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Policy briefing 18 July 2011
(5 July – 18 July 2011)
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The severe indiscretions of certain members of the press and the police have inevitably presided over public attention for the past two weeks. Nevertheless, an assortment of other stories of interest have also emerged, most notably the long-awaited publication of the ‘Open Public Services’ White Paper and the faintly optimistic latest labour market statistics.
A White Paper outlining the case for public service reform was originally due for publication back in January 2011 but was held up due to protracted inter-departmental discussions and negotiations with employer bodies. What has eventually emerged is a basic framework for enabling greater diversity in the provision of public services. Unfortunately, many of the details of this framework are either yet to be filled or in some cases are already taking place (such as the contracting of further education provision or welfare-to-work services), however the Paper has promised a “listening period” on reforms due to take place between July and September 2011.
The most recent round of labour market statistics have revealed a slight increase in employment of 50,000, with a corresponding fall in unemployment of 26,000 (much of which was due to a fall in youth unemployment). Average earnings also increased by 2% over the last quarter. Certain considerations still need to be borne in mind, however, not least the level of inflation (currently 5% according to the Retail Prices Index) and the 1.25m people currently working part time because they could not find a job, the highest number for nearly two decades.
Skills & Workforce
The latest labour market statistics have been published for March to May 2011. These show a fall in unemployment by 26,000 to reach 2.45m or 7.7%, whilst employment rose by 50,000 to reach 29.28m or 70.7%. The number of people in part-time employment rose by 31,000 to reach 7.96m. Meanwhile the claimant count also increased by 24,500, with the number of people claiming out-of-work benefits standing at 1.52m. The number of people in public sector employment fell by 24,000 to 6.06m, whilst the numbers of people in private sector employment swelled by 104,000 to reach 104,000. The full figures are available here.
The Office for Fair Access has approved 139 access agreements submitted by higher education providers seeking to charge over £6,000 tuition fees in 2012/13. Under these agreements, higher education providers plan to increase investment in access measures to £602 million a year by 2015-16. This will cover a range of activities, including outreach projects, fee waivers, bursaries and scholarships, and measures to improve retention. The estimated fee average across the HE sector is £8,393.
The Higher Education Funding Council for England (HEFCE) has published a strategy statement setting out its overall approach to implementing the Government’s proposals for higher education reform in the recent White Paper. HEFCE’s funding is to be increasingly targeted towards public benefit objectives and it also intends to consult on how to carry out its new role as “lead regulator” of higher education.
An official evaluation into the work of National Skills Academies (NSAs) has been published by BIS. The evaluation covers the 10 operational NSAs and makes a range of findings, including the need to improve engagement with SMEs; the existence of a “spectrum of employer engagement” from active leadership to the passive consumption of endorsed products or services; and wide variation in the funding they have managed to lever from employers.
The Government have published their response to the recent consultation on whether to extend employees’ right to request time to train to all organisations, irrespective of size. The Government will not extend this right to organisations with fewer than 250 staff as previously planned. This is due to the potential regulatory burdens that it could create.
Over £5 million is being distributed by the UK Commission for Employment & Skills to sector skills councils for projects that generate increased employer investment in skills training. Among the successful projects to receive funding is a scheme being run by Skills for Health to develop a skills passport for health workers that will increase the speed at which staff can take up a new post and reduce unnecessary training duplication.
A new report by the Association of Colleges warns that 248,000 people on inactive benefits risk being excluded from education due to the reform of skills funding. Of those affected, an estimated 185,000 will be women and 33,000 have disabilities. Under new funding arrangements, students who are 25+ and claiming income support, working families’ tax credits and housing benefits will be charged in full for course fees. Such fees can vary from between £500 and £1,000 for a full-time course according to institution.
The role of Local Enterprise Partnerships (LEPs) in tackling skills needs is the subject of a new joint-research report by the 157 Group, British Chambers of Commerce, and the Local Government Association. The reportconsiders the role of LEPs in articulating and addressing skills needs, with particular emphasis on the effective use of labour market information; the effectiveness of pre-existing strategic partnerships; and effective practice, issues and areas for improvement.
A memorandum of understanding on vocational education has been established between China and the UK. This follows a trip to Beijing from the Further Education Minister John Hayes and covers three years. It includes a range of joint-programmes relating to apprenticeships, institutional partnerships, and e-learning.
The new Business Link helpline service is to be delivered by Careline in partnership with the Business and Enterprise Group. This will be fully operational by 25 November 2011 when the Business Link Regional Services are due to close.
UKCES has launched further details of a project which intends to improve the commission’s understanding of how employers define training. This includes the investigation of how training is defined and classified within large-scale employer surveys, seeking to better capture a whole range of approaches.
Politics
A White Paper on public service reform has now been published by HM Government. Entitled ‘Open Public Services’, it provides a policy framework for the reform of services along the lines of choice, decentralisation, diversity, fair access, and accountability.
Key areas include a heightened attention to open data as a means of improvement; the use of ombudsmen as a means of redress when denied a choice of services; decentralisation of services to the level of parish or community council; and “continuity regimes” for failing services. This is likely to entail a series of consultations over the coming months in addition to a “listening exercise” due to take place from July to September 2011.
The current progress of each Government department in policy reform is captured in June’s edition of Structural Reform Plans. The Cabinet Office plan provides an update on the progress of the Big Society Bank; the BIS plan provides an update on several skills reforms, including plans to increase apprenticeship numbers; and the CLG plan provides an update on a range of matters relating to the Localism Bill. The full list of plans is available here.
The UK’s public sector net debt will become unsustainable in the absence of further tax increases or spending cuts according to the Office for Budget Responsibility’s ‘Fiscal Sustainability Report’. The rising costs of healthcare and pensions caused by an ageing population in addition to declining tax revenues are expected to prolong current economic austerity according to the OBR, the body with responsibility for independent analysis of public finance.
The Treasury is consulting on proposals to encourage investment in small businesses and start-up enterprises. This will seek to break some of the barriers for small firms in targeting equity finance and will involve the reform and simplification of the Enterprise Investment Scheme and Venture Capital Trusts through increased investment limits and income tax rate reliefs. The consultation closes on 28 September 2011.
A call for evidence has been launched by the Treasury on the possibilities of merging income tax with national insurance. This aims to build a strong evidence base on the burdens to employers of having to operate two different systems and the fairness for individual earners. The deadline for responses is 19 September 2011.
The Government’s vision for a public health system has become clearer with the publication of Healthy Lives, Healthy People. This follows a recent consultation on the subject and provides an update on several areas such as the leadership role for local authorities and directors of public health; proposals for commissioning public health services; and the creation of a new integrated public health service, Public Health England by 2013.
A consultation has been opened on proposed reforms to social housing by the Department for Communities & Local Government. These reforms will explore how to allow social landlords to issue flexible tenancies for new tenants; the launch of a internet-based mutual exchange schemes for existing tenants to change properties; greater tenant involvement in maintenance and repairs; and the introduction of the “Affordable Rent model” (80% of local market rate). The consultation closes on 29 September 2011.
A consultation has been launched into disability employment services by the Department for Work and Pensions. This follows the recent publication of the Sayce Review by the CEO of disability charity RADAR, which recommended that the Access to Work programme be expanded and for funding to follow the individual rather than the institution. The consultation closes on 17 October 2011.
The Department for Education has published a consultation in response to the Tickell Review of early learning and children’s centres. This covers proposals to dramatically reduce the number of learning goals; increase the flexibility in parent’s use of their free childcare entitlement; and plans for the greater use of mutual and co-operative approaches in children’s centres. The consultation closes on 30 September 2011.
The Department for Education has published its response to Professor Eileen Munro’s recent review of child protection. This entails a reduced role for central regulation and prescription, with greater responsibility for skilled social work professionals and local leaders in creating long-term reform. It is intended for a Chief Social Worker will also be appointed to provide a permanent professional presence in Government in place by the end of 2012.
The full list of recipients of £30m in funding for victim support has been published by the Ministry of Justice. This covers a range of projects under the Rape Support Fund, the Homicide Fund, and the Victim and Witness General Fund.
A “competition strategy” for the management of 9 prisons and the closure of 2 existing ones has been published by the Ministry of Justice. The prisons have been selected by the National Offender Management Service and will be open to bids from independent providers.
Communities are being asked to recommend places to become “Nature Improvement Areas” with access to £7.5m improvement funding. There will be 12 such areas which will see rural and urban sites revitalised and turned into inter-connected networks of wildlife habitats t ranging from 10,000 to 50,000 hectares in size. Initial applications will be due by autumn 2011 and are being managed by Natural England. All entries will have to demonstrate a shared vision between public and voluntary sector partners.
A White Paper has been published on proposed reform to the energy market. This intends to steer a path away from high-carbon energy and reduce impact on consumer bills. It also outlines the need for £110bn in investment to build the equivalent of 20 large power stations and upgrade the national grid. The Government intends to legislate for key elements of the White Paper in the second session of this Parliament, which starts in May 2012. This was released by the Department for Energy & Climate Change alongside the latest Fuel Poverty Statistics which show that there are 5.5m fuel poor households in Britain, an increase of 1m from the previous year.
The Voluntary Sector
A £30m fund to support local voluntary sector infrastructure is now open to applications. “Transforming Local Infrastructure” was first announced in the Giving White Paper, and will be administered by the BIG fund, who are contributing an additional £20m of development funding. The funding will be distributed in grants of between £250k-£400k and will be used to join up support services, avoid duplication, and develop more effective online resources. The deadline for expressions of interest is 5 August 2011.
A new £20m fund will be available over three years for the voluntary sector to help tackle homelessness. The fund, announced by the Department for Communities and Local Government, is part of their “No Second Night Out” campaign to help new rough sleepers. The fund will be administered by Homeless Link, the umbrella body for homelessness charities. This was also accompanied by the publication of the Government’s Vision to End Rough Sleeping.
A panel has been established by Civil Exchange and the Baring Foundation to explore the independence of the UK voluntary sector. The panel is made up of several figures with notable histories in the sector, such as Professor Nicholas Deakin, Lord Hodgson, and Julia Unwin. It will explore issues such as public service delivery and charitable purpose. An initial report outlining the panel’s work is available here.
The use of cheques is set to continue as a valid payment method according to the Payments Council. Previous plans to abolish cheques by 2018 were cancelled following lobbying from voluntary sector bodies such as the Institute of Fundraising.
Data from HM Revenue & Customs has shown a rise in the Gift Aid claimed on charitable donations. The amount claimed rose by 4.2% to £1.06bn in the tax year ending 5 April 2011 according to HMRC’s latest figures. Around 64,600 Gift Aid claims were processed overall, compared with 68,300 in the previous year.
Think Tanks & Research
Charities spend far less on fundraising than the levels perceived by the public according to new research from the Charities Aid Foundation. A survey of 1,037 individuals in the UK reveals that the public think charities spend 42p on fundraising per £1, however, analysis of data from 162,500 charities’ shows that in reality charities only spend 12p per £1 raised.
A lack of employability skills is fuelling the current employment crisis according to new research from the Centre for Social Justice - ‘Creating Opportunity, Rewarding Ambition’. Based on a survey and interviews with entry-level employers, the report argues that a commitment to hard work, presentation and punctuality are the most important factors (cited by 82% of respondents), more than doubly as important as literacy and numeracy skills (cited by just 38% of respondents).
There is no strong link between a community’s financial wealth and its ‘Big Society’ resources according to a recent report by the “localism think tank”, New Local Government Network. The report does argue, however, that those communities faced with “double deprivation” (i.e. lacking both financial wealth and community resources) should be targeted for extra help to cope with the withdrawal of traditional state services.