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Policy briefing: 17 January 2011
(4 - 17 January 2011)
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Testing times were experienced by the Coalition Government this week following defeat at the Oldham East and Saddleworth by-election and the publication of a scathing report on the “Bonfire of the Quangos”. The quango cull was the subject of trenchant criticism in an official report which argued that the process had been poorly managed, creating false expectations about cost savings and accountability. The committee responsible for evaluating the process also argued that an opportunity had been missed to transfer many of their functions to civil society organisations in line with the Big Society agenda.
The Prime Minister delivered a key speech outlining his plans for the “complete modernisation” of public services in preparation for forthcoming bills on health and education. In this speech, the PM criticised “unreformed public services and outdated welfare systems” with their focus on targets, inspection and guidance. Rather, the PM said that services should aim to free up professionals, give choice to the user, and encourage competition between suppliers. The debate over banking reform also came to an ambiguous end last week as the Treasury decided to prioritise Government support for small businesses rather than implement a new tax on bankers’ bonuses. This is despite May’s Coalition Agreement stating: “We will bring forward detailed proposals for robust action to tackle unacceptable bonuses in the financial services sector”.
In other news, the latest phrase to join the political vocabulary is “Alarm Clock Britain”. This phrase was coined by Deputy PM Nick Clegg to denote those people “who are getting up early, working hard, trying to make ends meet, and trying hard for their family”.
Skills and workforce
- End of Default Retirement Age
The Government has confirmed that they are to scrap the default retirement age this year. As of 6 April 2011 employers will no longer be able issue notices for compulsory retirement to their staff. Guidance for employers on how to manage the change has been published by ACAS and Business Link, and DWP has published research on the economic impact of the changes.
The Pensions Bill has now been published which details the new requirement for employers to automatically enrol eligible employees into a qualifying pension scheme from 2012. The Bill will also bring forward the increase in state pension age to 66 by 2020 and bring women in line with men by 2018.
Significant reforms are being made to business support services in wake of the proposed closure of regional Business Link services later this year. Reforms include an overhaul of the Business Link website; a national contact centre to help businesses who cannot find the information they need online; a network of 40,000 experienced business mentors to offer practical advice; and the Business Coaching for Growth scheme to support SMEs with high growth potential. The reforms are outlined in the BIS plan “Bigger, Better Business”.
The CEO of the Skills Funding Agency, Geoff Russell, has stated that 2011 will be “a world of less money and harder work” as the FE sector seeks to make efficiencies. Russell also commented on “the magic of the marketplace” whereby providers will drive greater enterprise rather than being subjected to the bureaucracy of national planning.
The UK Commission for Employment and Skills has published a review on the role of labour market intelligence in careers information, advice and guidance provision. This is part of the Commission’s role in identifying cost-effective methods for improving the provision of careers advice, especially online.
The Association of Learning Providers has published a paper calling for a comprehensive strategy of government support for those not yet ready or able to access an Apprenticeship. The paper is critical of the Foundation Learning Tier and calls for a more personalised model of support along the lines of the Entry to Employment scheme.
Politics
The Coalition Government’s plans to abolish 192 non-departmental public bodies has been criticised by the Public Administration Select Committee. A report published by the committee found that the process had been “poorly managed” resulting in badly drafted legislation that won’t deliver significant cost savings or improved accountability. There was also felt to be a lack of proper consultation with the bodies concerned or the general public. Those affected by the changes can find help in this transition guide published by the Institute for Government
The Government has published the latest progress update on its Structural Reform Plans. The plans, launched in June 2010, require each government department to set out their priorities for reform and the actions they will take to achieve them, within a specified timetable and measureable milestones. Departments are also required to explain the reasons behind missed deadlines.
Health Secretary Andrew Lansley has announced that an extra £162m is to be made available for frontline health services. The money, the result of efficiency savings, will be given to PCTs and local authorities who will decide how best to use the additional funding to relieve pressures on hospitals.
Organisations are being invited to bid for grant funding from the Government’s Supporting Communities and Neighbourhoods in Planning programme. A total of £6m will be available over two years to provide advice, guidance and support to community organisations who want to engage with the planning system in their local area. A prospectus on the selection criteria has been published by CLG.
- School League Tables & Spending
The Department for Education has published this year’s school performance tables showing a rise in pupil attainment at GCSE level. Alongside the performance tables, the department has also published data on school spending to enable greater comparison between schools in terms of effectiveness.
New figures have been released on Academy Schools. There are now 407 academies in England, of which 204 opened following the election. Out of these new academies, 136 were highly-performing schools who changed status and only 68 were schools that had been granted academy status to help tackle underperformance. An additional 264 schools are currently set to become academies
- Child Maintenance consultation
Reforms to child maintenance are being proposed which will place a charge on statutory services and increase the number of separating parents responsible for negotiating their own support arrangements. Consultation on the current system, which costs £460m a year to run, will close on 7 April 2011.
- Cuts to Lottery Distributors
Distributors of lottery funding have been told to reduce their admin costs by 5% following an announcement by the Department for Culture, Media & Sport. Distributors receive around £1.4bn annually and spend on average 6.5% on admin costs. The Heritage Lottery Fund has been given until March 2013 to reduce its costs. Meanwhile, the Big Lottery Fund, Arts Council England and Sport England/UK Sport will have until March 2014.
Legislation to reform the postal services has been passed by the Houses of Parliament. The Postal Services Bill will reform the service along a more commercial model while allocating 10% of Royal Mail shares to its employees and allowing local Post Offices to be converted into employee-owned mutuals.
- DFID: Private Sector Department
The Department for International Development has announced that it will set up a new department to engage with the private sector. This will include work to scale up new business models that enhance the contribution of firms to development; development of public-private partnerships; fair and ethical trade; business investment in infrastructure; and financial initiatives such as micro-finance.
The voluntary sector
- European Year of Volunteering
The Office for Civil Society has made a selection of small-scale contracts and grants available to organisations as part of the European Year of Volunteering. These grants and contracts will help encourage and enable individuals to volunteer through the development of employer supported volunteering programmes, shared practices and resources relating to volunteer management; and a focus on groups traditionally less likely to volunteer. Details on the contracts/grants are available on the Cabinet Office website.
David Cameron has launched a new weekly Big Society Award to provide recognition to individuals, businesses, and charities who “illustrate the Big Society in action”. People can submit nominations via the nomination form and winners will receive a certificate from the Prime Minister and be invited to a reception at Downing Street. In a similar vein, the National Lottery is also inviting nominations for its annual awards.
- Providers to pay for Community Organisers
Third Sector magazine has revealed that the community organiser initiative will only receive £2m in start-up costs according to tender documents from Cabinet Office. Following this sum, organisations delivering the service and training community organisers will be expected to raise around £10m to fund its continuation. Tender documents are not publicly available.
ACEVO, the Charities Tax Groups and Sue Ryder Care are all lobbying government in the hope of gaining VAT relief for charities delivering public services. Currently NHS bodies, Academy Schools and Local Authorities all receive VAT relief. The Charities Tax Group have estimated that the sector is liable to pay £140m more in tax over 2011.
It has been announced that the new organisation formed by the merger of BASSAC and the Development Trusts Association will be called “Locality”. The organisation will be operational from the end of April 2011 and Steve Wyler, former CEO of DTA, will take over as Locality’s new head. The organisation will also be expected to make redundancies.
The Social Enterprise Coalition have produced a report on the barriers to social enterprises expansion. The report, “Growing Social Enterprise: Research into Social Replication”, looked at social enterprises that had tried to expand via franchise and licensing arrangements but found that investors and grant funders declined support due to either suspicion or a lack of understanding of such models.
Social Finance, the organisation behind the much-lauded social impact bond has announced that is working with local authorities to help spread the model. Liverpool City Council and Essex County Council are currently in discussions on how the bond might be used to reduce the number of children in care through outcome-based payments.
- Future of Charity Commission
The Charity Commission will have to look to alternative sources of funding to plug a £8m loss in statutory funding according to its CEO, Sam Younger. The loss in funding is set to take place from 2014 and is likely to involve more collaborative work with similar organisations.
A new umbrella body for community organisations has launched in Scotland. The Scottish Community Sector Alliance gathers together a range of existing bodies to represent the specific interests of community groups.
Think tanks and research
The latest results of the Citizenship Survey commissioned from the Office for National Statistics by CLG have been published. The findings indicate that the numbers of people who want to be involved in local decision making and those volunteering on a regular basis have both fallen. The Government intends to cancel the survey completely next year.
Analysis of the latest Labour Force Survey shows that the number of people working in the voluntary sector has fallen by 2%. Analysis by Skills – Third Sector, NCVO and TSRC shows that the sector workforce fell by 13,000 down to 793,000. This contrasts to the private sector which has risen 2% and the public sector which has remained stable.
Almost two-thirds of the working population (58%) would volunteer if their employer provided support according to a cross-sector survey recently published by the volunteering charity “V”. Support could include flexible working hours and a formal volunteering policy. The survey also found that 96% of managers felt that volunteering helps to develop workplace skills such as self-confidence, understanding of social and cultural issues and teamwork.
The results of an independent review of Citizen’s Advice services commissioned by BIS have now been published. The review has found that investment in CAB leads to around £1bn a year in savings to clients and to government. It also argues that as CAB services are largely “enabling”, they are of no interest to private sector funders and need to be funded by government.
The Institute of Fiscal Studies has published its preliminary analysis of the Universal Credit set to replace other benefits and tax credits. Their analysis shows that planned welfare reforms will lead to gains for 2.5m families and losses for 1.4m families and that it will benefit those in the bottom 60% of the income distribution but will be detrimental to lone parents.