
them will hopefully ensure fewer people drop out of the system and do not achieve their full potential.
Although not in the devolution deal, RPA allows GM to focus on better tracking of young people to ensure a clearer picture of NEETS at
18, more focused IAG to ensure the pathways that young people take are appropriate and do not lead to drop out, increased focus on
maths and English leading to higher attainment rates and a more appropriate link between school and FE curriculum.
GM City Deal: Apprenticeship Hub
Currently many projects have been procured that support these outcomes. Due to the areas outlined in the devolution deal, City Deal
becomes very important in influencing the alignment of the Age Grant and also in stimulating demand for Apprenticeships in the future.
Given apprenticeships are out of scope currently and in the future funding is likely to be filtered through employers, City Deal is in a good
position to raise the awareness, standard and capacity of providers and employers to develop labour market relevant apprenticeships to
respond to the current mismatch between vacancies and candidates.
Youth Contract Extension
The investment will enable GM to test an innovative delivery model for supporting young people that are long term unemployed. Both
DWP and Cabinet Office officials will be involved in the GM programme evaluation and there is a joint commitment from GM and
government to generate a strong evidence base to inform future investment decisions. The investment also provides an opportunity for
GM to continue to demonstrate its ability to deliver worklessness measures at scale building on the success of previous programmes.
Evidence from this project can feed into the up-scaling of the 50,000 under complex dependency.
13. GM Priorities and current activity
ESF
GM’s overall EU funding allocation for 2014-20 is £356m, £161m of which is European Social Fund. GM’s overall European
Structural Investment Fund (ESIF) plan was submitted to Government earlier this year, outlining six themes for investment to
achieve a range of outputs. This plan responds to the GM Strategy and the subsequent GM Growth and Reform Plan, working
within EU funding rules throughout.
GM’s ambition was to ensure projects fully supported an integrated pathway of employment and skills support, which included
removal of barriers for people at each stage of their progression. This has not been possible given the Opt in’s inability to merge
funding streams – for example DWP (who fund employment support) will not allow SFA funded provision (mainly around skills
support) within a DWP procured project.
This has led to more ‘lots’ are being split out and the ESF breakdown looking overly complicated so as to ensure activity is
additional and targets the right residents. A number of additional ‘lots’ have also been created to ensure ESF can be added to GM
won contracts which have already been procured in an ESF compliant way (such as Working Well, Youth Contract and National
Careers Service), without the need for further tendering.
Through devolution and the current time delays being experienced with the approval of the Operational Programme and the
Financial Framework, GM now has an opportunity to rethink and simplify our ESF calls and lots given there is potentially more
funding within our control
PSR
Through devolution PSR gives GM the opportunity to better link the skills and employment system together particularly at the lower
end of the labour market.
By up-scaling the Working Well model to 50,000 it is only right that there is a responsive and flexible skills system that helps deliver
this.
GM through Local Growth Fund has been awarded £12m to support those individuals who are furthest away from the labour market
with skills to help them progress into employment.
14. 14
Growth
&
Reform
WW
expansion
Mental
Health &
Work
TCA
Over 55s
TF2
AGE Grant
Skills
Capital
Skills to
work /
In work
Co-comm
Work Prog
Short Term: One
combined
programme of
activity delivering
Working Well
expansion
Medium Term:
Redesign of the
end to end Work
and Skills system,
reflecting local
need
This work will require
support of DWP, SFA,
NE, and local partners
A single GM team will
develop a specification
for this programme and
oversee progress to
deliveryA design & delivery team
will ensure focus of the
grant reflects short and
longer term GM need
There are clear links between the range of work & skills
reform detailed in the devolution agreement (& other activity)
15. Overview
The GM Agreement includes a range of reforms across the work and skills landscape, enabling
GM to directly control or influence over £500m of funding. These are:
• The staged expansion of Working Well from Summer 2015. By the
time it is fully rolled out, the programme will cover 50,000 individuals
and have a £100m budget.
• A one-off pilot supporting older workers with long-term health
conditions back to work.
• Reshaping and restructuring FE (post 19 skills) provision worth
£150m (including Apprenticeships) within GM and aligning to £170m
of EFA spend.
• Government designing the Work Programme in a way that allows
GM to be a joint commissioner. Work Programme contracts across
GM are worth c£100m.
• Devolution of the AGE Grant to GM.
Though not included in the GM Agreement, ensuring alignment of
Skills Capital is fundamental in to the reshaping of the GM FE sector.
Programme 1: Working
Well Expansion
Programme 2: FE
Redesign
Programme 3: WP
Co-commissioning
Programme 4: AGE
Grant
Programme 5: Skills
Capital
2
16. Working age population:
1,754,900
Age 16-19:135,600 (7.7%)
GM Priority Raising Participation Age: 4 elements
•1. GM Tracking of young people, 2. CEIAG Strategy, 3. A
strengthened post-16/FE curriculum offer, 4. Specific maths and
English support focused on pre and post 16 curriculum
challenges to support better progression to higher skills.
Age 20-24: 203,500 (11.6%) Working Age Pop’
GM Priority: Youth unemployment. 1 Youth
Contract, 2. Talent Match, 3. City Deal App Hub
In Work: 930,750: 53%In Work claiming tax
credits: 252,150, 14%
Clear overlap between
priorities: Need to consider the
link with EFA 16-18 funding
and progression through to
SFA budget
EFA
provision
: Focus
on 16-18
without
English
& Maths
Clear overlap
between youth and
adult as SFA Adult
Skills Budget starts
from 19+ and JCP,
WP support
Reform
Agenda:
What does
devolution
allow GM
to focus
on?
Growth
Agenda:
What does
devolution
allow GM
to focus
on?
1.High attaining
young people 16-24:
ensuring
traineeships,
apprenticeships,
study Programmes
are employability
focused: Focus also
on high skilled
unemployed
EFA
provision:
Focus on
16-18
progressi
on routes
Sector specific LEP Priority provision at all levels: Incentivise providers but also need to link to IAG
agenda to ensure demand/supply: Higher Skills Strategy
2. High level
unemployed adults:
focus on skills
provision to enter the
labour market quickly.
Progression routes for
all unemployed with
regards to more
focused provision and
LMI relevant.
3. In work
progression for all
levels: flexible skills
system to respond to
the needs of a
changing labour
market and patterns
of work
2.Adults furthest from
the labour market:
current system not
supporting: Likely to be
ESA and Long Term
JSA: Review of
provision: build a GM
Study Programme &
develop a GM outcome
framework for provision.
Job, sustainment &
progression
3.Adults closer
to labour
market: likely to
be JSA as
current system
highlights: Pre
employment
courses: GM to
build a package
of skills to enable
individuals to
respond to
changing work
environment
4.Adults in work
on tax credits: low
pay, no pay
individuals, will be
affected by UC in
future: Provision
that builds a
package of skills
that allows
movement between
jobs: employer
focused
Out of work benefits; 236,800
16-24 Benefit claimants: 9690 ESA, 14,900 JSA
25-54 Benefit claimants: 91,900 ESA, 41,320 JSA
55-64 Benefit claimants: 39,700 ESA, 5,500 JSA
1.Poor attaining
young people 16-
24 (including
NEET)
4000 NEET in
GM; 26,000
unknown NEETS:
Better link
between English &
maths attainment,
progression to
relevant provision,
soft skills &
employability
throughout
Link to H&S devolution
deal: Employment as a
recovery outcome
Link to Transport
devolution deal &
Skills Capital
Employer Engagement
In all areas this is going to be crucial.
Utilising City Deal Apprenticeship
Hub funding we are looking at a more
strategic mechanism for engaging
with employers mainly around
apprenticeships.
Solutions require an understanding
of the structural changes in the
nature of the labour market- in
particular its ‘hour glass’ shape.
GM needs to ensure a skills &
employment system the is inclusive
of the needs of business.
Systems are focused on
Age 25-54: 286,500 (16.3%) Working Age pop’: Age 55-64: 1,129,200 (64.3%) Working Age pop’GM
Priority: Adult unemployment: JCP Offer, WP, SFA, ESF 2014-2020, WW, Mental Health Pilot, UC
Pilot, TCA
17. Reform Agenda
1. Poor Attaining Young People
2. Adults furthest from the labour market
3. Adults closer to the labour market
4. Adults in work
Poor Attaining Young People: Over 40% of young people do not obtain English & Maths GCSE: Approximately 75% of
young people unemployed for more than six months have qualifications below Level 2.
Action: Link to RPA Strategy and better CEIAG: EFA 16-18 Vocational Training Budget: Review of current provision in the SFA
budget similar to Wolfe Review: Embed employability in all provision and pay on outcomes and progression: GM Study Programme
Adults furthest from the labour market: Over 60% of adults on ESA have below L2 skills.
Action: Review all SFA funded starts: this shows us that over 70% of starts are for below L2 qualifications/awards: Need to
understand if GM is in a position to undertake a review similar to Wolf Report for young people for the ASB. Streamline
courses that are labour market relevant and pay on outcomes and progression: Build a GM Employability Programme
Need to build the link with Welfare to Work programmes
Adults closer to the labour market: On average there are approximately 30-40% of all benefit claimants with L3 and above
skills: Is it skills that is preventing them from obtaining and sustaining a job?
Action: Pre employment courses are successful for this group but do they stimulate higher skilled jobs and progression?
Work closer with JCP around skills conditionality
Adults in Work: Working tax credits is a drain on GM both in terms of benefits and tax take from the state.
Action: GM to commission a research brief to look at this group and make recommendations. Need to consider the changing
labour environment.
18. Growth Agenda
1. High Attaining Young People
2. High level skills: Unemployed adults
3. Adults in work
High Attaining Young People: 30% of 16-24 year olds are qualified to L3 with an additional 21% at L4.
Action: Link to RPA Strategy and better CEIAG: Employer perspective is important here, are the qualifications enough to
obtain employment? Stronger progression from classroom based learning into apprenticeships
Clearer definition of pathways in terms of industries and sectors: Skills & qualities which those sectors require.
High level skills Unemployed Adult: Although the number of people with below L2 is staggering, there is still a high number
of unemployed adults with high level skills.
Action: Labour market issues, are the jobs not there at the appropriate level? Is skills and employability a barrier, particularly
in graduates?
Provision less focused on courses more on professional and technical expertise.
Adults in Work: Stimulate growth for those already in work.
Action: Focus on progression and employer investment.
19. What we need to consider
• Funding rules
• Eligibility criteria
• GM Contract Package Area
• Skills for employment
• Inspection and performance
management
• Curriculum and Qualifications
• The quality of teaching, learning
and employment support
• Integration with other local services
• Status of vocational routes and
pathways
• Information, Advice and Guidance:
early years, schools
• Short termism of policy: How does
GM respond to national change
• Accountabilities /Governance
• Higher education: Pathways
• High skills strategy: Growth
