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LGA calls for devolution of employment and skills funding

The Local Government Association (LGA) is calling on the next government to devolve at least £15bn of employment and skills funding to local areas.

In the final report of the LGA’s ‘Realising Talent' series, developed with the Centre for Economic and Social Inclusion, it sets out a series of new proposals that describe “how power, funding and responsibility can be devolved to enable groups of councils to integrate and commission employment and skills support”.

The LGA believes councils are in a better position to reduce long-term unemployment and the number of young people out of work than the 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 £620m 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.”

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

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.

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