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Councils are setting out how the next government should devolve at least £15 billion worth of employment and skills funding and powers to local areas to help millions of the hardest-to-reach jobseekers into work and boost growth across all parts of the country.

The Local Government Association (LGA) recently publishes the third and final report in its ‘Realising Talent' series. Developed with the Centre for Economic and Social Inclusion, it sets out to tackle the challenges of reducing unemployment and giving businesses across the country the people and skills they need to grow.

The LGA believes councils and their partners can more effectively reduce long-term unemployment and number of young people out of work and target support far better than our current complex and fragmented national employment and skills system.

Its new proposals include:

• The introduction of Local Labour Market Agreements across England by 2016/17 – to be the basis of a deal between groups of councils and central government on what is needed to get more people into work, help low paid people progress in work, and address the skills demand for achieving local growth.
• A shift in national focus to help the most disadvantaged by replacing the £620 million Work Programme with two new programmes to be devolved to local areas – one to deal with long-term Jobseekers Allowance claimants and the other designed for 2.55 million disadvantaged claimants.
• Devolving skills funding and commissioning for all ages – so local areas can better gear the skills system to the needs of businesses.
• A National Employment and Skills Partnership – to bring together central and local government, businesses, voluntary sector and other stakeholders to agree a national employment and skills strategy.

Cllr David Sparks, LGA Chair, said:

"The current system for getting the unemployed into work needs radical reform and a key priority for whoever forms the new government will be how to make support for the unemployed more effective. Services run from Whitehall give insufficient freedom to local areas to meet local needs and ambitions.

"The next government will have a once-in-a-lifetime opportunity to enable everyone to benefit from growth and be fully equipped with the skills they need to compete for future jobs, especially given that Work Programme and Work Choice contracts come to an end in 2016/17.

"We believe far more can be done locally to reclaim a lost generation of young people and help long-term unemployed people, supporting them into work and ensuring a better supply to meet employers' current and future skills needs.

"Local authorities together with their local partners, not central government, best understand the needs of their residents, local economies and how to address their skills needs. With increased powers and funding, we could halve the number of unemployed young people and reduce long-term unemployment by a third.

"This report clearly sets out how power, funding and responsibility can be devolved to enable groups of councils to integrate and commission employment and skills support. We are committed and ready to work with whoever forms the next government on taking forward our recommendations and ensuring they are the foundation for reform."

The first Realising Talent report published last year revealed that a ‘skills' ticking time bomb will result in a huge mismatch between skills supply and employer demand by 2022.

It found the low skilled will lose out the most as 9.2 million people will chase only 3.7 million lower-skilled jobs, with similar consequences for people with intermediate skills. A shortage of higher skilled people will also damage growth.

The second focused on how a national system supports the unemployed and people with low skills. It concluded that national Work Programme job outcomes varied hugely across the country.

The average job outcome for the Work Programme is 23 per cent, but for Employment Support Allowance claimants is just 10 per cent. While councils know what kind of support is needed, they have been unable to act on it as the Work Programme is tightly controlled by national government.

Notes to editors

1. The LGA commissioned the Centre for Economic and Social Inclusion to produce a series of reports to identify the challenges faced by an incoming Government of a national employment, skills and welfare system. The final LGA report offers a local government solution.
   • Realising Talent: Employment and Skills for the Future focused on the impact of a future skills deficit in local places.
   • Realising Talent for Everyone focused on how a national system impact on the unemployed and people with low skills.
   • Realising Talent: A New Framework for Devolved Employment and Skills proposes a local government solution to the challenges highlighted in the previous two reports.

Contact

Greg Burns, Senior Media Relations Officer
Local Government Association
Telephone: 020 7664 3184
Email: greg.burns@local.gov.uk
Media Office (for out-of-hours contact): 020 7664 3333
Local Government House, Smith Square, London SW1P 3HZ