What our employment training review means for policy

22nd May, 2014

In the next few weeks the Government will announce the Single Local Growth Fund allocations for the 39 LEPs. There has been much public sharing of frustration from all parties about the process, ranging from LEPs being accused of not being ambitious enough, to Government being accused of changing the goals of the Fund and being overly prescriptive in what they want each area’s Growth Fund (and wider Strategic Economic Plan) to include.

Notwithstanding this wrangling, given the local economic growth challenges that many LEP areas face it is likely that addressing skills and employability issues will feature heavily in many of the SEPs and Growth Deals. At least I hope they will!

To help Government and LEPs develop policies relating to these issues, the first evidence review of the What Works Centre for Local Economic Growth looks at ‘what works’ in providing employment training support to individuals currently on the margins of the labour market.

What did the evidence review find? The first and most important finding is that employment training can have a positive impact on people’s income and employment prospects. Given some commentators’ scepticism about active labour market programmes, this is an important confirmation.

The review also suggests some ‘best bets’ – things that tend to work in the employment training policy field based on the best available impact evaluations. For example, shorter programmes tend to have a better impact than longer ones, and involving employers improves outcomes as well. You can read more about the detailed findings and how to use them here.

The review’s findings raise several issues that have implications for some of the policy debates that are currently on-going between national and local policy makers as part of the SEP and Growth Deals process.

The first issue relates to the design and delivery of employment training policy. Surprisingly the review didn’t find any conclusive evidence one way or another as to whether the delivery of the employment training programmes was ‘better’ when done by local versus national organisations. This is significant given the ongoing debates within city deals, single local growth fund deals, the work programme and community budget pilots about who is best placed to design and deliver employment training programmes. Too much of these debates has focused on who should design the policy rather than what the characteristics of the policy should be and how it will be delivered.

The second issue relates to the role of the private sector. The evidence is clear that those employment training programmes that work better have more involvement from the private sector not only in the design of the programme but also in its delivery. If we want more people to get a job then ensuring the support we provide them is useful to them and to the firms that are going to employ them is crucial. This is obvious on reflection, but is often forgotten when the ownership of the design and delivery of policy and programmes is being debated by different public sector organisations, e.g. DWP and LEPs.

The third issue relates to the size of impact we can expect from policy interventions. When the 39 SEPs and Local Growth Fund deals are announced, they are likely to be accompanied by some very optimistic statements about the impact they will have on places and people. However, the employment training evidence review shows that while the overall effects of such interventions is positive, the size of the effect is relatively small for each individual. The review also suggests that policy is better aimed at having smaller effects on lots of people, rather than trying to have bigger effects on fewer people. The relatively small individual effects may still be cost-effective (although there is very little evidence on this) but they do remind us that we need to be realistic about the effects that even well-designed policy can have.

The other crucial message to emerge from our review is that we should be focusing much more effort on figuring out which elements of programme design deliver larger, more cost-effective outcomes. This means moving on from arguments about who gets to design policy – something which may come as a welcome relief to all sides in the growth deal negotiations.

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