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11 November 2014updated 09 Jun 2021 2:18pm

Government has the wrong approach to tackling the skills gap

With youth unemployment falling to 733,000, it is time for devolving skills to improve the prospects for young people and safeguard against any future rise in the figures.

By Mark Boleat Mark Boleat

Centralised power has its merits, but when it comes to skills and training, the status quo is simply not working, and a local approach is desperately needed.

ONS figures due in a couple of weeks are expected to show a slight dip in the number of unemployed 16-24 year olds, but a fundamental disconnect remains between the skills the UK is producing and the skills employers need. Take London as an example – there is no shortage of jobs, but businesses are struggling to fill one in three vacancies because of a lack of suitable candidates. The government’s £4bn spend on skills provision in England is not delivering value for money, with too much spent on hair and beauty and health and safety training when the general trend is moving towards more high-skilled sectors such as digital, engineering and science.

Addressing the mismatch in the skills provision has to be a priority or the current and future generations will be unable to compete with a highly-skilled international workforce.  Skills support must follow a demand-led model and be closely aligned with the needs of the local economy.

Whitehall is not best placed to determine the skills needed in Manchester, Newcastle, London or Birmingham. It is local councils that need to take this leadership role as they have the comprehensive local knowledge and relationships with education institutions, employers and training providers in the area. Having central government hold the purse strings is not only inefficient but it is neutering our ability to tackle unemployment.

There is already extremely valuable work being done at a local level with town halls leveraging their strong community links and acting as a broker between learners and businesses. Devolving budget responsibility will enable local governments to take a more long-term view of skills needs. They can then respond effectively to the ever-changing jobs market and ensure residents have the requisite skills to get ahead.

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So, how local should the approach go? There is no one size fits all solution, which highlights once again how the UK skills system is misjudged. In London for example, each borough has vastly different business characteristics and economy. Through our charity, the City Bridge Trust, we offered grants of £100,000 to each London borough to support projects run by third sector organisations to reduce youth unemployment, because we recognise the granularity of the capital’s jobs market. The money is being used by local councils to fund community projects and skills providers who work with the hard to reach and understand the support and training needed to help their residents find and sustain employment.

In Waltham Forest, which borders the expansive Epping Forest open space, managed by the City of London Corporation, there are a number of opportunities in the booming horticultural industry, while the borough of Hackney is perfectly located to take advantage of jobs in the local digital sector – Silicon Roundabout. In the City, commercial developments such as One New Change have seen more demand for retail experience. This has led to us backing the Cheapside Employment Project – a free service to employers that provides customised training for local residents and matches them with vacancies in the retail, hospitality and construction sectors. Many unemployed or low-paid young people cannot afford to travel outside of their community, so it is vital that there is local training provision aimed at getting those people into jobs close-by. Looking through a national lens, these nuances are missed.

The devolving skills argument is showing no signs of abating because it makes practical sense. Youth unemployment is a complex and long-term problem but the solution is obvious. Councils already have strong community relationships and engage regularly with local businesses and colleges on a strategic level. They facilitate greater collaboration within the community; developing apprenticeships, internships and corporate volunteering partnerships that bolster economic development in the area.

By and large, councils have a good track record with aligning skills support with the needs of employers. They must be given the freedom and funding to enhance skills provision and ensure young people are fully prepared for the labour market.

Mark Boleat is the policy chairman of the City of London Corporation