How can Universities, Colleges and Employers Deliver the Skills for Local Productivity, Innovation and Prosperity?

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In this Policy Briefing, Professor Anne Green, Professor Chris Millward and Dr Abigail Taylor reflect on discussions during the Universities and Regions Forum skills seminar organised by City-REDI / WMREDI. They outline fundamental challenges which need to be addressed to improve skills systems in England. 

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The UK is experiencing low levels of economic growth compared with international competitors, and sustained inequality between different parts of the country.  Skills are fundamental to this because they drive productivity and growth while equipping people from all backgrounds to benefit from it.  These issues can be addressed by nurturing thriving ‘skills ecosystems’, which bring business and public service employers together with universities, colleges and government to raise both the demand for and supply of skills, and in a way that is tailored to the needs of local areas.

Successful skills ecosystems operate at different spatial scales, depending on the levels of skills needed, the character of each place and their economic and social priorities.  While there are commonalities in skills needs across areas, the precise mix of requirements and identity of actors involved in skills ecosystems varies across places.  Different approaches are being adopted across the UK nations and between English cities and regions.  It is increasingly important that the UK learns from the ways in which skills development is being supported in other countries.

Our Analysis

Our analysis and recommendations in this briefing – which are based on a seminar held in October 2022 by the Universities and Regions Forum at City-REDI / WMREDI at the University of Birmingham – are intended to support the delivery of skills commitments.  They build on previous City-REDI / WMREDI research, as well as participants’ insights from working for and providing advice to local and national governments in England, the national governments in Wales and Scotland, and the OECD’s education and economic development programmes.


In the Briefing, we identify a series of key challenges with the current skills system. These include:

  • The frequency of changes to skills policies and institutions.
  • How frequent policy and institutional changes are a recipe for complexity, confusion and a lack of trust.
  • How higher levels of education and skills are not necessarily improving productivity and equity; indeed, there may be a concentration of skills and wages in some places at the expense of others.
  • How in some local areas and sectors ‘low skills traps’ exist.

We discuss the role of different types of support suggesting that:

  • Support for business improvement and innovation is key
  • There is a key role for devolution
  • Local knowledge is important in tailoring local support to local needs.
  • There is work to do to build and strengthen local skills ecosystems in the UK so that they replicate features of successful local skills ecosystems identified from international evidence.

A focus on the ‘local’ in skills policy is not new. In England, there has been a succession of institutional structures over recent decades with some responsibilities for skills policy and delivery: from Local Employer Networks to Training and Enterprise Councils, Local Learning and Skills Councils, Regional Development Agencies, Local Enterprise Partnerships and now Local Skills Improvement Plans (LSIPs). LSIPs aim to place employers at the heart of local skills systems, provide an agreed set of actionable priorities that employers, providers and stakeholders in a local area can get behind to drive change and facilitate direct and dynamic working arrangements between employers and providers. It remains to be seen whether this will facilitate genuine and sustained co-development of skills strategies that position employers as co-producers rather than customers. Or whether partnerships will reach across universities as well as further education colleges so that local skills and innovation strategies can be more closely aligned with each other.

Summary of findings and recommendations

Our insights, based on research and practice, highlight that local areas are best served by policies that seek to nurture skills ecosystems, which stimulate dialogue and collaboration between further and higher education institutions and build demand among employers across businesses and public services.  There are good examples of this across all parts of the UK, which we have highlighted in this briefing, but they have too often been hampered in England by fragmentation between different sectors, centralisation and lack of responsiveness to local needs, and short-term changes to policies, funding and institutions.

Best practices can be found where local and national regulatory and funding approaches have been aligned to support the sustained partnership, so many of our recommendations below are focused on this. Notwithstanding this, participants in the October 2022 seminar were clear that universities, colleges and local government should not rely on the national government to nurture successful skills ecosystems across the country.  In particular:

  1. Universities, further education colleges, local agencies and employer representatives do not need to wait for the national government to map the strengths, needs and provisions in their local areas, and broker coherent and collaborative responses that shape demand for skills as well as their supply.
  2. Universities have the autonomy and capability to integrate more closely with communities, businesses and public services, so they are diagnosing as well as responding to skills and innovation imperatives, embedding this across their education and research missions, and aligning their investment with local opportunities.
  3. University researchers and practitioners can themselves develop a shared body of evidence on the innovative and impactful ways in which they are integrating with the communities and institutions around them, building demand and capability for skills and knowledge in their local areas.

Three fundamental challenges need to be addressed if we are to act on the evidence to improve skills systems in England:

  1. We need to create mutually reinforcing incentives for the different actors within local skills ecosystems by aligning the local and national influences on them. This means cutting through the current silos between different policy domains locally and nationally, particularly those between further education colleges and universities, skills and innovation, and the supply of education and training and its utilisation by businesses.
  2. We need to provide confidence and coherence for the different actors in local areas by committing to policies and investing in the capability of local institutions beyond the short term. This crucially includes more substantial devolution of powers and funding for skills and the factors that influence them.
  3. We need to capitalise on the potential for universities to attract people and investment, and to drive innovation and skills demand among business and public services in their local areas, by anchoring their education and research activities within their local skills ecosystems. This requires universities to be positioned centrally within local skills strategies and have greater accountability to local as well as national and international stakeholders.

The government’s Autumn Statement provides a platform for this through its exploration of ‘departmental-style’ funding settlements for devolution trailblazer areas that will provide more flexibility and accountability, and their potential extension to other mayoral combined authorities.  Also, the appointment of public service delivery expert Sir Michael Barber to see through the implementation of skills reforms adds impetus to change.

Download the full policy briefing

This blog was written by Anne Green, Chris Millward and Abigail Taylor, City-REDI/WMREDI, University of Birmingham.

The views expressed in this analysis post are those of the authors and not necessarily those of City-REDI or the University of Birmingham.

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