Following the success of a government pilot programme in 2021-2022 to test how employers, providers and local stakeholders could work together effectively to develop local skills development plans (LSIPs), the government rolled out the scheme to all 38 areas of England. Each LSIP area is led by an employer representative body and has access to the strategic development fund.

ReWAGE’s new report ‘Getting LSIPs right’ argues that it is important that this new investment in England’s skills infrastructure is effective, but that the current LSIP remit is unlikely to address the UK’s skills problems, suggesting how it could be adjusted.

Professor Irena Grugulis, co-chair of ReWAGE and author of the report says:

“Action is necessary and it is so important to get LSIPs right. At an individual level, low-paid jobs mean that 53% of working people are reliant on state benefits. At national and organisational levels, the UK’s longstanding skills problem damages our productivity and ability to compete – previous ReWAGE reports have considered the need to address both intermediate skills shortages and to upskill and reskill adult workers.

“Improvements in skills could change this, though these would need to be supported by improvements in a range of other areas including job design, organisational strategy and investments. However, it is not clear that the system of LSIPs will be equipped to tackle the existing problems.”

The report considers four areas that are crucial to making LSIPs work: engagement with employers, the role of FE colleges, who is being offered training, and the complexities of the UK job market.

Engagement with employers

In the LSIPs system employers feature largely in the front end, as customers, setting out their requirements, but for skills development, a much more active model of co-design and co-production is required, involving employers throughout the process.

Throughout the LSIP design process many of the employer representative bodies have made efforts to gather regional requirements through extensive consultations with employers, local and mayoral authorities, colleges and other stakeholders. In many areas only limited employer responses were received. This may be due to difficulties contacting employers, but it could also be explained by the fact that very few UK employers undertake workforce planning apart from the NHS, the public sector and large organisations actively set out their future staffing needs – few SMEs have the resources or the skills to attempt this.

The role of FE colleges

LSIPs aim to link local education and training suppliers more closely to employers. In theory, this encompasses all aspects of both vocational education and education, in practice most of this activity is linked to FE colleges. Although many FE colleges have positive links to employers there are no dedicated time or resources allocated to these relationships. LSIPs will provide colleges with resources, but this could simply be another temporary ‘pot’ of funds. In tight labour markets this relationship can be strained by employers competing for staff with colleges, often recruiting tutors into practice at better rates of pay.

Focus on who is being offered training

The skills of both new entrants and established workers are important for our future competitiveness. Each year the number of graduates, school and college leavers entering the workforce account for between 2% and 2.5% of the workforce. Training efforts focused on this group will be helpful but they do not make major inroads into overall levels of workforce skills. For that we need to look to employers to provide training for people already in work, a commitment that has been declining for more than two decades.

The complexities of the UK job market

The final area of complexity is the UK labour market itself, which is far more fluid than in other countries. In the UK it is common for young people to experiment with various occupations and sectors once in work, so targeting training primarily at young people in the hope that they will stay in the area in which they have been trained is a far from perfect solution to skills shortages.

In some sectors, such as social care, it is unattractive pay, terms and conditions that discourage workers and that result in high turnover. Expecting training and recruitment to solve this problem is a little like pouring more water in to a leaky bucket. It could result (at least temporarily) in more water in the bucket, but it would be far more effective to fix the leak.

How can the model be improved?

• Co-production. LSIP plans see employers as customers, involved in specifying skills plans and drawing up ‘wish lists’. A far better model has employers as co-producers, fully involved in skills delivery and implementation, with appropriate checks (training hours, number of apprenticeships) on activity and quality. Activities could further be strengthened, following the German system, by including worker representatives, trade unions and local authorities as co-producers.
• Extending skills training, reskilling and upskilling to established workers already in the labour market. New entrants are a small fraction of the labour market as a whole, limiting activity to new entrants means that existing skills shortages are not addressed.
• Introduce good career guidance to everyone in work. A previous ReWAGE paper explains more about the benefits of making effective careers guidance available to everyone of working age.

This ReWAGE Policy Brief was authored by Irena Grugulis (co-chair of ReWAGE and the Professor of Work and Skills at the University of Leeds) and Ewart Keep (Emeritus Chair in education, training and skills at the Department of Education, University of Oxford).