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Policy Briefing 29 November 2010
(15 November – 29 November 2010)
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Royal weddings aside, there have been plenty of significant new items over the past two weeks. A new Skills Strategy has finally been launched by the Department for Business, Innovation & Skills following recent consultation. When announcing the strategy, Vince Cable alluded to the harsh realities of the current economic context in which funding reforms are due to take place.
Perhaps unsurprisingly, the new strategy (which outlines the future direction and funding of further education plus adult and community learning) has failed to garner anywhere near as much attention as the controversial reforms to higher education or last week’s Schools White Paper. The relationship between secondary, further and higher education remains indivisible, however, especially since an increasing amount of students will no longer be able to afford the traditional three-year residential model of higher education study offered by universities. This, in addition to continually high levels of unemployment, will mean a greater number of learners will have to pursue more vocational routes or study for degree-level qualifications with further education providers. An analysis of the Skills Strategy may be read here.
Bold plans for public service reform have also gained further momentum over the past two weeks. A new £10m fund has been unveiled to support public sector workers to transform their workplaces into employee-owned mutuals via the “right to provide” policy. Under the scheme, staff will have to submit a bid in which they demonstrate how they can deliver public services at a lower cost as a mutual.
So far these plans have received a range of critical responses, especially from concerned unions. Unite has accused the government of “promoting DIY public services on the cheap”. Think tanks also remain divided, with the Institute for Economic Affairs arguing that mutualisation will make little difference to the quality of services which would be better delivered by large private sector firms able to deliver at scale. Meanwhile, the Social Enterprise Coalition welcomed the proposals but have led calls for an obligatory asset lock to prevent services becoming demutualised and sold off to the private sector.
Skills and workforce
The Government has launched a new Skills Strategy which outlines the future policy direction and funding of further education as well as how 25% cuts will be made to the FE budget. Significant new measures include an expansion in the number of adult apprenticeships; protection of the adult and community learning budget; Government-backed loans for learners aged 24 and over to study intermediate-level qualifications; a new SME-focused work-based learning programme to replace Train to Gain; and the introduction of £500k minimum contract levels with the Skills Funding Agency for training providers.
Geoff Russell, CEO of the Skills Funding Agency, used a speech to the Association of Colleges to welcome the greater freedoms granted to colleges under the new skills arrangements. Russell also spoke of the need for providers to explore new governance structure, business models, and learning methods to work within a reformed skills system.
- NIACE response
The National Institute of Adult Continuing Education (NIACE) have expressed disappointment about the implications of the new Skills Strategy on funding for English as a Second Language (ESOL). NIACE have argued that asking employers to pay the full costs of ESOL provision would be disadvantageous for those in low-paid employment or part-time work.
The British Chambers of Commerce have welcomed the greater responsiveness offered by reforms to the skills system. BCC also welcomes targeted provision for SMEs but warns that the real test “will be whether the proposals help local businesses in towns and cities across the UK”.
The TUC has warned that encouraging employers and individual learners to contribute more to the costs of training will be a struggle in the present climate. This is especially so given high inflation and hundreds of thousands of imminent job losses.
A conference was held to reflect upon the first half of the European Social Fund. The ESF, which will administer a total of £5bn between 2007 and 2013 has been used to help disadvantaged individuals with CV writing, job search support, interview technique, pre-employment and work placement opportunities, and continued support within work.
The Department of Health is set to invest £10m in the creation of 6,000 new NHS Apprenticeships. The money will be available for employers and will provide Apprenticeships in jobs with practical and technical training. This investment is based on recommendations from a recent report published on Apprenticeships in the health sector.
Politics
A new £10m fund has been announced by the Cabinet Office to support the “right to provide” programme for developing public service mutuals. The proposals also include provisions for a new helpline and web service for interested public sector staff and a “challenge group” to examine how the regulation of mutuals might be improved. This policy has been devised with the help of a range of partners (including John Lewis, Co-ops UK, and the members of the Mutual Pathfinder programme) and is set to operate across the vast majority of services, with the exception of areas such as security or defence.
The Cabinet Office and Treasury have launched a call for evidence on how ambitious plans for public service reform might be realised. The Government particularly wants to hear evidence on how to increase independent provision; the operation of the “right to provide” policy; how to attract greater external investment; innovative new funding mechanisms; and increasing democratic accountability. The call for evidence will run until 5 January 2011.
The past six months of Government spending over £25k has been published online. This is part of broader plans to challenge public bodies to deliver the Government’s transparency and open data agenda.
A report on how Government services may administered virtually has been published by the “UK Digital Champion”, Martha Lane Fox. The report’s recommendations include making all transactions available online and merging the DirectGov and Business Link web domains.
A network of 40,000 business mentors has been launched by BIS. This network of business experts will help start-ups, growing companies and those seeking financial mentoring. More mentors are still being sought for the network.
A white paper on school reform entitled The Importance of Teachinghas been launched. The paper outlines a range of proposals, including greater powers for teachers to improve pupil discipline; a transformed school curriculum; more academies and free schools; and a new “strategic” role for local authorities. The paper also announces that the Young People’s Learning Agency will be replaced by the Education Funding Agency which will sit closer to the Department for Education.
Children’s minister Sarah Teather has outlined a range of reforms to early education. Reforms include the removal of the requirement to offer full day care for Sure Start centres in the most deprived areas and reduced bureaucracy for early years’ professionals. The Children’s Workforce Development Council will also be stripped of its status as a non-departmental public body and will no longer be funded for workforce development activity according to a letter from the Department for Education.
The organisations responsible for the new Work Programme have been announced by the Department for Work and Pensions. The organisations named as preferred suppliers will soon be invited to tender for contracts to deliver back-to-work support from summer 2011. The list of preferred suppliers includes few voluntary organisations (A4E, BTCV, CDG and Groundwork) and has already raised concern from the sector.
The Work Capability Assessment is due to be changed following the publication of an independent review. Recommendations include creating a network of mental health champions; placing Jobcentre staff at the centre of the process; and ensuring that the assessment is transparent by recording all assessments in detail.
The Department of Health have announced personal budgets for an additional million elderly and disabled people over the next two years. Social care budgets will be allocated according to specific need and are likely to be administered as direct payments. An independent commission is also set to report on the funding of social care in summer 2011.
The final wave of social enterprises to be created under the NHS “right to request” scheme have been announced. The latest wave means that a total of 61 organisations providing services worth around £900m per year and employing almost 25,000 staff will become social enterprises. An additional £4.4m of funding will also be made available to projects through the Social Enterprise Investment Fund.
The Ministry of Justice has launched two consultations via which to introduce wide-ranging reforms to the costs of legal aid and civil litigation. The first consultation outlines proposals which aim to radically reform the Legal Aid system and achieve savings of £350m by 2014-15. The second consultation intends to reduce the costs payable in “no win no fee” cases and give more protection for defendants in such cases.
The Home Office will continue to allocate £28m in funding for the prevention of violence against women. Four key areas will be the focus of such funding – preventing repeat victimisation; provision of support for victims; bringing together groups to work in partnership; and ensuring that perpetrators are brought to justice. A cross-government strategy on the issue has also been published.
Greg Barker, minister of state for climate change, has iterated the relationship between energy generation and the Big Society. In a recent speech, Barker described how microgeneration represents “the point where climate security and energy innovation meet the Big Society”. Barker also called for more skills and training provision to support engineers and technicians to install low-carbon technology within communities.
The public sector duty to tackle economic inequality enshrined in the Equality Act has been withdrawn by the Coalition Government. The duty was to be implemented in April 2011 and would have applied to all councils and public bodies. Minister for Equality, Theresa May blamed political correctness for hampering advances in tackling inequality.
The Scottish Government Budget for 2011-12 has outlined a fall in voluntary sector funding from £35m down to £27m. Most of this cut will come from the withdrawal of the Scottish Investment Fund, a three-year loan and grant fund to build capacity in the sector. The Scottish Council for Voluntary Organisations has remained upbeat, however, pointing to potential income available in areas such as elderly care, children and young people, and climate change.
The voluntary sector
A private members’ bill advocating the use of social outcomes in public sector contracts has received broad support across the political spectrum following a second reading in Parliament last week. The Public Services (Social Enterprise and Social Value) Bill, introduced by Conservative MP Chris White, was drafted with the help of the Social Enterprise Coalition and will now go before the Public Bill Committee in early 2011 where it will debated further.
Sky News has reported that a number of high-street banks, including Barclays, HSBC, and RBS have all agreed to pay money into the Big Society Bank. Collectively this could generate around £1.5bn in capital for the voluntary sector. Sky have also reported that this could be part of a deal whereby banks that contribute will not be subjected to further taxation measures on their activities.
The number of organisations applying for charitable status has risen by 27% over the past 12 months according to the Charity Commission. The charities regulator received 571 such applications in October 2009, compared with 728 in the same month this year.
Cuts to the Office for Civil Society’s strategic partners programme could lead to Volunteering England losing over half of its staff. The charity has opened up a consultation with staff and the trade union Unite on plans to reduce its headcount from 55 to 24 posts. The CEO of Volunteering England described the redundancies as “heartbreaking” especially given the increasing significance of volunteering in the present context.
A survey of 586 members of the Institute of Fundraising and 330 sales, marketing and business development professionals has found that the economic climate and lack of support from trustees are the two biggest challenges currently faced by fundraisers. Whilst 86% of fundraisers surveyed said that they were satisfied in their jobs, less than half felt they received good support and guidance from management.
The Charity Finance Directors Group (CDFG) has called upon the Government to be more lenient in the use of grant funding. Currently many charities have grants which must be spent prior to 31 March or returned to the Treasury as underspend. CDFG proposes that the government relax the ring-fencing rules to set aside remaining funding into an “austerity reserve”.
Think tanks and research
The latest data released by the Office for National Statistics shows that unemployment has fallen by 9,000 down to 2.45m. These figures belie a greater trend towards part-time work, however as the number of full-time workers has actually fallen by 62,000 while part-time work has increased by 142,000. Public sector employment, which has been hit by Government spending cuts, was down by 22,000 whilst employment in private firms has risen by 308,000.
Respublica and NESTA have launched a joint publication on how the community ownership of assets might operate. The report covers ideas for creating an enabling framework aimed at empowering individuals and community organisations; examines the use of community shares and vouchers; and explores the nature of national support available to local groups.
New research published by the recruitment agency Badenoch and Clark has revealed that over half (56%) of public sector workers feel they lack the appropriate skills to enter into private sector employment. Workers in local government emerged as the most concerned, with 39% stating they would need to retrain. This was closely followed by central government employees at 38%. Meanwhile only 30% of NHS workers felt the need to retrain.
The Institute of Public Policy Research and PriceWaterhouseCoopers have launched a joint report outlining the practicalities of greater citizen involvement in the design and delivery of public services. A range of recommendations are suggested, including clearer information on what opportunities are available; systems to co-ordinate time and skills within the community; commissioning structures to encourage participation; a rethink of professional roles; and support for citizenship training.