How the mayor of Liverpool City Region is addressing local skills shortages

The government’s ‘devolution revolution’ is in full swing. Having published its detailed English devolution white paper in December, the government has now announced the six regions that will get new mayors in 2026 as part of the Devolution Priority Programme. 

One of the central pillars of the devolution offer is control of adult skills provision, which strategic authorities can use to support residents into better employment, encourage key growth sectors and increase workforce productivity. Last week, as part of a new Institute for Government project on skills devolution, I visited the Liverpool City Region to learn from local stakeholders about how devolved powers over skills have been put into practice since 2019. 

Skills are key to achieving the government’s growth mission 

Many employers are struggling to recruit people with the skills they need, with 36% of vacancies in 2022 reported to be due to skills shortages – more than double the rate in 2011. ²¹ Weston T, ‘Importance of skills: Economic and social benefits’, House of Lords Library, 2024, retrieved 9 January 2025, https://lordslibrary.parliament.uk/the-importance-of-skills-economic-and-social-benefits/#:~:text=This%20is%20based%20on%20the,current%20and%20future…  Sectors such as construction, digital technology and green industries are finding it a challenge to recruit talent, and all are all key to economic growth. ²² Edge Foundation, Skills shortages in the UK economy, 2024, retrieved 10 January 2025, www.edge.co.uk/documents/480/DD1279_-_Skills_shortages_bulletin_summary_2024_FINAL.pdf

The scale and nature of skills shortages varies by region, with the UK having significantly greater levels of skills inequalities than many European comparators. ³⁰ Evans S, Egglestone C and Treneman S, Worlds apart: skills and learning inequalities in the UK Learning and Work Institute, 2024, retrieved 6 January 2025, https://learningandwork.org.uk/resources/research-and-reports/worlds-apart/  In the Liverpool City Region, a mix of low-skilled residents and low-skilled job vacancies has led to in-work poverty, with 24% of workers lacking key essential skills, such as literacy and numeracy. ³¹ LCRCA, Long Term Skills Plan Final Draft – August 2024, 2024, retrieved 10 February 2025, https://liverpoolcityregion-ca.moderngov.co.uk/mgConvert2PDF.aspx?ID=74595   

Devolution enables cities like Liverpool to innovate

Since 2019, delivery of significant parts of the adult skills system has been devolved to mayoral combined authorities (MCAs). Predominantly, this involves the devolution of the adult skills fund (ASF), previously known as the adult education budget, of which £828m will be allocated by MCAs and the Greater London Authority (collectively now known as ‘strategic authorities’) in the 2024/25 academic year. ³² The Mayor of the East Midlands and the Mayor of York and North Yorkshire are due to receive ASF from late 2025, this figure accounts for the 10 other mayoral authorities. Data from the Department for Education, Adult education budget: devolved grant determination letters 2024, 29 August 2024, retrieved 10 January 2025, www.gov.uk/government/publications/adult-education-budget-devolved-grant-determination-letters-2024  In the Liverpool City Region, this has enabled the combined authority to tailor these funds to meet local priorities, such as by widening eligibility for fully funded courses for residents earning below the region’s median wage. ³³ https://liverpoolcityregion-ca.moderngov.co.uk/mgConvert2PDF.aspx?ID=74595  

The combined authority has also carved out funding for ‘Test and Learn pilots’, amounting to £1.7m in 2024/25. ³⁴ LCRCA, ‘Adult Skills Fund’, retrieved 10 February 2025, www.liverpoolcityregion-ca.gov.uk/adult-skills-fund  During my visit, I heard how this has been used to test innovative delivery methods – such as teaching numeracy skills through woodwork and English speaking through football – that wouldn’t have received funding under national ASF allocations.

But there are limitations to strategic authorities’ levels of flexibility. In the Liverpool City Region, for example, high levels of demand for essential skills and ESOL (English for Speakers of Other Languages) means much of the ASF is tied up in meeting statutory requirements.

Whilst mayoral strategic authorities only have direct control over non-apprenticeship adult skills programmes, many mayors are using their ‘soft’ powers to influence other parts of the system.

The mayor of the Liverpool City Region has set up an apprenticeship levy transfer scheme, which encourages and supports large employers to transfer up to 50% of their unused levy to other employers in the region. The scheme has led to the transfer of more than £7m and has been used to target specific sectors such as early years and childcare. ³⁵ LCRCA, ‘LCR Apprenticeship Levy Pledge’, retrieved 11 February 2025, https://lcrbemore.co.uk/levy-pledge/  The mayor has also backed a scheme piloting AI in schools and launched a ‘UCAS-style’ platform for local skills and employment opportunities. 

Mayors want government to go further with skills devolution

The devolution white paper included proposals for reform of devolved adult skills provision, such as the removal of some ringfences from skills funding and a greater role for mayoral strategic authorities in the Local Skills Improvement Plans that are currently produced by employer groups.

But could these reforms go further? Steve Rotheram, the mayor of the Liverpool City Region, was re-elected in 2024 with a manifesto pledge to campaign for “full devolution of 16-19 education” – a policy area where other mayors have also called for a greater role. ³⁶ Rotheram S, Taking back our future, 2024, retrieved 12 February 2025, https://steverotheram.com/wp-content/uploads/2024/04/Taking-Back-Our-Future-Web.pdf  The white paper included a commitment for mayoral strategic authorities to have “regular, structured opportunities” to feed into DfE’s strategy for post-16 education. However, it also said that government will ensure there is a “national and consistent approach”.

 While post-16 skills devolution isn’t on the cards right now, the government insists its devolution ambitions are the “floor not the ceiling”. With mayors due to be able to formally request further powers, expect further skills devolution to be high on their wish lists.