Policy briefing 14 March 2011
(1 March - 14 March 2011)
The debate around economic growth has been intensifying in the run up to the announcement of the Budget next week. During a speech in the City of London, Business Secretary Vince Cable warned that there was “no Delia Smith cookery book providing a simple recipe for producing growth” but did promise to critically examine every policy which might stand in the way. Meanwhile, in a speech to the Conservative Party Spring Conference, David Cameron pledged to take on the “enemies of enterprise” (i.e. central government bureaucrats, town hall officials, and public sector procurement managers).
The Government’s strategy for growth looks set to crystallise around increased enterprise and decreased regulation. Four specific ways intended to achieve this include the formation of Local Enterprise Partnerships between local businesses and public sector leaders; the Growth & Innovation Fund to encourage employer-led initiatives for the provision of skills; a proposed overhaul of vocational education to tackle youth unemployment; and the recently-announced plans to create Enterprise Zones in areas of high-growth potential.
Things have also been heating up in the voluntary sector with the slow trickle of announcements in relation to the Strategic Partners Programme. The programme is a significant source of income for many infrastructure organisations and is set to be gradually phased out by 2014. On the plus side however, voluntary organisations will be supported by a new “statutory force” in response to disproportionate local authority cuts according to the Communities Secretary, Eric Pickles. Further details on what this power will entail are still forthcoming.
Skills and workforce
A fund of £50m per year over the next two years is to be jointly-delivered by BIS, the Skills Funding Agency and the UK Commission for Employment & Skills. The Growth & Innovation Fund will aim to encourage employer groups to drive enterprise and tackle the barriers to growth in their sector. The fund will cover training that boosts productivity and addresses skills gaps; the increased use of professional standards and training levies; an expansion of the National Skills Academy network; and a leadership and management programme for SMEs. All bids for the fund are to be made by 3 June and proposals are expected to demonstrate how they will secure match-funding from employers.
The independent Wolf Review into vocational education has reported back with some scathing results about the “complex, expensive and counterproductive” offer available for young people. Radical findings emerging from the review include that 300,000-400,000 young people are doing courses which do not lead to higher education or jobs; league tables misinform pupils about the consequences of their educational choices; high-quality apprenticeships are a rarity; and that the current crisis in the youth labour market is historical. The review is also highly sceptical of the “bureaucratic triangle” created by Awarding Organisations, Sector Skills Councils, and the Qualification and Credit Framework.
Lord Hutton has published the findings of the Public Sector Pensions Commission. The final report sets out a range of recommendations for reform, including linking pension entitlement to career average earnings rather than final salary; setting a clear cost ceiling for public sector pensions; and introducing more “independent oversight” to the system. With costs rising to around £30bn in the next year, it is hoped that such measures can be introduced by 2015 (with previously accrued schemes being honoured in full). These reforms will impact upon charities taking on public services, potentially making it easier to bid for contracts by not obliging charities to set public sector schemes for their staff.
The Treasury has launched a consultation on “Fair Deal”, the policy which applies to pension provision for public sector staff when they are compulsorily transferred to another sector. This currently requires the new employer to provide a comparable pension scheme for the transferred staff. The consultation is due to close on 15 June 2011.
Small firms may no longer be required to have independently audited accounts following reforms proposed by the Business Secretary, Vince Cable. The reforms are anticipated to save 42,000 businesses a total of £40m per year and will amendment of the Companies Act to bring small company audit rules in line with the EU minimum in 2012 and removal of the requirement for small firms to produce specific accounts for Companies House in addition to those for tax purposes.
A minimum of 1,000 Apprenticeships will be publicly funded to deliver the Government’s plans to tackle rising energy prices and carbon emissions. Part of the cross-governmental “Carbon Plan”, employers and Sector Skills Councils will be tasked with designing new apprenticeship frameworks for workers in a range of “Green Skills” including solid wall insulation, energy efficient heating, and new green technologies.
The Government’s Equalities Office has launched a consultation on age discrimination in the provision of services and public functions. The consultation document sets out the circumstances under which it would still be lawful to discriminate products and services on the basis of age.
The Department for Communities & Local Government has promised to use statutory force to deal with councils that disproportionately cut voluntary sector budgets. Councils will be expected to abide by a set of “reasonable expectations” – a minimum of 3 months notice prior to funding changes; involvement of the voluntary sector in redesigning services; and for any cuts to the voluntary sector to be in line with cuts to a council’s own internal budgets. This was aligned with news that the voluntary sector is to receive an additional £1m to the Asset Transfer Unit to provide support, advice and expertise to groups who want to take over community assets.
The Department for International Development has published the findings of its review on how it spends its £8.4bn aid budget. Whilst the budget is set to increase from £7bn to £11bn by 2015, aid will increasingly follow a “value for money” approach and will be removed from 16 different countries (including Angola, Gambia, Iraq, and Vietnam). It has also decided to end its funding to several global development agencies, including the International Labour Organisation.
The Department for Education has published a Green Paper on Special Educational Needs & Disabilities. The paper proposes fundamental reforms to address issues such as the use of multiple assessments, bureaucratic delays in getting support, and the “over-identification” of children with special educational needs. Under new proposals, parents will be given personal budgets; a single assessment process and combined education, health and care plan will be implemented; and a greater role will be attributed to the voluntary sector in making assessments. A consultation on the proposals will last until 30 June 2011.
The first meeting of Local Enterprise Partnerships was held in Derby and hosted by the Cabinet. So far 31 LEPs have been formed, covering more than 70% of England’s population. The purpose of the meeting was for ministers to hear directly from businesses about the challenges that they face.
Chancellor of the Exchequer, George Osborne, announced plans to create “Enterprise Zones” during the Conservative’s Spring Conference. The zones, an echo of previous policy in the Thatcher era, will be based in areas with high-growth potential and will be subject to discounted business rates and simpler planning regulation
A cross-government action plan to tackle climate change has been published. The “Carbon Plan” aims to help ensure that each Whitehall department delivers key actions to meet carbon emission targets within a clear framework of deadlines. The plan covers sustainable energy generation, domestic heating, business emissions, and transport policy.
A review into the job search practices of different groups has been published by the Department for Work & Pensions. The review, based on analysis of the Labour Force Survey, focuses on JSA-claimants and their use of the internet and social networks in job-seeking. A key finding of the research was the existence of a complex “digital divide” in internet use based on age, education, and access.
Local authorities are set to undergo a comprehensive review of their legal duties following an announcement by the Decentralisation Minister Greg Clark. A list of more than 1,200 legal duties has been published, with councils being asked to advise ministers which duties create unwanted burdens and could potentially be repealed. An informal consultation will last until 25 April 2011.
The Department for Work & Pensions is implementing changes to the Crisis Loan scheme. Crisis loans, which cover the short-term needs of benefit claimants in an emergency, will be cut 15%, capped at 3 per year and no longer be available for items such as cookers or beds.
An action plan which aims to tackle domestic abuse, sexual assault, and the stalking of women has been published by the Home Office. The plan includes making information on violence more widely available; a campaign to raise awareness about abuse within teenage relationships; more training for key frontline professionals on identifying and dealing with violence against women; and creating sustainable funding for support services.
The Treasury has announced a new set of government spending controls expected to cut down costs on consultancy, property, ICT, advertising and marketing. Such measures, which include a freeze on civil service recruitment, are expected to save over £3bn in 2011-12.
The Ministry of Justice brought together ministers, voluntary organisations, and industry experts for a conference on using payment-by-results models in the justice system. The department’s recent “Breaking the Cycle” Green Paper committed itself to 6 new payment-by-results pilots. Justice Secretary Ken Clarke also expressed the need for subcontractors to be treated properly in new partnerships to address reoffending.
The voluntary sector
The Office for Civil Society has made some initial decisions about its future Strategic Partners. The programme, which provided £12.2m in funding for 42 voluntary sector organisations in 2010/11, will be phased out by 2014. Although not subject to a press release, it has been made public that BTCV, Community Development Exchange, CSV, the Mentoring and Befriending Organisation, the National Council for Voluntary Youth Services, and Time Bank will no longer receive departmental funding. A range of organisations will be assessed in a second round of decisions with announcements expected on 21 March.
The Charities Bill has been published, consolidating existing charities legislation (the Recreational Charities Act 1958, the Charities Act 1993 and the Charities Act 2006) into one single Act of Parliament. The Bill updates some of the text of the existing legislation rather than implementing any policy changes. Leading charity lawyers have expressed disapproval that this has been put forward prior to the forthcoming review of the Charity Act.
The final Capacitybuilders survey of local support providers has discovered that more than half of local support providers (52%) have cut back on staff numbers over the previous four months. This represents a significant increase on the 28% recorded back in October 2010. According to the survey, “cutting staff” has overtaken “increasing collaboration” as the most common action being taken by support providers in response to funding cuts. Almost half of respondents also reported cuts in funding from local authorities, compared with 22% in the previous survey. This is the last survey to be published by Capacitybuilders, which is set to close at the end of the month.
The Cabinet Office has received 450 responses to its recent consultation on charitable giving and volunteering. The majority of responses focused on much-needed reform of tax incentives to encourage greater levels of giving. Both ACEVO and the Institute of Fundraising pointed towards the lack of sufficient reform to Gift Aid. Meanwhile, NCVO’s response to the consultation focused on the importance of improving the quality and effectiveness of fundraising and NAVCA focused on the significance of traditional volunteer centres to increased charitable activity.
The Liberal Democrats have released a policy paper that outlines their position on the voluntary sector. The paper, entitled “Community Futures”, focuses on infrastructural reform, deregulation, and the use of tax incentives to encourage greater levels of charitable giving. The paper also promises strong support for charities’ rights to campaign.
The Small Charities Coalition and the Charity Trustee Network have announced plans to merge. The newly-merged charity will take on the Small Charities Coalition’s name and will be led by its current CEO, Cath Lee. The two organisations recently submitted a joint bid to become an Office for Civil Society strategic partner and expect no redundancies as a result of the merger.
The Government has officially opened the pilot of its International Citizen Service. The scheme will allow 18 to 22 year-olds to work as volunteers for 10 to 12 weeks in a developing country. The pilot will be delivered by a consortium of voluntary organisations led by VSO. The scheme, which will be backed by over £8m of public funding, aims to involved over 1,000 young people, most of whom will be expected to subside the costs.
The Volunteer Rights Inquiry has launched a call to action (the “3R Promise”) asking organisations to commit to certain standards in resolving matters of conflict with volunteers. The inquiry commits to certain actions to promote better volunteer management, including the identification of a trustee with responsibility for volunteering to monitor complaints and encourage rapid resolution in emerging conflicts, the exploration of local mediation services when necessary, and the commitment to hosting a fair hearing if a conflict arises
Think tanks and research
The first findings of ESRC’s “Understanding Society”, a longitudinal study following 40,000 UK households, have been released. These findings cover a wealth of information, including family life, life satisfaction and material well-being, employment during the recession, and attitudes towards the environment.
A total of £33.5m of public funding has been provided to finance a new comprehensive study of the British population. The Birth Cohort Facility Project, which will bring together existing cohort surveys and follow 90,000 new births, will explore the complex interplay between social, economic, biological, environmental and health-related experiences and conditions.
A report by the New Local Government Network has suggested that plans to cut the back-office functions of local authorities will not deliver the savings necessary to eliminate the structural budget deficit. Moreover, the report’s authors argue that experience of merging functions is mixed and plans would necessitate the majority of services to be shared.
A new report published by ACVEO and the Institute for Public Policy Research argues that for Local Enterprise Partnerships to prove effective, they must draw on the resources of the local voluntary sector. The report, based on research in the North of England, suggests that LEPs should recognise the sector’s contribution to economic growth and expand their notion of stakeholder engagement.
The Institute for Fiscal Studies has published its reflections of public sector pension reform. They argue that the scheme will prove more generous for those whose salary has grown by less than average earnings. Overall, however, the generosity of the reforms cannot be properly assessed until the parameters and level of employee contributions have been decided upon.