Meeting documents

2 RECOMMENDATION

3.1 It is expected that a sub-regional arrangement is likely to be more cost effective than unilateral arrangements by each local authority. Of the alternatives, the shared service approach is likely to be the best means of sharing risks between the 4 UAs.

3.2 If a sub regional arrangement is accepted, there will need to be a setting up of the new shared service. The costs of this will need to be developed. There is clearly a possibility that there may be a shortfall between this and the funding available. But there is no reason to be certain that this will be the case.

3.3 The second area of doubt is the formula that may be used to allocate funding. There is always a risk that this will allocate less to this geographic area than the current model does. But there is no reason to believe that this will be the case. The general principle ought to be that there will be passporting of sixth form funds to schools, and hence no financial liability on Councils or schools. This understanding will need to be confirmed once further announcements are made.

3.4 A full appraisal of the financial implications will be critical to the next stages in the process, and the recommendation in this report to opt for a shared service is subject to the completion of that appraisal.

5.2 A number of these proposals have now been established in legislation (Learning and Skills Act 2008).

5.4 The DCSF has made it clear that it will not allow individual Local Authorities to assume the full range of commissioning responsibilities unless a specific case can be made based on the demographic, demand for and supply of provision within the area. Where the DCSF does not accept the arrangements proposed by a Local Authority, the commissioning of FE and work based training provision will remain with the Regional Young Persons Learning Agency.

5.5 Currently in the West of England, there is a single local Learning and Skills Council which deals with the planning and funding of all 16-18 education and training in the schools, FE colleges and work based training providers in Bath and North East Somerset, Bristol, North Somerset and South Gloucestershire.

5.6 The functions performed by the local Learning and Skills Council which will transfer to the Local Authorities can be described as follows:

5.7 The funding formula by which the regional and local LSCs provide revenue funding for providers is set by the national LSC. Capital funding is again finally determined nationally, though local and regional LSCs have responsibilities to analyse and present bids to the national Council. It is not yet clear precisely how capital funding bids will operate post 2010.

5.8 The DCSF and the Government Office for the South West have made it clear that they would expect the four Local Authorities to enter into a sub regional arrangement to reflect the economic demands of the sub region and to address the considerable flows of students across the Local Authority boundaries in the 16-18 age range.

5.9 The DCSF guidance for sub regional arrangements sets out two possible models, namely:

5.10 If Local Authorities do not adopt one or other of the two models, the Young Persons Learning Agency regionally will commission FE colleges and work based training provision in the Local Authority area until such time as the DCSF has approved a sub regional arrangement.

5.11DCSF now require Local Authorities to complete a template outlining their proposals for sub regional groupings and return that template to their Government Offices by 27 February 2009. The template requires information to be supplied on the following criteria:

Governance,

including an outline of the proposed arrangements, political sign off, clear decision making, dispute resolution and accountability;

Collaboration and Strategic Contribution,

including arrangements to engage in strategic relationships across the whole sector and fit within the wider local and regional strategic priorities;

Resources and Capacity,

including a demonstration that staffing and infrastructure requirements will be sufficient to deliver the changes, including consideration of shared services to achieve economies of scale;

Policy and Planning,

including demonstration of how the sub regional approach will deliver the wider 14-19 agenda and the new statutory requirements on the raising of the participation age and the promotion of high quality provision.

5.12 Each sub region's outline plans will then be assessed against a set of published criteria and decisions made as to the fitness of purpose of the proposals for further development in time for the transition to be completed in 2010.

5.13 At this stage, the decisions required of the four Cabinets in the West of England are:

Why should there be a West of England Sub Regional Arrangement?

5.14 If the four Local Authorities cannot present a case for a sub regional grouping all commissioning for FE and work based training would lie entirely with the regional Young Persons Learning Agency. This could mean a lack of coherence across the West of England area with key decisions resting effectively at the regional Young Persons Learning Agency level. This could also result in discontinuity with other key West of England partnership shared priorities on economy, skills and transportation. There would be no place for the West of England area on the regional planning forum of the Young Persons Learning Agency

5.15 A sub regional grouping based on the West of England would achieve the following benefits:

5.16 It is considered that these advantages for the people, employers and providers in the sub region outweigh the disadvantages of the local authorities collectively accepting additional sub regional responsibilities.

A Shared Service or a Lead Authority?

5.17 If one Local Authority took on the lead role on behalf of all four, that authority would assume considerable additional liabilities and financial risk. It is extremely unlikely that, in the current economic climate, any one Local Authority would be prepared to accept these responsibilities. In addition, these would still need to be dispute resolution procedures and the potential for breakdown in the agreement between the lead authority and the other three would need to be addressed through complicated legal agreements.

5.18 A shared service offers the potential to achieve greater trust among the four Local Authorities, a more secure long term future for the arrangement, a sharing of risk and liabilities, greater efficiencies and better potential for synergy with the other key West of England shared strategic developments, in particular economy and skills and transportation.

5.19 On this basis a shared service is recommended, should the four Local Authorities agree to a sub regional arrangement, subject to a further detailed appraisal of the financial, personnel and risk implications.

Options for s Shared Service

5.20 At this stage, it is not necessary for the four Local Authorities to determine finally the details of any shared service, but rather to indicate the options under consideration.

5.21 There are effectively three options which are in many ways interrelated:

5.22 The next steps in the process would be to establish the pros and cons of each of these options, with a further report in due course being presented, as appropriate, to the Leaders of the four Authorities.

5.23 There will be other issues to be addressed once national guidance becomes clearer, in particular capital funding, provision for young people with learning difficulties and disabilities for whom the statutory responsibility extends to age 25 and links with the National Apprenticeship Service.

6.3 Whichever option is adopted, a further joint working agreement between the Authorities will be required. The issues this will need to address will be similar to those arising under the existing West of England joint working arrangements. The details will need to be agreed by the Head of Legal & Democratic Services.

6.4 If a joint executive committee is proposed, then a formal decision to establish such a body and to delegate the relevant functions will be necessary.

6.5 If it is proposed that any functions are to be delegated to another type of body (such as Connexions or a new local authority controlled company ie not a local authority) we will need to explore carefully the scope for this and the legal requirements which need to be met.

6.6 The extent of any restructuring of Connexions will need to be considered carefully. Its status as a wholly local authority controlled company must not be jeopardised.

6.7 The proposal to develop a sub regional shared service affords the opportunity to ensure a coherent approach which will contribute to the economic and social wellbeing of the West of England area and link with other key shared priorities, such as economy, skills and transportation.

6.8 There are risks associated with whichever approach is adopted.

6.9 A decision not to proceed with a sub regional arrangement is likely to pose fewer financial risks for each of the Local authorities but greater risks of failure to achieve coherence in 16-18 provision in the sub region which links with the 14-19 curriculum agenda, meeting the needs of the employers and communities of the sub region and achieving links with the West of England shared priorities and strategies for economy and skills and transportation.

6.10 A sub regional arrangement based on a lead authority would place greater financial risk on that authority and would also pose risks associated with greater potential for dispute and potential for a lack of convergence with the other West of England shared priorities.

6.11 A sub regional shared service could pose greater financial risks for the four authorities than would exist should the authorities opt not to have a sub regional arrangement but this has to be weighed against the benefits in relation to cohesion with the 14-19 curriculum agenda and the wider West of England shared strategic priorities and the ability to respond to the needs of employers and work based training providers and individual learners. In addition, a shared service provides the best opportunity for the four authorities to maximise economies of scale and thereby minimise financial risk.

6.12 Careful planning of the next steps in the process, including a full financial, personnel and legal appraisal of the options will minimise the risks associated with a shared service.