Government Must Ensure Decentralisation of Employment Support Does Not Create North-South Divide, Advises New Report
London, UK – Tuesday 1 July, 2025 – In order to successfully get Britain back to work, the government must ensure that plans to decentralise employment support do not create regional economic disparities, warns a new report from Localis, a leading think-tank.
The report, titled ‘Guarantee of potential: place-based employment support within a new local policy ecosystem’, analyzes the challenges faced by councils and combined authorities in delivering the biggest reforms to employment support in a generation. It also offers recommendations for achieving the national long-term target of an 80 percent employment rate.
According to the report, while regions in the north with higher unemployment rates have used their devolution deals to address economic disparities, there is a risk that southern counties with stronger economies and increased capacity may widen these regional gaps when they implement their own devolved powers.
The study also suggests that if revised funding formulas or political attention favor big cities, coastal, rural, and post-industrial areas may have their unique employment support needs overlooked.
Callin McLinden, senior researcher at Localis and author of the report, says, “With record levels of economic inactivity and expedited devolution frameworks, local government is being asked to tackle worklessness with more responsibility. However, they lack the capacity and resources to do so confidently. This report provides a practical roadmap for transforming fragmented employment services into coherent, integrated, and place-based support systems.”
The report recommends that the government facilitate coordination and innovation through central-local partnerships and establish long-term, devolved funding and governance for local employment support. It also calls for further integration of central health, skills, and welfare policies to address barriers to work and leveraging procurement and regulatory levers to incentivise inclusive employment.
Local authorities are advised to lead and collaborate within coordinated local partnerships to provide one-stop support for jobseekers and the economically inactive. They should also tailor support to local needs while recognizing shared challenges and use key levers such as planning, procurement, and convening of anchor institutions to stimulate job creation and inclusive hiring.
Jonathan Werran, chief executive of Localis, says, “This report arrives at a pivotal moment, as the UK grapples with persistent economic inactivity and the need for more inclusive growth. It offers a compelling case for enhanced local ownership and a practical and necessary shift in how we design, fund, and deliver employment services.”
The report has been welcomed by Ayden Sims, CEO of AKG, a company that delivers joined-up support across employment, learning, and health to help people reach their full potential. Sims says, “The findings underscore the value of empowering local authorities and strategic partnerships to lead the charge in tackling worklessness. When local leaders are given the tools and trust to innovate, they can build services that are more responsive, inclusive, and effective.”
The report will be launched at the Local Government Association Conference 2025, with a panel debate featuring speakers from East Midlands Combined County Authority, Liverpool City Council, NHS Confederation, AKG UK, and Royal Borough of Kensington and Chelsea.
The report’s recommendations include establishing a formal partnership forum between DWP, MHCLG, and local government to troubleshoot implementation issues, devolving funding and governance for local employment support, further integrating central health, skills, and welfare policy, and leveraging procurement and regulatory levers to incentivise inclusive employment.
Local authorities are advised to form or join local employment and skills taskforces, tailor support to local needs, use key levers strategically, and establish a culture of social responsibility in the local economy.
For press enquiries, please contact:
Jonathan Werran, chief executive, Localis
(Telephone) 0870 448 1530 / (Mobile) 07967 100328 / (Email) jonathan.werran@localis.org.uk
Notes to Editors:
About Localis
Localis is an independent think-tank dedicated to issues related to politics, public service reform and localism. They carry out innovative research, hold events, and facilitate a growing network of members to stimulate and challenge the current governance of the UK.
About AKG
AKG delivers joined-up support across employment, learning, and health to help people in communities across the UK reach their full potential. With deep local partnerships backed by a strong national infrastructure, AKG supports thousands of people every year through services designed by professionals and peers with lived experience. Their integrated approach enables individuals to overcome complex service needs, build skills and resilience, and find and sustain good work.
AKG is made up of four distinct parts, each playing a critical and interconnected role in providing support to those who need it. Through AKG Employment, they deliver a range of programmes designed to help those with complex barriers, including the long-term unemployed and those with health conditions, secure and sustain work. Their AK