Press release

Meeting local demand is the key to unlocking UK growth – new report proposes way forward

New report from the UK Commission for Employment and Skills (UKCES) and the Association of Colleges (AoC) sets out how local organisations need to work together to address skills issues in their area.

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Employers, education providers and local government are being urged to sign up to ‘local outcome agreements’ to help address endemic skills shortages at a local level that are holding back employment opportunities and business growth.

The report, Local action, national success: how outcome agreements can improve skills delivery, published today by the UK Commission for Employment and Skills (UKCES) and the Association of Colleges (AoC), proposes that leadership is needed at a local level to better link skills provision with employer demand. Skills shortages can then be identified and addressed more effectively, leading to better growth prospects for the whole area.

Outcome agreements bring together local education and training providers, employers and representative organisations to identify both the skills needs of a local area and the solutions to address them. Partners are then held accountable for delivery of their parts of the agreement.

The report draws on a number of international case studies, as well as consultations with further education colleges, employers, local enterprise partnerships (LEPs), business groups and local authorities across England. The report sets out the benefits of local outcome agreements for England and details eight propositions to take forward.

Barbara Spicer CBE, Commissioner at UKCES and CEO of Plus Dane Housing, commented:

To become a more productive, competitive nation, we need to better match individuals’ skills to demand from employers. Simply measuring educational attainment is not a strong enough indicator. We need to measure a wider set of economic outcomes.

This needs to start at a local level, with local players taking the lead. If this doesn’t happen then it simply won’t be successful. We are already seeing some good work in this area with local players working more closely together, but progress is sporadic and scattered. We need to credit the good work that is taking place and move it from a ‘good thing to do’ to a more systemic approach where each party is accountable for delivering on their part of the agreement.

Martin Doel, chief executive of the Association of Colleges, added:

With the amount of money available for skills provision decreasing, local outcome agreements can help colleges to provide greater value for money and return on investment.

We are already seeing a move in this direction, with many colleges building strong partnerships with employers. However, we need to build on this good work, reconsider the existing structures, culture and incentives in England, and apply lessons and experience from elsewhere.

Local outcome agreements will shift the balance so that colleges are more accountable to the local economic and social community.

The report proposes that for areas with little experience or history of this way of working, partners could start by identifying a limited number of skills challenges before building up to the wider local economic need. The ambition is that the majority of provision at a local level will be the subject of a local outcome agreement including programmes for young people, adults (both in and out of work), and apprenticeships.

Published 29 June 2015