Local Enterprise Partnerships: Putting Employers in the Driving Seat - to Nowhere
The voluntarist tradition of employment relations in the UK, coupled with increasing individualisation in labour markets, has led to weak local institutions and embedding of employer networks (Streeck 1992; Edwards et al. 2002; Grugulis 2007; Brown and Marsden 2011). Successive UK governments over the past forty or so years, in their efforts to improve workers’ skills and reduce unemployment, have experimented with a range of institutional arrangements. While the Industry Training Boards of the late-1960s represented a tripartite framework involving the state, businesses and trades unions, subsequent institutional arrangements have become increasingly localised and placed under the leadership of employers. This trajectory is traceable from the Manpower Services Commission of the 1970s, through to the Training and Enterprise Councils the late 1980s and early 1990s, and to New Labour’s Sector Skills Councils and Regional Development Agencies (RDAs) of the late 1990s and early 2000s. While 25 Sector Skills Councils remain in existence, along with their overarching quango, the UK Commission for Employment and Skills, the RDAs were formally abolished in 2012 by the Conservative-Led Coalition Government (CLC). The CLC reduced the funding previously given to the RDAs by approximately two thirds and converted this into the Regional Growth Fund, for which non-statutory bodies such as the new LEPs, formed from 2011 onwards, would then compete.
The break from RDAs to LEPs is of particular analytical interest. The LEPs were intended by the CLC to shift power to local civic leaders and businesses to promote local economic development. Indeed, award of LEP status depended upon evidence of support from local business, with a specific emphasis on an employer-led local development strategy. While there are other voluntary bodies - such as Business in the Community and the Chambers of Commerce - within which employers may exercise their influence over local employment and skills development, LEPs are joint business and local/regional authority bodies with access to significant amounts of public funds and discretion over how these are spent. Central to LEP strategies are ‘demand-led’ skill development systems that address employers’ future skill requirements across a particular region (c.f. Leitch 2006). LEPs have thereby assumed a leading role in the receipt and administration of key funds from the government’s Skills Funding Agency, European Social Funds and the Sector Skills Councils. In other words, the new governance arrangements for LEPs allow for significantly increased freedoms for private sector employers to influence and engage with the implementation of publicly-funded employment and skills initiatives.
The analytical puzzle is that, despite the progressively sharper orientation of publicly-sponsored programmes towards ‘employers’ needs’, there is continuing evidence of employer dissatisfaction and disengagement. The common complaint from employers has been that state-sponsored employment and skills agencies fail to tailor their services for specific employers; in turn, programme evaluations to date regularly cite lack of employer engagement as a key weakness (Meadows 2006, Hasluck 2011). The constraints on employers’ freedoms in their partnerships have varied slightly between New Labour and the CLC. On the one hand, the ‘New Deal’ initiatives under New Labour sought to involve local employers in the hiring and training of jobseekers but placed obligations on them to provide guaranteed job interviews to programme participants (Gregg 2011). On the other, the CLC’s ‘Work Programme’ for the long-term unemployed places no significant obligations on employers but, through its payment-for-results contracting regime, has reinforced centralisation rather than localisation (McNeil 2010). The key question for the future is whether the LEPs, as the new primary sponsors of employer engagement at local level, might introduce a more effective institutional arrangement for the delivery of employment and skills policy goals. Certainly, a consensus has emerged across the political spectrum that public funding for local economic development should be devolved on the basis of LEP boundaries (Heseltine 2012; Lawton 2014).
To assess the overall question of the LEPs’ potential for advancing collective employer interests, it is necessary to investigate the actual involvement of private employers at various levels. Which employers tend to be represented by the LEPs? Are they new? Are there patterns of representation in the type of employers, such as by size and sector? To what extent are employers engaged in the implementation of LEPs’ employment and skills strategies, and what the outcomes for employers? The paper has two main parts. After considering the theoretical and historical background of employer representation in the UK, the first part analyses the break from RDAs to LEPs and discusses the implications for employer involvement of the changing employment and skills policy landscape. In the second part, the paper analyses LEP membership and reviews the evidence of employer involvement in LEPs’ activities using public documentation and commissioned reports. This second part of the paper also draws on 10 interviews conducted in 2012 with LEP officials and associates across 3 LEPs to provide further insights into the experiences of employer involvement in LEPs.
The paper’s tentative conclusion is that LEPs have enabled greater strategic influence over public programmes among a small number of large private employers, but are unlikely to be more effectual than previous institutional arrangements in engaging or representing greater numbers employers. The paper also concludes that, despite the formation of increasingly employer-friendly, powerful regional structures, it is likely that local government authorities and publicly-sponsored employment and skills agencies will remain the key actors in the implementation of policy measures. Finally, the paper highlights the need for more detailed evidence in this area and points to avenues for further research.