What a new era of devolution could mean for universities and colleges

The political deck has been reshuffled with Andy Burnham taking the helm as Prime Minister and key cabinet appointments confirmed across the Department for Education (DfE) and the Department for Work and Pensions (DWP).

Lucy Powell returns to the Cabinet as Education Secretary, while Pat McFadden remains at DWP. The retention of Baroness Jacqui Smith as Minister for Skills is also a welcome continuity although the precise scope of her responsibilities is not yet known.

The national challenges

The UK faces a series of interconnected challenges: rising numbers of young people not in education, employment or training (NEET), persistent productivity gaps, skills shortages across key sectors and significant regional inequalities. Addressing these issues requires more than individual policy interventions. It calls for a more integrated tertiary education system that brings together further education, higher education, employers and local government around the needs of people and places.

We may therefore assume that greater alignment of employment, education and skills will be pursued through inter-departmental synergy, and that the Minister will retain her joint footprint across both DfE and DWP. But what will the Prime Minister’s ambition to broaden and deepen devolution mean for skills? What will it mean for universities and colleges as well as strategic authorities.

For education and skills this is not just about which budgets or powers might be transferred. It is whether devolved places will have the institutions, relationships and expertise needed to use them effectively. The emerging principle is straightforward: capability must move from the centre, alongside increased responsibility.

For universities and colleges, this could mark a significant change. Rather than operating mainly as individual providers within nationally designed systems, they may increasingly be expected to work as partners in place - helping strategic authorities connect education, employment, innovation and economic development.

From devolved funding to devolved systems

Skills devolution has often been understood primarily as the transfer of particular funding streams, most notably adult education budgets. But managing a budget is not the same as leading a skills system.

A more ambitious model would position Mayoral Strategic Authorities as stewards of local education and skills ecosystems. Their role would include identifying long-term labour market priorities, convening employers and providers, coordinating investment and ensuring that provision supports wider economic and social objectives.

This would require strategic authorities to move beyond transactional commissioning. They would need to build agreement between institutions that have different missions, funding arrangements and accountabilities. They would also need the analytical and delivery capability to turn economic strategies into credible programmes of education, training and workforce development.

The challenge is therefore institutional as much as financial. Devolution will succeed only where places can bring together local leadership, provider expertise and national capability around a shared plan.

Universities and colleges as strategic partners

Universities and colleges are central to this settlement because they possess much of the capability that devolved places need.

Colleges bring strong links with local employers, technical expertise, apprenticeship provision and experience of serving learners who may not have followed traditional academic routes. Universities contribute advanced skills, research, innovation, civic leadership and connections to national and international networks.

Yet the English system has often encouraged them to operate in parallel—and sometimes in competition. Institutions are funded, regulated and measured individually. Universities compete for students and research income, while colleges compete for learners, contracts and apprenticeship provision.

A place-based approach asks a different question. Not simply, ‘How can each institution increase its own provision?’ But ‘How can universities and colleges collectively address the economic and social needs of their place?’

That could mean developing shared pathways from further to higher education, coordinating provision in sectors with acute shortages, pooling specialist facilities, jointly engaging employers and creating modular routes that allow people to move between work and learning throughout their lives.

It could also mean universities playing a larger role in supporting the capability of the wider local system. Their research, data and evaluation expertise could help strategic authorities understand labour market change, assess whether programmes are working and design more effective interventions. Colleges, meanwhile, could bring detailed knowledge of local employers, occupational demand and the practical barriers facing learners.

The strongest devolved systems will not treat universities and colleges simply as contractors delivering courses. They will involve them as co-designers of local economic and workforce strategy.

A new relationship with the centre

Greater devolution does not remove the need for national leadership. It changes its purpose.

The Department for Education would remain responsible for national entitlements, qualification frameworks, regulation, quality and the overall distribution of resources. But it would need to allow places greater flexibility to determine how national objectives are delivered.

Skills England could provide the national infrastructure that local systems cannot efficiently reproduce: occupational standards, labour market forecasting, comparable data, evaluation frameworks and intelligence about future skills needs. Its role would be to equip places to make better decisions rather than prescribe every aspect of local provision.

The Department for Work and Pensions is equally important. Employment support and skills provision have too often operated as separate systems, with different objectives, budgets and institutional cultures. A genuinely place-based model would bring them closer together.

Rather than referring people between disconnected employment and training programmes, devolved places could develop integrated pathways combining work, modular education and continuing progression. This would be particularly valuable for young people outside education and employment, but it would also support adults who need to retrain as technology and labour markets change.

The relationship between the centre and places should therefore become less hierarchical and more collaborative. National departments would retain responsibility for stewardship and accountability, while making their expertise available to locally determined priorities.

In skills policy, “national capability at local direction” could mean civil servants from DfE and DWP, specialists from Skills England and teams within strategic authorities working alongside universities, colleges and employers on practical problems: developing sector pathways, addressing participation gaps, coordinating capital investment or designing programmes that combine employment and learning.

Place must be more than a consultation exercise

There is a risk that “place” becomes another layer of strategy rather than a different way of working. Universities and colleges may be invited to meetings, asked to endorse plans and then expected to continue delivering through largely unchanged national systems.

Meaningful devolution requires clearer local mechanisms for agreeing priorities and holding partners together. One option would be a Local Tertiary Growth Compact, led by the strategic authority and agreed with universities, colleges, employers, local authorities and relevant national agencies.

Such a compact could establish:

• the place’s priority sectors and occupations;

• the respective contributions of universities, colleges and employers;

• shared progression routes across further and higher education;

• plans for modular and through-life learning;

• arrangements for labour market intelligence and evaluation; and

• the responsibilities of DfE, DWP and Skills England in supporting delivery.

This would not require every institution to become part of a single organisation, nor should it eliminate institutional autonomy. Its purpose would be to create enough common direction for otherwise fragmented organisations to act as a system.

A larger economic role for tertiary education

The deeper implication is that universities and colleges would increasingly be understood not only as educational institutions, but as essential economic and civic infrastructure.

Their contribution would be measured not simply by qualifications awarded or learners recruited, but by their ability to support productivity, innovation, employment, public service reform and social mobility.

That does not mean subordinating education entirely to short-term employer demand. Universities and colleges have wider cultural, civic and intellectual purposes. But it does mean recognising that the education and skills system must be more responsive to the changing needs of learners, workers and places.

For universities, this may involve giving greater priority to technical education, continuing professional development, modular provision and collaboration with colleges. For colleges, it may mean a stronger role in higher technical education, innovation diffusion and supporting small and medium-sized businesses. For both, it means treating collaboration as a core institutional responsibility rather than an optional addition.

From providers to partners in place

The Prime Minister’s devolution agenda could therefore represent much more than the transfer of skills funding. At its most ambitious, it could reshape the way the tertiary system functions.

Strategic authorities would become convenors and stewards of local systems. Universities and colleges would become strategic partners in economic development. DfE, DWP and Skills England would provide national frameworks, resources and expertise while working more directly in support of locally agreed priorities.

The test will be whether the Government is prepared to devolve not only responsibility, but the flexibility and capability required to exercise it. The corresponding test for universities and colleges is whether they are willing to look beyond institutional boundaries and take shared responsibility for the success of their place.

The next phase of skills devolution should not be judged simply by the size of the budgets transferred. It should be judged by whether it creates stronger relationships between employment, further education and higher education - and whether those relationships produce better opportunities for people and more productive local economies.