LGA: One million people lost from jobs market could return if schemes are run locally

More than one million people who left the jobs market during the pandemic could be helped to return if fragmented national employment and skills schemes were run locally instead, new research for the Local Government Association reveals today.

Analysis for the LGA by the Learning and Work Institute shows that the number of people improving their skills or finding work could increase by 15 per cent, if councils and combined authorities were better able to coordinate and bring together employment and skills provision across a place.

This in turn boosts the prospects of residents and businesses, improving the health and wellbeing of local communities while reducing costs to the public purse. It would help not just those who left the jobs market directly because of the pandemic, but also job seekers, learners, people seeking a career change and young people working out their careers path.

There are now around one million fewer people in the labour force than there would have been had pre-pandemic trends continued. LGA analysis found that about £20 billion is spent by central government on at least 49 national employment and skills related schemes or services in England, managed by nine Whitehall departments and agencies. This includes programmes such as the Levelling Up Fund, Towns Fund and Help to Grow, as well as support to get people into work and training including Restart, Bootcamps and the National Careers Service.

The fragmented and disjointed nature of these schemes makes it difficult to target and join up provision for learners, unemployed people, career changers and businesses.

The LGA says a single place-based fund, where funding and powers over national employment and skills-related schemes are devolved to local leaders, could better support unemployed people into work, improve residents’ skills and match them up with new and existing vacancies. This would make more sense than councils bidding for separate pots of funding for different projects, which cannot be used together.

By simplifying the system, this should mean an end to competitive bidding and a move to long-term funding attached to specified, achievable targets.

For example, the analysis for the LGA by the Learning and Work Institute suggests that:

• For a typical medium-sized combined authority (a city region with a working age population of 960,000), more effective use of around £270 million investment per year – which represents 1.35 per cent of spend in England –  would mean an extra 2,260 people improving their skills each year and an additional 1,650 people moving into work.
• For a typical large rural local authority (a rural area with a working age population of 750,000) more effective use of around £77 million investment per year – which represents 0.38 per cent of England spend –would mean an extra 1,150 people improving their skills each year and an additional 640 people moving into work.

Decisions about creating jobs locally must go hand-in-hand with how to support local people to have the necessary training and skills to apply for these jobs. The LGA says these decisions can only be done at a local level, with all partners working together and is fundamental to levelling up both people and places.

Councils and combined authorities are the only constant in this continually changing employment and skills landscape, and have used their knowledge, experience and capability to make the best of the current system. With the right powers and resources, the LGA says they can do more. 

Other parts of the UK already enjoy a degree of local flexibility in deciding how best to meet their employment and skills challenges, so the LGA says there is no reason why this cannot happen across England as well.

Mayor Marvin Rees, Chair of the LGA’s City Regions Board, said:

“Empowering local leaders will get the best value for money from the billions currently spent by government on various national schemes to create jobs and encourage people into work or training.

“Every area has its own unique labour market including a mix of jobs, qualification levels, unemployment and vacancies. Councils and combined authorities want to unlock this potential talent, using their unrivalled local insight and knowledge to bring employers, training providers and jobseekers together with their proven track record in delivering more for less.

“They are making the best of the national system, but the Government now needs to do its bit by joining up the system and working with us to plan and deliver more effective support to residents and businesses.

“Communities across the country, who are experiencing an unprecedented cost of living crisis, need a clear and locally relevant jobs and skills offer, coordinated by councils and their partners on the ground, to get the results we need.

“Given the right resources, our research shows that councils can create new jobs, offer new training and spread opportunities to more people, in our shared endeavour to level up the country.”