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5. Strengthening the governance of skills policies in Northern Ireland

Abstract

Effective governance arrangements are essential to support Northern Ireland’s (United Kingdom) performance in developing and using people’s skills. The success of skills policies typically depends on the responses and actions of a wide range of actors, including government, learners, educators, workers, employers and trade unions. A whole-of-government approach, effective stakeholder engagement, integrated information systems and co-ordinated financing arrangements are essential to improve skills development and use. This chapter explains the importance of strengthening the governance of skills and provides an overview of current practices and performance in Northern Ireland. It then explores three opportunities to strengthen skills governance: making sustainable funding arrangements and committing to an overarching strategy for Northern Ireland’s skills system; increasing co-ordination and information distribution across the whole of government; and improving employer engagement in the governance of skills policies.

    
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The importance of strengthening the governance of skills policies

Well-functioning governance arrangements are central for effective skills policies and creating a sustainable skills system. Policies that aim to reduce skills imbalances, create a culture of lifelong learning, or transform workplaces to make better use of skills will only realise their full potential if accompanied by supportive governance arrangements. Potential policy responses to the economic crisis resulting from the COVID-19 (coronavirus) pandemic also necessitate strong governance arrangements in the area of skills policies, as many challenges of Northern Ireland’s skill system identified throughout this report might be reinforced. Creating such well-functioning governance arrangements can, however, be challenging.

Skills policies contribute to societal as well as economic goals (Carstensen and Ibsen, 2019[1]) both fostering economic development, as evidenced through key indicators like wages, productivity, growth and export performance, as well as suppressing unemployment and wage inequality (Ashton and Green, 1996[2]; Busemeyer, 2015[3]). The governance structures of skills policies are therefore complex. They require the involvement of a wide variety of actors in the provision, financing, reform and day-to-day administration of skills policy, ranging from different levels of government to stakeholders such as employers, employees, their associations, education and training providers, and students. In addition, in terms of responsibilities within government, skills policies lie at the intersection between more “traditional” policy fields and departments responsible for educational policy, labour market policy, innovation policy, industrial policy and others. Furthermore, skills policy is shaped by substantial uncertainty, especially in the face of rapid technological change, globalisation, and demographic and climate change, as well as the current economic crisis resulting from COVID-19. For example, skills needs might fundamentally change as a result of COVID-19. In the short term, this could be due to an increasing economic downturn in especially affected sectors. In the long term, relocations of economic sectors considered as critical infrastructure or changed consumer behaviour leading to structural economic change (e.g. boosting online trade and business practices, increased domestic business and tourism) could change skill needs. An inherent complexity thus emerges within this policy field.

In order to tackle the complex dynamics within the governance of skills policies, the OECD Skills Strategy (OECD, 2019[4]) identifies four pillars on which well-functioning governance arrangements are built (see Figure 5.1).

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Figure 5.1. The four pillars for strengthening the governance of skills policies
Figure 5.1. The four pillars for strengthening the governance of skills policies

Source: OECD (2019[4]), OECD Skills Strategy 2019: Skills to Shape a Better Future, https://doi.org/10.1787/9789264313835-en.

The first pillar captures co-ordination across the whole of government (“whole-of-government approach”). This includes “vertical” co-ordination between different levels of government (including the district council level, the central government of Northern Ireland and the United Kingdom [UK] Government), as well as “horizontal” co-ordination between different departments of government that are either directly responsible for skills policy or impact on skills policies; for example via funding arrangements (i.e. Department of Finance [DoF]). The second pillar emphasises the importance of stakeholder engagement in skills policies. These non-governmental stakeholders include employers and their associations, trade unions as well as education and training providers, students, and the voluntary and community sector. Engagement can range from opportunities for these stakeholders to voice their concerns, to a more wide-reaching delegation of governance tasks. Particularistic behaviour and undue influence of stakeholders should, however, be avoided in any of these forms of stakeholder engagement. Thirdly, integrated information systems on (future) skills needs are necessary to cope with the inherent complexity and uncertainty present in skills policy. Such systems help government and individuals as well as associated stakeholders to make informed decisions, leading to better skills outcomes. The final pillar captures the necessity of aligning and co-ordinating financing arrangements within skills policy. This includes the need to respond to the financial challenges and opportunities that will arise as a consequence of the UK’s exit from the European Union (EU) and the economic crisis resulting from COVID-19. Given that the benefits of skills policies are most visible in the long term, funding arrangements should be aligned in ways that overcome a focus on the short-term financial needs of all engaged actors. Furthermore, perverse incentives should be avoided in order to make the most efficient use of available funding.

These four pillars (OECD, 2019[4]) can be seen as enabling conditions for the other three priority areas discussed in this report. For example, without integrated information systems, lifelong learning might not provide the right skills that are needed, and would, therefore, reinforce skills imbalances. Similarly, without sufficient stakeholder engagement, policies aimed at improving skills use in the workplace might not be directed at the needs of employers in Northern Ireland. Without co-ordination across the whole of government, policies tackling skills imbalances might be implemented separately by different departments, possibly leading to inadequate and inefficient use of resources with harmful side effects that can compromise the effectiveness of the policies; for example, through unintended cycling of individuals between different programmes. If departments react individually to problems of skills imbalances, they might also unintentionally “overshoot” as a consequence of their cumulative, but individual and isolated policy responses, resulting in excess supply in the provision of certain skills. This chapter will first provide an overview of Northern Ireland’s skills governance system and performance. Subsequently, it identifies opportunities that can help Northern Ireland to strengthen the governance of its skills system, based on desk research and discussions with government and stakeholder representatives (participants) consulted during this project.

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Northern Ireland’s practices and performance in strengthening the governance of skills policies

Current practices to strengthen the governance of skills policies

Governance arrangements in skills policies are not only inherently complex, but they also differ heavily between locations, depending on historical, cultural and socio-economic factors (Thelen, 2004[5]). Consequently, “one-size-fits-all” recommendations for strengthening the governance of skills systems are often inadequate (OECD, 2019[6]). Nonetheless, learning from international best practices can be possible when their institutional context is taken into account. This chapter, therefore, aims to base its recommendations, partially influenced by relevant best-practice examples, within the specific context of Northern Ireland’s skills system.

In general, Northern Ireland’s skills system, alongside the UK’s overall skills system, can be classified as a so-called “liberal” skills system (Busemeyer and Trampusch, 2012[7]). In terms of governance structures, liberal systems provide skills mostly via the general education system and/or markets; i.e. with individuals financing a substantial part of higher education and vocational/further education via tuition fees. Furthermore, in liberal skills systems, vocational education is often seen as inferior compared to academic and higher education, and is mostly provided by further education (FE) colleges. Consequently, employer engagement in the governance and provision (and consequently also funding) of vocational education and training is rather low in most liberal skills systems compared to the “collective” skills systems of continental European countries with strong dual apprenticeship schemes.

Education and training providers and governmental stakeholders

In Northern Ireland, secondary level education is carried out in both grammar schools with entry requirements, which tend to teach more general, academic skills, as well as in secondary schools, which teach more vocational skills (Irwin, 2019[8]; Raffe et al., 1999[9]). According to recent studies (Irwin, 2019[8]), students leaving grammar schools are substantially more likely to continue to higher education and even further education, compared to students from secondary schools. At the age of 16 and above, students either continue at school, with many of them joining university afterwards, or go to FE colleges that offer further education, higher education and essential skills training. At a lower level, this can include general education; for example, leading to university entrance qualifications. Vocationally-oriented programmes are offered at all levels. FE colleges also offer full-time as well as part-time programmes, with some of the part-time vocational programmes following the apprenticeship principle of combined school- and work-based education (ranging from youth training and lower level apprenticeships to higher-level apprenticeships). However, these vocational programmes and FE colleges in Northern Ireland are “seen as a lower-status route and, in an education system where success is still in many ways defined as academic education, FE is not a first-choice option for many school-leavers” (Irwin, 2019[8]). FE colleges and, to a lesser extent, universities are also involved in offering courses in adult education, and certain courses tailored to the needs of specific employers (as also discussed in Chapters 2 and 3). These include the recently introduced programmes InnovateUs and Skills Focus, which target small and medium-sized enterprises (SMEs), or the Assured Skills programme introduced by the Department for the Economy (DfE) and Northern Ireland’s regional development agency Invest NI, which is targeted mostly at foreign investors.

Concerning the governmental actors involved, many responsibilities for skills policies were centralised in DfE in 2016, including the above-mentioned employment and skills programmes (including apprenticeships), higher and further education and career services. The Department of Education (DE) is responsible for early childhood, primary and secondary level education, special education and the youth service, and also manages career education and skills policy in primary and post-primary schools. The Department for Communities (DfC) is responsible for programmes targeted at job seekers and those who are unemployed, as well as policies related to inclusion, gender equality, disability, sexual orientation and population ageing. The Department of Agriculture, Environment and Rural Affairs (DAERA) is responsible for skills policy (higher education, further education, industry training) in its area of policy, including the College of Agriculture, Food and Rural Enterprise. Similarly, the Department of Health (DoH) is responsible for skills policy in health and social care, ensuring a sufficient supply of qualified staff. Finally, DoF sets the budget for all departments and runs the Northern Ireland Statistics and Research Agency (NISRA), the principal source of official statistics and social research in Northern Ireland.

The reform of local government in 2015 also gave local actors new responsibilities in addition to their previously only marginal role in skills policy (i.e. local economic development) (Knox and Carmichael, 2015[10]). Now responsible for community planning are 11 district councils, which can also tackle skills policy, including consultations with local employers on their skills needs (OECD, 2019[11]). New City Deals for Belfast and Derry/Londonderry and Growth Deals for Mid South West and Causeway Coast and Glens also transfer additional responsibilities in skills policies to the local level, with a new governance structure, including a Northern Ireland City and Growth Deals Working Group, regional Joint Council Forums and Programme Boards, and regional Pillar Advisory Boards responsible for specific policy pillars (e.g. employability and skills). More details are provided in Opportunity 2.

Non-governmental stakeholders

Concerning the non-governmental stakeholders who are involved, Northern Ireland partially exhibits the typical characteristics of a liberal skills system. For example, employer engagement in the governance of the above-mentioned skills policies is historically rather low compared to continental European countries. However, as part of the Success strategies on skills policy, Northern Ireland has in the recent past tried to substantially improve the stakeholder engagement of employers, employees, education and training providers as well as the voluntary and community sector via a number of newly established stakeholder consultation bodies (DEL, 2014[12]; DEL, 2015[13]; DEL; DE, 2009[14]).

Figure 5.2 depicts some of the actors and above-mentioned stakeholder engagement bodies. The Strategic Advisory Forum consists of employers, education and training providers, government representatives and trade unions, and advises the government on the provision of apprenticeships and youth training. Sectoral Partnerships for youth training and apprenticeships define curricula, structure, awards, and qualifications for each occupation within their sector, inform assessment and end-testing and try to increase participation in these skills policies. The Career Advisory Forum consists of representatives from business, education, and other key stakeholders to advise the government on career guidance, bringing education closer to labour market needs, and supporting local stakeholder involvement of service users, education providers and business. The NEET Strategy Forum includes over 80 voluntary and community sector organisations, giving that sector a voice in government policies targeted at those not in education, employment or training (NEET). The NEET Advisory Group consists of government representatives, health trusts, business and representatives from the NEET Strategy Forum. There is also a number of already well-established employer engagement bodies. This includes, for example, Sectoral Action Groups on future skills needs (DEL, 2006[15]). Furthermore, as a response to the Independent Review of Economic Policy commissioned by the former Department of Enterprise, Trade and Investment, the Economic Advisory Group was set up in 2010.

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Figure 5.2. Selection of actors and stakeholder engagement bodies in Northern Ireland
Figure 5.2. Selection of actors and stakeholder engagement bodies in Northern Ireland

Sector Skills Councils are independent, employer-led organisations that aim to reduce skills shortages (via promoting training participating) and improve learning standards. Sector Training Councils articulate the skills, education and training needs of their sectors and advise DfE. However, older employer engagement bodies have become less and less important (OECD, 2019[11]). For example, as funding from central government drastically declined in an attempt to make them more self-sustainable, the majority of Sector Councils have ceased to exist.

Funding arrangements and information systems

Northern Ireland has a variety of databases available on skills policy, with responsible agencies including different government departments, NISRA, the Universities and Colleges Admission Service, the UK’s Higher Education Statistics Agency and the UK’s Office for National Statistics. Northern Ireland has also introduced the Northern Ireland Skills Barometer, which is undertaken by the Ulster University Economic Policy Centre (UUEPC) under the direction of DfE (DEL, 2014[12]; UUEPC, 2019[16]). Its main purpose is to forecast future skills requirements and skills gaps by qualification level, field of study and sector. Recent amendments to the Skills Barometer will also result in this information being provided at a local council level for Northern Ireland. The project was commissioned in 2015 and provides updates every two years, with the latest report released in 2019. There are also online portals that distribute information concerning skills programmes, namely nidirect.gov.uk for citizens and nibusinessinfo.co.uk for employers.

Financing arrangements for skills policies in Northern Ireland are largely typical of a liberal skills system and often follow market logic. For example, participation in higher education as well as vocational education at FE colleges is usually subject to tuition fees and is therefore partly financed by individuals. However, skills policies targeted directly at employers are often partly or wholly paid for by government subsidies, such as the above-mentioned InnovateUs, Skills Focus, Assured Skills or Innovation Voucher programmes. Furthermore, the European Social Fund (ESF) contributes heavily to a variety of measures in Northern Ireland’s skills system. Funding for the off-the-job training element of apprenticeships is provided by both DfE and the ESF for individuals below the age of 25. Employers pay apprenticeship wages according to the National Minimum Wage Regulations but, in contrast to continental European countries, there are very few employers that train apprentices. There are also subsidies in place to increase employer participation in training. Furthermore, all employers with an annual pay bill of more than GBP 3 million have to pay into the UK-wide Apprenticeship Levy; however, revenue from the levy is currently not used to increase training participation. Public funding for education and training providers is allocated mostly according to different input targets and measures, with funding being set according to a centrally set number of places (universities), a number of retained students (schools) and a staged model considering the number of students in colleges (Gunson, Murray and Williamson, 2018[17]). New sources of funding from the UK Government will also become available through the new City Deals for Belfast and Derry/Londonderry and the Growth Deals for Mid South West and Causeway Coast and Glens.

Performance in strengthening the governance of skills policies

In the OECD’s assessment workshop in Northern Ireland, stakeholders ranked funding as the most important area for improving Northern Ireland’s skills systems. First of all, a significant issue for Northern Ireland’s skill system concerns the tight and steadily decreasing financial resources allocated to skills policies. The critical funding situation in the field of skills policies is, for example, reflected in school spending per pupil, as shown in Figure 5.3 for Northern Ireland, which lies not only well below spending in Scotland, England and Wales (United Kingdom), but has also been continuously decreasing since 2015.

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Figure 5.3. School spending per pupil across England, Wales, Scotland, and Northern Ireland (2019-20 prices), 2009/10-2018/19
Figure 5.3. School spending per pupil across England, Wales, Scotland, and Northern Ireland (2019-20 prices), 2009/10-2018/19

Source: Britton, J., C. Farquharson and L. Sibieta (2019[18]), Annual Report on Education Spending in England, https://www.ifs.org.uk/publications/14369.

 StatLink https://doi.org/10.1787/888934127947

Even so, as outlined in recent research (Gunson, Murray and Williamson, 2018[17]), despite their tight financial situation, schools are the education providers most protected from financial cutbacks due to a funding model that is calculated on a per-student basis. This funding model benefits schools in relation to FE colleges, and might, therefore, lead to perverse incentives and harmful competition. Consequently, other education and training providers are even more affected by decreasing funding for skills policies than schools.

While the tight financial situation of Northern Ireland’s skills system, and the dependence on ESF, was seen as a concern by most participants, discussions with participants also showed that absolute levels of funding are not the only funding issues (see, for instance, outcomes of a pre-workshop survey among participants in Annex B). In addition, more efficient use of the funding already available was seen as essential by the participants. Moreover, in light of the current economic crisis resulting from COVID-19 and which is putting additional strain on government budgets, such efficient use of available funding becomes even more critical. This can be created by improving co-ordination across the whole of government, through establishing integrated information systems and improving stakeholder engagement.

Concerning the first point on co-ordination across the whole of government, despite the recent centralisation of many responsibilities for skills policy in DfE, horizontal co-ordination of policies across different departments in skills policies is essential. Examples include, but are not limited to, programmes targeted at job seekers and the unemployed (DfC), or career education (DE). Furthermore, there are a number of additional government institutions that engage in skills policies more broadly (Invest NI, Innovate UK, DfE’s Careers Service). Findings from earlier reports (OECD, 2016[19]; OECD, 2019[11]), group discussions, workshops as well as interviews with political parties indicate that co-ordination between, as well as within, departments could still be improved. This is reflected on the one hand at the manifold, partly overlapping employer engagement bodies introduced in Northern Ireland (see further below). On the other hand, it leads to policies that are not aligned between different governmental bodies, ultimately leading to an expensive overlap of policies for similar target groups across departments. A possible consequence is also that individuals cycle between these programmes, rather than being successfully integrated into the labour market.

Vertical co-ordination is becoming increasingly important with new responsibilities being transferred to the local level via City Deals, Growth Deals and the recently created 11 district councils. Participants emphasised that local stakeholders are very invested in creating comprehensive regional community plans and City Deal strategies. However, risks of different levels of government working in isolation could be further mitigated in order to make more efficient use of resources and avoid duplications of similar policies. Furthermore, some participants highlighted that resources allocated to the local level are often used for projects on the higher end of the skills distribution with high public appeal, instead of being used more efficiently at multiple (and therefore also lower) levels of the skills distribution; for example, targeting those individuals most in need.

Second, concerning integrated information systems, substantial resources are used for generating high-quality information; for example, through the Northern Ireland Skills Barometer. Data from a variety of sources and methodologies are available on a regional as well as sectoral level, and data concerning longitudinal employment outcomes of graduates also exist, as has been recommended by the OECD (OECD, 2017[20]). However, this information is not being effectively used and does not sufficiently guide policy making, according to participants. Furthermore, due to financial cutbacks and the disappearance of many Sector Skills Councils, business and private sector involvement in the Skills Barometer and other information sources proves to be challenging (OECD, 2019[11]).

Third, most participants commented that employers are not sufficiently contributing to the funding of skills policies; for example, by providing apprenticeship training. In general, this is not surprising given that in Northern Ireland (together with the rest of the UK), employer engagement is historically quite low compared to continental European and some Nordic economies. In these countries, the share of upper-secondary students in combined school- and work-based programmes, like apprenticeships, is much higher (see Figure 5.4).

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Figure 5.4. Share of all upper-secondary students in vocational programmes, and share of all upper secondary students in vocational programmes combining school- and work-based learning, 2015
Figure 5.4. Share of all upper-secondary students in vocational programmes, and share of all upper secondary students in vocational programmes combining school- and work-based learning, 2015

Notes: In Australia, Canada, Greece, Italy, Japan, Korea, Mexico, the Netherlands, New Zealand, Portugal, Slovenia and Turkey, information on combined programmes is missing, or the category does not apply. Programmes combining school- and work-based learning are defined as those in which 25-90% of the curriculum is delivered in the work environment.

Source: Kuczera, M. and S. Jeon (2019[21]), Vocational Education and Training in Sweden, https://doi.org/10.1787/g2g9fac5-en.

 StatLink https://doi.org/10.1787/888934127966

Compared to the rest of the UK, Northern Ireland ranks last concerning the share of employers with training budgets (see Figure 5.5), reflecting employers’ low willingness to invest and engage in skills policies.

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Figure 5.5. Share of employers with training budgets in Northern Ireland and other UK countries, 2017
Figure 5.5. Share of employers with training budgets in Northern Ireland and other UK countries, 2017

Source: UK Government (2017[22]), Employer Skills Survey 2017, https://www.gov.uk/government/collections/uk-employer-skills-survey-2017.

 StatLink https://doi.org/10.1787/888934127985

However, in the last few years, Northern Ireland has made significant attempts to improve employer engagement in skills policies with a number of new tripartite governance bodies (Strategic Advisory Forum, Sectoral Partnerships, Career Advisory Forum, etc.). This is noteworthy as these new bodies not only give employers a voice, but partly delegate certain quasi-public functions like curriculum development, the creation of one single qualification per occupation, or quality control to them. They, therefore, resemble the “private interest governments” (Streeck and Schmitter, 1985[23]) of many continental European countries, which are seen as a central factor in enabling employer participation in training in these countries (Busemeyer and Trampusch, 2012[7]; Emmenegger, Graf and Trampusch, 2019[24]).

Creating governance arrangements that increase employer engagement in skills policies is challenging in countries that have been historically shaped by low employer participation, and Northern Ireland is no exception. For example, participants advised that employer associations participating in these bodies are not necessarily representative of local business, and/or do not necessarily have the expertise to assume such new responsibilities. Consequently, employer engagement bodies might need additional steering by independent experts in order to compensate for such shortcomings. Second, existing bodies are not able to limit poaching between firms to a sufficient extent to increase training participation. This, therefore, requires dedicated, potentially local, arrangements that promote skills policies and create co-operation and trust among employers to prevent poaching. Third, Northern Ireland’s economy is characterised by a large share of SMEs that are often regarded as more reluctant to engage in skills policies. Policies to motivate training participation, especially among SMEs, could, therefore, make a substantial contribution in raising employer engagement in skills policies. Finally, government policy itself is not always entirely consistent. Funding for older employer engagement bodies like Sector Skills Councils and Sector Training Councils, which were successful in certain sectors, has been cut, leading to their disappearance, and new employer engagement bodies cannot fully replace their functions (see Opportunity 3). However, employer engagement bodies only realise their potential benefits in the long term, requiring sustainable funding models. At the same time, the number of new employer engagement bodies is still seen as too high by many participants, leading to overlaps between bodies (including older ones) and substantial confusion and frustration among employers.

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Opportunities to strengthen the governance of skills policies

Improving the governance of skills policies is crucial to ensure that they are both effective and ultimately create a sustainable skills system, as policies in the three priority areas covered in Chapters 2 to 4 will only realise their full potential if they are accompanied by supportive governance arrangements. This chapter describes three opportunities where governance arrangements of Northern Ireland’s skills system can be improved. The selection is based on input from the literature, desk research and discussions with stakeholders of Northern Ireland’s skills system; for example via discussions in workshops in Belfast, Derry/Londonderry and Dungannon, group discussions and several related meetings. As a result, the following opportunities are considered to be the most relevant for strengthening the governance of Northern Ireland’s skills system:

  1. 1. Making sustainable funding arrangements and committing to an overarching strategy for Northern Ireland’s skills system.

  2. 2. Increasing co-ordination and information distribution across the whole of government.

  3. 3. Improving employer engagement in the governance of skills policies.

Opportunity 1: Making sustainable funding arrangements and committing to an overarching strategy for Northern Ireland’s skills system

Sufficient funding for skills policy is essential in making societies fit for technological change and the subsequent new skill requirements arising from it. However, the benefits of skills policies are most visible in the long term. Consequently, cost-benefit calculations by the actors involved can be subject to substantial uncertainty about future payoffs of skills. This is especially relevant in the face of rapid technological change and innovation, which constantly changes skill requirements and the needs of the economy.

This uncertainty in the field of skills policy holds for both employers and individuals. Both can consequently be expected to under-invest in skills as a consequence of possible market failures due to uncertainty, potentially leading to a provision of skills below the level optimal for society, as well as for individuals (Johansen, 2002[25]; Streeck, 1992[26]). The public sector, however, is in a position to influence investment in skills by introducing certain incentives for employers, students and education and training providers, especially in certain skills programmes that might be of strategic value in tackling future challenges for the respective economies (OECD, 2017[27]).

Considering that the potential benefits of skills investments will only be fully realised in the long term, political decision makers can be pressured to focus on short-term issues in the face of electoral cycles, consequently leading to an under-funding of skills policies. Northern Ireland must ensure that the importance of skills for future economic growth, social inclusiveness and well-being (Busemeyer, 2015[3]; Carstensen and Ibsen, 2019[1]; Iversen and Soskice, 2010[28]) is understood by all major stakeholders, and in particular, political decision makers. Consequently, the creation of a shared commitment among political decision makers is central for a common long-term strategy for skills policy that guarantees sustainable funding arrangements. Such commitments ideally contain agreements on common funding priorities that are informed by all available evidence (see Opportunity 2 on evidence-based policy making), as it is of central importance how the money allocated to skills policy is actually spent. This concerns the distribution of funding across different educational sectors, including schools, universities, FE colleges, and costs associated with employer engagement. It also concerns funding across different stages of learning, ranging from early childhood education, primary and secondary education to adult learning. Long-term strategies for skills policies should also be reflected in the respective budgets of, not only government departments but also education and training providers, enabling multi-year planning.

The exit of the UK from the EU will have important consequences for Northern Ireland’s skills system, in turn giving rise to fundamental uncertainty. The ESF finances a substantial portion of skills policies in Northern Ireland and, according to the current Withdrawal Agreement, funding for the UK will stop when the transition period ends (Brien, 2019[29]). Consequently, a common strategy on how to replace ESF funding with UK-wide funding opportunities and how to prioritise the spending of these funds will be needed. However, more efficient allocation of money spent on skills policy can also include a more straightforward restructuring of certain skills policies, in order to avoid possible overlaps between similar programmes with the same target groups. This avoids duplications in the administration and delivery of programmes, as well as individuals cycling between programmes.

Attempts to engage non-governmental stakeholders, like employers, to increase investments in skills policies (see Opportunity 3) can only be successful if they are accompanied by sustainable funding arrangements and governance structures that are supported by political stakeholders, and which guarantee a certain degree of stability and certainty to firms and individuals. This opportunity, therefore, tackles putting sufficient and balanced funding of skills policies on top of key decision makers’ agendas.

Putting sufficient and balanced funding of skills policies on top of decision makers’ agendas

It is essential to ensure that Northern Ireland’s decision makers and central government put balanced and sufficient funding arrangements for skills policies at the top of their agendas. Pressure to focus on short-term issues in the face of electoral cycles can lead to an under-funding of skills policy by political decision makers, which will likely lead to weak educational outcomes. Compared to England, Scotland and Wales, spending on education and skills is lowest in Northern Ireland, relative to total spending. Per capita, Northern Ireland spends more than England and Wales, but substantially less than Scotland, as shown in Figure 5.6.

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Figure 5.6. UK regional spending on education and skills, 2018
Figure 5.6. UK regional spending on education and skills, 2018

Source: ONS (2019[30]), Country and Regional Analysis, https://www.gov.uk/government/statistics/country-and-regional-analysis-2018.

 StatLink https://doi.org/10.1787/888934128004

In recent years, Northern Ireland has launched a series of sub-strategies as part of the 2011 Success through Skills strategy in order to improve its skills system (Department for Employment and Learning, 2015[31]). However, none of these strategies led to a sustainable overall increase of funding for skills policies (Gunson, Murray and Williamson, 2018[17]), which was regarded as essential by many stakeholders consulted by the OECD.

This assessment from stakeholders is also supported by a number of current reports, arguing that Northern Ireland’s funding for skills policy shows a structural deficit that is expanding year on year. It has been argued (Skilling, 2019[32]), for example, that the potential to upgrade Northern Ireland’s skills profile is constrained by tight public funding. As highlighted (Gunson, Murray and Williamson, 2018[17]), the budget allocated to skills policies declined significantly in real terms in the years since the financial crisis and public sector austerity. This can, for example, be seen in the budget of the former Department for Employment and Learning (DEL) that fell between 2014 and 2016 in absolute terms, and also that the subsequently created DfE was subject to real-term decreases in its budget.

Possible consequences of budget cuts to skills policy in Northern Ireland could not only have negative impacts on educational outcomes but could also compromise strategies to increase employer engagement in skills policies (see Opportunity 3). This can be seen from the funding cuts for Sector Skills Councils, most of which consequently ceased to exist (OECD, 2019[11]). A focus on short-term goals is not only a problem at the level of political decision makers, but also concerns the budgeting process. An earlier OECD report (OECD, 2016[19]) has emphasised the problems of short-term, one-year planning and budgeting, leading to substantial constraints on strategic thinking; participants recently consulted by the OECD team have confirmed that assessment also for the field of skills policy. The OECD’s earlier assessment (OECD, 2016[19]) has, for example, suggested an effective application of medium-term expenditure frameworks (MTEFs) in Northern Ireland (see Box 5.2 for details), something that can also help to mitigate above-mentioned issues in the field of skills policy more specifically. Focus on short-term goals is also reinforced at the level of education and training providers, specifically through the classification of FE colleges as “non-departmental public bodies” (NDPB). According to some research (Gunson, Murray and Williamson, 2018[17]), NDPB status and the consequently rigorous procurement procedures led to the fact that FE colleges “can no longer build reserves to enable multi-year investment, long-term investment, or to cushion fluctuations in income.” According to participants consulted by the OECD, Northern Ireland currently lacks an overarching skills strategy for the period after 2020 which features long-term goals and common funding commitments by government, together with all relevant stakeholders. The older skills strategy, Success through Skills, was published in 2011 and runs only until 2020. Furthermore, many participants acknowledged the importance of an overarching skills strategy covering all parts of the skills system and with cross-departmental buy-in, in contrast to the more fragmented nature of Northern Ireland’s old skills strategy, with its numerous and relatively uncoordinated departmental sub-strategies mentioned above (see also (Skilling, 2019[32]). The need for a cross-departmental approach to a new Skills Strategy was also emphasised by a recent evaluation of Northern Ireland’s previous Skills Strategy (Kieran and Murray, 2020[33]).

The “New Decade, New Approach” agreement of Northern Ireland’s new government in 2020 (NIO, 2020[34]) suggests that a focus on skills policy could be an integral part of a future common agenda for government. For example, the priorities of this new Executive, particularly the goal to “invest strategically in ensuring that Northern Ireland has the right mix of skills for a thriving economy” requires a common commitment from decision-makers to a binding Skills Strategy (see Box 5.1 for an international example). However, this potential opportunity for consensus is not yet reflected in the “New Decade, New Approach” agreement via clear and detailed commitments by decision-makers to increase funding for skills policy.

While funding for skills policy has suffered severely in recent years, a potential future increase in spending has to be balanced most effectively in its division between different educational sectors (schools, universities and FE Colleges) and/or stages of learning, ranging from early childhood education, primary and secondary education and adult learning, as well as ongoing costs associated with employer engagement. This requires difficult political decisions which in turn require equity considerations on how funding for skills policy can be fairly distributed among the population (OECD, 2019[4]). Consequently, these decisions on funding priorities in skills policies have to be democratically justifiable, and must be made by the respective political decision makers. In order to reach common long-term goals, such funding priorities on skills policy should be agreed upon in the framework of a common skills strategy. These potentially hard decisions should be supported by available evidence generated by skills anticipation and assessment tools (see Opportunity 2), in order to ensure an efficient use of the money available, and in order to mitigate political conflicts.

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Box 5.1. Relevant international example: A comprehensive skills strategy committing all relevant stakeholders

A comprehensive skills strategy: An example from Norway

Norway is generally regarded as one of the leading countries in terms of developing and using the skills of its people. The Norwegian Strategy for Skills Policy 2017-2021 is a binding agreement that commits the strategy partners to “ensure that individuals and businesses have the skills that give Norway a competitive business sector, an efficient and sound public sector, and an inclusive labour market.” The strategy was signed by the Norwegian Government represented by the prime minister, as well as the Ministry of Labour and Social Affairs, the Ministry of Local Government and Modernisation, the Ministry of Education and Research, and the Sami Parliament representing the Sami indigenous people in Norway. Furthermore, a range of arms-length bodies associated with the ministries, as well as social partners (including trade unions and employer associations) and certain third sector organisations signed the agreement. All strategy partners have agreed on three main priorities:

  • Contribute to making informed choices for the individual and society (e.g. creation and improved provision of sufficient information for individuals, educational institutions as well as the private and public sector, including skills forecasting and career guidance).

  • Promote learning in the workplace and effective use of skills (promotion of dual vocational education and training, increasing co-ordination between higher education and the labour market, reskilling especially towards digital skills and an improved certification of skills acquired in the workplace and/or abroad).

  • Enhance skills among adults with weak labour market attachment (increased collaboration between firms, non-governmental organisations [NGOs] and private training providers in order to implement adult education measures for specific target groups, like individuals with poor basic skills, low formal qualifications or lacking Norwegian skills or the Sami group).

In addition, new whole-of-government co-ordination bodies have been introduced as part of this strategy in order to support implementation (for details, see Opportunity 2).

Source: OECD (2019[6]), "Strengthening the governance of skills systems", in OECD Skills Strategy 2019: Skills to Shape a Better Future, https://doi.org/10.1787/2a40e30e-en.

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Box 5.2. Relevant international example: Medium-term expenditure frameworks (MTEFs)

Medium-term expenditure framework (MTEF)

A medium-term expenditure framework (MTEF) is a structured approach to integrating fiscal policy and budgeting over a multi-year horizon, and links fiscal forecasting, fiscal objectives or rules and planning of multi-year budget estimates. MTEFs are used extensively, with 88% of OECD countries reporting that they used MTEFs. MTEFs can improve the effectiveness of public spending by aligning public expenditure with national priorities and giving government agencies greater certainty of resource availability over a multi-year period, promoting more effective forward planning and resourcing of policies that require an extended time horizon for implementation, such as large capital projects, new programmes, and organisational restructuring. To be effective, a MTEF should have real force in setting boundaries for the main categories of expenditure, for each year of the medium-term horizon; it should be fully aligned with the top-down budgetary constraints agreed by government; should be grounded upon realistic forecasts for baseline expenditure (i.e. using existing policies), including a clear outline of key assumptions used; should show the correspondence with expenditure objectives and deliverables from national strategic plans; and should include sufficient institutional incentives and flexibility to ensure that expenditure boundaries are respected.

Sources: OECD (2019[35]), OECD Best Practices for Performance Budgeting, https://doi.org/10.1787/c90b0305-en; OECD (2015[36]), Recommendation of the Council on Budgetary Governance, http://www.oecd.org/gov/budgeting/Recommendation-of-the-Council-on-Budgetary-Governance.pdf.

Recommendations for putting sufficient and balanced funding of skills policies on top of decision makers’ agendas

4.1. Commit all relevant decision makers and ministers to guarantee support and sustainable financial resources to achieve strategic goals as part of a binding, cross-departmental Skills Strategy for Northern Ireland. The agreement would contain a long-term vision for the development of Northern Ireland’s Skills System, supported by Executive-level guarantees (including the first minister and deputy first minister) to provide adequate funding for the implementation of the strategy. This long-term vision should ideally contain common priorities on how to allocate funding to different sectors and/or stages of learning of the skills system. Agreement should be based on available evidence (for details, see Opportunity 2) and in conjunction with employers (for details, see Opportunity 3). It should be implemented by a whole-of-government co-ordination body that can also propose possible future revisions of the skills strategy (see Recommendation 4.5).

4.2. Ensure sustainable funding models and budgeting processes that enable multi-year planning beyond the short-term, traditional annual budgeting cycle. Possibilities for multi-year planning have to be ensured, firstly at the level of departments. This can, for example, be supported through an effective application of medium-term expenditure frameworks (see Box 5.2) that integrate fiscal policy and budgeting over a multi-year horizon and have the potential to lead to the more effective planning of policies that require longer time horizons for implementation (e.g. skills policies), as previously recommended (OECD, 2016[19]). Second, at the level of education and training providers, multi-year budgets should also be enabled, for example, in FE colleges.

Responding to the potential impact of the United Kingdom’s exit from the European Union and the loss of ESF funding

The exit of the UK from the EU results in challenges as well as opportunities for Northern Ireland’s skills system. The ESF, which will not be accessible after the UK’s exit, currently finances a substantial portion of skills policies in Northern Ireland. This is evident from Figure 5.7, which shows substantial shares of funding for programmes that support the unemployed (Priority Axis 1) and projects that support individuals with disabilities (Priority Axis 2) to access employment, education and training, as well as skills policies as part of Skills For Growth (such as apprenticeships; Priority Axis 3).

The UK left the EU on 31 January 2020. However, this will not instantly impact funding for skills policy, as ESF funding for the UK will stop only when the transition period ends (Brien, 2019[29]). This is currently scheduled for 31 December 2020, with possible extensions by 12 or 24 months. In order to mitigate this financial shock, the UK Government has pledged to set up a “Shared Prosperity Fund” in order to replace the structural funding from the EU. However, it is unclear if the Shared Prosperity Fund will be able to fully replace the ESF for Northern Ireland. As outlined in a recent study (Brien, 2019[29]), this will depend on a number of factors that are still unclear or undecided, with decisions on the fund’s design being regularly postponed and currently planned to be undertaken during a full Spending Review in 2020.

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Figure 5.7. European Social Fund budget (ESF) and national contribution for priority areas, Northern Ireland (UK), 2014-20
Figure 5.7. European Social Fund budget (ESF) and national contribution for priority areas, Northern Ireland (UK), 2014-20

Source: Department for Employment and Learning (2014[37]), Northern Ireland ESF Programme 2014-2020, https://dera.ioe.ac.uk/24943/1/NI%20European%20Social%20Fund%20Programme%202014%20-2020.pdf.

 StatLink https://doi.org/10.1787/888934128023

First, the amount of money allocated to the Shared Prosperity Fund is still undecided, and it is not clear whether it will account for the full GBP 1.8 billion a year which would be needed to replace EU funding (Industrial Communities Alliance, 2020[38]).

Second, the Shared Prosperity Fund is officially supposed to “reduce inequalities between communities” (Brien, 2019[29]), but the specific priorities and objectives of the fund, and consequently the money allocated to skills policies compared to the ESF, are still unclear. The uncertainty connected to these two issues is amplified by the current economic crisis resulting from COVID-19, which might have consequences for the extent and priorities of a potential Shared Prosperity Fund.

Third, the ESF is currently set up in a needs-based way that benefits the structurally weaker devolved administrations, including Northern Ireland. However, it is currently not clear if the Shared Prosperity Fund will rely on a similar allocation mechanism, or if it will draw on other mechanisms like the “Barnett Formula”. The latter mechanism is used by the UK Treasury to determine changes in public expenditure allocated to devolved administrations, taking into account population size and the degree of devolution of government functions of devolved nations of the UK. As has been explained (Brien, 2019[29]), because “EU funding is currently higher in per-person terms in the devolved nations of the UK than it is in England, the amount these nations [and respectively Northern Ireland] receive may end up lower” under the Barnett Formula compared to the ESF. However, funding might also be allocated via a competitive funding mechanism, whereby potential beneficiaries apply to the respective funding authority with proposed plans or projects, similar to the current funding allocation for City Deals. This may also result in “less developed areas losing out on funding” (Brien, 2019[29]). Consequently, the UK’s exit from the EU might be a good opportunity for Northern Ireland to reassess its dependence on external funding, in order to make the skills system more flexible and resilient to external shocks, given that continuation of similar amounts of ESF funding for skills policies cannot be guaranteed.

Fourth, it is also unclear which authority will determine potential funding priorities, the projects to be funded, or how monitoring and evaluation of funded programmes will be carried out. These responsibilities might be allocated to devolved administrations, as under the current ESF framework. Alternatively, they might be decentralised even further to local authorities, or could even be administrated centrally by the UK Government. Depending on these decisions, Northern Ireland must be prepared to co-ordinate skills policies that are funded by the Shared Prosperity Fund between different levels of government, potentially between the district council level and Northern Ireland’s central government.

Finally, the ESF currently allocates funding in planning periods of seven years, which might be incompatible with the more short-term Spending Review periods of the UK, which are usually between three and four years (Industrial Communities Alliance, 2020[38]). This might be especially detrimental to skills policies, as the benefits of skills policies are most evident in the long term. This could create additional pressure on decision makers to focus on policies with clear, short-term payoffs as part of potential Shared Prosperity Fund programmes. It is, therefore, necessary to ensure that long-term goals, as part of a potential Skills Strategy for Northern Ireland, are also reflected in future skills policies under the Shared Prosperity Fund.

This being said, the loss of ESF funding will also bring opportunities for policy makers in Northern Ireland. ESF funding is bound to certain goals and key actions that are set out in the Common Strategic Framework of the EU and which are derived from the “thematic objectives” of the Europe 2020 strategy. ESF programmes in Northern Ireland focus on Thematic Objective 8 (“Promoting sustainable and quality employment and supporting labour mobility”), Thematic Objective 9 (“Promoting social inclusion and combating poverty and any discrimination”) and Thematic Objective 10 (“Investing in education training and vocational training for skills and lifelong learning”). While EU member states and the respective designated Managing Authority in Northern Ireland (initially DEL, now DfE) have substantial autonomy in selecting and implementing specific actions to fulfil ESF goals, they must be set in accordance with, and justified with respect to, the overall ESF priorities. Furthermore, ESF regulatory requirements set minimum funding allocations to certain objectives; for example Thematic Objective 9 must account for at least 20% of total ESF funding in Northern Ireland’s ESF programme (Department for Employment and Learning; European Commission, 2014[37]). Similar ESF-related restrictions might create certain “path-dependencies” in skills policies, and limit the leeway of policy makers in Northern Ireland to set their own priorities, thereby possibly limiting policy innovation.

While the UK’s exit from the EU might consequently provide an opportunity for Northern Ireland to set its own priorities and goals as part of a new overarching Skills Strategy (see the previous section), it remains to be seen how strictly money from the Shared Prosperity Fund is to be bound to certain targets, and who defines these targets. In any case, the UK’s exit from the EU gives Northern Ireland an opportunity to reassess and restructure some of the ESF-funded programmes implemented there. Certain expensive inefficiencies are visible across ESF-funded programmes. According to participants, there are many fairly similar ESF-funded programmes across departments for similar target groups (e.g. unemployed individuals late in their working life), with individuals cycling between these programmes rather than being successfully (re)integrated into the labour market. These overlaps could be avoided, which might free up a substantial part of financial resources urgently needed elsewhere in Northern Ireland’s skills system. As the ESF programmes are located across all departments active in skills policy in Northern Ireland, the loss of ESF funding might prove an incentive for departments to co-operatively restructure and reassess their programmes. This could be supported by an inter-departmental co-ordination body (see Opportunity 2).

Recommendations for responding to the potential impact of the United Kingdom’s exit from the EU and the loss of ESF funding

4.3. Reassess and restructure current ESF-funded programmes across departments in order to avoid possibly inefficient and expensive overlaps of programmes for similar target groups. This restructuring can be planned by a cross-departmental co-ordination body, as outlined in Recommendation 4.5. As part of this restructuring, the Northern Ireland Government should also ensure that future policies potentially funded by the Shared Prosperity Fund are aligned with a long-term Skills Strategy for Northern Ireland. According to the degree of decentralisation in the administration of the future Shared Prosperity Fund, Northern Ireland must also be prepared to potentially co-ordinate skills policies that are funded by the Shared Prosperity Fund between different levels of government, e.g. between the district council level and Northern Ireland’s central government (see Recommendations 4.6 and 4.7).

4.4. Consider shifting previously ESF-funded programmes to departments’ own budgets, as opposed to continued reliance on external funds (e.g. on a potential Shared Prosperity Fund). The amount of money allocated to skills policies and the priorities set within the Shared Prosperity Fund in Northern Ireland cannot be guaranteed to equal ESF funding. Northern Ireland should consequently assess scenarios for decreasing its reliance on external funding in order to set its own goals and sustain adequate funding for its skills system.

Opportunity 2: Increasing co-ordination and information distribution across the whole of government

Especially in times of tight budgetary constraints, amplified by the current economic crisis connected to COVID-19, it is essential to ensure that existing financial means are used most efficiently. Making the most efficient use of available resources requires co-ordination across the whole of government (i.e. a “whole-of-government approach”) (OECD, 2019[4]; Skilling, 2019[32]). This, first of all, includes horizontal co-ordination between (and within) different departments responsible for skills policy (see Figure 5.8). In terms of responsibilities within government, skills policies lie at the intersection between more “traditional” policy fields. Consequently, with various departments responsible for educational policy, labour market policy, industrial policy and others, this often leads to substantial co-ordination challenges for countries that are seeking to apply a more joined-up approach to skills policies.

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Figure 5.8. Horizontal and vertical co-ordination across Northern Ireland’s Government
Figure 5.8. Horizontal and vertical co-ordination across Northern Ireland’s Government

Not only should skills policies be guided by common goals and a shared vision across all relevant stakeholders and decision makers (see Recommendation 4.1), they also need to be implemented and designed to be complementary to each other, i.e. mutually reinforcing (OECD, 2019[6]). Individual departments or agencies should not pursue their own skills policies without co-ordination with other relevant departments and governmental bodies. Consequently, whole-of-government co-ordination can also help to minimise or prevent expensive and inefficient overlaps between policies organised by different departments, but which are aimed at similar target groups. Not only can such overlaps be detrimental for sustainable funding for skills policies, but they can also lead to sub-optimal results for individuals, as individuals might “cycle” across different skills programmes instead of being successfully (re)integrated into the labour market after being subject to a targeted policy intervention. In other words, a lack of co-ordination across government also negatively affects performance in the other priority areas tackled in this report. This leads to inefficient use of skills (Chapter 4), possible perverse incentives in lifelong learning (Chapter 3) and might even give rise to skills imbalances (Chapter 2).

In addition to horizontal co-ordination, a whole-of-government approach also requires co-ordination between different levels of government, e.g. between district councils and central government (see Figure 5.8) (OECD, 2019[4]). Skills needs can differ drastically between regions, depending on the structure and size of the population, economic performance, dominant sectors, infrastructure, geographic size and distance between cities, etc. Co-operation between all relevant levels of government can help to tackle the unique needs of each region but are also essential in keeping local policy making consistent with the long-term goals of an overarching skills strategy. Furthermore, keeping local policy makers involved in higher-level co-ordination bodies might help create awareness of the importance of skills policies and keep it on their agenda; local policy making often centres around more graspable, short-term policy fields (OECD, 2019[6]).

Strong governance arrangements that support co-ordination across the whole of government are essential for a well-functioning skills system and better skills outcomes. However, it is also necessary to ensure that decision makers within these governance arrangements can make informed choices about the skill needs of the economy. Skills assessment and anticipation (SAA) tools contribute to making informed choices on skills policies (OECD, 2017[20]). Consequently, the availability of adequate data and information, for example, concerning future skills needs, current skills policy outcomes and labour market information is important. However, high-quality information only realises its full benefits if it is acknowledged as legitimate by, and disseminated to, all relevant stakeholders, thereby enabling evidence-based policy making.

Increasing inter- and intra-departmental co-ordination

Horizontal co-ordination within Northern Ireland’s government relates to co-operation between and within departments and arms-length bodies active in skills policy (e.g. Invest NI and FE colleges). In 2016, many skills policy responsibilities from the former DEL and the Department for Enterprise, Trade and Investment were taken over by the newly created DfE. Responsibilities for skills policy are now spread across five different departments (in addition to DoF), including DfE, DE, DfC, and DAERA, as set out in Table 5.1.

Consequently, co-ordination is necessary between departments and arms-length bodies active in skills policies, along with managing the potential and partial overlaps in responsibilities. For example, the provision of career guidance requires co-ordination between the activities of DE (responsible for career education in primary and post-primary school) and DfE (responsible for the Careers Service). Similarly, programmes targeted at job seekers and the unemployed, with responsibilities being located at DfC, also benefit from co-ordination with the Employment and Skills Programmes located in DfE.

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Table 5.1. Relevant departments active in skills policy in Northern Ireland

Department name

Function (with regard to skills)

Department for the Economy (DfE)

  • Responsible for Employment and Skills Programmes for citizens and employers (e.g. apprenticeships, youth training, Skills to Succeed, Innovate US, etc.).

  • Responsible for the Careers Service.

  • Responsible for higher education and further education in Northern Ireland.

Department of Finance (DoF)

  • Responsible for setting the budget for other Northern Ireland departments.

  • The Northern Ireland Statistics and Research Agency (NISRA), an agency of the DoF, is the principal source of official statistics and social research on Northern Ireland.

  • Oversees public sector procurement for Northern Ireland.

Department of Education (DE)

  • Oversees the effective implementation of education policy. Main areas of responsibility are 0-4 provision, primary, post-primary (secondary school level), special education and the youth service.

  • Manages career education and skills policy within primary and post-primary schools.

Department for Communities (DfC)

  • Programmes targeted at the unemployed (e.g. Work Experience programme) and policies related to inclusion and social change, looking at areas such as gender equality, disability, sexual orientation and population ageing.

Department of Agriculture, Environment and Rural Affairs (DAERA)

  • Responsible for skills policy (HE, FE, industry training) in its areas of policy (e.g. agri-food industry), including the College of Agriculture, Food and Rural Enterprise (CAFRE).

Department of Health (DoH)

  • Responsible for skills policy in Health and Social Care (HSC), ensuring a sufficient supply of qualified staff.

Source: Department for Communities (2020[39]), “Topics”, www.communities-ni.gov.uk/topics; Department for the Economy (2020[40]), “Employment and skills programmes and Careers Service”, www.economy-ni.gov.uk/articles/dfe-programmes; Department of Education (2020[41]), “Topics”, www.education-ni.gov.uk/topics; Department of Finance (2020[42]), “Topics”, www.finance-ni.gov.uk/topics; DAERA (2020[43]), “Education and research”, www.daera-ni.gov.uk/topics/education-and-research.

However, evidence shows that co-ordination across government is not always working optimally in Northern Ireland. Findings from earlier reports (OECD, 2019[4]; OECD, 2019[11]), group discussions, workshops as well as interviews with political parties indicate that co-ordination between, as well as within departments, could still be improved. According to participants, as already mentioned in Opportunity 1, resources are not used to the most efficient extent, with duplications of policies and participants switching between them, especially in the area of ESF-funded programmes. Similarly, as part of the previous Success through Skills strategy which runs until 2020, several strategies in the field of skills policy were implemented separately, all intended to tackle specific parts or issues within the skills system (Department for Employment and Learning, 2015[31]). These included, for example, the Further Education Means Success strategy of 2016, Generating our Success – the Northern Ireland trategy for youth training of 2015, the Securing our Success: Northern Ireland Strategy of Apprenticeships of 2014, the Pathways to Success NEET strategy of 2012, the Enabling Success strategy for economic inactivity of 2015, the Graduating to Success higher education strategy of 2015, and the Preparing for Success strategy of 2016 for career education and guidance. However, these strategies were not sufficiently co-ordinated, according to some participants. Additionally, a recent evaluation of Northern Ireland’s previous skills strategy highlights the co-ordination problems resulting from the various sub-strategies and emphasises the need for a “more collaborative approach across government” (Kieran and Murray, 2020[33]). Improved inter-departmental co-ordination is therefore needed to ensure a well-aligned implementation and possibly necessary revisions to any potential future overarching skills strategy for Northern Ireland.

Currently, there is no central (i.e. overarching, higher-level) oversight body responsible for co-ordinating skills policy across departments (as well as beyond them) in Northern Ireland. Many participants emphasised the potential benefits of such a co-ordinating body (see also Annex B with outcomes of a pre-workshop survey among participants), which is supported by recent research on Northern Ireland (Skilling, 2019[32]). As seen in Table 5.2, such a central oversight body could be designed with varying degrees of responsibilities. While pure co-ordination bodies simply aim to facilitate joint planning, delivery and information exchange, policy- or decision-making bodies have clear authority to set national priorities in skills policy making. Box 5.3 presents some international examples of such oversight bodies in the Republic of Ireland and Norway.

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Table 5.2. Oversight bodies for skills policy with varying degrees of policy responsibility in Northern Ireland

Types of oversight bodies

Policy responsibility

Advisory bodies

These focus on including partners and providing advice to the central authorities in charge of skills policies or the relevant ministries. They traditionally include social partners, private or public suppliers of education and training and local development agents.

Co-ordination bodies

These focus on developing mechanisms for joint planning or delivery where appropriate. They seek to improve information or to set up better evaluation efforts, rather than simply offering a forum for providers to share information about their activities.

Policy-/decision-making bodies

These focus on improving the provision of services, research, information and guidance – in short, they function as a central authority for skills policies. Their role is to establish national priorities to balance education and labour market programmes, vocational and non-vocational programmes, and the relative roles of national and local governments. They also set training priorities for specific groups such as women and immigrants, and for potential new programmes and services.

Source: OECD (2005[44]) Promoting Adult Learning, Education and Training Policy, https://doi.org/10.1787/9789264010932-en; OECD (2019[45]), OECD Skills Strategy Poland: Assessment and Recommendations, https://doi.org/10.1787/b377fbcc-en.

Similarly, such oversight bodies can vary with regard to the represented stakeholders, which can range from departments to arms-length bodies and education and training providers, but may even involve representatives of employers/employees, as seen in continental European corporatist countries (Busemeyer and Trampusch, 2012[7]; OECD, 2019[6]). The involvement of the latter non-governmental stakeholders, however, is also subject to trade-offs. For example, including too many members might impede the cross-departmental co-ordination function such a council should fulfil. Similarly, a recent evaluation of Northern Ireland’s former skills strategy emphasises that co-ordination bodies should be kept small in order to ensure efficient collaboration (Kieran and Murray, 2020[33]). It might also prove to be too far-reaching for Northern Ireland to include non-public stakeholders, given it does not have a strong tradition of social partnership and tripartite decision making. In addition, issues of legitimacy of decision making in such councils could consequently arise, as business interest associations and labour unions in Northern Ireland have a quite a narrow membership base, and may not be able to legitimately represent the whole of business/labour (for details, see Opportunity 3). A solution to this dilemma could be a separate, central employer/stakeholder engagement body that closely advises the central cross-departmental oversight body, such as a central skills needs advisory body (see Figure 5.9), which is presented in detail in subsequent sections in this chapter under Recommendations 4.8 and 4.10-4.13.

Many stakeholders also emphasised the importance of a potential oversight body being chaired by one or more ministers, in order to ensure political buy-in. While buy-in at a high political level in such oversight bodies is essential, it also has potential downsides, as it might lead to a prioritisation of politics over in-depth debates on specific policies (OECD, 2019[6]). In order to resolve this issue, separate sessions of the oversight body can be beneficial; higher-level political decision makers can meet at one level, while lower-level sessions are reserved for in-depth discussions on specific policy issues.

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Figure 5.9. Potential structure of new governance arrangements and central oversight body on skills policy in Northern Ireland
Figure 5.9. Potential structure of new governance arrangements and central oversight body on skills policy in Northern Ireland
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Box 5.3. Relevant international examples: Horizontal co-ordination mechanisms

National skills councils: An example from the Republic of Ireland

The Republic of Ireland established its National Skills Council (NSC) in follow up to the National Skills Strategy 2025. This infrastructure and regional co-ordination mechanism address both horizontal and vertical governance mechanisms, as well as stakeholder engagement. The NSC is chaired by the minister for education and skills and is made up of officials and private sector organisations, firms and agencies. Insofar as government departments are concerned, there are representatives from the Department of Social Protection, the Department of Jobs, Enterprise and Innovation and the Department of Public Expenditure and Reform. Including non-governmental stakeholders, the National Skills Council has 20 members in total. The mandate is to advise on the prioritisation of identified skills needs and how to deliver on these needs, as well as to promote and report on the delivery by education and training providers of the priorities mentioned above. It also oversees research in the field of skills policy.

Skills policy councils: An example from Norway

In order to improve governance arrangements in Norway, the Norwegian Strategy for Skills Policy 2017-2021 (Nasjonal Kompetansepolitisk Strategi) included the implementation of the Skills Policy Council. According to its mandate, the council’s purpose is to follow up on the strategy and to continue to promote co-operation between the involved stakeholders. The governmental stakeholders include all ministries involved in skills policy (Ministry of Labour and Social Affairs; the Ministry of Local Government and Modernisation; the Ministry of Education and Research; the Ministry of Trade, Industry and Fisheries; the Sami parliament), as well as Skills Norway - an arms-length body specialised in lifelong learning. Including non-governmental stakeholders (e.g. social partners), the Skills Policy Council has 15 members. The council’s activities include regular discussions and advice on current skills policy issues, regular reports on the strategy partners’ own policy measures to implement the strategy, as well as potential revisions to the strategy if needed.

In practice, the Skills Policy Council acts as an advisory body to all involved stakeholders, with the goal of co-ordinating and improving existing and new policy measures in the field of (public as well as non-public/social-partner provided) skills policy. The minister of education chairs the council, thereby providing the opportunity for all stakeholders to influence policy making at a very high level. High-level discussions at ministerial level are supplemented by working-level discussions of civil servants, thereby ensuring that skills are on the agenda of decision makers, as well as concrete outputs in terms of policy making are met. Currently, it does not have a decision- or policy-making function and only gives non-binding advice. The council meets three to four times a year in sessions that last around two hours. One main benefit of the Skills Policy Council is that it oversees and applies a holistic approach to a previously very fragmented policy area. It can, therefore, identify overarching challenges and help to develop more comprehensive policy solutions, instead of addressing just specific parts of the system.

Source: OECD (2018[46]), Skills Strategy Implementation Guidance for Portugal: Strengthening the Adult-Learning System, https://doi.org/10.1787/9789264298705-en; OECD (2019[6]), "Strengthening the governance of skills systems", in OECD Skills Strategy 2019: Skills to Shape a Better Future, https://doi.org/10.1787/2a40e30e-en; Department Of Education and Skills (2020[47]), “National Skills Council”, https://www.education.ie/en/The-Department/Regulation-of-Lobbying-Act-2015/Groups-Committees-exempted-under-the-Transparency-Code/national-skills-council.html.

Recommendations for increasing inter- and intra-departmental co-ordination

4.5. Increase co-ordination in skills policy (e.g. to implement the proposed skills strategy) by introducing a central oversight body with representatives from all relevant departments and arms-length bodies. This oversight body should meet regularly. High-level government officials, e.g. relevant minister(s), should chair the central oversight body in order to ensure political buy-in. However, such high-level meetings should be supplemented by lower-level sessions reserved for in-depth discussions on specific policy issues. Figure 5.9 provides an overview of a new potential skills policy governance structure, including this central oversight body.

Improving vertical co-ordination and the governance of skills policies on a local level

Northern Ireland’s vertical governance structure on skills policy (i.e. for co-operation between different levels of government) has been subject to comprehensive changes in the last decade. First, the reform of local government in 2015 gave local actors new responsibilities in addition to their previously only marginal role in skills policy (i.e. local economic development). Eleven district councils, whose members are elected in Northern Ireland’s local elections, are now responsible for community planning, which is defined as a process where the district council, jointly with community-planning partners (e.g. public service providers), improves the well-being of districts via long-term objectives and actions. This includes planning, provision and improvement of public services like education, and consequently, skills policy (Knox and Carmichael, 2015[10]). While the councils manage this community-planning process, the development and delivery of the plan are conducted jointly by the councils and the planning partners with the respective responsibility for public service provision (e.g. the Education Authority of the DE). For example, as part of the community-planning process, some district councils have initiated consultations regarding schools with local employers on their skills needs (OECD, 2019[11]).

Second, several new “City Deal” and “Growth Deal” initiatives have been launched in Northern Ireland in recent years. City Deals are an agreement between the UK Government, Northern Ireland’s central government and a city and its surrounding area. The agreement matches funding of local (public and private) actors, Northern Ireland and UK governments for City Deal projects (Universities UK, 2016[48]). Consequently, powers (e.g. to pilot and design certain programmes in the area of employment and skills) are devolved to local areas to implement projects that are grouped into several “pillars” (i.e. according to policy fields). Each of these pillars is supervised by a specific advisory board with City Deal Partners and members of the Northern Ireland City and Growth Deals Working Group. The latter is comprised of representatives from both the UK Government and Northern Ireland’s central government. Figure 5.10 gives an overview of the current governance arrangements underlying City Deals and Growth Deals.

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Figure 5.10. Governance arrangements underlying City Deals and Growth Deals in Northern Ireland
Figure 5.10. Governance arrangements underlying City Deals and Growth Deals in Northern Ireland

The “Belfast Region City Deal” covers the six district council areas of Antrim and Newtownabbey Borough; Ards and North Down Borough; Belfast City; Lisburn and Castlereagh City; Mid and East Antrim Borough; and Newry, Mourne and Down District, which are all represented in a Joint Council Forum involved in the governance of the City Deal. The “City Deal for the Derry/Londonderry City Region” covers the Derry City and Strabane District Council area. In addition to these two City Deals, Growth Deals for Mid South West and Causeway Coast and Glens have been announced that also match local (public and private) funding and money from Northern Ireland’s central government with funding from the UK  Government, thereby covering the remaining district council areas of Northern Ireland that had not yet been covered by a City Deal (UK Government, 2019[49]; UK Government, 2019[50]).

These new responsibilities and financial means at a local level are important to adapt skills policy to the needs of local individuals and businesses “on the ground”. However, increased decentralisation of responsibilities can also lead to a risk that different levels of government are working in isolation, leading to policies that are not well aligned and inefficient use of resources. Consequently, it should be ensured that district council initiatives and their community-planning initiatives in skills policy, as well as City and Growth Deals, are aligned with an overarching skills strategy for Northern Ireland. This would ensure that all levels of government are working towards the same long-term goals.

Many participants in the workshops and missions argued that local stakeholders within new bodies are heavily invested in creating comprehensive regional community plans and City/Growth Deal strategies. However, as OECD consultation with stakeholders in Northern Ireland has shown, Northern Ireland’s central government might not be fully informed of the multitude of local activities in skills policies, again leading to a lack of co-ordination and duplication of policies. This can be evidenced, for example, in the variety of different information portals that exist for available apprenticeship positions. Simultaneously, putting skills policy on the agenda of local stakeholders is central. Local levels of government are responsible for a multitude of issues, among which skills policy might not be considered a high priority for many local decision makers.

Furthermore, the resources used for skills policies are often allocated to projects on the higher end of the skills distribution with high public appeal, for example, visible in the “Innovation and Digital" pillar of the Belfast City Deal (Belfast City Council, 2019[51]). In contrast, only GBP 30 million of a total planned GBP 500 million is to be spent on the “Employability and Skills” pillar, which also includes (but is not exclusive to) policies aimed at the lower level of the skills distribution and policies affecting those in need. It is essential to align such decisions regarding the distribution of available funds with the overall funding priorities of Northern Ireland’s overarching skills strategy.

In order to tackle these co-ordination challenges, it can be beneficial to ensure representation from district councils as well as City Deal and Growth Deal areas to a central oversight body for skills policy (see the previous section). However, this might have negative consequences for the effectiveness of this oversight body, due to an unwieldy number of representatives. Norway attempts to solve this dilemma by appointing one single representative to sit on the oversight body, who is responsible for all local administrations, and who acts as an intermediary (see Box 5.4). However, one might expect that a single representative may not be able to reconcile the diverging interests (due to variations in size, location, economic structure, etc.) between a large number of subnational units (OECD, 2019[6]). A potential solution could be to appoint a small number of intermediaries located at the central oversight body, each representing a set of district councils with potentially similar interests.

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Box 5.4. Relevant international examples: Vertical co-ordination mechanisms

Regional reform: An example from Norway

Norway recently conducted a regional reform (regionreform) that restructured its administrative divisions. It reduced the number of counties from 19 to 11 and gave these regions more responsibilities in the field of skills policy, thereby possibly leading to a trickling down of the topic of skills to the agenda of local governments. As part of that process, every county is also “strongly recommended” to create their own regional skills strategy. The counties (Fylke) are represented in the central Skills Policy Council by one single representative of the county council (Fylkesting). This representative’s role is to report back to all the heads of the county administrations (chief executives). The inclusion of a county representative (one joint representative representing all counties) within the Skills Policy Council helps to put skills on the agenda of the individual county executives, who often regard other policy areas, such as infrastructure, as their main priority. Regular meetings between the county representative and the individual county executives facilitate this effect. In practice, the county representative’s role is to put skills on the agenda of the county executives, rather than reconciling potentially diverging interests between counties.

Multi-level governance reform: An example from Finland

Finland’s multi-level governance reforms have driven collaboration between local areas and regions on education and training services. The PARAS (Kunta- ja palvelurakenneuudistus) reform in Finland was a multi-dimensional reform that included municipal mergers, inter-municipal co-operation for service provision (in particular in the areas of healthcare and education), and better governance in urban regions. Legislation introduced quantitative thresholds to be reached for healthcare and education provision. Municipalities or inter-municipalities authorised to provide basic education services had to have at least 50 000 inhabitants. The local authorities involved could agree that the functions of co-management areas would be conducted jointly or by one local authority on behalf of one or more other local governments. Municipalities and urban regions had to submit their reports and implementation plans to central government by the end of August 2007. In 2008, central government evaluated the reform progress, based on supplementary information submitted by municipalities. The reform was implemented between 2009 and 2012. As decisions were voluntary, each municipality/urban region implemented (or not) its plans at its own pace. The establishment of quantitative thresholds for education services drove collaboration and was supported by a joint project by the Ministry of Education and Culture and education providers to ensure structural and economic support for education and training across regions.

A central co-ordinating agency: An example from the Republic of Ireland

In the Republic of Ireland, SOLAS (An tSeirbhís Oideachais Leanúnaigh agus Scileanna) was established in 2013 under the Further Education and Training Act as an agency of the Department of Education and Skills. It is responsible for funding, co-ordinating and monitoring further education and training provision. It advances money to Education and Training Boards (ETBs) which in turn administer further education and training on a subnational level, and which are comprised of local authorities, parents-, community- and employer-representatives. Furthermore, it works closely together with the Regional Skills managers representing the Regional Skills Fora that exchange information on skills needs and provision between employers and local authorities and education and training providers (see Opportunity 3).

Source: OECD (2017[52]), Multi-level Governance Reforms: Overview of OECD Country Experiences, https://doi.org/10.1787/9789264272866-en; Education and Training Boards Ireland (2015[53]), “Homepage”, https://www.etbi.ie/; SOLAS (2020[54]), “About”, https://www.solas.ie/about/; OECD (2019[6]), "Strengthening the governance of skills systems", in OECD Skills Strategy 2019: Skills to Shape a Better Future, https://doi.org/10.1787/2a40e30e-en.

Recommendations for improving vertical co-ordination and the governance of skills policies on a local level

4.6. Increase vertical co-ordination by appointing skills representatives of district council/City Deal/Growth Deal areas and including them in a central oversight body that co-ordinates skills policy at a higher level (see Recommendation 4.5). In order to avoid possible negative consequences for the effectiveness of this oversight body due to an unwieldy number of representatives, a small number of intermediary representatives could represent a set of district council areas with potentially similar interests. To also include City Deals and Growth Deals in this infrastructure, Northern Ireland could include representatives of the respective Pillar Advisory Boards that are responsible for skills policy at the central oversight body.

4.7. Put skills policy on district council stakeholders’ agenda by encouraging them to commit themselves to their own local skills strategies in accordance with the priorities of Northern Ireland’s overarching skills strategy. These local skills strategies could be part of the community-planning process of the respective district councils. They should be implemented in conjunction with the respective potential “Regional Skills Hubs” that include employers and other relevant stakeholders (see Recommendation 4.15). In order to raise the importance of skills policy for district-level decision makers, budgetary means for local skills strategies could be ring-fenced. Such a local approach does not necessarily stand in conflict with a more “top-down” economic strategy including skills and innovation policy, as proposed by recent research (Skilling, 2019[32]), if it is ensured that local strategies are in accordance with Northern Ireland’s overarching skills strategy and priorities.

Making full use of and including stakeholders in information systems

While co-ordination across the whole of government is essential for better skills outcomes, it is necessary to ensure that decision makers in these governance arrangements can make informed choices regarding the skills needs of the economy. Supporting information, produced with SAA tools, can be appropriately distributed across governmental (and non-governmental) stakeholders, in order to enable improved, evidence-based policy making.

Northern Ireland currently has a variety of databases available on skills policy. These include databases and forecasts based on econometric modelling, as well as surveys assessing employers' recruitment difficulties. Data are available on a regional as well as sectoral level, and data tracing employment outcomes of graduates over time also exist, in line with OECD recommendations (OECD, 2017[20]). For example, the UK-wide Employer Skills Survey asks about recruitment difficulties and skills lacking from applicants and employees, as well as anticipated needs in the coming months. The Northern Ireland Skills Barometer was implemented in 2015, and bases its assessment and forecasts of future skills needs and gaps on econometric modelling, and also looks at sectoral skills needs (DEL, 2014[12]; UUEPC, 2019[16]). The Northern Ireland Skills Barometer will also soon be applied on a regional level, informing future skills needs by sub-region. Additional databases exist that shed light on graduates and students over time with respect to educational and employment success, for example, the “Further Education Leavers Survey” and “Destination of Leavers from HE” (Department for the Economy, 2019[55]; HESA, 2020[56]).

Agencies responsible for generating the databases mentioned above include a multitude of different departments at different governance levels, e.g. NISRA, the Universities and Colleges Admission Service, the UK’s Higher Education Statistics Agency and the UK’s Office for National Statistics. The Northern Ireland Skills Barometer is undertaken by the UUEPC under the direction of DfE. All interviewed participants acknowledged the high quality and usefulness of the information available on Northern Ireland. However, the large number of actors involved in SAA tools makes data dissemination potentially challenging, and many participants highlighted that the information available on Northern Ireland is not used as effectively as it could be. This holds especially for the rich variety of data sources available besides the Skills Barometer. According to stakeholders, one of the main reasons why existing information is not effectively used is that the available information is not gathered and shared among policy makers and decision makers. Consequently, if data distribution among all interested stakeholders could be optimised, improvements in evidence-based policy making could also be made. This requires a dedicated effort to gather, collect and distribute existing data in a comprehensive and easily understandable way to decision makers (for international examples, see Box 5.5). Furthermore, a certain degree of accountability for decision makers with regard to available evidence can facilitate evidence-based policy making (for details, see Opportunity 3).

The information mentioned above is based on a variety of sources and methodologies, acknowledging that there are “inherent strengths and weaknesses with every type of skill needs data source” (OECD, 2017[52]). However, earlier reports of the Skills Barometer also included supplementing quantitative data with qualitative evidence through discussions with a variety of stakeholders, including business representatives in Sector Skills Councils. As not only public decision makers can benefit from such information, employer engagement in SAA tools also allows business to benefit from available information. However, due to financial cutbacks and the disappearance of many Sector Skills Councils, business, and private sector involvement in the Skills Barometer and other information sources proves challenging (OECD, 2019[11]). Also, according to participants, links with other stakeholders in considering more qualitative information could be improved. Box 5.5 offers international examples of government bodies that supplement research with input from stakeholders, including employers and trade unions. In order to ensure high stakeholder engagement, decision makers should be required to provide some form of accountability on how available information is actually used in policy making (OECD, 2019[6]) (for details, see Opportunity 3).

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Box 5.5. Relevant international examples: Integrated information systems

A system for labour market and skills forecasting: An example from Estonia

Estonia introduced two laws in 2015 to improve the governance of skills anticipation. The new arrangement established that the System of Labour Market Monitoring and Future Skills Forecasting (Oskuste Arendamise koordinatsioonisüsteem, OSKA) provides skill forecasts in five sectors every year. Based on quantitative forecasts and qualitative insights developed by sectoral expert panels, the OSKA Co-ordination Council publishes a yearly analysis of labour market trends and skills needs. Representatives from employers and trade unions are involved in the co-ordination council that oversees OSKA, alongside ministries and the Estonian unemployment insurance fund (11 members in total). Education providers are also involved in sectoral expert panels, while experts from universities and professional associations sit on the OSKA Panel of Advisers (a body guiding methodological discussion and reflection). The whole system is administered and developed by the Estonian Qualifications Authority (Kutsekoda) and is co-funded by the ESF. The OSKA council publishes the main findings by sector on a portal (https://oska.kutsekoda.ee/), as well as recommendations for policy makers, education institutions and employers.

Future Skills Needs Committee: An example from Norway

The role of the Future Skills Needs Committee (Kompetansebehovsutvalget) in Norway is to “provide the best possible evidence-based assessment of Norway’s future skills needs, as a basis for national and regional planning, and for strategic decision making of both employers and individuals”. More specifically, its tasks involve to “generate and organise the evidence base” on Norway’s future skills needs based on already available data as well as to “stimulate the development of new evidence”. For this purpose, the Future Skills Needs Committee is also able to fund its own research via its budget financed by the Ministry of Education. Concerning the types of data used, the Future Skills Needs Committee is expected to use a variety of both qualitative as well as quantitative data sources. The Future Skills Needs Committee is comprised of representatives from social partners (employers and employees), the involved ministries, as well as experts, and is headed by a renowned economist (19 members, plus 3 in the secretariat). The committee is relatively protected from direct influence at the political level, and can, therefore, act as an independent advisory body.

Source: OECD (2016[57]), Getting Skills Right: Assessing and Anticipating Changing Skill Needs, http://dx.doi.org/10.1787/9789264252073- en; OECD (2019[58]), Getting Skills Right: Creating Responsive Adult Learning Systems, www.oecd.org/employment/emp/adult-learning-systems-2019.pdf; OECD (2019[6]), "Strengthening the governance of skills systems", in OECD Skills Strategy 2019: Skills to Shape a Better Future, https://doi.org/10.1787/2a40e30e-en; Norwegian Committee on Skills (2020[59]), “Future Skills Committee”, https://kompetansebehovsutvalget.no/utvalgsmedlemmer/, Estonian Ministry of Education and Research (2020[60]), “OSKA”, https://oska.kutsekoda.ee/en/.

Recommendations for making full use of and including stakeholders in information systems

4.8. Re-engage business in skills anticipation and assessment via a central skills needs advisory body. This central skills needs advisory body should be comprised of experts from academia, business, potentially labour unions and civil society and be headed by a recognised, independent (e.g. non-governmental) expert on skills policy. Based on quantitative and qualitative research from science as well as input from business, it should advise the central oversight body on skills policy (Recommendation 4.5) about the future skills needs of Northern Ireland, as well as assess if skills policy making by Northern Ireland’s government is in accordance with all available evidence. This central skills needs advisory body should be the result of a merger of employer/stakeholder engagement bodies (see Recommendation 4.10).

4.9. Ensure distribution of all available evidence to policy makers. A task force within a potential skills needs advisory body should fulfil the function of gathering and collecting information from external data sources as well as its members, and further distribute this data in a comprehensive and easily understandable way among its members, as well as to decision makers in government.

Opportunity 3: Improving employer engagement in the governance of skills policies

While it is essential for a successful skills system to ensure sufficient funding (Opportunity 1) as well as to spend existing money efficiently and effectively (Opportunity 2), increasing employers’ participation in and contribution to the provision and funding of skills policies can substantially relieve pressure on public budgets. As research on skills systems has shown, in order to ensure employer contributions (e.g. to raise their participation in training or apprenticeship schemes), it is beneficial to include employers in the governance of skills policies (Busemeyer and Trampusch, 2012[7]). Employer involvement in the governance of skills systems can vary according to specific tasks; for example, including the strategic development of the skills system, content definition (e.g. curricula), organisation of training provision, the matching of skills demand and supply, as well as monitoring, examination and certification of qualifications (Emmenegger, Graf and Trampusch, 2019[24]). Employer involvement in the governance of skills systems also varies according to the degree of involvement. It ranges from giving employers a voice in policy making via simple consultation processes on an ad hoc basis to the delegation of quasi-public functions and decision making on a permanent basis (OECD, 2019[6]). Furthermore, employer engagement in the governance of skills systems also ensures that the skills provided by the education and training system are close to labour market needs, leading to low youth unemployment (Busemeyer, 2015[3]).

However, creating such sustainable forms of employer engagement is especially challenging for liberal skills systems like in Northern Ireland, which lack a long-lasting tradition and infrastructure of corporatism, including social partnership and tripartite decision making (Hall and Soskice, 2001[61]). Central to sustainable, long-term forms of employer engagement is first the existence of some form of encompassing intermediary between business and government that legitimately speaks on behalf of the whole business community (Schmitter and Streeck, 1999[62]; Streeck and Schmitter, 1985[23]). In continental European neo-corporatist countries, business interest associations take over this function, which are shaped by far lower membership density and fragmented issue agendas in Northern Ireland, making stakeholder engagement much more challenging (Valler et al., 2004[63]).

Second, in countries with tripartite and social partner bodies, businesses have incentives to engage due to their direct access to political decision makers and the consequently resulting degree of influence, often even resulting in the above-mentioned “private interest governments” taking over quasi-public function from the state (Streeck and Schmitter, 1985[23]). However, it might not necessarily be beneficial in Northern Ireland to give employer engagement bodies such wide-ranging responsibilities, due to the above-mentioned problem of a missing institutional infrastructure of encompassing business interest associations. Engagement of trade unions in the governance of skills systems as a counterbalance to business interests is also regarded as essential in creating skills systems with employer participation (e.g. dual apprenticeship), as it makes the respective skills policies attractive for individuals (Busemeyer and Trampusch, 2012[7]; Emmenegger, Graf and Trampusch, 2019[24]). This is equally challenging in Northern Ireland, due to the same problems of low membership density of trade unions. Consequently, it has to be ensured that stakeholder engagement bodies concerning both employers and labour are protected from a capture of policies by vested interests.

Cultural constraints are also regarded as essential in creating an environment of co-operation necessary for joint business involvement in training (Streeck, 2007[64]). In other words, cultural norms, which make training to some extent “socially obligatory” for companies, help to overcome short-term economic interests of business, and motivate employer participation in skills policies. Dedicated governance arrangements might be necessary to create such an environment in liberal skills systems, whose business community is shaped by a culture of competition over co-operation between business (O’Sullivan, 2000[65]; Streeck, 1997[66]), and consequently, poaching over collective training.

One possibility is to compensate for such a lack of cultural constraints by introducing, for example, training funds that create financial incentives for business to participate (see Chapter 3). However, research has shown that it is also possible to create such a culture of employer engagement in liberal skills systems like Northern Ireland if it starts “on the ground” at lower levels of government, thereby first fostering co-operation between a limited number of involved employers (Fortwengel and Jackson, 2016[67]; Baccaro et al., 2018[68]) to increase their training participation in apprenticeships and youth training or uptake of adult learning offers. This is especially central for the economy of Northern Ireland, which is shaped by SMEs that might struggle to provide training on their own. Such a local approach does not stand in conflict with a more “top-down” economic strategy including skills and innovation policy, as proposed by recent research (Skilling, 2019[32]), as deliberate and strategic choices by the government can be made regarding those economic sectors that should be prioritised. Consequently, Northern Ireland should ensure that employers are engaged in skills policy via well-functioning governance bodies.

Restructuring stakeholder engagement bodies

In order to realise the full benefits of employer engagement in Northern Ireland, businesses need to have clear incentives to engage. Simultaneously, however, there must also be adequate steering by the government in order to compensate for the lack of encompassing business interest associations. This employer engagement at higher levels of government (i.e. business engaging with departments of Northern Ireland’s central government) could be achieved by restructuring currently existing employer engagement bodies, thereby simplifying overly complex governance structures.

In recent years, Northern Ireland has made significant reforms to attempt to involve employers in governance bodies of skills policies. This led to the rapid growth of a large variety of governance arrangements, as many of the sub-strategies of the 2011 Success through Skills strategy involved the creation of (one or more) issue-specific employer engagement bodies. For example, for apprenticeships and youth training, a Strategic Advisory Forum, as well as Sectoral Partnerships, were created as part of the Securing our Success Strategy on Apprenticeships as well as the Generating our Success Strategy for Youth Training (DEL, 2014[12]; DEL, 2015[13]). The Strategic Advisory Forum includes employers, government, trade unions, training providers and youth representatives, and advises government at a strategic level, specifically on the issue of apprenticeships and youth training. Similar to existing tripartite or social partner governance structures in countries with dual apprenticeship systems, Northern Ireland delegated certain quasi-public functions to Sectoral Partnerships, in order to increase employer participation in the provision, and consequently, funding of skills policies. The Sectoral Partnerships contain industry representatives and curriculum experts who determine the curriculum (including overarching outcomes for work-based learning and the qualifications to be delivered).

Other examples of newer bodies include the Career Advisory Forum set up under the Preparing for Success 2015-2020 Strategy for Careers Education and Guidance, and the NEET Advisory Group that was set up under the Pathways to Success Strategy for those young people who are NEET (Department for Employment and Learning, 2012[69]; DEL; DE, 2016[70]). The Career Advisory Forum consists of representatives from business, education and other key stakeholders to advise the government on career guidance, bringing education closer to labour market needs, and supporting local stakeholder involvement concerning service users, education providers and business. The NEET Advisory Group consists of government representatives, health trusts, business and representatives from voluntary and community sector organisations.

However, a number of older employer engagement bodies were also introduced previously, but without establishing any long-term modes of co-operation. These include, for example, Sectoral Action Groups on future skills needs (DEL, 2006[15]). Furthermore, as a response to the Independent Review of Economic Policy commissioned by the former Department of Enterprise, Trade and Investment, the Economic Advisory Group was set up in 2010. It is a group of experts including researchers and employers that advises the department on policy development and strategic thinking concerning Northern Ireland’s economy (Department for the Economy, 2020[71]), but with rather limited activity in recent years, according to stakeholders. Sector Skills Councils and Sector Training Councils are also older, independent employer-led organisations that aim to reduce skills shortages (via promoting participating in training), improving learning standards and advising on skills, education and training needs. Funding from central government has drastically declined in an attempt to make these sectoral bodies self-sustainable. However, this has only worked for a minority of sectors, for example, in “Food and Drink Sector Skills” (OECD, 2019[11]). On a UK-wide level, also the UK Commission for Employment and Skills (including business, trade unions, and experts) was only active from 2008 to 2017, and consequently did not establish long-term co-operation (albeit some of its activities have been continued and transferred to other institutions).

This list of stakeholder engagement bodies is in no way exhaustive but already points towards some of the main problems with Northern Ireland’s complex landscape of employer engagement bodies. According to stakeholders, one issue is that employer engagement up until now was mostly conducted in an ad hoc, issue-specific and only short- to mid-term manner. This lack of an institutionalised, long-term form of employer engagement might have also contributed to the fact that business organisations until now partially lack expertise in skills policy (as highlighted by some stakeholders). It is therefore questionable if employers should be involved in very specific and narrowly defined governance bodies. In any case, setting up such bodies consequently requires much more time and effort in Northern Ireland, compared to many continental European countries.

Many of the employer engagement bodies have relatively narrow issue agendas (e.g. NEETs, career guidance), and simultaneously have overlapping membership of business representatives in many of these bodies. According to stakeholders, the recent rapid growth of all these bodies has led to fundamental confusion and frustration among the business community concerning which issues can be tackled by which of the respective advisory bodies. As a consequence, the specific roles and responsibilities of these bodies are not clearly delineated, including for the well-established employer engagement bodies. Such clarity is, however, an important condition for well-functioning employer engagement bodies (OECD, 2019[6]). Stakeholders also emphasised that there exists no high-level, overarching employer engagement body that oversees this complex landscape of issue-specific employer engagement bodies.

According to stakeholders, one reason for this very fragmented landscape of multiple employer engagement bodies working in parallel is the limited whole-of-government co-ordination between and within departments (see also Opportunity 2), each of whom set up their own, specific employer engagement groups without any clear overarching governance structure in mind. In short, limited whole-of-government co-ordination leads to inefficient employer engagement. Any attempt to restructure the currently very complex employer engagement governance structure must, therefore, be conducted jointly by all involved departments, in order to build upon and change the already existing infrastructure, instead of creating additional parallel structures.

Another well-acknowledged problem in the literature is the limited representativeness of business interest associations in Northern Ireland, leading to limited legitimacy to speak for the whole of business (Valler et al., 2004[63]). Stakeholders have emphasised that representatives and leaders from elite and leading firms that have a respected voice in their sectors and clusters might be one way to substitute for lack of encompassing business interest associations, and lack of expertise among many employers. However, focus on leading firms can also lead to an over-emphasis of the interests of large firms over SMEs. Stronger steering from experts can, therefore, help to counterbalance the dominance of some business groups (see, for example, Box 5.6). Such steering might also help mitigate similar problems of interest representation of trade unions (if they are included in respective stakeholder engagement bodies), which are also characterised by narrow constituencies in Northern Ireland, potentially leading to a lack of legitimacy and/or expertise. Furthermore, for the reasons mentioned above of a limited tradition of long-term, stable employer engagement and missing encompassing business interest associations, it is not necessarily beneficial for Northern Ireland to give employers wide-ranging responsibilities, decision-making powers and quasi-public functions as in “private interest governments”. Moreover, giving employers decision-making powers in tripartite-style governance bodies with both private actors as well as all involved departments might also lead to bloated governance arrangements (see also Opportunity 2). In order to avoid sluggish proceedings and decision-making processes within these bodies, it can be beneficial to rely on separate employer engagement bodies that regularly advise and meet with their public partners in government. But as these quasi-public functions and direct decision-making powers act as incentives for business to stay involved in employer engagement bodies, Northern Ireland needs to find other ways to compensate for these incentives. One possibility is to implement mechanisms that ensure that it is clear for business how its advice is used and how it influences policy making, as well as why its particular advice may not have been implemented (OECD, 2019[6]).

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Box 5.6. Relevant international example: Advisory body combining employer engagement and expert advice

Social and economic councils: An example from the Netherlands

The Social and Economic Council of the Netherlands (SER) advises the Dutch Government and Parliament on key points of social and economic policy. It also undertakes activities arising from governance tasks and self-regulatory matters and functions as a platform for discussions of social and economic issues. The council consists of independent Crown-appointed members (including academia), employers and employees (33 members in total). SER has set up a large number of committees and working parties to carry out its tasks and prepare its advisory reports. Established in law by the Social and Economic Council Act (Wet op de Sociaal-Economische Raad), the SER is the main advisory body to the Dutch Government and Parliament on national and international, social and economic policy. The SER is financed by industry and is wholly independent of the government. It represents the interests of trade unions and industry, advising the government (upon request or at its own initiative) on all major social and economic issues. The SER also has an administrative role. In addition, it helps the government enforce the Works Councils Act (Wet op de ondernemingsraden).

Source: OECD (2019[4]), OECD Skills Strategy 2019: Skills to Shape a Better Future, https://doi.org/10.1787/9789264313835-en; Netherlands Social and Economic Council (2020[72]), “What is the SER”, https://www.ser.nl/en/SER/About-the-SER/What-is-the-SER.

Recommendations for restructuring stakeholder engagement bodies

4.10. Improve governance structures by assessing potential mergers and making responsibilities of employer engagement bodies clear. All departments involved in skills policy (e.g. via the central oversight body – see Recommendation 4.5) should first assess the current structure of employer engagement bodies in Northern Ireland. Second, possible overlaps between these bodies should be removed either via clearly demarcating responsibilities between bodies or by merging engagement bodies with similar tasks and/or overlapping memberships.

4.11. As a result of mergers of high-level employer engagement bodies, implement a central skills needs advisory body to advise the government on the skills policy. The process mentioned above of restructuring employer engagement bodies should have the twin goal of creating an overarching stakeholder engagement body that regularly advises government at the strategic level, as set out in Figure 5.9. All departments involved in skills policy (e.g. via the central oversight body – see Recommendation 4.5) should assess how such a central skills needs advisory body could emerge from the already existing infrastructure and could oversee and co-ordinate potentially remaining employer engagement bodies on issue-specific/sectoral topics, instead of creating new parallel structures. For example, the already existing Economic Advisory Group could be the basis of such a central skills needs advisory body. In any case, the central skills needs advisory body should be comprised of well-respected, leading business actors, potentially trade unions and complemented by independent experts from research (see Recommendation 4 12).

4.12. Ensure sufficient steering of the central skills needs advisory body by including independent experts and researchers. The central skills needs advisory body (see Recommendation 4.8) should also include independent experts, e.g. from academia. This supplements and potentially back employers’ preferences for policy making with all available research on skills needs. Furthermore, independent experts and researchers should be able to steer the recommendations given by the central skills needs advisory body to a certain extent in order to counter and mitigate problems connected to a lack of tradition in employer and trade union engagement (i.e. narrow membership in business interest associations and trade unions, potential lack of expertise, dominance of large elite employers over SMEs).

4.13. Ensure accountability of policy makers towards advice given by the central skills needs advisory body. In order to create clear incentives to participate, business must be convinced that their voice is actually heard. This includes regular meetings between the proposed central skills needs advisory body (see Recommendation 4.8) and the (public) central oversight body for skills policy chaired by the relevant minister(s) (see Recommendation 4.5). Furthermore, maximum transparency on how stakeholders’ advice is used should be ensured; for example with mandatory, written responses from government to any advice from the central skills needs advisory body (OECD, 2019[6]).

Improving governance arrangements for involving employers at lower levels of government

Stakeholder engagement at the local level should comprise improvements to local governance structures in order to create/facilitate employer participation in skills policies. Northern Ireland’s business landscape is shaped by patterns typical of Anglo-American countries. Participants considered that many employers struggle to retain their workforce after investing in their training. Consequently, employers’ fear of poaching (losing their former apprentices/trainees/employees to other companies after training them) is one of the main reasons employers refrain from increasing their expenditure on skills policies.

In many countries with strong employer participation in skills policies, a common economic culture among employers acts as a “constraint” that makes poaching socially unacceptable, while at the same time making training socially obligatory (Streeck, 1997[66]). Other research (Kuhn, Schweri and Wolter, 2019[73]) has empirically shown that training incidence is higher in communities that are “characterized by a stronger norm towards the private provision of training”. Creating a culture of employer engagement and therefore, employer co-operation in training, rather than competition for potential employees, is an important building block to increase employer participation in skills policies. Albeit challenging, research has shown that it can indeed be possible to create such a culture when starting “on the ground” at lower levels of government, first fostering co-operation between a limited number of involved employers. For example, previous research (Fortwengel and Jackson, 2016[67]) has demonstrated a US example of how training networks between a limited number of firms (albeit including many subsidiaries of continental European companies) can increase training participation, and stabilise retention rates through a shared common code of conduct. This includes a non-binding agreement to refrain from poaching, shared pay scales to limit wage competition after training, or joint recruiting of apprentices.

There are different models of such training networks, including their funding models (subsidised or not) as well as their training models, some of which are set out in Box 5.7. With regard to apprenticeship training, other research (Leemann and Imdorf, 2015[74]) has argued that if apprentices are employed at the training network, rather than at individual training firms, it will reduce “employers’ fear of being at a competitive disadvantage [due to solely bearing training costs] and a potential victim of poaching, which makes them more willing to engage in training” in the first place. However, this mechanism does not work for forms of training that concern already hired employees. Some forms of training networks can also help to facilitate training within companies that do not have the resources (administratively, financially as well as in terms of training opportunities on the shop floor) to train, e.g. especially SMEs that dominate Northern Ireland’s economy. In such models, trainees cycle through companies as part of their training courses, with training at each company reflecting its distinct capacities, and the whole network is governed by a larger lead-company or training provider that takes over many administrative and legal tasks (Leemann and Imdorf, 2015[74]).

Research (Culpepper, 2003[75]) has highlighted the importance of SMEs in facilitating more collective forms of training, and proposes targeting measures at firms where effects on training participation are potentially the largest. In order to identify such candidate firms, the knowledge of elite business actors and or sectoral business organisations can be central in Northern Ireland. However, such choices of appropriate target firms could also be aligned with a “top-down” economic strategy for Northern Ireland, including skills and innovation policy, as proposed by recent research (Skilling, 2019[32]), with government strategically selecting which economic sectors to focus on. Drawing on experience from training networks in the United States, other research (Bernhardt, Dresser and Rogers, 2002[76]) has recommended focusing on selected sectors with high demand for skilled workers and high union coverage, thereby pushing up training incentives for employees through granting labour more influence in the governance of training. Similarly, it would also be possible to focus on sectors with especially organised and representative business interest associations. Especially well-organised business interest associations might have the best information on potential candidate firms (i.e. they know the firms where effects of such networks on training participation might be the largest). Consequently, discriminating between different types of companies regarding their eligibility or the extent of subsidisation for such training networks can be beneficial.

In order to increase employer participation in skills policies, information exchange regarding available subsidies and training programmes is central. For example, awareness-raising initiatives and technical assistance for business can be one mechanism to increase employer participation in skills policies (see Chapters 3 and 4). In Northern Ireland, both the 2014 Apprenticeship Strategy as well as the 2015 Youth Training Strategy proposed the introduction of a central service seeking and managing opportunities for work-based learning across Northern Ireland’s economy, thereby running promotion campaigns as well as a “full end-to-end service”, including advice and guidance on how to participate in apprenticeships and youth training, outlining the range of support available, including incentives, advertising vacancies and offering ongoing support (DEL, 2014[12]; DEL, 2015[13]). According to these strategies, industry consultants with extensive knowledge of local economic environments, local councils and other key organisations should have supported this central service on the ground. However, this central service supported by industry consultants was never implemented. Formerly, Sector Skill Councils and Sector Training Councils gave employers a voice in apprenticeship and training policies and tried to motivate employer participation more locally, but are no longer functional in many sectors (OECD, 2019[11]).

However, such direct contact with individual firms was regarded as essential by participants. Consequently, new institutions that bring together local government, employers and potentially other stakeholders should take up these functions, as seen in the similar Regional Skills Fora in the Republic of Ireland or the Mid-Ulster Skills Forum in Northern Ireland (see Box 5.7). Such bodies could consequently set common goals (as seen in the local skills strategies mentioned in Opportunity 2) and exchange information concerning available programmes among local businesses. With their potentially extensive knowledge of the local business communities, such potential “regional skills hubs” can then also target and promote specific policies, including offers of potential local training funds (see Chapter 3), at individual businesses, for example, those most in need or that have the potential to benefit the most from the respective policies. This can include the training networks mentioned above, but also policies for promoting high-performance work practices (HPWP) (including management and leadership capabilities) among SMEs (as suggested in Chapter 4), or policies for strengthening the provision of adult learning to low-skilled learners in the workplace (as suggested in Chapter 3).

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Box 5.7. Relevant national and international examples: Different models of facilitating employer engagement at lower levels of government

Vocational training networks: An example from Switzerland

In Switzerland, the government established vocational training networks (Lehrbetriebsverbünde) through the 2004 Act on VET (vocational education and training). These are networks of two or more training firms that share apprentices, with training organised across several firms on a rotating basis. The aim is to allow firms that lack the capacity and resources to provide the full training of an apprentice to be engaged and to lower the financial and administrative burden on individual firms. One of the firms in the association has overall responsibility for the training of the apprentice, signs the apprenticeship contract and represents the association externally. The confederation subsidises networks with initial funding during the first three years for marketing, administrative and other costs necessary to set up the joint training programme. After this initial support, training associations are supposed to be financially independent. The canton of Zürich also finances its networks via means of a cantonal training fund where non-training companies are required to contribute. An evaluation (Resultate Evaluation Lehrbetriebsverbünde, OPET, Bern) found that most firms participating in training networks would not have engaged in training otherwise.

Mid Ulster Skills Forum: An example from Northern Ireland

The Mid Ulster Skills Forum in Northern Ireland is a local initiative by 30 local businesses, colleges/universities and industry sectoral bodies formed in 2017. It is private-sector led and the first of its kind In Northern Ireland. The forum created an Action Plan (2018-2021) that presents several priorities and actions, including supporting the development of future-proof skills and capabilities to enhance business performance, raising the quality and quantity of apprenticeships and reducing annual rates of staff turnover among business (i.e. limiting poaching).

Skillnet and Regional Skills Fora: Examples from the Republic of Ireland

Skillnet is the Republic of Ireland’s national publicly funded agency dedicated to workforce development. It seeks to increase companies’ participation in enterprise training by operating enterprise-led learning networks in different economic sectors and regions, as well as by offering various other services. Skillnet currently supports over 15 000 companies nationwide and provides learning experiences to over 50 000 trainees, with businesses and Skillnet Ireland providing around half of the funding each. Furthermore, Skillnet is supported by a National Training Fund/Levy.

The process of determining training needs and co-ordinating the delivery of training is primarily owned by the enterprise groups engaged with Skillnet Ireland. Through 65 Skillnet learning networks, Skillnet Ireland allocates funding to groups of companies in the same industry sector or region and with similar training needs so that they can deliver subsidised training for their teams. Skillnet’s learning networks also enables cohesive enterprise networking and the flexibility to respond to ever-changing skills demands through formal and informal learning. As part of the National Skills Strategy to 2025, the Republic of Ireland also introduced nine Regional Skills Fora and respective Regional Skills Fora Managers. They are single points of contact for employers in the region and are in charge of promoting regular collaboration between employers and the education and training system at the regional level. They help employers understand and access the full range of services offered by the education and training system. They also help the government respond to local skills needs and better co-ordinate policies between different levels of government, thereby also informing national funding decisions.

Source: Kuczera, M. and S. Jeon (2019[21]), Vocational Education and Training in Sweden, https://doi.org/10.1787/g2g9fac5-en.; Mid Ulster Skills Forum and Mid Ulster District Council (2018[77]), Skills Report and Action Plan 2018-2021, https://www.midulstercouncil.org/getmedia/fbca2ca4-b60f-4aae-8d66-075414945074/MUDC-Skills-Report-Action-Plan-2018-2021-(Full-Report).pdf.aspx; OECD (2019[78]), OECD Skills Strategy Latvia: Assessment and Recommendations, https://doi.org/10.1787/74fe3bf8-en.

Recommendations for improving governance arrangements for involving employers at lower levels of government

4.14. Improve employer engagement by encouraging the creation of local, collaborative training networks among employers. Such training networks can share training responsibilities and collaborative recruiting and establish a common code of conduct that creates trust among employers (e.g. no poaching, commitment to raising training participation). The government of Northern Ireland should provide financial support to such networks, with the possibility of focusing strategically on certain sectors in line with an overall skills strategy. The reach and composition of these training networks can be variable according to the respective needs of business (similar to the Skillnet’s learning network approach), meaning that there could be one or multiple networks per district, but also cross-district networks, and multi- as well as single-sector networks.

4.15. Create an infrastructure of regional skills hubs at district councils that increase information exchange and co-ordination between employers, education and training providers and (local) government. In such regional skills hubs, these stakeholders set common goals for regional skills policy, for example, the local skills strategies (see Recommendation 4.7). By involving experienced local representatives of the business community with knowledge of potential local training opportunities and needs, these hubs can effectively promote skills policies among the business community (e.g. for example by launching awareness-raising initiatives as mentioned in Chapters 3 and 4) and facilitate businesses’ access to the range of services in skills policies offered in Northern Ireland. Consequently, the hubs could also target policies for improving HPWP and adult learning for low-skilled learners at those most in need (see Chapters 3 and 4), or help to channel funding for training networks (see Recommendation 4.14) to companies or sectors where effects on training participation are potentially the largest.

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Overview and discussion of recommendations

Improving the governance of skills policies is crucial for ensuring effective skills policies and creating a sustainable skills system, as policies in the three priority areas (discussed in this report) will only realise their full potential if accompanied by supportive governance arrangements. Three opportunities have been selected indicating where governance arrangements of Northern Ireland’s skills system can be strengthened:

  1. 1. Making sustainable funding arrangements and committing to an overarching strategy for Northern Ireland’s skills system.

  2. 2. Increasing co-ordination and information distribution across the whole of government.

  3. 3. Improving employer engagement in the governance of skills policies.

This chapter presented a total of 15 recommendations in order to seize these opportunities in the area of governance. This selection is based on input from literature, desk research, discussions with the Northern Ireland Project Team, and broad engagement with a large variety of stakeholders, including two workshops in Belfast, two meetings in Derry/Londonderry, a meeting in Dungannon, and various related meetings and group discussions.

In these recommendations, a number of common areas could be identified and various recommendations are inter-related. A starting point for improving governance arrangements is to commit all relevant decision makers and ministers (including the first minister and deputy first minister) to a binding, cross-departmental Skills Strategy for Northern Ireland in order to formulate strategic goals and ensure sustainable funding arrangements for the future development of Northern Ireland’s skills system (Recommendation 4.1). However, in order to achieve such strategic goals as part of the proposed skills strategy, Northern Ireland should also implement sustainable funding models and budgeting processes that enable multi-year planning beyond the short-term, traditional annual budgeting cycle (4.2). One development that might impact the future implementation of such a skills strategy is the UK’s exit from the EU. In order to respond to the potential impact of the UK’s exit on the funding of Northern Ireland’s skills system, Northern Ireland should assess the restructuring of existing ESF programmes (4.3), and partially shift funding for these programmes to their own budgets due to the uncertainty regarding a potential Shared Prosperity Fund (4.4).

However, goals as part of a common Skills Strategy for Northern Ireland can only be effectively achieved through co-ordination across the whole of government, which should be ensured first of all through a new central oversight body with representatives from all relevant departments and arms-length bodies (4.5). In order to expand this whole-of-government co-ordination also between different levels of government, district council representatives could be included in this central oversight body (4.6). Furthermore, district councils could also commit themselves to their own local skills strategies in accordance with the priorities of Northern Ireland’s overall skills strategy (4.7).

Such a central oversight body (4.5), however, should be complemented by both expertise from business (and potentially employee representatives) as well as independent experts, as suggested by involving both in a new central skills needs advisory body (4.8 and 4.11) that supports and advises the central oversight body. The combination of employers and independent experts in one advisory body can mitigate potential problems connected to a lack of tradition in employer engagement (4.12). A certain degree of accountability of political decision makers to scientific information and assessment as well as employer advice given by such a skills needs advisory body must be ensured (4.13). Conversely, the advisory body (and in particular independent experts within it) should also ensure the distribution of all available evidence to policy makers in order to enable evidence-based policy making (4.9).

Furthermore, this central skills needs advisory body could also help improve Northern Ireland’s currently very complex infrastructure of employer engagement bodies, some of which could be merged, ultimately creating a foundation for the new central skills needs advisory body (4.10 and 4.11). In order to further strengthen employer engagement in Northern Ireland’s skills system, the chapter also proposed to create an infrastructure of regional skills hubs at the district council level (4.15), bringing together employers, education and training providers and (local) government to set common goals, for example, the regional skills strategies (4.7), and promote and target skills programmes at the local business community. For example, local training networks could be created that share training responsibilities and collaborative recruitment, and establish a common code of conduct (4.14).

Based on discussions with the Northern Ireland Project Team, three recommendations have been selected that could be considered to have the highest priority based on potential impact, relevance in the current Northern Ireland context, as well as the overall support for implementation. To strengthen governance of the skills system, the OECD recommends that Northern Ireland:

  • Commit all relevant decision makers and ministers (including the first minister and deputy first minister) to guarantee support and sustainable financial resources to achieve strategic goals as part of a binding, cross-departmental Skills Strategy for Northern Ireland (4.1).

  • Increase co-ordination in skills policy (e.g. to implement the proposed skills strategy) by introducing a central oversight body with representatives from all relevant departments and arms-length bodies (4.5).

  • As a result of mergers of high-level employer engagement bodies, implement a central skills needs advisory body to advise government on skills policy (4.11).

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Table 5.3. High-level overview of recommendations to strengthen the governance of skills policies in Northern Ireland

Policy directions

Recommendations

Responsible parties

Opportunity 1: Making sustainable funding arrangements and committing to an overarching strategy for Northern Ireland’s skills system

Putting sufficient and balanced funding of skills policies on top of decision makers’ agendas

4.1. Commit all relevant decision makers and ministers to guarantee support and sustainable financial resources to achieve strategic goals as part of a binding, cross-departmental Skills Strategy for Northern Ireland.

  • Government departments

  • First minister and deputy first minister

  • Business stakeholders

4.2. Ensure sustainable funding models and budgeting processes that enable multi-year planning beyond the short-term, traditional annual budgeting cycle.

  • DoF, DfE, DE, DAERA

Responding to the potential impact of the United Kingdom’s exit from the EU and the loss of ESF funding

4.3. Reassess and restructure current ESF-funded programmes across departments in order to avoid possibly inefficient and expensive overlaps of programmes for similar target groups.

  • DE, DfC, DfE

4.4 Consider shifting previously ESF-funded programmes to departments’ own budgets, as opposed to a continued reliance on external funds (e.g. on a potential Shared Prosperity Fund).

  • DoF, DE, DfC, DfE

Opportunity 2: Increasing co-ordination and information distribution across the whole of government

Increasing inter- and intra-departmental co-ordination

4.5. Increase co-ordination in skills policy (e.g. to implement the proposed skills strategy) by introducing a central oversight body with representatives from all relevant departments and arms-length bodies.

  • Government departments (DfE, DoF, DE, DfC, DAERA)

  • Arms-length bodies active in skills policies

Improving vertical co-ordination and the governance of skills policies on a local level

4.6. Increase vertical co-ordination by appointing skills representatives of district council/City Deal/Growth Deal areas and including them in a central oversight body that co-ordinates skills policy at a higher level.

  • District councils

  • DfE, DoF, DE, DfC, DAERA

4.7. Put skills policy on district council stakeholders’ agendas by encouraging them to commit themselves to their own local skills strategies in accordance with the priorities of Northern Ireland’s overarching skills strategy.

  • District councils

  • DfE

  • Potential central oversight body

Making full use of and including stakeholders in information systems

4.8. Re-engage business in skills anticipation and assessment via a central skills needs advisory body.

  • Business stakeholders

  • DfE

4.9. Ensure distribution of all available evidence to policy makers.

  • DfE

  • Stakeholders in potential central skills needs advisory body

Opportunity 3: Improving employer engagement in the governance of skills policies

Restructuring stakeholder engagement bodies

4.10. Improve governance structures by assessing potential mergers and making responsibilities of employer engagement bodies clear.

  • DfE, DoF, DE, DfC, DAERA

  • Business stakeholders

4.11. As a result of mergers of high-level employer engagement bodies, implement a central skills needs advisory body to advise the government on the skills policy.

  • DfE, DoF, DE, DfC, DAERA

  • Business stakeholders

4.12. Ensure sufficient steering of the central skills needs advisory body by including independent experts and researchers.

  • DfE, DoF, DE, DfC, DAERA

  • Independent experts

4.13. Ensure accountability of policy makers towards advice given by the central skills needs advisory body.

  • DfE, DoF, DE, DfC, DAERA

  • Independent experts

  • Business stakeholders

Improving governance arrangements for involving employers at lower levels of government

4.14. Improve employer engagement by encouraging the creation of local, collaborative training networks among employers.

  • Business stakeholders at the local level

  • DfE, DfC

4.15. Create an infrastructure of regional skills hubs at district councils that increase information exchange and co-ordination between employers, education and training providers and (local) government.

  • District councils

  • Business stakeholders at the local level

  • DfE, DfC

Note: DoF is the Department of Finance; DfE is the Department for the Economy; DE is the Department of Education; DAERA is the Department of Agriculture, Environment and Rural Affairs; DfC is the Department for Communities; CCEA is the Council for the Curriculum, Examinations and Assessment.

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